Govt is converting all the 7.85% preference shares and not the 87% that had initially been mentioned. 76,622,891 new shares will be created as a result.

The total number of shares then becomes 155,750,891. The diluted trailing EPS then becomes 23.86 and at yesterday's price of 237 this is a PE ratio of 9.93. NBV is 184.53 giving a PBV of 1.28 at yesterday's price. We however know that NBV is still understated, because assets have not been revalued.

A 8:1 split of shares brings the total number of shares to 1,246,007,128. "Splitting" yesterday's price brings this to Kshs 29.63 with an EPS of 2.98.

A rights issue of 488,630,245 new shares is roughly a 40% entitlement. If the rumours that Govt intends to raise 10 Billion from the rights issue are true the rights price will therefore be 20.47 giving a 31% discount to the current price.

With above factors, I can confidently say KPLC should be a BUY. If the market trades at a PE ratio of 12 price could get to 286, given the diluted EPS of 23.86!!!

Sure VVS. A lot more power will be coming into the grid in the next few years and as far as I know KPLC will remain the main distributor.

And by the way, restructuring removes the anxiety that's been dogging this share for ages.

@GG. Now that is a strategy that could work. Indeed it could prevent the price from going up as like minded guys sell and wait for rights.

It seems we have a debate here. This is certainly a possibility (in the short run), but in my view it will only DELAY the inevitable.

@VVS, which 9 preference shares - are you talking of the rounding?