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Kenya airways Right Issue
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StatMeister
#41 Posted : Tuesday, March 13, 2012 7:44:07 PM
Rank: Veteran

Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
VituVingiSana wrote:
StatMeister wrote:

Over next 5 years, they borrow 180b. At 10% interest, sounds like interest payments work out at 18b. I dont see how doubling operations will generate additional operating profits of even 10b. KQ keeps making more money from derivatives than from operations.

1) The rates are much lower than 10% of USD loans. Probably closer to 5% coz borrowed from US EXIM Bank.
2) The 180bn is not borrowed in one go but gradually as planes are delivered. Therefore the additional payments are made after more planes are in service.


This is an even bigger problem since KQ has to either hedge the USD or take impairments even now and then.

Then, KQ annuals will shift focus from operations to performance of fuel and forex hedges ...
A bad day fishing is better than a good day at work
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maligumu
#42 Posted : Tuesday, March 13, 2012 7:45:53 PM
Rank: Member

Joined: 2/22/2010
Posts: 510
Location: De egg
Thanks to my broker I ejected @18 bob but not without bruises . Not looking back till I see sub 10 . But will have to think hard .
Peace be with you
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StatMeister
#43 Posted : Tuesday, March 13, 2012 8:29:46 PM
Rank: Veteran

Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
I sometimes wonder, yesterday this stock closed at 18.05, and we all know it will be doing sub-14 by week-end.

So, exactly who was buying today at 17.95, and exactly what are they getting today from the stock that they will miss if they wait till Friday?
A bad day fishing is better than a good day at work
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sparkly
#44 Posted : Tuesday, March 13, 2012 8:52:46 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
StatMeister wrote:
VituVingiSana wrote:
StatMeister wrote:

Over next 5 years, they borrow 180b. At 10% interest, sounds like interest payments work out at 18b. I dont see how doubling operations will generate additional operating profits of even 10b. KQ keeps making more money from derivatives than from operations.

1) The rates are much lower than 10% of USD loans. Probably closer to 5% coz borrowed from US EXIM Bank.
2) The 180bn is not borrowed in one go but gradually as planes are delivered. Therefore the additional payments are made after more planes are in service.


This is an even bigger problem since KQ has to either hedge the USD or take impairments even now and then.

Then, KQ annuals will shift focus from operations to performance of fuel and forex hedges ...


Aren't the majority of KQ's collections in USD?
Their tickets are also in USD equivalent.

Life is short. Live passionately.
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sparkly
#45 Posted : Tuesday, March 13, 2012 8:55:26 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
maligumu wrote:
Thanks to my broker I ejected @18 bob but not without bruises . Not looking back till I see sub 10 . But will have to think hard .


@Maligumu are you a trader or an investor. Trading too much will turn you into a "buy high" "sell low" investor.
Life is short. Live passionately.
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sparkly
#46 Posted : Tuesday, March 13, 2012 8:59:33 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
Sure wrote:
KQ 16:5 rights will burn your fingures

If you can, sell your secondary rights of KQ at NSE and forfeit paying 14 bob for every 5 shares you have. KQ will start making positive returns from the rights issue partially in 2014 and the Dreamline delivery will have to work like clock work for KQ to give good returns for those who will have been holding the baby from 2012 to 2014.

Wait for KQ at 10 bob or less after the rights issue and just when elections fever will be high as we end the year and before March 2013 or June 2013 if there will be a rerun.

Those who have ears, let them hear.

I foresee a political assassination this year.

They have eyes, but do not see, they have ears but do not hear.


@sure what do you consider a fair valuation of KQ? @the deal was buying at 46 an year ago.

Life is short. Live passionately.
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sparkly
#47 Posted : Tuesday, March 13, 2012 9:08:32 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
KQ ina wenyewe... Air France - KLM Royal Dutch Airlines and GOK. Wanyiku (Wazuaiku) doesn't have 20B and is selling instead of buying?
Life is short. Live passionately.
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sparkly
#48 Posted : Tuesday, March 13, 2012 9:17:52 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
guru267 wrote:
www.somalipress.com/news/2009-feb-19/unprofitable-south-african-airways-saa-needs-big-bail-out-finance-chief-tells-mps.h


www.reuters.com/article/...es-idUSTRE7AS0T220111130


www.guardian.co.uk/busin...usiness&type=article

www.bangaloreaviation.co...lines-ending-in.html?m=1


https://www.gplus.com/ai...ways-on-the-brink-48289

Im just saying..I wonder what differentiates KQ from these giants?? Food for thought... smile

Common denominator = debt + oil prices...


@guru you will give us ulcers, but there is more:

http://www.bbc.co.uk/news/business-16787761

http://travel.usatoday.c...tralia-collapse/629912/1
Life is short. Live passionately.
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mwekez@ji
#49 Posted : Tuesday, March 13, 2012 11:05:43 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
About 80 per cent of Kenya Airways Sh20.7billion share rights issue has been secured, KQ management said

This is reinforced by the fact that local and foreign institutions own 77.14% of KQ shares while local individuals own 22.14%. Foreign individuals own a mere 0.71%.

There you have it, only wanjiku is yet to decide whether to exercise their rights
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mwekez@ji
#50 Posted : Tuesday, March 13, 2012 11:18:46 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
Cde Monomotapa wrote:
mwekez@ji wrote:
Citi Bank to underwrite the offer

Interesting. Shrewd way of securing a client for the longrun ;-)


Indeed shrewd

... and wanjiku should derive some comfort from the underwriting
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