- The Government of Kenya approved a shareholder loan of KSh 45.15bn (USD 350 million) for Kenya Airways to address urgent operational needs
- The government also gave in-principle approval to convert existing loans of approximately KSh 122bn into equity to rescue the airline from negative equity
- Kenya Airways warned investors to exercise caution when trading its securities until all outstanding terms are formally announced
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Kenya Airways PLC has announced that the Government of Kenya has approved two significant financial measures aimed at stabilising the national carrier and supporting its long-term recovery.
Source: Twitter
The airline disclosed the development in a public announcement dated October 9, 2026, signed by Acting Group Managing Director and CEO Habil Waswani and issued in compliance with the company's disclosure obligations to the Capital Markets Authority (CMA) and the Nairobi Securities Exchange (NSE).
Government approves KSh 45.15bn shareholder loan
The government has agreed to extend a shareholder loan of USD 350 million, equivalent to approximately KSh 45.15bn, to help the airline meet urgent, non-deferrable operational costs.
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The funds are intended to cover aircraft maintenance, the return to service of grounded aircraft, and other critical operational obligations as Kenya Airways pursues its broader turnaround strategy.
The loan carries a repayment period of 10 years and may, subject to shareholder and regulatory approvals, be converted into equity at the government's option as part of a future capital restructuring or repaid earlier on mutually agreed terms.
KSh 122bn debt conversion to restore positive equity
Separately, the government has granted in-principle approval for the conversion of existing shareholder loans totalling approximately KSh 122bn, inclusive of accrued interest, into an equity-qualifying tradeable instrument.
The conversion remains conditional on the completion of corporate, shareholder, regulatory, and transactional approvals.
Kenya Airways said the conversion is designed to lift the company out of its current negative equity position, strengthen its balance sheet, and improve its creditworthiness.
The airline added that the move is intended to support a planned capital raise through an Investment Memorandum and facilitate the onboarding of strategic partners and investors.
Both measures are still subject to the negotiation and execution of definitive agreements, shareholder approvals where required, and sign-off from the CMA and NSE, among other regulatory consents.
Caution advised for investors
Kenya Airways urged shareholders and the investing public to exercise caution when dealing in its securities until the outstanding terms are finalised and formally communicated to the market.
The cautionary notice will remain in effect and be renewed at intervals of no more than 60 days until a further announcement is made or the notice is withdrawn.
The company confirmed it will keep shareholders, the CMA, the NSE, and the public informed of all material developments and directed enquiries to investor.relations@kenya-airways.com.
Source: TUKO.co.ke