Kenya Airways Agrees Debt-for-Equity Restructuring Terms

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Kenya Airways will be almost 90 per cent owned by the Kenyan government and a group of 11 local banks under a restructuring deal to be unveiled on Monday, after the terms of a debt for equity swap for the lossmaking airline were agreed, the Financial Times reported. The Kenyan government will own 48.9 per cent of Kenya Airways and the banks 38.1 per cent after the debt-for-equity swap, agreed in principle in June. The big losers under the deal appear to be Air France-KLM, which owned 26.7 per cent; the International Finance Corporation, the investment arm of the World Bank, which owned 9.6 per cent; and retail investors, who owned 33 per cent of the airline. The government will convert some of its $237m of debt into 19.1 per cent of the airline, which is mired in negative equity and some $2bn in debt. Its stake in Kenya Airways before the restructuring was 29.8 per cent. A zero coupon convertible loan agreement has been agreed to cover the remainder of the debt. Read more. (Subscription required.)