Capital FM Business former Managing Director and advisor to the Kenya Airways Board, Mbuvi Ngunze, said the move will see the airline pay its dues in the next four years.
“We already have concessions for finance leases… those that have helped Kenya Airways finance purchases of aircrafts. We are also seeking concessions from operating leases 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% 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%.
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 is implemented.
“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 capitalisation plan.
Accident damages plane
A Sh10 billion Kenya Airways aircraft was on Sunday night extensively damaged just prior to takeoff, forcing the airline to ground it and book the Johannesburg-bound passengers on other flights.
The national carrier says one of its eight Boeing 737-800 aircraft suffered damage to its main body (fuselage and engine) after a tow truck —which was dragging the plane from the terminal bay to the runway — rammed it.
“Kenya Airways confirms that one of its aircraft was involved in an unfortunate incident Sunday evening,” the airline said in a statement. “There were no injuries. Flight KQ764 was later cancelled to allow for further investigations and all guests were accommodated on other flights.”