Icon8888 Gossips About Stocks
(Icon) Air Asia (4) - Tony Fernandes Sell Car Sell House To Sai Lang At RM1.84
(How often do you encounter oil price at such low level for extended period of time ? Tony Fernandes decided to bet big)
Today, Air Asia announced that Tony Fernandes and buddy will be forking out RM1 billion to subscribe for 559 mil new Air Asia shares at RM1.84. Some forum members worried that this will cause Air Asia shares to crash upon uplifting of suspension on Monday (because of EPS dilution of 20%).
Are you kidding me ? The founder and CEO of a PLC is forking out RM1 billion to buy his own company's shares at zero discount to market. He will only do that if he is convinced that share price can easily stay above RM1.84 (even after EPS dilution).
TONY FERNANDES IS PUTTING MONEY WHERE HIS MOUTH IS. THAT IS A BIG VOTE OF CONFIDENCE FOR AIR ASIA.
I interprete this latest development VERY POSITIVELY. As Tony Fernandes' funding is very likely from margin facility, he will be under pressure to ensure that share price will perform. Over the next one to two years, we can expect a series of road shows to fund managers as well as multiple value unlocking exercises to ramp up share price.
Air Asia is truly living up to its promise that NOW EVERYONE CAN FRY.
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Discussions
4 people like this. Showing 50 of 76 comments
Tony has rm2bil debts in airasia, why not fork out these rm1bil and settle loan? Still spend money building fancy hq, buying planes etc.
2016-04-01 20:43
And who will buy at 5.50?
You?
3.4 billion shares, market cap $18 billion.
Can buy American Airlines already.
2016-04-01 20:44
Airlines shareholders who went burst.....
If it happens, will not be fir the first time.
Tony to join them?
2016-04-01 20:46
Dumb asses....the only winners in the airline business is Boeing and Airbus and the airports
2016-04-01 21:05
AAB can't convince any bank to lend again money to it after having so much debt, far more than its asset value, there is the only move. No future. Sell lah.
2016-04-01 21:18
Good news or bad news? It depends on your (previous) view on the company.
I think it's good news because i was pessimistic before, now Tony is willing to take responsibility by giving full support to the company, thereby mitigate AA's cashflow problem and reduce earning risk. With enough capital, maybe they can "tahan" until AAI etc get listed, and solve problems like USD loan and buy more oil futures.
Tony is more matured now (hehe!). He talk less on share price and focus on doing his job. This is a good sign! Even if it goes to RM100 he also cannot sell one, un? He was hoping future dividend is enough to cover installment etc. So the 4c is a MUST! (Which may also mean more consistency on payout)
On the other hand, if you think the company is in great shape now, then Tony just rob you.
By the way, did he do something on monday or tuesday? (Small people's heart) Monday unexpectedly went up so much he got to press it down?
The new planes ordered by Airasia has an NEO (New Engine Option), which will improve fuel efficiency by a lot. But it needs lots of $$ to smooth the transition (sell old planes and buy new ones!), and he can't do it without enough bullet. Airasia will be on the lead again once they got this done. (You know, a lot of AA's older "innovation" has been successfully copied by competitors).
I may wait a while.
2016-04-01 21:21
No doubt the aviation oil price has come down. However, the competition from other carriers especially Malindo will be getting stronger with time. Malindo is flying to Perth and will start flying to China, India and Japan (direct competition to Air Asia). Other local and foreign full service carriers are also reducing their air ticket prices if you follow their recent advertisements in the mass media. Being an low cost carrier, Air Asia has to be cheaper than them. Therefore, what I can say is that the benefits that it may derive from low aviation oil price is not as great.
Actually the number of air passengers in Asia and the whole world is reducing and expected to stay subdued for short to medium term due to the current regional and world economy conditions. The carriers in competition are fighting to grab the diminishing pool of passengers. Therefore, even if Air Asia may become profitable again, its earning per share will not be high.
Furthermore, the growth rate of Air Asia has tapered off in these few years. Just check which potential market that Air Asia has not explored. In addition to that, its expansions to other countries are not as successful as its home turf, Malaysia. Only AA Malaysia and AA Thai are profitable. AA India, AA Indonesia and AA Philippines are losing money. Their growth in their respective markets are slow as compared to Cebu Pacific and Lion Air. It is also doubtful that they may be profitable there.
I can say that its share price may go up or down being sentiment driven in short term. Medium term to long term, it will be an uphill battle for Air Asia.
2016-04-01 21:35
Malindo flight attendance got more beauty? I like airasia ones. All slim body sexy, good face and polite. Yummy.......
2016-04-01 21:43
Support tony for his vision and mission. Proud to be Malaysia.Malaysia is famous over the world by tony revolution in air fare..
2016-04-01 22:17
Hahaha, ya, everyone forget about this
xxxxxxxxx
supersaiyan3 神仙難賺吉寧錢
01/04/2016 21:26
2016-04-01 23:15
The way he's doing it this time "boh swee." He shouldn't be allowed an issue of new shares, which causes dilution to other shareholders.
If he wants to raise his stake, let him buy up the stock from the market, then there's no dilution to shareholders.
2016-04-01 23:16
Let's think about what will happen to AA share price next Monday !? Move up due to major shareholder increase its stake through placement new share or move down due to dilution earning.......however, The fact that placement new 16% share at 1.84 is consider fair to retail shareholder as it marks to current market price .
But, these placement share at 1.84 may also limit and spoil AA current share upward momentum, which should be on track to trade above RM 2.00, or some even predict to go up RM 3.00 or RM 4.00.....these is because retail investor maybe perceived TF will get immediate surge profit on his latest placement 16% volume share at 1.84 instantly.....TF have past record dispose its stake under pledge margin account in open market.....if AA share surging now....instantly, TF will profiting immediately which may prompt him to sell his placement share back to open market....
2016-04-01 23:40
Errr.... is the diok show on Monday still on? I am just an audience only. Heard somewhere that Icon Vs Paperplane.
2016-04-02 02:49
The bet is that if not rights issue, Lux88 diok
If rights issue, I diok paperplane
2016-04-02 06:02
if Tony and co buy share using pleadged collateral but not cash it will not only dilute earning but cause unnecessary margin call if share price drop. Let just wait for more details before jump into conclusion
2016-04-02 09:12
Tony is borrowing 1B from bank or friends to put in more money for AirAsia (his own company). You only put more money into your own company if you believe that it is a good business. Dividend is also higher this year (4 sen - a 30% increase over last year). Share buybacks by Co or directors do not grow a company organically, it only helps in building confidence for shareholders. Tony's way is to put in more CASH (borrowed or otherwise) to grow the business and to control Asia's sky (like what Ryanair do to Europe and Southwest Airlines do to N.America). In an austere Economy, low cost carriers rule!
2016-04-02 09:34
Virgin Airline is selling when oil is down and airline profitable. Tony is buying into his own airline. It would be interesting to see who makes the right decision a few years from now.
2016-04-02 10:13
RAIDER ALSO SAYS U NEED TO BE CAUTIOUS AND SPOT THE DANGER TOO....!!
1. AIRASIA NEED CASH....THAT MEANS ITS CASHFLOW NOT THAT GOOD LOH...!!
2. TONY AND GANG....TAKING THE PLACEMENT.....IS GREEDY TOO AND TAKING UP THE PLACEMENT THRU BANK BORROWING...!!
CONCLUSION
VERY POTENT RISKTAKING
1. POOR CASHFLOW
2. MAJOR SHAREHOLDER BUY MORE THRU BORROWING.
2016-04-02 10:15
u must understand Tony....he is a guy with high ego and a gambler too loh....!!
just look at how much monies he has wasted in F1 racing and English Football clubs ?
This tony...will sometime do silly not financial prudent thing too...!!
2016-04-02 10:18
Placement share at 1.84.... Will adjust back to 1.80 as placement share not entitle divided 4 sen....raise RM 1 billion...but only can interest cost RM 10.7m pa....therefore placement 16% new share will result 1% cost saving, but dilute earning 16%........
2016-04-02 11:08
i mean once resume...airasia worth the best is 1.80...cannot go up further
2016-04-02 13:51
if the tony using this price to dilute to share, so more of the share holder will stay on the airasia ship, to me, tony is now gambling on his company
2016-04-02 14:39
I view TF to do placement 16% stake at RM 1.80 and announce it in these time as naughty strategy....Many have anticipate good AA result due to strengthen RM and prolong oil price, thus AA financial condition should improved greatly forward...therefore AA share should leapfrog up to above RM 2.00 and heading toward RM 3.00 in short time.
But....TF now placement 16% share and fixed at RM 1.80, and still need to seek shareholder approval in EGM and only can expect to complete in Q3....so.....Will shareholder will happily approve TF placement share at 1.80 in EGM if AA share alrdy surge above RM 2.00-RM 3.00 !!?? allowing TF instant windfall profit by expense on minority shareholder?
By logically thinking If AA financial improved greatly next and therefore share price up RM 2-RM 3...then, if TF want to profit it, he should instead buy from open market as much as possible now and profit it after AA good result is announce.
Therefore, i view TF placement share now as naughty strategy....as it essentially limit AA short term share price performance even if next quarter result is good....until its placement new 16% share grant approval by shareholder in EGM...complete in Q3...then only AA share can conveniently surge above RM 2- RM3
2016-04-02 15:28
r°Moi 702,000,000 open market vs 1,000,000,000 under PP
If it is all about increasing their % to 32%.. Tony could have done it with 702,000,000 by buying in the open market... even if the average price is assumed to be 2.00
(32−19)%×2,700,000,000×2.00
=702,000,000
Remember... Tony could have easily bought a block or two from Wellingtons and EPF even at cheaper prices...
So... the average price would be lower than 2.00... and with no complications like.. EPS dilution.. pissing off minorities.. bla bla... and the risk of margin call as importantly the price would likely stayed at 2.00 or even higher...
The effects of this 32% is better than the 32% achieved via PP
02/04/2016 15:44
X
r°Moi So.. of course.. it is not about increasing the % to 32%.. now do you get it?
02/04/2016 15:48
2016-04-02 16:03
This 32% thru open market could enjoy all the benefits like the presumed up in price... exactly like the 32% that they have to swing to them.. in the process pissing off the minorities and disrupt the price...
2016-04-02 16:06
PP settle the short term debt problem, if call for right issue, I think it will happened like MAS.
2016-04-02 16:16
after PP, if TF call for right issue it holding will more than 33.33%
PP give you confident that AA will no call for right issue in next few years. it mean TF have confident that next few year debt can settle by earning $$.
2016-04-02 16:19
Minority shareholders holdings will be diluted, I.am not positive on this. It is good for Tony but not minor ity shareholders
2016-04-02 21:28
I seldom agree what fayeTan said, but this time she is talking what I am thinking.
xxxxxxx
fayeTan Minority shareholders holdings will be diluted, I.am not positive on this. It is good for Tony but not minor ity shareholders
02/04/2016 21:28
2016-04-03 02:23
AirAsia was doing well financially (benefits from lower oil price, stronger RM) until this placement comes in to dilute minorities. The key question is whether the earnings can more than offset the dilution?
2016-04-05 08:27
Stock: [AIRASIA]: AIRASIA BHD
Apr 1, 2016 09:01 PM | Report Abuse
Posted by Icon8888 > Apr 1, 2016 01:20 PM | Report Abuse
btw, I don't believe that Tony is forking out money to increase his shareholding to 30% (by way of placement)
no tycoon will do that in real life
tycoon like to make big money with small capital (for example : on hind sight, Gamuda issues WE because they anticipate securing huge contract soon).
Tony is not young, he will be stupid to commit so much capital at this stage of his life. If he wants to benefit from the up cycle, he would have tried to do it by warrants (for example : issue new warrants and try to swing a block to himself
This i copy bulat, bulat icon punya comments. See!!hahzhahahahaha
2016-04-05 22:30
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Air Asia hit 5.50? Airasia will hit 10.00 la after so many sifu coment Tiu
2016-04-01 20:26