Kenya Airways has advised shareholders and investors to exercise caution when trading in its securities until the terms of the proposed financial restructuring are finalized and announced to the market.
In an announcement on October 9, the airline warned that the proposed conversion of approximately KSh122 billion in existing government loans into an equity-qualifying tradable instrument, as well as the potential conversion of the new KSh45.15 billion shareholder loan into equity, remains subject to the necessary shareholder and regulatory approvals.
“Shareholders and the investing public are advised that the proposed conversion of existing Government shareholder loans and proposed future conversion thereof to create or issue of new instruments or securities, will be subject to receipt of specific shareholders and regulatory approvals.
Accordingly, shareholders and investors are advised to exercise caution when dealing in the securities of the Company until the outstanding terms are determined and announced to the market in accordance with applicable capital markets laws and regulations,” read part of the announcement.
Kenya Airways to Receive KSh45.15 Billion Government Loan as Debt Restructuring Plan Advances
It added that the transaction terms have yet to be finalized and that definitive agreements have not yet been signed. The cautionary notice will remain in force and be renewed at intervals of no more than 60 days until a further announcement is made or the notice is formally withdrawn.
Kenya Airways stated the 10-year facility will support critical expenses, including aircraft maintenance, returning grounded aircraft to service and meeting other immediate operational requirements.
Under the proposed terms, the government may convert the loan into equity as part of a future capital restructuring, subject to the necessary shareholder and regulatory approvals. Alternatively, the loan may be repaid earlier under terms to be agreed between the government and the airline.
Also Read: Cabinet Approves KSh45.4 Billion Financing for Kenya Airways
Separately, the government has approved the conversion of approximately KSh122 billion in existing shareholder loans, together with accrued interest, into an equity-qualifying tradable instrument.
The proposed conversion is intended to move Kenya Airways from a negative equity position to a positive one, strengthen its balance sheet and improve its creditworthiness.
The airline said the restructuring would also support plans to raise additional capital through the market using an Investment Memorandum and facilitate the entry of suitable strategic partners and investors.
Also Read: Kenya Airways Cabin Crew: Salary Package, Qualifications and How to Join in 2026
What It Means to Investors
However, implementation of the two measures remains subject to negotiations and the signing of definitive transaction agreements, shareholder approval where required, and approvals or no-objections from the Capital Markets Authority (CMA) and the Nairobi Securities Exchange (NSE).
The transactions will also require any applicable exemptions or confirmations and other statutory, regulatory and third-party consents.
Kenya Airways said it would issue further announcements once the outstanding matters had been sufficiently determined, in line with applicable capital markets laws and regulations.
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