#ddtg take debts for breakfast since young, no issue to have debts for lunch.

banks is unlikely to extend any meaningful loan to aagb.

not that the market is short of funding. believe tf could secure funding. the question is how much hair cut current creditor and dilution current shareholders need to take.

So.... this morning's rush to buy is because of news banks will extend loan to AA? That's kinda dangerous though...? If the price drops later and you still hold on, be prepared to be stuck with AA shares for a year (seeing Q2 and possibly Q3 all in red).

If AA is issue right issue, will you subscribe it if you are holding some share right now?

If you are not going to subscribe the right issue, what will happen to your share value?

if you don't subscribe, then you will be diluted......
your share price is going to be adjusted too. but your investment cost remains the same.

Smooth talking....

https://www.thestar.com.my/business/busines...-back-to-normal

I really give him credit... Excellent salesman...

Till that one statement...



LOL! Like that aslo dare say out loud??

If no leasing... lol... not only cash flow positive but AA will make billions lo...

And he still thinks he did a good hedge.

Doesn't look like he will learn from his hedging failures... and at this rate, future heading losses will happen again.

... and he's still not addressing the core issue.

AA was built on debts. All the problems AA is facing is cos he got greedy and expanded too rapidly, borrowing way beyond its means to built brand name.

And when a house of a cards is built too high.. it collapses.

Does AA deserve the second chance?

Nope. Let them game over and close down

They cant / refuse to pay airport tax. Big red flag.

Should close zombie company like Malaysia airlines rather than one was financially feasible.

Yup. Remembered that fiasco.
They collected the money but refuse to pay MAHB. Kept giving beating around the bush.
That was during the time when their nett debt was over 10 billion ringgit. Go figure.

Other shameful stuff was charging customers for using their credit card. Totlly not giving a hoot over Bank negara directives. Then they got fined. Lol. Such pathetic arrogance from the boss 1.

maybe also its time to show that TF is still a human after all

The price is the downfall of AA

He got way too arrogant forgetting that AirAsia was built on a debt model.

Can debt grow forever?

He should realise that once he switched to the sale and leaseback (asset light) model that the switch was his last throw of the dice. Whatever asset the company had was all charged to leases. Now what asset does Airasia really have?

got, fake right-of-use assets arises from MFRS 16

since when Air Asia was financially feasible lol.

no airlines company in the world not built on debt.

Most if not all malaysia airlines aircraft are leased like air asia, loss about rm800m every year, has no prospect to breakeven or profit consistently in the foreseeable future and tax payers have lost over rm 8bn, why not close it down first?

This post has been edited by icemanfx: Jul 12 2020, 11:00 AM

Tracing how AirAsia got where it is today....


1. I recall that record breaking deal with AirBus... (google search boleh!)

https://www.bbc.com/news/business-13884433

That happened on June 2011.

and this statement...

So AA had an order of 175 planes. AirBus supplied 89. So company has a backorder of planes not yet supplied 86 planes (worth 19 billion) but it goes on a record buying spree of 200 new planes worth 58 Billion ringgit (based on exchange rate then)(If this is not excessive, what is?)

2. I then checked on the QR report before June 2011.

https://www.malaysiastock.biz/GetReport.asp...t_1Q%202011.pdf

Cash balances then 1.8 Billion...
Total debts then 7.8 Billion! (from page 27. Previous debt the previous year same period is 7.1 Billion. Ballooning debt issue!)

Capital commitment to buy those 86 planes remaining is 19 billion.


3. I remember AirAsia before this, had problems taking delivery of new planes. They had to asked AirBus to defer delivery of new planes. (go search 'Airasia defer plane delivery)

https://www.thestar.com.my/business/busines...partly-deferred




Now putting the pieces together....

AirAsia went on a plane buying spree. Ignoring the fact that it's core cash flow balance had always be weak.

In 2007, buy 175 new planes....
In 2009... choking already... no money... (2009 account showed 700 million in cash and over 7 biillion in loans. How to complete delivery for 19 billion worth of new planes?) So it had to ask AirBus to defer delivery (which is a good thing to do)

By 2011.. cash balance did improved to 1.8 billion but debts remain high at 7.8 Billion.

But in 2011... it went bonkers and ordered another 58 billion new planes (source of problem? Overbuying of new planes... exploding debts?)

But this is where the damning thing is... as we now learned.... AirBus USD50 million bribery scandal with AirAsia happened in 2012!!!!

The year AFTER AirAsia made the insane 58 billion new plane order!!!

In 2015.. the news of the massive Sale and leaseback of planes started....

https://www.todayonline.com/business/airasi...lise-operations

In Nov 2016. Cash balances 1.5 Billion. Total debts 10.3 Billion. Plane backorder is now worth 91 billion!

https://www.malaysiastock.biz/GetReport.asp...32016_24Nov.pdf

In Jan 2017. Completes 1 billion special special ownself share placement to boss 1 and boss 2..

https://www.theedgemarkets.com/article/aira...-shareholders-0


In March 2018. The sale and lease back started....

https://www.reuters.com/article/us-airasia-...t-idUSKCN1GD3VP

In 2018 AirAsia started to pay huge chunk of dividends. Note how the company, which was weak financially, started paying interim dividends in 2017, right after that special special ownself share placement to boss 1 and boss 2.



the numbers and the dates are all there........


And here we are ... 2020.... company is asking for bailout? ( Isn't it crystal clear the company management farked up?) It was choking in debts, it had to the sale and leaseback of planes to ease the debt. But instead of prudently handling the money, AirAsia went on a frenzy and started throwing money back to its shareholders!


So assume AA gets the 2 billion it is asking for.... okay.... no problem...
but we have to address the issue of what next?
Why?
The core fundamental weakness of the company will still remain... which at is... the company simply has way too many planes on back order. Cos once this virus blows over and AirAsia somehow survive, AirAsia will soon have to start take delivery of new planes....
which means....ahem.... new financing!!!
which will also means.... either the leasing amount, which as of today, is at 12 Billion, will balloon much higher...
or else.... the company will have to take on new debts.
Remember backorder of new planes is over 110 billion!!!!

and then we have the issue of their aggressive hedging... in 2009 kena 640 million in hedges... and now 2020, will total hedging losses runs over a billion?
and then in future? How? Can we be assured that in the future, AirAsia would not be hit with another multi million dollar hedging losses once more?

Remember the recent interview... "Right now, we’re trading cash flow positive if you take out the leasing and some fuel hedging that we thought we did a good hedge." where he stubbornly reckons he did a good job!

And the thing about the rights issue.... if AirAsia refuses to do one... clearly it means the boss 1 and boss 2 is refusing to put in own money when the company is in dire straits...

This post has been edited by Boon3: Jul 12 2020, 01:34 PM

Returning excess equity to shareholders via either buy back or dividend is fairly common practice.

ROCE is a yardstick use by many fund managers.

Under current situation, no white knight will consider without massive devaluation of existing share value.

This post has been edited by icemanfx: Jul 12 2020, 06:26 PM

The truth is out there.......


That article from the Edgemarkets has one very important point....

https://www.theedgemarkets.com/article/aira...-shareholders-0



That part in bold...

Bursa had to extend that special privilege placement 4 times and that it required boss 1 and boss 2 to borrow!!

Empat kali lo...

Borrow to buy the new shares... 559 million new shares .... the share were priced at 1.80.

The dividends since Jan 2017... ie the dividends since these 559 million shares were issued...



Total dividends given out since then.... 178 sen!!

WOW!!

Borrow to fund 559 million shares at 1.80. Get back 1.78 in dividends per share.

Not to forget the direct shares they had.... Boss 1 had 1,600,000 shares. Boss 2 had 2,000,000 shares

( source:
https://www.bursamalaysia.com/market_inform...?ann_id=2732191
https://www.bursamalaysia.com/market_inform...?ann_id=2732190
)




So would I be wrong to say the following... when AA had excess money, boss 1 and boss 2 would die die borrow to buy new shares in the company so can profit from the dividends...
and now the company is in dire straits.... why boss 1 and boss 2 no want to die die borrow to buy new shares in the company to save it?

and then... when we think about it...
AirAsia had the money...
Yes they had the money, which came from all the disposal of planes but they gave most of it away as dividends...
now.. they want to borrow?

whose fault? wanna to blame covid 19 meh? how about calling it as it? Mismanagement by boss 1 and boss 2!!!

This post has been edited by Boon3: Jul 13 2020, 09:21 AM

Dividend benefited every shareholders.