KENYA AIRWAYS AND CAPITAL MARKET AUTHORITY ANNOUNCE SHARE ISSUE DATES
An elaborate presentation by the Chief Executive and Group Managing Director of Kenya Airways, Dr. Titus Naikuni, rang in the countdown towards the 30th of March, when the new share issue will be formally launched in the market, following the final approvals last Friday by the Capital Market Authority of Kenya.
This will be the largest ever share rights issue in the Eastern and Central African region, if not the whole of Africa, aimed to raise some 250 million US Dollars in new capital, and as a further novelty, 49 percent are already subscribed firmly by the Government of Kenya, which holds 23 percent and KLM / Air France which holds 26 percent of the issued shares.
Kenya Airways, initially formed in 1977 after the breakup of the old East African Airways, was put on the path of privatization by the Kenya government in 1996 and has since grown from strength to strength carrying over 3 million passengers last year and showing operating profits every year since.
Dr. Naikuni pointed out that the overall financial requirement until 2011, when the airline was to have grown from the present 34 aircraft to 119 aircraft, a fleet of dedicated freighters included, will be in the region of a staggering 3.6 billion US Dollars while in the near term some 151 million US Dollars were due for fees to EXIM Bank in the United States to issue guarantees for the purchase of aircraft already ordered and new orders to be placed very soon.
Amongst other developments was it mentioned that the B737-800 fleet will grow from the present 5 aircraft to 10 by 2014/15 and to 18 by 2018/19 financial years while the fleet of B777s of 300ER, 200LR and 200ER make is set to grow to 4 each and 12 overall. The presently ordered B787 Dreamliners are under current assurances by Boeing due to arrive from March 2014 onwards, no longer by the end of 2013 and the 9 under firm order and 4 options are likely to be sharply raised to meet the fleet and route development plans of The Pride of Africa 10 years from now.
From the current 55 destinations in 45 countries on 4 continents KQ intends to fly to 115 destinations in 77 countries on all continents from JKIA, also a reminder for the Kenya Airport Authority to pull up their socks and complete the expansion works presently underway and begin the long overdue construction of a second runway and yet another terminal, without which Kenya Airways plans would be in tatters for lack of infrastructure at their hub airport.
The trading in shares for Kenya Airways will close this Friday, 19th of March and will then not resume until the 12th of June, and in between the register of the shareholders will be closed at end of business Friday to establish who will obtain share issue rights, granted as 16 new shares for 5 existing shares at a discount of 32 percent below the average share price of the last 90 days. A total of 1.477.169.549 shares will be on offer as of 30th of March, with dealing commencing on 02nd April to last until 18th April. Final deadline is the 27th April to complete the exercise. When asked by this correspondent about competitive threats and anticipated market shares, Dr. Naikuni responded: Africa is the last great frontier in aviation and considering the vast expanse of the continent, in comparison with similar geographic expanses in Europe, Asia and America, there is room for growth in Africa. We have a market share in different markets of Africa between 40 and 50 percent and with our development plans we intend to maintain such market shares. About competition, British Airways has been flying to Kenya since the 1930s and we only started in 1977 and we are still on that route and hold our own, and fly more often than British Airways. Yes,the Gulf carriers are here but they also bring passengers to Nairobi whom we then transport to their final destination in the region or across the continent. We are not scared of competition, we welcome competition.
Capital Market Authority CEO Ms. Stella Kilonzo also addressed the gathering, confirming that all required approvals had been given and that this would be a unique opportunity for Kenyans and East Africans to invest in a major African blue chip company.
Kenya Airways The Pride of Africa, is now entering the arguably most exciting period of its corporate life with the rollout of Project Mawingu as the 10 year strategic development plan has been named. Watch this space for periodic reviews of progress of the share rights issue and the subsequent implementation of short, medium and long haul goals Kenya Airways has set for itself. Reporting live from Nairobi.