Kenya airports body sees land at $10bn on revaluation

12th April 2019 By: Bloomberg

Kenya Airports Authority (KAA) expects its land holdings to be worth more than one-trillion shillings ($9.9-billion) after a revaluation is concluded in a month, CEO Jonny Andersen said.

“Since we’ll have a different balance sheet, we can go to the banks and ask for completely different financing because we’ll have so much value,” Andersen said in an interview in the Kenyan capital, Nairobi. “It will completely change the balance sheet of KAA because we are valued at a completely different rate.”

The state-owned agency last valued its 11 000 acres of land in the capital, Nairobi, in 2004 at 80-million shillings, which is “putting KAA at a huge disadvantage,” chairperson Isaac Awuondo told lawmakers on Wednesday.

The agency’s revenue was 15.9-billion shillings in the 12 months through June 2017, about 80% of which was from Kenya’s biggest airport in Nairobi. The facility has lost market share to neighbouring rival Ethiopia Airlines Group, which has invested in a new fleet and expanded the main airport in Addis Ababa into a regional hub.

KAA will have to invest in the Nairobi hub to stem the loss in market share, which now stands at 34% of regional traffic, from 47% in 2013, Andersen said.

The agency that operates 18 airports and airstrips in the East African nation owes 31.9-billion shillings from lenders including the French Development Agency, the World Bank and the African Development Bank.

KAA also plans to revise its charges taking into account inflation and other changes since it last reviewed rates more than two decades ago.

“It will make us more commercial, not so much dependent on taxes and fees,” he said. “We are charging too much on some things and too little on others, so we need to look over the whole thing to be more adjusted to the market data.”