ARM Cement’s Kigali plant will be auctioned for the second time to pay off a debt. The troubled Kenyan-based cement company halted the first auction through a court injunction after the offer made failed to meet company expectations. The sole offer was $1,157 which fell short of the plant’s market value of $1.4 million by over 70 per cent.
“The only bid was $1,157 and it was rejected because it was far lower than the 70 per cent of the $1.4 million the market value of the plant,” Kigali Professional Bailiffs Association tweeted on Monday last week.
The auction will help the cement company pay off its creditor Rwanda Enterprise Investment Company (REIC) $693,641. The plant is being auctioned as a result of a court battle that lasted from 2013 to 2016 according to a court bailiff Aloys Bizimana.
The plant belongs to the Kigali Cement Company, a subsidiary of ARM Cement. REIC has been a shareholder of Kigali Cement since 2008 as reported on The New Times.
ARM Cement and Kigali Cement
ARM purchased a 37 per cent stake in Kigali Cement in 2010 and started to struggle financially at around the same time.
“Since 2010, ARM has been struggling to run the Kigali Cement subsidiary due to management inefficiencies from the time they acquired the plant and dividends to shareholders begun shrinking,” a source told The New Times.
The management that was obligated to run Kigali Cement was allegedly running obscure operations behind the backs of the private shareholders.
The agreement between REIC and Kigali Cement was entered into in 2008 where REIC promised to invest $482,307 in Kigali Cement where $337,608 would be repaid over 60 months at ten per cent interest while $144,669 would be an equity investment.
Part of the agreement required REIC to offer technical assistance which KCC says the company failed to do thereby making it impossible for the firm to generate the $115,606 yearly.
However, the court ruled that it found no proof that the lack of technical assistance resulted in the failure of the company’s operations and their ability to pay the creditor. Additionally, KCC agreed in court that REIC has provided $20,000 as technical assistance.
The court, therefore, ordered KCC to pay REIC $729,876.
ARM has been facing financial troubles in Kenya where it was suspended from trading on the NSE last month after it was placed under administration.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.