Kenya Airways close to approving new restructure plan to replace IMF-backed plan

Sources indicate that a new restructure plan for Kenya Airways is close to being approved by the East African government. This new plan would replace the one introduced by the previous administration and backed by the International Monetary Fund (IMF).

The airline, which is one of Africa’s three biggest, encountered financial difficulties in 2018 after an expansion drive left it with hundreds of millions of dollars of debt. In 2021, former President Uhuru Kenyatta introduced a plan under which the government agreed to provide loans and eventually take over $800 million of the airline’s debt.

However, Kenyatta’s successor William Ruto, who took office in September of the same year, has expressed concerns about the government’s participation in Kenya Airways and vowed to reduce borrowing. As a result, the East African government has decided to revise the previous plan and introduce a new one that better suits the current administration’s priorities.

The International Monetary Fund (IMF) had approved the previous scheme as part of a $2.34 billion lending program it agreed upon in April 2021 with Kenya’s government, which holds a 48.9% stake in the airline. It is yet to be seen if the IMF will support the new plan put forth by the East African government.

Kenya Airways is a vital national carrier that connects Kenya to the world, and the proposed restructure plan will determine its future. The airline’s financial stability is essential not only for the aviation industry but also for the country’s economic growth. The new restructure plan is expected to address the airline’s financial challenges and ensure its sustainable growth in the long term.

In conclusion, the impending approval of a new restructure plan for Kenya Airways is a significant development that will have far-reaching implications. The country’s leadership is committed to ensuring the airline’s success and providing the necessary support for its growth. The coming weeks and months will reveal more details about the new plan and its potential impact.