In a research note sent out on Thursday by Dyer and Blair Investment Bank, Kenya Airways say that they have received commitments for 70% of the shares on offer in its on-going rights issue. Majority shareholders Dutch airline KLM (26%) and the Government of Kenya (23%) had already affirmed their commitment to exercise their rights fully in the Kshs. 20.6 billion rights issue through which KQ intends to raise capital to finance its expansion plans.
“According to the chief executive (Titus Naikuni), in addition to the Kenyan government and KLM, who are currently the biggest shareholders, a couple of local and institutional shareholders have committed to take up rights,” the Business Daily said in this regard quoting the research note. The paper went on: “This is positive news after the share market price fell below the discounted rights offer price raising fears about the rights issue success, added Dyer.” Tanzania and Ugandan capital markets regulators also approved the rights issue, easing fears that investors in the two countries would be locked out of the region’s biggest ever cash call.”
Kenya Airways shares are currently traded on the Nairobi Securities Exchange, the Uganda Securities Exchange and the Dar es Salaam Stock Exchange and the company is hoping that investors exercise their rights and the company is able to raise the funding it requires for its next phase of expansion of its business in which it intends to increase the number of aircraft from 34 to 107 by the year 2020 whilst increasing its flight destinations from 56 to 115.
The press announcement of the rights issue is currently going at the KICC and can be streamed live from http://www.capitalfm.co.ke/tv/kqrightsissue or #KQRightsIssue