Kenya government takes control of Kenya Airways in $200 million debt swap agreement

The Kenyan government and domestic lenders have agreed to convert more than $400 million of Kenya Airways’ debt into equity, 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. Read the full story here.