National carrier Kenya Airways on Friday announced that it had entered an agreement with the International Finance Corporation (IFC) in which the IFC will buy shares and loan out money to the airline to the tune of Kshs. 8.7 billion  ($105 million). KQ chief executive, Mr. Titus Naikuni, said on Friday that the International Finance Corporation had committed to take up $25 million (approximately Sh2.068 billion) worth of shares in the issue and had approved an additional Sh6.6 billion ($80 million) in debt to fund KQ’s expansion plans, quoting the Business Daily.

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The IFC’s commitment to purchase Kenya Airways rights shares should boost the subscription rate of the rights and encourage other investors to take up their rights. Kenya Airways is seeking funds to finance acquisition of new aircraft, both passenger and cargo, that will build on its existing fleet and facilitate the airline fly to more destinations.

Meanwhile, Citigroup, the leading global financial services company, is also underwriting Sh420 million of the Sh20.6 billion rights issue, the region’s biggest fundraiser of its kind. Citigroup has signed to take up to Sh420 million of the rights (2%) of the total amount the airline is seeking, according to the information memorandum released last Friday.

Kenya Airways rights shares are on sale from today 2^nd April 2012 up until Friday 27^th April 2012 and shareholders have the opportunity to buy 16 new ordinary shares for every 5 ordinary shares held as of the register closure date (19^th March 2012). So far, Dutch airline KLM, the Government of Kenya, The International Finance Corporation , Citigroup and other institutional investors have pledged to exercise their rights fully, putting the commitment to purchase the rights shares at about 72% of the shares on offer.