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  • Chidozie Uzoezie

Kenya Airways to Seek Funds For Restructuring


According to Financial Times, Kenya Airways will seek to raise several hundred million dollars in fresh capital in the next step of a restructuring that has seen it dispose of aircraft and announce a 15 per cent cut in staff.


The Nairobi-listed airline’s share price is down almost 90 per cent in five years. An ambitious expansion plan collapsed in the face of falling tourist arrivals to east Africa’s largest economy as terrorism and the Ebola virus scared people away.


Mbuvi Ngunze, chief executive, told the Financial Times that the size of the capital raise “was still being worked out” and would be announced next month.


But he added, “Nirvana would be to go to the market with a lesser requirement” than the $300m-$400m being discussed by analysts.


“There’s already quite some interest in [Kenya Airways] because of our unique hub position, our investment in Africa. So people have come to the table with different ideas,” he said.


“We will have to take those ideas, looking at what our requirement is, and decide what works for us.”


Kenya Airways last went to the markets in 2011 with a $3.65bn capital raising. It has made a loss in each of the past three years, including Ks25.7bn ($255m) in the year to March 2015, the largest in the country’s corporate history.


The average load factor fell to 63.8 per cent, about 15 percentage points below the industry average and 8 percentage points lower than rival Ethiopian Airlines, according to data from the International Air Transport Association.


The airline’s main shareholders are the Kenyan government, with 29%; Air France-KLM (26%), and the International Finance Corporation (9.7%).

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