Kenya finds buyer for 30pc stake in Portland Cement

16Jul 2023
The Guardian Reporter
Business
The Guardian
Kenya finds buyer for 30pc stake in Portland Cement

The government has found a deep-pocketed buyer for a 30 percent stake in East African Portland Cement Company (EAPCC) for Sh15 billion in a deal that is likely to trigger a fresh fight for control of the cement firm facing insolvency.

Industry Principal Secretary (PS) Juma Mukhwana (pictured) told the National Assembly that the Ministry of Investment, Industry and Trade had approved a turnaround plan that will see the strategic investor buy 30 percent shareholding in the company.

 

The PS said the deal is now only awaiting President William Ruto’s approval.

 

“We were to meet the President yesterday (Wednesday) but the meeting has been rescheduled to next week. We have approved a proposal between the National Treasury, the National Social Security Fund (NSSF) and Lafarge that we get a strategic investor to buy 30 percent shareholding at EAPCC,” Dr Mukhwana said.

 

“A strategic partner will also bring money, new blood and management style as we move to turn around the company.”

 

Dr Mukhwana, who did not disclose who the new buyer is, said the proposal will see the Treasury, the NSSF and French firm Lafarge cede part of their shares to create a 30 percent stake for the new investor.

 

The government, through the Treasury, holds 25 percent shareholding, the NSSF controls 27 percent, Lafarge 42 percent and other Kenyans six percent of the Nairobi bourse-listed cement manufacturer.

 

But Lafarge, whose representative attended the same meeting, expressed surprise at the government proposal requiring it to cede part of its stake to the new investor.

 

“We are not aware that we will be ceding shares,” Geoffrey Ndugwa, a representative of Lafarge who arrived in the country on Thursday for the tripartite meeting convened by the National Assembly’s Public Investments Committee on Commercial and Energy Affairs, said.

 

The committee chaired by Pokot South MP David Pkosing asked the government to resolve the conflict with other shareholders before presenting a final proposal.

 

“I agree we need to put our house in order. We all agree core business is to produce cement. EAPCC has idle land and as a government, we are keen to give life back to Portland,” Dr Mukhwana said.

 

The PS said the government would go back to the drawing board and come up with a comprehensive plan on how to dispose of idle assets, pay debt and revive the company.

 

“We propose you give us time out. We will have a workshop to bring our members together and return on August 17 with a comprehensive plan and an agreed draft Cabinet memo on the EAPCC business plan,” Dr Mukhwana said.

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