KQ shares suspended from trading at the NSE as State takeover nears

Kenya Airways shares have been suspended from trading on the Nairobi Securities Exchange for three months as the process of State takeover enters a crucial stage.

Nairobi Securities Exchange said in a Friday morning statement that KQ had applied for the suspension.

This will also see the airline’s share register closed until the resolution of its future is determined.

“The company’s operational and corporate restructure and Government buy-out is now imminent following the publication of the National Management Aviation Bill, 2020, on 18th June 2020,” a statement from the NSE said.

“Consequently, the company has applied for suspension of trading in its shares and closure of its register until the resolution of its future is determined.”

The Capital Markets Authority (CMA) has approved the suspension. This now means that KQ shareholders will be unable to buy or sell their shares during the period.

The suspension sets in immediately and will remain in force up to October 3 and comes at a time KQ share has been witnessing a rally, defying the generally bearish bourse since Covid-19 struck in mid-March.

KQ share has gained by 173.57 percent in the last three months – the highest on the bourse – to close Thursday trading at sh3.83.

KQ is 48.9 percent government-owned and 7.8 percent held by Air France-KLM. It was privatized 24 years ago but sank into debt and losses in 2014.

Air-France KLM, which had the option of selling its stake to the government and staying on as a technical partner for the airline, has opted to exit.

The offer price will be a premium on the carrier’s prevailing trading price at the Nairobi bourse as agreed by the two parties. The same KLM offer price will be used to acquire the minority shareholders, who hold about 2.8 percent of the shares currently valued at sh397 million.

The return of KQ to the NSE now lies in the hands of Parliament given that the passage of the National Aviation Management Bill 2020 will see government take back full control of the national carrier by October and delist it.

According to Business Daily David Pkosing, the chairman of Parliament’s transport committee, said MPs will seek to pass the Bill swiftly. He added that the committee has set a budget of sh800 million for purchase of the minority investors, representing a premium of 101 percent.

A consortium of local lenders, who acquired 38 percent of the company’s equity during the 2017 restructuring, could be paid through government debt, possibly in 10-year Treasury bonds, Treasury Cabinet Secretary Ukur Yatani said.


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