President William Ruto is pitching for strategic investors to acquire a controlling stake in Kenya Airways.
This has been revealed by Transport Cabinet Secretary Kipchumba Murkomen. According to Murkomen, Kenya has narrowed its search to foreign carriers with financial muscle for the revival of the national carrier.
“We are doing everything possible to ensure that we no longer subsidize the airline and that is why we are looking for a strategic partner. Even on the President’s trip to the US, one of the topics for discussion is how to get a strategic partner for Kenya Airways,” said Murkomen.
The possible deal will see the government cut its shareholding from 48.9 per cent and reduce the ownership of local lenders who converted their debt to a 38 per cent stake.
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Currently, Air France-KLM owns a small stake in Kenya Airways.
The national government sold a 26 per cent stake in KQ to KLM in 1995. It then sold a 22 per cent stake to local shareholders through an initial public offering at the Nairobi bourse in 1996.
The deal offered KLM seats on the KQ board, the right to appoint certain executives, in particular the chief finance officer, and act as the technical partner for the national carrier.
KLM has since reduced its stake from 26.7 per cent after the conversion of State debt and bank loans to equity diluted the firm’s ownership to 7.76 percent.
“It is time to relook the national carrier and ensure that it continues to operate without government support. We need to bring in a strategic investor,” Treasury Principal Secretary nominee Chris Kiptoo said.