KQ says it has no plans to offload 29pc shares

Kenya Airways (KQ) has denied knowledge of shareholding changes at the national carrier, insisting that the government has no plans to cede control of its 29 per cent shareholding to a Gulf State.

Mbuvi Ngunze, the KQ chief executive officer, on Tuesday told a Parliamentary committee that the recent government bail-out of Sh4.2 billion is meant to allow the national carrier to stay afloat as it awaits $200 million long- term financing it is about to clinch from financial institutions.

Mr Ngunze told the national assembly’s Transport Committee chaired by Starehe MP Maina Kamanda that speculation that the airline is planning to change its shareholding has no basis.

“We have seen speculations in the media of planned changes in KQ’s shareholding. That is just speculation. There is no change of shares. The government holds 29 per cent of shares, KLM has 26 per cent while the rest belongs to other shareholders,” he said in response to questions raised by Mr Kamanda.

READ: Kenya Airways gets Sh4.2 billion Treasury bailout

The Starehe MP had sought to know whether it is true that KQ was facing serious problems that could bring the national carrier to its knees.

“There has been speculation in the public domain that KQ has immense problems which could see it go under any time. We gave you Sh4.2 billion in the supplementary budget and we want to know if that money is enough to keep your operations going,” posed Mr Kamanda.

Mr Ngunze said KQ is focusing on reducing its cost of operations and returning to profitability.

“We own assets through debts and also operating lease. The Sh4.2 billion is a bridging loan as we work for refinancing. The government and KLM stepped in to give us short term loans,” he said.

Mr Ngunze expressed hope that increased economic activity will help KQ in its turnaround plan.

The committee had invited the KQ management to help it shed light on the procurement of passenger apron buses by the Kenya Airports Authority (KAA).

The committee is investigating the controversial procurement of five Apron buses by KAA at a monthly cost of Sh11 million ($120,000).

The tender which has since been stopped after President Uhuru Kenyatta blew the whistle on the price was awarded to Relief and Mission Logistics Limited.