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KPLC share capital restructuring - Time to bail out?

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mwanahisa		#91 Posted : Monday, October 11, 2010 3:17:34 PM
Rank: Elder Joined: 6/2/2008 Posts: 1,438		@VVS. Its not explicitly stated in the announcement. Its just me "trying to be smart" (I hope I succeed). If you look at the rationale for the restructuring, part of it reads "eliminate the fixed dividend burden of the RPS". I have looked at the KPLC's financials for 2008-09. An amount of 1.248 B (preference dividend) was included under proposed dividends. All along KPLC has been stating that preference dividend has been provided for but we have never actually seen a cheque being presented to the Treasury. I would expect that this would have been done with a lot of pomp and show. So think about it, what will happen to the Preference dividends? Do you expect KPLC to continue carrying this as a liability? Anyway, I guess we will soon know as the AGM is bound to be in early November.
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VituVingiSana		#92 Posted : Monday, October 11, 2010 3:23:18 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		mwanahisa wrote: @VVS. Its not explicitly stated in the announcement. Its just me "trying to be smart" (I hope I succeed). If you look at the rationale for the restructuring, part of it reads "eliminate the fixed dividend burden of the RPS". I have looked at the KPLC's financials for 2008-09. An amount of 1.248 B (preference dividend) was included under proposed dividends. All along KPLC has been stating that preference dividend has been provided for but we have never actually seen a cheque being presented to the Treasury. I would expect that this would have been done with a lot of pomp and show. So think about it, what will happen to the Preference dividends? Do you expect KPLC to continue carrying this as a liability? Anyway, I guess we will soon know as the AGM is bound to be in early November. 1) The "eliminate the fixed dividend burden of the RPS" is for the future not present/past 2) Well... provided for means the liability remains on the books. The piper will have to be paid at some point. 3) I think GoK/Treasury will 'offset' the liability against REP (Rural Electrification Program) or GoK bills (Harambee House, etc) Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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mwanahisa		#93 Posted : Monday, October 11, 2010 3:43:48 PM
Rank: Elder Joined: 6/2/2008 Posts: 1,438		@VVS. You have got a point there. I am probably letting my overactive imagination go to work there. I guess it would be nice if were to come true. I await the Information Memorandum and/or further information to be availed. Meanwhile, I am not dismissing my theory, pending clarity on the issue.
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VituVingiSana		#94 Posted : Monday, October 11, 2010 3:49:54 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		My dilemma is... 1) If I sell my shares the wait for the Additional Shares... what happens if I get fewer than the 40% offered? [Especially so if the price is attractive coz then the uptake of the Rights will be high] 2) If the Rights Issue happens after the 1H 2010-11 results are announced & are very good... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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mwanahisa		#95 Posted : Thursday, October 28, 2010 5:28:08 PM
Rank: Elder Joined: 6/2/2008 Posts: 1,438		My 2 cents wrote: Am I missing something? I thought the conversion and split will come before the rights. Which will come first? According to my calculations; the share will after pref share conversion and after split be about Kshs. 30 Then may be a rights price of Kshs. 18 bob (40% discount) What am I missing Mwanahisa? According to the latest available information i.e. the proposed shareholders circular, rights price is 18/=. Talk about clairvoyance! My 2 cents, was this an educated guess?
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mwanahisa		#96 Posted : Thursday, October 28, 2010 5:38:26 PM
Rank: Elder Joined: 6/2/2008 Posts: 1,438		VituVingiSana wrote: mwanahisa wrote: mwanahisa wrote: @VVS. You were right. The conversion is being done at a price of Kshs 207.50. However, Govt is still screwing us as no revaluation of assets has been done. I have recalculated the conversion "price" for KPLC to Kshs 240. In my initial computation, I had only taken into account the amount of Redeemable Preference Share Capital of Kshs 15,899,250,000. Having reread the Press Announcement, it appears that the consideration for conversion includes the accumulated preference dividend that had been provided for in 2008-09 and 2009-10, an additional 2.496 Billion. If this is the case, it means that the conversion price was to all intents and purposes fixed at the NSE market price - slight rounding up as the average price on Oct 5th and 6th was Kshs 237. Nope... Or are we reading from different scripts? I do not see the 'accumulated Pref Divs' in the announcement... @VVS, Mea Culpa. I was wrong on the conversion price for the prefs being done at 240. If only ? It has now been officially confirmed as 207.50. On this one, I have to admit my bubble has been burst(ed).
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VituVingiSana		#97 Posted : Sunday, October 31, 2010 3:15:13 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		The Top 20 shareholders consists of multiple Funds & Insurance Firms which seem to have excess 'liquid' cash... See the constant over-subscription of T-Bonds [long-term govt paper]. The 10bn cash raise will be an easily met. If GoK sells it Rights to huge buyers then there will be a dearth of 'additional' shares... The question is what is the earnings potential of KPLC in 2011 (& forward)? I think KPLC should easily make KES 4bn (PAT) in 2010-11 thus an EPS of 2.20 for this period. For the full 2011-12 with the additional cash (10bn) the EPS could jump to 2.50... If KPLC hits all its targets: - New pre-paid meters in 2011-12 - New/improved sources of supply Then we could look at EPS of 3/- for FY 2011-12 [2 yrs from today] which is pretty cheap considering the current PERs on the NSE... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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guru267		#98 Posted : Sunday, October 31, 2010 5:59:10 PM
Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi		VituVingiSana wrote: The 10bn cash raise will be an easily met. If GoK sells it Rights to huge buyers then there will be a dearth of 'additional' shares... @VVS my broker at D&B confirmed to me that the rights issue figure is 8.795billion which will be a better discount... Mark 12:29 Deuteronomy 4:16
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