Markets

Extension of suspension from trading KQ shares to stay for further 9 months

The Nairobi Securities Exchange (NSE) has extended the suspension from trading the Kenya Airways (KQ) shares for a further nine months.

“The extension of suspension from trading the company’s shares will remain in force for an additional nine months with effect from April 5, 2021.” Said the NSE.

According to the NSE, the national airline is yet to finalise on its operational and corporate restructure for the eventual government buy-out.

This follows the publication of National Management Aviation Bill 2020 in June last year.

However, this is not the first time this kind of extension has been reviewed.

In September last year, the bourse extended the suspension of KQ’s shares for a period of six months which lapsed in March.

The first time KQ shares were suspended from the bourse was in July last year when the government moved in to 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.

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

The loss-making airline, which is 48.9 percent government owned and 7.8 percent held by Air France-KLM, was privatised 24 years ago but began sinking into debt and losses in 2014.

In its 2020 full year results ended December 30, the national carrier plunged into a pre-tax loss of Ksh.36.573 billion.

The loss was nearly triple the previous year’s loss of Ksh.12.9 billion, which KQ Chief Executive Officer Allan Kilavuka attributed to the coronavirus pandemic.

“Since the start of the year, coronavirus has devastated the aviation and travel market, causing consistent and severe capacity cuts week after week. Globally, overall capacity is down nearly 50 million seats which is over 47 percent,” said Kilavuka.

Yet again with the ongoing coronavirus-related lockdowns and restriction of movement globally, the airline could be far from making any profits after it suspended all flights to the United Kingdom until further notice.

KQ said the move was due to a government directive to suspend all flights to the UK.

“The suspension is due to the directive given by the Government of Kenya suspending all flights from the UK.” Said the airline in a statement.

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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