Loss-making Kenya Airways has successfully restructured more
than $2 billion of its debt, converting a quarter of it into
newly formed equity. This is the country’s largest
ever debt-for-equity swap to date.
Exceptional in terms of scale for the Kenyan market, the
corporate deal saw nearly $500 million of unsecured debt
converted into equity, opened $750 million of sovereign
guarantees and required the largest ever scheme of arrangement
in the country on record.
Richard Harney, partner at Bowmans in Nairobi who advised
Kenya Airways, there were a number of key components that led
to this particular structuring. "We didn’t want
the company to end up in state ownership, and the government
didn’t want to take control of the company
either," he said.
The government wanted to ensure that the airline had a
future because of its strategic value to the economy overall.
"It was willing...