Kenya Airways Jumps Most in Month on Possible Management ChangesBy
Government, biggest shareholder, said to be demanding shake-up
International Finance Corp. may be given seat on board
Kenya Airways Ltd., Sub-Saharan Africa’s third-biggest carrier, gained the most in a month after a report said the government is considering changes to the company’s board and management following an annual loss.
Shares in KQ, as the company is known, climbed as much as 5.3 percent to 6 shillings before trading 3.5 percent higher at 5.90 shillings by by 2:30 p.m. in the capital, Nairobi. A close at this will level would be the biggest gain since Aug. 11. More than 25 times the three-month daily average volume of shares traded.
“The market is taking the likelihood of changes in the board and management as a positive sentiment,” Kevin Tuitoek, a research analyst at Nairobi-based Genghis Capital Ltd., said by phone.
KQ, which is 30 percent owned by the government of Kenya and 27 percent by Koninklijke Luchtvaart Maatschappij NV, is selling aircraft to raise as much as $320 million after the airline’s loss widened to 25.7 billion shillings ($243.6 million) in the year through March, from 3.38 billion a year earlier, on hedging and impairment charges.
The government is reviewing its shareholder agreement to grant the International Finance Corp., KQ’s biggest creditor, a seat on the board, Nairobi-based Standard newspaper reported on Sept. 3, citing Treasury Secretary Henry Rotich. The review may dilute KLM’s stake, Rotich said.
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