ARM Kenya in Talks to Hire New CEO as Management Reorganized

NAIROBI (Capital Markets in Africa) – ARM Cement Ltd., a debt-laden Kenyan manufacturer of the building material, said it’s identified a potential new chief executive officer as it named a former director of rival Lafarge Africa Plc among new board members.

The management shake-up comes 10 months after ARM began a search for a strategic investor. The company is struggling under the weight of debt that ballooned to 14.4 billion Kenya shillings ($142.9 million) last year and in June defaulted on a coupon payment for a $10.3 million loan.

“The company has experienced turbulent operational and financial challenges,” it said in a statement emailed Monday from the capital, Nairobi. “To overcome these challenges and to ensure a turnaround of the company’s performance, the board has unanimously agreed to make key changes to the leadership of the company both at management and board level.”

Thierry Metro, a former board member at Lafarge Africa, becomes a non-executive director, while Linus Gitahi takes over the role of chairman from Wilfred Murungi, who retires on Aug. 13, the company said.

Pradeep Paunrana, ARM’s current managing director, said in a mobile-phone text message he’ll “actively continue providing strategic direction to ARM as a key board member.” The new CEO will be start in the coming weeks, he said, declining to comment on whether Lafarge — which already has a stake in Kenya’s biggest cement maker — plans to invest.

ARM’s has been seeking an investor since October to help stem losses that more than doubled to 6.55 billion shillings last year. Last month, Paunrana said the company, which has operations in Tanzania, had yet to reach an agreement with the International Finance Corp. about a capital injection.

Source: Bloomberg Business news