JKIA Takeover: The Kenyatta family has been linked with the Kenya Airways bid to take over the Jomo Kenyatta International Airport. According to reports, the link is facilitated by a bank that is controlled by the Kenyattas. The bank holds a significant stake in Kenya Airways.
According to a report that recently appeared in the Star Newspaper, it has also emerged that KAA board chairman Isaac Awuondo is also the Group Chief Executive officer of the Kenyatta-owned Commercial Bank of Africa.
“CBA and NIC, which are at an advanced merger stage, are said to have lent the troubled national Sh. 5 billion which they are yet to recover,” the paper reports.
Kenya Airways owes Kenyatta’s CBA Group Sh. 3.1 billion, NIC Sh. 2.1 billion, Equity Bank Sh. 5.2 billion, National Bank Sh. 3.5 billion, Co-operative Bank Sh. 3.3 billion, DTB Sh. 2.1 billion and KCB Group Sh. 2.1 billion.
If successful, KQ will run JKIA for 30 years. It has also emerged that Kenya Airways owes KAA Sh. 3.8 billion and is losing its hold of the East African market share.
“Further, an audit by KPMG is said to have revealed gaps that it wants KAA to address before further engagement with Kenya Airways on the deal,” says the report in the Star.
Kenya Airways currently controls 34 per cent of air traffic, down from the 50 per cent it held in 2011, yet it has brought KLM on board as a shareholder controlling 23 per cent.
Questions have also come up on how Kenya Airways allegedly initiated the deal before the Cabinet memo on the venture was served to KAA.
The Star further reports:
“The government, through the National Treasury, has invested in KQ in efforts to return it to a profit-maker. KLM, which signed a 22-year venture with KQ, is reported to own a 13.71 per cent stake, the government 46 per cent and 11 per cent by commercial banks. The banks converted their debts to KQ into equity.
In June last year, the Cabinet, in a policy statement, said the planned merger was part of the financial restructuring to save the airline from collapse. It was also expected to reposition and model its operations along those of its main rival Ethiopian Airlines, which runs Addis Ababa’s Bole International Airport.
The public-private partnership was to be signed last September. It would have enabled the takeover of all KAA staff and operations and expansion of its services, such as ground handling, maintenance, catering, warehousing and cargo.”
