@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.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett