Kenya Airways seeks state takeover of debt

Bloomberg

Kenya Airways Plc‘s head said the government should step in to repay $750 million of state-guaranteed debt to help the East African carrier emerge from the Covid-19 crisis that has battered the industry.
The airline is scheduled to resume repayments of the sovereign-backed debt next month, following a moratorium negotiated with lenders following the grounding of most international travel a year ago, CEO Allan Kilavuka said. “The bigger discussion though is how do you actually restructure that debt,” he said in Nairobi. “For us to do that we need government support, because as you know they have guaranteed quite a lot of our debt. There is a discussion around that.”
The government, which holds a 48.9% stake in Kenya Airways, is in the process of fully nationalising the company under a proposed law that will have units including the Kenya Airports Authority put under a holding entity. The carrier awarded London-based Steer Group a contract to review its turnaround strategy after years of losses were exacerbated by the coronavirus pandemic.
Kenya Airways plans to grow the passenger revenue it generates from charter flights fivefold to 10% by the end of this year, and has begun a new unit to operate drones, Kilavuka said.
“The good thing with charters is that the margins are better and they are more predictable,” he said. “We have noticed that business people are now more careful about travel so some of them would prefer to do charters.”