NAIROBI, Kenya, Jul 25 – Kenya Airways will be seeking for a deferral of payments or repayment holidays to its financiers in the new capital optimization plan that seeks to plug a Sh230 billion hole.
Speaking to Capital FM Business former Managing Director and advisor to the Kenya Airways Board, Mbuvi Ngunze, says the move will see the airline pay its dues in the next four years.
“We already have concessions for Finance leases…those who have helped Kenya Airways finance purchases of aircrafts. We are also seeking concessions from operating leases (those who lease planes to KQ) for an additional 8 to 12 years,” he said.
Ngunze says close to Sh5 billion of the debt has been converted to equity resulting in a significant dilution of the shares.
Following the equity conversion, Equity Bank, KCB Group and Cooperative Bank own 35.7 per cent stake in the airline through a special purpose vehicle – KQ Lenders Company Limited.
Through its conversion of its debt to equity in the airline, the government will be the largest shareholder at 46 percent.
Kenya Airways will offer shareholders rights issues by end of the year in a move that will see shareholders re-invest in the airline after the restructuring plan takes root.
“The Banks can hold equity up to 10 years, but they are also free to sell equity during this period,” he noted.
The firm is set to meet shareholders on August 7, 2017 at an Extra Ordinary General Meeting to seek approval for this capitalization plan.
Last year, the firms’ losses dropped by 62 percent, to Sh10.2 billion compared to Sh26.2 billion reported in the previous year.