Kenya Airways gets $240 million in loans from government, Afrimexbank
02 September 2015, 21:27
Nairobi - Kenya has provided a 4.2 billion shilling ($40 million) loan
to loss-making Kenya Airways , the country's finance minister said, while
African Export-Import Bank (Afreximbank) has approved a $200 million bridging
loan for the airline.
The money is needed to support Kenya's national carrier,
which has not made a profit in three years because the country's tourism
industry has suffered fallout from a number of Islamist militant attacks.
The airline, part-owned by Air France-KLM, also has rising
debts from new plane purchases and its losses for the year to March increased
to 29.7 billion shillings from a 4.86 billion shillings a year earlier.
Kenya has estimated the carrier will need a $500-600 million
bailout but a precise figure will depend on a turnaround plan being prepared by
McKinsey and Seabury consultants.
Finance minister Henry Rotich said Kenya's government, which
holds a 29.8 percent stake, had provided the 4.2 billion shilling loan to help
the airline meet its operational requirements and pay off suppliers of fuel and
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The company told investors in July it had sought the $200
million loan from Cairo-based Afreximbank.
"This short term facility will be received in two
tranches of $100 million each," Finance minister Henry Rotich told a
committee at the Kenyan senate on Tuesday.
"Once the long-term capital requirements are firmed up
based on the approved turnaround plan, the government in consultation with
other shareholders will review its options, including equity injection and/or
loan guarantees," Rotich said.
Until its problems of the past few years, the carrier was
regarded as a model of successful privatisation after its listing in 1996
turned it into a profitable company.