The East African Portland Cement Company plant in Athi River. FILE PHOTO | NMG
Summary
- East African Portland Cement Company closed the year with long-term loans of Sh3.6 billion compared to Sh1.8 billion reported in 2016.
- Simon Peter ole Nkeri, EAPCC’s managing director, said the increased debt resulted from the conversion of an expensive overdraft held with KCB into a seven year-loan, with the benefit of a three-month moratorium on repayment.
East African Portland Cement Company (EAPCC) has negotiated a restructuring of its loan with KCB Group
to ease repayment pressure as lower sales deepened the firm’s net loss
for the six months to December nearly four-fold to Sh969.6 million.
The
listed cement maker, which has consistently reported losses mainly
attributed to mismanagement, closed the year with long-term loans of
Sh3.6 billion compared to Sh1.8 billion reported in 2016.
Simon
Peter ole Nkeri, EAPCC’s managing director, said the increased debt
resulted from the conversion of an expensive overdraft held with KCB
into a seven year-loan, with the benefit of a three-month moratorium on
repayment.
The debt restructuring comes at a time when Portland Cement is
trying to sell idle land to ease its cashflow crunch. The company’s
half-year sales revenue dropped Sh660 million to Sh3.06 billion.
“We
restructured our loan with our main banker KCB last December. An
overdraft is extremely expensive, especially when you skip a payment,”
Mr ole Nkeri said in an interview.
“This is a longer
term loan and it will go a long way in easing pressure on the company.
We got a three-month moratorium so we shall start paying it around
April.”
Mr ole Nkeri said the extended electioneering
period caused a slowdown in the uptake of cement as investors put on
hold construction projects.
An increase in the cost of clinker — the main raw material for cement — coal and electricity also ate into the firm’s earnings.
No comments :
Post a Comment