ARM Cement’s shares slid last week to an eight-and-a-half year low as investors sold off shares after the firm announced it is seeking a new strategic investor whose entry will lead to further dilution for existing shareholders.
The value of the firm’s shares declined by 16.72 per cent week-on-week to close at Sh13.70 per unit, market data showed, with close to 1.53 million shares exchanging hands last week.
The company, which recently raised Sh14 billion in exchange for a 42 per cent equity stake to UK-based CDC Group, said earlier this month it is looking for additional funds to steady current operations and support new investments.
“We will first sell the non-cement business, take short term shareholder loans and then bring a strategic long-term investor,” group chief executive Pradeep Paunrana said on September 5.
“We will do what is right for all shareholders to restore the value. The value has been eroded because of our Tanzanian operations.”
ARM reached a deal to sell its non-cement business, which include Mavuno Fertilizer and ARM Minerals and Chemicals, to Swiss industrial firm Omya for undisclosed value on September 8.