KQ plane departs from JKIA. Kenya is considering another round of debt restructuring to keep afloat loss-making national carrier, Kenya Airways.
The National Treasury indicated this at a media roundtable Wednesday, adding that it has already injected Sh10 billion into the airline to cushion it from the financial pitfalls caused by Covid-19 disruption.
Last August, the airline, known internationally as KQ said it projects to incur a Covid-19 loss of up to Sh70 billion.
Its management said it was in talks with the government to receive support in order to remain afloat even as it hopes to return to profitability by 2024.
“We are still in discussion with the government on how much they can give us, we need a lot of money but we will not get all that we want because of the demand arising from the health sector,” KQ board chair Michael Joseph said in August last year.
While launching the resumption of domestic flights in August last year, KQ chief executive Allan Kilavuka said they were working to see efficiency, lower fixed costs, maximising on digital platforms and exploring cargo platforms for recovery that might start in 2022.
Yesterday, the acting director-general, Public Investments and Portfolio Management Directorate at the National Treasury Stanely Kamau told the forum that the government with a 48 per cent shareholding in f KQ is planning a debt restructuring programme similar to the one in 2017.
The Kenyan government and 11 banks took almost 90 per cent ownership of KQ in a $2 billion over (Sh200 billion) debt-for-equity swap to boost the airline’s books. While the government more than doubled its shareholding to 48.9 per cent and 38.1 per cent for the banks, Air France – KLM and other minor stakeholders lost significantly.
France’s aviation firm which owned 26.7 per cent saw its stake fall to 7.8 per cent. will now own 7.8 per cent.
All other shareholders, which previously owned 43.5 per cent of the company were diluted down to 5.2 per cent.
”KQ is a strategic asset for the government. This is why we guaranteed a debt worth $750 million. We foresee another round of debt restructuring to keep the airline afloat even as the nationalisation bid enters third reading in the Parliament,” Kamau said.He, however did not disclose details on the amount of debt to be restructured and timeframe.Treasury Cabinet Secretary Ukur Yatani, in the 2021 Draft Budget Policy Statement, said the government is developing strategies to […]
