May 30 2019, 09:44 AM
QUOTE(yhtan @ May 29 2019, 11:48 PM)
Prior this Red tune (Tony and kamaruddin holding company) subscribe about RM1bil private placement at RM1.80 per share. Now they have received special dividend of about RM1.3bil until to date (40 cents + 90 cents special dividend).
Where goes the dividend come from? It is by selling and leaseback the plane to a third party, mind u airasia has to spend a huge sum of money to refurbish and hand over, after leasing period has to refurbish back to good condition back to lessor. Now my question is about this, why does Airasia need to sell plane while its core business is in airline. They still has to pay rental at higher rate with fix term, in the mean time have to pay for plane maintenance as well.
It is fine where they sell the old plane, lease it for 5-7 years then proceed with the A320 neo where fuel consumption is lesser, if u read the report, the lease is about 15 years.
Sell and lease back will make company balance sheet looks good (the planes asset and loan of it, won't in the balance sheet) and enhances cash position.Where goes the dividend come from? It is by selling and leaseback the plane to a third party, mind u airasia has to spend a huge sum of money to refurbish and hand over, after leasing period has to refurbish back to good condition back to lessor. Now my question is about this, why does Airasia need to sell plane while its core business is in airline. They still has to pay rental at higher rate with fix term, in the mean time have to pay for plane maintenance as well.
It is fine where they sell the old plane, lease it for 5-7 years then proceed with the A320 neo where fuel consumption is lesser, if u read the report, the lease is about 15 years.
But with new MFRS 16, it requires the company added back into the balance sheet in the form "right to use lease" under liabilities section.
That's why we see big difference in the balance sheet compared to previous year one.
Also, depreciation is incurred with the new MFRS 16, which may affect the bottom line figure.
Sell and leaseback will do one good thing, the cash.
Many airliners worldwide are doing this to free up cash, instead borrow billion to own the planes.
Just like company rent a place to run a business instead buy or own the place.
It always depends on company financial situation and needs (particularly cashflow)
Yes, the special dividend mainly come from the cash generated from the sell and leaseback of planes.
90 cents dividend means the company will fork out roughly 2.9 bil cash to shareholders.
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