Still an acquisition target for the sharks.

M&A (more so A) could be the reason Ohana is more interested in playing around with debt financing and costs associated therein while neglecting the delivery plaform and business performance!

@mainat is right. I have NOT been as enthusiastic about KK. As he hinted the 'savings' are coming from lack of maintenance and sales/marketing budget.

Borrowings: These will be reduced using proceeds from sale of properties. The "false savings" [lack of maintenance] will disappear once KK decides to improve the look and feel of their stations.

Sales: I expect a drop due to closing or reducing unprofitable lines. I expect the Gross Margin to rise.

Assets: I believe their assets are very valuable and an attractive proposition for an investor with cash to invest IN the business. If I were the "Board" I would look for a strategic investor to reduce Biwott's presence while getting cash to reduce debt, increase trading opportunities and spruce up the image. How? NOT by having them buy existing shares BUT by investing NEW cash. Let KK sell 25-51% of the business at a price that is fair [even a premium to current share price] and allows the 'new' KK to grow back into a regional giant.

KK needs to attract the lost customers. There were issues with the K-Card when customers were asked to pay at the Head Office! What a waste of time. And loss of sales.

Do not expect a takeover in 2014. Earliest in 2015. I prefer the Strategic Investor vs a Takeover for long(er) term value.

In sum, the majority of the KK wazuans are "hope" investors? What if there is no takeover? Can you live with that KK share? Puma walked away at Ksh14 and only another takeover will take the price to those heights. In the absence of the whiteknight, I like VVS view of its assets, but fear that Piwott is an old man who just wants out. Where will the funds to refresh the brand come from?

A strategic investor is ideal, but frankly, selling oil is a thin margin business and unless KK is a better proposition beyond that,I can' see what a strategic investor would want.

Conclusion: as a standalone maiden, KK is probably worth Ksh10-12, IF it can avoid past fx loss issue.


Half year results should be with us by the end of the month