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Is Mumias finally getting it right?
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2012
#1 Posted : Wednesday, February 16, 2011 9:11:50 AM
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Joined: 12/9/2009
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Location: Nairobi
I think so. The A+ rating will help them big time in accessing cheap credit. They can easily acquire one or two millers and hopefully get Tarda running on much cheaper interest rate than they would pay on the bond.

BBI will solve it :)
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VituVingiSana
#2 Posted : Wednesday, February 16, 2011 9:58:41 AM
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Joined: 1/3/2007
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Not cheap but cheaper... Best option is a Bond if long-term financing required!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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2012
#3 Posted : Wednesday, February 16, 2011 10:05:44 AM
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VituVingiSana wrote:
Not cheap but cheaper... Best option is a Bond if long-term financing required!


Why a bond and at what rate?
I think they can easily access financing at below 4%p.a. interest externally hoping they don't mess up line EAPC.

BBI will solve it :)
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guru267
#4 Posted : Wednesday, February 16, 2011 10:11:04 AM
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VituVingiSana wrote:
Not cheap but cheaper... Best option is a Bond if long-term financing required!


I'm seriously not a fan of debt financing... I much prefer equity financing as it has negligible long term implications...

They should carry out a rights issue...
Mark 12:29
Deuteronomy 4:16
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VituVingiSana
#5 Posted : Wednesday, February 16, 2011 10:21:29 AM
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2012 wrote:
VituVingiSana wrote:
Not cheap but cheaper... Best option is a Bond if long-term financing required!


Why a bond and at what rate?
I think they can easily access financing at below 4%p.a. interest externally hoping they don't mess up line EAPC.
Rate depends on Term & Currency.

Why a Bond? Does not dilute existing shareholders. Plus they can issue a series of Bonds as needed instead of a huge Equity Raise...

As for bank loans... if they match Bonds in term + interest rate then a-ok...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Gordon Gekko
#6 Posted : Wednesday, February 16, 2011 2:35:44 PM
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Joined: 5/27/2008
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@vvs, bond also better because we are sure the management will use it well because it is under strict supervision by the bondholder. Management has no accountability to shareholders and can just fritter away equity and get away with it.
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VituVingiSana
#7 Posted : Wednesday, February 16, 2011 6:29:25 PM
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Gordon Gekko wrote:
@vvs, bond also better because we are sure the management will use it well because it is under strict supervision by the bondholder. Management has no accountability to shareholders and can just fritter away equity and get away with it.
True... See Sameer or Olympia...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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