Saturday, Feb 27, 2021
HomeBusinessEconomyKQ suspension from NSE extended for further 6 months

KQ suspension from NSE extended for further 6 months

The new entity will further comprise a new Kenya Airports Authority (KAA) and the Aviation Investment Corporation.

The Capital Markets Authority has approved the extension to suspend Kenya Airways from the Nairobi Securities Exchange (NSE).

The extension is effective October 4, 2020 and will stay in force for a further six months.

KQ shares were suspended from the NSE in July this year when the government moved into fast track the re-nationalization of the carrier.

A week earlier before suspension, the government had submitted the National Aviation Management Bill in the National Assembly to rubber stamp the buy-out approved by the house in 2019.

The new entity will further comprise a new Kenya Airports Authority (KAA) and the Aviation Investment Corporation.

Suspension of the shares from trading is a capital market procedure which is aimed at protecting investors from material changes in companies.

Kenya will take at least 21 months to resume full control of Kenya Airways, buying out minority shareholders and converting shares held by banks into Treasury bonds, a lawmaker briefed on the transaction said.

The loss-making airline, which is 48.9 percent government owned and 7.8 percent held by Air France-KLM, was privatised 23 years ago but sank into debt and losses in 2014.

In its 2019 half years results, KQ posted a pretax loss of Ksh.8.56 billion through June 30.

This marked a more than double increase in losses for the airline which recorded a Ksh.4 billion loss for the same period last year.

The expanded loss, which is against a recent trend of loss cutting by the carrier, is attributable largely to both increased operational costs and elevated impairment losses.

Kenya Airways has pushed for increased network and route expansion including the launch of new destinations to Geneva, Milan, New York and Mogadishu.

Extension on suspension of the airline from NSE comes on the back of the airline’s management to finalise on its operational and corporate restructure for the imminent government buyout.

POST TAGS:
FOLLOW US ON:
Comparison of Corona
World Bank appoints

Digital Desk, Metropol TV

Rate This Article: