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Kenya Government Takes Control of Kenya Airways in Debt Swap

  • Government, banks agree to convert $405.3m of debt to equity
  • Agreement dilutes shareholders including Air France-KLM
Updated on

Kenya’s government and domestic lenders agreed to convert $405.3 million of Kenya Airways Plc debt into equity, giving the state a controlling stake and diluting other shareholders including Air France-KLM.

The government, which has given Kenya Airways shilling and U.S.-dollar loans totaling $238.1 million, will increase its stake to 48.9 percent from 29.8 percent, according to statements published in the Nairobi-based Standard newspaper on Monday. Lenders owed $217.2 million will convert part of that debt into a 38.1 percent holding.