National carrier Kenya Airways has posted a 20.5 per cent decrease in losses after a string of crippling debts that has pushed it to brink of insolvency.
The troubled airline has recorded a Sh3.8 billion loss after tax for the six months period ending September 2017 against Sh4.8 billion in last year’s corresponding period.
Chief executive Sebastian Mikosz has attributed the result to a rise in the airline's operating profit from Sh949 million to Sh1.4 billion and increased passenger numbers.
The green shoots of hope comes in the wake of a recovery plan to claw Kenya Airways from the troubles it has sank in.
Recently, Nairobi Stock Exchange (NSE) suspended the trading of Kenya Airways’ Sh7.9 billion worth of shares to allow for restructuring of the ownership and allow the listing of additional shares.
“Notice is hereby given on the suspension in trading of Kenya Airways PLC effective November 15, 2017 up to and including November 28, 2017. The suspension is to facilitate the share split and simultaneous consolidation of the company’s shares which forms part of the Kenya Airways PLC capital transaction,” the NSE said in a notice.
The Sh207.5 billion debt restructuring exercise also entered into a debt-equity swap deal with its lenders after wallowing in a weak liquidity ratio of Sh45 billion in its financial year ending March 2017.
Under the arrangement, a consortium of local banks agreed to convert the debts owed by KQ into equity. A move that positioned them as the second largest shareholder at the carrier with 38.1 per cent stake as the state controlled 48.9 per cent.
“We will pay less now to allow us a bit of time to reshape the business to pay a bit more on the tail end,” former CEO of KQ and financial advisor in the exercise said on the move.