Kenya Airways near completing capital restructuring

Kenya Airways is about to conclude its capital restructuring, its chairman said on Wednesday, edging closer to putting past financial woes behind it, the carrier’s chairman said.

Kenya Airways, part-owned by the state and AirFrance KLM , sank into the red four years ago after tourism slumped following a spate of attacks in Kenya by militants from the Somalia-based al Shabaab Islamist group. Last year the carrier had negative equity of 35 billion shillings ($339 million), Reuters data showed, and the business was sustained by shareholder loans.

Its financial predicament caused delays in paying staff, industrial action and the ousting of chief executive Mbuvi Ngunze, who is being replaced by Sebastian Mikosz, a Polish national who has prior experience of turning around an ailing airline.

“We are heading towards a conclusion on the capital-restructuring. We hope now that we will conclude this end of June, middle of July,” Kenya Airways chairman Michael Joseph told Reuters on Wednesday.

Joseph said the major shareholders, including the Kenyan government, were involved in the restructuring, without providing more details.

“This provides us the foundation on which we can turn around the airline,” he said.