Kenya Airways (KQ, Nairobi Jomo Kenyatta) will be required to repay USD150 million to the Kenyan government through a shareholder loan agreement, the terms of which are to be negotiated and finalised by mid-2025, Treasury Cabinet Secretary John Mbadi disclosed in a notice to the Kenyan parliament.

According to the country's Business Daily newspaper, this comes after the Treasury, as sovereign guarantor, had to settle KES19.3 billion shillings (USD150 million) worth of Kenya Airways' unpaid loans in cash with a consortium of Kenyan commercial banks by the end of August 2024 or provide an acceptable government security instrument to avoid a sovereign default that would have harmed Kenya's credit rating.

The banks had rejected the Treasury's offer of repayment through a 6.5-year bond. The banks, known as the KQ Lenders, own 38.1% of the airline and include Equity Bank, KCB Group, and Cooperative Bank.

On January 3, the government withdrew the amount as an emergency item without parliamentary approval. Business Daily reports that the settlement is now included in the supplementary budget for parliamentary review.

ch-aviation has reached out to Kenya Airways for comment.