Mike answer on how AA can exit from PN17: CGS-CIMB estimated that AirAsia would need a RM7.39 billion boost to its shareholders’ funds (on a pro forma basis) as at Sept 31, 2021 to be removed from classification as a PN17 company, which the brokerage think would be extremely challenging to achieve.
By Bernama | 2022-01-17 11:24:34 KUALA LUMPUR (Jan 17): The share price of AirAsia continued its downtrend in the early session on Monday (Jan 17) amid weaker sentiment after the group was classified as under Practice Note 17 (PN17) status following its failure to secure an extension of the relief period from Bursa Malaysia.
As at 10.30am, AirAsia had declined 2.5 sen or 4.03% to 59.5 sen, with 35.54 million shares traded.
AirAsia group chief executive officer Tan Sri Tony Fernandes recently gave an assurance that the group was in the midst of formulating a plan to regularise its financial condition to address its PN17 status, and relevant announcements will be made in due course.
AirAsia was supposed to have been classified as a PN17 issuer 18 months ago when its auditors raised significant uncertainties in its 2020 audit report that cast doubt on the group's ability to continue as a going concern.
However, AirAsia was given a general waiver by Bursa until Jan 7, 2022 as part of its Covid-19 relief measures, but the bourse declined to extend the waiver despite an appeal from the group, but there was no immediate implication for its listing status.
CGS-CIMB estimated that AirAsia would need a RM7.39 billion boost to its shareholders’ funds (on a pro forma basis) as at Sept 31, 2021 to be removed from classification as a PN17 company, which the brokerage think would be extremely challenging to achieve.
"Only RM193 million or 20% of the RM974.5 million redeemable convertible unsecured Islamic debt securities (RCUIDS) have been converted into shares so far, and further conversion will not be imminent, as AirAsia's share price is now just 62 sen, below the RCUIDS conversion price of 75 sen,” it added.
The brokerage also noted that the RM650 million warrants were also unlikely to be converted as the exercise price is RM1.
"In our view, AirAsia may explore the de-consolidation of Indonesia AirAsia and Philippines AirAsia, which may improve its shareholders’ funds position by RM2.25 billion on accounting grounds.
"Alternatively, Airasia may consider selling down stakes in its various digital businesses to below 50% to benefit from fair value accounting revaluation gains," CGS-CIMB noted.
Meanwhile, the brokerage said a potential PN17 classification would have negative implications for AirAsia's share price as it believes most institutional investors would not be permitted by their mandates to invest while retail investors may panic and dump the shares.
"Derating catalysts include credible information that a new ultra-low-cost carrier airline is currently in the process of seeking regulatory approval to set up in Malaysia, having signed deals to lease two A320s at cheap leasing rates,” it added.
its out by 110 million from my RM7.5 Billion estimate (1.5% deviation from 5 seconds of hard sweating painful challenging skulldruggery work).
My ex-IB colleagues will wink wink at me. Thats from experience..................
Sslee Mike answer on how AA can exit from PN17: CGS-CIMB estimated that AirAsia would need a RM7.39 billion boost to its shareholders’ funds (on a pro forma basis) as at Sept 31, 2021 to be removed from classification as a PN17 company, which the brokerage think would be extremely challenging to achieve.
Haha ssleee oredi given loh , stockraider is given loh , calvin also ... even have Philip Top 4 list during he is misleading by ssleee in his praise calvin blog ...
value negative..PN17 should hv been expected manu- many months ago la.. same like Serba tak kena.. initial sign already on the wall..only ppl not paying attention to it.
after Glove finished.. nothing else to invest here in Bursa.. property drop, semicon drop, plantation drop, everything drop, sales all drop... even housing price keep on dropping, shop closing one by one.... better put money under bantal. ..only time will tell when kita kena declare bancrupt country.. at that time..all counter become penny stock!
Posted by Ron90 > Jan 17, 2022 2:47 PM | Report Abuse
after Glove finished.. nothing else to invest here in Bursa.. property drop, semicon drop, plantation drop, everything drop, sales all drop... even housing price keep on dropping, shop closing one by one.... better put money under bantal. ..only time will tell when kita kena declare bancrupt country.. at that time..all counter become penny stock!
You sounded like describing the situation now in China.
ha...HA...HA
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Posted by Ron90 > Jan 17, 2022 2:47 PM | Report Abuse
after Glove finished.. nothing else to invest here in Bursa.. property drop, semicon drop, plantation drop, everything drop, sales all drop... even housing price keep on dropping, shop closing one by one.... better put money under bantal. ..only time will tell when kita kena declare bancrupt country.. at that time..all counter become penny stock!
Short till 0.10 ; Airasia founder will eventually buy more share back once reach 0.3-0.25...useless AA but i glad i sold before the dump...another coming within these few weeks...
"Teo was previously AirAsia’s group head of sales and distribution between 2004 to 2020.
“MYAirline’s plan is to build an airline business in Malaysia and maybe challenge AirAsia for dominance,” a source told theedgemarkets.com.
The source said now is a good time to start a new airline as aircraft lessors are desperate for business, which makes for super cheap leasing rates, while pilots and flight crew who were retrenched during the Covid-19 pandemic could also be hired at reasonable salaries.
“A new airline starting from scratch means it has a fresh balance sheet which is not damaged by the pandemic,” the source added."
now we understand why silly mike turned Brutus and stabbed his backers Ass Airlines from the back by purposely posting enanyang confirmation of destruction of Ass Airlines multiple times
alenac New Airline to provide a run on Airasia business?
"Teo was previously AirAsia’s group head of sales and distribution between 2004 to 2020.
“MYAirline’s plan is to build an airline business in Malaysia and maybe challenge AirAsia for dominance,” a source told theedgemarkets.com.
The source said now is a good time to start a new airline as aircraft lessors are desperate for business, which makes for super cheap leasing rates, while pilots and flight crew who were retrenched during the Covid-19 pandemic could also be hired at reasonable salaries.
“A new airline starting from scratch means it has a fresh balance sheet which is not damaged by the pandemic,” the source added."
Mike, 21 months is how long it take from PN17 to suspension and delisting.
“MYAirline’s plan is to build an airline business in Malaysia and maybe challenge AirAsia for dominance,” a source told theedgemarkets.com.
The source said now is a good time to start a new airline as aircraft lessors are desperate for business, which makes for super cheap leasing rates, while pilots and flight crew who were retrenched during the Covid-19 pandemic could also be hired at reasonable salaries.
“A new airline starting from scratch means it has a fresh balance sheet which is not damaged by the pandemic,” the source added.
The entry of a new ULCC was first cited by CGS-CIMB Research in a report on Monday (Jan 17) as a potential derating catalyst for AirAsia.
"Credible information that a new ULCC is currently in the process of seeking regulatory approval to set up in Malaysia, having signed deals to lease two Airbus A320s at cheap leasing rates," CGS-CIMB Research aviation analyst Raymond Yap wrote.
He is reiterating a "reduce" call on AirAsia, with an unchanged target price of 14 sen, as he thinks it may be very difficult for AirAsia to recover from slipping into Practice Note 17 status last week, which has resulted in panic selling by investors, even though suspension and delisting are at least 21 months away.
Any possibility that MyAirline is linked to Tony as an alternative or last resort that current Airasia recovery plan does not pan out, where there is a possibility of delisting and that happened Myairline had the option of buying all assets of Airasia Group Bhd?
Posted by i3lurker > Jan 17, 2022 4:21 PM | Report Abuse
airasia pn17 and MYairline launched at the same time. The udang di sebalik batu punya cerita lah. Now everything makes sense. InvisibleHand brings down AA.
This wayang, I sudah predicted. This wayang is so subtle. Lots of Bilis con by Stony. Wayang kulit AA in 2022, so that new company can buy AA assets paying 1 sen for every 1 Rm. Sad Con Story line nobody predicted.
Posted by LALA > Jan 16, 2022 8:04 PM | Report Abuse X
I heard someone says another new company is going to buy AA with sen for every RM. Betulkah?
Posted by alenac > Jan 17, 2022 4:50 PM | Report Abuse
Any possibility that MyAirline is linked to Tony as an alternative or last resort that current Airasia recovery plan does not pan out, where there is a possibility of delisting and that happened Myairline had the option of buying all assets of Airasia Group Bhd?
I predicted MyAirline ... a new company will cooperate with Lions Air and MAS to control price at market prices.... Meaning no more cheap tickets post Covid.
No more tactics of cheap tickets to kill MAS and to kill Lions Air. All have learnt a really bitter lesson AA Stony ridiculous cheap air tickets.
SinGor AirAsia’s fate: Two extremist views from CGS-CIMB and Maybank ________________________
CIMB and AA were best of best friend when Nazir was the CEO of Cimb....The moment Nazir resigned from CIMB and Cimb no longer extend loan to Tony so you got Cimb Tp's 14cents.
As we have said a Thousand Times, Bank Tp cannot be Trusted. It all boils down how many millions Cash are loan to AA....The more Loan, the Higher Tp AA gets ( Looks like MayBank in deep shit by looking at its Tp given to AA )
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Sslee
5,519 posts
Posted by Sslee > 2022-01-17 13:12 | Report Abuse
Mike answer on how AA can exit from PN17: CGS-CIMB estimated that AirAsia would need a RM7.39 billion boost to its shareholders’ funds (on a pro forma basis) as at Sept 31, 2021 to be removed from classification as a PN17 company, which the brokerage think would be extremely challenging to achieve.
By Bernama | 2022-01-17 11:24:34
KUALA LUMPUR (Jan 17): The share price of AirAsia continued its downtrend in the early session on Monday (Jan 17) amid weaker sentiment after the group was classified as under Practice Note 17 (PN17) status following its failure to secure an extension of the relief period from Bursa Malaysia.
As at 10.30am, AirAsia had declined 2.5 sen or 4.03% to 59.5 sen, with 35.54 million shares traded.
AirAsia group chief executive officer Tan Sri Tony Fernandes recently gave an assurance that the group was in the midst of formulating a plan to regularise its financial condition to address its PN17 status, and relevant announcements will be made in due course.
AirAsia was supposed to have been classified as a PN17 issuer 18 months ago when its auditors raised significant uncertainties in its 2020 audit report that cast doubt on the group's ability to continue as a going concern.
However, AirAsia was given a general waiver by Bursa until Jan 7, 2022 as part of its Covid-19 relief measures, but the bourse declined to extend the waiver despite an appeal from the group, but there was no immediate implication for its listing status.
CGS-CIMB estimated that AirAsia would need a RM7.39 billion boost to its shareholders’ funds (on a pro forma basis) as at Sept 31, 2021 to be removed from classification as a PN17 company, which the brokerage think would be extremely challenging to achieve.
"Only RM193 million or 20% of the RM974.5 million redeemable convertible unsecured Islamic debt securities (RCUIDS) have been converted into shares so far, and further conversion will not be imminent, as AirAsia's share price is now just 62 sen, below the RCUIDS conversion price of 75 sen,” it added.
The brokerage also noted that the RM650 million warrants were also unlikely to be converted as the exercise price is RM1.
"In our view, AirAsia may explore the de-consolidation of Indonesia AirAsia and Philippines AirAsia, which may improve its shareholders’ funds position by RM2.25 billion on accounting grounds.
"Alternatively, Airasia may consider selling down stakes in its various digital businesses to below 50% to benefit from fair value accounting revaluation gains," CGS-CIMB noted.
Meanwhile, the brokerage said a potential PN17 classification would have negative implications for AirAsia's share price as it believes most institutional investors would not be permitted by their mandates to invest while retail investors may panic and dump the shares.
"Derating catalysts include credible information that a new ultra-low-cost carrier airline is currently in the process of seeking regulatory approval to set up in Malaysia, having signed deals to lease two A320s at cheap leasing rates,” it added.