comp
The country is about to approve Kenya Airways’ restructuring plan
Friday, March 24, 2023
Kenya Airways CEO Allan Kilafuka. file image | Diana Ngella | NMG
The Kenya Airways CEO told Reuters that the Kenyan government is close to approving a restructuring plan for Kenya Airways to replace one put forward by the previous administration and supported by the International Monetary Fund.
The airline, one of Africa’s three largest, fell into bankruptcy in 2018 after an expanding campaign left it hundreds of millions of dollars in debt.
Former President Uhuru Kenyatta’s administration presented a plan in 2021 under which the government agreed to make loans and eventually assume more than $800 million in the airline’s debt.
Kenyatta’s successor, William Ruto, who took office last September, said he would cut borrowing and questioned the government’s involvement in Kenya Airways.
Chief Executive Alan Kilavoca told Reuters that a new restructuring plan was before the government.
is reading: Kenya Airways revives the position of Director of Operations and chooses George Kamal
“The government is currently in the tail end of approving this strategy,” he said in written responses to questions from Reuters.
Also responding to written questions, Treasury Minister Nguguna Ndongo said the government wanted to change KQ so it could secure a strategic investor but gave no details of the new plan.
The International Monetary Fund approved the earlier plan as part of a $2.34 billion lending program agreed in April 2021 with the government holding a 48.9% stake in the airline.
Kilavoca said the plan would include some of the same elements as the previous plan, including eliminating toll roads, but he did not say how the two would differ.
is reading: The United States issues Kenya a notice of default on a debt of Ksh57 billion
A senior KQ source, who asked not to be named, said it was not yet known whether the new plan would maintain the government’s $800 million debt collection commitment.
“It’s a big deal,” the source said.
is reading: Treasury ends KQ bailouts by December
The IMF representative in Kenya did not respond to requests for comment.
Kenya Airways will present its 2022 results to investors on Monday.