National carrier, Kenya Airways (KQ), now considers of tapping a consortium of investors, as opposed to a single strategic investor, to strengthen its balance sheet, which closed the 2025 in a negative equity position of Sh131 billion.
A negative equity position in a company’s balance sheet signals that the liabilities are larger than the assets, a pointer of financial distress, given that even if the company liquidated all its assets, it would be unable to service debt obligations.
KQ’s top leadership now says that a blend of strategic investors, as opposed to targeting a single strategic investor, is one of the options being considered, given the ambitious plans for curing the balance sheet and scaling the business with growth and expansion. The airline says that, in consideration for a strategic investment consortium, investors are looking for equity, debt, revenue share models, as well as fleet strengthening through new aircraft.
“We are at a good stage of discussion with a few potential investors. Some of these investors are looking to come in with equity, others are looking at debt, others are looking at revenue share, and some are looking at potentially putting aircraft into our fleet for operations,” KQ acting Managing Director and CEO, George Kamal, told Business Daily in an interview.
“Having the mix will actually support KQ very much because we want to grow, and if you want to do that, you cannot take a single model and operate based on that," he said.
KQ is also angling to push its anchor shareholder, the Government of Kenya, holding a 49 percent stake, to consider converting some of its Sh131.4 billion debt to an equity stake as it looks to reduce its debt burden and mitigate the pressure of finance costs on its profitability.
In the year ended December 2025, KQ’s finance costs stood at Sh12.3 billion, an increase from the Sh11.1 billion reported in 2024.
“When we consider strategic investment, we are also looking at what would be the optimal capital structure for the business. Our total debt is Sh146 billion, out of which 90 percent is government debt. The shareholder agreements we have with the government include the option of conversion from debt to equity at the right time,” Mary Mwenga, the acting Chief Finance Officer at KQ, told the Business Daily.
“It is a parallel exercise where we are working towards securing a strategic investor, and once that is done, we will have a conversation with the government on this. It is an option which is already on the table, but we just cannot exercise it now,” she added.
In the full year ended December 2025, KQ reported a Sh17.2 billion loss, down from a Sh5.4 billion profit reported in the year ended December 2024.
The airline has attributed the slide back into loss territory to the grounding of its fleet, which undermined its capacity, pushing its turnover to close 2025 at Sh161.5 billion, a decline from the Sh188.5 billion reported in 2024.
