Not sure about this. The shares will be substantially diluted coz of entry of new capital converted from debenture. Am not sure how the debenture will be converted. Will it be ordinary sharecapital or will it be preference shares like KPLC. Its better for us old shareholders that it comes in as preference shares.

Uchumi is also facing significant challenges in their business from competoition (Nakumatt, Tuskers and all the rest) and they may not immediately win over investors till people start to see good results on their shop floors

@Chi20, I doubt, should the government convert debt into ordinary shares they will really dilute the company. I think that is the most probable action since converting its debt into preferrential shares is a loan by any other name.

IMHO... the price will drop to around 3/- but then rapidly rise... I think the 5/- number may not be off.

The CATCH is that you have to be patient... Most people are not...

As @mukiha said... if you have waited for 4 years (how long has it been?) then why not wait a little longer.

(Bloomberg) -- Uchumi Supermarket Ltd. of Kenya shareholders voted to end the company’s receivership at a shareholders’ meeting in Nairobi today.

The company’s debenture wll be converted into shares of 10 shillings each, Receiver Manager Jonathan Ciano said at the meeting today.

Planned total shares of 262.5 million, up from 180m - a smaller increase in shares than i had expected. Their target of 500m earnings for the current year would therefore translate to a targeted EPS of about 1.9shs. Shs 19 as trading price seems feasible (translating to a PE of 10) in the short to medium term.
I dont really see a price under 10shs.
But, lets wait and see. This market has its surprises..

Is the 500mn projected for 2010-11 PAT or PBT?

In 2008-9, there was a 250mn tax credit (as part of the 420mn PAT) so the 'real' performance was not as good.

Well, an investor who is willing to buy a longer-term stake in Uchumi may be interested. Uchumi will need to raise more cash (debt or equity) to improve the stores, expand & increase the range of merchandise offered.

@guru - The 14/- shown is 'fake' coz it was the last traded price before the crap hit the fan...

There are a lot of holes here... lakini for a strategic investor it makes sense to sweep them up cheap...

@guru - I have no idea what constitutes 'cheap' for Uchumi.
Do you have the latest results?

You could use PE... but the shares may be increased... so account for the dilution...

When I say 'cheap' by a strategic investor... it means they would do additional due diligence... thus have a better idea than we do...

Asante... I expect many will sell at 10 or below 10...
10/- in hand is worth 20/- in the future...

They are not desperate to sell. They had not taken loans like their SCOM friends.

There will probably be a shortage of supply. So may be, just may be, we might be looking at another "Carbacid" return...