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BBT March/April 2019 cover
March/April 2019

Kenyan govt takes larger stake in Kenya Airways

Kenya Airways

The Kenyan government has agreed to convert some of Kenya Airways’ debt into equity, which means it will own a nearly 50 per cent stake in the troubled carrier, according to state media.

Kenya Airways confirmed in a statement that the government’s debt-for-equity deal will give it a 48.9 per cent stake in the airline. The state has given the carrier a loan in shilling and US dollars totalling US$238.1 million and previously held a 29.8 per cent stake.

State media reports lenders have also agreed to convert part of the $217.2 million debt into a 38.1 per cent stake. Air France KLM currently owns 26.7 per cent of the airline.

According to the Financial Times, Kenya Airways has posted losses for the last five years, including a nearly US$253 million loss in 2016/2016. In 2016, the airline reported an operating profit of US$8.7 million, but financing costs far outweighed that figure by almost nine times.

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