@wazurians
when KPLC announced that they planned to carry out a rights issue i anticipated that they would attempt to raise a maximum of sh4billion..

yesterday i got wind that they are attempting to raise sh10billion.. i,ve tried all the possible math to see how this would be possible but haven't been able to come up with anything..

Does anyone have a clue how they plan to raise this amount???

@mukiha since the rights issue price most times is a discount to the market price i calculated the amount of shares that GOK would offer and multiplied that by any price les than sh110..

but the way it looks to me for KPLC to raise 10bn the rights issue price would have to be above sh250 and it doesnt make any sense to me...

please... i stand to be corrected???

@mukiha what do you think will happen to gov. shares that will be converted from pref. to ordinary? is it that the gov. will keep them and subsequently denounce the rights? coz i thought the gov. was to sell their converted pref shares to raise money.

If one shareholder [GoK in this case] sell their shares, then that's not a rights issue... it would be a secondary offer and the shares would be offered to everyone, not just to the existing shareholders.

GoK will not renounce its rights, rather it will sell them in the NSE to any willing buyer at some premium. That's the way it can make money from its converted shares....and still keep them.

But at then of the process, GoK's percentage holding in KPLC will be diluted even though their total number of shares will remain the same.

@mukiha i,ve just done some quick calculations according to your info it looks like the issue price will be about sh120...

did you come up with anything close to that??

@mukiha you can use the info you gave to get the price.. we have the exact amount they are wanting to raise and then we have the information on the ownership change...

just correct me if this is total crap...

15.9bn converted at an average of sh155.. gives about 102mn shares and add this to current issued shares it gives about 182mn shares..

75% of tht gives 136mn share for GOK.. since the final GOK ownership will be 51% total issued shares after the issue gives 136mn *2 which gives 273mn shares..

to find the number offered in the rights issue: 273mn-182mn= 91mn

10bn/91mn= sh109 as rights issue price...

@mukiha i went in reverse order because i didnt know how to arrive at the rights issue price...

but using your formula or mine gives about the same answer for the number of rights issue shares that will be offered... (around 85mn-95mn shares)

thanx for everything!!