It is not uncommon to have debt converted into Equity.
NBK
KPLC
Now KenGen.

Other firms in which debt could be converted into Equity include ARM & Transcentury. Though the debt was issued as Convertible Debt so it was expected unlike KPLC/KenGen.

The company actually plans to take up to $1Billion in additional debt after the rights issue.

...with most of it going to tenderpreneurs..

I have these ten reasons for considering adding to my Kengen position and looking for counter reason why not:

1. The big other comprehensive income from Asset revaluation is good for shareholder as it unlocks the true value of the company, caveat as long as it is done by credible valuer and raises NAV.
2. The rise in the earning per share to 5.24 is due to increased revenue from capacity increase and not because of the asset revaluation.
3. The market valuation of the company is 17b yet the company had annual revenues of 26b and earnings of 11b. The market has valued the company below its annual revenue.
4. Kengen is currently selling cum dividend with 8.3% yield.
5. The rights issue will offset government debt and reduce interest paid out by 1.8b and improve on current asset ratio
6. More capacity is to be added going forward with potential of tax benefits.
7. With government secured load with weighted average of 4.X, this is free money. Where can you
get such favorable rates for your investments.
8. Kengen has a 73% market share with very wide moat.
9. Kengen projects are delivered on time and have shown consistent impact on the bottom on completion due to capacity generated that also must be taken up by KPLC.
10. Average EPS for six years is 2.1, and sector average P.E is 7.7, discounting these values by 20% Will give P.E=6.16 and EPS=1.68, gives a fair value of 10.3

With the above ten reasons, why should I not buy additional Kengen shares at prevailing market price of below 8?
Assume I will be able to raise the approx. 14 shillings per current share required to redeem the rights.

KENGEN should shake the energy sector by building the Grand Falls hydro power station of 2,000MW.
This on top of the upcoming geothermal power projects;KENGEN can stay for five years without building an additional power station as we wait for demand to build up

@murchr
Mutonga in Tharaka Nithi constituency.
It was part of the seven forks hydro project.
only 5 have been built

anyone with the timeline for the rights

@sparky great job,but you advise a wanjiku here,go for the rights or dispose now?

No new power plant expected in FY 2016 apart from 25MW on wellheads.

[quote=Ericsson]Post #59 relating to this business daily article;
http://www.businessdaily.../-/pdws4pz/-/index.html[/quote]

And I bet this was a negotiated, not open sale....


NSSF just transferred PUBLIC property to PRIVATE hands at throw away price.