thx Icon, some extra info wish can help your analysis: 1. base on TA Report and info after investor roadshow, Airasia "might" target inject more aircraft to AAC from current 55 -68 units. 2. base on the Qtr report, AAC latest" total equity" is only 45.9m, With ttl assets 801m and total Debt 755m 3. New appointed CEO, Stéphane Daillencourt, with 30 years exp in GE, manage leasing arm 1700 aircraft portfolio.
base on above info, and the latest p&L and balance sheet, i believe the 1b is viable, how ever, to be realistic, there is 2 possibility: 1. buyer will take 755m debt out of airasia balance sheet with AAC, and paid extra usd 245m, in cash, which mean it will greatly reduce debt and boost AA BS to healthy zone.( jus like tony first bought AA at RM1 and take the 40m debt with it) 2. buyer pay 1b, and AA keep the 755m debt in AA balance sheet, with USD 1b cash, Tony will pay special dividend and cover the private placement of RM 1b.(which i thk with high possibility)
I'll add my compliments, Icon8888. What's your view of a report I read that there won't be US$1.4 bil for distribution after sale of Asia Aviation Capital as it has huge borrowings? Anyway, I'm in AirAsia for its operating profit, not AAC. That latter's just a bonus.
1. May i know what's pass-through revenue? 2. Why do you say lost earnings contribution is not significant? AAC contributed USD19m or RM80 last quarter (ignoring inter-company), Airasia made RM342m in 2Q, RM412m in 1Q excluding forex. but one-off cash boost also good and may bring down interest cost 3. I think technically net assets should still be RM45.9m. Amount owing to holding is debt, not equity. In disposals, this amount should be settled. other than amount owing to holding of RM185m, there's also an amount owing from related parties RM68. so net for AirAsia group AAC owe RM117m. but it's more likely than this amount would have been factored in the USD1b valuation (if it's true) 4. What do you think about its valuation right now? especially considering the new shares to be issued will dilute the eps
Icon, just assume that Airasia sold the AAC. The item under revenue "Aircraft Operating Lease" (On June16 Qtr 328m), and the item under expenses "Aircraft Operating Lease" (On June16 Qtr -121m) both will disappear, right? That mean quarterly Airasia will lost net income on this item around 200m/qtr right? correct me if mistaken.
dear Jay and Tee Tom, I think your questions are valid. My argument that disposal of AAC will not affect Air Asia profitability in a big way was based on AAC figures. However, upon taking a closer look at Air Asia's financial figures, the lease income and lease expense is much higher than that of AAC. One possibility is that only part of Air Asia's leasing activities are housed under AAC. Due to lack of information, I think it is best that I don't take a stance when come to this issue. I have added a paragraph in item (d) of Concluding Remarks to say that I no more comfortable with my original view.
Icon, I have no mean to question on your hard effort piece of work. Haha, I think you spent a lot of time & effort to produce this top class analysis. Anyway, no discuss, no debate, it wont has spark. This is just a normal processes we are going. The more important is the ending, right? You are my top example I want to learn on; Your analysis ability, your fugures sensitivity, your top class sense of investing, and your ability to put your thought on the paper. I always enjoy your writing. Thank god you are always by our side. Thanks.
Oh no offence taken. You guys gave your comments in a professional way, I have no complain
By the way, I finished that article at almost 1am at night. So the last few items were not as well thought out and written as I wish (sleepy...). So I welcome you guys comments to point out any inadequacy.
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