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Government raises Kenya Airways stake

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Staff Writer | November 14, 2017
The Kenyan government and domestic lenders have agreed to convert more than $400 million of Kenya Airways' debt into equity.
Kenya Airways
Africa   A $700 million financial restructuring
This is increasing the state's stake in the airline to almost 50 percent.

The airline is undergoing a $700 million financial restructuring aimed at reducing its debts and returning to profitability after posting heavy losses, including Kenya's biggest annual corporate loss of 26 billion shillings ($251 million) in the financial year 2016.

The government is converting more than $200 million of shilling and dollar-denominated loans, the airline said in a statement on Monday to the Nairobi Securities Exchange.

The agreement will increase the government's stake from 29.8 percent to 48.9 percent. Air France-KLM has a 26.7 percent stake in the airline.

The deal gives 11 local banks a 38.1 percent stake, which will be held in a special purpose vehicle called KQ Lenders Co.

Both the government and the lenders still have outstanding portions of debt to be converted at a later date, they said.