Condition near to approve Kenya Airways restructure program

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Point out close to approve Kenya Airways restructure program

Friday March 24 2023

Kenya Airways CEO Allan Kilavuka. FILE Photograph | DIANA NGILA | NMG

Kenya’s govt is near to approving a restructuring prepare for Kenya Airways (KQ) to switch just one launched by the past administration and backed by the Worldwide Financial Fund (IMF), the airline’s CEO advised Reuters.

The airline, just one of Africa’s three biggest, fell into insolvency in 2018 right after an growth push left it with hundreds of millions of dollars of credit card debt.

The administration of previous President Uhuru Kenyatta launched a program in 2021 underneath which the authorities agreed to offer loans and eventually acquire over $800 million of the airline’s credit card debt.

Kenyatta’s successor William Ruto, who took business office last September, has mentioned he will minimize borrowing and referred to as into query the government’s participation in Kenya Airways.

A new restructuring system is with the authorities, CEO Allan Kilavuka instructed Reuters.

Browse: Kenya Airways revives COO article, picks George Kamal

“The government is at present at the tail finish of approving this strategy,” he stated, in prepared responses to Reuters’ issues.

Also responding to composed questions, Treasury Cupboard Secretary Njuguna Ndung’u said the governing administration needed to convert about KQ so it can secure a strategic trader but did not offer details of the new approach.

The IMF authorized the former plan as portion of a $2.34 billion lending programme it agreed in April 2021 with the federal government, which holds a 48.9 per cent stake in the airline.

Mr Kilavuka reported the system would include some of the similar things as the previous a single, such as eradicating reduction-producing routes, but did not say how the two would vary.

Read: US difficulties Kenya a default notice for Sh57bn KQ financial debt

A senior KQ supply, who asked not to be named, explained it was not however recognised if the new plan would keep the government’s commitment to using around the $800 million in debt.

“It is a significant if,” the supply explained.

Examine: Treasury to close KQ bailouts by December

The IMF’s representative in Kenya did not reply to requests for comment.

Kenya Airways will existing its 2022 success to buyers on Monday.