Two African airlines are moving closer to privatisation, as Kenya Airways seeks an airline investor and Air Tanzania awaits the government's plan for its intended sell-off.
International Finance Corporation, the World Bank body advising the Kenyan government, has written to all Iata members requesting expressions of interest in buying a shareholding of around 20 per cent in Kenya Airways.
Short-listed airline bidders will be invited to produce a cooperation plan, make an offer, and indicate whether they propose to inject capital into the airline as well.
Last year's $128 million recapitalisation boosted Kenya Airways' net worth to $33 million, with $49 million of longterm debt and share capital of $47 million. In the financial year to 31 March, Kenya Airways doubled its trading profit to $14 million before exchange effects. The targeted profit for 1995/6 is $19.9 million on revenues of $166 million.
A deal with an airline partner may be in place by September. This will be followed by a private placement of 20 per cent of the shares to Kenyan financial institutions and then a public flotation of around 30 per cent on the Nairobi stock exchange. Employees will be allocated 10 per cent while the government will retain 20 per cent.
Meanwhile Air Tanzania has asked local institutions for tenders to gauge interest. The state's plan has not been finalised but it will probably sell two-thirds of the carrier.
Air Tanzania reduced staff numbers by one-third in 1993. Despite competition and low domestic fares the 1993/94 profit was TSch2.57 billion ($4.5 million) on turnover of TSch9.77 billion.
Source: Airline Business
