Lack of House quorum leaves KQ’s bailout plan in limbo
What you need to know:
- So disinterested were MPs that even after the bell was rung for 10 minutes to call them into the House, there were still too few of them in the chambers for it to be properly constituted.
- The National Treasury is seeking approval to grant Kenya Airways Sh4.2 billion emergency shareholder loan. The National Assembly Budget and Appropriations Committee approved the loan meant to help the national carrier address its cash flow problems.
- Airline chief executive Mbuvi Ngunze has expressed optimism in recovery efforts for the carrier, which has been flying in turbulent financial times since 2009.
Lack of quorum in the National Assembly Wednesday left a government plan to bail out Kenya Airways hanging in the balance as members have only today to approve the emergency loan.
The debate, which was part of the National Treasury request for approval to spend an additional Sh198.3 billion before Tuesday next week, was stopped prematurely last evening due to lack of quorum.
So disinterested were MPs that even after the bell was rung for 10 minutes to call them into the House, there were still too few of them in the chambers for it to be properly constituted.
This means that the House only has today to adopt the report of the Budget and Appropriations Committee and then rush through the Supplementary Appropriation Bill.
Ruaraka MP Tom Kajwang, who was the temporary speaker, was forced to stop the proceedings an hour before the scheduled end of the sitting at 6.30pm.
GRANT KQ SH4.2BN
The National Treasury is seeking approval to grant Kenya Airways Sh4.2 billion emergency shareholder loan. The National Assembly Budget and Appropriations Committee approved the loan meant to help the national carrier address its cash flow problems.
The National Treasury’s emergency shareholder loan will be a great relief but an addition to the debt load KQ has been carrying amid a tough operating environment. Details of the credit terms have, however, remained unknown.
Airline chief executive Mbuvi Ngunze has expressed optimism in recovery efforts for the carrier, which has been flying in turbulent financial times since 2009.
“Over the last decade, KQ worked hard to successfully shed the image of an ailing airline dependent on government lifeline. Since it was privatised in the late 1990s, the airline grew rapidly, lifted by strong fundamentals and embracing a culture of competitiveness and innovation,” Mr Ngunze wrote in an opinion piece published by the Nation.
The national carrier’s earnings were affected by slow growth in passenger numbers just as it was in the middle of a heavy investment in new aircraft. It handled 2.1 million passengers over the period, an 8.2 per cent increase from 1.94 million last year.
Sinking deep into financial difficulties, the airline reported relying on debt to pay workers as income grew thinner.
“In the short term, we are experiencing a tight liquidity position driven by our business environment, hence the work we are doing on refinancing our commitments and raising cash for working capital,” Mr Ngunze wrote in the May article.
