under 50 cents...
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under 50 cents...
I’m assuming AIR started drawing down the loan on 1/9/20. At 75 mill cash burn per month they will be down to 600 mill by 1/12/20 or not long after at which point they will effectively be insolvent.
They can’t continue to operate with less cash than that.
Before 1/12/20 there is more capital coming from somewhere otherwise Statutory Administration looms to which they have been to within a hair’s breadth of before.
This is hugely political.
Immediately after the election, and only after the election, I think we will see a substantial cash issue announced to the market with the Government's full participation. This will be on the basis of saving the airline from administration at which time it will be very close to, hence providing the Government a legitimate justification.
Fun and games.
Greg Foran has kept well clear of saying the Airline is actually doomed well before the 900 mill has been used up.
I wouldn't participate in a capital raise at that level. On the other hand a very large capital raise (enough to plausibly give them the chance to get to the other side of this unprecedented Covid thing), say 8:1 at 25 cents might pique my interest. That would raise about $2.2 billion, enough for about 3 years operations at $60m a month cash burn. Do it once and do it right and give them the horsepower to survive and climb out of this thing otherwise they risk multiple capital raises.
The risk here is that Greg Foran's 800 day plan to "survive, revive and thrive" ends up really being an 1800 day plan :eek2:
From the Sydney Morning Herald;
"Mr Scurrah said Virgin was hopeful of a travel corridor with New Zealand could be established, even if it only begins with one or two Australian cities."
When this happens Cullen Airlines will have to contend with the spreadsheet jockeys hunting for cash flow.
Boop boop de do
Marilyn
Assume Air NZ will have to announce to the market when they start drawing on the government's loan. No announcement yet.
They still had $200m in cash left as at 25 August so enough for up to two months depending on the timing of any lumpy payments. They won't draw on the $900m until they have to.
Agree after the election is when we can expect a rights issue, underwritten by the government. How much runway will they want? 10 months at $75m/month, about $750m? Monthly cash burn will continue to decline (probably be closer to $50m/mth by January) so $750m could last more than a year. $750m would be a 1:2 rights issue at today's price. A 1:2 rights issue at $1 would be about $500m and a 1:1 rights issue at $1 about $1b.
https://www.nzherald.co.nz/business/...ectid=12362022
Hey Winner...looks like your mate Cam is pretty cozy with Alan Joyce CEO of Qantas and they get on well together.
In his 19 years at Air New Zealand, Wallace has built up strong connections throughout the industry, particularly with alliance partner United Airlines and transtasman rival Qantas, where he gets on well with chief executive Alan Joyce.."I resigned today so that I can focus the next stage of my career on opportunities that allow me to work on the global stage where I deeply enjoy the challenges across geographies, cultures and economies," Wallace says, adding that he's been fortunate enough to have been recently presented "with some professional opportunities".
Probably still miffed he was passed over for the CEO role last year. Probably take all his experience and inside knowledge of AIR over to its most formidable competitor Qantas and then he and Alan Joyce can get nice and cozy.
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Beagle - he's hanging around to give Greg hugs and cuddles (at a huge hourly rate) when Greg needs them
Probably tells everybody he's indispensable at Air ..... usually of that's the case nobody will miss him.
Maybe starts with QF after Christmas when travel might be easier
JAA, No reason why AIR should announce the drawdown of the loan. They said last week it would be within days.
Wonder when Cam will hock off his shares ...over half a million of the
Share price not as high as it was last year...but then he got most for free
still the share price defying gravity... maybe its just doesnt know its a hard landing .... like sky city today.. no real profit but the price went up... maybe its not going to crash land...