Sorry for the delay - got a bit distracted by other topics.

Just did a retest with
"linux-image-4.4.0-116-generic_4.4.0-116.140~lp1735420ModifiedAnnotations_s390x.deb"
but still can see the kvm device:

ubuntu@ubu-vm-01:~$ uname -a
Linux ubu-vm-01 4.4.0-116-generic #140~lp1735420ModifiedAnnotations SMP Wed Mar 
21 17:57:02 UTC 20 s390x s390x s390x GNU/Linux
ubuntu@ubu-vm-01:~$ kvm-ok 
INFO: /dev/kvm exists
KVM acceleration can be used
ubuntu@ubu-vm-01:~$ ls -la /dev/kvm
crw-rw---- 1 root kvm 10, 232 Mar 27 01:45 /dev/kvm
ubuntu@ubu-vm-01:~$

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https://bugs.launchpad.net/bugs/1735420

Title:
  Avoid creation of /dev/kvm in Xenial KVM virtual machines on s390x

Status in Ubuntu on IBM z Systems:
  Triaged
Status in linux package in Ubuntu:
  Triaged
Status in linux source package in Xenial:
  Triaged

Bug description:
  Since nested virtualization with KVM is not supported on s390x, please 
disable this in Xenial - in case it's doable with reasonable effort.
  (I think it was already disabled for later Ubuntu releases ... was also 
discussed on IRC)

To manage notifications about this bug go to:
https://bugs.launchpad.net/ubuntu-z-systems/+bug/1735420/+subscriptions

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