Kenya Airways Keeps Delisting Option Open to Protect Finances

NAIROBI (Capital Markets in Africa) – Kenya Airways Plc may revisit plans to delist from the Nairobi Securities Exchange as the loss-making carrier proceeds with a recovery strategy.

The withdrawal of Africa’s third-biggest airline from the bourse was an option considered by the company during last year’s financial restructuring but was dropped, chiefly to protect minority shareholders, according to Chairman Michael Joseph.

“There are no concrete plans to delist at the moment,” he said in an emailed response to questions. “Going forward we may revisit this again, but it is not on our action list for now.”

The airline has had three consecutive years of losses, including the worst performance in Kenyan corporate history, that forced it into austerity measures such as job cuts, a 15 percent reduction in the fleet, the culling of unprofitable routes and increasing focus on its African network.

In November, the government and domestic lenders agreed to convert $405.3 million owed by the carrier into equity, giving the state a controlling stake and diluting other shareholders including Air France-KLM. Kenya now holds a 48.9 percent stake from 29.8 percent before.

The recovery strategy is starting to bear fruit with full-year losses narrowing to 10.2 billion shillings ($101.5 million) last year from a record 26.2 billion shillings a year earlier. Its shares are down 42 percent this year after the company issued 663.5 million shares as part of the debt-for-equity swap.