The week opened with news that Athi River Mining had defaulted on the interest of a privately placed paper in June, portending further defaults with expectations that it is to settle a whopping Sh13 billion within the year and Sh1 billion beyond the year but within the next five years according to its financial reports.
ARM owes a corporate bond of Sh1 billion and Sh771 million in commercial papers. The strain on their books can, however, be seen on the leaning to overdrafts which increased from Sh2.2 billion in 2016 to Sh4.5 billion last year.
However,during an interview with Business Daily where Pradeed Paunrana said that World Bank would inject money to restructure the firm’s debt saved the counter from a free fall.
On Friday closing, ARM was the leading gainer for the third consecutive session, up 9.9 percent, to close at a 2-month high of Sh4.45. Local investors have been rather bullish on the counter upon news of a possible Balance Sheet restructuring in the near term.
ARM has had a dramatic decline from a high of Sh76 a share in July 2015 to a low of Sh2.70 on June 27.
Overall the market benchmark indices posted mixed results, with the NASI and NSE 25 posting dips of 0.3 percent and 0.1 percent respectively; the NSE 20, however, resisted the downward trend of the other two to post a gain of 1.0 percent.
Market activity was subdued relative to yesterday’s session, as equity turnover dropped 40.9 percent to $2 million on reduced foreign investor participation.
Foreign investors maintained their bearish position of the Bourse for the fourteenth consecutive session, recording net outflows of $1 million almost at par with Thursday’s session.
Safaricom reclaimed its position as the most traded counter, accounting for 66.8 percent of total turnover. The telco shed a marginal 0.9 percent to close at a three-week low of Sh28.25 on foreign investor selling.