Restructuring: Kenya Airways Receives Government’s Support
Kenya Airways has received the Government of Kenya’s support to the restructuring efforts and that the Cabinet had approved the terms of this support, which will be submitted to the National Assembly for approval by Treasury Cabinet Secretary Henry Rotich.
The support confirmed by the Cabinet included conversion of the Government of Kenya loans into equity, and provision of contingent guarantees subject to parliamentary approval in exchange for material concessions to be provided as part of the financial restructuring, which would secure future funding of the company and would more importantly NOT require Government to provide CASH as part of the restructuring.
The Cabinet took note of the strategic importance of KQ to the economy, and the efforts so far made in the restructuring of KQ and that these efforts are delivering positive results on the operational side of the business as reflected in the company’s full year results for FY2016/17.
The Cabinet also noted that to achieve the required turnaround, the company also requires a financial restructuring to reduce the overall debt burden on the Balance Sheet and to extend the repayment period for its debt.
This would stabilize the company and allow it to meet its obligations and facilitate long term growth. By so doing, it would also position the company to continue playing its crucial role in the economy.