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Jetlink airline faces closure over Sh4bn debt
Tuesday September 13 2016
A Jetlink plane at Kisumu Airport. The High Court has allowed a petition to wind up the airline over a Sh4 billion debt. FILE PHOTO | NATION MEDIA GROUP
In Summary
By RICHARD MUNGUTI
More by this Author
An airline may be wound up for failing to pay creditors over Sh4 billion.
A petition to dissolve Jetlink Express Limited was allowed Tuesday by Justice Farah Amin.
JetLink Ltd was accused of failing to pay FineJet Ltd Sh16.4 million for supply of jet fuel in 2012.
“The court has before it a debt that has been admitted and the petition is allowed with costs,” said Justice Amin in her 26-page judgment.
The judge also allowed a plea that JetLink directors, Captain Elkana Aluvale and Captain Kiran Patel, be enjoined in paying the costs for the winding-up cause.
She said FineJet Ltd has satisfied all the legal requirements to apply for the winding up of the airline, which offers services in East Africa.
Seven other creditors joined the petition, filed by lawyer Fred Athuok, after an advertisement was placed in the media.
Justice Amin said the creditors who filed notices to appear alongside FineJet included Mexican CRJ Ltd (Sh2.3 billion) and Equity Bank Ltd (Sh818 million).
Others are Kenol Kobil Ltd (Sh19.6 million), Avmax Spares (E.A) Ltd (Sh58.7 million), Kenya Civil Aviation Authority (Sh14.5 million), Kenya Aerotech Ltd (Sh1.8 million) and National Bank of Kenya (Sh600 million).
Justice Amin said the petitioner had a right to seek a winding-up order as the airline had failed to pay up the debt within 21 days.
The airline’s directors have been given 14 days to respond to the request that they be ordered to pay the costs of the winding-up petition.
Jetlink faces closure over Sh4bn debt
Fastjet eyes Kenya's Jetlink amid Fly540 legal challenge
The announcement comes within hours of news that Fastjet subsidiary Fly540 has commenced legal action over the repayment of $6.78 million in debt - a move that had threatened to postpone the launch of Fastjet's planned base in Nairobi, Kenya.
"Under the terms of the MOU, Fastjet and Jetlink are working together to create a joint venture which will give a platform for the launch of the Fastjet brand in Kenya," the low-cost startup says.
Chief executive Ed Winter adds that the joint venture could see Fastjet aircraft enter the Kenyan market "within the next few months".
Jetlink suspended operations in November 2012 after encountering funding difficulties in South Sudan. The Nairobi-based carrier has a fleet of seven Bombardier CRJ100s and CRJ200s plus one Fokker F28, according to Flightglobal's Ascend Online database.
It operated services to the Kenyan cities of Mombasa, Kisumu, Eldoret and Wajir, as well as flying to Juba in South Sudan, and Mogadishu in Somalia.
"We believe the partnership will be mutually beneficial and will go a long way in meeting the current demand for capacity on Kenya's domestic and regional routes," says Jetlink chief executive Elly Aluvale.
News of the partnership came on the same day that Fastjet responded to legal action by subsidiary Fly540 over the latter's underwriting of $6.78 million in outstanding debt.
Fly540 chief executive Don Smith commenced legal proceedings after writing to Fastjet parent Lonrho on 9 January. "The debt relates primarily to the financial support given to Fly540 Tanzania, as well as branches in Angola, Ghana and elsewhere operated by Lonrho Aviation," says Fly540.
"Under the acquisition agreement, Lonrho Aviation - now Fastjet - agreed to pay off this bank debt. To date, they have not done so. This money is not owed to any individual or executive of Five Forty Aviation."
Fastjet dismissed the legal challenge by saying its acquisition of Fly540 has been "fully consummated" and that no further payments are outstanding.
"Mr Smith certified in a document signed by him on 24 July 2012 that - other than specified liabilities as set out in the document - there is no other liability or indebtedness due to him or any entity controlled by him," says Fastjet.
The legal action had threatened to disrupt Fastjet's establishment of a second base in Nairobi, Kenya - originally planned for the first quarter of 2013.
Speaking to Flightglobal before the Jetlink MOU was announced, operations director Rob Bishton confirmed that Fastjet was seeking "clarity" over unspecified "obstacles" in the Kenyan market.
"We're not going to be beholden to it [the Nairobi base] in terms of the business model for this year," he said. "But it is an important piece of the puzzle for us long-term, so when we do see movement that we're confident is clear and transparent then we will move quickly.
"We'll only go in there when we're confident that we've got good sight of all the obstacles."
Fastjet launched operations in November 2012 in Dar es Salaam, Tanzania, serving two domestic routes with a fleet of three Airbus A319s.
The Stelios Haji-Ioannou-backed carrier acquired Fly540 in a reverse takeover in June 2012. It had planned to take over the subsidiary's four air operator's certificates in Tanzania, Kenya, Ghana and Angola. Fly540 has already ceased operations in Tanzania.
Fastjet eyes Kenya's Jetlink amid Fly540 legal challenge
MY TAKE
This is the same company that Fastjet wanted to buy and refused out of thinking they could force fastjet giving them more stake in the company that was to be created fastjet Kenya! Poor them..
nomasana, sam999, NairobiWalker, hbuyosh, msemakweli, simplemind, Kimweri, Bulldog, MK254, Kafrican, Ngongo, Ab_Titchaz, mtanganyika mpya, JokaKuu, Ngongo, Askari Kanzu, Dhuks, Yule-Msee, waltham, mombasite gabriel, Juakali1980, Boda254, mwaswast, MwendaOmo, Iconoclastes, oneflash, Kambalanick, 1 Africa, saadeque, burukenge, nyangau mkenya, Teen-Upperhill Nairobi, kadoda11
Tuesday September 13 2016
A Jetlink plane at Kisumu Airport. The High Court has allowed a petition to wind up the airline over a Sh4 billion debt. FILE PHOTO | NATION MEDIA GROUP
In Summary
- The judge also allowed a plea that JetLink directors, Captain Elkana Aluvale and Captain Kiran Patel, be enjoined in paying the costs for the winding-up cause.
- Justice Amin said the petitioner had a right to seek a winding-up order as the airline had failed to pay up the debt within 21 days.
By RICHARD MUNGUTI
More by this Author
An airline may be wound up for failing to pay creditors over Sh4 billion.
A petition to dissolve Jetlink Express Limited was allowed Tuesday by Justice Farah Amin.
JetLink Ltd was accused of failing to pay FineJet Ltd Sh16.4 million for supply of jet fuel in 2012.
“The court has before it a debt that has been admitted and the petition is allowed with costs,” said Justice Amin in her 26-page judgment.
The judge also allowed a plea that JetLink directors, Captain Elkana Aluvale and Captain Kiran Patel, be enjoined in paying the costs for the winding-up cause.
She said FineJet Ltd has satisfied all the legal requirements to apply for the winding up of the airline, which offers services in East Africa.
Seven other creditors joined the petition, filed by lawyer Fred Athuok, after an advertisement was placed in the media.
Justice Amin said the creditors who filed notices to appear alongside FineJet included Mexican CRJ Ltd (Sh2.3 billion) and Equity Bank Ltd (Sh818 million).
Others are Kenol Kobil Ltd (Sh19.6 million), Avmax Spares (E.A) Ltd (Sh58.7 million), Kenya Civil Aviation Authority (Sh14.5 million), Kenya Aerotech Ltd (Sh1.8 million) and National Bank of Kenya (Sh600 million).
Justice Amin said the petitioner had a right to seek a winding-up order as the airline had failed to pay up the debt within 21 days.
The airline’s directors have been given 14 days to respond to the request that they be ordered to pay the costs of the winding-up petition.
Jetlink faces closure over Sh4bn debt
Fastjet eyes Kenya's Jetlink amid Fly540 legal challenge
- 28 January, 2013
- BY: Martin Rivers
- London
The announcement comes within hours of news that Fastjet subsidiary Fly540 has commenced legal action over the repayment of $6.78 million in debt - a move that had threatened to postpone the launch of Fastjet's planned base in Nairobi, Kenya.
"Under the terms of the MOU, Fastjet and Jetlink are working together to create a joint venture which will give a platform for the launch of the Fastjet brand in Kenya," the low-cost startup says.
Chief executive Ed Winter adds that the joint venture could see Fastjet aircraft enter the Kenyan market "within the next few months".
Jetlink suspended operations in November 2012 after encountering funding difficulties in South Sudan. The Nairobi-based carrier has a fleet of seven Bombardier CRJ100s and CRJ200s plus one Fokker F28, according to Flightglobal's Ascend Online database.
It operated services to the Kenyan cities of Mombasa, Kisumu, Eldoret and Wajir, as well as flying to Juba in South Sudan, and Mogadishu in Somalia.
"We believe the partnership will be mutually beneficial and will go a long way in meeting the current demand for capacity on Kenya's domestic and regional routes," says Jetlink chief executive Elly Aluvale.
News of the partnership came on the same day that Fastjet responded to legal action by subsidiary Fly540 over the latter's underwriting of $6.78 million in outstanding debt.
Fly540 chief executive Don Smith commenced legal proceedings after writing to Fastjet parent Lonrho on 9 January. "The debt relates primarily to the financial support given to Fly540 Tanzania, as well as branches in Angola, Ghana and elsewhere operated by Lonrho Aviation," says Fly540.
"Under the acquisition agreement, Lonrho Aviation - now Fastjet - agreed to pay off this bank debt. To date, they have not done so. This money is not owed to any individual or executive of Five Forty Aviation."
Fastjet dismissed the legal challenge by saying its acquisition of Fly540 has been "fully consummated" and that no further payments are outstanding.
"Mr Smith certified in a document signed by him on 24 July 2012 that - other than specified liabilities as set out in the document - there is no other liability or indebtedness due to him or any entity controlled by him," says Fastjet.
The legal action had threatened to disrupt Fastjet's establishment of a second base in Nairobi, Kenya - originally planned for the first quarter of 2013.
Speaking to Flightglobal before the Jetlink MOU was announced, operations director Rob Bishton confirmed that Fastjet was seeking "clarity" over unspecified "obstacles" in the Kenyan market.
"We're not going to be beholden to it [the Nairobi base] in terms of the business model for this year," he said. "But it is an important piece of the puzzle for us long-term, so when we do see movement that we're confident is clear and transparent then we will move quickly.
"We'll only go in there when we're confident that we've got good sight of all the obstacles."
Fastjet launched operations in November 2012 in Dar es Salaam, Tanzania, serving two domestic routes with a fleet of three Airbus A319s.
The Stelios Haji-Ioannou-backed carrier acquired Fly540 in a reverse takeover in June 2012. It had planned to take over the subsidiary's four air operator's certificates in Tanzania, Kenya, Ghana and Angola. Fly540 has already ceased operations in Tanzania.
Fastjet eyes Kenya's Jetlink amid Fly540 legal challenge
MY TAKE
This is the same company that Fastjet wanted to buy and refused out of thinking they could force fastjet giving them more stake in the company that was to be created fastjet Kenya! Poor them..
nomasana, sam999, NairobiWalker, hbuyosh, msemakweli, simplemind, Kimweri, Bulldog, MK254, Kafrican, Ngongo, Ab_Titchaz, mtanganyika mpya, JokaKuu, Ngongo, Askari Kanzu, Dhuks, Yule-Msee, waltham, mombasite gabriel, Juakali1980, Boda254, mwaswast, MwendaOmo, Iconoclastes, oneflash, Kambalanick, 1 Africa, saadeque, burukenge, nyangau mkenya, Teen-Upperhill Nairobi, kadoda11
