The Kenya Development Corporation (KDC) wrote down the value of its equities investments by Sh1.23 billion in the year to June 2024, largely on account of a Sh1.33 billion impairment on its holding in the Development Bank of Kenya (DBK).
The state-owned development finance institution said the total value of its unquoted equities investments after impairment stood at Sh16.59 billion in June 2024, down from Sh17.83 billion in June 2023.
KDC disclosed the valuation of its various holdings in private and state-owned corporations in a tender document calling for consultancy services for a new valuation for the year to June 2025 for purposes of financial reporting for the period.
“KDC seeks to undertake a valuation of its unquoted equity investments for the purpose of reporting in its financial statements for the period ending June 30, 2025 and aims to contract an expert consulting firm to undertake the valuation on its behalf,” said KDC in the tender document.
The institution’s unquoted equities investments are held in a total of 33 entities, the largest being a Sh4.03 billion, 31.57 percent stake in Almasi Beverages Limited, and a 43.77 percent holding in Kwal Holdings EA Ltd (Kwal) valued at Sh3.72 billion.
In the document, KDC says the value of its direct holding in DBK fell from Sh2.83 billion in 2023 to Sh1.49 billion last year. KDC puts the stake in the lender at 16.14 percent, although previous documents by the Privatisation Authority put its exposure to DBK at 89.3 percent.
The bank has generally been profitable in the past five years, and has been complying with the minimum capital and liquidity ratios set by law.
In the year ended December 2024, DBK reported a net profit of Sh83.04 million, representing a 73 percent increase from the Sh47.92 million profit in 2023.
DBK’s net assets grew to Sh17.33 billion from Sh15.02 billion in 2023, while its core capital to total risk weighted assets ratio stood at 14.6 percent, well above the statutory minimum of 10.5 percent.
Another significant impairment was recorded on Almasi at Sh353.6 million, and on International Hotel (Kenya) Ltd where the valuation fell by Sh172.4 million to Sh678.2 million.
KDC holds a 40.6 percent stake in International Hotel, the entity that owns the now closed Hilton Hotel in Nairobi’s Central Business District.
On the other hand, there were upward revaluations of equity stakes in companies such as Kwal (up Sh339.7 million to Sh3.72 billion) and Minet Kenya Insurance Brokers (up Sh236.1 million to Sh1.56 billion).
Some of the KDC holdings have been identified for privatisation by the government, including the Hilton and DBK stakes, meaning that the equity valuation will help determine the pricing of such sales when they eventually materialise.
The government also lined up other hotels held under KDC—with stakes of between 72 and 98 percent— for sale in its privatisation plan published in 2023.
These include Kenya Safari Lodges, Mt Elgon Lodge Limited, Golf Hotel Ltd, Sunset Hotel, and Kabarnet Hotel. As per the valuation report of June 2024, these five hotel groups were valued at a total of Sh576.8 million, with the bulk tied to Golf Hotel at Sh513.5 million.
