The Air France-KLM Group has declared its stake in Kenya Airways as a financial asset that it could offload in the market anytime. The group has also stated that its stake is too minor for it to have any significant in Kenya’s national carrier.
“The Group’s stake in Kenya Airways Ltd is 7.76 percent as at December 31, 2023. The Group has no significant influence on Kenya Airways and, due to its strategic intention, it is regarded as a financial asset at fair value through other comprehensive income under IFRS 9,” Air France-KLM Group stated in its 2023 annual report.
Currently, the government holds a 48.90 per cent stake in Kenya Airways, followed by KQ Lenders Company 2017 Limited at 38.09 per cent, Kenya Airways employees at 2.44 per cent, and Dutch airline KLM at 7.76 per cent. The remaining shares are divided among the remaining seven shareholders.
Initially, the Group held a 26.7 per cent stake in Kenya Airways. KLM had acquired this stake in 1995. This was diluted to the current levels following a rescue plan in 2017 in which local banks who were owed by Kenya Airways converted the debts into equity.
The declaration by Air France-KLM Group comes barely two months after Kenya Airways chief executive officer said in an interview that the airline is anticipating to close a deal with a foreign investor who will acquire up to 49 per cent in the airline before the end of year 2024.
“We are looking for an equity investor that can invest up to a maximum of 49 per cent,” said Kilavuka in an April 2024 interview. “This is the maximum because the rules and regulations in Kenya do not allow you to have a Airline Operating Certificate (AOC) if you have more than 50 per cent foreign ownership. The ideal investor will be the one who gives us the capitalization that we are looking for.”
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Air France-KLM Group in June 2023 opened its Africa headquarters in Nairobi as part of its strategic plan to bolster its network and enhance regional services.
The services target seven markets, including Kenya, Uganda, Tanzania, Rwanda, Djibouti, South Africa, Nigeria, and Ghana, with the addition of South Africa, Nigeria, and Ghana as new markets.
With a fleet of 522 aircraft divided between Air France, KLM Royal Dutch Airlines, and Transavia, Air France-KLM Group provides services to up to 300 destinations in 120 countries, mainly from its central hubs in Paris-Charles de Gaulle and Amsterdam-Schiphol. In 2022, we transported 83 million passengers worldwide.
