KCB Group Plc is pursuing defaulters as Kenya’s biggest lender combines recently purchased National Bank of Kenya Ltd. into its operations, Bloomberg News reported. “You’ll see more actions, more demand letters going after our customers” who aren’t repaying loans, KCB Chief Executive Officer Joshua Oigara said on the sidelines of a conference in Nairobi last week. “Next year is the real recovery period for the loans we have for NBK.” The acquisition of state-owned NBK, which has 49% of its loans classified as non-performing, will almost double KCB’s ratio of bad debts to 12%.
Kenya’s loss-making Mumias Sugar Company has been placed under receivership to protect its assets and maintain its operations, local lender KCB Group said on Tuesday, Reuters reported. “The Bank has appointed Mr. PVR Rao (Tact Consultancy Services) as the sugar company’s receiver manager,” KCB said in a statement, giving no more details. Mumias, which used to be the East African nation’s leading producer at more than 250,000 tonnes a year, has been beset by poor management and mounting losses in recent years.
Kenya Airways must avoid picking a board packed with politically-connected individuals after it is renationalized in order to ensure future success, its chairman said on Tuesday. The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, was privatized 23 years ago but sank into debt and losses in 2014, Reuters reported. Lawmakers voted to re-nationalize it in July. Chairman Michael Joseph said the requirement for professionals to be put in charge of the airline is being built into draft laws that will guide the renationalization.
Kenya will take at least 21 months to take back full control of its national carrier Kenya Airways, buying out minority shareholders and converting shares held by banks into Treasury bonds, a lawmaker briefed on the transaction said. The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, was privatised 23 years ago but sank into debt and losses in 2014, Reuters reported. Lawmakers voted to re-nationalise it this week.
Kenya’s parliament voted on Tuesday to nationalise the country’s main airline Kenya Airways to save it from mounting debts, Reuters reported. The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, has been struggling to return to profitability and growth. A failed expansion drive and a slump in air travel forced it to restructure $2 billion of debt in 2017. The airline later proposed taking over the running of Nairobi’s main airport to boost its revenue.
Kenya’s East African Cables and its parent firm TransCentury Ltd have completed a debt restructuring deal that has reduced the group’s debt by almost half, they said on Monday, Reuters reported. TransCentury, which was founded by a group of Kenyan investors in 1997, invested in a range of infrastructure companies, including East African Cables but has struggled with a heavy debt burden, losses and a plunge in its share price.
A Kenyan parliamentary committee on Tuesday recommended nationalising Kenya Airways as part of an effort to turn around the loss-making airline, Reuters reported. The transport, public works and housing committee also proposed setting up of an aviation holding company with four subsidiaries, one of which would run Kenya Airways, which is 48.9% owned by the state and 7.8% by Air France-KLM. Under the proposals, which still need to be debated and voted on by parliament, another arm of the holding company would operate Nairobi’s main international airport.
Kenya will more than double its capital gains tax rate to 12.5% from 5% to bring it in line with international standards, Finance Minister Henry Rotich said in budget proposals to parliament on Thursday, Reuters reported. Analysts said the move showed the government had opted to squeeze already hard-pressed taxpayers, rather than cut expenditure, to make ends meet. “They are basically trying to get more and more out of a small tax base,” said Kenneth Minjire, head of securities at Nairobi-based Genghis Capital.
Kenya Airways plans to double its fleet over the next five years, its chairman said on Monday, as the loss-making carrier combats regional rivals like Ethiopian. The Kenyan airline, which is 48.9% government-owned and 7.8% by Air France-KLM, restructured $2 billion of debt in 2017 and is opening new routes as it seeks to return to profit, Reuters reported. It had a fleet of 41 airplanes at the end of last year, comprising a mix of wide and narrow body Boeing planes, compared with Ethiopian which operates more than 100 planes.
Kenya’s headroom for new borrowing has shrunk since it tapped the Eurobond market this month and it is time for the country to begin reorganising its debt, central bank governor Patrick Njoroge said on Tuesday, Reuters reported. Njoroge, whose term is due to end next month, told reporters that the $2.1 billion Eurobond issuance in mid-May allowed Kenya to refinance some of its existing loans and “hopefully (give) us more room to expand the economy” and increase export capacity.