yep. they already raked in the cash. why risk it now?

esp when they know things will suck for months, maybe years.

How much of these in total portfolio? what about oil field in capsian sea or what not?

Holders of the stock should be prepared in the event of a rights issue ... they need to make sure they have enough funds to participate fully

it could be a rather tricky situation...

1. it they don't participate fully in the rights issue, they could face bigger losses (although it can be mitigate some losses by selling the rights to the rights issue...)
long ago, icapital decline a rights issue scenario and it ended up losing about 12million (if i remember correctly)
2. rights issue never a sure win thing. If the shares are Char Kuay Teuw, then good fortune lo... but if turns out to be a SAPNRG, then cry also no tears come out..

and they might think twice.... say if they already dumped in 20k into AA, they might think it is not wise to dump in more money into AA. For example, would they be willing to fork out another, say, 20k into AA?


--------------------


and the question now is... how much money does AA need?

Dec-Mar qr, showed a 900 million cash burn rate..
the next quarter cash burn rate is gonna be intense since planes are not flying...
they got the leases to pay...
they still got loans to pay...
they got that massive paper losses from their hedges to settle (paper loss stood at 1 billion but should be less since jet fuel recovered some what but the losses should probably remain or maybe higher from their interest rates hedges)
salaries to pay....

ok... they probably can get deferral on acceptance of new planes (what to do... backorder of planes is over 110 BILLION (not a typo there)) ... but .... they sooner rather later... they will still ned to take delivery of at least 1 or 2 new planes....

most worrying is their lessors... imo
they are using many lessors from all over the world... not all will be understanding and forgiving .....


... yeah.... they so lucky Bursa announced on April 2020 that pn17 are given one year to get their shit together ...

This post has been edited by Boon3: Jul 9 2020, 10:11 AM

Given the low price, buy and stay long and don't time the market like you always remind others

I dont get why people like to buy debt and liabilities. But seemed market is telling us people really do like it.

I guess just the brand name of airasia is worth few billions of intrinsic value.

exactly lo.


The bribery case... the insider trading.... can it all be a non issue as long as the stock rises?

Do you know during the march low down, many established companies in US were fighting off hostile takeover attempts when their stock price fell drastically?

I am guessing AA's competitors or interested potential big players are looking at this stock with an eye for longer term view...so when is the good time to do the hostile takeover?

Just my 2 cents, I might be wrong but I always like to apply the scenarios that have taken place in US market especially...

i m thinking....

right issue with some sweetener such as free warrants? Then substantial shareholder to provide full undertaking maybe?

With the commitments from the substantial shareholder, i guess bank loans are easier to get.... Placement to a white knight in this current environment quite susah, unless there will be some sort of commitment from the substantial shareholder?

US hostile take over or corporate raiding happen when share prices fall below the company underlying assets value. Meaning if you take controlling power via buy over and pay off all its debt + obligations and liquidate all its assets you still get positive cash back. This is due to on-going business they have hard assets such as property, plant, equipment, patents & IPs.

In Airasia case, you just raid a pile of debt back which Tony bought for RM1 initially. Now you buy all this debt and liabilities at a tune of few billions. Crazzzy.

what asset is left for AirAsia to use as collateral for bank loan?

planes sold to leasing companies already....

As you mentioned, worthy or not to do a hostile takeover may be due to brand name and also being leading Asia LCC market dominance

A simple analogy is like this.

A once famous burger stall currently owes creditors RM100k + employee monthly salary RM50K every month.

The only asset they have which is the physical burger stall and shop, they sold it to a leasing company and lease back at RM10k / month. The money sold for the burger stall and shop the owner pocketed instead of putting back into the business.

Now with 160k of monthly expenses running, the boss say i got no money to pay. But hey i got a great business model, so I'm willing to sell you RM500k for a 50% stake in my monthly debt obligation of RM160k.

Would you pay RM500k to be a partner of a money losing burger stall that got no asset except for the brand name ? Knowing the money you put in probably will let them burn finish in 5 - 6 months with nothing to show for it.

That my friend is airasia in a nutshell.

Ahaha for me i don't want to dominate a no profit established business la. Airlines and for the matter of fact low cost carrier, is going to be capital draining for atleast 1 - 2 years till demand goes back to peak.

If i want to drain money like that, i would rather bet on tech startup / unicorns for better returns. As the risk/reward seemed fairer in my view.

But that's just my take. Maybe some industry insider that know the business much better would want AA.

but then they will argue....

this burger stall got a very geng branding wo!
Best in Ipoh, Best In Korea, Bester In Shenzhen and Lagi Bester in Loondon


the value is in the brand name.... kekeke

Imo the only parties now interested to sink money into airasia now would be our dear gov (to secure jobs and remove mas competitor) and possibly, just possibly other rival airlines (BUT unlikely as they are also facing severe headwinds even the mighty SIA)

Your bearish view is up to 1-2 years, agreeable with this... after 2 years? assuming the pent up travel demands once the pandemic died off

Btw, looking at the momentum now, any traders worth their salt should have earned some fast bucks now that the share is up 7.++%



Not asking you to buy but just offering alternative and longer term views...

in this dire situation, personal guarantee by mr tony and gang? I feel owner's commitment is a must if want to save this company.

Besides, this covid thingie is just a temporary event, at least for now. I m very certain that airasia's advisor sure will bull their way through and claim that once covid gone, things will back to normal. And the bank will definitely try to accommodate that too because everyone knows covid will be a temporary thing (at least for now).

Yeah punting and investing a bit different. If you punt airasia, i would say 50/50 you can make money. It's a good punt, cause Airasia got a good branding, meaning there is appetite from the retail end.

As for long term, i definitely think they are a cash burning business. They might need atleast 3 bil to 5 bil cash burn just to survive and maybe start to turn around. Once turn around i'm guessing if done well 500m / annum profit max ? It will need 10 - 15 years to recoup the 2 years of heavy cash burn.

Anyway I'm looking as if i own the business. If share price, once turn around show profit, i guess P/E could jump 50x and you would have win the trade.

.... personal guarantee by Boss 1 and Boss 2 worth the 3 billion (that's the sum those experts are saying what AA needs) ??

doubt any will give based on that.

lemme keep post this here : https://www.thestar.com.my/business/busines...or-rm1b-funding