East African Portland Cement Company’s plan to sell parts of its large tracts of land is hinged on the outcome of court cases, its managing director said yesterday.
The board has proposed that the cash strapped firm whose majority shareholders are the National Social Security Fund, National Treasury and French cement and construction firm Lafarge puts up part of its land for sale to raise operational capital.
This was expected to raise Sh15 billion, but yesterday EAPCC managing director Peter ole Nkeri said the proposed bailout plan is under the mercy of the courts.
“We have all our land titles intact in the bank. They are under lock and key and those claiming share of Portland land assets need to understand this,” said Nkeri.
Acting board chairman Kung’u Gatabaki said the fundraising strategy by way of disposing land will enable the company pay its debts and invest in new plants and upgrade the existing factory. He however said as it stands, their hands are tied.
Gatabaki said cement companies in the country are facing tough times and the situation at EAPCC has been aggravated by management issues dating back 10 years.
Another cement firm in the country currently facing deep financial trouble is Athi River Mining Cement. The firm was placed under administration in a move aimed at giving the debt-laden firm a lifeline to recover by keeping away creditors from attaching its property.