KQ Buyout: The national government is set to buyout the troubled national carrier Kenya Airways. The government will buy out Air France-KLM, local banks and more than 80, 000 individual shareholders from Kenya Airways.
KQ is 48.9 percent government-owned, 38.1 percent (lenders), 7.8 percent (Air France-KLM), 2.4 percent (Kenya Airways employees) and 2.8 percent (small investors).
“You have to ensure that everybody gets their dues, that is why you have to do valuation. Once you know how much it will cost you and have the process under the law… it is a matter of getting the shareholders themselves to pass the necessary resolutions to facilitate the payouts within the law,” Transport Principal Secretary Esther Koimett told Parliament on Thursday.
The government targets to close the buyout by end of next year, setting the ground for its delisting from the NSE where Kenya Airways listed in 1996 through a privatisation plan. Kenya Airways shares have plunged 81 percent at the Nairobi bourse to Sh. 2.72 each, valuing the carrier at Sh. 15.45 billion. The market valuation puts the lenders’ stake at Sh. 6 billion, Air France-KLM (Sh. 1.23 billion), Kenya Airways employees (Sh. 380 million) and small investors (Sh. 443 million).
According to the Business Daily, on Thursday, KQ chairman Michael Joseph warned of financial duress for the national carrier if the buyout deals and the nationalisation plan are not completed in the next six months. “We need a decision because in the next six months we run the danger of considering alternative measures that are not pleasant,” Mr Joseph told MPs.
“Kenya wants to emulate countries like Ethiopia, which runs air transport assets – from airports to fuelling operations – under a single company, using funds from the more profitable parts to support others. Under the model approved by Parliament, Kenya Airways will become one of four subsidiaries in an Aviation Holding Company. The others will be Jomo Kenyatta International Airport (JKIA), the country’s biggest airport; an aviation college; and Kenya Airports Authority, which will operate all the nation’s other airports,” the BD reported.
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