Wowee... that is about as much as its market cap I believe... Hopefully they can keep the share price at incredibly lofty height it is currently at... 1 for 1 raise coming?
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Can they put anymore debt on the balance sheet MR B? Cap raise now the only option as they are all as they say when surfing a "Dumper" and not a wave to catch.
Not sure how anyone can build an investment case at anything above the book value of the assets, (especially with some of the aircraft's valuations seriously in question).
Book value was $1,01 as at balance date but will be considerably lower when they report next week.
This suggests to me something like a 2:1 capital raise at somewhere around 75 cents is on the cards. Holders at $1.60 are ostensibly compelled to participate unless they accept a massive dilution in their shareholding.
No they can't put any more debt on their balance sheet mate...a massive capital raise is definitely imminent.
TRIGGER WARNING: Some opinions in this post may not offend some people.
I am disappointed Grant Robertson has blindly committed the taxpayer to financially rescue Air New Zealand without taking steps to reduce the taxpayers open guarantee of rescue next time the airline crashes and burns financially.
We know these crashes will come as they have happened in the past. Ansett 9/11 global financial crisis and currently Wuhan Flu.
Mr Roberson needs to be mindful the source of this rescue money is taxpayers who may sweat in shearing sheds or wipe residents bottoms in rest homes to provide him with it. Mr Robertson needs to be careful with their hard earned money.
Writing Air New Zealand blank cheques for ever is not a responsible use of this money.
I accept there needs to be some form of support for Air New Zealand as a policy which means members of parliament have to take the bus to visit their electorates in politically untenable.
I propose Air New Zealand in the future is limited to the operation of propeller aircraft and single isle jets. This means Air New Zealand's operations will be limited to domestic, South West Pacific and Australia. When the next crash comes the taxpayers liability will be reduced.
If Air New Zealand wishes to operate long range multi isle aircraft it must be done in a separate operation run at arms length with the explicit understanding the taxpayer is not on the hook.
Boop boop de do
Marilyn
Has anyone done the maths on the total return to shareholders (realised - dividends + unrealised - capital gains) over the past 20 years since the government buyin to 82% during the big crash 2001? Would be interesting to know whether the government investment overall is above or under water - to-date.
From memory one of the brokers did the maths and it was eight point something percent before Covid hit. That's just the direct return. One also has to consider the hundreds of millions they get back in PAYE and GST every single year and the economic benefits the regions get that would not otherwise be served by a company such as Jetstar, e.g. Hokitika.
All that said, I think Marilyn has a point...however on the other hand if the Govt can keep extracting all the direct and indirect benefits and socialize some of the losses every time a crisis happens one could equally make the case the Govt can't lose.
Heaps
Milford did this a few years ago but numbers would have improved up to this year
https://milfordasset.com/insights/ai...-for-taxpayers
https://milfordasset.com/insights/ai...-for-taxpayers
So on face value the government has made a good investment by nationalising the airline. Bear in mind the recent $900m is a loan at exorbitant interest rates - not a capital gift, so again the government seems to have done a good deal for tax payers. I think the SP got down to 21 cents in 2001, or something like that? What a good buy that would be knowing the anchor shareholder would be the government. Wonder if it will get down that low again this time.
Thanks for that Winner, pretty impressive returns, especially when you see the split between capital and loans, then payouts and capital gains. As beagle says, all that other income from PAYE, GST. Seems that any rights issue or cap raise is pretty much guaranteed with the government as a backstop to pickup any shortfall, one way or another. Only question really is the price.
You have an excellent memory, I believe that's exactly how low it went. Predicting the future is an inexact science at the best of times but I think its safe to say that shareholders are metaphorically standing on the runway in the flightpath of an approaching Dreamliner which is about to have an extremely hard landing. I would suggest the outcome for minority shareholders will be anything but a "Dream" experience ;)