"A little-known South Korean group is in advanced talks to acquire a stake in AirAsia Bhd's aircraft leasing unit, according to three people familiar with the matter.

Two of the people said a deal would value AirAsia's fully-owned unit, Asia Aviation Capital, at roughly $900 million."

Those are the exact words used in the the first 2 paragraphs of the reported news.

"to acquire a stake in .... leasing unit" can only mean to acquire a partial stake of the leasing unit NOT the full stake which would have so stated had that been the case.

Whatever the percentage of the leasing unit the stake might be, it would value the whole AAC at roughly USD900 million NOT the stake.

For USD900, KOTAM can have 70 to 75% of AAC.

RenegadeMaster, on the contrary, I am certain the AAC divestment will happen.

But you are right to point out that if the divestment exrcise fails, we get to retain a profitable business asset. Then TF & KM will have to contend with servicing a huge offshore loan for a while longer with the accompanying interest and forex risks. We shall not be getting a special dividend enabled by the unlocking of AAC's wealth via its disposal.

AA could be shifting towards the 50/50 owned/leased aircrafts operation model.

I too have been with AA quite a while since the time it dropped below 90c and bottomed at 76.5c in late Aug 2015.

A counter that moves the way AA does, almost in contempt of reality and conventional behaviour, seemingly oblivious to the positive results it generates and the current long stretch of dream operating environment that it is enjoying.

You can easily imagine why this is so.

Therefore as a word of caution, beware the ides of march. Expect the unexpected as you gleefully anticipate the glory ahead. It may not be delivered to you on a silver platter but you may have to survive hell or rather, a spine chilling adventure to earn it.

Maybe 2.80 will do for the low today. The operator is still sizing up the retailers' strength and reserves. There is plenty of time to do their damnest yet.

No bombs dropping yet?

PAS

Most importantly, TF must stay in good health. I don't like the notion of him being strapped with a gigantic personal loan while running around making sure that AA hums along nicely. Too much stress over long periods is not good for health. I am all for a $1.20 special dividend payout asap.

Something to chew on.

http://jewtube.tv/innovation/say-goodbye-arab-oil-hello-israels-car-runs-air-water/

True. Also there is the growth coming from expansion and the growing middle class population throughout ASEAN, India, China and north Asia. Everything is hunky dory for AA ahead.

Yeah, pretty sure crude oil will drop a lot further over time and put downward pressure on our Ringgit too. Everyday I seem to be using new currency notes and coins, and I can't help feeling that we are rolling out too much fiat money. Hope I'm wrong.

RM4.00 to the Dollar? Almost an impossible dream the way things are. A paper tiger can't talk the money up. You need increased productivity through brains, sweat and investment.

There is ample time for a inverted head and shoulder formation to be completed before the release of any news on the bids for AAC. I can see a possible price retracement to the 2.70 region before moving to higher levels. However I don't expect much higher levels before AAC's disposal which is still months away.

Air pockets and turbulence ahead for low cost airlines operating in the EU region in the aftermath of Brexit and potentially more countries exiting?

https://www.theguardian.com/business/2017/mar/09/brexit-airlines-worst-fear-preoccupation-legal-framework

That's more like it. Take it up and don't look back. Procrastinators don't get left behind.

If you are confident enough in your own assessment of AA's fundamentals and outlook going forward, you should be unfazed by the dysfunctional price behaviour relative to the information we have been getting through the various channels unless you think those factors have started deteriorating. I think AA is growing stronger and stronger.

Hypothetically speaking, the recent confounding price movement can be alluded to Mr Market who can be rather fickle and irrational. But then again, it could also be a gremlin or a powerful operator rigging the market. How else can our bewildered minds be satisfied with any other postulations?

I have nothing to complains about Tony's work since December 2015. He has been most industrious and passionate in carrying out his duties in AA Bhd and the results have been outstandinng. I don't think shareholders should be ungrateful judging from that perspective. He has no time to watch the market like we do. His job is to manage the business well, deliver decent returns reliably and add value for the shareholders. The market will find its correct level eventually.

It is March now.

This should be the cue for a trend reversal. Time to accumulate more for me.

AA listing in HKEX by April is obviously out of the question now and it may be a dual listing in New York instead of Hong Kong. What is certain is that both options are being considered and there is still work to be done before the exercise can progress further. No fixed dates have been set for AA dual listing and the IAA and PAA IPOs, all expected to be completed in 2017.

So in the near term, the focus will be on FY16 annual dividend, divestment of AAC and, to a lesser extent, network expansion and growth updates. So things might become a drag somehow and drag on a bit.

Just as well I am also watching and building up on BJCorp, Evergreen and TunePro to get past the boredom of waiting.

http://www.nst.com.my/news/2017/02/215775/flying-asean-dream-airasia-start-ball-rolling-dual-listing?m=1

Niki, there isn't really much we can talk about AA's secondary listing in HKEX until such time when a proper proposal is announced and all the nitty gritty laid out for all to see. Meantime, we can read up on cross-borders dual listings, existing examples and models. Different countries have different laws, hence there are obstacles to be surmounted before a dual listing can happen. That's why they have hired IBs and consultants to handle the listing exercise.

Muarkia calculated exactly as CIMB did. I can deduce how rhey did it.

CIMB had calculated based on the arithmetic average of the VWAP of the five days in Feb 2017 being the 21st, 22nd, 23rd, 24th and 27th which were 2.6998, 2.7970, 2.7840, 2.7237 and 2.6536 respectively.

Hence, their VWAP;
(2.6998+2.797+2.784+2.7237+2.6536)/5 = 2.7316

and their cash settlement amount;
(2.7316 - 2.00)/3 = 0.2439, rounded to 0.244

Strictly speaking, the terms of CW34 did not state, "the arithmetic mean of daily volume weighted average market price of AIRASIA shares for the 5 market days prior to and including the market day immediately before the Expiry Date."

Stated exactly was,

"The VWAP of AIRASIA Shares (subject to any adjustment as may be necessary to reflect any capitalisation, rights issue, distribution or others) for the 5 Market Days prior to and including the Market Day immediately before the Expiry Date (subject to the market disruption event provision below)."

Therefore strictly speaking, the correct way to determine the 5 days' VWAP should be to extend each of the 5 days' VWAP against the day's traded volume, then add all these together and the total divided by the total volume of the 5 days.

Hence, VWAP should be;
(2.6998 × 28,076,500 + 2.797 x 40,844,500 + 2.784 x 23,445,300 + 2.7237 x 21,433,000 + 2.6536 x 19,789,800)/133,586,100 = 2.7413

and settlement cash amount should be;
(2.7413 - 2.00)/3 = 0.2471, rounded to 0.247

The difference is 1.23% meaning if you are going to receive $10,000, it should rightly be $10,123.

I don't know, perhaps conventionally, this is how CW issuers have always done it but that is not what the terms' wordings of CW34 describe how it should be done. In my humble opinion.

The cash settlement amount for CW34 that I worked out is RM0.247/unit.

I found the January news clip on the HKSE listing.

The Asean Holding Company is a long term ambition in the making and it entails a lot more work to be done talking to Asean leaders before such an integrated entity can come to fruition.

The ongoing task is a dual listing of AirAsia in Hong Kong.

http://www.thestar.com.my/business/business-news/2017/01/13/airasia-to-list-in-hong-kong/

27th Feb is the last of the 5 days

Closing Price : The VWAP of AIRASIA Shares (subject to any adjustment as may be necessary to reflect any capitalisation, rights issue, distribution
or others) for the 5 Market Days prior to and including the Market Day immediately before the Expiry Date (subject to the market disruption event provision below).


Posted by thurston > Feb 27, 2017 04:57 PM | Report Abuse
Anyone know if c34, 5 days average price is till today or tomorrow?

I wonder if the weak pricing of AA in KLSE has anything with the coming listing in HK. Are potential investors holding back in KLSE so as to plough straight into Asean Holding Group in HKSE later?

During the 4Q16 analysts & investors earnings briefing, TF confirmed that the process to list the Asean assets of the Group in HKEX under a single holding company has been underway for sometime already and on another occasion intimated that it could be done by his birthday in April this year. If successful 2 months from now, it will be a big celebration for us and a double happiness for TF.

However details are scant and how will the shares we now hold be impacted? It is surprising none of the analysts requested clarity on this matter.

Des07, you are right if you are pointing out that they are probably not using the net operating profit amount to do the calcs but my estimate is based on what the current policy states. The only caveat is that the dividend must not be detrimental to the company's cash flow requirements or I suppose what is foreseeable.

Sori typo ... should be RM0.10

This dividend payout should not have any foreseable detrimental effect on AA's cashflow.

Dividend policy

The Board of Directors of AirAsia Berhad (“AirAsia” or “the Company”) wishes to announce that the Company has adopted a dividend policy to pay an annual dividend of up to 20% of the net operating profit earnings per share (per the audited financial statements of the Company), rounded to the nearest whole sen number, provided that such distribution will not be detrimental to the Company’s cash flow requirements. This dividend policy shall commence for the financial year ending 31 December 2013.

Announcement date: 26 Febuary 2013


Net Operating Profits FY16 (RM,000);
1Q 409,795
2Q 276,257
3Q 440,420
4Q 544,588
Total 1,671,060

Estimated annual dividend for FY16 = 20% of RM1,671/3342 = RM1.00

I think the PP shares are entitled to this yet to be announced dividend.

Usually annual dividend announcement by end of March, ex-date in April and payment in May.

Thanks feicsh. I get it is the T+3 Working Day period whereby the scripts are picked up by the broking house of the purchaser.

Why should the last trading day of CW34 shares not be on the last Working Day just before its expiry date?

CW34 expires on Tuesday 23 Feb 2017

Last day of trading of CW34 shares is Monday 22 Feb 2017

You must realise that as the Ringgit drops, the USD assets that AA owns increase by the same rate implyng hugh increases in the unrealised value of aerplanes running into billions of Ringgits which is not reflected in the financial reports.

Depends on how you treat it yourself. Fund managers and long term investors are not too bothered by such figures. They are more concerned with the core figures.

Balance of USD loans as at 30 Sep 2016 was RM8,836 million. 62% was hedged leaving 38% exposed to forex fluctuations. Using Bloomberg forex records of USD:MYR records, closing rates on 30.09.16 and 30.12.16 were 4.1385 and 4.4862 respectively implying a drop of 7.75% in the value of the Ringgit Q-Q. Although we can guess to some extent end of quarters USD loans balances, I am not attempting to do so because the unrealised forex gain or loss is not a crucial figure to monitor.

RM8,836m x 0.38 x 0.0775 = ~RM260m

Hence, unrealised forex loss in 4Q16 was approximstely RM 260 million in 4Q16. There are other forex figures to look at besides this.

Catalysts for February and March ... 4Q16 report and firmer details of bids for AAC. Catalysts for April/May ... possible details of listing of Asean Holding Group in HKEX. For the rest of 2017, highlights may be possible dual listings of IAA and PAA in their respective home countries, continuing expansion of group through new airplanes deliveries and higher frequencies of service for existing routes or establishment of new routes. Somewhere down the timeline, there will be roadshows again to market the AA growth story and aviation's coming of age in Asia. When the huge pension funds come to bite into AA, you want to be holding a lot of AA stocks.

Tony should be a Roman Catholic.

You can go to the websites of the issuers of call warrants to download the prospectus or term sheet of the call warrants to peruse all pecuniary details of the CW.

Sorry, after checking the AirAsia CW34 Prospectus, I do not find any specific clause calling for a deduction of 2% of the money that the call warrants may be in to cover general expenses. Apparently different issuers follow different policies in their administration work.

See page 1 in particular for Terms and Conditions of The Call Warrants in the link below ...

http://warrants.cimb.com/doc/gcCIMBWR/509934KL/AIRASIA%20CW.pdf

To cover general expenses. Go and read the fine prints of the CW issued. I have not read it for CW34 but I have seen a 2% required to be deducted in some other CWs I have read before.

Following your example above, it will be (0.98 x $0.80)/3 CW34 = $0.26133/CW34

it is the VWAP (volume weighted average price) of the last 5 trading days of the mother shares before the day of the call warrant's expiration. I think you still have to take away 2% from the amount money the call warrants are in to cover expenses and then divide the net amount by the conversion number to arrive at the figure that the CW issuer will pay you for each unit of the CW you hold at the date of expiry.

First stirrings at the end of a long slumber? This dragon can scale great heights if it decides to take to the skies this year.

BJCorp has an agreement with Vietlott to run a computerised lottery business in Vietnam exclusively for 18 years starting from their launch date in July 2016.

Berjaya GTI was incorporated as a joint stock company to own, invest in and setup, and manage the computerised lottery business. Vietlott owns 49% of Berjaya GTI with Berjaya Lottery Vietnam Limited owning the balance of 51%.

BLV is 80% and 20% owned by BJCorp and BJToto respectively.

Why is there confusion about financial reporting? What is normally done? That is what we expect.

I know a pilot working for Malaysia Airlines and a senior flight attendant working for Singapore Airlines. That is the impression I get from them although I never asked or bothered to find out.