“In addition to acquisition of equity under the debt conversion and subscription agreement, the government and KQ have entered into a zero coupon ordinary mandatorily convertible loan agreement in relation to settlement of the remaining portion of the government loans. The effect of the zero coupon ordinary mandatorily loan convertible loan agreement is the issuance of ordinary shares to the government at a future date,” Treasury Cabinet Secretary, Henry Rotich said.

However the government does not intend to make a takeover offer of the struggling airline.

Moreover, the KQ Lenders Company that comprises of 11 banks will also take over 38.1 percent stake in the company.

KQ cut their loss by 61 percent in 2017 to register a net loss of Sh10.2 billion compared to the Sh26 billion it recorded in 2016.