Kenya Airways, the national carrier in East Africa’s biggest economy, is in talks with three investors over plans to sell a stake in the loss-making airline and raise cash for its operations.
The airlines needs about $600 million in new debt and equity funds to finance its operations, months after it posted a record net loss of $258 million (Sh 26.2 billion) for the 2015-16 financial year.
The African carrier has posted losses for the last three consecutive years.
“We are talking to about three or four parties,” Mbuvi Ngunze, the airlines Chief Executive Officer told Reuters.
Kenya Airways received several bids from potential suitors for the stake buy-out. The airline is also in talks with banks for a review of its debt terms to provide capital to help the airlines operate in the short term, Standard reported.
The plan to acquire funding for the loss-making airlines is headed by PJT Partners, a U.S. investment banking company.
The government sought the services of the U.S. firm in February to help in raising capital for long-term operations and lead its restructuring process, after a period of sustained losses in recent years.
The airlines did not however disclose names of the interested investors.
Kenya Airways has also undertaken several measures to ensure its survival in the wake of the losses.
The national carrier sought permission from Kenya Aviation Workers Union (KAWU) to freeze annual pay rise to its unionized workers for two years from July, Business Daily reported.
It started plans to lay off 600 workers in May.
The airlines also sold its prime landing slot at Heathrow Airport to Oman Air in March, for about $ 74.1 million (Sh 7.5 billion) to raise money for debt payment.
It leased its aircraft to Turkish Airlines and Oman Air as part of efforts to rationalize its excess capacity and increase aircraft utilization, Aviation Tribune reported.
The sub-leasing and selling of the aircraft was expected to reduce the monthly fleet expenses by over $7 million.
The airlines’ shares on the Nairobi Securities Exchange have fallen down by almost 90 percent in the last five years, Financial Times reported.
The global fall in oil prices, fall in tourist numbers to Kenya and the Ebola outbreak that hit West Africa in 2014 contributed to the losses.
Meanwhile, the airlines nominated Michael Joseph, former Chief Executive Officer at Telecoms firm Safaricom, to its management board.
Kenya Airways hopes to bank on Joseph’s experience at helm of the biggest mobile phone service provider in East Africa, where he introduce revolutionary mobile-money service platform M-Pesa, to help in its turnaround plans.