NSE Suspends Trading of KQ Shares to facilitate share split

The Nairobi Securities Exchange has suspended trading in shares of Kenya Airways (NSE:KQ) effective November 15, 2017, up to and including November 28, 2017 to facilitate the consolidation of the airline’s shares as part of restructuring efforts.

The exchange said, “the suspension is to facilitate the share split and simultaneous consolidation of the company’s shares which forms part of the Kenya Airways PLC capital transaction.”

Kenya Airways PLC is securing its long-term growth with the close of its financial and capital optimisation plan.

The restructuring plan saw all key stakeholders sign their commitment to be part of the airline’s future this week, paving way for its continued operational efficiency and financial sustainability.

The post-restructuring share ownership will see Government holding increase from 29.8 percent to 48.9 percent. Local banks, through KQ Lenders Company 2017 Ltd, also converted unsecured debt into equity, resulting in a shareholding of 38.1 percent. KLM as result of its in-kind contribution will have a shareholding of 7.8 percent and the balance, of 5.2 percent, between other shareholders and a new employee share ownership Plan (ESOP).

The company will continue to be listed on the Nairobi Securities Exchange, as well as on the Ugandan and Tanzanian stock exchanges.

Kenya Airways’ Chairman Michael Joseph lauded the restructuring initiative, noting that it was intended to strengthen the airline’s financial capability and make it ready for growth and return to profitability in the highly competitive global and regional aviation environment.

“This process was crucial in securing the airline’s future with a healthy liquidity profile and maintaining a strong and more competitive outlook in its operations, necessary in projecting an attractive airline to strategic partnerships,” he said.

As part of the process, Kenya Airways employees will be able to own part of the organisation through the ESOP, which will be awarded on performance-related contributions to the airline’s future. At the same time, the Board structure will change, with two new Board members representing local banks, and an additional Board representative from the Government of Kenya, while KLM will reduce its representation by one.

An open offer of new shares is intended at a later date to enable shareholders to reinvest in the airline post-restructuring.