EAPC considers bond option

EAPC considers bond option
17 December 2004

East African Portland Portland Cement (EAPC) is considering the possibility of listing a bond that would pay off a Sh3.8 billion yen dominated loan it owes the Japanese government. "We are looking at the possibility of launching a bond to repay this loan," Benson Ndeta, the company’s chairman, said yesterday. "Since this loan was taken way back in 1986, market dynamics have improved considerably and there is now a lot of liquidity in the market."

Ndeta said the loan has become a big burden to the company and that it has ceased adding value to the company’s performance."We don’t need a long time to repay this loan," said Ndeta. He was speaking shortly after the conclusion of the company’s annual general meeting in Athi River. He said EAPC was currently in discussion with the Government, consultants and some banks on the possibility of listing the bond issue.

The loan was extended by the Overseas Economic Co-operation Fund of Japan (OECF) in 1986 and is guaranteed by the Kenya government. It is repayable semi-annually at 2.5 per cent interest and is expected to be completed by 2020. Though EAPC started repaying the loan in 2000, the foreign exchange risk posed by the debt has been a major burden to its profitability and finances.

Published under Cement News