{"id":42325,"date":"2021-12-23T16:55:42","date_gmt":"2021-12-23T16:55:42","guid":{"rendered":"https:\/\/www.africa-press.net\/kenya\/?p=42325"},"modified":"2021-12-23T14:33:51","modified_gmt":"2021-12-23T14:33:51","slug":"kq-to-receive-sh147bn-state-financial-boost","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost","title":{"rendered":"KQ to receive Sh147bn state financial boost"},"content":{"rendered":"

Africa-Press – Kenya. <\/strong><\/span>Loss-making national carrier, Kenya Airways has received a major financial boost after the exchequer pledged to take over $827 million (Sh93.5 billion) of its debt.<\/p>\n

The National Treasury further plans to pump in $473 million (Sh53.5 billion) in direct budget support in the fiscal year that ends in June 2022 as well as the subsequent one.<\/p>\n

The revelation by the government appears in the letter to the International Monetary Fund (IMF) dated December 2.<\/p>\n

This comes just two months after the government converted a Sh24 billion debt held by the national carrier, known internationally as KQ into equity, causing an uproar in the Parliament.<\/p>\n

The National Assembly\u2019s Public Accounts Committee (PAC) summoned the National Treasury Cabinet Secretary Ukur Yatani to shed light on the debt swap deal and how the State\u2019s equity in KQ had been treated in government books.<\/p>\n

The Treasury acquired an additional 19.1 per cent stake after the State and domestic lenders agreed to convert debt into equity.<\/p>\n

This is not the first time KQ is undergoing debt restructuring. In 2017, it undertook a financial restructuring, with the State and a consortium of local banks \u2013 KQ Lenders Company \u2013 converting their loans into shareholding.<\/p>\n

This resulted in the Treasury increasing its stake to 48.9 per cent from 29.8 per cent.<\/p>\n

KQ Lenders Company emerged as the second-largest shareholder with a stake of 38.1 per cent.<\/p>\n

The restructuring diluted the shareholding of KLM, KQ\u2019s longtime partner, to 7.8 per cent from 26.7 per cent while retail shareholders ended with a 1.78 per cent stake from 24 per cent.<\/p>\n

KQ has failed to record a profit since 2014 and the losses have compounded the huge debts the airline took on to buy a fleet of new Boeing planes, pushing it into negative equity territory.<\/p>\n

The airline posted a Sh11.49 billion net loss in the six months ended June\u2014 a 19.8 percent cut from the Sh14.33 billion loss it incurred in the preceding similar period, taking its accumulated losses over the years to above Sh127 billion.<\/p>\n

At the same time, the exchequer has told Reuters that it aims to replace a nominal legal public debt ceiling with a debt anchor by the end of June 2022.<\/p>\n

Debt anchor means that the debt level sought will be clear, given the approved surplus target.<\/p>\n

But as with the surplus target, the assessment of the desirable level of the debt may be changed for reasons such as demographic trends or a changed need for safety margins.<\/p>\n

This is an about-turn from the country’s earlier plans to lift the debt ceiling limit from the current Sh9.1 trillion to Sh12 trillion.<\/p>\n

Pundits have hailed this debt management plan, saying it will enable the country to live within its budget and avert unnecessary borrowing.<\/p>\n

Speaking to the Star on phone, independent economist Dan Okwema said debt ceiling is not sustainable and gives room for unnecessary budgeting.<\/p>\n

Anchoring debt on budget is welcome. It will instil a sense of debt management and perhaps limit the appetite that has seen the country’s public debt rise over six folds in past seven years.<\/p>\n

Kenya’s total debt currently sits at Sh7.7 trillion.<\/p>\n

For More News And Analysis About Kenya<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Kenya. Loss-making national carrier, Kenya Airways has received a major financial boost after the exchequer pledged to take over $827 million (Sh93.5 billion) of its debt. The National Treasury further plans to pump in $473 million (Sh53.5 billion) in direct budget support in the fiscal year that ends in June 2022 as well […]<\/p>\n","protected":false},"author":84,"featured_media":42324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8,16],"tags":[6857,7003,544],"class_list":["post-42325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","category-twitter","tag-africa-press","tag-africa-press-kenya","tag-kenya"],"yoast_head":"\nKQ to receive Sh147bn state financial boost - kenya<\/title>\n<meta name=\"description\" content=\"Loss-making national carrier, Kenya Airways has received a major financial boost after the exchequer pledged to take ove ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"KQ to receive Sh147bn state financial boost\" \/>\n<meta property=\"og:description\" content=\"Loss-making national carrier, Kenya Airways has received a major financial boost after the exchequer pledged to take ove ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost\" \/>\n<meta property=\"og:site_name\" content=\"kenya\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2021-12-23T16:55:42+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2021\/12\/img-61c488b97a912.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"662\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"KQ to receive Sh147bn state financial boost\",\"datePublished\":\"2021-12-23T16:55:42+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost\"},\"wordCount\":531,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2021\/12\/img-61c488b97a912.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Kenya\",\"Kenya\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\",\"twitter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost\",\"url\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/kq-to-receive-sh147bn-state-financial-boost\",\"name\":\"KQ to receive Sh147bn state financial boost - 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