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Kenya

KQ to float rights issue by the end of 2017

Former KQ CEO Ngunze, who is now an advisor to the Kenya Airways Board, says the financial restructuring involves a lot of negotiation

NAIROBI, Kenya, Jul 5 – Kenya Airways is set to offer shareholders a rights issue by end of the year.

Former Chief Executive Mbuvi Ngunze says the move will see shareholders re-invest in the airline after the restructuring plan takes root.

Ngunze who is now an advisor to the Kenya Airways Board says the restructuring includes government converting their existing debt into equity.

“Other existing shareholders will be offered the opportunity via a new share issue to be offered at a discounted value to re – invest in Kenya Airways shortly after the completion of the process,” Mbuvi said.

The national carrier reached a deal with key creditors and major shareholders to convert the Sh25 billion debt it owes the government and about Sh23.25 billion commercial loans from 11 domestic banks to equity, a deal endorsed by the Cabinet.

According to Ngunze, this is the best option for the airline to get back to profitability.

“It has taken a lot of negotiations to be here, we are soon calling for an extraordinary general meeting to seek approval for the plan,” he said.

The firm will release a detailed circular on other issues of the restructuring plan.

Last year, the firms’ losses dropped by 62 percent, to Sh10.2 billion compared to Sh26.2 billion reported in the previous year.

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