Kenya Airways= Loses Because Of Aircraft Lease Charges-Who Owns The Aircraft?

[Stockguru]

RV is factual. Kenyattas do not own any aircrafts. The banks lost money, the govt forced banks to convert these loans to equity. unfortunately fore banks KQ has no assets that banks can sell to exit their position. KQ is dead and should be sold or disbanded. There are numerous investigative articles on KQ debt issue. I believe the aircraft leases were part their turnaround scheme that didn't work. I believe they have surrendered a few of the aircrafts because they can't keep up with the leases

[RV Pundit]

Yes that true position. Uhuru interest here is simple - to get his bank paid. KQ has zero assets to be seized and sold. Not to lease jets to dead airline.

Ultimately a decision has to be made - for debt to be dealt with somehow. Banks really had enough time to provision for bad debts.

So KQ should be shut down - unless they can survive without treasury,

RV is factual. Kenyattas do not own any aircrafts. The banks lost money, the govt forced banks to convert these loans to equity. unfortunately fore banks KQ has no assets that banks can sell to exit their position. KQ is dead and should be sold or disbanded. There are numerous investigative articles on KQ debt issue. I believe the aircraft leases were part their turnaround scheme that didn't work. I believe they have surrendered a few of the aircrafts because they can't keep up with the leases

[Nowayhaha]

Kenyan Government is the Guarantor of that debt. Wewe skariguru you dont even know what you talking about. Atleast RV is googling as we go ahead.

RV is factual. Kenyattas do not own any aircrafts. The banks lost money, the govt forced banks to convert these loans to equity. unfortunately fore banks KQ has no assets that banks can sell to exit their position. KQ is dead and should be sold or disbanded. There are numerous investigative articles on KQ debt issue. I believe the aircraft leases were part their turnaround scheme that didn't work. I believe they have surrendered a few of the aircrafts because they can't keep up with the leases

[patel]

Precisely, either he is deliberately choosing to be ignorant or he does not know jack. How can a stokoguru be this wrong? How hard is it to understand kenyatta family with the help of Naikuni and others set up some offshore accounts named after kenya game parks, bought aircraft from boeing and leased them to KQ knowing very well if KQ was to default GOK was going to pick the tab. What a good business plan? Easy money no losses. High loss forced KQ to restructure which included leasing out some of those aircrafts to other airlines which is what KQ should have done in the first place.   

Kenyan Government is the Guarantor of that debt. Wewe skariguru you dont even know what you talking about. Atleast RV is googling as we go ahead.

RV is factual. Kenyattas do not own any aircrafts. The banks lost money, the govt forced banks to convert these loans to equity. unfortunately fore banks KQ has no assets that banks can sell to exit their position. KQ is dead and should be sold or disbanded. There are numerous investigative articles on KQ debt issue. I believe the aircraft leases were part their turnaround scheme that didn't work. I believe they have surrendered a few of the aircrafts because they can't keep up with the leases

[RV Pundit]

Googling as we go? Check this post and the dates. I simply refuse to allow your Low grade Low IQ propaganda to pass unchallenged. Kenyatta do not own any jet. They own KQ mess because they lent 4B kshs to it.

Kenyan Government is the Guarantor of that debt. Wewe skariguru you dont even know what you talking about. Atleast RV is googling as we go ahead.

[Arcadian_Dreamer]

Stockguru is another Pundit handle 

Expect Pundit to enlist the help of more handles as the elections draw closer.

[RV Pundit]

Just because you operate many handles doesnt mean everyone does it. Seek mental help.

Stockguru is another Pundit handle 

Expect Pundit to enlist the help of more handles as the elections draw closer.

[Georgesoros]

[Nowayhaha]

They are there for self interests. Nipe nikupe . Instead of shooting the bill down due to merrits or demerrits they were using the bill as pawn to get CDF funds for their own benefits.

Kimunya had to do an about turn lest the bill dies instantly as having to return it after a defeat would be next to impossible.

https://taalamu.com/state-shelves-bill-on-kq-nationalization/

[Nowayhaha]

Rv , No hard feelings but you know nothing about aviation. Better stick to growing trees and storming into Nairobi National Park.

Googling as we go? Check this post and the dates. I simply refuse to allow your Low grade Low IQ propaganda to pass unchallenged. Kenyatta do not own any jet. They own KQ mess because they lent 4B kshs to it.

Kenyan Government is the Guarantor of that debt. Wewe skariguru you dont even know what you talking about. Atleast RV is googling as we go ahead.

[RV Pundit]

Facts are very stubborn. Just show us the jets owned by Kenyatta. Simple. Otherwise Kenyatta interest on KQ is NCBA exposure after lending money to it.

In a statement to the newsroom, KQ Managing Director Titus Naikuni said the two firms, Samburu Limited and Amboseli Limited based in Cayman Islands, were incorporated by the airline's lenders Standard Chartered Bank and the African Export Import Bank (Afriexim) as part of a financing agreement to purchase 10 new Embraer ERJ-190 from South America.

Rv , No hard feelings but you know nothing about aviation. Better stick to growing trees and storming into Nairobi National Park.

[RV Pundit]

Again someone said KLM still have code sharing with KQ - it ended. I remember reading that.

Now KLM are trying to fly to Mombasa

Here we go
https://airwaysmag.com/airlines/kenya-airways-af-klm-part-ends/

[Nowayhaha]

RV, Joint venture and Code Sharing are different.
KQ will code share with all airlines in Sky Team including but not limited to KLM. The joint venture had been in existance since KLM acquired KQ shares im the 90s and it was skewed in advantage of KLM
a piece of advice . Do a research on aircraft acquisations and code sharing.

Again someone said KLM still have code sharing with KQ - it ended. I remember reading that.

Now KLM are trying to fly to Mombasa

Here we go
https://airwaysmag.com/airlines/kenya-airways-af-klm-part-ends/

[RV Pundit]

Right. That is clear. Now explain to us how Kenyatta own jets. Tell us which of 40 aircraft or 36  in KQ are owned by kenyattas.

RV, Joint venture and Code Sharing are different.
KQ will code share with all airlines in Sky Team including but not limited to KLM. The joint venture had been in existance since KLM acquired KQ shares im the 90s and it was skewed in advantage of KLM
a piece of advice . Do a research on aircraft acquisations and code sharing.

[KenyanPlato]

Noway
Show us how kenyattas would go lease aircrafts and lease them to KQ that is insolvent. Where would kenyattas get the money to pay these leases and why would a kenyatta finance manager think this is a worthy investment. Makes no sense to think that kenyattas would risk their capital is such a venture. You believe Boeing too would lease aircrafts to kenyattas when the risk of corruption which can land them in big trouble with the feds in USA. As Pundit is saying we need reave cheap propaganda to Facebook. Let us strive to provide facts. The burden of is on you to show that kenyattas own the jets and are leasing the to Kq

[Kadudu]

The time this scheme was hatched, Naikuni was CEO and CFO was Alex Mbugua. KQ was at its peak and the expansion plans were made to counter Ethiopian Airlines on the African market. Uhuru being then finance minister used his connections to get KQ to lease the planes from his family offshore companies.

Nobody says Kenyattas own the planes. They could even themselves have leased the planes. The lease KQ got from Kenyattas was way above market price. There companies in the world that have specialised on the leasing of planes. No need of KQ going to an unknown entity and leasing planes from there.

The parliamentary committee that was to do this investigation just never kicked off. Why has Naikuni since then been put to shame after years of being the darling CEO of the Kenyan press? The man has a lot of skeletons in the closet and is untouchable as he knows too much.

Noway
Show us how kenyattas would go lease aircrafts and lease them to KQ that is insolvent. Where would kenyattas get the money to pay these leases and why would a kenyatta finance manager think this is a worthy investment. Makes no sense to think that kenyattas would risk their capital is such a venture. You believe Boeing too would lease aircrafts to kenyattas when the risk of corruption which can land them in big trouble with the feds in USA. As Pundit is saying we need reave cheap propaganda to Facebook. Let us strive to provide facts. The burden of is on you to show that kenyattas own the jets and are leasing the to Kq

[RV Pundit]

Not true. AfriExim financed the Embaers from Brazil. US Eximbank financed the  Boeings.

These are asset-based financing with the aircraft serving as collateral

KQ is not leasing any planes. It was actually leasing out it's own planes to other airlines.

The time this scheme was hatched, Naikuni was CEO and CFO was Alex Mbugua. KQ was at its peak and the expansion plans were made to counter Ethiopian Airlines on the African market. Uhuru being then finance minister used his connections to get KQ to lease the planes from his family offshore companies.

Nobody says Kenyattas own the planes. They could even themselves have leased the planes. The lease KQ got from Kenyattas was way above market price. There companies in the world that have specialised on the leasing of planes. No need of KQ going to an unknown entity and leasing planes from there.

The parliamentary committee that was to do this investigation just never kicked off. Why has Naikuni since then been put to shame after years of being the darling CEO of the Kenyan press? The man has a lot of skeletons in the closet and is untouchable as he knows too much.

Noway
Show us how kenyattas would go lease aircrafts and lease them to KQ that is insolvent. Where would kenyattas get the money to pay these leases and why would a kenyatta finance manager think this is a worthy investment. Makes no sense to think that kenyattas would risk their capital is such a venture. You believe Boeing too would lease aircrafts to kenyattas when the risk of corruption which can land them in big trouble with the feds in USA. As Pundit is saying we need reave cheap propaganda to Facebook. Let us strive to provide facts. The burden of is on you to show that kenyattas own the jets and are leasing the to Kq

[Nowayhaha]

Went even to an extent of showing how business is done in Aviation but still ujuaji makes people not learn.

You don't get. Banks bought the planes on behalf of KQ. They are "leasing" it to KQ until they make the final loan repayment.

Banks do not create offshore companies to lease aircraft to local airlines. Then banks might as well create offshore companies for mortages.
As I wrote before, there are companies that specialiase in leasing of aircrafts. There was no reason for KQ to lease aircrafts from thos offshore companies. Also some of the aircrafts were later leased to other airlines at a lower rate than KQ was leasing. What sense does that make?

But this was created by the Banks themselves. I don't see any fire or smoke here.

Rv Pundit, Kadudu knows what she is talking about. For once she is right
Refer to below it will give you an insight of A/C financing.



https://www.lexology.com/library/detail.aspx?g=4e48c85e-27cb-4157-8a7e-24b2eeee7faf

An innovative solution for securing aircraft financing: Insurance-backed financing models

Turkey September 2 2019

As government-backed credits extended by US Ex-Im Bank and European export credit agencies (“ECA”) for aircraft financing have diminished, Marsh Group, a globally leading insurance broker acting as an aircraft broker in the aviation sector, has developed an insurance-backed aircraft financing product named Aircraft Finance Insurance Consortium1 (“AFIC”) with Boeing and subsequently another product named Balthazar with Airbus. BNP Paribas, a leading bank in aviation financing, offered financing in the amount of up to USD 225 million for five Airbus A321 NEO aircrafts to be delivered to Turkish Airlines in 2019 using the Balthazar model!2

The demand for air travel has been on the rise in Turkey since 2002.3 The increase is only expected to go up as the cost of air travel continues to decrease for the average customer, together with the opening of the new and higher-capacity İstanbul Airport set to become a global aviation hub. Despite the increasing demand for air travel, the total number of aircrafts in the Turkish airline companies’ fleets decreased rather sharply in 2017 due to the downsizing policies of some of these companies and remained nearly the same in 2018.

One reason for this disparity is presumably the difficulty of securing financing for aircrafts, partially due to diminishing support from ECAs4 for aircraft companies over the past few years. In the face of these difficulties, the insurance sector has filled the gap created by these governmentbacked credits provided by ECAs. A leading global insurance company, Marsh Group, has developed an insurance-backed aircraft financing product named Aircraft Finance Insurance Consortium (“AFIC”) specifically for US based Boeing aircrafts.

AFIC is reported to having financed approximately USD 3.5 billion of assets for eight airlines and two aircraft leasing companies since March 2017.5 Later on, Marsh Group issued a similar product with Airbus to ease aircraft financing named “Balthazar”, which was first used by Turkish Airlines recently. BNP Paribas, one of the leading banks in aviation financing, is said to provide financing in the amount of up to USD 225 million for five Airbus A321 NEO aircrafts to be delivered to Turkish Airlines in 2019 using the Balthazar model.

The Structure

The financing structure of insurance backed financing is similar to ECA-backed financing models in many ways. A simple outline of the typical structure can be summarized as follows:

Loan phase

• Incorporation of a Special Purpose Vehicle (“SPV”) by an airline company –this reduces the risk for the lenders as they would rather have an independent legal personality as the borrower, free from any financial distress that may be experienced by the airline company.

• Financing documents – similar to any ECA backed financing, the key finance documents will include a loan agreement between the SPV and lenders, an intercreditor agreement, and agreements covering the security package generally consisting of an aircraft mortgage, share pledge, assignment of receivables, and others based on the particularities of the deal.

Insurance phase

• Non-payment Insurance (“NPI”) – this is the key component of insurance backed aircraft financing. The SPV or parent company procures an NPI to be provided by a group of insurers in favor of the lenders. The group of insurers will then appoint an insurer representative to oversee coordination between the insurers and the lenders. The NPI mechanism will work as follows:

-If the SPV (as the borrower) fails to make the required payments to the lenders, the insurers will step-in and make the scheduled payments in lieu of the SPV;

-The content of the insurance policy can be negotiated between the parties to provide sufficient comfort to the lenders and insurers as well as the borrower and minimize the potential risks of the lenders (e.g. events of default);

-The insurance would cover 100% of the loan; and з The insurance premium may be paid in installments or in a lump sum by the SPV since it is also possible to finance the premium with the loan extended by the lenders.

Acquisition of aircrafts

• Extension of Loans and the Acquisition of Aircrafts – The lenders extend a loan to the SPV to finance the aircraft acquisition. Once the SPV acquires the aircraft, it leases the aircraft to the parent airline company.

• Repayment – The SPV uses the lease proceeds it receives from the parent airline company to pay the lenders.

• Event of Default - Upon occurrence of a continuing event of default, the insurance policy kicks in and the insurance companies will start to pay the lenders. It is worth noting that each insurer would be liable for a certain share of the loan. In line with the principles of the insurance law applicable to the insurance policy, insurers would become the successors of the lenders for the payment they have made. In other words, the insurers would replace the lenders for the portion of the payment they made, being able to use the rights that the lenders would have upon occurrence of an event of default (e.g. foreclosing the securities).

An Ideal Scheme for the Lenders

This structure is beneficial to the lenders as they shift all major risks to insurance companies. For instance, the lenders would be satisfied directly by a group of highly-rated insurance companies in cash instead of dealing with the – sometimes overly cumbersome - procedure of foreclosing the securities provided by the SPV. Another benefit of the structure for the lender comes from the incorporation of the SPV, creating a financially stable borrower remote from the risk of bankruptcy.

The structure also benefits the airline company and the aircraft manufacturer by making it easier for them to convince lenders to provide financing with the confidence brought by the insurance companies. The cost of financing is expected to be lowered by reducing the risk of non-payment significantly through 100% insurance coverage and confidence brought by the insurance companies.

The structure is similar to ECA-backed financing models. The main differences stem from the private sector insurance companies replacing the ECAs. Among others, this means that non-commercial constraints (such as domestic content thresholds) put by the ECAs will not be applicable.

The structure also benefits the airline company and the aircraft manufacturer by making it easier for them to convince lenders to provide financing with the confidence brought by the insurance companies. The cost of financing is expected to be lowered by reducing the risk of non-payment significantly through 100% insurance coverage and confidence brought by the insurance companies.

As for the insurance companies, the insurance-backed financing models provide another way for insurance companies to benefit from the available seats in the aviation sector by participating in aircraft financing transactions in addition to conventional aviation insurances. These models are appealing to insurance companies that would like to take part in and capitalize on aircraft financing transactions involving high-risk and requiring large amounts of financing.

Turkish Law Perspective

In principle, there are two fundamental aspects to the deal structure that must be evaluated from a Turkish law perspective: first, the conventional security package to be provided to the lenders, which is currently dealt with as established practice in Turkey. The second and most characterizing aspect of the deal is the insurance policy. One of the main roles of Turkish lawyers is to ensure that the insurance policy is enforceable in Turkey, as the insurance company may need to enforce the insurance policy to collect the insurance premia or to retrieve the payments it made in lieu of the SPV.

A Prospect for the Future

Even though the recent accidents that took place involving the Boeing 737 Max aircrafts and the technical errors associated with the said craft may have slowed down Boeing craft related financing, the addition of the insurancebacked financing models seem to be more than welcomed by the aviation sector around the world including Turkey.

[RV Pundit]

You have no evidence. Kenyatta interest in KQ that is proven is NCBA exposure of 7B Kshs. The jets were bought by AfriExim (Embraers) and US Exim bank (Boeings -dreamliners) - registered in special vehicles in those Island until KQ finish payment of the loans. KQ has not been leasing IN aircrafts - but leasing them out. I recall they had leased them out to Turkish Airlines.

Stick to facts - otherwise we would look like fools.

Went even to an extent of showing how business is done in Aviation but still ujuaji makes people not learn.

[Nowayhaha]

I have more than evidence but wont let it out bare because of on
obvious reasons. The people who can read between the lines already know whatsup.
Wewe google na usome magazeti.

You have no evidence. Kenyatta interest in KQ that is proven is NCBA exposure of 7B Kshs. The jets were bought by AfriExim (Embraers) and US Exim bank (Boeings -dreamliners) - registered in special vehicles in those Island until KQ finish payment of the loans. KQ has not been leasing IN aircrafts - but leasing them out. I recall they had leased them out to Turkish Airlines.

Stick to facts - otherwise we would look like fools.

Went even to an extent of showing how business is done in Aviation but still ujuaji makes people not learn.