The government has approved a $350 million (approximately KSh45.4 billion) shareholder loan for Kenya Airways to support urgent operational requirements as the national carrier continues with its restructuring programme.
The funding will cater for critical expenses, including aircraft maintenance, with the money expected to be released in instalments under the oversight of the National Treasury.
The loan repayment period will extend to 10 years, with an option to convert the facility into equity.
In a separate measure, the Cabinet has approved in principle the conversion of KSh122 billion in existing government loans to the airline into an equity-qualifying tradable instrument.
The proposed restructuring is intended to strengthen Kenya Airways’ balance sheet and improve its ability to attract strategic investors.
However, the proposed arrangements remain subject to the necessary shareholder and regulatory approvals.
The latest measures come as the government seeks to support the airline’s operational needs while pursuing changes to its financial structure.
The conversion of existing loans could alter the composition of the government’s financial exposure to the carrier, depending on the final terms of the arrangement.
The approval of the new loan and the proposed debt conversion mark further steps in the government’s efforts to address Kenya Airways’ financing needs and support its longer-term restructuring plans.
