Potential investors had to decide whether that offering price made Kenya Airways a good investment.  The net asset value per share, valued at historic cost, was KShs 5.19 per share, while the adjusted net asset value per share based on the current valuation of assets was KShs 16.18 per share.  At the offer price, Kenya Airways' price to earnings ratio before unrealized exchange gain was 1.92, while including exchange gains made the price to earnings ratio 3.4 per share.  The Prospectus noted that, barring unforeseen circumstances, the Directors of Kenya Airways anticipated recommending a dividend payout ratio (defined as dividends paid to investors per share divided by earnings per share) of 40% for the financial year ending 31 March 1997.

The initial public offering was in fact oversubscribed in aggregate by 94%.  There were 112,000 domestic applications for 311 million shares, 182% of the number of shares available.  Foreign investors applied for 146.7 million shares, 228% of the shares available for foreign investors.  The strong interest in Kenya Airways shares represented a clear vote of confidence in the prospects for the company.

Given the oversubscription, rules needed to be established to allocate the shares among applicants.  The Board of Kenya Airways made the following decisions:

• The staff applied for a total of 4.6 million shares as individuals.  Each of these applications were fulfilled in full.
• The Kenya Airways Employee Share Ownership Plan (ESOP) applied for 4.7 million shares.  It received this application in full.
• The Kenya Airways Employee Provident Fund applied for 4.2 million shares.  It received this application in full.
• All applicants who applied for 1000 shares or fewer received their applications in full.
• All applicants, other than those discussed above, who applied for over 1000 shares received an equal pro-rata allocation with a minimum allocation of 1000 shares.