Kenya Airways share price surges on relisting

Kenya Airways was off to a flying start at the Nairobi Securities Exchange (NSE) after re listing its shares following a two week debt and equity restructuring break.

The Kenya Airways touched a high of Sh12 by 11am rallying from its last trading price of Sh5.30.

The airline completed a debt and share restructuring program that saw the government increase its shareholding to 48.9 percent while a group of 11 banks took up 38.1 percent of Kenya Airways after converting outstanding loans into shareholding.

Speaking during the relisting, Kenya Airways chief executive director Sebastian Mikosz said the debt conversion plan gives the airline financial headroom to complete its return to profitability.

“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,” Mr Mikosz said.

The share price rally was driven by foreign investor inflows at the bourse.

Kenya Airways has been on the path to recovery after announcing its half year loss reduced by 20.5 percent to Sh4.7 billion two years after posting a historic 26 billion shillings loss.

The airline closed the intricate financial and capital restructuring process, bringing to the table key stakeholders including shareholders, financiers and lessors to agree to secure the airline’s future.

Kenya Airways created additional shares to convert some of its debt into equity, leading to a 95 percent dilution of existing shareholders.

Following the restructuring KLM has seen its shareholding drop to 7.8 percent while employees will also get a crack to own a stake in the airline through an employee share ownership Plan.

Mr Mikosz said the airline plans to continue on the path to profitability with key strategic decisions to be made.

“We have lots decisions on our desk. There are positive decisions that we will worry about and very difficult decisions to be made that will draw general public attention, so I will be very happy to come and communicate particularly to the financial community to understand where we are going,” he said.