Kenya Air­ways to re­struc­ture its fi­nanc­ing: New Chair­man

Kuwait Times - - BUSINESS -

Kenya Air­ways needs to ex­tend debt re­pay­ments and make other changes to re­struc­ture its bal­ance sheet, which would take pri­or­ity over find­ing a strate­gic part­ner, the new chair­man of the loss-mak­ing air­line told Reuters. Shares in the car­rier, 27 per­cent-owned by Air France KLM , have surged 68 per­cent this month on hopes of a turn­around after four straight years of losses.

The ap­point­ment of vet­eran tele­coms ex­ec­u­tive Michael Joseph as chair­man has also lifted sen­ti­ment. Pi­lots had threat­ened to strike from last week to de­mand man­age­ment changes, but called off the ac­tion when Joseph’s ap­point­ment was an­nounced. “Our first pri­or­ity is to re­struc­ture the fi­nanc­ing and once we have done that we can start think­ing about a strate­gic in­vestor but it is too early to talk about that at the mo­ment,” Joseph said.

Restruc­tur­ing would aim to se­cure “longer (credit) terms, changes in in­ter­est rates”, Joseph said yes­ter­day, his of­fi­cial first day in the role after re­plac­ing Dennis Awori. Asked about the fate of Chief Ex­ec­u­tive Mbuvi Ngunze who pi­lots also de­manded should go, Joseph said: “The pri­or­ity is sta­bil­ity in the air­line. When you are restruc­tur­ing your fi­nanc­ing, you need con­tin­u­a­tion of lead­er­ship.”

He did not elab­o­rate. Kenya Air­ways, also partly state owned and which car­ries 12,000 pas­sen­gers a day in its fleet of Boe­ing and Em­braer planes, has been hit in re­cent years by fall­ing earn­ings due to a de­cline in the num­ber of vis­i­tors to Kenya. Tourism has been hurt by se­cu­rity wor­ries stoked by So­mali Is­lamist group al Shabaab’s at­tacks in the coun­try, in ap­par­ent re­tal­i­a­tion for Kenya’s mil­i­tary de­ploy­ment in So­ma­lia. The air­line has been re­duc­ing the size of its fleet, sell­ing non­core as­sets like land and cut­ting jobs to re­cover from the losses it in­curred after tourism slumped. It has also said pre­vi­ously that it re­quires fresh cap­i­tal of 70 bil­lion shillings ($691 mil­lion). — Reuters

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