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Kengen success
Rank: Elder Joined: 6/23/2009 Posts: 13,517 Location: nairobi
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Aguytrying wrote:sparkly wrote:Ebenyo wrote:Aguytrying wrote:Ericsson wrote:@Obiero
Go and read the information memorandum. The purpose was to re balance the debt:equity ratio so for the case of gqva part of the debt was retired by converting to equity for the rights issue. So if for example kengen owed gava sh.30bn post rights issue its now 10bn.
That gives kengen room to pay lower finance costs and get loans from JICA for new power plants to be built
I used to like kengen once upon a time. Then came the massive expansion plans using debt. mind boggling debt figures. that was the end for me. even this rights issue is to reduce debt so they can borrow more. i have an issue with too much (gross) debt. debt to equity ratio be damned I was attracted to kengen by a high dividend yield.I entered at kshs 6.80 which at the current dps of kshs 0.60 represents a dividend yield of 11%. That is if DPS is maintained at 0.6 after the dilution. highly unlikely. After dilution the yield at 6.55 should be about 3-4%. I hope u know That @Ebenyo. Just divide the dividend by 4. To estimate the new dividend. Assuming pay out ratio remains the same I have gone and read the IM
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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Aguytrying wrote:sparkly wrote:Ebenyo wrote:Aguytrying wrote:Ericsson wrote:@Obiero
Go and read the information memorandum. The purpose was to re balance the debt:equity ratio so for the case of gqva part of the debt was retired by converting to equity for the rights issue. So if for example kengen owed gava sh.30bn post rights issue its now 10bn.
That gives kengen room to pay lower finance costs and get loans from JICA for new power plants to be built
I used to like kengen once upon a time. Then came the massive expansion plans using debt. mind boggling debt figures. that was the end for me. even this rights issue is to reduce debt so they can borrow more. i have an issue with too much (gross) debt. debt to equity ratio be damned I was attracted to kengen by a high dividend yield.I entered at kshs 6.80 which at the current dps of kshs 0.60 represents a dividend yield of 11%. That is if DPS is maintained at 0.6 after the dilution. highly unlikely. After dilution the yield at 6.55 should be about 3-4%. I hope u know That @Ebenyo. Just divide the dividend by 4. To estimate the new dividend. Assuming pay out ratio remains the same Kusoma ni kazi ngumu for Gen Y. Or is it Gen Z/ Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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VituVingiSana wrote:Aguytrying wrote:sparkly wrote:Ebenyo wrote:Aguytrying wrote:Ericsson wrote:@Obiero
Go and read the information memorandum. The purpose was to re balance the debt:equity ratio so for the case of gqva part of the debt was retired by converting to equity for the rights issue. So if for example kengen owed gava sh.30bn post rights issue its now 10bn.
That gives kengen room to pay lower finance costs and get loans from JICA for new power plants to be built
I used to like kengen once upon a time. Then came the massive expansion plans using debt. mind boggling debt figures. that was the end for me. even this rights issue is to reduce debt so they can borrow more. i have an issue with too much (gross) debt. debt to equity ratio be damned I was attracted to kengen by a high dividend yield.I entered at kshs 6.80 which at the current dps of kshs 0.60 represents a dividend yield of 11%. That is if DPS is maintained at 0.6 after the dilution. highly unlikely. After dilution the yield at 6.55 should be about 3-4%. I hope u know That @Ebenyo. Just divide the dividend by 4. To estimate the new dividend. Assuming pay out ratio remains the same Kusoma ni kazi ngumu for Gen Y. Or is it Gen Z/ Ina unekana ni ngumu sana. Lack of knowledge will kill my people. It's in the Bible The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Debt is a beautiful thing when return on assets exceeds the interest paid on debt... Debt is also cheaper than equity in the long run as equity cannot be redeemed... With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 4/4/2016 Posts: 1,997 Location: Kitale
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Aguytrying wrote:VituVingiSana wrote:Aguytrying wrote:sparkly wrote:Ebenyo wrote:Aguytrying wrote:Ericsson wrote:@Obiero
Go and read the information memorandum. The purpose was to re balance the debt:equity ratio so for the case of gqva part of the debt was retired by converting to equity for the rights issue. So if for example kengen owed gava sh.30bn post rights issue its now 10bn.
That gives kengen room to pay lower finance costs and get loans from JICA for new power plants to be built
I used to like kengen once upon a time. Then came the massive expansion plans using debt. mind boggling debt figures. that was the end for me. even this rights issue is to reduce debt so they can borrow more. i have an issue with too much (gross) debt. debt to equity ratio be damned I was attracted to kengen by a high dividend yield.I entered at kshs 6.80 which at the current dps of kshs 0.60 represents a dividend yield of 11%. That is if DPS is maintained at 0.6 after the dilution. highly unlikely. After dilution the yield at 6.55 should be about 3-4%. I hope u know That @Ebenyo. Just divide the dividend by 4. To estimate the new dividend. Assuming pay out ratio remains the same Kusoma ni kazi ngumu for Gen Y. Or is it Gen Z/ Ina unekana ni ngumu sana. Lack of knowledge will kill my people. It's in the Bible Not really that way.Im a long term investor.So i make decisions based on a company good fundamentals.During kengen IPO in 2006 the price was kshs 11.90.So somebody who boarded at that price and me who has entered at 6.80,clearly i have got it cheap.Kengen business of producing and selling electricity is also reliable in producing returns in the long run which will beat recent dillution.Im clearly not happy with huge debt to equity ratio which ofcourse makes the share price and profits volatile.As long as i will maintain my margin of safety by adding more at rock bottom prices,i will be fine.I will consider exit should there be problems in their ability to make profits and pay dividends.But over the last ten years they have been making profits and paying dividends.I trust that they will make more profits to compensate the recent dillution.Meanwhile i will take advantage of the dillution to get more shares at cheap price when they start flooding the market.So im comfortable for now. Towards the goal of financial freedom
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I think the new Company's Act does [or will] allow for share buybacks. So yes, equity can be redeemed. Some firms issue/d Preference Equity/Shares. These too can be redeemed. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 13,517 Location: nairobi
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guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I love reading your comments. One of the most astute investors on wazua
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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obiero wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I love reading your comments. One of the most astute investors on wazua Make love not war  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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hisah wrote:obiero wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I love reading your comments. One of the most astute investors on wazua Make love not war  "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. Massive debt with the promise of higher revenues and in turn profits. Thats always the plan, it's a risk, one thing goes wrong and the interest payments eat you alive. Debt is good, but too much will kill you, ask KQ The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Member Joined: 5/30/2016 Posts: 332 Location: Kayole
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VituVingiSana wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I think the new Company's Act does [or will] allow for share buybacks. So yes, equity can be redeemed. Some firms issue/d Preference Equity/Shares. These too can be redeemed. well said chief. in my short time at wazua I realize anyone can throw around some fancy terminologies and expect all the people to be fooled KEGN, KPLC, KQ, SCOM
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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mkate_nusu wrote:VituVingiSana wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I think the new Company's Act does [or will] allow for share buybacks. So yes, equity can be redeemed. Some firms issue/d Preference Equity/Shares. These too can be redeemed. well said chief. in my short time at wazua I realize anyone can throw around some fancy terminologies and expect all the people to be fooled This is just funny
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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VituVingiSana wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I think the new Company's Act does [or will] allow for share buybacks. So yes, equity can be redeemed. Some firms issue/d Preference Equity/Shares. These too can be redeemed. Really? "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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murchr wrote:VituVingiSana wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. I think the new Company's Act does [or will] allow for share buybacks. So yes, equity can be redeemed. Some firms issue/d Preference Equity/Shares. These too can be redeemed. Really? No. Not really. http://www.businessdaily...60/-/le989b/-/index.htmlGreedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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Aguytrying wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. Massive debt with the promise of higher revenues and in turn profits. Thats always the plan, it's a risk, one thing goes wrong and the interest payments eat you alive. Debt is good, but too much will kill you, ask KQ I echo your thoughts @aguy. I find growth of wealth through equity more palatable, any day. the risks are way too low. dissolution/ liquidation or hostile take over hence loss of business but at premium on your capital. debt poses all above and at pricey interests that must be paid. ,Behold, a sower went forth to sow;....
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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muandiwambeu wrote:Aguytrying wrote:guru267 wrote:Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. Massive debt with the promise of higher revenues and in turn profits. Thats always the plan, it's a risk, one thing goes wrong and the interest payments eat you alive. Debt is good, but too much will kill you, ask KQ I echo your thoughts @aguy. I find growth of wealth through equity more palatable, any day. the risks are way too low. dissolution/ liquidation or hostile take over hence loss of business but at premium on your capital. debt poses all above and at pricey interests that must be paid. Not if the firm is TransCentury. http://www.businessdaily...08/-/yoviea/-/index.htmlGreedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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VituVingiSana wrote:muandiwambeu wrote:Aguytrying wrote:[quote=guru267]Debt is a beautiful thing when return on assets exceeds the interest paid on debt...
Debt is also cheaper than equity in the long run as equity cannot be redeemed...
With Kengen's asset base we should be seeing at least KES 20Bn PAT.. So waiting for that potential to be unlocked should be rewarding. Massive debt with the promise of higher revenues and in turn profits. Thats always the plan, it's a risk, one thing goes wrong and the interest payments eat you alive. Debt is good, but too much will kill you, ask KQ I echo your thoughts @aguy. I find growth of wealth through equity more palatable, any day. the risks are way too low. dissolution/ liquidation or hostile take over hence loss of business but at premium on your capital. debt poses all above and at pricey interests that must be paid. Not if the firm is TransCentury. http://www.businessdaily...8/-/yoviea/-/index.html[/quote] Thank you. transcentury, KQ, KK and ARM are good examples of what Large large debt can do to a company. One thing goes wrong and the pack of cards comes crumbling down. even Kenol kobil was in the mix but has managed to claw itself out. Manageable debt is good. But when i hear a company is planning to take on 200bn to 1 trillion in debt to grow its assets. i RUN for the hills. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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@Aguy - Though TCL screwed over their Bondholders. The announcement today, also captured by BD, seems to indicate they paid the Bondholders, after 5 years, just 5% of their investment... in shares not cash! http://www.businessdaily...8/-/yoviea/-/index.html[Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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VituVingiSana wrote:@Aguy - Though TCL screwed over their Bondholders. The announcement today, also captured by BD, seems to indicate they paid the Bondholders, after 5 years, just 5% of their investment... in shares not cash! http://www.businessdaily...8/-/yoviea/-/index.html[ This is a comedy, well know the cast hopefully The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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Jameni hii ni thread ya KENGEN maneno ya TCL iko in another topic/thread Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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