“The things we have seen and heard from the press about our airline are not good and we would like to know what is happening and what is the way forward,” he demanded.
“Last year a time like this Mr Chairman, you people told us all will be well after you announced some Sh10 billion loss. But now this year again you are telling us that all is well and there is hope for our airline. How?” another shareholder enquired.
It was during a question and answer session at the 39th AGM that the Kenya Airways (KQ) board and management were bombarded with all manner of questions to explain the reason behind the losses running into billions of shillings.
The shareholders insisted that since KQ announced a Sh26billion full year loss for the year 2015 in July this year, there has not been a concrete explanation.
READ: KQ flies into more turbulence with Sh25.7bn loss
However, KQ’s leadership maintains that the airline is not on its death bed but rather on a recovery journey.
In this regard, the CEO Mbuvi Ngunze revealed that the airline has already received the first tranche of Sh10billion ($100million) bridging loan from African Export-Import Bank (Afreximbank) out of the full amount of Sh20.5billion ($200million).
The Cairo-based bank was this year appointed as an adviser to help the ailing airline on a capital raising plan as well as arrange for the bridging loan.
The turnaround plan is expected to be implemented over the next 12 to 18 months once the right financing structure is in place. The airline is looking at a combination of long-term debt and shareholder equity to finance its operations over the long-term.
“We will not, and can’t die unless we are killed,” Ngunze told the shareholders, optimistic that KQ is here to stay despite the deep losses.
The airlines is also in the process of selling of some of its aircraft to trim costs and reduce excess capacity.
The Government of Kenya which has a 29 percent shareholding has also given out Sh4billion, which has been seen as drop in the ocean considering the airline needs close to Sh60billion to bail it out.
“I urge you as shareholders to rally behind your airline. Businesses the world over experience challenges from time to time. What matters most is the measures instituted to put the business on a recovery path and ultimately on a sound footing,” Ngunze said.