Kenya Airways shares suspended for yet another year
Stocks in the indebted airline have not been 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 national carrier battles to return to profitability.
The airline’s shares have been suspended since July 2020 in the midst of the COVID-19 pandemic, which devastated global air travel.
“The extension of suspension seeks to enable the company [to] complete its operational and corporate restructure process,” the Nairobi Securities Exchange said in a statement on Wednesday.
— NSE PLC (@NSE_PLC) January 4, 2023
Last month, Kenyan President William Ruto said the government was ready to sell its entire stake in the airline, which has been deep in debt for years.
The government owns a 48.9 percent stake in Kenya Airways while Air France-KLM has 7.8 percent. The rest is owned by private owners and banks.
“I’m willing to sell the whole of Kenya Airways,” Ruto told Bloomberg News during his first visit to the United States as Kenya’s president.
“I’m not in the business of running an airline that just has a Kenyan flag – that’s not my business,” said Ruto, who reportedly met executives from US carrier Delta Air Lines during the trip.
Kenya Airways’ woes worsened in November when pilots staged a days-long strike, which led to hundreds of flight cancellations and stranded 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 as lawmakers were considering a plan – since dropped – for the state to take full ownership of the carrier.
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 to 42 destinations annually.
But it has not made a profit since 2012, and the government has pumped in millions of dollars to keep it afloat.
Last month, the International Monetary Fund called for progress on structural reforms in Kenya while announcing a $447 million loan for Kenya under a 38-month aid programme
The IMF said “addressing vulnerabilities” at Kenya Airways as well as the majority state-owned utility Kenya Power was “urgent”.
In August, the airline reported an $81.5 million half-year loss, citing high fuel costs. It was a marked improvement on the $94.6 million loss in the period the year before.
Local media reports cited a letter from Treasury Cabinet Secretary Njuguna Ndung’u to the IMF at the end of December as saying Kenya Airways would get an additional state bailout of about $280 million soon.