Kenya Airways is required to repay $150 million to the Kenyan government by mid-2025 following a shareholder loan agreement. The government recently settled outstanding loans to prevent default risks that would affect the country’s credit rating, after banks rejected its bond repayment proposal. The situation has now been included in the supplementary budget for parliament’s review.
Kenya Airways is obligated to repay $150 million to the Kenyan government via a shareholder loan agreement, with negotiations set to conclude by mid-2025, as per Treasury Cabinet Secretary John Mbadi’s announcement to the parliament. This resolution arises after the Treasury, acting as the sovereign guarantor, paid 19.3 billion shillings ($150 million) in unpaid loans to a consortium of Kenyan banks to prevent default risks that could negatively impact the nation’s credit rating.
The Kenyan Treasury had originally proposed repayment through a 6.5-year bond, but this offer was declined by the banks involved, collectively called the KQ Lenders, who hold a 38.1% stake in Kenya Airways. The consortium includes reputable financial institutions such as Equity Bank, KCB Group, and Cooperative Bank.
On January 3, the government accessed these funds as an emergency measure without securing parliamentary consent. This settlement is now part of the supplementary budget currently under parliamentary review.
Kenya Airways faces a significant financial obligation to repay $150 million to the Kenyan government by mid-2025, following a negotiated shareholder loan agreement. This situation arose from the government stepping in to cover the airline’s outstanding loans to prevent default, especially after a previous repayment proposal was rejected by the banks involved. The process automatically impacts Kenya’s credit rating, emphasizing the stakes of the agreement’s outcomes.
Original Source: www.ch-aviation.com
