obiero wrote:muandiwambeu wrote:obiero wrote:Othelo wrote:I hope there are other tangible strategic issues and business processes this McKinsey guys have pointed out sio activities tupu!!!
@Maka is there will by staff to partcipate in this 'change'?
@Othelo.. Several strategies have been floated including most urgently conversion of the short tenor loans to longer periods. Also sale of obsolete and underutilised assets. These are major cash points expected to address @vvs negative equity
Sale of assets does not address negative equity and closest it means that the company is being prepared for liquidation and therefore creditors should press for liquidation to protect pecking order and charged assets from being canibalised by the management.
on to your marks...... Run.
Shindwe.. The proceeds from sale are expected to be used in liability reduction. How will that not address the asset liability imbalance??
Sale of assets can generate cash that can be used to reduce liabilities. Unless the assets are worth more than the Book Value [not necessarily the case as seen with the 777s] the hole [aka Negative Equity] remains unfilled.
I'll use KK as an example. It lost 6bn in 2012 which almost wiped out the equity as stated BUT the (real estate) assets were at HISTORICAL value & the sale of some of these helped shore up the 'Equity' [for accounting purposes].
If I had my way, I would sell off many of the KK stations [or do Sale-Leasebacks] to generate cash to pay down debt to zero.
Compare this to KQ. The Embakasi land will be sold but I think it has been revalued to the current realizable value. The planes are probably worth less than their book values. The 777s were written down further in 2015-16 when KQ realized they could get the Book Value for them.
@Obiero - I am past making fun of your choices. It was just in jest. I have been burnt by crooks like Matu, Naikuni and Mbugua. The decision to exit KQ at a loss was hard but necessary. Once I made the decision, I just did it. I called my broker and said... start selling.
TRUST - If you do not TRUST the management and board then forget it. I do not trust KQ's management.
Ownership - Not all firms with owner-managers will do well but it has been shown in Kenya that most (not all) of those controlled (or as directors) by owner-managers do well. Even Collymore has a significant number of shares in Safaricom. They are a large enough part of his portfolio to matter.
Some criticize James Mworia but he has a significant stake in Centum. And we know about James Mwangi.
Some are conmen eg Merali but he has always been a conman. Michael Matu is one too but I found out too late. Other conmen include Hector Diniz & the HAFR guys.
Back to KQ. The current set of managers can do little to save the firm in its current state. That's the truth.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett