KQ returns to Dar bourse with record share price gain

Wednesday December 20 2017

A man enters the trading room of The Dar es

A man enters the trading room of The Dar es Salaam Stock Exchange in Tanzania. FILE PHOTO | REUTERS  

BUSINESS DAILY
By BUSINESS DAILY
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After suspending trading at the Dar es Salaam Stock Exchange (DSE) on November 20 this year for shareholding restructuring, Kenya Airways returned to the Tanzanian market on Monday with a bang.

The company’s share price jumped 225 per cent to close at Tsh390 ($0.18) on Monday, higher than Tsh120 ($0.05) recorded on November 20 this year.

This is the highest point the airline's share price has hit since it cross-listed its shares on the DSE.

The price rise comes amid increased investor activity at the Dar bourse following consolidation of its shares that effectively increased units issued from from 1.49 billion to 5.82 billion.

Suspend trading

Last month, the management of Kenya Airways requested to close the register and suspend trading for a period of two weeks. The suspension facilitated the share split and simultaneous consolidation of its shares as 10 Kenyan banks converted Ksh22 billion ($213.4 million) debt to equity.

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Following the restructure, the government’s stake has increased to 48.9 per cent from 29.8 per cent while KQ Lenders Co - the special purpose vehicle formed by the lenders – controls a 38.1 per cent stake.

KLM Royal Dutch Airline’s stake now stands at 7.8 per cent, KQ’s Employee Share Ownership Scheme (ESOP) now owns 2.4 per cent and other shareholders own 2.8 per cent.

On its comeback at the Nairobi Securities Exchange (NSE) late last month, KQ's share price shot up by more than 130 per cent to close at Ksh12.50 ($0.12), from its last closing price of Ksh5.30 ($0.05) before the suspension.

“The restructuring makes us competitive and sets us on a path of profitability with a healthy liquidity. We appreciate all the work that went into ensuring we continue to turn around this airline and secure its future,” Kenya Airways chief executive officer Sebastian Mikosz said.

The firm posted a Ksh3.8 billion ($36.8 million) net loss for the six months to September, narrowing its losses by 20.5 per cent from the previous year when it stood at Ksh4.78 billion ($46.4 million).

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