From left, NSE vice chair Bob Karina, Kenya Airways CEO Sebastian Mikoz
and NSE chief executive Geoffrey Odundo during KQ's relisting at the
bourse on November 29, 2017. PHOTO | SALATON NJAU | NMG
The financial restructuring of Kenya Airways will create positive shareholder equity, cash flow and free it from
unsustainable debt, deal advisor Kestrel Capital said on Wednesday.
Kestrel
executive director Andre DeSimone said the national carrier now has a
positive net asset base, which will help it move forward despite the
massive dilution of shareholders’ stake.
“The
balance sheet has always been holding back the company, now since that
has been released and replaced by positive equity, shareholders have the
opportunity of participating in that growth going forward,” Mr DeSimone
said on the sidelines of bell ringing ceremony to commence the
re-listing of the KQ, as the airline is known by its international code,
shares at the Nairobi Securities Exchange.
On
Wednesday, the national carrier started trading 5.3 billion shares at
the Nairobi bourse following a two-week suspension meant to facilitate
the share split and consolidation of company’s shares.
In
August KQ held a meeting where shareholders approved a restructuring
proposal that would reduce KQ’s debt burden by approximately Sh50
billion through conversion into equity.
Mr DeSimone said as a result, shareholders equity position would change from a negative Sh45 billion to a positive Sh12 billion.
This
translated into a positive book value per share of approximately
Sh1.60, based on Kenya Airways March 31, 2017 year-end financial
statements and accounting for both share dilution and a partial share
consolidation.
KQ also plans a new share offering in
2018, to allow shareholders to participate in the final stage of
airline’s balance sheet restructuring.
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