@ The Deal. You appear to have chosen to ignore the many posts on the topic of conversion, so let me weigh in as well.
KPLC has Kshs 15,899,000,000 worth of preference shares in its books (ignoring the other older preference shares). 87% of these shares = Kshs 13,882,130,000. It is this value in Kshs that is to be converted into ordinary shares. The practice has been to use the weighted average market price for say the 6 months period before the application to the CMA for the conversion or publication of the intention to convert. Pundits can correct me on this.
I believe the price for the last 6 months has been ranging from 170 - 210. At Kshs 170, which, is the lower end of the range the new shares would be 81,365,470. If however, the conversion ratio was set at Kshs 190 the government would only get 72,800,684 additional ordinary shares meaning conversion would actually be lower than 1:1.
A 1:1 conversion ratio would certainly not be any cause for alarm as the shares would only just double. Mind you, many of us believe that KPLC should first revalue all their assets before conversion since their assets are currently undervalued which could result in a more equitable conversion ratio perhaps to the extent of govt getting less than 50% of current ordinary shares. This scenario is however unlikely as Govt calls the shots at KPLC.
Even if we extend the argument and include the proposed rights issue shares (touted at Kshs 10 billion in various quarters), it is clear that the current KPLC share price appears to have discounted all that. True, in the short run, the price may fall, but for many of us, that would only provide us the opportunity to get MORE of a value share at GREAT price.