Connect with us

MANAGEMENT

Mbuvi Ngunze: KQ must remain focussed

Published

on

Former kenya Airways CEO Mbuvi Ngunze. He was retained in an oversight role to oversee airline’s balance sheet restructuring.

K24 TV’s Brenda Kerubo had a chat with Kenya Airways ex-CEO Mbuvi Ngunze on his
time at the airline and his views for the future. Here are excerpts:

Q: As an advisor to the Kenya Airways board, what exactly does the role entail?
A: Over the last four, five months since I stepped down as chief executive officer, l have been
helping to guide as advisor to the board on the financial restructuring process.

Last year in July, we said operational restructuring on its own was not sufficient and that we needed to optimise the balance sheet of KQ. So we said we were going into a capital optimisation process, which are three objectives: one, to deleverage, that is, to reduce the debt on the balance sheet.

Secondly, to improve the liquidity to ensure KQ has a bit more cash and third to find the easiest way to implement it. So we have been running with that idea since that time.

Q: What exactly was your role in securing the debt-swap transaction?

A: I was at the forefront together with our financial advisors to negotiate the process. First of all, we had to agree with the government as it was going to convert its debt into equity. Secondly, we had to work with 11 local banks in terms of their role in conversion of their debt to equity. If you look at the balance sheet of KQ it is in negative equity.

That is, there are more liabilities than there are assets and, therefore, we needed to reshape that to have some of that debt converted to equity. The conversation with banks was not easy because banks are not naturally owners of shares. So we had to find a vehicle through which the banks could own the shares of KQ but still keep a debt-like instrument.

And that is why we created KQ Lenders Company as a special purpose vehicle to hold the shares in the company while the banks have a debt in the KQ Lenders Company. Those deliberations take time.

READ: Funguo eyes more capital to diversify investment portfolio

We had also to negotiate with other lenders of KQ. Operating lessors, people who lease assets into Kenya Airways for use and people who financed assets that are owned by KQ. We had to negotiate with them to change the profile of payment so that the airline could get a longer window to pay its debt.

Q: Apart from restructuring, what else needs to be done to turn around Kenya Airways back to profits?

A: KQ must continue to stay focused on its strategy. We set a strategy around winning in Africa. Being in a competitive landscape, you have to define and be the best in what you want to be.

The second part is in having the right partnerships. You can’t fly everywhere but you can fly to those places with the right partner. I don’t want to pre-determine what KQ is doing today. But l think the evolution of the operational restructuring and the turnaround will help to deliver that value in time.

Q: Now that the capital optimisation is over, what next move after Kenya Airways?

A: I am taking time off. I said as soon as I finish my role at KQ, I want to take three months off.

Nokia 8 - Share Both sides of the story.

Business Today is the leading independent online business website in Kenya. Started in 2012 by a veteran business journalist, it has a huge following both in Kenya and abroad. It covers various business and related issues. Email editor at: [email protected]

Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News Updates

Health20 hours ago

Former TV presenter Louis Otieno goes deaf

The only way his hearing can be fixed is by having a procedure undertaken in India called Cochlear implant

Health20 hours ago

Five surprising causes of hearing loss

The number-one cause of deafness is probably quite an obvious one: age. Most people’s hearing begins to decline from 30...

NEWS3 days ago

Blind couple celebrates their love in style

As the world marked Valentine’s Day on Wednesday, visually challenged Joseph Mwaniki decided to surprise his blind wife of 27...

NEWS3 days ago

Aboud Rogo’s widow jailed for 10 years

Haniya Said was found guilty of conspiracy for supporting an attack in which three women fire-bombed the port city's main police...

Health3 days ago

Kenya says open to more insurance investors

Kenya has a population of 45 million people, according to Kenya National Bureau of Statistics and the government says it...

NEWS3 days ago

Quit if you can’t deliver, Uhuru tells new Cabinet

President said he expected his new Cabinet to help in the achievement of the Big Four Agenda that will transform...

NEWS3 days ago

Jubilee MP Alfred Keter arrested for Sh633m fraud

Recently, he was among the four Jubilee legislators kicked out of house committees for defying a State House order on...

NEWS3 days ago

I stopped Kalonzo from taking oath, churchman says

Arch Timothy Ndambuki says together with 19 clerics from the county they met Kalonzo prevailed upon him to keep off...

NEWS4 days ago

High Court revokes Miguna’s deportation

Justice Luka Kimaru directed the government to deposit Dr Miguna’s revoked passport at the court within seven days

Health4 days ago

Where patients give witchdoctors first priority

Professional diagnosis by doctors in hospitals is sought as a last resort after the traditional healers have failed

Advertisement



Trending