@VVS hehehe hakuna chakula not even maji...i'm not going...i rather go to Neveready's choma...lets hope Jub dishes out food at Serena i wanna test 2000 bob lunch.

I have perused the 2 notices relating to the issue of new shares to the ESOP, the first dated 31st March 2011 and the ammended one dated 11th April 2011. I can't help thinking that the first proposal was NOT actually an error as KK have tried to make us believe.

In the 1st place, why does it take a full 12 days to discover an error of such magnitude. Secondly, I just can't see how you can confuse 300 million with 140 million. Even if you multiply 140 mil by 2, you do not get 300 mil. Fine, in the first notice, you can see there is an error in the nominal value of the 300 mil new shares to be issued but not in the nominal value of the total issued share capital which had gone up by the correct amount of 15 million to stand at 88,588,060.

Now my hypothesis is that KK Mgt realized that there would be a backlash from angry shareholders at the intial massive proposed dilution. They then decided to reduce it to a more palatable less than 10% of the current issued capital. My view is buttressed by the fact that there will be absoultely no refreshments at the AGM. This I believe is meant to try and dissuade such militant shareholders such as Chami from attending the meeting and turning the AGM into some sort of PR nightmare for the B.o.D.

I am happy that the number of proposed new shares to be issued has been reduced by more than 50%. All the same I would still have expected KK to issue an Information Memorandum (Briefing Note or some sort of aide memoire) detailing comprehensive rationale for the new shares. Come to think of it, should this not be a requirement under CMA rules? In the absence of such an IM, I am still getting the feeling that this whole thing is shrouded in some unnecessary opaqueness!

There is definitely considerable merit in doing away with refreshments/freebies at AGMs. This will encourage more serious shareholders to attend AGMs and ask the sort of probing questions that push the board and management to deliver on our investment.

I will certainly endeavour to attend the KK AGM. And I will bring my own water so that my throat does not run dry when I wish to ask the questions, which I hope will be relevant.

@mwanahisa - Please ask RELEVANT questions [not bus-fare or food], carry your own water to oil your throat & keep them short [but ask as many questions including followup questions]...

Another peculiar Kenyan habit is PLO-style questions... By the time the question is asked, we have no idea what the question was!

Yes!

@Genghis Khan, anytime new shares are issued at less than market price, there will always be dilution, regardless of how issued (ESOP, bonus, rights). But the silver lining could be a the unissued extra authorized might be preparing for a bonus issue to us.

@genghis. Indeed the 7% is small considering employees currently own less than 1%. But the additions to treasury stock eases their aggressive expansion plans, in the event that over 100 bn in sales significantly stretches working capital. these shares can fuel their acquisition based strategy and prove more rewarding to shareholders if DRIPs are legalized. the dilution appears punitive but necessary.