Savannah Cement’s Administrator Opens Up Sale of Company’s Assets

  

One year after the High Court approved the appointment of an administrator to recover Savannah Cement’s defaulted debt, the failed cement maker’s administrator has invited expressions of interest in its assets. The Expressions of Interest (EOIs) will be submitted between the date the announcement was published (29th July) and 16th August at 4 pm.

Key Points:

- EOI Submission Period: 

Interested buyers have until 16th August to submit their expressions of interest.

- Evaluation and Shortlisting: 

Between August and September, proposals will be evaluated, and shortlisted buyers will be taken on site visits.

- Final Evaluation and Asset Sale: On 25th October, a final evaluation of bids will take place, with the administrator aiming to finalize the asset sale by 31st December this year.

Buyers interested in Savannah Cement’s assets are expected to provide details of their business and demonstrate their financial and technical capacity to improve the company’s assets. Additionally, companies intending to purchase the assets will undergo assessment for bankruptcy.

 How Savannah Cement Fell:

Savannah Cement, founded in 2012, initially produced 1.5 million tonnes annually. In 2020, the company commissioned a second mill, increasing production to 2.4 million tonnes. However, ownership wrangles led to financial difficulties, and by 2022, Savannah Cement was unable to repay KSh 10 billion in loans owed to KCB and ABSA Bank. The Supreme Court allowed the appointment of an administrator in 2023 to restructure the business and recover the debts.

Before its collapse, Savannah Cement’s products were used in various infrastructural projects, including the Standard Gauge Railway (SGR), Kibwezi-Mutomo-Kitui road, UoN Towers, Kipeto Wind Power Station, Thiba Dam, Thwake Dam, and the Nairobi Southern, Eastern, and Western Bypasses.

The major assets being sold by Savannah Cement's administrator include its production facilities, land, machinery, and other tangible assets. These assets were previously used for cement production and related operations. 😊🏭

 Savannah Cement had two production facilities before its financial difficulties. These facilities were used for cement production and related operations. 

Savannah Cement's two production facilities had a combined production capacity of approximately 2.4 million tonnes annually. These facilities were crucial for cement production and related operations. 

🏭The decline in Savannah Cement's production capacity can be attributed to ownership wrangles and financial difficulties. These challenges impacted the company's ability to maintain and operate its facilities efficiently, ultimately leading to a decrease in production capacity. 

Savannah Cement faced several financial difficulties that contributed to its decline:

1. Ownership Wrangles: Internal disputes among shareholders and management affected decision-making and operational efficiency.

2. Loan Defaults: The company was unable to repay KSh 10 billion in loans owed to KCB and ABSA Bank.

3. Operational Costs: High production costs, maintenance expenses, and overheads impacted profitability.

4. Market Challenges: Competition, pricing pressures, and market dynamics affected revenue streams.

These challenges collectively led t

o the company's financial distress.