On Wednesday, the national carrier started trading 5.3 billion shares at the Nairobi bourse following a two-week suspension meant to facilitate the share split and consolidation of company’s shares.
The stock went up over seven times on resuming trading.
The financial restructuring of Kenya Airways #ticker:KQ will create positive shareholder equity, cash flow and free it from unsustainable debt, deal advisor Kestrel Capital said on Wednesday.
Kestrel executive director Andre DeSimone said the national carrier now has a positive net asset base, which will help it move forward despite the massive dilution of shareholders’ stake.
“The balance sheet has always been holding back the company, now since that has been released and replaced by positive equity, shareholders have the opportunity of participating in that growth going forward,” Mr DeSimone said on the sidelines of bell ringing ceremony to commence the re-listing of the KQ, as the airline is known by its international code, shares at the Nairobi Securities Exchange.
On Wednesday, the national carrier started trading 5.3 billion shares at the Nairobi bourse following a two-week suspension meant to facilitate the share split and consolidation of company’s shares.
In August KQ held a meeting where shareholders approved a restructuring proposal that would reduce KQ’s debt burden by approximately Sh50 billion through conversion into equity.
Mr DeSimone said as a result, shareholders equity position would change from a negative Sh45 billion to a positive Sh12 billion.
This translated into a positive book value per share of approximately Sh1.60, based on Kenya Airways March 31, 2017 year-end financial statements and accounting for both share dilution and a partial share consolidation.
KQ also plans a new share offering in 2018, to allow shareholders to participate in the final stage of airline’s balance sheet restructuring.
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