NAIROBI, Kenya, Nov 13 – About 11 banks are set to take 38.1 percent stake in Kenya Airways after regulatory approvals.
Through the KQ Lenders limited Umbrella, the banks have converted a part (Sh17.3 billion) of the debt owed to them by the Kenyan carrier to equity.
The government, on the other hand, has converted it’s Sh24 billion debt to 19.1 percent stake raising its stake to 48 percent of the ordinary shares in the airline.
“In addition to the acquisition of equity under the debt conversion and subscription agreement, the government and KQ have entered into a zero coupon ordinary mandatorily convertible loan agreement in relation to the settlement of the remaining portion of the government loans. The effect of the zero coupon ordinary mandatorily loan convertible loan agreement is the issuance of ordinary shares to the government at a future date,” Treasury Cabinet Secretary Henry Rotich said.
However, the government does not intend to make a takeover offer of the struggling airline.
KQ hopes to clear Its Sh230 billion debt in four years.
The airline is set to offer shareholders rights issues by end of the year in a move that will see shareholders re-invest in the airline after the restructuring plan takes root.
KQ cut their loss by 61 percent in 2017 to register a net loss of Sh10.2 billion compared to the Sh26 billion it recorded in 2016.
In May KQ appointed a turnaround CEO Sebastian Mikosz to take over from Mbuvi Ngunze who hired Polish expatriates as part of the airline’s management team in its efforts to return to profitability.