Kenya Airways Restructuring Advances

FILE: November 05, 2022 photo shows Kenya Airways planes parked at Jomo Kenyatta International Airport in Nairobi. The airline says its restructuring is moving forward.

NAIROBI - Kenya's government is close to approving a restructuring plan for Kenya Airways to replace one introduced by the previous administration and backed by the International Monetary Fund (IMF), the airline's CEO told Reuters.

A new restructuring plan is with the government, CEO Allan Kilavuka told Reuters.

"The government is currently at the tail end of approving this strategy," he said, in written responses to Reuters' questions.

Also responding to written questions, Finance Minister Njuguna Ndung'u said the government wanted to turn around Kenya Airways so it can secure a strategic investor but did not provide details of the new plan.

The airline, one of Africa's three biggest, fell into insolvency in 2018 after an expansion drive left it with hundreds of millions of dollars of debt.

The administration of former President Uhuru Kenyatta introduced a plan in 2021 under which the government agreed to provide loans and eventually take over $800 million of the airline's debt.

The International Monetary Fund (IMF) approved the previous scheme as part of a $2.34 billion lending program it agreed in April 2021 with Kenya's government, which holds a 48.9% stake in the airline.

Kenyatta's successor William Ruto, who took office last September, has said he will cut borrowing and called into question the government's participation in Kenya Airways.

A senior Kenya Airways source, who asked not to be named, said it was not not yet known if the new plan would maintain the government's commitment to taking over the $800 million in debt.

"It is a big if," the source said.

The IMF's representative in Kenya did not respond to requests for comment.

Kenya Airways will present its 2022 results to investors on Monday.