East African Business Week

NAIROBI, KENYA-Kenya Airways shareholders have approved plans by the airline to raise additional capital by way of a rights issue to finance its 10-year expansion plan
Shareholders argued during the airline's 35th Annual General Meeting (AGM) in Nairobi recently, that the move will pave the way for the airline to acquire additional aircraft to drive its fleet and route expansion programme.
 Rights issue is a special form of raising capital through selling shares to existing shareholders. It is different from an initial public offering where shares are sold to the general public through stock markets.
The approval is a key milestone in a rights issue. It is however, subject to final approval by the regulator, the Capital Markets Authority
Kenya Airways is already a public company listed at the Nairobi Stock Exchange and cross-listed in regional bourses including the Dar es Salaam Stock Exchange.
It was, however, not disclosed how many shares will be sold in the rights issue. The Kenyan government has 23 per cent ownership in the airline while the KLM has 26%. About 51% shareholding is listed on stock markets.
During the AGM, the airline's shareholders approved an increase in the authorized share capital of the company from KSh5 (Sh85 billion) billion to KSh10 billion to enable it go ahead with the rights issue.
However, some shareholders complained they have never got any bonus share since they bought the KQ shares. The AGM also approved a dividend of KSh1.50 per share for the year ended 31st March 2011.
KQ's fleet expansion plans include purchase of 10 new Embraer E-190 aircrafts, which will mainly service the African routes.
KQ has also signed agreements with US-based Boeing Aircraft Manufacturing to deliver 24 new aircrafts over the next five years.