Friday, July 21, 2006




WARNING:THE INFORMATION BELOW MAY BE HARMFUL TO YOUR WEALTH.CONSULT YOUR INVESTMENT
ADVISOR,STOCKBROKER,BANKER,ACCOUNTANT OR OTHER PROFFESSIONAL ADVISOR ON THE COURSE OF ACTION YOU SHOULD TAKE.

SCANGROUP IPO-THE FACTS

I have just read the SCANGROUP prospectus. The following facts worried me:

-69 million shares are being sold.The Vendor(Bharat Thakrar)gets the proceeds of 60 million shares that is Ksh.584,176,501 while SCANGROUP gets the proceeds of 9 million shares i.e. Ksh73,883,843.

So the company is to expand and retire debts on Ksh.73 million and the Vendor pockets Ksh.584 million. Thats what i call capitalism.

-The group has a long term liability of Ksh 990,000 that is not properly disclosed on Page 92 of the prospectus.
We are not told to whom the loan is owed, the duration, the terms of the loan etc.
Remember Net Profit in 2005 was Ksh 148 Million

-SCANGROUP and CFC Financial Services Ltd-Which is the Transaction Advisor, Joint underwriter and Sponsoring Stock Broker- share the same Company Secretary one, Ramesh R. Vora. Is this a conflict of interest?

-SCANGROUP has 50% of the Ad. market can it grow further? Thats the way Barclays dominates the Banking sector

Inspite of the above facts , i shall buy the shares because the market currently favours IPO's .Hopefully,I shall be able to flip them after listing for a profit.

9 comments:

Udi said...

i believe the long term liability is 990,000 and not 990 million.

coldtusker said...

Bw.Pesa Tu - Nunua spectacles..., like udi says... don't scare us coz it is only 990,000/- (less than 1M)... They can pay it off easily with the proceeds from the IPO.

The prospectus clearly states that BT gets the bulk... see my blog where this issue was raised...

A Company Secretary is not high up in the ranks... they are "advisers" of protocol but basically make sure the procedures are followed... no big deal. Sharing DIRECTORS concerns me more...

The 50% might not grow BUT the pie or the quantity of ugali will... in 5 years 25% of the pie/ugali will be greater than the 50% of the pie today!

My concern for the flippers is... nani atanunua baadaye?

coldtusker said...

Dude - Ur comments counter seems to be faulty... coz it showed 0 comments while there are already 2 (before I wrote this)...

Someone had it on their blog that ScanGroup might buy Adopt-A-Light... any truth to that?

pesa tu said...

Udi: thanks the long term liability is 990,000. i tend to read statements in millions hence the typo.

Coldtusker: Pole sana for the typo. At least a few people read keenly. A lot of Kenyans out there want to 'invest' so flipping isnt an issue.

No havent heard about Adopt- a-light.But their biz model is shaky. its based on a monopoly licence from City councilfa

coldtusker said...

Dude... no updates? I read that it was oversubscribed... Any news/connections on the next step as is what do they expect to give per applicant?

Hey... need ur comments input on how u rate management of NSE firms on www.coldtusker.blogspot.com

pesa tu said...

coldtusker: Heard it was oversubscribed, will release more news when i hear it.
Yes, will talk aboutNSE firms mgt.when i go on ur site.

gathinga said...

update tafadhali

Mwenyenchi said...

The same company secretary thing, just shows Kenyan business is like a boys club; you're in you're rich. If you're not then you are just a mwananchi. Cosy way of making lots of money. I hear the IPO was heavily oversubscribed. Hope you got a piece of the action though.

pesa tu said...

@Gathinga: Am back so updates r there

@mwenyenchi: Ha..ha.. u r a cynic but its true. Only a measly 400 shares