The National Treasury is seeking to sell a majority stake in Kenya Airways to a private investor.
Details on the prospective sale say that the State will reduce its shareholding in the national carrier from 48.9 per cent and cut the ownership of lenders who converted their debt to a 38 per cent stake.
The sale, if it goes through, will see the new investor take over the burden of funding the loss-making business that is currently relying on bailouts from the taxpayers.
Air France-KLM owns a small stake in Kenya Airways and it remains to be seen if the multinational, previously KQ’s anchor shareholder, will sell its remaining 7.76 per cent stake.
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.
Self-entitled KQ pilots must not be allowed to kill Kenya Airways
“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 during his vetting by the National Assembly Committee on Appointments.
His sentiments came barely weeks after Transport Cabinet Secretary Kipchumba Murkomen hinted that Kenya Airways could also be split into subsidiaries. Murkomen made this suggestion during his vetting for the CS position.
