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Kenya Airways CEO resigns

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Kenya Airways Chief Executive Officer Sebastian Mikosz has resigned on “personal grounds”, effective December 31.

In an internal memo to staff, Mr Mikosz said he had decided to shorten his contract.

“It is my personal decision and I have obviously discussed it with the board as well as my family,” he said.

He noted that he had informed the Capital Markets Authority and the Nairobi Securities Exchange of his decision, in line with regulations since KQ is a listed company.

Mikosz, who speaks fluent French, English and Russian in addition to his native Polish, was appointed in 2017 and was seen as the fresh hire who would stop the airline’s loss-making.

This was due to his experience turning around LOT Polish Airlines, the flag carrier of Poland.

The CEO noted that he remains “fully determined” to the plans for the national carrier’s turnaround that were rolled out three years ago.

“I believe this is the ideal timing to begin a transition process to find someone who will continue with the turnaround initiatives,” he said.

Mr Mikosz noted that the efforts have seen the company decrease its losses from Sh25 billion in 2014 to Sh7.5 million currently.

“I am convinced that KQ is on a good path for a full recovery,” he stated.

READ ALSO:   Why Mikosz could not fly KQ out of turbulence

The CEO also informed staff that he would be travelling to China to work on the launch of directs flights to Beijing.

He will also attend the International Air Transport Association General Assembly and carry out a business review in Bangkok.

Mr Mikosz has been pushing the Kenyan government to take decisive actions – to either nationalise the airline or change its mandate in a way that would remove the dividend-paying requirement from its shoulders, given its main competitors are State-backed.

“We must be given a different mandate,” he said when he visited Nation Centre this week.

The CEO and group managing director has argued that the ground for Kenya Airways is uneven owing to the shareholding structure of its rivals.

Its main competitors – Ethiopian, RwandAir and the three Gulf carriers – are all 100 per cent State-owned.

This means that to compete with them, Kenya’s national carrier needs the kind of muscle that only the government can offer.

Mr Mikosz’s biggest blow came recently when the government appeared to have had a change of heart on its planned merger with Jomo Kenyatta International Airport (JKIA), which it was hoping to use to turn around its fortunes.

Kenya Airports Authority (KAA) did not help as it questioned the financial viability of the deal given KQ was the one in problems.

READ ALSO:   Why Mikosz could not fly KQ out of turbulence

Unions have never been on its side – they have been demanding the removal of Mr Mikosz as well as the management team.

Instead of focusing on the turnaround strategy, the chief executive has found himself having to explain just how much he and his expats earn.

Mr Mikosz flew in with a team of polish expats, described by insiders as his ‘kitchen cabinet’ that were initially thought to have been needed for just six months.

Their skills have remained wanted at the airline almost two years later, to the chagrin of union officials.

Mr Mikosz defended his strategy, which he maintains is working, but it has not worked at the pace he needs to fly KQ out of the loss-making territory.

His quick wins include finalising the deal that saw banks convert their debt into equity, lifting a repayment burden that was choking its cash flows.

He also counts the direct flights to the US as another feather in his cap.

source:nation.co.ke

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Business

Luxury Westlands hotel on auction over Sh240m debt

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A luxury hotel in Westlands, Nairobi formerly known Westend is set to be auctioned over unpaid Sh240 million bank loan.

In a notice published in the dailies Wednesday, Dalali Traders invited potential buyers of We Hotel and Suites formerly known as Westend to attend the event Thursday.

“Under instructions received from the charges advocate, we shall sell by public auction the under mentioned property on Thursday 20 February at our offices along Kijabe Street next to Universal Church starting at 10:30am,” the auctioneer said in a notice.

The hotel is associated with media entrepreneur Purish Shah.

Mr Shah, who is the vice chairman of Radio Africa linked urban station East FM had earlier pushed back similar attempts to sell his We Hotel and Suites through the court.

The Business Daily has learnt the latest planned auction of the upscale hotel is due to the debt owed to Bank of India. The hotel comprises a seven-storey building with basement parking. It has 42 rooms, 14 serviced apartments, spa, gym, conference space and a restaurant on the 7th floor.

Its basement comprises 17 parking spaces and a security office. Its ground floor has a conference centre, laundry area, staff dining room, and stores.

Located on Stima Road off Lower Kabete in Westlands it sits on approximately 0.0858ha (0.212 acres).

READ ALSO:   Why Mikosz could not fly KQ out of turbulence

“A deposit of 25 percent of the sale price must be paid in cash or banker’s cheque at the fall of the hammer and balance paid within the 90 days to the charges,” said the auctioneers.

The auction comes as the number of properties going under the hammer or businesses crippled by mounting debt has risen sharply in recent months.

We Hotel and Suites joins the growing class of distressed hotels owned and operated by locals that have fallen to mounting debt and slowed down business as a result of the increased supply of rooms in the country and the government’s directive for public servants to hold their meetings in government institutions as part of cost-cutting measures.

By Business Daily

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Nairobi reports high January home sales driven by access to credit and lower property prices

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Realtors have reported increased sales of standalone homes within Nairobi and its suburbs, largely driven by improved access to credit and lower property prices.

A survey of several real estate dealers in the city has revealed that January property sales were much higher than the average monthly transactions reported in 2019.

Realtor HassConsult said high-end properties in Westlands as well as the Gigiri diplomatic zone performed well last month, with several off- plan deals recorded.

“January has witnessed three times more activity than any other month last year,” said HassConsult’s head of development consulting and research Sakina Hassanali.

She said Kenyans appear to be enjoying better access to capital as many property buyers and tenants had paid all their instalments that lagged behind last year.

Mr Patrick Muchoki of Mahiga Homes said they have seen higher demand in developments in Ruiru and Kitengela, mostly from investor- buyers from the diaspora market.

“There is hope as Kenya’s population is rising and new well-paying jobs

are fast emerging within the digital space. 2020 is shaping up to be different from 2019, as banks are now willing to lend to would-be homeowners,” he said.

Enkavilla Properties General Manager Lilian Juma said good infrastructure has been supporting new sales for upcoming residential development in areas such as Kangundo Road, while Kitengela serviced plots sold under a buy-and-build basis have witnessed heightened interest among young couples.

READ ALSO:   Why Mikosz could not fly KQ out of turbulence

Releasing their fourth-quarter housing property index, Kenya Bankers Association reported a seven percentage points jump in maisonette and bungalow sales within Nairobi and its suburbs.

KBA research and policy financial markets director Jared Osoro said there was a 17 per cent rise in sales of maisonettes in the fourth quarter of 2019 compared to a 10 per cent rise in the third quarter.

Outlook
ALL NOT LOST, SAY PLAYERS

The fourth-quarter KBA Housing Index registered a 0.61 per cent decline compared to the third quarter’s 2.28 per cent drop in house prices, an indication that the repeal of the interest rate capping law last November could have eased access to credit.

Increasing opportunities especially in the ICT sector, rising income levels and infrastructure are among factors that will push demand for homes up, according to some property managers.

By Nation

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Africa

Barclays Bank Kenya is now ABSA Kenya and it has opened its doors to the public

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Following the issuance of the requisite regulatory approvals, Barclays Bank of Kenya re-branded to Absa Bank Kenya on 10 February 2020 and is now open for business.

Absa Bank Kenya Plc  is a subsidiary of South Africa-based Absa Group Limited.[2] It is licensed by the Central Bank of Kenya, the central bank and national banking regulator.

The headquarters and main branch of the bank are located at Barclays Westend Building, off of Waiyaki Way, in Nairobi, Kenya’s capital and largest city.

The bank is a large financial services institution in Kenya, with an asset base in excess of KES:259.718 billion (US$2.597 billion), with shareholders’ equity of KES:42,388 billion (US$423,83 billion). At that time the bank serviced 833 268 customer accounts, in 121 branches, 214 automated teller machines and 2,591 members of staff.

Barclays Africa Group Limited has officially been renamed Absa Group Limited and started trading under its new name and new share code (ABG) on the Johannesburg Stock Exchange today. The name change marks the start of a new era for the group as a standalone African group with a new brand design fit for a forward-looking business in a digital age.

No longer just a South African brand, the new Absa Group has a presence in 12 African countries and plans to open international offices in the UK and the US.

READ ALSO:   Why Mikosz could not fly KQ out of turbulence

“Our new name and brand are an expression of our new purpose and strategic direction, which commits us to growing in Africa,” Absa Group Limited Chief Executive Officer, Maria Ramos said. “We are rallying around a shared sense of purpose and identity while celebrating our diversity,” she said.

Absa Group launched a new growth strategy on 1 March 2018 as it separates from Barclays PLC. The strategy prioritises cultural transformation as well as restoring leadership position in the group’s core business areas, and developing pioneering propositions for customers and clients. The new Absa brand design is an expression of the group’s new purpose, which is:  ‘bringing your possibility to life’.

The rollout of the new Absa brand design in South Africa will be completed in 2019. The new Absa brand will also be rolled out to Absa Group’s Barclays banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda and Zambia by mid-2020, subject to approvals including from regulators in those countries. Product and service functionality will not be affected by the rebranding programme.

In renaming Barclays banks across the continent, the group will be able to build on the pedigree of the Absa brand as a strong and stable bank. The brand has substantial equity – Absa was named the fourth most valuable brand (with an estimated value of R18.9 billion, or about US$1.5 billion) in South Africa by global brand valuation and strategy consultancy Brand Finance this year.

READ ALSO:   Why Mikosz could not fly KQ out of turbulence

“We would like to build the brand as a bank that Africa’s people can be proud of, a truly independent African bank with global scalability,” said Ramos. “A single brand will enable us to unite behind a single identity, purpose and strategy; we are excited by the enormous opportunity we have to create a bank that Africa can be proud of.”

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