Tanzanians show low response on KQ rights issue

Public response to buy Kenya Airways (KQ) shares through 400bn/- rights issue has been low as the offer expires today.

Orbit Securities Chief Executive Officer, Mr Laurean Malauri was however reluctant to give reasons on the low  turnout.

The CEO, whose company is the lead sponsoring broker for the airliner said he was disappointed on the outcome despite massive publicity on the issue since last December.

Kenya Airways wants to raise KSh22 billion (about 400bn/-) to boost chances of hitting the share sale target.

KQ’s Treasury Manager Jane Kiboi said “anything above 70 per cent of the rights issue is a success.”

The manager said rights issue fund will enable the airline to realize it’s ten-year dream of owning 107 planes.

The aircraft will enable KQ to fly to 115 destinations in six continents. Currently, KQ is serving 55 destinations in four continents, with 31 airplanes.
Mr Malauri

The move to directly involve brokers in the three countries will assist in raising the share sale in the region’s biggest ever rights issue.

Kenya’s Standard Investment Bank Director (Corporate Finance), Mr Amish Gupta said the right issue is the biggest in the region which signifies the bloc ability to handle big IPOs.

“Kenya Airways grew on debt successfully since privatization in 1996,” Mr Gupta said in Dar es Salaam.

Mr Gupta said KLM and the Kenyan government have committed to take up their full rights that is expected to support the cash call. The two are the top shareholders in the company with a combined stake of 49 per cent.

KQ is listed on the Nairobi Securities Exchange (NSE), Uganda Securities Exchange (USE) and Dar es Salaam Stock Exchange (DSE).

The rights issue offer is 280/- a piece share with the current shareholders given the rights of 16 shares for every five.
Source: The Daily News
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