The Cabinet has approved Sh45.44 billion ($350 million) in shareholder financing for Kenya Airways to help the national carrier meet urgent financial obligations, maintain aircraft and return grounded planes to service.
In a dispatch following a Cabinet meeting chaired by President William Ruto at State House on Friday, the government said the funds would be disbursed in tranches under the oversight of the National Treasury.
The financing will have a repayment period of up to 10 years, with the possibility of conversion into equity, subject to the necessary approvals.
The Cabinet also endorsed a proposal to convert Sh122 billion in existing government loans, together with accrued interest, into an equity-qualifying tradable instrument.
The proposed conversion is intended to strengthen Kenya Airways’ balance sheet and support future capital raising.
“The measures form part of Kenya Airways’ long-term turnaround plan and are intended to safeguard an airline that contributes more than $1.3 billion annually to Kenya’s GDP through tourism, trade and regional connectivity. Implementation remains subject to the necessary corporate, shareholder and regulatory approvals,” the dispatch read.
The government holds a 48.90 per cent stake in Kenya Airways, representing approximately 2.85 billion shares, making it the airline’s largest shareholder.
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