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Kenya Airways...why ignore.. end 2025
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actuarywahisa
#7901 Posted : Friday, June 16, 2017 11:29:18 AM
Rank: Member

Joined: 5/21/2014
Posts: 184
muandiwambeu wrote:
Ericsson wrote:
@muandiwambeu
KQ will still go back to the same hole since they have said they intend to take more debt

The moot here is eps and mp at the best case scenario.
deleveraging has got nothing to do with efficient use of the assets and neither does it reduces cost of capital since the banks will definitely demand dividend to their investment. Further, taxation burden will increase overall.
Concessions are inconsequential being a can of worms kicked down the road five yrs atop just expiring one's.


Do not underestimate the power of concessions on tenure to reduce pressure on an entity's cashflow. KQ has been trying to bring in experts in various departments to help actually improve operations. The concessions help to reduce pressure as the changes take effect. Whether the changes will be successful, that is another matter. I would stay out for now as there are quite a number of unknowns e.g conversion price, the fine details of the concessions. KQ just like mumias is subject to so many external factors.
There are too many opportunities all around. Open your eyes and maybe you'll spot one
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VituVingiSana
#7902 Posted : Friday, June 16, 2017 11:50:39 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,388
Location: Nairobi
obiero wrote:
Ericsson wrote:
Kq is still in negative equity. Government loans amounting to $243mn is what will be converted to equity.
$525mn owed to US Exim Bank and $225mn owed to local lenders will have to be repaid with GOK acting as guarantor.
Local lenders/banks will not own any stake in KQ.

You could be right and that would imply less dilution.. Meanwhile, airlines and negative equity go hand in hand.. It's a normal thingy which we have already discussed here. The cash flow is what will be increased via the tenor concessions.. And that is a very good thing... As for bank debt to equity position, soma hii link along with the cautionary statement http://mobile.reuters.com/article/idUSKBN1962OA


Which other (profitable) airlines run on Negative Equity?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Friday, June 16, 2017 11:51 AM | Reason: Not specified
bartum
#7903 Posted : Friday, June 16, 2017 12:14:56 PM
Rank: Veteran

Joined: 8/11/2010
Posts: 1,011
Location: nairobi
Watch reversal of kq noq
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ARAP CHARLES
#7904 Posted : Friday, June 16, 2017 12:29:38 PM
Rank: Member

Joined: 5/30/2016
Posts: 217
Location: Talai
bartum wrote:
Watch reversal of kq noq
... THIS DUST NEED TO BE SETTLED...
Watch and Listen and Live
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  | | Edit by user: Friday, June 16, 2017 12:36 PM | Reason: Not specified
actuarywahisa
#7905 Posted : Friday, June 16, 2017 12:32:41 PM
Rank: Member

Joined: 5/21/2014
Posts: 184
obiero wrote:
[quote=Ericsson]Kq is still in negative equity. Government loans amounting to $243mn is what will be converted to equity.
$525mn owed to US Exim Bank and $225mn owed to local lenders will have to be repaid with GOK acting as guarantor.
Local lenders/banks will not own any stake in KQ.

You could be right and that would imply less dilution.. Meanwhile, airlines and negative equity go hand in hand.. It's a normal thingy which we have already discussed here. The cash flow is what will be increased via the tenor concessions.. And that is a very good thing... As for bank debt to equity position, soma hii link along with the cautionary statement http://mobile.reuters.com/article/idUSKBN1962OA[/quote]

The $225m for local banks will be converted to equity and then the deal appears for them to exit through open market. In the event that they are unable to exit and recover their money within the set timelines because of share price not recovering sufficiently then the government has to step in and compensate. And in the unlikely event that KQ folds then the Government wires capital + interest.
There are too many opportunities all around. Open your eyes and maybe you'll spot one
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obiero
#7906 Posted : Friday, June 16, 2017 1:41:00 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,341
Location: nairobi
actuarywahisa wrote:
obiero wrote:
[quote=Ericsson]Kq is still in negative equity. Government loans amounting to $243mn is what will be converted to equity.
$525mn owed to US Exim Bank and $225mn owed to local lenders will have to be repaid with GOK acting as guarantor.
Local lenders/banks will not own any stake in KQ.

You could be right and that would imply less dilution.. Meanwhile, airlines and negative equity go hand in hand.. It's a normal thingy which we have already discussed here. The cash flow is what will be increased via the tenor concessions.. And that is a very good thing... As for bank debt to equity position, soma hii link along with the cautionary statement http://mobile.reuters.com/article/idUSKBN1962OA[/quote]

The $225m for local banks will be converted to equity and then the deal appears for them to exit through open market. In the event that they are unable to exit and recover their money within the set timelines because of share price not recovering sufficiently then the government has to step in and compensate. And in the unlikely event that KQ folds then the Government wires capital + interest.

@actuary seems @Ericsson did not go to school.. Could we team up and send the guy for gumbaru
COOP, IMH, KEGN, MTNU
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obiero
#7907 Posted : Friday, June 16, 2017 2:15:56 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,341
Location: nairobi
ARAP CHARLES wrote:
bartum wrote:
Watch reversal of kq noq
... THIS DUST NEED TO BE SETTLED...

@arapcharles anyone trading with the share in the past five days is either insane or genius
COOP, IMH, KEGN, MTNU
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muandiwambeu
#7908 Posted : Friday, June 16, 2017 2:25:29 PM
Rank: Veteran

Joined: 8/28/2015
Posts: 1,247
obiero wrote:
muandiwambeu wrote:
Ericsson wrote:
@muandiwambeu
KQ will still go back to the same hole since they have said they intend to take more debt

The moot here is eps and mp at the best case scenario.
deleveraging has got nothing to do with efficient use of the assets and neither does it reduces cost of capital since the banks will definitely demand dividend to their investment. Further, taxation burden will increase overall.
Concessions are inconsequential being a can of worms kicked down the road five yrs atop just expiring one's.

The problem with Africans is mixing up issues.. I will sell this stock at some point. The capital gains are my only focus and so far I am up 28% on the shareholding as at this minute..

Your wish sir. Let ur wish be granted. Out for my gravy wkd now.
,Behold, a sower went forth to sow;....
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  | | Edit by user: Friday, June 16, 2017 2:30 PM | Reason: Not specified
actuarywahisa
#7909 Posted : Friday, June 16, 2017 3:52:12 PM
Rank: Member

Joined: 5/21/2014
Posts: 184
obiero wrote:
ARAP CHARLES wrote:
bartum wrote:
Watch reversal of kq noq
... THIS DUST NEED TO BE SETTLED...

@arapcharles anyone trading with the share in the past five days is either insane or genius


I am neither. Not even with a 5km pole.
There are too many opportunities all around. Open your eyes and maybe you'll spot one
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obiero
#7910 Posted : Friday, June 16, 2017 5:37:16 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,341
Location: nairobi
actuarywahisa wrote:
obiero wrote:
ARAP CHARLES wrote:
bartum wrote:
Watch reversal of kq noq
... THIS DUST NEED TO BE SETTLED...

@arapcharles anyone trading with the share in the past five days is either insane or genius


I am neither. Not even with a 5km pole.

Closes the day with full reversal only one session away from cautionary announcement date.. But then over 4m cumulative shares have been traded at KES 5.15 to KES 5.75.. Think about it someone who bought shares worth KES 5,150,000 two days ago, is now worth KES 5,750,000.. Only cocaine offers a better return in such a short span
COOP, IMH, KEGN, MTNU
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  | | Edit by user: Friday, June 16, 2017 6:58 PM | Reason: Not specified
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