EXTRAORDINARY GENERAL MEETING ACCEPTS KENYA AIRWAYS RESTRUCTURING PROPOSALS
(Posted 08th August 2017)
Kenya Airways yesterday held an extraordinary general meetings of the company’s shareholders with but one major item on the agenda, the financial restructuring which will see a conversion from debt to equity.
This now allows, among others, the Kenyan government to convert their loans and loan guarantees into shares with the percentage rocketing from the current 29.8 percent to a whopping 46.53 percent.
KLM’s fortunes, despite a capital injection of 2.7 billion Kenya Shillings, will however move in the opposite direction as their share percentage drops under the newly approved move from 26.73 percent to just 13.71 percent.
The result will be a re-alignment on the board of directors where the government is expected to take up an additional seat.
Fresh on board as a shareholder will be the banks whose loans equate to a share holding percentage of 35.69 percent.
Smaller shareholders are hardest hit as their holdings are greatly diluted from previously 24.02 percent to a measly 1.24 percent. Kenya Airways’ staff will benefit from a 1.9 percent shareholding, perhaps instilling a greater sense of responsibility after only two weeks ago the rabid pilots union KALPA was allegedly once again involved in withdrawing goodwill which resulted in major flight disruptions – with some sources instantly suggesting this was aimed to sway voters for today’s general elections.
Some of the individual and smallscale investors have already vowed to take their grievances to court after accusing the chairman of Kenya Airways of wiping out their investments in one fell swoop but for that it will be wait and see who, if anyone, makes good of that threat.
For now are the foundations laid to move Kenya Airways once again into calmer financial skies after the possibility of a technical bankruptcy has been removed from the horizon.