The National Treasury plans to close Kenya Airways buyout by the end of 2020, the local media reported. The buyout was decided after the State House Kenya voted to nationalise the airline in July. For that reason, the transport ministry is closely working with International Finance Corporation (IFC) to determine the buying price and new valuation.
Kenya Airways is mired in mounting debt. The government targets to close the deal by the end of next year. Transport principal secretary Esther Koimett, told the media that, “You have to ensure that everybody gets their dues. It is a matter of getting shareholders to pass the necessary resolutions to facilitate the payouts within the law.”
The transport ministry is working with IFC to recruit a technical expert to carry out a fresh valuation. The airline has proposed a business model similar to Emirates and Ethiopian Airlines. According to the model, Kenya Airlines will operate as a unit of state-owned holding companies.
Kenya Airways will become one of the four subsidiaries in a state-owned aviation holding company. The other subsidiaries include Nairobi’s Jomo Kenyatta International Airport, Kenya Airports Authority and Kenya Civil Aviation Authority.
Currently, Kenya Airways is 48.9 percent state-owned, while lenders hold 38.1 percent, and Air France-KLM holds 7.8 percent, Kenya Airways employees 2.4 percent and individual investors 2.8 percent. The airline’s market valuation has put lenders’ stake at Sh6 billion. Lenders who invested in Kenya Airways during the 2017 restructuring might be paid through a 10-year treasury bond, the local media reported.