Avation Dividends - AVAP

Avation Dividends - AVAP

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Avation Plc AVAP London Ordinary Share GB00B196F554 ORD 1P
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 111.50 08:00:10
Open Price Low Price High Price Close Price Previous Close
111.50 109.50 111.50 111.50 111.50
more quote information »
Industry Sector

Avation AVAP Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

russman: AVAP has a $1bn fleet so the impairment % should have been nearer the current industry average. I have excluded the purchase / lease "options" assets from my company ratios.
russman: Not unexpected but there will be more impairments / credit losses. Cannot see any growth in the short term. Bond yields have turned up, AVAP could still get squeezed in the middle.
fastbuck: Significantly higher volume today, including 175,000 shares at 122p worth noting.AVAP maybe being pulled along and up with other travel stocks today, helped by the positive piece from Simon Thompson.
harrogate: Avap was tipped by ST yesterday. Think that accounts for today's move
wigwammer: Or perhaps the entity that approached AVAP with a view takeover in Jan 2020 is back in the picture... or both :)
russman: AVAP is in the middle. It is not in a good negotiating position. Cashflow is suffering by supporting its customers. Have to give a warrant kicker to the bondholders. But how big?
wigwammer: Thanks Donogh. You make some good points. I would add that the company has bought back both equity and debt over the last year, with the latter bought as recently as November. Perhaps the company is better positioned than outsiders to determine the appropriate value of these instruments. To repeat - the required yield is based on a perception that can change rapidly. Otherwise - it is tail wag dog. This time last year AVAP was approached. The shares were trading at around 300p at the time. In the event that interested party returns - at perhaps a discounted valuation - we will rapidly see the dog wagging its tail again. Why would they be interested? For the same reasons I previously outlined. Nobody has provided any decent reasons why this business - given a modest amount of time - cannot return to generating previous levels of operating cash flow. ATB
cc2014: I think you guys may be misunderstanding the situation. We are not in the position were the bonds were issued at 6.5%, the company has had a bit of a rough time and currently trading at 10% and therefore there is some negotiation going on as to whether they are refinanced at a price close to 10%. These bonds are trading at 125%, yes 125%. And I do mean 125% not 25% as I've demonstrated in the two posts above. Nothing that is trading at 125% is going to get refied at 11%. Or rather if it gets refied at 11%, the bondholders are going to want something like a 90%+ equity holding for free because they are going to have to put in more equity capital to make the numbers add up. Finally I have an additional question. If the bonds are refied at 11%, does AVAP generate enough cash to pay the interest and principle? or is the model broken?
cc2014: "The current yield you describe reflects a perception of a company’s ability to generate cash to cover bond payments" No, the yield describes what borrowers are prepared to lend at. If I felt the yield at 125% was good value I would go and buy some in the market, the bond price would rise slightly and the yield dropping to 120% or whatever. But, no-one wants to buy those bonds, even at 125%. It's telling us something. Now consider the following. AVAP has to pay back $300m in May. If it had cash or access to cash it could buy these back itself for $225m right now at 75c on the dollar. But it can't because it isn't generating cash and no-one wants to lend it any cash. Sure, you are right and perceptions may change but AVAP are still stuck with the problem that even if all cash-flows immediately started tomorrow on all planes, in the current climate lenders now want a higher interest rate than pre-Covid. Effectively the margin AVAP were making in the middle no longer exists.
russman: It is a small leasing company; AVAP needs cheap debt finance to grow. Their business model is broken if the bonds cannot be refinanced at a cheaper rate than AVAP lease their fleet out.
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