Treasury CS Henry Rotich. [Photo/the-star.co.ke]
Treasury Cabinet Secreatry Henry Rotich has hailed the decision to inject funds into ailing national carrier, Kenya Airways.
According to Rotich, the move is an informed one.
Following the move, the government will be the largest shareholder to a tune of 48.9% from the current 29.8%, which National Treasury Cabinet Secretary Henry Rotich says will go a long way in reducing the company’s financial strain.
“Kenya Airways is a strategic national asset and plays an important role to our economy and, therefore, the need for government to come in to enable trade and economic growth within Kenya and the East African region,” he added.
Speaking on Tuesday, Rotich noted that the financial restructuring will restore the confidence of key stakeholders.
In the deal, the government has has provided contingent guarantee amounting to Ksh 75 billion to the operating asset lessors and lenders.
This follows a deal proposed by the airline that will see 11 local banks convert Ksh 17.3 billion of the Ksh 22.5 billion in loans issued to the airline into equity.
“The move is to harness the power of the private sector by encouraging shareholders to take up both equity and financing opportunities to enable the airline restructure its operations and return to profitability,” Rotich said.