Kenya Airways (Plc) shares have resumed trading at the Nairobi Securities Exchange after a two-week break, given to allow restructuring of its shareholder portfolio.
The airline on Wednesday listed additional shares at the NSE after a share split and simultaneous consolidation of the company’ stock, as part of the carrier’s successful financial and capital restructuring plan.
KQ closed the intricate financial and capital restructuring process, the first of its kind in the market, on 15 November, bringing to the table key stakeholders including shareholders and financiers to agree to secure the airline’s future.
The restructuring has seen the government increase its shareholding to 48.9 per cent after agreeing to convert a Ksh24 billion loan into equity.
A consortium of 10 local banks, through a special purpose vehicle – KQ Lenders Company 2017 Ltd, now own 38.1 per cent shares of the airline, after having their Ksh17.3 billion debts converted to equity.
KLM as result of its in-kind contribution will have a shareholding of 7.8 per cent and the balance, of 5.2 per cent , between other shareholders and a new employee share ownership Plan (ESOP).
To facilitate the share capital reorganisation, the register was closed from close of business on November 14, 2017 and trading was suspended from 15 November 2017 to November 28.
Speaking during the bell ringing ceremony to commence the relisting of the shares at the NSE trading floor, Kenya Airways Chief Executive Officer Sebastian Mikosz said: “This occasion, the relisting of Kenya Airways shares, demonstrates another step towards securing the airlines growth that will be anchored by operational efficiency and financial sustainability.”
“The restructuring makes us competitive and sets us on a path of profitability with a healthy liquidity. We appreciate all the work that went into ensuring we continue to turnaround this airline and secure its future,” he added.
Mikosz reassured stakeholders, and more shareholders, that the airline is on a growth path having reported a 52.1 per cent increase in operating profit to Ksh1.443 billion for the period ending 30 September 2017, compared to KSh 0.9 billion in the prior period.
Its cabin factor grew by 5.4 per cent with passenger numbers going up by 3.3 per cent to 2.31 million. Loss after tax reduced by 20.5 per cent to KSh3.8 billion from Ksh 4.78 billion.
Reiterating his remarks, NSE Chief Executive Geoffrey Odundo said: “We applaud Kenya Airways for boldly using this process of a debt – equity restructuring, which we believe will result in the company having a lower debt profile and moving it onto a better financial footing.”
“The company’s continued growth and expansion supported by the capital markets is a fine example of the abundant opportunities our market offers,” he added.
Kenya Airways Plc will continue to be listed in the Ugandan and Tanzanian stock exchanges as well, the management said.
In May, KQ appointed a turnaround CEO Sebastian Mikosz to take over from former CEO Mbuvi Ngunze, who however remained an advisor to the board on the restructuring plan.
Mikosz has hired Polish expatriates as part of the airline’s management team in its efforts to return to profitability
KQ has lauded the government for converting its loans and accrued interest into equity, and through the provision of guarantees to key financial stakeholders to enable the success of the plan.
“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,” Kenya Airways’ Chairman Michael Joseph said in a statement.
The national carrier has put a spirited fight in the last one year to regain profitability, after a series of losses which hit Sh26.2 billion (net loss) in March 2016.
Source: Asoko Insight