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NBK - Dilution through conversion
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VituVingiSana
#1 Posted : Saturday, August 31, 2013 1:07:19 PM
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http://www.businessdaily...-/15ggseaz/-/index.html

I expect the dilution to be nasty. I wonder how long CBK will allow NSSF to own more than 25% of NBK?

I would not want to hold NBK shares. Atwoli setting lending policies?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mwekez@ji
#2 Posted : Saturday, August 31, 2013 9:54:34 PM
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Dilution galore. Picture this. NBK has:-

280,000,000 Ordinary shares of Sh 5 each but a whopping 1,135,000,000 Preference shares of Sh 5 each
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mwekez@ji
#3 Posted : Sunday, September 01, 2013 6:35:03 PM
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Quote:
Privatisation Commission suggested a formula where preference shares would be converted into ordinary stocks on the basis of 1:1.

NSSF protested, arguing that the conversion plan would cause the fund to lose money


The dilution here is just mind boggling
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hisah
#4 Posted : Monday, September 02, 2013 4:52:07 AM
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mwekez@ji wrote:
Quote:
Privatisation Commission suggested a formula where preference shares would be converted into ordinary stocks on the basis of 1:1.

NSSF protested, arguing that the conversion plan would cause the fund to lose money


The dilution here is just mind boggling

KQ's rights issue now looks like xmas on comparison terms with what NBK is about to do.

@cde - if this is passed, you'll get a rough shaving no doubt...
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Cde Monomotapa
#5 Posted : Monday, September 02, 2013 8:53:58 AM
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Settled for the 17-22 technical rebound & walked in Q2. Still on the watchlist though where bad news can be good news. Let's see.
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vastcapital
#6 Posted : Monday, September 02, 2013 10:22:50 AM
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Joined: 10/10/2010
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Location: Nairobi
If that is the conversion ratio the dillusion is mind boggling indeed with a resulting conversion price of 5.25 which technically means the NSE price could be as good as 5.25! If the preferred stock were issued @5 and now the ratio is given as 1:1 this means that the conversion ratio is a big bonus to the prefered stock holders. I think the MD is trying to entice the majority of his common stock holders who are still the prefered stock holder! in time for the rights issue. The wanjiku stock holder hana chake. The share could fall below 10bob! Who is the investment bank in this deal? Should CMA let this be?
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vastcapital
#7 Posted : Monday, September 02, 2013 12:37:20 PM
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The bank recently had a bonus issue 2:5. the only one ever had by the bank.
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mwekez@ji
#8 Posted : Monday, September 02, 2013 12:56:13 PM
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vastcapital wrote:
The bank recently had a bonus issue 2:5. the only one ever had by the bank.


Which was basically a capitalization of the share premium in the books of March 2010. Minority shareholders who have bought this counter at very high prices from back in the days (chart below) are damned by the dilution
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mwekez@ji
#9 Posted : Monday, September 02, 2013 12:59:47 PM
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.....
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mwekez@ji
#10 Posted : Monday, September 02, 2013 2:10:21 PM
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Factoring the bonus, the cost per share for those who participated in IPO is KES 5.00. The IPO participants are safe however bad this dilution goes. But then again, they have held the shares from the 1994/6!
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