Today the Kenya Airways rights issue opened. The rights issue is such that each shareholder has the opportunity to purchase 16 new shares for every 5 shares they currently own at Ksh 14 per share.

The World Bank ‘s private sector lending arm the International Finance Corporation (IFC) has committed to take up Ksh 2.068 billion worth of shares in the issue. This is part of its Ksh. 8.7 billion commitment in equity and debt to Kenya Airways’ expansion plans.

Citigroup is also underwriting Sh420 million of the Sh20.6 billion rights issue.

The government and Dutch airline KLM, who are anchor shareholders of the national carrier with a combined 49 per cent stake, have already committed to take up their rights. This translates to approximately Ksh. 10.094 billion.

This means that of the 20.6 billion shillings the national carrier seeks to raise, it has received commitments worth Ksh. 12.582 billion shillings from these four institutions.

According to Dyer and Blair Investment Bank, the airline has received commitments for 70% of the Ksh 20.6 billion rights issue. This means that in addition to the four institutions mentioned above, there exist other commitments worth Ksh. 1.838 billion.

The airline is optimistic that Kenyans will take up their rights and this rate the issue may raise more than expected by a substantial margin.