NAIROBI, Kenya- In a move to rejuvenate its financial standing, Kenya Airways (KQ) is seeking an investors to inject fresh capital and provide technical expertise, as part of the ongoing recovery plan.
The national carrier has however ruled out the sale of shares to a strategic investor.
Capital Injection, Not Share Sale
Allan Kilavuka, the CEO of Kenya Airways, made it clear that the focus is on finding an investor who can bring additional funds to the airline rather than purchasing existing government shares.
The Kenya government, which holds a 48.9 percent stake in the airline, is exploring the possibility of relinquishing its entire shareholding to attract a deep-pocketed investor.
This investor would be expected to inject new capital and technical know-how to turn around the company’s fortunes.
“We are seeking an investor who doubles up as a complementary growth partner. Engagements and talks with potential investors are ongoing and we hope to finalize this by the end of the year,” Kilavuka said in a recent interview.
The capital injection forms the second phase of Kenya Airways’ turnaround strategy, aptly named “Project Kifaru.”
This ambitious plan aims to return the airline to a stable financial footing within three years.
Phase One focuses on improving operating profit, targeting a break-even at the bottom line by 2024. Phase Two centers on sustainability and overall company growth through capital injection.
Government’s Role and Future Prospects
The Kenyan government’s involvement in finding a strategic investor has been ongoing.
National Treasury Principal Secretary Chris Kiptoo indicated a push for a fresh equity investor who would inject capital and offer management expertise.
This shift in strategy came after the government abandoned a nationalization plan approved by MPs in 2019, which would have delisted the airline from the Nairobi Securities Exchange.
In recent developments, KQ has shown less interest in the Delta deal, with Chairman Michael Joseph stating that the airline is open to various potential investors, including Delta and South African Airways (SAA).
The strategic partnership with SAA, formed in 2021, aims to create a pan-African airline, although restructuring has delayed progress.
Seeking a capital-injecting investor rather than selling shares is a calculated effort to stabilize and grow the airline.
