CMA approves Kenya Airway’s Sh20.7 billion Rights Issue

By John Oyuke

Kenya Airways (KQ) has received the green light to float a rights issue through which it plans to raise Sh20.7 billion to enable it meet additional capital requirements related to expansion and acquisition of additional aircraft.

Capital Markets Authority (CMA) Chief Executive, Ms Stella Kilonzo, said the Authority had reviewed disclosures made by the airline in the Information Memorandum in accordance with Capital Markets rules, and is satisfied with the requirements.

She added that in addition to the biggest ever cash call, the Authority has also approved the listing of an additional 1.48 billion ordinary shares on offer under the rights issue on the Nairobi Securities Exchange.

"The Authority welcomes the move by Kenya Airways Limited for electing financing through the capital markets to meet its current and future infrastructure development initiatives," she said in a statement on Friday.

KQ intends to expand its operations through acquisition of new fleets, inline with its ten-year plan. If realised, the money will enable it to fund the ambitious plans to double its fleet by 2015, and become Africa’s premier carrier with a footprint in every nation in Africa in next ten years.

The plan

Kenya Airways is also set to acquire nine new Boeing 787 Dreamliners over the next few years to enable it effectively operate long haul flights to regions such as Far East, North Asia, and Southern America.

In February this year, the carrier appointed Crested Stock Securities from Uganda and Orbit Securities Company from Tanzania to join the transaction team that would steer the planned rights issue that is slated for November this year.

Kenya Commercial Bank will be the receiving bank, while CFC Stanbic is lead transaction adviser. Scanad and Ogilvy PR will be advertising and public relations advisors respectively.