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State gives Kenya Airways Sh5bn loan

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Kenya Airways Sh5 billion to sustain operations of the loss-making airline, which is expected to be nationalised.

The move increases the national carrier’s indebtedness to the government –its top shareholder with a 48.9 per cent stake.

The State in 2017 converted Sh16.8 billion worth of loans it had provided to the company into shares as part of the airline’s debt restructuring.

The government also holds another Sh7.7 billion worth of convertible debt.

KQ, as the carrier is known by its international code, said the new loan demonstrates the government’s commitment in ensuring it remains aloft. “The government through the National Treasury made a loan on commercial terms to KQ of Sh5 billion for the purpose of enabling it to (i) complete the scheduled engine overhaul programme of its E190 Embraer fleet and (ii) fund its working capital requirements,” the airline said in a statement.

The company also warned current and prospective investors that its proposed corporate restructuring, including nationalisation, could hurt the value of their holdings. “

The possible restructuring … once confirmed in greater detail, will have a material effect on the price of KQ’s securities. Accordingly, shareholders and investors are advised to exercise caution when dealing in KQ’s securities until a further announcement is made,” the airline said.

Among other terms, shareholders will be waiting to know the price the government will be offering to buy them out. Despite dropping to the current levels of Sh2.1, KQ’s share price represents a major premium given that the airline’s liabilities exceed its assets.

The firm reported a net loss of Sh8.5 billion in the half year ended June 2019, more than double the net loss of Sh4 billion the year before as costs rose faster than revenue. The loss saw the company’s negative equity widen to Sh16.1 billion from Sh2.4 billion, underlining the airline’s capital crisis.

Turnover in the review period rose to Sh58.5 billion from Sh52.1 billion, representing a 12.2 percent increase.

KQ’s problems have been linked to a mix of increased competition, corruption, mismanagement and a previous debt binge that continues to weigh on its balance sheet.

It is also looking at losses from the suspension of flights to China due to the coronavirus outbreak, with management putting the lost revenue at Sh800 million in the one month of flight stoppage.

The losses on the Nairobi-Guangzhou route include foregone passenger and cargo revenue.

BY Nation


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Business

VIDEO: Optiven CEO opens up about growing up in abject poverty, doing laundry for fellow students

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George Wachiuri, the CEO of Optiven Limited, has opened up about a side of him few people know about. Despite having built a multi-billion Shilling Real Estate Company and becoming one of the most recognisable names in the field, Wachiuri has remained a humble servant, who says he views his customers as associates and greatly respects and values his work mates. 

In an interview with Jeremy Damaris of Kenya Diaspora Media, he tells of how he struggled, lost money and friends, before rebounding “by the grace of God.”

A Certified Public Accountant – CPA (K) and is a former Lecturer at Daystar University, his entrepreneurial spirit developed early, and was awarded the Entreprenuer of the year 1997 by the University of Nairobi.

He is currently a PhD candidate at the Jomo Kenyatta University of Agriculture and Technology.

He holds a Masters’s degree in Business Administration (University of Nairobi), and a Bachelor of Commerce (Marketing option) Degree from University of Nairobi.

Watch as he tells his amazing story in Gīkūyū


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Cry of a Kenyan man whose Multi-Million-Shilling Apartments have gone unoccupied for 4 Years

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A landlord in Kenya has been left counting losses after his real estate retirement plan goes down the drain.

85-year-old David Ndolo from Kitengela told the media that he had lost more than Ksh10 million in rent after his multimillion apartment block stayed unoccupied for 4 years.

Ndolo says he built the multi-million-shilling property in Kitengela, Kajiado County through his pension savings. Its construction was completed in 2014.

The building consists of five bedsitters and 19 two-bedroom houses, which should earn him a total of Sh250,000 per month.

“I have watched helplessly as my retirement investment crumbles,” he lamented.

According to neighbors, his tenants started fleeing due to sewer water suspected to be coming from an adjacent building linked to a retired government official.

Ndolo’s troubles began in 2014 when over 200 tenants occupied the adjacent building and sewer water started seeping into his apartments.

He says he reported the matter to the National Environmental Management Authority and public health officials but the authorities closed the building instead.

His daughter Roselyn Ndolo said that officials ordered the closure citing that the apartments were a health hazard.

When contacted by journalists, Kitengela Public Health Officer Benard Kiluva stated that he did not have enough information on the matter since he was recently posted to the area.

Kajiado NEMA Director Joseph Kopejo promised to visit the site to probe the matter.

Government officials say Many landlords in the country have been contravening these provisions by either discharging untreated effluent into a public sewer or discharging it into the environment without an effluent discharge license.

“According to Kenyan law, it is illegal for  any person from discharging any effluent from sewer treatment works, industry or other sources into the environment without a valid effluent discharge license issued by the authority,” said a NEMA official.

 


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Kenyans in Diaspora to get a free ride from the Airport courtesy of Certified Homes

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Your developer of choice Certified Homes Ltd is offering Kenyans working and living in the diaspora FREE ride from the airport to their destinations within Nairobi metropolitan.

Certified Homes Ltd is the first developer in Kenya specialising in affordable houses to offer all Kenyans in diaspora rides from the airport free of charge.

On arrival the diasporans will receive special gift hampers courtesy of Certified Homes Ltd.
Have a look at Sukari Heights comprising of Studio, 2 & 3 br plus SQ apartments starting from Ksh 2.7M located in the most exclusive Kahawa Sukari neighborhood.

 

To book your free ride;
Call/WhatsApp +254711128128
Email: diaspora@certifiedhomes.co.ke
www.certifiedhomes.co.ke


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Special Offer: Own one starting at Ksh 3.7M


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