Amedeo Air Four Plus Share Discussion Threads

[nicholasblake] 22/11/2022 07:13

MRF, curious as to what exactly you’re querying?

[rambutan2] 21/11/2022 20:31

Yes, the usual mix of pint half full/half empty news. Includes some interesting commentary on the A350-900 valuation.

hTTps://www.aa4plus.com/wp-content/uploads/2022/11/2022-11-21-AA4-Factsheet-Q32022.pdf

[gary1966] 21/11/2022 17:51

Nice announcement today. Company believes the market is greatly undervaluing the company and they are always looking at ways to address this.

[gary1966] 28/10/2022 14:27

1.3m gone through at 35p just before 15:00.

[gary1966] 25/10/2022 08:37

Peanuts in monetary terms but nice that a very longstanding, successful activist hedge fund clearly sees value in the sector.

[gary1966] 25/10/2022 06:55

Yes and given that there was no notifiable interest previously that is a large chunk all in one go. I wonder who the seller was.

[rambutan2] 24/10/2022 19:33

Noted that Elliott has picked up 6% - also been a recent buyer of DNA2 and 3:

hTtps://investegate.co.uk/Index.aspx?searchtype=1&words=Elliott+Associates,L.P

[gary1966] 14/10/2022 07:37

Looking good for lease extensions on the A380’s.

[rambutan2] 13/10/2022 21:43

Update from sibling (DNA3):

htTps://www.rns-pdf.londonstockexchange.com/rns/8542C_1-2022-10-13.pdf

[rambutan2] 12/10/2022 20:27

CousinIT, thanks for the comments. Yes, all the debt is in $, but some of the lease payments do appear to be in £.

Yes, those caps will have flown up in value! They appear to have capped the last of the Thai debt in July.

Agree, unclear on inflation link. But think I heard something about the value of the metals used in the engines increasing?

This goes ex div tmrro.

[cousinit] 10/10/2022 12:34

I think the Emirates/A380, Boeing leases are split - USD to repay the debt and GBP for the excess to pay the dividends. I presume the replacement Thai/A350 leases are in USD.

The Emirates debt seems to have been packaged back-to-back with the leases, so looks effectively fixed. The Thai debt now has interest rate caps (on at least 3 of the 4 aircraft). If the Fed carries on, the interest rate caps may be worth more than the aircraft (assume the lenders won't be completely sanguine about the caps being sold!)

Would imagine that there is an inflation-type relationship on the aircraft that are in demand (so maybe not the A380s) primarily driven by replacement costs (which will probably have an element of current manufacturing and finance costs).

[rambutan2] 09/10/2022 21:05

The drop in Sterling v US$ must be helping with the div payments. Likewise the nav, with the aircraft being valued in $. (The USD/GBP exchange rate was 1.3138 at 31 March 2022 - on 30 Sept it was 1.115).

Re rise in interest rates, most of the debt seems to be fixed or hedged.
I'm unclear as to how/whether it effects the discount rates used, but assume it must to some extent.
Of course, any cash held will now be starting to earn some interest.

I suppose also the value of the aircraft must at least to some extent be linked to inflation?

Or have I got that all wrong?

hTTps://www.aa4plus.com/wp-content/uploads/2022/07/4.-c119516CCL-Updated-version-from-BC.pdf

[langland] 06/10/2022 17:23

'only'18% yield!

[gary1966] 06/10/2022 16:12

Increase in dividend to 6ppa.😊

[petewy] 05/8/2022 18:14

Thanks for the post DaveB

[fram7] 29/7/2022 13:11

good update. lets hope A380s keep their value....they should and the pessimism on A380s is overdone. More fuel efficient plane in the world per passenger (if full). with post covid pent up demand should not be difficult to fill up.
lets hope Thai keeps up with their repayment promises, I do not trust airlines but they are backed by the government so should be fine.
lets hope the company keeps their cost and management remuneration low.

[my retirement fund] 29/7/2022 12:13

Looking like a good investment and income stock

[davebowler] 29/7/2022 09:26

Liberum;
Amedeo Air Four Plus

Improving outlook

Mkt Cap £113m | Share price 32.5p | Prem/(disc) -64.0% | Div yield 15.4%

Event

AA4's full year results have demonstrated a significant improvement in its position. The agreement of the lease amendment with Thai Airways was pivotal in enabling a £30m capital return and the resumption of quarterly distributions. Lease income from Emirates underpins the current 5p distribution. The board has stated that it expects to be able to maintain the distribution at this level for the foreseeable future.


Estimated residual values reduced by 16% in the year. The portfolio comprised 12 aircraft at 31 March 2022 - six A380s (leased to Emirates), two B777s (leased to Emirates) and four A350s (leased to Thai Airways). The majority of the impairment related to the A380 and B777 aircraft.


The situation with Thai Airways has improved steadily since the restructuring completed in December 2021. The airline is making power by the hour (PBH) payments in 2022 before switching to a fixed payment from January 2023. During Q1 2022, flight hours for the four A350 aircraft were equivalent to 60% of pre-pandemic hours. The PBH payments have been sufficient to cover the quarterly interest and expense.

AA4 has also provided additional disclosure on the lease terms. The fixed lease rent from 1 January 2023 is 45% below the previously agreed rent. Thai Airways' rehabilitation plan provides for $6.7m of pre-petition unpaid rent to be payable to AA4 in instalments starting in 2024. This will be used to repay debt. The lease has also been extended by six years, with future rents to be determined by market rates. Thai Airways has announced plans to exit bankruptcy in 2024 and is seeking to strengthen its balance sheet with new equity and debt-for-equity swaps. AA4 has reiterated its view that it does not expect to receive any income from the Thai aircraft after expenses and debt service costs, but there is scope for the recovery of equity value.

Liberum view

AA4's 15% dividend yield is covered by income from Emirates. We believe there is potential for an increase in distributions over time as we estimate recurring earnings of £26m (vs. £17m of annualised distributions). We believe AA4 is gradually building up cash reserves within the A380 SPVs, to ensure there is enough capital to meet obligations on the junior debt. In this regard, the recent sale by Doric Nimrod Air One of its A380 to Emirates for $30m was encouraging. In relation to AA4's A380 aircraft, the lease return compensation and redelivery costs are much lower than $30m. The first of AA4's A380 lease expires in 2026 and it is still unclear what will happen with the aircraft at the end of the lease. Emirates is experiencing capacity issues, in part due to problems with the delivery of Boeing's 777X programme. The first delivery of 777X aircraft is expected to occur in 2025. The success or otherwise of the 777X programme will play a determining role in the residual value of AA4’s A380s. Even on relatively conservative assumptions (no equity value for A380 and $12.5m for A350), we estimate an IRR of 14% from the current share price.

[gary1966] 19/7/2022 08:56

Two trades today for 500 and 750k, both at 34p. Sizeable for AA4 and so I am wondering what is going on.

[bedbel] 18/7/2022 18:17

From WINV annual report today:

The Company's portfolio has remained quite fully invested during the reporting period. This includes a previously undisclosed holding of some 3.7% of Net Assets in Amedeo Air Four Plus Limited ('AA4'). AA4 is a Guernsey company, whose shares are listed on the Specialist Fund Segment of the London Stock Exchange's Main Market. AA4 has a market capitalisation of £109.4 million and owns via its subsidiaries an aircraft fleet of six A380s and two B777-300ERs leased to Emirates Airlines ('Emirates') and four A350-900s leased to Thai Airways ('Thai Air'). As at 30 September 2021, the AA4 group held cash, net of provisions for maintenance, of slightly less than £84 million, which has subsequently been reduced by a £30 million pro rata capital redemption. In addition, unencumbered gross lease payments contracted to be paid to AA4 by Emirates as at 31 March 2022 were some £194 million. Once Thai Air trading has normalised, there is scope to return by way of capital return the £15 million held by AA4 as a capital buffer, and to increase very substantially the annual dividend of five pence per share, which is presently constrained by the AA4 board's prudent approach to Thai Air's current trading.

[nicholasblake] 18/7/2022 15:55

@pejaten The DNA1 £25m sale has to be weighed against the two DNA2 half sale returns at $12m.

[pejaten] 18/7/2022 15:31

Main reason for rise is that Emirates have agreed to buy DNA1 sole aircraft for £25m at the end of the lease in Dec. Gives some confidence in the residual values.I still like AA4 best due to the length of time remaining and the prospect of increase in dividend next year at the latest when Thai resume fixed payment.

[gary1966] 18/7/2022 08:34

Nice to see a bit of interest here and the price moving up. Good news about the A380’s as this will only underpin the NAV which the shares trade at a substantial discount to. Another dividend to be received shortly and at 5ppa underscores the investment case further.

GLA

[fram7] 27/6/2022 16:19

Lufthansa to Bring Back A380 in Reversal as Travel Demand Soars.......A380 are helping to ease pent up demand around the world.......