After SAA, Kenya Airways seeks more funds for revival
After Kenya Airways (KQ) shares started to tumble at the Nairobi Securities Exchange (NSE), the loss making national carrier is seeking for more funds from the government in bid to turn around its fortunes.
January 10, 2020: After Kenya Airways (KQ) shares started to tumble at the Nairobi Securities Exchange (NSE), the loss-making national carrier is seeking more funds from the government in a bid to turn around its fortunes.
In November 2019, Kenya’s National Treasury has planned to close the buyout of the carrier by the end of 2020.
The airline has requested the National Treasury to be part of the funds it needs to buy back the shares in the nationalisation process. The funds sought for by the national carrier will be used in settling the investors once the nationalisation process gathers steam.
In December 2019, the struggling airline fired over 70 employees.
According to a report by Citizen TV on January 9, the airline’s shareholders are concerned after the carrier’s shares tumbled to two shillings. As a listed company the airline will have to place an offer for its shareholders to buy back the shares and place it fully under the hands of the government.
KQ is 48.9 percent state-owned, 38.1 percent (lenders), 7.8 percent (Air France-KLM), 2.4 percent (Kenya Airways) employees, and 2.8 percent (individual investors).
The carrier has announced a 25 percent drop in earnings for the year ending December 31, 2019, even though the government had written off KSh 24.2 billion in debts in March 2019. In 2018, the company's loss stood at KSh 7.59 billion up from KSh 6.4 billion recorded in 2017.
Meanwhile, by the end of February 2020, the business rescue practitioners (BRPs) overseeing the South African Airways (SAA) have to present their turnaround plan for the bankrupt state-owned carrier.