Boma Hotel owned by Kenya Red Cross placed under receivership
The National Bank of Kenya (NBK) has now hotels owned by the Kenya Red Cross (KRC) under receivership due to huge debt.
They include Boma Hotel Nairobi and Boma Inn Eldoret.
According to NBK’s financial documents, Red Cross is the biggest borrower from the bank that was recently acquired by the Kenya Commercial Bank (KCB).
Reports indicate that the last time the said businesses made profits was in 2011 with losses moving up to Ksh1.4 billion in just three years.
In a notice dated December 16, 2019, the management of NBK appointed PVR Rao as an administrator of the said properties.
“None of the directors, shareholders, employees and no other person is authorized to transact any business on behalf of the company without express written consent from the administrator,” read a notice from PVR Rao right after his appointment.
Kenya Red Cross is reported to have been struggling financially with management allegedly manipulating books to indicate all is well.
The organization confirmed the reports of receivership terming the current business environment in Kenya as difficult.
“Faced with these realities, the Red Court has gone into a process of administration,” the statement reads. Red Court was running the three hotels.
Boma Hotel in Nairobi was reportedly the hardest hit while Boma Inn Nairobi apparently has no loan obligations.
Kenya Red Cross further noted that Boma Inn Eldoret is up to date with its loan repayments.
“…It is our belief that this decision will return the hotels to a profitable path to continue to serve their intended purpose of generating income for the Society,” read the statement.