Kenya Airways (KQ) will get an additional State bailout of KES 34.9 billion to help the airline repay debts including to aircraft lessors.
In a letter to International Monetary Fund (IMF) managing director Kristalina Georgieva-Kinova, Treasury Cabinet secretary Njuguna Ndung’u said the financial support is contained in the supplementary budget that will be tabled at the National Assembly before the end of January 2023.
The IMF, which had entered into a 38-month programme with Kenya to help it deal with its debt vulnerabilities, pushed for the restructuring of KQ as one of the conditions of the programme.
Kenya Airways is one of the State-owned enterprises that will receive extraordinary support from the government amounting to KES 37.3 billion in the upcoming mini-budget.
The funds, the Treasury says, will help KQ repay some of the loans that are overdue to avoid default. As of November 17, 2022, KQ’s debt amounted to $835 million.
This includes all debts, loans, letters of credit facilities, and convertible equity amounts. Of this amount, U$688 million is guaranteed by the Government of Kenya.
Business Daily reports that as of end-October 2022, KQ’s payables amounted to approximately KES 44 billion out of which KES 24 billion is overdue.
These creditors include aircraft lessors, operation, and maintenance costs, landing and rental fees, fuel costs, rent, navigation, handling charges, and taxes.
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