Kenya Airways has been placed into a trading halt by the Nairobi Securities Exchange.
According to the NSE, the airline’s operational and corporate restructure and Government buy-out is now ‘imminent following the publication of the national Management Aviation Bill 2020 on 18 June 2020.”
“Consequently, the company has applied for suspension of trading in its shares and closure of its register until the resolution of its future is determined.”
“The suspension from trading the company’s shares take effect from July 3, 2020, and will remain in force for a period of three calendar months,” said the NSE.
The suspension was approved and issued by the Capital Markets Authority pursuant to section 11(3) (w) of the Capital Markets Act and regulation 22 of the Capital Markets (Securities) (Public offers, Listings, and Disclosures) Regulations, 2002.
On Thursday, the listed airline maintained its rally, jumping 9.8 percent on local investor sentiments to close at Ksh 3.60 per share. According to Standard Investment Bank analysts, the airline has cumulatively gained 39.1 percent over the last four sessions.
If the Bill is adopted by Parliament, it will lead to the formation of an Aviation Holding Company to run Kenya Airways, Kenya Airports Authority (KAA) and the Kenyatta International Airport (JKIA).
The Kenyan government owns 48.9 percent of the national carrier and it is expected to buy out the remaining holders of 51.1 percent of the shares.
Air France-KLM owns an almost 8 percent stake in Kenya Airways.
Local lenders own a 38.1 percent stake which they acquired in 2017 after KQ was unable to service its loans of Ksh16.9 billion.
Under the proposed law, KQ will be recapitalised with a new share capital of Ksh.7.5 billion upon nationalization.