The airline has proposed a model similar to Emirates and Ethiopian Airlines, which operate as units of state-owned holding companies. By Our Correspondent
November 19, 2019: Finally, Kenya’s National Treasury is planning to close the buyout of Kenya Airways (KQ) by the end of next year. The buyout plan comes after the State House Kenya voted in July to nationalise the carrier and save it from mounting debts.
The airline has proposed a model similar to Emirates and Ethiopian Airlines, which operate as units of state-owned holding companies. Under the model, KQ will become one of four subsidiaries in a state-owned aviation holding company. The other three are Nairobi’s Jomo Kenyatta International Airport (JKIA), Kenya Airports Authority (KAA) and Kenya Civil Aviation Authority (KCAA).
KQ is 48.9 percent state-owned, 38.1 (lenders), 7.8 percent (Air France-KLM), 2.4 percent (Kenya Airways) employees, and 2.8 percent (individual investors). The market valuation puts the lenders’ stake at Sh6 billion, Air France-KLM (Sh1.23 billion), Kenya Airways employees (Sh380 million) and investors (Sh443 million). Lenders who acquired a stake in the company’s equity during the 2017 restructuring, could be paid through government debt, possibly 10-year treasury bonds.
Transport principal secretary Esther Koimett said that the ministry is working with the International Finance Corporation to recruit a technical expert ahead of Christmas to conduct a fresh valuation.
“You have to ensure that everybody gets their dues. It is a matter of getting shareholders to pass the necessary resolutions to facilitate the payouts within the law,” said Koimett.
Recently, the airline’s chairman Michael Joseph proposed the nationalisation of Kenya Airways and its inclusion in a state-owned aviation holding company to enhance its ability to borrow funds for expansion. He warned of financial pressure for the airline if the buyout deal and the nationalisation plan are not concluded in the next six months.
KQ shares at the Nairobi Securities Exchange (NSE) closed at 2.76 on November 18, a -0.20 plunge as compared to the previous day closure. The buyout sets the ground for its delisting from the NSE where KQ got listed in 1996 through a privatisation plan.