Senegal to Nationalize Airline, Sell Minority Stake by June
Senegal Airlines will be nationalized and the government will sell a minority stake in the carrier by June to prevent it from collapsing.
The government will convert the debt it holds to equity in a new company, Amadou Hott, chief executive officer of the nation’s sovereign wealth fund, said in an interview on March 20. Senegal will sell 49 percent of the airline, Hott said. The remaining 51 percent will be owned by the government and private Senegalese investors, he said. The fund will manage the government’s stake, he said.
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Currently, Senegal owns about 35 percent and the rest is held by private investors.
“We will apply a restructuring plan,” Hott said. “The state wants to develop a good airline company and make Senegal a hub for civil aviation.”
The government has sought a partner for more than a year to rescue the carrier, which was running unprofitable routes. President Macky Sall said earlier this month the airline needs new planes and managers to return to profit.
“We are in this transition phase that would bring the state to have a major stake in the company,” Senegal Airlines CEO Mayoro Racine said. “We need cash, from the state, from the shareholders or from new investors.”
Racine declined to provide details by phone on March 24. The government holds a majority of the carrier’s debt of 45 billion CFA francs ($75 million), he said.
An airline in the United Arab Emirates is in talks with the government to buy the minority stake of the restructured company, Hott said. He declined to name the airline. The new company will fire some workers to reduce costs, Hott said.
Senegal Airlines was set up in 2009 after the collapse of Air Senegal International and operated its first flight in 2011. The carrier originally aimed to fly to 15 cities in West Africa, according to its website. It has two planes.
“The idea is to transform a machine that was losing money in to a machine that makes money,” Racine said. “These difficulties are not insurmountable.
Currently, Senegal owns about 35 percent and the rest is held by private investors.
“We will apply a restructuring plan,” Hott said. “The state wants to develop a good airline company and make Senegal a hub for civil aviation.”
The government has sought a partner for more than a year to rescue the carrier, which was running unprofitable routes. President Macky Sall said earlier this month the airline needs new planes and managers to return to profit.
“We are in this transition phase that would bring the state to have a major stake in the company,” Senegal Airlines CEO Mayoro Racine said. “We need cash, from the state, from the shareholders or from new investors.”
Racine declined to provide details by phone on March 24. The government holds a majority of the carrier’s debt of 45 billion CFA francs ($75 million), he said.
An airline in the United Arab Emirates is in talks with the government to buy the minority stake of the restructured company, Hott said. He declined to name the airline. The new company will fire some workers to reduce costs, Hott said.
Senegal Airlines was set up in 2009 after the collapse of Air Senegal International and operated its first flight in 2011. The carrier originally aimed to fly to 15 cities in West Africa, according to its website. It has two planes.
“The idea is to transform a machine that was losing money in to a machine that makes money,” Racine said. “These difficulties are not insurmountable.
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