The Kenyan government has continued to address the financial obligations of Kenya Airways (KQ, Nairobi Jomo Kenyatta) by settling a further portion of guaranteed debt amounting to KES2.7 billion shillings (USD17.6 million) plus KES351.29 million (USD2.29 million) in interest during the three months ending September 2023. This information was disclosed in a report issued by the Office of the Controller of Budget (OCOB) in Kenya.
The recent payments contribute to a total of KES13.35 billion (USD87 million) that the National Treasury has disbursed thus far, following the transfer of the debt burden from the national carrier. The initial payment was made in the quarter ending December 2022, as detailed in the report, which aligns with a similar disclosure for the financial year up to June 30, released in August.
Last year, the Treasury informed the International Monetary Fund (IMF) of its intention to restructure the national carrier's debt, which involved assuming responsibility for debt incurred in 2014 from the EXIM Bank (United States of America). This strategic move aimed to enhance the management of credit risk for the national carrier, particularly concerning potential calls upon the government's guarantee. In February 2023, the Export-Import Bank issued a default notice to Kenya for overdue repayments of this USD831.2 million guaranteed loan.
The government's assumption of the airline's debt forms part of a broader initiative to restructure Kenya Airways' operations, encompassing cost reductions and network optimization. Ultimately, this endeavor aims to provide support to the carrier while minimizing the financial impact on the government.
(This article is sourced from ch-aviation.com and curated by Thetransporteronline24)
