Troubled national carrier Kenya Airways has received Sh10 billion soft loan from the National Treasury, giving the airline muscle to implement its turnaround strategy. The government borrowed the cash from Cairo’s Afreximbank on behalf of KQ whose fortunes have dwindled in the last five years hurting its ability to book debt on its own.
“We have already disbursed to KQ because this money was for on lending,” said Treasury secretary Henry Rotich.
The loss making firm declined to reveal how it plans to spend the cash saying it is in a closed reporting period. The airline, which shocked the market with a Sh25.7 billion after tax loss last year, is expected to release its full-year results at the end of the month.
Market activity slowed down on Wednesday albeit marginally. The All Share Index and the NSE 25 Share Index increased slightly to close the day at 139.17 points and 3926.26 points respectively.
The NSE 20 share index shed 3.57 points to end the day at 3926.26 points. Market capitalization improved to KES 2001.212 billion from KES 1996.839 billion previously. The equity turnover dropped to KES 0.57 billion from KES 0.59 billion from KES 0.55 billion yesterday due to a reduction in traded volumes compared to Tuesday’s.
The Kenyan shilling traded in a tight range on Wednesday against the US dollar due to importer dollar demand being balanced out by prospects of the central bank selling the U.S. currency though continued weakening against other major international peers was noted.
The shilling shed 0.24% and 0.95% against the Euro and the Sterling to close the day at a mean of 112.18 and 132.41 respectively. The pound is anticipated to gain ground further against the local currency as it will be riding on a likely improved economic environment in the UK pegged on the entry of Theresa May, Britain’s new prime minister expected in office today.