Minister calls for Sh1bn state rescue for Jetlink

THE STAR
LOCAL 37
Monday, November 19, 2012
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Renaissance Group splits key units
BY SOLOMON KIRIMI
RENAISSANCE Group has
split its asset management
unit from investment banking arm.
The group separated its
operations from its investment banking division
following an announcement
by Renaissance Group and
Onexim Group of the sale
of Renaissance Capital and
Renaissance Credit in Russia, to Onexim.
The separation of the
business units under the
Renaissance Group umbrella leaves the Renaissance
Group to focus on asset
management, African urban
developments, consumer finance in Africa, and Russian
real estate funds.
Chief executive Stephen
Jennings will remains at
the helm of the firm, which
now comprises Renaissance
Asset Managers, and Asset
Management Company.
Others include Rendeavour engaged in development in develop African
cities, Renaissance Credit
Nigeria, consumer finance
and Renaissance Real Estate
in Russia.
Renaissance capital is
involved in development of
Tatu city in the outskirts of
Nairobi.
Onexim Group and Renaissance Group announced
last week that an agreement had been reached for
Onexim Group to buy Renaissance Group’s stakes in
Renaissance Capital Investments, Renaissance Capital,
and Renaissance Capital
International Services for an
undisclosed amount.
Minister calls for Sh1bn
state rescue for Jetlink
GROUNDED: Jetlink Express said on Thursday it has suspended operations for lack of cash flow.
BY JUSTUS OCHIENG
IMMIGRATION minister
Otieno Kajwang’ has petitioned President Kibaki to
direct the Treasury to release
stimulant funds to rescue the
airline Jetlink Express.
Operations at the local
airline have been grounded
for lack of cash blamed on
failure to convert into dollars revenue from its ticket
sales in South Sudan.
Managing director Captain Elly Aluvale last week
said the airline is unable
to access more than Sh170
million ($2 million) held
in Equity Bank and Kenya
Commercial Bank accounts
in Juba.
Subsequently, its 350 staff
have been sent home pending further communication.
The airline heavily depends
on foreign exchange to buy
fuel, aircraft lease rentals,
importation of spare parts
and landing fee.
Kajwang’ said the cash
flow crunch that has hit the
company is likely to affect
the country’s revenue.
The minister who was
speaking in Kisumu on Saturday said that a swift move
by the head of state will save
the company.
“Treasury under the directive of the President has offered aid to Kenya Co-operative Creameries, coffee and
pyrethrum industries and
it will not cost the country
much to come to the aid of
Jetlink,” the minister said.
He said just like Kenya
Airways has received state
assistance in the past, Sh1
billion from the Treasury
can save the Jetlink.
“The Sh1 billion can be
given as a loan to the company to enable it continue
its operations since when
one business venture collapses, Kenyans lose several
jobs and families suffer,” Kajwang’ said.
The airline said with foreign exchange shortage in
South Sudan, banks are under instruction from the government to give priority to
essential services like food,
medicine and fuel imports
in their foreign exchange allocation.
The currency shortage
arises from the stand-off
between Sudan and South
Sudan over oil export transit fees forcing the South to
stop refining its oil in Khar-
toum.
Equity Bank Kenya has
reportedly been advancing
them dollar payments based
on Jetlink’s deposits in Equity South Sudan pending
resumption of normal foreign exchange trade in South
Sudan.
Jetlink, which has operated for over four years, runs
scheduled domestic flights to
Kisumu, Mombasa, and Eldoret and regionally to Juba
and Mwanza with a strategic plan to spread its wings
to Zanzibar and Dar-es-Salaam in Tanzania, Kigali in
Rwanda, Asmara in Eritrea
and Khartoum in Sudan.
It has a jet fleet of eight
aircrafts including seven
CRJ aircrafts (50-seater)
and one Fokker-28 aircraft
(79-seater).
Can YOU outsmart
the expert?
ALY KHAN’S
STAR
PORTFOLIO
BARAGOI: BLACK SWAN
OR NEW NORMAL?
WHEN I was young and the heat was at its most intense
in the afternoon in Mombasa and only the sound of
crows would occasionally pierce that heavy hot stillness
and my mother was having her siesta, I would read and
I consumed books because they were my lifeline to the
world.
Today, the world is flat and my laptop [nicknamed my
‘lovetop’ by my better half] connects me but then it was
a different time, a world when we were all disconnected.
The one author I always wrestled with was James
Joyce whom I later learnt was the inventor of the
‘stream of conciousness’ style of storytelling and my
piece today might be characterised as a little James
Joycean, I admit.
I start with Nassim Taleb who has written a number
of very prescient books. Taleb is the author of The Black
Swan [fooled by randomness] which caught the attention of folks who live and breathe the financial markets.
“What we call here a Black Swan is an event that is an
outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point
to its possibility and it carries an extreme ‘impact’.’’
And I refer to the randomness of the fact that 41
people have died in the Gaza Strip and 48 police officers
were killed in Baragoi, Samburu.
Let’s set aside for a moment the share of voice that
the events in the Gaza Strip are receiving which simply
dwarfs the share of voice the massacre in the Samburu
received by comparison. I pray that the souls of all the
departed [and I include the three Israelis as well as the
police officers as well as those in the Gaza Strip] rest in
eternal peace.
I am left wondering what on earth is going on?
When did we start ranking worse than the Gaza Strip?
Are these spikes and paroxysms of violence Black
Swan events or are we entering a new normal?
Everything starts with security and without it, we
are in very deep trouble and these spikes have been
increasing in frequency, in intensity and spreading
geographically. The Swahili coast remains a potential tinderbox and the Rift Valley is hardly a demilitarised zone.
Somehow, the genie was put back in its bottle in 2008
but when you keep stepping close to the precipice,
there is a high chance that you misjudge distance and
you fall over the edge.
Can the system regain control?
Will lashings of blunt force trauma be enough?
What happens if it all kicks off all at once and together?
Is the system responding with enough sophistication?
Or do we only have one tool in the tool box?
Everything starts with security
and without it, we are in
very deep trouble and these
spikes have been increasing
in frequency, in intensity and
spreading geographically