stocksmaster wrote:VituVingiSana wrote:It's 450mn. At 20% this is 90mn in Interest Income for 2012. Looks good!
BTW, WTK has moved to rented premises in Karen Business Park.
Why not use the money to buy out the remaining 60% of Kapchorua Tea........60% of 3,912,000 Kapchorua shares @ Ksh 150 per share (a 20% mark up on prevailing share price) would cost Ksh 352M.
Since they have been managing the whole company (Kapchorua), the acquisition would be very smooth (no lengthy due deligence etc).
That would leave about Ksh 100M for distribution as a special dividend to shareholders (about Ksh 10 per share).
The Williamson tea shares are overdue for a share split.A split by a factor of 10 would be logical to increase liquidity and lower the unit price per share.
The company has huge reserves (Over Ksh 4B).Keeping the funds from the sale of Williamson House without clearly explaining to the shareholders the intended purpose of use would border on the criminal.
Happy Hunting.
Kapchorua - I would not sell the shares at 150/-. The NAV is 200+. I did suggest a swap so Kapchorua is 'merged' into Williamson. That is more likely but WTK doesn't own 50% so needs the OK of the other major shareholders.
Reserves - This is not cash sitting in a box. Reserves is a mere accounting term on the Equity side of the Balance Sheet. In many instances, it is being combined with Par Share Capital & simply known as the more logical "Shareholders Funds"
Cash - Actually, during the AGM, the Board was clear. They have a plan to build a new HQ in Karen where WTK owns some land. The thought was to build it later if it made sense. For now they are at Karen Business Park.
If the commercial/office space 'boom' peters out then there will be plenty of 'empty' office space available. WTK can then get a good deal at a lower rent/sq foot when Landlords are desperate.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett