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Kenya Airways Gets USD$240 Mln In Loans

Kenya has provided a KES4.2 billion shilling (USD$40 million) loan to loss-making Kenya Airways, while African Export-Import Bank (Afreximbank) has approved a USD$200 million bridging loan for the airline.

The money is needed to support the carrier, which has not made a profit in three years because Kenya's tourism industry has suffered fallout from a number of Islamist militant attacks.

The airline, part-owned by Air France-KLM, also has rising debts from new aircraft purchases. Its losses for the year to March increased to KES29.7 billion shillings from KES4.86 billion a year earlier.

Kenya has estimated the carrier will need a USD$500 million - USD$600 million bailout but a precise figure will depend on a turnaround plan being prepared by McKinsey and Seabury consultants.

Finance minister Henry Rotich said Kenya's government, which holds a 29.8 percent stake, had provided the KES4.2 billion shilling loan to help the airline meet its operational requirements and pay off suppliers of fuel and other services.

The company told investors in July it had sought the USD$200 million loan from Cairo-based Afreximbank.

"This short term facility will be received in two tranches of USD$100 million each," Finance minister Henry Rotich said.

(Reuters)