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NAIROBI, Oct 22 (Reuters) - The administrator of Kenya’s debt-laden ARM Cement will ask its creditors for support to keep the company running by selling some of ARM’s assets to cut debt, as well as a plan to engage with financiers for working capital.
George Weru, a co-administrator for the cement firm, told Reuters the proposals will be put to the company’s creditors on Tuesday when they meet to chart the best way forward.
The company was put into administration in August by some of its creditors and its shares suspended from the Nairobi bourse. It owes a total of about $190 million to a range of creditors including local commercial banks.
“The level of leverage is significant so what we are seeking to do is to get approval to run a transaction process, aimed at disposing a subsidiary or certain assets to bring cash to reduce the debt,” Weru said.
“In the meantime we recommend that operations are continued and therefore we are also seeking permission to engage financiers for capital.”
He said the company’s production machinery was in need of urgent spare parts while its management needed to be rebuilt, after several key staff left due to its cash flow problems.
Reporting by Duncan Miriri, editing by David Evans and Emelia Sithole-Matarise