KQ Buyout Delisting: The takeover of Kenya Airways by the national government and the subsequent delisting from the Nairobi Securities Exchange has entered the homestretch.
This is after a bill that will pave the way for the takeover was table in parliament for debate. The bill dubbed, The National Aviation Management Bill 2020 is expected to revert control of Kenya Airways back to the State by October this year.
The acquisition of KQ by the State will involve the buyout of minority shareholders at a premium and converting shares held by banks into Treasury bonds.
According to a report that appeared in the Business Daily on Friday, “Kenya has reached an agreement with Air-France KLM on the offer price, which will be a premium on the carrier’s prevailing trading price at the Nairobi bourse. The same KLM offer price will be used to acquire the minority shareholders, who hold about 2.8 percent of the shares currently valued at Sh. 397 million.”
The daily further says that the National Treasury has confirmed that the transactions will be conducted once the bill is approved.
“We are ready to complete the transactions once Parliament passes the Bill. A lot of work has been done in the background including striking an agreement with KLM and talks are advanced with banks on conversion of their equity to bonds,” the National Treasury cabinet secretary Ukur Yatani was quoted.
Since 2014, Kenya Airways has been recording mind boggling annual losses despite posting growths in its revenues. The losses have been attributed to among other issues mismanagement.
In the latest financial posting, the national carrier posted a Sh. 12.98 billion net loss. However, revenue increased by 12.4 percent to Sh. 128.31 billion on improved passenger and cargo numbers due to expansion of network.
The National Treasury is the carrier’s biggest shareholder with a 48.9 percent stake. Kenyan banks, which converted their loans into equity, own a 38.1 percent stake. KLM holds a 7.8 percent stake while other investors hold 5.2 percent stake. KQ Buyout Delisting.