The Kenyan government has announced its take over of the country’s national carrier, Kenya airways. Kenya’s Treasury Secretary (equivalent of Nigeria’s Finance minister) made the announcement today.
“The government of Kenya shall acquire effective control in Kenya Airways and it shall make an application to the Capital Markets Authority for exemption from the take-over requirements in compliance with the Take-overs regulations,”
The government will convert loans it had granted the airline amounting to $238.1 million an additional 19.1 stake, taking its total holdings to 48.9%. Lenders to the airline will also convert part of their debt into equity.
Why the Kenyan government may have taken the action
Kenya Airways in 2016 declared a$253 million loss one of the largest in Kenyan corporate history. Converting its stake, prevents creditor banks from taking over the airline.
Should Nigerian Government have rescued Nigeria Airways ?
Nigeria Airways, the country’s national carrier was liquidated by the Federal Government due to its large debt overhang. The airline reportedly owed over $100 million in debts, and only recently were pensioners of the defunct airline settled. The Nigerian government through the Asset Management Company of Nigeria (AMCON) has had to bail out two airlines Arik Airlines and Aerocontractors due to debts owed Nigerian banks running into hundreds of billions of Naira. AMCON converted the loans it had injected into the airlines into equity, and is now a key shareholder. This then begets the question Should Nigeria have rescued Nigeria Airways ?
Why the government bail outs ?
The airline industry is a difficult one to operate in as profit margins are quite thin. The carriers are also subject to various volatile factors such as petrol prices and foreign exchange rates. The depreciation of the Naira against major world currencies last year, lead to a hike in air fares and difficulties in foreign airlines accessing FX to repatriate their revenue. The FX challenges also led to a hike in the operating costs for most airlines.
Kenya Airways Ltd is the flag carrier of Kenya. The company was founded in 1977, after the dissolution of East African Airways. The airline was wholly owned by the Government of Kenya until April 1995, and it was privatised in 1996, becoming the first African flag carrier to successfully do so. The Airlines’ are traded on the Nairobi Stock Exchange, the Dar es Salaam Stock Exchange, and the Uganda Securities Exchange.
Agip shut oil facility in Bayelsa due to oil spillage, environmental pollution reported
Agip on Wednesday confirmed an oil leak, resulting in a shutdown.
The Nigerian Agip Oil Company (NAOC) has confirmed the shutdown of its Idu oilfields at Egbebiri settlement within Biseni in Yenagoa Local Government Area in Bayelsa, due to an oil spillage.
A Joint Investigative Visit (JIV) report on the incident said that the leakage at the facility could be traced to equipment failure due to a rupture at the wellhead.
According to a report from the News Agency of Nigeria (NAN), Eni, the parent company of NAOC, in a response statement, said the facility was shut down to prevent further damage to the environment.
What Eni is saying
An Eni spokesperson on behalf of the Italian Energy firm, in a statement, said, “As soon as the incident was reported, we activated our oil spill response, shut in the well, and notified government regulatory agencies.
“The Joint Investigation Visit (JIV) was carried out on 09/05/2021, with the participation of community representatives and the government regulatory agencies.
“The event occurred within the Company’s wellhead location which is paved and walled round. There is no significant third-party impact,” Eni stated.
Environmental Rights Group reports environmental degradation
An environmental rights group, Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), however, said that the incident which discharged crude and associated gas had severely polluted the environment.
The Non-Governmental Organisation said that a visit to the spill site showed pictorial evidence of the crude spreading beyond NAOC’s right of way as nearby vegetation were affected as a result of the crude impact.
The Head of Field Operations at ERA/FoEN, Mr Alagoa Morris, in a field report on the spill said the Idu fields was notorious for frequent spills caused by equipment failure.
He said, “The people of Egbebiri in Biseni kingdom have experienced several oil spills over the years. And all the oil spill incidents documented by the Environmental Rights Action/ Friends of the Earth Nigeria (ERA/FoEN) in this community environment have occurred as a result of equipment failure and on Wellheads.
“ERA/FoEN has had cause to visit the environment of Idu Well 5 and 11 located within the same place in the past and it has always been Idu Well 11 spewing crude oil into the environment.
“Available records from ERA/FoEN indicate that there have been previous oil spills from this particular Idu Well 11 operated by Agip. Before concluding this Field Report, ERA/FoEN confirmed that Joint Investigation Visit (JIV) was carried out on Sunday, 9th May 2021.
“This is why the official Spill Reference No 2021/LAR/028/058 is indicated in this report; sourced from the JIV report. Cause of spill was attributed to equipment failure,” ERA/FoEN stated.
The report quoted a resident of the community simply identified as Georgie as saying that the spill incident of May 7 spilled oil from around 10 p.m till about 8 a.m the next day before the leak was stopped adding that the level of damage was enormous.
What you should know
It can be recalled that in a similar circumstance, Shell Petroleum Development Company reported an oil pipeline spillage at its Okordia-Rumekpe 14-inch crude truck line, discharging about 213 barrels of crude oil into the Ikarama community in Bayelsa State and polluting about 1.34 hectares of land.
This new leakage is the latest in a series of oil spillages by the multinational oil exploration and production companies, which has put them in conflict with the host communities.
Nigeria records system collapse during holidays
Nigeria’s national electricity grid collapsed on Wednesday morning.
The Nigerian grid has experienced a partial collapse, dealing a blow for stay at home Nigerians during the holidays.
This was confirmed in a statement by the Eko Electricity Distribution Company (EKEDC), as seen by Nairametrics.
What EKEDC is saying about the grid collapse:
“Dear customer, there is a partial system collapse on the National Grid. Our TCN partners are working to restore supply immediately. Please bear with us.”
According to latest reports, partial restoration of power is already occurring across the country.
Nairametrics | Company Earnings
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- Seplat Petroleum Development Company postpones Q1 2021 dividend payment date.
- FMDQ approves quotation of MTN’s Commercial Paper worth N73.5 billion.
- MTN Nigeria issues a 7-Year Series 1 bond worth N110 billion.
- Caverton Offshore Support Group reports profit after tax of N520 million in Q1 2021.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.