Kenya Airways #ticker:KQ has appointed former KCB #ticker:KCB chief executive Martin Oduor-Otieno and former banker Carol Musyoka as non-executive directors to represent 10 Kenyan banks that are now the second largest shareholder in the airline.
The national carrier has also appointed Esther Koimett, the Investment Secretary, as a director, bringing Treasury’s representation on the board to three following its increased stake.
The Treasury and 10 local banks on Tuesday night signed the conversion of their combined Sh44.2 billion debt into shares, occasioning the new board appointments.
“We wish to advise that at a board meeting held today (November 16), these directors were appointed with immediate effect,” Michael Joseph, KQ’s chairman, said in a filing to the capital markets regulator.
KQ’s shareholding structure changed significantly following the just concluded balance sheet restructuring. The Treasury converted a Sh27 billion loan into equity, effectively pushing its shareholding from 29.8 per cent to 48.9 per cent.
10 local banks, who were owed Sh17.2 billion by the national carrier, on Tuesday night also agreed to convert this into equity, handing them a 38.1 per cent stake in the business.
KLM, which until this deal was KQ’s second largest shareholder with a 26.2 per cent stake, has also been diluted massively down to 7.8 per cent despite committing Sh2.7 billion in in-kind contributions.
Following the completion of the restructuring transaction, Treasury’s board representation has now increased to three from two.
National Bank of Kenya #ticker:NBK, Co-operative Bank #ticker:COOP, CBA, NIC Bank #ticker:NIC, DTB #ticker:DTK, KCB #ticker:KCB, I&M #ticker:I&M, Chase Bank, Equity #ticker:EQTY and Ecobank have now selected Ms Musyoka and Mr Oduor-Otieno to represent their interest in the business.
One of the two directors previously nominated by KLM, Ronald Schipper, retired by rotation ahead of the KQ’s annual general meeting in August and did not offer himself up for re-election. KLM will now have just one representative on the board - Joseph Veenstra.
Other shareholders in the national carrier, including the World Bank’s private investment arm the International Finance Corporation (IFC), will hold a combined 5.2 per cent stake.
Mr Oduor-Otieno served as KCB's chief executive between May 2007 and December 2012 during which he steered the tier one lender to a dominant position in terms of size and absolute profits.
He currently runs a private consultancy business (The Leadership Group) and is also on the boards of BAT Kenya #ticker:BAT and South Africa’s Standard Bank Group. He has previously served on EABL’s #ticker:EABL board as well as an adviser for Deloitte East Africa.
Ms Musyoka, a Business Daily columnist, is an experienced hand at the board level. She currently sits on the board of British American Tobacco Kenya, East African Breweries Limited and the Competition Authority of Kenya (CAK).
She also chairs the Business Registration Services (Companies Registry).
Ms Musyoka has experience in the finance industry, having served as the chief operating officer of K-Rep Bank, corporate director at Barclays Bank #ticker:BBK and as Citibank Kenya’s corporate manager.