East African Portland Cement to swap yen loans to U.S. dollars.

By bne IntelliNews January 3, 2011
Kenya's No.2 cement maker, East African Portland Cement, will swap its yen-dominated loans for U.S. dollars in January in a bid to cut costs, the Business Daily reported. The cement maker reported a loss of KES 292mn (USD 3.6mn) in the year to June 2010, compared to a profit of KES 1.8bn a year earlier. According to the company, the loss was caused by one-off staff costs, a jump in cost of sales and a KES 451mn foreign exchange loss due to the currency's weakness against the yen which raised the cost of a yen loan. East African Portland Cement will swap its yen loans with dollar-dominated ones in January, hoping to reduce exchange losses due to the lower volatility of the dollar compared to the yen. The firm has already secured the services of a bank to handle the transaction, the company's CEO, Kephar Tande, was quoted as saying. The company took the loan of KES 1.7bn in 1990 at a rate of 2.5% but despite servicing it since 2000, it still has over KES 3bn to settle. The loan matures in March, 2020, and is paid twice a year in March and September, based on the prevailing exchange rates at the time.

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