Kenya's cabinet has approved 350 million US dollars in shareholder financing for Kenya Airways, the National Treasury said. The money will be released gradually and is intended to help the airline pay urgent bills, maintain its aircraft and return grounded planes to service. The funds can be repaid over up to 10 years, and may be converted into equity with appropriate approvals.
The government also endorsed converting 122 billion Kenyan shillings in existing loans, plus interest, into a tradable equity instrument to improve the airline's financial position and help it raise money in future. Both measures are part of Kenya Airways' turnaround strategy. The airline contributes more than 1.3 billion US dollars annually to Kenya's economy, according to the government's assessment.