Eight commercial banks have compelled the Treasury to settle a Ksh 19.3 billion (US$149.9 million) defaulted loan on behalf of Kenya Airways (KQ) after the airline failed to meet its repayment obligations.
The lenders, among them Equity Bank, NCBA, and Cooperative Bank, rejected a proposed 6.5-year bond and insist on immediate settlement in cash.
Treasury, which had guaranteed the loan, released the funds on January 3 without parliamentary approval. The payment later appeared in the supplementary budget, which is now before Parliament for review.
Treasury Cabinet Secretary John Mbadi informed Parliament that the amount will be recovered from KQ as a shareholder loan, with repayment terms yet to be finalized.
READ ALSO: Treasury Reduces Crowdfunding Fees While Maintaining Strict Rules
Kenya Airways reported a first half-year profit in a decade but remains in a deep financial hole, with a negative equity of Ksh 123.6 billion.
The airline seeks to ease its debt burden through a debt-to-equity conversion and hopes to attract a strategic investor.
Lenders previously converted Ksh 21.6 billion of KQ’s debt into shares, giving them a 38.1 percent stake in the airline.
Treasury now holds 48.9 percent of KQ, making it the largest shareholder. Kenya Airways has struggled with heavy debt since 2013, despite an increase in passenger numbers and revenue growth.
Old Mutual General Insurance Kenya (OMGIK) is strengthening its agent and agency network to deepen…
Smaller and community-focused commercial banks have secured a vital regulatory reprieve after warning that aggressive…
Airtel Money users will soon enjoy wider access to cash services across Kenya. A new…
Roads and Transport Cabinet Secretary Davis Chirchir has denied that the government secretly awarded a…
Former Interior Cabinet Secretary Fred Matiang'i has held high-profile political talks with key leaders from…
Amboseli Eco Camp sits in Kajiado County, on the northern edge of Amboseli National Park.…