Wednesday May 10, 2023
The Kenya High Court has ordered a fresh valuation of charter carrier Bluebird Aviation (Kenya) (BBZ, Nairobi Wilson) amid a buy-out dispute between shareholders, reports Standard Media in Nairobi.
Citing lack of transparency, Commercial Court division Judge Njoki Mwangi has set aside a valuation report tabled in court last year valuing the shares of
founder Yusuf Abdi Adan at KES320 million Kenyan shilling (USD2.3 million), according to the Nation Media Group.
The judge found there was no transparency and independence in the preparation of the valuation report compiled by RSM (East Africa) Consulting Ltd on behalf of Yusuf's partners, former Kenya Air Force officers Hussein Farah and Hussein Mohammed and pilot Mohammed Abdikadir, who each own 25% of the company. The airline was founded in 1992 to transport shipments of miraa or khat to Somalia, a stimulant plant native to East Africa and the Arabian Peninsula.
However, a
shareholder fallout has seen Yusuf file
multiple legal actions against his partners over the years, resulting in the High Court directing his partners to buy him out three years ago. The valuation report assessed the value of the carrier's aircraft, land and buildings at Nairobi Wilson, reviewed its balance sheet and prepared a financial model incorporating historical performance over the preceding three years. Upon conclusion, the report was prepared and shared with the parties, and the money was wired to a judiciary account. Yusuf's shares were transferred to Abdikadir.
However, Yusuf challenged the report arguing that the KES320 million was a speculative figure. He was supplied with the report on December 6, 2021, but the airline's audited financial statements for the financial years from 2017 to 2021 were not provided as backup.
The judge directed the four parties to appoint a new valuer. If the value of the airline is found to be less, the airline would be refunded from the amount already deposited in the judiciary account. If the value is found to be more, the airline would have seven days from the new report being filed to top up the difference. The sum held in court will be released to the applicant's (Yusuf's) advocate within seven days of filing the new valuation report in court. Yusuf will bear the cost of the new valuation.
According to the ch-aviation fleets advanced module, Bluebird Aviation operates a fleet of ten (mostly leased) aircraft, including four DHC-8-100s, one DHC-8-Q400, three DHC-8-Q400(PF) freighters, and two F50s.