The National Treasury will seek a foreign strategic investor to buy a controlling stake in Kenya Airways (KQ) as a path of returning the national carrier to profitability.
Treasury Principal Secretary nominee Chris Kiptoo told MPs the government will push for a fresh equity investor who is expected to inject capital and offer management expertise in the next step of restructuring.
If the sale goes through, it would see the State reduce its shareholding from 48.9% and cut the ownership of lenders who converted their debt to a 38% stake.
Treasury says Kenya will prefer a cash-rich foreign airline as a strategic investor in a plan that could offer the national carrier aviation expertise and cut its reliance on the State for operational cash.
As Business Daily reports, the fresh restructuring plan comes after the State dropped the favoured long-term solution that was anchored on nationalisation of the airline.
The plan approved by lawmakers in July 2019 would have led to the delisting of the airline from the Nairobi Securities Exchange (NSE).
Early this month, the Cabinet approved a decision to have the Government of Kenya take over the payment of a $525 million US Export-Import Bank loan it guaranteed for Kenya Airways (KQ), after the national carrier failed to meet its repayment obligations.
In its latest Annual Debt Management Report (2021/2022 fiscal year), National Treasury reported that the government in 2017 guaranteed part of the $841.6 million 10-year facility running until FY2027/28 that the airline took to purchase seven aircraft and one engine.