KP is assured of revenues no matter what, since it is the only power distributor. However they have massive debts that GoK has idemnified. GoK can't let them go under.

Kengen has agreements with KP which mandate it to take the power generated at agreed rates, incase KP can't pay i'm sure GoK will intervene.


Link

The biggest threat is dilution. A very likely scenario is where the GOK guaranteed debt cannot be repaid then GOK converts all the debt owed to it into equity. Right now there are about 1.95 billion shares of KPLC. KPLC has about 100 billion worth of debt. Suppose half that debt was converted into shares at the current price of 2 shillings a share. There would now be 27 billion shares with GOK owning about 26 billion of them. The share previously valued at 2 shillings would now be worth less than 20 cents.

Rights issue like the one Kengen issued a few years ago can also greatly dilute the stock and lower the share price.

Kenya is set to declare wholesale power supply contracts null and void following a drop in demand in the wake of the global Covid-19 pandemic, setting the stage for a crisis in the electricity market that could hurt supply.

The Ministry of Energy says that it will declare force majeure on power generation contracts, which technically means that Kenya will not be bound by the existing pacts on payment of electricity from the more than 10 power producers.

Ministry moves to declare wholesale power deals null https://www.businessdail...1734-ifpgvuz/index.html via @BD_Africa

Covid19 has been with us for 3 months months only but is being blamed for losses that started 3 years ago.

Salaries are paid on 26th. For the first time ever, there has been a delay of 3 days and counting. This may sound benign but it is literally unprecedented. Secondly, I have heard of "restructuring" - wait for the inevitable job cuts news.