KQ set to roll out new rights issue

Business Daily Kenya:  Kenya Airways will offer all its shareholders a chance to bail it out in a rights issue on a yet to be announced dat...

Business Daily Kenya: 

KQ plane. Photo/File

Kenya Airways will offer all its shareholders a chance to bail it out in a rights issue on a yet to be announced date. In a cautionary statement sent to Nairobi Securities Exchange yesterday, the airline said the rights issue is part of combined government and management effort to restructure its balance sheet.

“As part of this process, it is expected that the company’s shareholders will be invited to participate in a new equity issue on a pro rata basis,” said the airline in the cautionary signed by Company Secretary Teodosia Osir.

However, the airline warned that the rights issue price will be significantly discounted against the current share price. At the close of the market yesterday, the company’s share was trading at Sh6.80 or 20 cents lower than its 52 week high of Sh7.

Efforts to restructure it went a notch higher this week after treasury Cabinet secretary Henry Rotich sought parliamentary approval to provide the airline with a Sh75 billion guarantee for loans to international and local lenders.

Treasury’s guarantee will allow the company to borrow Sh52.5 from United States Exim Bank and Sh22.3 billion from a consortium of 11 local banks. Yesterday, the airline confirmed to investors that it had made good progress in restructuring efforts.

“The company confirms that it is in advanced stages of discussions with its stakeholders including the government, KLM Royal Dutch Airlines and certain key lenders to recapitalise its balance sheet and secure additional near term liquidity in order to place itself on a stronger footing,” said Osir in the statement.

The post KQ set to roll out new rights issue appeared first on Mediamax Network Limited.

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