KENYA AIRWAYS DAY OF RECKONING ARRIVES
Today is the official announcement expected by Kenya Airways and their financial advisory team of how the recently concluded share rights issue was accepted in the market place alongside the announcement of financial year results for 2011/12.
Overshadowed by continuously high interest rates, a deterrent of significance for private investors many of whom in the past borrowed against the shares they purchase then with loans, institutional investors were all reported to have taken up their share allocation and in the case of the IFC, the World Banks private sector lending institution, bought into the airline in a major way from outside.
While the tight lipped approach worked for some time, in recent days some leaks appeared from usually reliable sources and word in the financial corridors have it that 77 percent of take up has been accomplished at closure of the offer, with private investors largely forfeiting on their rights. However, the airline and their financial advisory team were locked in talks with additional financial investors and institutions to take up those unclaimed share rights, and that in fact will be the much awaited core of the announcement later today in Nairobi, just who and how much such a potential or several investors may have snapped up, as the share price had gone well above the 14 KShs per share the airline had asked for.
Meanwhile though, from a merely mathematical stand point should the 77 percent figure be confirmed later today, have the two main shareholders the Government of Kenya and KLM numerically increased their holdings from 23 and 26 percent respectively, a combined 49 percent as it stood before the share rights issue, probably increased their new stake well into the combined 50 percent range of ownership. The arrival though of new investors, eventually buying into the airline, would reduce that level again towards the pre-share rights issue holding of 49 percent. One thing though is clear, that the mandatory ownership of 51 percent resting in Kenyan hands, has been retained to secure the crucial status as a Kenyan owned airline, with wide implications on traffic rights under respective bilateral air services agreements. Watch this space as results will be announced later today and instantly reported right here.