Originally Posted by
Beagle
That "loan" has some interesting terms and not just the widely criticized interest rate of a whopping 8-9% (when the Govt is borrowing money with Kiwi bonds at 0.25%), and the plain fact of the matter is the public are not privy to the full terms which include the right to convert the loan to equity. On what terms ? That would be interesting to know as a $900m loan converted at say 50 cps would involve the issue of 1.8 billion shares and radically dilute minority shareholders stakes who would then only own ~ 538m shares in a company with $2,922m issued shares, just an ~ 18% stake down from ~ 48%.
50 cents seems like a pretty provocative figure for me to pick doesn't it ! (Relax I didn't pluck it out of thin AIR...you see what I did there :) ) Thing is earlier today I estimated NTA will probably be down to 75 cents by the end of August and if this whole gnarly process is deferred until after the election accumulated losses by the end of October could see NTA down to a figure very close to what I've suggested so its by no means an outrageous possibility.
Speaking of outrageous...as disclosed in that paywalled article it turns out AIR have already paid the Govt a $5m commitment fee for that loan even before its drawn down ! Talk about flogging a dying horse or severely clipping a bird's wings. That's Savage ! (Also the surname of the E Tui Union leader who is also known to be equally Savage in his own ways)...gee I'm in good form with the pun's this late at night :)
The old cliché of "Its hard to soar with the Eagles when you're surrounded by Turkey's" for some strange reason springs very readily to mind.
Minority shareholders look like they're ostensibly on a one way financial trip to Mt Erebus. Maybe this post helps one or two wake up and smell the coffee and jump ship before its too late...NZX will provide the necessary parachute, (assuming they ever operate properly again).