Kenya Airways Chairman Michael Joseph has said the adoption of the National Aviation Management Bill 2020 will position the airline more favorably to compete on a level playing field regionally and globally.
The Bill was tabled in Parliament, officially opening the debate into the planned nationalisation of Kenya Airways (KQ).
If the bill is adopted by Parliament it will lead to the formation of an Aviation Holding Company to run Kenya Airways, Kenya Airports Authority (KAA) and the Kenyatta International Airport (JKIA).
“The National Aviation Sector Management Bill 2020 …will kick off the much-needed reforms in Kenya’s aviation sector. The enhanced collaboration and cooperation between sector players will position the airline more favourably in our hub, ensuring our competitiveness in the region and across the continent,” said Micheal Joseph in the KQ 2019 Annual Report.
“It is a complex process and not just nationalisation. It is also a question of how we deal with minority shareholders. All these still remain to be finalised,” Mr Micheal Joseph, KQ Chairman, and Independent Non-Executive Director said after its 44th Annual General Meeting Friday.
“We wanted to have to complete by August we will probably complete later than that,” he added.
The Kenyan government owns 48.9 percent of the national carrier and it is expected to buy out the remaining holders of 51.1 percent of the shares.
Air France-KLM owns an almost 8 percent stake in Kenya Airways.
Local lenders own a 38.1 percent stake which they acquired in 2017 after KQ was unable to service its loans of Ksh16.9 billion.
Under the proposed law, KQ will be recapitalised with a new share capital of Ksh.7.5 billion upon nationalization.
“The initial share capital of Kenya Airways shall be seven billion four hundred and eighty-two million three hundred and forty-five thousand, one hundred and seventy-four (7,482,345,174) shillings divided into seventy-four million, eight hundred and twenty-three thousand, four hundred and fifty-two (74,823,452) ordinary shares as may be varied from time to time in accordance with the provisions of the Companies Act, 2015.”
In the proposals, an authority will be established to create to be known as the Kenya Airports Authority, successor to the former Kenya Airports Authority.
Key functions of the outfit will be to own, operate and maintain Aerodromes and to construct, operate and maintain Aerodromes and other related facilities.
The initial share capital of the Kenya Airports Authority shall be sixty-six billion (66,000,000,000) shillings divided into sixty-six million (66,000,000) ordinary shares as may be varied from time to time in accordance with the provisions of the Companies Act, 2015.
The Aviation Investment Corporation will be tasked with carrying on businesses in relation to aviation activities and any other business related to or ancillary to the aviation sector as may be determined by the Board and to undertake all necessary activities necessary to construct, operate and manage such businesses.
The initial share capital of the Aviation Investment Corporation shall be one million (1,000,000) shillings divided into fifty thousand (50,000) ordinary shares as may be varied from time to time in accordance with the provisions of the Companies Act, 2015.