Kenya rethinking Air France/KLM partnership in Kenya Airways
Kenya’s government is reviewing its partnership with Air France-KLM in Kenya Airways Ltd., which needs about $600 million to recover after posting a record loss, Treasury Secretary Henry Rotich said.
The state may increase its shareholding in the airline if a capital injection “dilutes shares” of other principal shareholders, Rotich said in an interview Wednesday on Citizen TV, a Nairobi-based broadcaster. Any additional funding would include a mixture of debt and equity and would depend on a turnaround strategy expected from the airline’s management soon, he said.
It’s “difficult for Kenya Airways to borrow long-term” because of the loss it made, Rotich said.
Kenya Airways, sub-Saharan Africa’s third-largest carrier, said July 30 it will borrow $200 million and sell assets after posting a dull-year loss of 25.7 billion shillings ($255 million), the biggest in the nation’s corporate history. The shares have dropped 19 percent since the announcement to the lowest level in almost 13 years.
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