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Billionaire puts up Sh5 billion Sentrim Hotel for sale

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A guest room at Sentrim Hotel. FILE PHOTO | NMG 

The Sentrim Hotel portfolio associated with a Kenyan Asian billionaire investor has been put up for sale.

It will be sold at a guiding price of Sh5.2 billion according to Knight Frank which has been contracted to oversee the transaction.

The property manager’s head of agency Anthony Havelock told the Business Daily that the hotel owners, whom he described as “a consortium” of family business owners, had put the estate in the market due to age-related reasons.

“The consortium sees that key decision makers are approaching retirement age,” said Mr Havelock on Thursday.

The Sentrim portfolio comprises eight hotels spread across the country including 680 Hotel in the Nairobi city centre.

Others are the Boulevard Hotel located on the fringes of the CBD along Harry Thuku Road with 70 rooms, Castle Royal Hotel situated in Mombasa city along Moi Avenue (68 rooms) and newly built Elementaita Lodge on the shores of Lake Elementaita with 84 guest rooms and 58 cottages.

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The group also owns Samburu Lodge situated in Samburu National Reserve with 21 cottages, Sentrim Tsavo located in Tsavo East National Park with 21 luxury tents, Sentrim Mara located in the Maasai Mara game reserve with 31 twin tents and Sentrim Amboseli located in the Amboseli National Park with 60 tents.

The hotels are likely to attract several potential buyers, including high-net-worth investors, as well as hospitality groups who are active investors in the country’s hospitality market.

“We are receiving interest from local and international hotel firms,” Mr Havelock said.

There has been a string of heavy investments by leading luxury hotels in Kenya recently.

The list includes global brands such as Accor Hotels, Hilton, Carlson Rezidor, and Acacia Premier.

Nineteen hotels are also expected to come to Kenya shortly, with a total of 3,453 new rooms in the pipeline, according to a report by Lagos-based consultancy W-Hospitality Group.

Hotel chains in Kenya are increasingly facing pressure from ultra-affluent clients who demand special service.

Kenya and South Africa are tipped as the next continental hotspots in luxury hotel investment.



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Firm roots for PPPs in universal healthCARE

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General Manager of General Electric (GE) Health for sub-Sharan Africa, Eyong Ebai

The government has been urged to engage the private sector more in funding universal healthcare in the wake of Covid-19.

General Manager of General Electric (GE) Health for sub-Sharan Africa Eyong Ebai said the pandemic had demonstrated that governments alone cannot fund public health systems.

“There are two sides to the discussion and the first is in regards to supporting governments to create demand-side activity so there is appropriate funding that the supply side can then provide services to the general public,” said Mr Ebai in a recent interview. 

“On the demand side, we need to focus on instruments that can share risk and typically this will be in the form of health insurance programmes that can be national health insurance schemes like in Ghana, Nigeria and South Africa,” he added.

In the upcoming 2021/2022 budget, the National Treasury has allocated Sh121 billion to the Health Ministry, representing an increase of Sh3 billion from the current financial year that ends in June. 

Treasury has allocated another Sh47.7 billion for the universal healthcare plan, bringing the total allocation to the country’s health sector at Sh168 billion for the 2021/2022 financial year. 

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However, this represents 1.7 per cent of the country’s GDP and is below the international average spending for low-income countries that stood at 6.3 per cent as of 2019.

According to Ebai, governments can also tap into regional authorities through developing state or provincial-wide health insurance schemes that will directly benefit local communities, thus easing the pressure on central governments. 

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“The real trick for Africa is to tap into the informal sector as well as the formal sector,” he explained.

“This means everyone pays a small premium towards a pot which then goes towards providing coverage for individuals when they become unwell.” 

This is especially crucial as more than 80 per cent of patients on the continent still meet trig healthcare bills through out-of-pocket payments.

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Third time lucky? Amana CEO makes fresh stab at saving firm

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Reginald Kadzutu, Amana Capital acting CEO.

For the past few years, Reginald Kadzutu and Amana Capital have been joined at the hip.

The source of their shared torment has been the ghosts of collapsed giant retailer Nakumatt, which sank with the investment firm’s Sh255 million.

And any attempts to exorcise Nakumatt’s ghosts have proven unsuccessful so far. A strategic investor touted to pump Sh300 million and recapitalise the investment firm shied away at the last minute.

It was not clear why Sanjeet Thethy, the strategic investor, backed out.

Now, Kadzutu is back at Amana Capital in his third stab at turning around the company.

“My title is Interim Chief Executive Officer; I’m here just to turn it around. I have given myself three years,” Kadzutu told Financial Standard recently on his return at the investment firm.  

In February last year, he appeared before anxious investors to explain how their money put in Nakumatt commercial papers would be recovered.

This was at a testy Extraordinary General Meeting (EGM) of investors in the Amana Shilling Fund, which overcame a liquidation vote that would have impacted the future of the entire company.

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Withdrawals had been frozen and investors faced losing their money, with the fund’s only other investment being Sh185 million fixed deposits put in the troubled Jamii Bora Bank (now Kingdom Bank).

Kadzutu, however, explained that there is a misconception that he was part of the team that made the decision to invest in Nakumatt.

He had worked in Amana before for four years between 2008 and 2012 and then left for tech firm Craft Silicon.

Kadzutu rejoined the fund manager in 2018 after it had already invested in Nakumatt in 2016. His return, he insisted, was “to clean up the  Nakumatt mess.”

“The reason I actually came in was to sort the Nakumatt issue. I advised the firm to inform people they had invested in Nakumatt. I was the one who held the first EGM.”

He said he was also the one who notified the Capital Markets Authority (CMA) of the ill-fated investment and froze withdrawals by anxious investors.

His second stint at the firm, however, was short-lived and left for rival Zamara in August 2019.

“The framework of what they needed to do was already in place. I’d done my job to freeze it and let it be known to everyone and gave the solutions,” he said. Now, Kadzutu says Amana Capital is “aggressively” following up on the Nakumatt investment.

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“We believe someone should be held accountable, and money should not be lost,” he said.

The CEO said they are pursuing legal routes but is quick to add that the intention is not to “recover everything.”

“Atul Shah is not broke,” deadpanned Kadzutu.

He pointed an accusing finger at the market regulator, CMA, arguing that it could have done more to protect investors.

“If the authority were really after protecting investors, they’d go after Nakumatt and manage to get that Sh4 billion… they have the capacity,” he explained.

Commercial paper holders are part of the unsecured creditors and at the bottom of the food chain when it comes to any funds that would be recovered from Nakumatt.

The investment firm is part of investors who lost a total of Sh4 billion after buying Nakumatt’s commercial papers.

Nakumatt went down with a Sh38 billion debt, with the unsecured short-term debt instruments it had issued to about 800 institutions going up in smoke.

Kadzutu is well aware of the implication of the nature of the debt and said they’ll “pursue other avenues that may benefit us.”

Charting a recovery for Amana Capital saw 59 per cent of funds in the Amana Shilling Fund written off and substituted for a 30 per cent equity stake in the firm, which was part of the AGM resolutions.

The 30 per cent equity shares will be issued “proportionally” to individual holdings of funds lost in the fund.

They will also take up board seats. Liquidity has been one of the challenges for the investment firm.

Kadzutu said the fund not only had money in Nakumatt and JBB but had “deposits all over.”

The third tier bank was also facing liquidity problems. Early last year, Last year, Co-operative Bank completed the acquisition of 90 per cent of the troubled bank.

Only one fund had invested in Nakumatt and JBB.

The other funds by the investment firm include the Amana Growth Fund, Umbrella Fund and the Balanced Fund, which were not affected.

He said by December last year, Co-op Bank had paid the whole amount.  

This coincided with his return to the firm. “We paid and are still paying others,” said the CEO. “This shows the element of putting effort into trying to make sure that people get their money,” he added.

Kadzutu said legally, they could have written off the hole created by Nakumatt but “mistakes happen,” hence the option to convert the debt into equity.

 “Once you write off, all is lost. But in this new arrangement, what you are losing is liquidity,” This will see investors get dividends after turning the firm around and doing a share buy-back, according to Kadzutu.

“Our plan is that in two to three years, we can buy back those shares and definitely compensate for the interest that you’d have otherwise earned over the period,” he said.  

He said the valuation and allocation has been done, and lawyers are now working on changing the company from a private to a public entity, with the shareholders now set to rise to 1,000.  

[email protected]     

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The upside of waiving the patent on Covid-19 vaccines

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The patent holder gets a monopoly to make money if the patent is commercialised.

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