Blog Archive

Tuesday, April 22, 2008

Ah, the Kenya we know...

Apparently the Libyans want in on Kenya but in a back-handed manner. They want to buy the Grand Regency Hotel for a song.

Mukesh Ambani (of Reliance India) & partners are offering an estimated KShs 8-12 bn while the Libyans want in at KShs 1.6bn. That is a glaring difference. I wonder who gets the difference between the 2 bids?

Solution: An open bidding process with a 20% deposit & allow the winning bidder to seek financing within 12 months. Failure to pay for the GRH in 12 months means forfeiting the deposit. In the meantime, the bidder can run the hotel JOINTLY with the CBK appointed receiver.

Kenyans will stand to benefit as they will get the best price for the asset they have paid for through their taxes.

Similarly, there is the issue of the Refinery. It is old & inefficient and needs a major upgrade but the GoK is stalling by not selling its shares to Essar - who won the tender by paying the highest price - nor agreeing to pony up 50% of the capital needed for the upgrades. The Libyans want in but they did not pay the highest price back then so why would they do so now? Kenyans lose no matter how you slice or dice it!

Solution: The GoK should let KPRL sell shares in KPRL to the Kenyan public to retain Kenyan ownership. So the GoK will be co-owners with Essar & the Kenyan public. It would be unsafe to cede the refinery to the Libyans who will favour OilLibya vs the other Oil Marketers e.g. Kenol, Total, etc.


Anonymous said...


FWIW I think these Libyan investors are fronts for the political elites. We seem to love the ideas of foreign investors.... With all the plundering by the political elite, why can't they just openly invest their money locally.

bankelele said...

stange that reliance are mixing it up with the libyans. The former trade minsiter signed up a lot of deals giving the Libyans confidence

coldtusker said...

Banks: Reliance is not partnering with the Libyans. They are competitors.

If Reliance had won the SNO license... SafCon wud have been in trouble since they are aggressive competitors with deep pockets... The public would benefit from lower pricing.