Thanks for your thoughts |
Part of the overall strategy on debt reduction. Avation will see a reduction in its future interest payments on these bonds (6.5% cash and 2.5% payable in kind (PIK)
or 8.25% all cash) plus they picked up a little as a Gain on Repurchase. These gains are recognized in the profit or loss statement.
Generally speaking of late, Avation have stated they prefers to make large bulk purchases of share buybacks which in practice requires finding a large shareholder who wants to sell the shares e.g. Rangely Capital/Raper.
Similarly with the bonds they can only currently buy them back when there is a willing seller.
Avation did make Tender offers for the notes back in 2021/2 and 2023 but there were relatively few takers as bond holders preferred to hang on to them.
So in summary I would say that both buybacks and bonds are only traded when there is a seller of size albeit they do from time to time go into the market and contact investors at a personal level. |
So why do you think they would buy back the senior notes at close to par rather than use the cash to buyback shares at half of NAV ? |
Anyone know of a broker that offers Avation's listed warrants for purchase, AVAW ? |
Only 30,000 bought by company. Surprised. |
Another 250,000 gone through at £1.38 this morning. Hopefully another buy back on top of the 300,000 from yesterday. Moping up equity at this big discount is a good move. Once the Bond gets refinanced the opportunity will pass. |
https://www.lemonfool.co.uk/viewtopic.php?t=6425&start=160#google_vignette |
Do you have a link please Harrogate? |
Detailed post on lemonfool by Carcosa is a must read for anyone invested here. While it was clear from the presentation that they are prioritising improving the credit rating ahead of the bond refi through growth with airlines with great credit ratings and debt reduction, yesterday's buyback shows they are not going to miss the chance of taking out shares at less than 50% of NAV. |
The Oak Bloke has a detailed and reasoned view here, if you can tolerate the substack medium he posts on, which is a bit wobbly at times. The link below is working as I post but it wasn't yesterday:-
His conclusion is strong buy, which he says he was doing yesterday. |
I have been a bit surprised at the share price reaction. Suspect reduction in EPS gets most attention. The question is what is going to be the trigger for any narrowing of that discount to NAV? Probably the bond refi. As there is a penalty until Oct 25 on that it certainly won't be until then. Shame no meaningful dividend while we wait for any rerating. |
Another interesting and encouraging investor call - worth listening back if you missed it. The big refinancing next year appears to be a good opportunity to have a step decrease in the overall cost of debt, which will have a big impact on profitability. NAV per share up to £2.94, plenty of growth baked in, more buy backs likely yet there's sellers at the £1.40 mark, baffling! |
As always there are a lot of moving parts in AVAP results but it looks to me like there are lots of things going on and progress in a lot of areas. If we can get some clarity on the bond refinance due next year I think we can make a fair bit of progress to £2. |
Interesting that the warrants have dropped nearly 60% in the last couple of weeks - down to 25p. They convert at £1.15 I think and run until well jnto 2026. Could be an interesting play here for the brave. If we get to £2 they would treble. Don't think there is a lot of volume but a few sales recently |
Atr adding starlink to the atr72 elon musk tweeting about it .... |
Drifting on no news, a good entry for those missing out perhaps, below the recent buy back price. To my mind the 'bid rumour' was skulduggery and engineered, most likely by our 'Activist' shareholder who wanted to bank a 100% profit. I wouldn't be surprised if the company were put in a tight corner and left with little option but to buy the shares (but apparently had no clue who the seller was; yer-right!)
Anyway, that's all history and we're trading again at well below nav, topped up today having sold a few into the rise. |
What we need to see are the TR1s. Should be informative |
So the company know's nothing about the bid speculation. Nothing at all. However, the buy back gives the indication that they are striving to stave off any low ball offer, and perhaps implies an Activist/large investor is none too chuffed with no engagement and has chosen to offload a chunk. We shall see. |
That is a pretty large buyback and something they should have done before the activist got in. Still improves NAV per share- as long as they actually cancel them |
I don't think Rangeley could have bought more as they were already over 25%, they could have sold some though. Anyway we should find out in the next couple of days who the buyer is. If its Azorra or any entity linked to them then it would spark TO rumours again. Anyone buying 14% of share capital at 150-155.5p must have a strategic objective. No one would buy this for the yield right and growth in NAV would be limited to 5% p.a. for at least the next couple of years until they can refinance the bonds. I do think its only a waiting game with AVAP. I think it gets acquired in the short term (i.e. less than a year). |
My guess is that Rangeley bought the rest of the Oceanwood stake. They sold out at 72p if i remember rightly, leaving them with 2.4%. so probably happy to let the rest go at double the price. If that's the case, and Rangeley also bought the warrants, they must be close to a 30% stake. IMO this would also be very good news as they will want an exit, and would only pay that price if they still see substantial upside. I may of course be completely wrong. |
Maybe Jeremy Raper selling to Azorra ... |
It wasn't just the 3.69m warrants that were sold at 150p, another 6.5m shares exchanged hands in 2 block trades at 150p and 155.5p on 28th November. The total sum amounts to 14% of the company's share capital. It appears to be a single buyer although I am not sure who has sold the remaining c6.5m shares. I believe there has to be a TR1 on Monday. In addition, another 12m shares were traded between 16 October to 27 November without any notification of holdings which is odd for a company with a relatively small free float. Surely something is going on in the background. |
Interesting to see who bought them. I would think it means there are no takeover talks taking place. |
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