KENYA AIRWAYS GETS BOARD APPROVAL FOR ARRANGING FINANCING FOR 20 AIRCRAFT
The Board of Directors has given Kenya Airways management approval to arrange for the pre-financing of as many as 20 aircraft, comprising 9 B787-800 Dreamliners, 1 B777-300ER and 10 Embraer 190s and the deal was concluded today already in Nairobi as the airline, according to a regular source in Embakasi, has no time to waste.
Kenya Airways had back in March invited financial bids by export finance institutions and AFREXIMBANK, baed in Egypt, emerged as the bank with the best package deal. Covered are all pre-delivery costs and final payments on delivery of the new jets, which will begin to join the fleet between now and the end of 2014.
AFREXIMBANK termed the deal with Kenya Airways as a major breakthrough and their CEO Jean-Louis Ekra was quoted at the signing ceremony in Nairobi to have said: We at Afreximbank are truly honoured to support one of Africas leading carriers, Kenya Airways. The fleet expansion programme supported by the proposed financing promises to keep Kenya Airways ahead of its peers in the years ahead, and more importantly facilitates intra-African trade, which is at the core of Afreximbanks mandate. In implementing this important mandate, Afreximbank will further its efforts towards modernisation of the African aviation sector, one of the key enablers of intra-African trade.
Dr. Titus Naikuni, CEO and Group Managing Director of Kenya Airways in his response said: Our 10 year strategy is quite robust, based on sound business projections. The new deliveries financed by AFREXIM, will serve both capacity increase as well as allow for replacement of aircrafts that are due for retirement. The Dreamliners will replace the 767s whilst the E190s will be used for capacity expansion on the Africa/regional routes. Africa is said to be the next economic growth frontier, it is therefore important to have an efficient transport infrastructure. Transport is an important component in economic development as it opens up markets allowing access to goods and services. Our Jomo Kenyatta International Airport hub is currently being expanded to effectively meet the growing traffic; the airport is centrally located to effectively open up Africa to the world.
(Dr. Titus Naikuni is seen here with Mr. Ekra exchanging the financial instruments after the formal signature)
The African Export-Import Bank (Afreximbank) is a trade-finance-focused development bank that was established in October 1993 as supranational trade development institution to finance and promote trade between African countries and between Africa and the rest of the world, with its headquarters in Cairo, Egypt
As a supranational institution, the Bank enjoys certain privileges and exemptions in its member states under an establishment charter that also grants the Bank a preferred creditor status in its countries of operation. The Bank was created as a profit-oriented Multilateral Development Bank (MDB), with a mixed public-private shareholder base, focusing on private sector loans, guarantees and advisory services.
The Banks shareholder base is split in a three-tier structure with Class A shareholders comprising African states, central banks and public institutions, such as the African Development Bank (AfDB), Class B made up of African financial institutions and private investors, and Class C composed of non-African investors (mostly international banks and export credit agencies such as Standard Chartered Bank, HSBC, Citibank, China Exim Bank, and Exim India amongst others)
Afreximbank is rated BBB- by Fitch and Standard and Poors and Baa2 by Moodys. All ratings have a stable outlook.