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kengen announcement :rights issue resolution
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mugo2of3
#51 Posted : Thursday, November 19, 2015 12:01:13 PM
Rank: New-farer

Joined: 5/22/2014
Posts: 78
VituVingiSana wrote:
lochaz-index wrote:
Ex-rights for a short term ride you will make money. Longterm however, kengen is a sad tale of a company with respectable performance which happens to be in a capital intensive industry.

Large capex with government involvement tends to be a vicious cycle of debt conversions and rights issues. This means dilution is always around the corner which begets a low share price.

Bingo.
The NAV/share is almost irrelevant for utilities. You cannot sell the assets, many of which are politically sensitive, immovable or have terms and conditions attached.
The dividend yield is important since utilities act almost like bonds.
And in Kenya utilities have the stain of massive corruption in their ranks.
Utilities are also affected by politics and populism. Look at KPLC. It makes little profit, it gets criticized. It makes a fair profit, it gets criticized. It makes super-normal profits, it get criticized.


Thanks @lochaz-index.
@vvs, you have explained so much in a niiiice summary..
..I keep getting wiser on the Wazua forum .

I await the price post Rights-Issue
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Ericsson
#52 Posted : Thursday, December 10, 2015 12:53:55 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,809
Location: NAIROBI
Technical analysis of the amount of money to be raised suggests the following;
The rights issue will be a 2:1 bringing total number of shares to be issued at 4.4bn
GOK will be allocated 70% or 3.08bn shares for the debt to equity conversion.
Private shareholders owning 30% will be left to scramble for the remaining 1.32bn shares.
The rights issue price will be about ksh.6.5
Private shareholders will be required to raise ksh.8.58bn
The conversion of GOK debt is as follows (3.08bn *6.5=20.02bn which equals the amount KENGEN debt converts to equity
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Aguytrying
#53 Posted : Thursday, December 10, 2015 9:38:50 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Ericsson wrote:
Technical analysis of the amount of money to be raised suggests the following;
The rights issue will be a 2:1 bringing total number of shares to be issued at 4.4bn
GOK will be allocated 70% or 3.08bn shares for the debt to equity conversion.
Private shareholders owning 30% will be left to scramble for the remaining 1.32bn shares.
The rights issue price will be about ksh.6.5
Private shareholders will be required to raise ksh.8.58bn
The conversion of GOK debt is as follows (3.08bn *6.5=20.02bn which equals the amount KENGEN debt converts to equity


Undersubscription pap. No way private shareholders will raise 8 bn in this liquidity crunch and bear market. Let's be realistic. Fahari I reit know what I mean
The investor's chief problem - and even his worst enemy - is likely to be himself
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Ericsson
#54 Posted : Thursday, December 10, 2015 9:51:15 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,809
Location: NAIROBI
@Aguytrying
Fahari reit guys had no faith in it;it had nothing to do with liquidity crunch and bear market.
Remember KENGEN PIBO which was oversubsribed in 2009 was during a bear market run.
If guys have faith in something pesa watatoa.
If we are in liquidity crunch how will you explain the huge traffic jam been experienced in Nairobi and number plates moving bubble gums being chewed
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Ericsson
#55 Posted : Thursday, December 10, 2015 9:57:38 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,809
Location: NAIROBI
So I can't quickly judge that it will be undersubscribed
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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muandiwambeu
#56 Posted : Thursday, December 10, 2015 11:02:48 PM
Rank: Veteran

Joined: 8/28/2015
Posts: 1,247
How wanjikus got screwed up in kengen was a marvel. Let's it all begin again. It's a wash and wear thing. And wash and wear again.
,Behold, a sower went forth to sow;....
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sparkly
#57 Posted : Friday, December 11, 2015 9:18:54 AM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
muandiwambeu wrote:
How wanjikus got screwed up in kengen was a marvel. Let's it all begin again. It's a wash and wear thing. And wash and wear again.


How exactly was Wanjiku screwed in Kengen??

For your info GOK offered 30% to the public in March 2006 at KES 11.90 which was oversubscribed by 236%. The company has consistently returned a profit, grown the balance sheet and paid a dividend.



The price has been higher than IPO price most of the time (rose to 40 post listing).


Kengen also successfully issued a KES 15B tax free PIBO at 12.5%.

Again how has Wanjiku been screwed by Kengen?
Life is short. Live passionately.
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muandiwambeu
#58 Posted : Friday, December 11, 2015 10:16:15 AM
Rank: Veteran

Joined: 8/28/2015
Posts: 1,247
Wanjiku bought a piece of company to own. How many sold at forty? So many of them laments they had no idea this thing would tank this much and we are not down yet.
,Behold, a sower went forth to sow;....
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Boris Boyka
#59 Posted : Friday, December 11, 2015 10:21:58 AM
Rank: Veteran

Joined: 11/15/2013
Posts: 1,977
Location: Here
obiero wrote:
only government can afford to sit out a rights issue. in any case there are only two options. one is to sell off entire holding if calculations show the price is likely to dip post rights. second is to buy into the rights and load up more if price drops after the issue. the latter option has been noted by myself to be cost effective since the element of commissions doesnt arise and prediction of a fall can at times be sketchy

Myself too.
Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Boris Boyka
#60 Posted : Friday, December 11, 2015 10:26:10 AM
Rank: Veteran

Joined: 11/15/2013
Posts: 1,977
Location: Here
muandiwambeu wrote:
Wanjiku bought a piece of company to own. How many sold at forty? So many of them laments they had no idea this thing would tank this much and we are not down yet.

That's not enough reason. Selling and holding is a personal decision depending on one's strategy. We all know shares move up and down and they always will. A shareholder decides what to do when. Recently a wazuan refused to offload CFC @140 and its back to his buying price.
Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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