Don't I love Odieros, everyone caring to see through this smoke screen can see Diageo seeking to increase its stake in EABL through the back door. They are quietly confident most of the shareholders will not participate in the rights issue and therefore they will have the rights to themselves and voila! they will have raised their stake to perhaps 70% from the current 53%.

There is no mention of the proceeds from the 20% TBL stake which surely must be able to raise 70% of the cash required to purchase KBL from SABM. Add onto that the cash used on Serengeti and they would have had sufficient money to pay SABM and start up in Sudan. Serengeti could have been purchased using a bond which could have been floated last year or next year when interest rates cool off.

EABL at any onetime used to have about Kshs 8 billion in its coffers but now it appears the company is suddenly struggling for cash. I believe some busy bodies in their M&A department have engineered this situation or are seeking to profiteer from it. They definitely didn't believe a 51% stake in Serengeti was worth 5B at current market prices. It's a loss making entity and could have been bought latter for a lower amount or may be they were unlucky.

Either way this rights issue is very sinister and similar to the previous EABL one. I suspect the rights price will be above 175. Why didn't EABL go for debt to fund repurchase of KBL which was a higher yielding investment. Debt was cheap last year and the markets were very favorable. Even safcom collected cash in December for use this year.

Blease be seated!