State firms on sale to be known next month
National Treasury Principal Secretary Chris Kiptoo. He says list the list of State-owned companies earmarked for privatisation to be released before the end year.
What you need to know:
- East African Portland Cement Company among State-owned companies earmarked for privatisation.
- State owns a majority shareholding of 52 per cent in the Nairobi Securities Exchange listed company.
Treasury Principal Secretary Chris Kiptoo says the list of State-owned companies that are earmarked for privatisation, including East African Portland Cement Company (EAPPC), will be released before the end of next month.
Dr Kiptoo told the National Assembly’s Public Investments Committee on Commercial Affairs and Energy that the government will fast-track the process of disposing of loss-making entities like EAPCC.
“I commit that we are going to undertake privatisation and we will have a list of all entities earmarked for privatisation by the end of December and EAPCC will be among them,” Dr Kiptoo told a round table meeting convened by the committee to find mechanisms to revive the once profitable cement maker.
“We have agreed as shareholders that Portland Cement should be privatised. I commit that we will determine to what extent the government shareholding will be retained by the Treasury.”
The State owns a majority shareholding of 52 per cent in the Nairobi Securities Exchange listed company. The Treasury controls 25 per cent shareholding while the National Social Security Fund (NSSF) has 27 per cent stake.
Other shareholders of Portland Cement are Cemential Holdings (14.6 per cent), Associated International (14.6 per cent), Bamburi Cement (12.5 per cent), and other shareholders (six per cent). Dr Kiptoo, who was accompanied by Industry Principal Secretary Juma Mukhwana, NSSF managing Trustee David Koross, EAPCC managing director Oliver Kirubia, and a representative of Lafarge, told MPs that EAPCC began experiencing financial woes in 2012.
“Turnover of EAPCC PLC declined from Sh10.17 billion in 2011 to Sh2.8 billion in 2019. The accruing losses from operations led to successive negative cash from operations that generated negative working capital,” Dr Kiptoo told the committee.
“This led to the company solely depending on KCB Bank loan facility when the liquidity position of EAPCC further deteriorated and the company was unable to settle salaries and wages which stood at 60 per cent of revenue as well as loan repayments and interests.”
He said the Cabinet in August 2019 approved balance sheet restructuring through the sale of idle land and the company managed to retire KCB loan amounting to Sh6.8 billion through debt property swap.
