Kenya Airways (KQ, Nairobi Jomo Kenyatta) may finally be catching a break, with Equity Bank reportedly agreeing to sign on to a restructure scheme for the airline. Business Daily Africa has seen documents that show the previously recalcitrant bank has now accepted the debt conversion plan.
The deeply-indebted national carrier is trying to pursue a USD2.2 billion debt restructuring exercise, in order to convert debt to equity and secure new funding sources. The deal was approved by parliament in June this year, and has been okayed by all but three lenders – Equity Bank, Ecobank and Jamii Bora Bank. Kenya Airways filed a petition to force the banks to sign on, but the banks took the matter to the Supreme Court.
This less-than-ideal tug of war has led the parties to seek an agreement outside of the courts.
"We have been holding discussions with all the players involved in the restructuring with the aim of bridging the differences of opinion," a treasury representative told the Business Daily. "We hope to have an agreement on paper soon."
Those negotiations, it appears, are starting to payoff. "The updated allocation and guarantee proposal is designed to find a consensual and equitable resolution which will allow KQ to receive the full backing of all 11 of its Kenyan banks," Kenya Airways says.
