ARM Cement's independent auditor has cast doubt on the Kenyan company's survival as a going concern after losses mounted last year.
The company, Kenya's second-largest cement maker behind LafargeHolcim's Bamburi Cement, sunk into losses in recent years after financing costs associated with an expansion drive weighed it down.
Its pretax loss nearly doubled to 7.52 billion shillings ($74.75 million) last year from 3.97 billion shillings, after slower sales hit its revenue, it said in a statement seen by Reuters on Tuesday.
"A material uncertainty exists which may cast significant doubt on the Group's ability to continue as a going concern," said the auditor, who signed off in the report as F. Okwiri.
The auditor cited the wider loss for last year, the group's current liabilities exceeding its current assets by 13.47 billion shillings, its accumulated losses and its historical performance.
In the report, the auditor declined to offer an opinion on ARM Cement's financial statements for last year.
Pradeep Paunrana, the group's chief executive, did not respond to a Reuters request for comment on Tuesday.
ARM's shares have plunged to 2.80 shillings each from a peak of 98.50 shillings in January 2014, as investors dumped the stock due to concerns about high financing costs and the growing losses.
The group said it was "undergoing a significant review of current operations, asset base and financing structure to address company-specific challenges."
In November last year it said was seeking a strategic investor to pump in equity capital.
Global cement firms have been seeking to expand in Africa to take advantage of rapidly growing economies and major public transport and other infrastructure projects.