I spoke too soon...
My blogpost on 24 Feb 2009
KQ's share price has tumbled further since I posted the above. At 12.38 pm on 6 Mar 2009 KQ is trading at Kes 17.25 (though the trading is very thin)...
Did I miss anything on my blog post that accounts for the additional decline?
At this point I think KQ should close up shop... to protect the shareholders!
- Sell the planes while there is a market. Emirates & Ethiopian are still buying planes. Perhaps they would be interested in immediate delivery of the newer planes?
- Cancel or transfer leases of the leased planes.
- Sell the older planes to myriad African 'matatu' airlines.
- Sell the routes (if there is value to be gained) &/or landing slots to Emirates, BA, Virgin, KLM or Air Uganda.
- Cancel (or sell/transfer) all plane orders to get back the cash from down-payments/deposits.
- Use the above proceeds to pay off all debtors.
- Close offices & but sell the 'marketing machine' to another airline.
- Take the remaining cash & distribute to shareholders.
I think the above will yield enough cash to pay each shareholder more than 45/- which is far better than the current price realisation!
OR just sell the entire airline to Emirates or Qatar or AF-KLM who will get the enviable & profitable routes as well trained staff & ready to fly planes in one fell swoop at a far lower cost than a de novo set-up.
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