Kenya Airways draws down half its $200 mln bridging loan

Kenya Airways has received the first half of a $200 million loan from Afreximbank to help keep the struggling airline afloat and expects the second tranche in two weeks, its chief executive said on Friday.

The airline, part-owned by Air France KLM, has not made a profit in three years and sunk further into the red in the year through March with a pretax loss of 29.71 billion shillings ($289 million).

A series of Islamist militant attacks in Kenya has hurt the country's tourism industry, which hit the airline's revenue right after it bought expensive, modern airplanes.

Kenya, which holds 29.8 percent of the carrier, reckons it may now need a $500-$600 million bailout though the exact amount will depend on a turnaround plan being prepared by consultants McKinsey and Seabury.

"Kenya Airways will survive ... you can't die before you are killed," Chief Executive Officer Mbuvi Ngunze told angry stockholders on Friday at its annual general meeting, adding that the airline was ferrying 10,000-12,000 passengers daily.

The $200 million bridging loan from Cairo-based Afreximbank is in addition to a 4.2 billion shilling loan from the government to help the airline meet its operational requirements and pay suppliers of fuel and other services.

"Our focus in the next three to six months is on getting sustainable financing," Ngunze told a news conference after the shareholder meeting.

He said Kenya Airways had managed to sell its Boeing 767 and 737 planes but attempts to sell four Boeing 777-200s had so far failed due to a softening of the wide-body aircraft market.

Ngunze did not share details of the turnaround plan being prepared but sought to assure shareholders the company would continue in business, despite being technically insolvent due to negative shareholder equity.