Forsyth Barr analyst Andy Bowley said the funding provided "ample liquidity" for the foreseeable future however, it would need additional equity within a year and may need to sell planes
Sell Planes!! sell to who??
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Forsyth Barr analyst Andy Bowley said the funding provided "ample liquidity" for the foreseeable future however, it would need additional equity within a year and may need to sell planes
Sell Planes!! sell to who??
If the government's $900 million loan to Air NZ is turned into shares at is an option, would this mean new shares are issued and the value of current shares would drop drastically?
I've worked it out. What a Eureka moment. Its clear they have put a brand value on the Koru symbol on the tail fin of the planes at $7 billion and the $4-5 billion they will lose in the next 3-4 years means the net present value is $2.10. That's "brilliant", Morningstar are genius's and I can't believe its taken me this long to see the true value :D
This sort of says it all about the credibility of these people. How can he say in the same sentence that they have ample liquidity for "the foreseeable future" and that an additional equity is needed "within a year". Right there he is saying his "foreseeable future" is much less than a year. Then suggest they need to sell planes, with 80-90% of the World{s fleet grounded and much of it up for firesale !! How pathetic.
Beagle I agree with your earlier post. Not only are they in financial ruin dependant on the Government, their brand loyalty is also shot. Customers will not have any loyalty to a small domestic airline that has recently treated their loyalty worse than most overseas carriers when the **** really hit the fan !
For what its worth I have listened into AIR's investor conference calls after each annual and half year result for many years and Andy Bowley has never really impressed me. At the best of times he asks very average questions of management, (Maybe on those occasions he had consumed 4 strong coffee's that morning). In short, I don't rate him and comments about selling aircraft are obviously absurd.
Markus Curly of UBS is much brighter and he recently estimated AIR are burning cash at the rate of $211 a month, PLUS redundancy, restructuring costs and airfare refunds. I assume ~ $40m per month to close out fuel collar positions is another extra cost on top of all that. The whole $900m loan from the Govt will be well gone BEFORE 31 July 2020, you read it here first ! I think they could be forced to do a massive capital raise as early as next month or if not in May, June 2020 would be highly likely ! They'll certainly be "flying on a near empty tank" by the end of June if they don't.
AIR on a crash course with economic reality, its as simple as that. Investors should adopt the brace position for the inevitable VERY hard landing.