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Avation Share Discussion Threads
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|Notable share price reaction... not quite sure why a buyer would pay a large premium to book value for the fleet? Surely they could get the planes themselves new and then lease them out...in Avation's trading history sometimes it sells old planes above book and sometimes below.... so book seems a reasonably good marker of their value..
However, they are sold outside of lease usually and the may be worth more if leased to a good airline on a long-term basis....I don't think the maker of the ATR's has such a long order lead time....I think it is about 3 years...so I can't see why someone would pay a significant premium for Avation's fleet of ATR's...
Unless it is a crazy buyer like the Chinese who seem to be buying everything at the moment...|
|Just seen this pop up on my radar, on the face looks extremely interesting.... might dabble my toe tomorrow.|
|Leasing of aircraft offers high yields with a high degree of certainty of income. The recent billion dollar funding for BOC Aviation highlights the amount of money wanting to get into this market. However there is quite a lead time between placing orders for planes and actual delivery. A quick way in for a newcomer is to buy a leased fleet.
Avation is a relatively small operation therefore we might expect it to be taken out by one of the big boys keen to get the aircraft and the leasing customers.
This could show a very healthy return over the next few months since there is deep value to be had here-|
|Recent deals were at 1.2 & 1.6x net assets so you would think they would want similar. @ 40% of fleet may crystailze value that is currently on 0.6x net assets. So double it at least .|
|I would imagine its a leasing co or financial company who like the yields, they are like high yield well secured bonds, the company is not for sale but all the assets are, in a world of negative/ low rates there should be a good number of interested parties,|
|Not really sure what to make of this to be honest...not sure if it will go ahead and it seems quite bizzare to me...why would someone want to buy all of the group's turboprops which are under lease??? Why not just buy new turboprops??? If it is a leasing business then why doesn't it just buy the whole of Avation?? Why would Avation want to sell most of its fleet??
Not sure I understand this and it seems unlikely to come to anything... any other views??|
|To sell half the fleet and the half with the highest yields will need a decent bid above book value I would think that would need to be at least 15 mio usd , with the gbp at 1.22 i see nav around 2.77 gbp per share this deal could push up to 3 pounds, they can then buy a bunch of shares back and a few more a321 should give a huge boost to the share price, of course no firm deal yet but shows there is value in the book and the shares still trade very cheap|
|Good news is hard to find today - so this is welcome.
No decision on a sale has been made. However, the directors are willing to consider a proposal aligned with attractive shareholder returns for this portfolio, a portfolio which currently generates strong cash yields for the Company."
The Company will make further announcements in due course as and when there are any relevant developments|
|So a surprise RNS: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/AVAP/13013377.html in which somone (Avalon?) wants to aquire the ATR fleet. Given that within the industry the valuation of these aircraft would be well known (disregarding what is stated in the AVAP annual report) then the question really remains as to what premium over book value would be acceptable.
I reckon at least $93m should be achievable:
Current Estimated NBV: $371,295,346
Outstanding Loan $282,184,463
Premium to NBV 5%
Net Cash $93,566,427|
|The share placing was supposed to be double that. Because it is in sterling.Still need to raise dollar funds.|
|Vietjet's latest A321-211SL, VN-A684 (MSN 7342) had its first factory flight last Wednesday. Deliveries are typically 7-10 days after first flight assuming no major snags. For some reason the share price often goes up when an aircraft is delivered...|
|Contracted fleet revenue: US$ 752.5 million
Remaining lease term (weighted average) 7.4 years
Calculated Annual revenue 752.5/7.4 = $101.6m as of 30th September 2016 ??|
|Mmmm no RNS re the new ordinary shares as to who the beneficial owners are...
The US export licenses are being restricted see:
So as things stand at the moment it would appear that only ATR have are working on overcoming the financing issue (cannot use US$) and Iran are being pushed into a corner and are now looking at smaller aircraft...
Have had it confirmed by AVAP that the statements regarding future ATR deliveries in the Annual Report (p87) ".. commitments to purchase nine ATR 72-600 aircraft... Two of these aircraft are due to be delivered before the end of the calendar year 2016...Management intends to arrange leases for or agree sales of these aircraft prior to delivery." remain true so we can see a potential (small) profit from those deals before end of the year if sold, or an addition to the forecasted lease revenue.
Also had it confirmed that a further increase to the guided lease revenue can be expected from aircraft that are expected to have their leases renewed, I suspect those are one or two of the F100's so don't expect the increase to be material.|
|CS: I would not come to that inferred conclusion until end of play tomorrow.|
|No holding rns , must have been placed with several holders ?|
|Will be interesting to see who shows up as the buyer if it is a single buyer, also if it was driven by the need for cash or to get the investor on board. In general I dont like to see a placement done below nav , however if the cash on the balance sheet is all invested and this is to grow the fleet further then I think its a good thing..|
|The shares are for a new institutional shareholder who would otherwise have had no practical access to the shares. The fact they were able to pony up at practically a zero discount does not disenfranchise current share holders to any major degree. To grow the company, some equity release has to occur and keeps the cost of debt manageable.
Others may take a differing view and that is, at the end of the day, what makes a market. For me, today's RNS is a positive for the medium term growth of the company.
If you want to put a negative spin on the announcement then I would claim they have not been able to gain interest in the two Airbus aircraft up for sale which they were banking on to help fund the Vietjet aircraft... except I don't believe that!
A further RNS will be released on the 11th October stating who the institutional buyer is.
meanwhile has anyone read the Annual Report. Quite a lot of interesting data to be had. Seems as though the Vietjet aircraft are on a reduced lease rate (by about 100bps) and the acquisition costs are substantially below market due to VietJet's very large order quantity for Airbus aircraft.
Can someone clarify what the ATR sales are going to be this year? Am sure in the video they said no sales until 2017 onwards but the AR (p87) states ".. commitments to purchase nine ATR 72-600 aircraft... Two of these aircraft are due to be delivered before the end of the calendar year 2016...Management intends to arrange leases for or agree sales of these aircraft prior to delivery."|
|ragehammer - technically you are right... but in reality nearly all companies would state share placing in the RNS...put this together with weak communication from Avation in other areas and it is frustrating.... but why do a placing when you don't ever say why....that is just ridiculous and treating shareholders with contempt in my view... diluting people without saying for what purpose...given the cashflow why does the group need a placing?|
|The announcement is neither misleading or inaccurate. It's an issue of equity so what it says on the tin.
Also it was done at the bid price so effectively no dilution for existing holders. It increases cash on the balance sheet by £4.6m to help fund the growth which has been well flagged.
It's astonishing that you try to compare it to QPP.|
|harrogate - I disagree as they could have made the RNS announcement accurate. That doesn't cost anything. Generally it is dodgy companies such as Quindell that try to mislead investors. Issue of equity is usually for share options etc. It is not for a share placing.
On the basis of this unnecessarily misleading announcement alone I am consigning Avation to the dog house.|
|I think you need to relax. If they had done it at massive discount without allowing us to have a go at it then fair enough but they didn't. If they didn't do this and used all debt some people would complain about the increased leverage. They have always said that they will use a mix of equity and debt to fund the growth. They have 3 airbus to buy for Vietjet in the short term - they are expensive and they need to fund them. If you want AVAP to grow without any equity raises I would sell now. It could also be a sign that they have some institutional demand which would be a positive too.|
|Don't like this at all. Announcement says issue of equity when it should say placing. Just gives the impression that Avation isn't straight up with investors.
Agree with catsick: why do they need the money? They don't say here. With the depreciation charge non-cash they should have great cashflow.
This is a shady way of doing things in my view and makes me much less keen on Avation.
Not a nice way to treat shareholders. Just dilute everything by 5% without saying why. Jeff is not my kind of CEO.|
|Bit odd why place these shares ? Was there a need for the money , they had plenty of cash last balance sheet date|
|Say AVAP make 10 sale & leasebacks with Vietjet.Their Chairman provides the debt finance.You will be in Vietjets Chairmans pocket.|
|"Airbus on Wednesday became the first airplane manufacturer to get U.S. government permission to sell aircraft to Iran..."
I would have anticipated the ATR deal would be less technologically problematical for the US govt. Still, it's lurching along the right path...|