Kenya Cabinet approves KSh45.4bn ($350m) shareholder financing for Kenya Airways; KSh122bn debt conversion endorsed

On 9 October 2026 Kenya’s Cabinet approved KSh45.4 billion (about $350 million) in tranchable shareholder financing for Kenya Airways to meet urgent obligations, and endorsed a proposal to convert KSh122 billion in government loans plus interest into an equity‑qualifying tradable instrument; implementation requires corporate, shareholder and regulatory approvals.

The Cabinet decision shifts near‑term liquidity risk away from immediate sovereign cash outflows towards a combination of staged shareholder loans and a proposed quasi‑equity instrument. If implemented, the Treasury’s contingent fiscal exposure will be extended in tenor and potentially reclassified, concentrating short-term credit risk with domestic creditors and longer‑dated sovereign‑linked claims. Market pricing will depend on final terms, conversion mechanics and actual disbursement timing.

Publication of the financing terms and completion of required corporate, shareholder and regulatory approvals (disbursement schedule).