Kenya Airways Starts Marketing $2 Billion Loan With AfreximbankStephen Morris
Kenya Airways Ltd., Africa’s fifth-biggest carrier, started marketing a $2 billion loan that will be used to expand its fleet.
The debt will fund the purchase of 10 Boeing Co. and 10 Embraer SA aircraft, Obi Emekekwu, a spokesman for arranger African Export-Import Bank, wrote in an e-mail. U.S. Ex-Im Bank is backing the Boeing deal and Afreximbank is being advised by EM Finance Consulting on syndication of the loan, he said.
The financing includes a $300 million portion to be used for pre-delivery payments loaned over a seven-year period and the remainder will be paid back over 10 years, Kenya Airways’ Finance Director Alex Mbugua said last year. The longer loan includes senior- and junior-ranking portions, Emekekwu said.
Kenya Airways plans to triple the size of its fleet to 107 aircraft and more than double the number of routes it flies as part of a 10-year expansion plan, it said in March 2012.
The country’s government owns 30 percent of the airline and Air France-KLM Group is its largest shareholder with a 26 percent stake, Emekekwu said. It operates from Nairobi’s Jomo Kenyatta International Airport.