Kenya Airways financial restructuring goes ahead as court rules against dissenting banks

KENYA AIRWAYS FINANCIAL RESTRUCTURING NOW DEFINITELY ON

(Posted 26th August 2017)

Equity Bank, Jamii Bora and Ecobank yesterday had their court case thrown out by the Court of Appeals in Nairobi which they filed over their objections to be ‘forced‘ to become part of a new shareholder set up at Kenya Airways under which debts are to be converted into equity.
They where the only three who in the end kept objecting to the resolutions taken on the 07th of August during an Extraordinary General Meeting of the airline’s shareholders but must now toe the line after their appeal case was found lacking merit.
Kenyan financial institutions will now hold around 37 percent of the national carriers shares, disposal of which has also been clearly prescribed giving the airline financial breathing space while boosting share values.
With this crucial issue now out of the way can the airline concentrate on getting back into profit territory after several years of massive losses.

Tourism stakeholders in the meantime have taken exception to comments attributed to the airline’s chairman, one Mr. Michael Joseph, who reportedly demanded added protection from international airlines flying into Kenya.
The Ministry of Tourism and the entire industry have vocally advocated for greater access to the main Kenyan airports, such as Mombasa and Nairobi, by international carriers, a demand now opposed by Joseph. Michael Joseph gained notoriety when he walked out of his appointment as Chairman of the Kenya Tourism Board of Directors several years ago to the consternation of the entire industry and many stakeholders have again raised this issue with this correspondent, claiming the man lacked understanding of the industry, its challenges and options for a full revival.
The disputed comments were quoted as follows: ‘We want the Government to understand that KQ is a national airline, and there is need to protect it. There is no need to pump in money and then leave it at that. There is need to ensure that the playing ground is level by having rational policies on air transport where you do not kill your own airline by opening up your skies‘.
The coast tourism fraternity has for long lobbied for more international carriers to be granted landing rights in Mombasa where at present only Ethiopian Airlines, Turkish Airlines and RwandAir operate scheduled services. Kenya Airways itself has not reacted positively to demands by tourism associations to operate some of their services from Europe via Mombasa, prompting vocal demands for foreign carriers to be allowed to fly to the coast’s primary airport.
Qatar Airways has named Mombasa as a new destination for 2018 but the comments by Joseph are again casting doubts on the licence finally being granted which would constitute a major setback for the Kenya coast’s resorts and hotels.

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