Seen briefly on 1pm news. Plan to raise 7-10 bn.
transaction advisor D&B,legal advisor the normal company sec for KPLC.

Time to start preparing funds to take up our rights and more! It will be interesting to see how the share price will respond to these news. Will probably remain depressed, but I am certain that price will rise once the rights issue closes.

a 7-10 billion rights issue basically means a 10billion rights issue...

here is the circular http://www.2shared.com/d...areholder_circular.html

share split ration 8:1 to a par value of 2.50

The PRICE for CONVERSION is Ksh. 207.50

According to the circular i posted they are seeking to raise Ksh.8,795,344,000 by issuing 488,630,245 rights. A simple calculation yield Ksh18.00 per share and 1 bob for transactional costs. I expect the rights to be priced at Ksh 20.00 or 19.00

I have had a brief review of the shareholders circular whose link was kindly provided by BGL.

If it is the real deal, then the approximate rights price is actually proposed to be set at Kshs 18 (post split) or Kshs 144 (pre-split).
I would expect the price to be somewhat higher to offset the costs of the right issue.

I have arrived at this figure given that the Proforma Balance Sheet envisages Capital and Share Premium increasing by a figure of Kshs 8.795,344,000 (or more precisely 8,795,344,410).
On the other hand, the new number of ordinary shares is given as 488,630,135.

I am presuming that the circular that I have referred to above is a work in progress. Otherwise, there would be no reason for the MD to give a generalised figure of wanting to raise between 7 to 10 billion. We should therefore wait to see the final version of the shareholders circular or even better the Information Memorandum for the rights issue.

However, for purposes of discussion, if the rights issue price were to be set at Kshs 18 pre-split, I think price on the market will fall at first. However, savvy shareholders will buy up the shares to lock in the very cheap rights issue shares. This will then cause the price to rise again as we approach closure of the register for the rights.

What do the rest of you think?

@the deal, The equivalent pre-split price is actually 160 (i.e. 20*8).

Your strategy assumes that the rights issue is not seriously oversubscribed. However, if the rights are priced at between 18-20, I would expect it to be HEAVILY oversubcribed, notwithstanding the fact that GOVt will not take up its rights. Remember the last NIC Bank rights issue?

I prefer Stockmaster's strategy of buying the (Govt) rights on the market. In addition, I WILL also apply for additional rights and I will even take a bank loan to ensure that I get the maximum possible. If others are like minded, oversubscription will be a foregone conclusion.

Question is how many will you get with institutional investors, investment groups and individual investors etc scrambling for them? I find it wise to buy now at the current price of 28.5/- (after split), working with rights offer of 20/- it's still a bargain.