Kenya Airways to seek funds for next stage of restructuring

Kenya Airways will seek to raise several hundred million dollars in fresh capital in the next step of a restructuring that has seen it dispose of aircraft and announce a 15 per cent cut in staff. The Nairobi-listed airline’s share price is down almost 90% in five years. An ambitious expansion plan collapsed in the face of falling tourist arrivals to east. CE Mbuvi Ngunze said that the size of the capital raise “was still being worked out” and would be announced next month. But he added, “Nirvana would be to go to the market with a lesser requirement” than the $300m-$400m being discussed by analysts. “There’s already quite some interest in [Kenya Airways] because of our unique hub position, our investment in Africa. So people have come to the table with different ideas,” he said. “We will have to take those ideas, looking at what our requirement is, and decide what works for us.” Kenya Airways last went to the markets in 2011 with a $3.65b capital raising. It has made a loss in each of the past three years, including Ks25.7bn ($255m) in the year to March 2015, the largest in the country’s corporate history.<br/>The average occupancy of its flights, known as the load factor, fell to 63.8%, about 15 percentage points below the industry average and 8 percentage points lower than rival Ethiopian Airlines, according to data from IATA. <br/>