Mwango Capital Profile picture
Oct 7, 2021 16 tweets 11 min read Read on X
1/ A quick thread on the EABL [@EABL_PLC] and Abasa Bank Kenya [@AbsaKenya] situation that was featured in the Business Daily today.

There are a few things that raise eyebrows that may need a more detailed explanation from 2 of Kenya's oldest and largest firms.
2/East African Breweries PLC [@EABL_PLC] is Africa’s leading alcohol beverage company celebrating 100 years in the brewing business.

The custodian of the Tusker brand.

The Group MD & CEO is Jane Karuku, appointed in 2021.
3/ ABSA Bank Kenya [@AbsaKenya] (formerly known as Barclays Bank) is one of Kenya's oldest and largest banks.

The CEO is Jeremy Awori [@jeremyawori].
4/
ABSA is regulated by the Central Bank of Kenya [@CBKKenya] which is headed by Patrick Njoroge [@njorogep].

@EABL_PLC and @AbsaKenya listed entities on the Nairobi Securities Exchange [@NSE_PlC] are also regulated by the Capital Markets Authority [@CMAKenya]
5/ This is the story @BD_Africa story as written by Victor Juma

businessdailyafrica.com/bd/corporate/c…
6/
So yesterday, EABL indicated that they are raising around Ksh 11B.

So @EABl_PLC issued an Information Memorandum which has financial details to enable it to issue a Medium Term Note (MTN).

Here is a copy for the nerds (only 237 pages long btw): mwangocapital.files.wordpress.com/2021/10/eabl-2…
7/ From the IM and from the annual report of EABL, one can see that Absa Kenya has loaned Kshs 18.8B to EABL.

There is a possibility this could be syndicated from Absa Group, the holding company, but this is not mentioned in either the annual report or the IM.
8/ In Kenya, the @CBKenya’s Prudential Guidelines a Kenyan bank cannot lend more than 25% of its Core Capital to a single borrower.

It’s a precaution to ensure the bank doesn’t run into major problems should the borrower default.

More here for nerds: centralbank.go.ke/wp-content/upl…
9/ Now for the (quick) math:

A. ABSA Kenya’s core capital on 30 June 2021 was Ksh 46.4B
B. ABSA Kenya’s loans to EABL as of 30 June 2021 were Ksh 18.8B

A/B= 40.6%

That’s a lot more than 25%. This is the question the reporter was asking.
10/ What's more interesting though is this:

The current EABL Chief Financial Officer - Risper Ohaga - worked for ABSA/Barclays prior to being appointed EABL’s CFO in 2018.
11/
The Stockbroker, arranger, placing agent, and receiving bank for the MTN are all part of Absa.

The chair of Absa Securities is @patriciaIthau who is a Non-Executive Director of Absa and has held previous roles at EABL.

ABSA and EABL seem tightly linked on executives.
12/ Btw, the current chairman of ABSA Charles Muchene is a former chairman of EABL.
13/ One would expect the IM to have all the relevant information but the IM issued on 7 Oct 2021 provides information from (unaudited?) accounts of period to 31 Dec 2020

EABL has released updated information in its Annual Report of Year ended 30 June 2021

The IM needs updating
14/ So whereas all seemed well with Loan/Core Capital on 31 Dec 2020, it is not the case on 30 Jun 2021.

Dec 2020 vs June 2021. The difference is this loan maturing July 2022 of Kshs 11B that Absa gave EABL.

Is this the loan that EABL is looking to retire with the MTN?
15/ This now begs a few questions:

1. Where is the regulator @cbkkenya in all this given this high exposure Absa seems to have to EABL?

2. Why didn’t CMA insist on an IM with the latest information since the EABL 20/21 FY results had already been published?
16/ A response from @AbsaKenya.

Still begs the question why it's Absa Kenya that is listed in the @EABL_PLC annual report as the lender.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Mwango Capital

Mwango Capital Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @MwangoCapital

Oct 15
KETRACO [@KETRACO1] has taken 3 pages in the Star Newspaper to give more details on the Adani Energy deal.

Here is a thread with a few key points we noted from the statement. Image
@MativoMJohn @arnoldi254 @kinjeketile @Jasiri_MAR @DollyOgutu @lindahoguttu @RichardOnyonka_ 1. Background:

—The Transmission Master Plan (TMP) projects the need for an additional 9,600 km of transmission lines and a $5.2B investment by 2042 to support industrial growth and electrification.
—KETRACO is exploring Public-Private Partnerships to bridge the funding gap Image
2. Why PPPs?

—KETRACO projects have historically been financed through loans from development partners like the World Bank, AfDB, JICA, and Exim banks.
—The next set of funding from these partners is estimated to be available after the financial year 2028/2029. Image
Read 12 tweets
May 11
The latest Finance Bill proposes several key changes to Kenya's tax laws.

Here is a thread of a few things we picked:🧵

[Corrections welcome] Image
@Nikhil_Hira @mwaniki_joseph @wakili_dennis @ill_dduor @coldtusker @Brianmbunde @janetmachuka_ @arnoldi254 @mmnjug @Theo_mwangi 1️⃣ Finance Bill 2024 introduces the Motor Vehicle Tax:

💰 The tax rate is set at 2.5% of the vehicle's value

🔴 Minimum tax: KES 5k. Maximum tax: KES 100k

✍️Calculation based on make, model, engine capacity, and year of manufacture.

Image
Image
Image
2️⃣ Withholding Tax:

The bill introduces withholding tax on goods supplied to public entities at 3% for resident persons and 5% for non-residents.
Image
Image
Read 21 tweets
Apr 16
We compiled a thread on SACCO's FY 23 Results that we have received so far.

Here is the thread: Image
@cheruiyotkb @the_acemt @moneyacademyKE @nderi_j @RonnyChokaa @xysist @wiseshilling @StellarSwakei @tyrus_ 1. Nation DT Sacco[@NationDTSacco]:

—Total Assets: +17.7% to 3.5B
—Net Income: +8.5% to 235M
—PAT: +3.8% to 116M
—Dividend rate on deposits: 20%
—Interest rate on member deposits: 11% Image
2. Magereza DT Sacco:

—Total Assets: +12.7% to 7.9B
—Net Income: +33.4% to 606M
—PAT: +53.9% to 129M
—Dividend rate on share capital: 10%
—Interest rate on member deposits: 6% Image
Read 21 tweets
Apr 5
10 Key Takeaways from the CBK Post-MPC Briefing by the Governor.

1. CBK is keen on the separation of Safaricom & M-Pesa:

"One of the factors that has been delaying this..is the tax liability which is fairly significant in the order of at least KES 75B & what to do with it"
2. There has been a sharp rise in remittances to Kenya this year:

"If one were to compare the first two months of 2024 (Jan & Feb 2024), we see remittances for those two months compared to the two months in 2023 have increased by more than 20%"
3. There was a slowdown in growth in credit to the private sector in Feb 2024 from 13.8% to 10.3%

"A certain amount of private sector loans is denominated in dollars & therefore, when the exchange rate appreciated the level of credit to the private sector did decline"
Read 10 tweets
Jan 7
We selected the top #MwangoMemes from 2023 for you to enjoy!

1. The Kenya shilling closed 2023 at KES ~157 against the dollar.

Earlier in the year the President had promised that it would be trading at around 115 to 120 in a few months.

#MwangoMemes Image
@coldtusker @OchiengJasper @Brianmbunde @Bebi_16 @swabrah @KenyansNoContxt @Dicksonmagecha @MugambiNandi @alexmwanzo @InvAnalystKe 2. Kenya Power [ @KenyaPower] sought to enter the internet business.

It identified some 93 hotspots in Nairobi & Mombasa where it will connect with high-speed internet through 1,331.68 km of overhead fiber optic cables in phase 1 of its data business.

#MwangoMemes Image
3. There was a proposal to make Kenyans working abroad make mandatory contributions to a new Fund.

Every migrant worker would have to register as a member of the fund before departing the country.

#MwangoMemes Image
Read 25 tweets
Dec 24, 2023
𝐓𝐡𝐢𝐬 𝐖𝐞𝐞𝐤'𝐬 𝐓𝐨𝐩 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐍𝐞𝐰𝐬 𝐢𝐧 𝐌𝐞𝐦𝐞𝐬:

1. Kenya's backlog of incomplete projects reaches KES 1.3 T, sparking calls for a halt on new government projects until existing ones are completed

#MwangoMemes Image
@MihrThakar @KenyansNoContxt @PesaWall @alexmwanzo @swabrah @NguliMT @MwangiMaina_ @Brianmbunde @arnoldi254 @DollyOgutu 2. Taxpayers are facing a new burden as President Ruto's administration plans to secure an additional KES 362B to fund his second full-year budget, set to surpass the KES 4T mark for the first time.

More debt on the way:

#MwangoMemes Image
3. Emergency loans the Treasury has tapped directly from CBK [ @CBKKenya] have hit a historical record KES 91.13 B.

According to CBK data, GoK’s overdraft has grown from KES 61.12 B at the end of July to KES 88.33B on December 1.
#MwangoMemes Image
Read 20 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(