national treasury
Eight banks have compelled the National Treasury to settle a Ksh 19.3 billion (US$149.9 million) debt that Kenya Airways (KQ) owes them.
This comes after the national carrier failed to meet its debt repayment obligations.
According to reports the commercial banks which include; Equity Bank, NCBA, and Cooperative Bank, rejected a proposed 6.5-year bond and insisted on immediate settlement in cash.
The Treasury is reported to have released the funds to the banks on January 3 without parliamentary approval.
However, the funds have been indicated in the supplementary budget, which is now before Parliament for review.
Treasury Cabinet Secretary John Mbadi while appearing before the Senate on Wednesday said the amount will be recovered from KQ as a shareholder loan, with repayment terms yet to be finalized.
The Treasury now holds 48.9 percent of KQ shares, making it the largest shareholder.
Kenya Airways planes
In 2024, the National Treasury paid $109 million to the American Eximbank to save Kenya Airways from bankruptcy proceedings after it defaulted on an $841.6 million loan from the Washington-based lender in the 2021/2022 financial year.
KQ had taken out the loan in 2017 to purchase seven aircraft and an engine, with $525 million of the amount guaranteed by the government.
A report by the Controller of Budget revealed that between July and September 2023, the government made an additional payment of Ksh2.72 billion ($19.78 million), bringing the total payments to Ksh15.04 billion.
Also Read: KQ Issues Statement After Plane Crash Landed At Kisumu Airport
