Kenya Airways on Monday, 12 October, urged its shareholders and investors to exercise caution after the Kenyan government approved a $350 million shareholder loan, valued at about 45.2 billion shillings. The company stressed that implementation still depends on negotiations, final contractual documents and the necessary approvals.
The Cabinet had approved the financing on 9 October. It is intended to meet urgent operational needs, including aircraft maintenance and the return to service of grounded aircraft. Funds are to be disbursed in instalments under the supervision of the National Treasury, with a repayment period of up to ten years.
The loan could be repaid early on terms to be agreed, or converted into shares at the state's option as part of a future capital restructuring. That option requires the agreement of shareholders and regulators. Political approval therefore does not yet amount to a disbursement or an effective conversion.
A second measure concerns around 122 billion shillings of existing public loans and accumulated interest. The government proposes to convert them into a negotiable instrument that meets equity criteria, in order to ease Kenya Airways' balance sheet and facilitate a future capital raise.
The company said it would inform the market once the conditions were sufficiently defined. Its notice to the Capital Markets Authority and the Nairobi Securities Exchange aims to prevent investors from treating the announced amounts as definitively secured before the agreements are signed and the required votes are held.
The intervention forms part of the recovery of a carrier facing high maintenance costs and a capacity shortfall. According to data published by the Kenyan press, revenue for the first half of 2026 rose 9% to 81 billion shillings, while the net loss widened to 16.1 billion shillings from 12.2 billion a year earlier.
The government, which holds 48.9% of Kenya Airways, estimates that the airline contributes more than 1.3 billion dollars a year to gross domestic product through tourism, trade and regional connectivity. This official estimate describes the airline's economic importance but does not prejudge the profitability of the new financing for public finances.