Troubled Kenya Airways has tapped US-based consultant Seabury Group to advise it on financial restructuring and a revival plan amid a government-backed bailout.
Troubled Kenya Airways #ticker:KQ has tapped US-based consultant Seabury Group to advise it on financial restructuring and a revival plan amid a government-backed bailout.
“They will assist with the restructuring as part of the financial support from the National Treasury,” Kenya Airways chairman Michael Joseph said while confirming the deal.
Seabury has over the years been appointed by several airlines around the world including Indian international airlines Jet Airways, German air Berlin Air, Norwegian Air Shuttle among others where it has advised them on cutting losses, increasing revenue and restructuring their debt in some airlines.
“Seabury Consulting, now part of Accenture, offers a unique range of expertise specific to the aviation industry that complements Accenture’s global capabilities, solutions and services to help propel airlines into the future,” says the firm on its website.
The appointment comes at a time the Treasury’s supplementary budget estimates presented to Parliament on Tuesday indicate that KQ was among parastatals that received a Sh26.5 billion bailout.
The national carrier needs money for the maintenance of grounded planes, payment of salaries and settlement of utility bills such as security, water, electricity and parking as well ease the effects of the virus that has obliterated global demand for travel.
Without State aid, the airline risked running out of money in the near future against the background of unease among banks about lending to African carriers.
The Treasury had targeted offering Kenya Airways Sh53.4 billion in direct budget support in the fiscal year that ends in June 2022 as well as the subsequent one, making it the largest corporate bailout.
The nationalisation plan approved by lawmakers in July 2019 would have led to the delisting of the airline from the Nairobi Securities Exchange (NSE) #ticker:NSE .
KQ said recently it is fast-tracking negotiations to launch common initiatives with South African Airways (SAA) with which it signed a pact last year to establish an African airline by 2023.