Friday, June 22, 2007
KPLC break-up (at last...
As argued here and here, the power sector is now beginning to get some much needed re-engineering. By removing the distribution business, it will allow resources to be directed at reducing 25%+ losses in power output thus enhancing revenue. The distribution business will like-wise benefit via more efficient delivery due to envisaged increase in competition. It will be interesting to see how GoK will carry this out given that KPLC is a listed share. As to the impact on its price, investors might be better off waiting to see the shape the listed business will have before voting with their pockets.
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2 comments:
I think this is a very positve move on part of the goverment. Smaller outfits will be able to focus more on their core busines and hence increased efficiency. I wonder though, how the 49% private investors interest at KPLC will be taken care of. Since the new companies to be formed shall acquire some of Kplc's distribution assets, will the share holders be accorded proportionate shares in these companies?
JK, the issue of who gets what is what will make GoK keep shareholders waiting. Plus the tariff issue...
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