Avation Share Discussion Threads

[ragehammer] 02/6/2016 17:21

It's entirely up to you, Woozle1, but you are severely restricting your investment universe (particularly small cap) if you only stick to companies audited by the Big 4, incorrectly in my view.

[qs99] 02/6/2016 15:56

well nice to see a little tick up....

[russman] 02/6/2016 15:41

99.6% according to Jeff.

[russman] 02/6/2016 15:37

AVAP need to extract their capital from CLA.

[ragehammer] 02/6/2016 15:37

AVAP owned 99.1% of CLA (see RNS 12 Nov 2015) and it may have gone up since, now that CLA has delisted. They offered to buy the shares off remaining holders at a price below market price and significantly below book value, which caused understandable consternation amongst minority CLA shareholders.

FD not being on the board is not important and is common practice in some countries. I would certainly not describe RW as a poodle, although I've not met Jeff.

Kingston Smith LLP, the auditor, is certainly not "unknown". It's a Top 20 firm.

[woozle1] 02/6/2016 15:23

AVAP own 96% of CLA, up from 68% last year. Presuming that they issued a bunch of news shares to themselves to dilute the minorities. Also surprised that the FD is not on the board. This seems v unusual and must mean that the he is a poodle. That combined with an unknown auditor is a red flag for me and may explain the lowly rating

[catsick] 02/6/2016 14:37

What does he have to say ? Anything interesting ?

[tromso1] 02/6/2016 12:08

Just been tipped by Simon T in the IC.

[russman] 02/6/2016 12:02

I can find no recourse to CLA for the bonds.The covenants to the bank loans are standard.

[russman] 02/6/2016 10:31

That is clear.
AVAP have £30m of capital invested in CLA but do not own 100%.
Some shareholders are more equal than others.

[woozle1] 01/6/2016 17:32

If the planes are sold the order of priority payments are the banks, the bonds and then the equity. If you are a CLA shareholder you must rank equally with the other AVAP shares.

[russman] 01/6/2016 17:18

I estimate LTV to be over 90. There are a couple of large purchases on the horizon.If you do sell the CLA planes - you will have to pay me out first.

[woozle1] 01/6/2016 16:00

Also that bond issue is junior debt and is effectively equity for the purposes of raising more bank debt. In other words, the bond issue is worth 4 times more in terms of bank debt that it can raise. So, $100m equals $500m (i.e $100m equity/$400m bank debt. This assumes 75% LTV, which mat=y be wrong). So, it looks like there's plenty of balance sheet capacity at the moment.

[buffetteer] 01/6/2016 15:44

Russman
Following on from Woozle i believe the GMTN of $100m is only 1/5th of the $500m note so theres lots of funding .They intend to grow at 30% per annum & have the finances to deliver .

[ragehammer] 01/6/2016 15:32

They are also looking to sell older aircraft. You can see this on their website, under Aircraft Portfolio -> Available Aircraft

They have 3x A321 and 1x A320 under the Trading section. These are the older Thomas Cook/Condor (ex CLA) fleet and the A320 is with Virgin Australia. These aircraft are 13-15 years old, so they are trying to keep their overall fleet young.

[woozle1] 01/6/2016 14:48

Planes are pre funded by the looks of it. Hence the high interest charge. This is from the 3rd para of the chairman's statement in Feb:

"Avation has preserved cash raised from the $100 million unsecured notes issued under a Global Medium Term Note programme ("GMTN") to support the funding of further aircraft acquisitions."

[russman] 01/6/2016 10:07

The proceeds of the first bond should be nearly used up now.
How is AVAP going to fund the rest of this years deliveries.
Use its current cashflow.
Sell older planes.
Re-mortgage.
Sell more Bonds.
Sell equity
Sell a high income tax-free preference share model.

[lucky punter] 01/6/2016 10:06

virgin Australia; when was the last time they entered into a agreement with AVAP. I suspect if HNA want to buy out the existing agreements that Avation will not quibble about that and will deploy the funds elsewhere.

[buffetteer] 01/6/2016 08:47

With HNA taking a 13% stake in Virgin Australia ( Avaps biggest customer by far) one wonders if the future for Avap & Virgin is going to turn dark - HNA has its own leasing business I read in the FT today . At least profits of this serial loss maker should start to improve .

[hastings] 31/5/2016 15:28

A few thoughts that may be of interest.

[russman] 31/5/2016 13:40

Brilliant posts ragehammer.

[buffetteer] 31/5/2016 10:31

Woozle
I cant find where i got the information . The number one lessor of ATRs has been acquired this year at a large premium to net assets -think Richard told us at a presentation.(AVAP is No 2).

[ragehammer] 31/5/2016 07:18

Confirmed delivery of the first A321 to VietJet and also an unspecified lease extension to the A320 with Air France. Both pieces of good news.

[woozle1] 30/5/2016 17:40

Buff .. you say that "the prices paid by competitors for similar businesses ... something has to change" .. have you got those prices to hand .. also the new shareholder, Oceanwood, are event driven investors and so with near on 30% will determine what will happen next and they may indeed try and engineer a sale of the business .. W
PS
I'm sure I've seen your name on the DTG thread. Also looking at FLYB, which also looks v cheap