The National Treasury plans to hire a consultant to help Kenya Airways Plc evaluate options to restructure its debt load (capital restructuring). Kenya Airways has been banking on the government to take control and absorb its debt, which totaled 92.5 billion shillings ($847 million) at the end of 2020-- as the pandemic exacerbated years of losses. But after rounds of talks, Kenyas government scrapped a plan to fully nationalize the carrier. The airline, in which the Kenyan government has a 48.9% stake, faces mounting debts and depressed passenger demand amid pandemic-related travel restrictions.

Restructuring the airline would cost an estimated $1 billion and the Kenyan government would have to inject money into Kenya Airways because it has already guaranteed $750 million of the companys debt, through a special purpose vehicle (SPV) created in earlier restructuring. The government has set aside 26.6 billion shillings to help Kenya Airways in a bail out schemes, as the come continue to make losses.

KQ, as the airline is known, needs to overhaul its business model to minimize the burden it places on the state given the aviation industrys challenges amid the pandemic. Changes required include cutting back on its operations and staff, enhancing efficiency and renegotiating leases and suppliers contracts as proposed by International Monetary Fund.

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Using financial reports of Kenya Airways for the last 5 years, comment on the trend and the effects of government bailout scheme on the capital structure