KQ Gets KSH5 Billion Boost from Government amid Nationalization Plan

An additional KSh5 billion commercial loan has been pumped into Kenya Airways (KQ), by the government, through the National Treasury as it struggles to remain afloat, even as its nationalization plans are still underway.

“The government through the National Treasury made a loan on commercial terms to KQ of Sh5 billion for the purpose of enabling it to (i) complete the scheduled engine overhaul programme of its E190 Embraer fleet and (ii) fund its working capital requirements,” said KQ in a statement.

KQ intends to also use the funds to complete the scheduled engine overhaul program on its E190 Embraer fleet this, according to a statement.

Lately, Kenya Airways has been on the brink of starvation due to the suspension of flights to Guangzhou amid the coronavirus menace, thus suffering an $8 million loss.

The Ksh5 Billion upsurges the national carrier’s indebtedness to the government –its top shareholder with a 48.9 per cent stake.

On the other hand, the government also holds another Sh7.7 billion worth of convertible debt.

In 2017, the government converted Sh16.8 billion worth of loans it had given to the company into shares as part of the airline’s debt reform.