The thing is that Airasia got this money to give out as dividends when they sold off their planes to the leasing company.

Prudently, how could they give the money out as dividends when Airasia clearly needed those money.

This was so wrong.

This post has been edited by Boon3: Mar 20 2020, 01:59 PM

Yup. The major shareholders who had the special privilege of subscribing to new shares. Sorry. Lots of new shares.

So if this company in the near future, is of need of a bailout...
How would you feel?

In the news much earlier...

https://www.thestar.com.my/business/busines...ase-sports-team

I wonder how Airbus would feel...

They were the ones footing the sponsorship in millions...
They were the ones paying the fines too for the sponsorship...

LOL!!

Does BDO even understand what corporate governance is?

Just sharing some rant..

This goes to show that these rumours do not read the facts supplied by AA in their qr reports. It's really not difficult to read.

Previously, at one point, it had less than a billion cash but over 12 billion in debts. It was so bad that it is FORCED to resort to sale and leaseback to reduce debts.

Total debts as per last qr showed only 400 million plus.

They sold planes to the leading company. Problem is how big is their lease? It is now over 12 billion and counting....

Frankly, I be mighty pissed if AA is bailed out with any of our tax money. Why? My reasons...

1. company was reckless. They bought planes without a blink of an eye. The infamous plane purchase, which subsequently, got the bosses into trouble was an 18 billion USD purchase. A massive and mind boggling order of planes when Airasia still had 150+ planes yet to be delivered. And yeah the following year after that purchase cane that 50 million usd sponsorship to sports team owned by Ah Tony.

2. company is reckless with their hedging. 10 years ago they got burnt bad in their hedging and lost millions. And yet their hedging amount is crazy. They bet on oil contracts, they bet on interest rate and they bet on currencies. Can someone make a table out and show how much they made and how many millions they had lost in their hedging? Compare it with the actual running of their plane operation. Are they a hedging company or are they an airplane company?

3. The owners. So much issues I can bring out. The said sponsor money. Oh and issues like arrogantly and blatantly ignoring rules such as no credit card surcharges imposed on travellers who charge with their credit cards. Bank Negara said no surcharges and yet Airasia dared to arrogantly charge those charges. I could go on... The unbelievable special private placement of shares to JUST Ah Tony and gang who subsequently got a huge payday when Airasia paid out 2 trenches of special dividends.

Hell. I would be really pissed if they get a bailout!!

This post has been edited by Boon3: Mar 26 2020, 05:54 PM

Yea, the latest NTA is at 1.33.
However, the previous year, the NTA was 2.33.

AA NTA has decreased so much in one year.
So how can it be safe to depend on that NTA figure of 1.33?

This post has been edited by Boon3: Mar 30 2020, 05:34 PM

Wild speculations... imo.
Not to say never or not possible but some thoughts...

1.Khazanah owns major stake in MAS. Over 69%. Khazanah owns nothing in AirAsia.

Can Khazanah bail out both airlines? Why should it bailout out AA when it has such a huge stake in MAS?

2.Tony and side kick alone owns 60%+ in AirAsia. 60% plus.
Think about it. All the speculators is hoping that the gov bailout 2 person while many in the country, esp the small business are collapsing?

To make matters worse is when one thinks about it. Especially how Tony and his sidekick enlarged their shareholding because of that one private placement recently. And after that special privileged placement of shares, AirAsia gave out obscene special dividends. Think about it...

3. Most of the planes had been sold to the lessor company. So what kind of assets does AA have really? Lease liability is over 12 billion.... Well they used to owe banks in similar amounts...

4. Rest of the stakes are ikan bilis size. EPF is no longer a substantial shareholder.... Again a bailout makes no sense the country is basically bailing out 2 person..... Anyone ok with this?

5. Rights issue... this is probably the logical way to go. But then... is this the way? Would Tony say this is the way. He and his sidekick owns more than 60%... Would they and could they afford to do the rights way?

Rights issue is different meat. It requires topping up more money for a badly managed company. If a speculator bets say 10 million on AA. The rights issue might require the speculator to double their bet to 20 million... And the obvious question is could they afford it and would they be OK betting 20 million in it, more so the rights issue would require the speculator to be committed to the bet for a much longer period of time?

Side note... witnessed occasions where local investors lost mega millions due to rights issue! Cavaet.

6. The other option of course is to placed out a new block of shares. Any takers?

7. The area of focus is really their hedging. Said it to many times already.....

This post has been edited by Boon3: Apr 2 2020, 10:47 AM

There are many ways to punt on stocks.

I am sure you are aware of it. There are even cases when one can win shitload of money without any reasoning.

Me? I like repetition. I want consistency. Most of all I want to minimise my risks and win big.

This is why I ask such questions to myself if my punt on AirAsia is based solely on the issue of bailout.

The need to know the shareholding structure is important. Those 2 who are accused of accepting bribery holds more than 60% (this includes direct and indirect shareholding) of the company. Could it really happen or is this is a mere wicked speculation spread around just to boost the share price?

If I can't get a handle of this, then how logical is my punt on the stock?

Hahahaha. Bail them out just cos of its employees? Smart reasoning. MAHB qualify?

And guess what....

https://www.theedgemarkets.com/article/aira...-tony-fernandes

See, in that article, he openly said the company has more than 2 billion in cash (which is correct but his definition of net cash is utterly wrong as loans and leases needs to be paid) but slyly he admitted his company needs cash.

Why?

That is the more important question.

And imo, it lies again on the company hedging which runs into billions.

1.Fuel hedging. He's got that terribly wrong. 11 million barrel plus as per qr report. Some reports said they were hedged at over 60. Oil price now? How much losses? And with planes not flying, these oil hedges will be a terrible problem.

2. Interest rate contracts runs into the billions. Has he gotten that right?

3. Currency hedges. Ringgit at one point strengthened very strongly against the dollar since the last qr. Then it tanked big time. Two massive swings during the period. Did he gambled correctly.

4. Audit Audit Audit. So huge amounts gambled in its hedging. Even the auditor raised concern. Do refer annual rpt. Me? Too little info and I feel AA is gambling and not hedging. That's my opinion.


Besides the hedging, the sale and lease issue. We know that most of the current cash pile came NOT from its operation but its financing. The sale of the planes raised most of the current cash pile. It's lease liability is now over 12 billion. This is insane. Gila betul.

With planes not flying, a lot of money will be needed to pay leases on planes not flying. Fastest way to burn cash....

And again there isn't much info is there? At what prices are they selling these planes. What was their purchase price. What are the leasing terms? If there is a delay or no payment, will AA be forced to default on their planes? Reports that AAX wa seeking deferrals of payment in Feb 2020 and it was noted that not all lessor will agree.

And yeah, with most planes being sold, how can AirAsia get loan from bank? Not much asset left to pledge mah...

Which is why Tony openly pleads the govt to lend them money.

What a blardy joke. The govt is not a bank la

Anyway, should govt even lend money to a company whose planes are already sold.. income almost gone.... now if the virus situation persist a couple more months and mco persist...how will AirAsia get income? Even when the situation improve, how many will even dare to fly? Won't they be weary? If so even when AA flies again, won't ticket sales be down?

This post has been edited by Boon3: Apr 3 2020, 08:33 AM

Hmmmmm..... Star biz talking about some of the issues raised here...

https://www.thestar.com.my/business/busines...-light-strategy

The article mention lease charges about 500 million. The figures should be much more......

If you read in between the lines it's just a blardy a joke of company. Lapsap!

It actually had a shit load of a money when it started its sales and leaseback program. But instead of putting the money to good use, it decided to splash it all away by giving free money via special dividends.

Now it wants a loan from govt? Lol. What assets does AA have left?

Of course we see what we will see. Me? A bailout on MAS most likely would happen. AA? I doubt it. That's just my opinion.

And do know that my opinion has zero monetary value. If I am wrong, I am wrong. I have no vested interest in this stock and neither will I have if it plunges deep deep. Hope you understand this issue.

Most of the srltuff I had said are based on figures found on AA own website.

I stressed that AA will find it difficult to get loan from banks itself. Why? It went on asset light strategy. How can they get loan when their planes are sold like crazy under their sale and leaseback. Have a look at these two BS comparison. 2014 vs 2019.



Vs



AA used to have planes over 12 billion. Look at the latest figures. The planes all sold to the leasing company.

No asset how to get a loan? Surely the govt realises this!

And most of all, this is why the NTA figure of 1.30 is not a good indicator to use for AA. The NTA is shrinking!!!

Quote



Fuel hedging losses 77 mil per month. What about the other 2 hedges?



https://www.theedgemarkets.com/article/cgsc...ed-save-airasia

Take a look at AAX instead. They had already tried asking for deferrals...

https://www.flightglobal.com/strategy/airas.../136882.article



As you can see, AAX has a number of lessors... and as you can read from the article, not everyone will agree. If I am the lessor, I would think its wise to just sell the planes....

Borrow from banks with govt guarantee? Interesting but would you, the rakyat be happy that govt is helping a company which TF and his sidekick owns more than 60%? Bailout of 2 who was accused of taking a 50 million bribe? You ok with this? I am not.

D7?

AK?

sorry do not know what they refer to.....

I see.

Never did I mention I will touch AirAsia. I have no interest in it. Seriously. What la.

As for AAX, clearly it was a non investable stock from day one. I dare say so when I am a mere trader.

As for a AirAsia.

Quote: Gomen could charge a premium for its guarantee like insurance company. AK is still liable to banks, is not a bailout or free money like to MH.

The problem with what you mentioned is that because AA adopted the asset light strategy of sale and leaseback, it doesn't have any feasible asset left (if you followed my arguments earlier). Its planes are sold to the lessors. So how could govt even consider giving such a loan guarantee?

And based on AA track record, it definitely does not deserve any bailout at all! That's my opinion and that's what I am stressing.
Got money from sale and leaseback, 5 billion plus, gave it all back as special dividend (a move which clearly benefited the big 2 shareholder!)