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KQ hires American firm to advise on Sh60bn capital injection plan
Kenya Airways (KQ) has signed up a New-York based advisory firm to restructure its balance sheet and help it seek approximately Sh60 billion in long-term capital refinancing.
KQ has appointed PJT Partners as its transaction advisers, giving them the mandate of streamlining its books ahead of a debt and equity injection it expects to be complete in six to nine months.
The national carrier, which has reported losses for three straight years, has engaged the American firm as part of an ongoing restructuring expected to help the airline turn around its fortunes.
“We are at a stage where our turnaround strategy is beginning to gain traction,” said KQ chief executive Mbuvi Ngunze in a statement.
“Over the next six to nine months, we will work with PJT Partners and they will be instrumental in assisting the airline to secure its future beyond the turnaround.”
PJT Partners is a fledgling advisory and capital raising firm owned by a former Morgan Stanely dealmaker.
It spun off from the Blackstone Group a multinational investment and advisory, in October. The firm, which listed at the New York Stock Exchange on October 15, has done work worth tens of billions of dollars including the ongoing sale of Verizon Communication’s assets to Frontier for $8.6 billion.
KQ’s long- and short-term loans (and other facilities) grew to Sh105 billion and Sh52 billion respectively for the six months to September as flat-lined revenues saw it post a loss of Sh10.95 billion net loss in the period.
It reported a record Sh25.7 billion after-tax loss in the year to March 2015. The airline has already taken a Sh4.2 billion bailout loan from the Treasury and another Sh20 billion from the Afreximbank but is still in the red.
