This archive report was first published on 16 December 2019.
On December 16, 2019, Kenya Red Cross' Boma Hotels was placed under receivership after failing to repay loans owed to National Bank of Kenya.
The hotel's creditors have appointed PVR Rao as an administrator, effectively barring the current management from the business.
According to local reports, the business was insolvent with negative capital, meaning the entire investment by the KRC had been wiped out by losses. The last time the business had positive capitalisation was in 2011.
The hotel's financial records had raised major concerns about its viability, with huge debts and inability to pay employees' retirement savings.
The Boma Hotels brand and portfolio consist of properties namely Red Court, Boma Hotel Nairobi, Boma Inn Nairobi and Boma Inn Eldoret.
As part of the receivership, management was directed to speak with lenders to review the terms of loans, including rescheduling repayment plans.
None of the directors, shareholders, employees and no other person is authorised to transact any business on behalf of the company without express written consent from the administrator.
PVR Rao, Administrator
