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Kenya Airways...why ignore..
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obiero
#9091 Posted : Thursday, November 30, 2017 8:42:10 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,213
Location: nairobi
Spikes wrote:
VituVingiSana wrote:
I haven’t been following the happenings in KQ for some time. The proposition, despite all the drama with IFRS9 and interest caps, has me more interested in banks. Plus there’s KK [higher oil prices hurts KK’s financing costs], Unga [higher maize/wheat prices, subsidies, elections, etc], KenRe, etc to keep me busy.

After reading the posts, here’s what I gathered.

4 “old” KQ shares have been “reverse split” into 1 “new” KQ share.
4 old KQ shares were trading at 4/- = 16/-
1 new KQ sure is trading at 12/-

So anyone who held onto their KQ Shares has lost 25% in one week.

The option of the “Open Offer” [which feels like a Rights Issue] was available even before the restructuring. It was a known known. A price of 1.80 (for the open offer) was being bandied around but is this per new or old share?

Why is KQ looking to raise just 1.5bn from the Open Offer? Even after the Debt:Equity conversion, it seems there’s a huge need for cash in light of fleet renewal or acquisitions as well as higher fuel prices and the debt.

There’s a Mandatory Debt Conversion feature for the banks. What are the terms?
Is KQ Lenders Co locked in before they can sell their shares? How long is the lock-in period?

I wish KQ all the best.


Thanks @ vvs for your input. This is the basis on which we should question the Open Offer and the much dramatized 1:4 share consolidation. In my opinion this stock will trade between 5-8.55 after the dust has settled.
As long as all information pertaining to KQ lenders company lock-in period remains uncertain anything related to stock volatility can happen.

@spikes Never let anyone think on your behalf. The aim of reading is to reduce or eliminate ignorance.. There's no lock in period for KQ Lenders Co Ltd.. As for the 1.5B for the Open Offer, why would existing shareholders expect same number of shares after consolidation without building up their equity contribution.. That sum raised would be pre-emptive defense of proportional ownership, not a figure that can buy a plane or even a significant part of it.. Actually Michael Joseph has clearly stated that 100% of the Open Offer sum shall be used to further settle debt, which is a wise thing.. Finally, if 2.1m shares traded at KES 12.5 yesterday and all the major shareholders bought at KES 8.52, what on earth will drive the share down to KES 5

KQ ABP 4.26
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  | | Edit by user: Thursday, November 30, 2017 9:21 AM | Reason: Not specified
Impunity
#9092 Posted : Thursday, November 30, 2017 9:38:24 AM
Rank: Elder

Joined: 3/2/2009
Posts: 26,331
Location: Masada
obiero wrote:
muandiwambeu wrote:
HaMaina wrote:
I was expecting higher movement not 2.1 Mil.

That's no usual movement. That's 8.4 milis for Ur info. Slota continues tomorrow after ppt failed flat.

You are a very funny character.. 2.1 million shares out of 125m is giving you such high excitement.. Let's wait for your tomorrow to see what's up
. Meanwhile, logical investors must understand that KES 21 was never meant to print. KES 12.5 is fair value with low of KES 8.52 being new minimum



If this thing was done 4:1 ratio,does your fair value price of kes. 8.52 means the price is actually 2.1 (were we not to have the consolidation) ?
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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obiero
#9093 Posted : Thursday, November 30, 2017 10:33:09 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,213
Location: nairobi
Impunity wrote:
obiero wrote:
muandiwambeu wrote:
HaMaina wrote:
I was expecting higher movement not 2.1 Mil.

That's no usual movement. That's 8.4 milis for Ur info. Slota continues tomorrow after ppt failed flat.

You are a very funny character.. 2.1 million shares out of 125m is giving you such high excitement.. Let's wait for your tomorrow to see what's up
. Meanwhile, logical investors must understand that KES 21 was never meant to print. KES 12.5 is fair value with low of KES 8.52 being new minimum



If this thing was done 4:1 ratio,does your fair value price of kes. 8.52 means the price is actually 2.1 (were we not to have the consolidation) ?

@muandiwambeu which slaughter has continued? KQ up 9.6% today.. @impunity Yes that is the direct implication.. But KES 8.52 is not fair value but conversion value.. Would read KES 2.13 to be exact, but that's water under the bridge

KQ ABP 4.26
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  | | Edit by user: Thursday, November 30, 2017 2:55 PM | Reason: Not specified
obiero
#9094 Posted : Thursday, November 30, 2017 2:51:02 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,213
Location: nairobi
Supply volume all dried up.. Whoever sold yesterday was duped big time! Some lucky fellows bought sub KES 12 and will average down at KES 1.8.. Meanwhile, expect multiple highs of close to 10% in the next few days until the Open Offer circular is released which should lead to a final spike upwards depending on the T&Cs

KQ ABP 4.26
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  | | Edit by user: Thursday, November 30, 2017 2:54 PM | Reason: Not specified
Spikes
#9095 Posted : Thursday, November 30, 2017 3:09:32 PM
Rank: Elder

Joined: 9/20/2015
Posts: 2,811
Location: Mombasa
obiero wrote:
Supply volume all dried up.. Whoever sold yesterday was duped big time! Some lucky fellows bought sub KES 12 and will average down at KES 1.8.. Meanwhile, expect multiple highs of close to 10% in the next few days until the Open Offer circular is released which should lead to a final spike upwards depending on the T&Cs


Today KQ traded on vapour volume!
John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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obiero
#9096 Posted : Thursday, November 30, 2017 4:08:53 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,213
Location: nairobi
Spikes wrote:
obiero wrote:
Supply volume all dried up.. Whoever sold yesterday was duped big time! Some lucky fellows bought sub KES 12 and will average down at KES 1.8.. Meanwhile, expect multiple highs of close to 10% in the next few days until the Open Offer circular is released which should lead to a final spike upwards depending on the T&Cs


Today KQ traded on vapour volume!

Expect the trend to persist.. High demand with no supply leading to increase in the share price.. Meanwhile, Sebastian Mikosz has sacked all the engineers who downed their tools yesterday http://www.businessdaily...09186-hjbpaez/index.html

KQ ABP 4.26
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  | | Edit by user: Thursday, November 30, 2017 4:25 PM | Reason: Not specified
tandich
#9097 Posted : Thursday, November 30, 2017 5:47:03 PM
Rank: Member

Joined: 5/6/2008
Posts: 199
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obiero
#9098 Posted : Thursday, November 30, 2017 6:10:18 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,213
Location: nairobi
tandich wrote:
https://facebook.com/story.php?story_fbid=10154833596251876&id=556751875&_rdr

Shallow understanding of finance in that link. Extremely shallow

KQ ABP 4.26
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Ericsson
#9099 Posted : Thursday, November 30, 2017 6:12:18 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,804
Location: NAIROBI
http://www.businessdaily...8664-7glcm6z/index.html

Interest rates on the converted loans from local banks diverged by up to 5.5 percentage points, indicating varying risk perceptions among the lenders.
KCB’s Sh2 billion had the highest interest rate of 12.5 per cent,
National Bank of Kenya’s Sh3.5 billion at 11.22 per cent.
Equity Bank, Commercial Bank of Africa and Ecobank all priced their respective loans of Sh5.1 billion, Sh3 billion and Sh824 million respectively at 10 per cent.
The Sh412 million that KQ owed Jamii Bora had an interest rate of nine per cent, the same level as NIC Bank’s Sh2 billion.
Co-op Bank COOP priced its Sh3.3 billion loan at 8.83 per cent,
Diamond Trust Bank’s Sh2 billion (at 8.5 per cent) and
Chase Bank’s Sh721 million (8.25 per cent).
I&M which lent KQ Sh824 million, offered the national carrier the lowest interest rate of seven per cent.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Kusadikika
#9100 Posted : Thursday, November 30, 2017 8:02:29 PM
Rank: Elder

Joined: 7/22/2008
Posts: 2,721
Banks always have provisions for bad debts. This is an important thing to remember here because the share price will not depend on any fundamentals in the near term, it will depend on how banks choose to deal with their shares.

A decision to cut losses and get whatever cash they can will will lead to a massive selloff that will drive down share price.

Banks need cash and they are in the business of selling debts every day not sitting and waiting for shares to appreciate. I bet some bankers would be willing to take 50% or less of what they put in if they could get the cash today rather than wait 5 years and hope to recover the whole amount. As soon as serious buyers show up this price will tank precipitously. I hope I am wrong but a steep drop is coming. I am calling a sub 5/= by end of January 2018.
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