The Nairobi Securities Exchange has suspended trading in shares of national carrier Kenya Airways effective November 15, 2017 up to and including November 28, 2017.
The exchange said, “the suspension is to facilitate the share split and simultaneous consolidation of the company’s shares which forms part of the Kenya Airways PLC capital transaction.”
It is part of a debt restructuring exercise that will see the government increase its shareholding in the company by 19.1 percent to 48.9 percent having previously held a 29.8 percent stake in the airline. Eleven local banks which lent the airline a total of USD 217.2 million will see the issuance of 2.2 billion ordinary shares equivalent to a 38.1 percent ownership through a special purpose vehicle set up by the banks called KQ Lenders Company.
The suspension in trading was approved by CMA on November 14, 2017.
After completion of the share split exercise, KQ Lenders Company and the Govt of Kenya will now control about 87% of the airline.
The result is that Air France KLM and other minority shareholders will be diluted by a huge margin. KLM’s stake in the airline will be diluted from 26.7 percent to 7.8 percent while the International Finance Corporation and retail investors will also see their 9.6 percent and 33 percent stakes diluted respectively.