US-based advisory firm Seabury Consulting has kicked off its advisory brief on the financial restructuring and revival plan for Kenya Airways #ticker:KQ in a contract expected to take six months.
The restructuring process aimed at keeping the troubled national airline afloat comes amid a planned government bailout.
“They have started work but it’s an ongoing assignment with various deliverables along the way,” Kenya Airways chairman Michael Joseph said on Friday in an interview with Business Daily.
“(They have) specific timelines - it’s a six-month contract.”
Kenya Airways tapped Seabury in early February to advise it on financial restructuring and a revival plan amid continued losses that have seen the company rely on State bailouts to keep operating.
“They will assist with the restructuring as part of the financial support from the National Treasury,” Mr Joseph said.
Seabury has over the years been appointed by several airlines around the world including Indian international airline Jet Airways, Germany’s Air Berlin, Norwegian Air Shuttle among others where it has advised them on cutting losses, increasing revenue and restructuring their debt.
“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 came at a time the Treasury’s supplementary budget estimates presented to Parliament indicated that KQ was among parastatals that are to receive 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 Covid-19 pandemic that has hurt 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 on lending to African carriers.
The Treasury had initially planned to offer Kenya Airways Sh53.4 billion in direct budget support in the fiscal year that ends in June 2022 as well as the subsequent one in what would have made it the biggest corporate bailout in the country.