- Kenyan government is on the lookout for a foreign investor to buy a controlling stake in Kenya Airways to restore the national carrier to profitability.
Kenyan government is on the lookout for a foreign investor to buy a controlling stake in Kenya Airways to restore the national carrier to profitability. The travel slump following COVID-19 had left the national carrier bleeding. Several multi-billion-shilling State bailouts were given to keep it afloat. KQ’s main business lines-cargo, passenger, and handling are all reported to be in severe losses. The announcement marks a departure from the Treasury’s earlier position to nationalise KQ.
Treasury Principal Secretary nominee Chris Kiptoo disclosed to MPs that the government will seek a fresh equity investor who can inject capital as well as offer management. The proposal is to reduce the shareholding of the country from 48.9 percent. The ownership of lenders who converted their debt to a 38 percent stake will also get pruned. The government of Kenya is on the lookout for a cash-rich foreign airline as a strategic investor that can offer KQ aviation expertise and operational cash, reducing the dependence on the State for operational cash.
Also read;
https://trendsnafrica.com/kenya-airways-pilots-to-strike-work-from-saturday/
https://trendsnafrica.com/kenya-airways-suspends-ticketing-services-to-malawi/
Currently, Air France-KLM has a minor stake in Kenya Airways. In 1995 KLM took a 26 percent stake in KQ. Later, the government sold a 22 percent stake to local shareholders through an initial public offering at the Nairobi bourse in 1996. The deal with KLM included seats on the KQ board, the right to appoint certain executives, in particular the CFO, and act as the technical partner for the national carrier. KLM later reduced its stake from 26.7 percent to 7.76 percent. It also wanted to exit KQ when the government opted to nationalise the airline. In 2021, KQ deal with Air France-KLM on code sharing for Africa-Europe routes also ended.
