Shares in the indebted airline have not traded since 2020, and the president says he wants to sell the government’s stake.

Trading in Kenya Airways shares has been suspended for another year, the local stock exchange says, as the troubled flag carrier struggles to return to profitability.

Shares of the airline have been suspended since July 2020 amid the COVID-19 pandemic, which has devastated global air traffic.

“The extension of the suspension is to enable the company [to] complete the operational and corporate restructuring process,” the Nairobi Securities Exchange said in a statement on Wednesday.

Last month, Kenyan President William Ruto said the government was ready to sell its entire stake in the airline, which has been deeply in debt for years.

The government has a 48.9 percent stake in Kenya Airways, while Air France-KLM has 7.8 percent. The rest is in the hands of private owners and banks.

“I am willing to sell all of Kenya Airways,” Ruto told Bloomberg News on his first visit to the United States as Kenya’s president.

“I’m not in the business of running an airline that only flies a Kenyan flag — that’s none of my business,” said Ruto, who reportedly met with executives from US carrier Delta Air Lines during the trip.

Kenya Airways’ woes worsened in November when pilots staged a days-long strike, leading to hundreds of flight cancellations and the stranding of thousands of passengers. It also defaulted on a $525 million loan from the US Export-Import Bank last year.

The shares were first suspended two and a half years ago when lawmakers considered a plan — since withdrawn — for the state to take full ownership of the airline.

The airline, whose slogan is “The Pride of Africa”, was founded in 1977 after the demise of East African Airways and now flies more than four million passengers annually to 42 destinations.

But it hasn’t turned a profit since 2012, and the government has pumped millions of dollars to keep it afloat.

Last month, the International Monetary Fund called for progress on Kenya’s structural reforms while announcing a $447 million loan to Kenya under a 38-month aid program

The IMF said “addressing vulnerabilities” at Kenya Airways and at Kenya Power, a majority state-owned company, was “urgent”.

In August, the airline reported a half-yearly loss of $81.5 million, citing high fuel costs. It was a marked improvement over the loss of $94.6 million in the prior year period.

According to local media reports, a letter from Finance Minister Njuguna Ndung’u to the IMF was cited in late December stating that Kenya Airways would soon receive an additional state aid of approximately $280 million.

Source link

By wy9m6

Leave a Reply

Your email address will not be published. Required fields are marked *