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KPLC rights issue 2011 VERRY STRONG BUY
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the deal
#31 Posted : Thursday, June 16, 2011 11:09:42 AM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
KPLC=Kenya paraffin and lighting candles....buying their shares is the only way u can hedge against those stupid high power bills
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mkonomtupu
#32 Posted : Thursday, June 16, 2011 11:15:14 AM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
I was looking thoroughly at their five year corporate strategic plan 2011/2012 to 2015/2016(i had posted the link sometime back) and looking at their distribution plans the 9b rights looks like will be spent in year, their funding needs are big if they are to improve on efficiency. In as much as they are improving access by bring more small customers their projected electricity sales in GWh will only double in five years to 10000 GWh.

I'm just adjusting my portfolio and placing capital in sectors i feel will achieve much faster growth. KPLC just didn't meet the cut it's now a spare wheel on my portfolio
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VituVingiSana
#33 Posted : Thursday, June 16, 2011 11:27:39 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,342
Location: Nairobi
mkonomtupu wrote:
I was looking thoroughly at their five year corporate strategic plan 2011/2012 to 2015/2016(i had posted the link sometime back) and looking at their distribution plans the 9b rights looks like will be spent in year, their funding needs are big if they are to improve on efficiency. In as much as they are improving access by bring more small customers their projected electricity sales in GWh will only double in five years to 10000 GWh.

I'm just adjusting my portfolio and placing capital in sectors i feel will achieve much faster growth. KPLC just didn't meet the cut it's now a spare wheel on my portfolio
This is just a discussion. Not critiquing your choice/decision. After all its your money not mine!

1) The 9bn was a 'downpayment' for additional loans + funding. Most lenders want to see 'skin' in the game.

2) Makes sense to use the 9bn first before you go borrow [the Rights cash is interest-free]

3) Erm, Kenya is not starting from a zero base so 2x growth is unit sales is very, very good! Most Kenyans who can AFFORD electricity have access to power. Note, as a shareholder I don't give a crap about the guy who uses 50 (subsidized) units!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mkonomtupu
#34 Posted : Thursday, June 16, 2011 11:46:24 AM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
What doesn't make sense is the projects for the 9b just sufficient for establishment of a few substations, limited upgrading and pre-paid metering system. The real projects that will give it efficiency will need more funding which will come from borrowing mostly based on sovereign guarantee which was a requirement from the new IPPs. I would rather lend KPLC than be a shareholder
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2012
#35 Posted : Thursday, June 16, 2011 12:52:23 PM
Rank: Elder

Joined: 12/9/2009
Posts: 6,592
Location: Nairobi
No matter what anyone says, 21.25-21.75 is a buy. KPLC is a monopoly and the only way for this counter eventually is up.

But here's the reason why you should be buying into KPLC now, remember this statement by the MD during the AGM last year:

He informed shareholders that the company had embarked on an organisation culture change and corporate rebranding exercise aimed at enhancing its image, customer service and financial performance.
A consortium comprising of Ogilvy & Mather East Africa Ltd., McKinney Rogers Kenya Ltd. and SBO Research Kenya Ltd. was engaged by KPLC in October 2009 to assist the company to implement the culture change and rebranding project in a three-year period.

link here

BBI will solve it :)
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  | | Edit by user: Thursday, June 16, 2011 12:53 PM | Reason: Not specified
The Merchant
#36 Posted : Thursday, June 16, 2011 1:33:36 PM
Rank: Veteran

Joined: 5/24/2010
Posts: 846
Location: KENYA
Even WB would buy this one...a monopoly providing a crucial service. This trend of hiring consultants to enable the KCBs and KPLCs of this world to improve efficiency is a good move. WB would discourage it though. He hates consultants but he clearly has not seen how state companies are run here. The lesser of two evils if you ask me and ID rather the consultants. Like I said before Ill buy at anything below 22. Cash is becoming a BIG issue now since I can see KK is slipping too Sad
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VituVingiSana
#37 Posted : Thursday, June 16, 2011 2:38:59 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,342
Location: Nairobi
mkonomtupu wrote:
What doesn't make sense is the projects for the 9b just sufficient for establishment of a few substations, limited upgrading and pre-paid metering system. The real projects that will give it efficiency will need more funding which will come from borrowing mostly based on sovereign guarantee which was a requirement from the new IPPs. I would rather lend KPLC than be a shareholder
Multi-lateral loans come with various conditions but tend to be cheaper than 'commercial' loans.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mwenza
#38 Posted : Thursday, June 16, 2011 2:46:33 PM
Rank: Elder

Joined: 4/22/2009
Posts: 2,863
mwenza wrote:
The KPLC interim dividend was to be paid on 31st May. Has anyone received theirs? Have not seen mine.


Dividend imelipwa? Ndio ama la???
IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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The Merchant
#39 Posted : Thursday, June 16, 2011 3:13:18 PM
Rank: Veteran

Joined: 5/24/2010
Posts: 846
Location: KENYA
@mwenza...not received mine.... Sad
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mwenza
#40 Posted : Thursday, June 16, 2011 3:18:51 PM
Rank: Elder

Joined: 4/22/2009
Posts: 2,863
The Merchant wrote:
@mwenza...not received mine.... Sad


Thanx @Merchant....was getting worried since the payment date was supposed to be 31st May.

IF YOU EXPECT ME TO POST ANYTHING POSITIVE ABOUT ASENO, YOU MAY AS WELL SIT ON A PIN
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jerry
#41 Posted : Thursday, June 16, 2011 3:19:13 PM
Rank: Elder

Joined: 9/29/2006
Posts: 2,570
The Merchant wrote:
@mwenza...not received mine.... Sad

=>still waiting also.
The opposite of courage is not cowardice, it's conformity.
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mozenrat
#42 Posted : Thursday, June 16, 2011 3:22:25 PM
Rank: Veteran

Joined: 5/18/2008
Posts: 796
VituVingiSana wrote:


2) Makes sense to use the 9bn first before you go borrow [the Rights cash is interest-free]


@VVS Rights cash does have a cost (although it may not be called interest) - The additional dividends the company has to pay in perpetuity. With a dividend yield of only 4% its still cheaper than the bank interest which is a peculiarity of the Kenyan market where equity is cheaper than debt.
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Genghis Khan
#43 Posted : Thursday, June 16, 2011 4:34:30 PM
Rank: Member

Joined: 8/5/2010
Posts: 335
Location: Nairobi
mozenrat wrote:
... With a dividend yield of only 4% its still cheaper than the bank interest which is a peculiarity of the Kenyan market where equity is cheaper than debt.


Shame on you
CapitalGain + DividendYield > CostOfDebt

Equity is less risky for KPLC hence it is DEARER than debt.

Debt is riskier for KPLC hence it is CHEAPER than Equity (Rights).

The inverse is true for the INVESTOR / LENDER.

This is what (I hope) we expect from the market. KenyaMarket is not peculiar in this respect.
"I'd rather be lucky than clever... every time!" - ME
"The problem is not what we don't know... it's what we know for sure that just ain't!" - MARK TWAIN
"Space we can recover... time never!" - NAPOLEON BONAPARTE
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  | | Edit by user: Thursday, June 16, 2011 4:45 PM | Reason: Not specified
VituVingiSana
#44 Posted : Thursday, June 16, 2011 6:32:44 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,342
Location: Nairobi
mozenrat wrote:
VituVingiSana wrote:


2) Makes sense to use the 9bn first before you go borrow [the Rights cash is interest-free]


@VVS Rights cash does have a cost (although it may not be called interest) - The additional dividends the company has to pay in perpetuity. With a dividend yield of only 4% its still cheaper than the bank interest which is a peculiarity of the Kenyan market where equity is cheaper than debt.

Careful! KPLC already HAVE THE CASH... they are not obligated to pay dividends! Note that during Rights Issues firms say all the right stuff but AFTER the Rights...

See Uchumi or KCB or a host of other Rights Issues... Dividends, wapi?

Dividend Yield is a cheaper form for KPLC than Debt. Why? 4% vs 14% [No tax shield though]

As for the Perpetuity aspect...
KPLC can borrow debt in perpetuity [borrow from Peter to pay Paul] so what's your point about 'dividends' in perpetuity?

In the future when KPLC is cash rich & CMA allows buybacks... they can always redeem the shares aka buy back the shares!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Thursday, June 16, 2011 6:41 PM | Reason: Not specified
mkonomtupu
#45 Posted : Tuesday, March 18, 2014 2:40:22 PM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
2012 wrote:
VituVingiSana wrote:
mkonomtupu wrote:
I am selling half of KPLC portfolio today, this company needs too much capital and is not good in utilizing capital it's like an airline. i'm looking for better bargains now that the market is looking down
Does it need capital? Yes, but that's what it raised in Dec 2010.


My thoughts exactly. I was wondering what mkonombaya is talking about.


3 years down the line looking at the share price, KPLC, there were better bargains. I think it's now time to start cautiously accumulating KPLC
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