Jetlink Express Ltd finally winds up due to Sh4.5b debt

Jetlink Express Ltd has been wound up due to a debt amounting to over Sh4.5 billion owed to its creditors.

Delivering the judgement yesterday, High Court judge Farah Amin said the matter had been in court for three years yet the creditors had not been paid for five years, thereby justifying the action.

"In the course of this case, the company had numerous opportunities to pay but that did not happen. In view of the fact that this matter has been in court for over three years, I hereby order the company wound up," Justice Amin said, while granting Jetlink seven days of stay to allow them to appoint creditors.

"I have, however, allowed stay for seven days. The next step is to determine the costs, which will be fixed for next month," she said.

Finejet filed a winding up petition on March 19, 2013, alleging that Jetlink owed it Sh14 million in unpaid fuel bills. Later, more creditors joined the suit.

By 2012, Jetlink owed Sh554 million to its creditors including Aerotech Ltd, KenolKobil, Avmax Spares East Africa and Finejet. The firm also separately owes Equity Bank Sh703 million. Others owed include National Bank of Kenya and the Kenya Civil Aviation Authority (KCAA).

In total, the company owes its creditors Sh4.5 billion.

"We have been in court for a very long time fighting this matter. At least today we have an order," said Fred Athwok, the lawyer for Finejet. The airline suspended its flights in November 2012.

Jetlink Managing Director Elkana Aluvale, through court files, said the airline had suspended its operations due to an inability to transfer sums in excess of $2 million (Sh202 million) from South Sudan. The company was the first airline to start flights between Nairobi and Juba, one of its most profitable routes.

However, with most sales being in South Sudan Pounds (SSP), the airline was unable to repatriate the funds back to Kenya to support its operations.

And with the banks unable to guarantee any further credit against the airline's deposits in South Sudan due to currency and cross-border risk considerations, the airline was left with no money to support its operations.

Jetlink has been seeking means to settle the debt and at one stage, it offered its creditors shares in a recovery plan that would have seen it receive funding from CfC Stanbic Bank.

The airline even engaged in negotiations with prospective investors with a view to restructuring and resuming operations, a matter Ms Amin said yielded no fruit.

At one stage, KCAA renewed its licence for scheduled and non-scheduled air services but the creditors challenged the licence, citing the firm's inability to pay for services.