Kenya Airways seeking to restructure its many debts
Kenya Airways‘ hopes to have its liabilities absorbed by the government have been dashed.
That’s because the Kenyan Government has scrapped an earlier planned nationalisation exercise for the airline.
In view of the current reality, the heavily-indebted airline is in the process of restructuring its loans. Business Insider Africa understands that the company has already commenced consultations with the likes of Seabury Consulting (a subsidiary of Accenture) and others to this effect.
Kenya’s National Treasury, which had earlier converted a $217.4 million (Sh24 billion) government debt owed by Kenya Airways into equity, confirmed that the airline will indeed hire a consultant soon to facilitate the debt restructuring bid.
Read: Gov’t urged to explore more areas to cut expenditure
Kenya Airways’ debts stood at $847 million (Sh82.5 billion) as of year end 2020. The debts are believed to have risen further since then, as the airline has continued to struggle due to the negative impacts of COVID-19 travel restrictions.
According to Bloomberg, it would cost about $1 billion to restructure Kenya Airways’ debts. So far, Kenya’s Treasury has already guaranteed the company’s debts with about $750 million.
In the meantime, the Kenyan Government has plans to dole out additional bailout funds to Kenya Airways and other state-owned corporations in 2022. Business Insider Africa earlier reported that the bailout funds would enable the struggling firms to bounce back from the economic slow-down caused by the pandemic.
The Kenyan Government still owns a 48.9% minority stake in the airline.
