Kenya Civil Aviation Authority (KCAA) last week declined to renew the air service licence for Kijipwa Aviation – the company in which former US Navy Seal Erik Prince, owns a 49 per cent stake – citing queries over the shareholding of the Mombasa-based carrier.
Mr Prince, 44, is the founder of Blackwater - the controversial defence contractor that came under fierce attack over its operations in Iraq.
“Licence not granted,” said KCAA, in a Kenya Gazette notice dated October 21, 2014; in response to Kijipwa’s application for renewal of its operating licence.
KCAA acting director-general Joseph Kiptoo told the Business Daily that the decision was informed by the uncertainty regarding the ownership of Kijipwa and non-compliance with Kenyan laws that limit foreign ownership of aviation firms.
“There are shareholding questions about the company,” said Mr Kiptoo.
Frontier Service Group Ltd (FSG), where Mr Prince is the chairman, acquired the 49 per cent stake in Kijipwa Aviation for an undisclosed amount.
The new owners planned to acquire a controlling stake in the carrier and to use Mombasa as its base to service the emerging natural resources extraction industry.
Kenya has capped foreign investment in the aviation sector at 49 per cent, meaning that licensed carriers must be majority owned by locals.
The decision by KCAA, the aviation industry regulator, deals a heavy blow to the private security baron’s plans to offer logistics, aviation and risk management services to multinationals operating in mining, oil and gas in eastern Africa.
Mr Prince had in April bought a 49 per cent stake in Nairobi-based Phoenix Aviation in a deal valued at Sh1.2 billion, making his second stab at Kenya’s aviation industry with an eye on logistics services.
The entry of Mr Prince, best known for founding the world’s largest private military Blackwater, had set tongues wagging on the emerging business opportunities as Kenya moves towards joining the league of oil producing countries.
Mr Prince had lined up 25 aircraft delivered to Kijipwa’s airstrip located on the grounds of Bamburi Cement in Mombasa, to provide specialised aviation services and aerial survey of installations such as oil pipelines to players in the extractive industry.
Source: David Herbling - Business Daily