NAIROBI, A group of companies which are owed by Kenya Airways (KQ) will sign a deal to acquire a 38.1 per cent stake in the national flag carrier as part of the airline’s ongoing debt restructuring plan, a move which will see the government increasing its stake in Kenya Airways to 48.9 per cent.

However, both the government and airline’s creditors have assured the public that they have no interest in taking over the airline company, which has been teetering on the brink of closure occasioned my massive debts, which have constrained it from seeking fresh capital to shore up its operations.

The lenders, comprising 11 local banks, have formed a special purpose, the KQ Lenders Company, which they plan to use to convert their 217.24 million US dollars in debt into equity by acquiring 2.2 billion ordinary shares of Kenya Airways.

This deal signed Monday at the National Treasury was witnessed by National Treasury Cabinet Secretary (Finance Minister) Henry Rotich, his Transport Ministry counterpart, James Macharia, as well as Investment Cabinet Secretary Esther Koimett and representatives from both Kenya Airways and KQ Lenders Company.

The shares owned KQ Lenders Company will be managed by the Mauritius-based Minerva Fiduciary Services.

In addition to this debt to equity conversion agreement, KQ Lenders Company have entered into an agreement with Kenya Airways to convert into shares another outstanding loan totalling to 50 million USD in future.

Further, the government is to acquire an additional 19.1 per cent shareholding in Kenya Airways, pushing its total shareholding to 48.9 per cent by converting the 4.2 billion shillings and 197 million dollars advanced to Kenya Airways as well as interest the cash has accrued into equity.

Both the government and the KQ Lenders Company have applied for an exemption from a Capital Markets Authority requirement to make a takeover offer on grounds of among others restructuring a listed company’s share capital in this instance KQ in accordance with regulation 5(2) (c) of the takeover regulations. �