Kenya Airways to Repay $150mn to Treasury by Mid-2025
Kenya Airways (KQ, Nairobi Jomo Kenyatta) will be required to repay USD150 million to the Kenyan government through a shareholder loan agreement, with the terms set to be negotiated and finalized by mid-2025, Treasury Cabinet Secretary John Mbadi disclosed in a notice to the Kenyan parliament.
According to the country’s Business Daily newspaper, this follows the Treasury’s intervention as a sovereign guarantor to settle KES19.3 billion (USD150 million) of Kenya Airways’ unpaid loans.
The payment was made in cash to a consortium of Kenyan commercial banks by the end of August 2024 to avoid a sovereign default that could have negatively impacted Kenya’s credit rating.
The banks, collectively known as the KQ Lenders, rejected the Treasury’s offer of repayment through a 6.5-year bond. They hold a 38.1% stake in the airline and include Equity Bank, KCB Group, and Cooperative Bank.
On January 3, 2025, the government withdrew the funds as an emergency measure without prior parliamentary approval. Business Daily reports that the settlement is now included in a supplementary budget for parliamentary review.
Kenya Airways has yet to comment on the repayment arrangement. The development highlights the ongoing financial restructuring efforts of the airline and the government’s role in stabilizing its operations.
Source: CH-Aviation
