hisah wrote:@cde - The debt sink hole is what needs a proper plan on how it will be served. Can KQ do what KK has done by cutting back the heavy debt burden as soon as possible? Risk management in KQ needs an overhaul so that investors can be comfy about the repayment of the debt burden.
Meanwhile new yr low printed @7.05. All time low in focus...
The debt hole is huge. And deep. KK did the following:
1) Cut back on staff. Can KQ fire pilots? No, as we saw with the go-slow by their colleagues!
2) Sold assets. KQ's 'plane' assets are burdened by loans. There might be some land in Embakasi but what other assets does KQ have that aren't encumbered by loans?
3) Stopped supplying deadbeats & reduced Receivables. I saw KK stations changing hands and when one asks the attendants, they tell you the dealers are being kicked out. Other stations were 'dry' and enquiries tell you the story about dealers not paying & KK cuts them off.
4) Negotiated lower rates. KQ gets very low USD rates which cannot go much lower. KK went from 16% to 12% [Kestrel sells CP for KK. And a phone call can provide this info]. KK doesn't want your money at 12+% [see Ohana's statement]. Who will reduce KQ's USD interest rate below 5%?
5) The shareholders are watching. Biwott has his people on the board. Who is watching KQ for the shareholders?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett