Celsius Resources Share Discussion Threads

[davydoo] 03/12/2010 10:13

Harrogate I think your concern about 'risk diversification' is a very valid one. As you say AVAP already own 51% of CLA, and also CLA has 3 planes leased to Skywest (the original leases it had before the step up to the Thomas Cook A321s)

My single biggest concern for CLA is that it becomes an unused backwater. So that if Skywest's operating needs drive this collection of companies, e.g purchasing more A320s, which is their stated aim (and with 1 already they can leverage their initial costs)then once found those planes will be purcashed and leased through Avation.

[gosgos] 03/12/2010 09:33

Yes it is a good BB ;-)

I have been trading DES a bit in the last few months and those BBs are insane!

[harrogate] 03/12/2010 09:10

Hi

I never meant to suggest your questions at the AGM weren't the right ones ...It is tough at AGMs since it is never a really chatty environment and when most are on the phone even worse. I guess I am frustrated since I expected the move to main market by AVAP to be followed very closely by a new lease or some corporate tidying up. I call myself a long term investor ...maybe I need to behave like one!!! I appreciate the comments and the background as always. This is a good BB

[gosgos] 02/12/2010 19:32

Harrogate: I understand your issues and I have to say I think Jeff has devised a fantastic earner for himself and his close colleagues. However, as far as I can see Jeff has done a good job developing SkyWest and the leasing business is also very sound financially. I struggle to see the upside for Jeff in peeing on institutions and along side that PIs. That said, there is no particular urgency for Jeff or the institutions in driving the share price higher in the short term given that the underlying value is clearly there.

If I had plenty of spare cash I would continue to invest in CLA and to a lesser extent AVAP (based on current valuations). But you need a 2-5 year time horizon!

[gosgos] 02/12/2010 19:25

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[davydoo] 02/12/2010 18:56

I can understand your sense of vagueness from my post. I guess I am a little too, but I havent been left with any major concerns, it just seems to be a continuation of the current status quo. The people with the answers were on a conf call from Singapore, so it made it difficult to see the body language of the response, or at times to even know who was responding, and i felt a little awkward in knowing how far to press, especially as I was unable to gather my thoughts with no other shareholders there to ask thier own questions.

[harrogate] 02/12/2010 18:37

Thanks for the update. I regard myself as a CLA shareholder and I have to say I am pretty underwhelmed with what I think they are saying ..The logic of splitting the non Skywest business is bonkers given 51% of CLA is owned by AVAP. And in fact I may be wrong but I think they did some non Skwest business in AVAP anyway. Just doesn't make sense to me. I am off to think about AVAP ..I may be thinking it is time to move on. Roadshow ...more likley trying to get it tipped by the t1ps lot I would think. Who can buy any shares in CLA ..what is the free float? The price from my knowledge hasn't been caused by the large holders selling. It all sounds really vague and doesn't quite smell right but I don't know why

[gosgos] 02/12/2010 18:22

Thanks very much for the feedback DD. I too am happy to hold but hopeful of some activity in the New Year ;-)

[davydoo] 02/12/2010 17:55

I attended the agm today. I was the only external shareholder there, but there was a full representation (split across London and Singapore) of all directors, co. sec, nomad, auditor etc.

All resolutions were passed including the option to buy back up to 10% of shares. I got the impression this was more of a procedural thing to have the option rather than any immediate plans.

I asked about AVAP plans for CLA, but understandably that question was considered one for an AVAP agm not for CLA board to answer. (The AVAP agm was also held today in Singapore, but i didnt get involved in it) However the intention is to continue operating CLA as a stand alone business, along the original lines of continued diversifcation of risk away from sole reliance on Skywest. The board recognise the undervalution and are planning to market the company with some kind of roadshow, but i dont have details of what that entails or when.

I asked about the previous finance facility, which they confirmed had lapsed, and the suggestion was it could have continued but would have cost to do so, they felt confident they still had good banking relationships that could enable the finance of additional aircraft.

I also got the impression a fund raising may be needed to provide the extra equity to go with any additional borrowing. It was recognised that this might be difficult with original investors currently underwater, perhaps therefore the intention to promote the company through a roadshow, and perhaps a reason for AVAP to raise equity which was approved at its agm today, to allow it to increase or at least maintain its controlling stake in CLA.

With very few shares available, any positive attention should move the price quickly i think, especially if that number is reduced by CLA buying back its own shares.

There was a general discussion about the arbitrage opportunity with CLA now undervalued compared to AVAP.

Im happy to keep holding. I may not see the quick exit i had hoped was possible, but i believe this is very low risk though at this price, with the underlying assets and rapidly improving balance sheet.

[timanglin] 02/12/2010 09:15

I normally buy dividend producing shares, in the sense that I think that the discipline of a company paying a dividend makes the management at least think about the shareholders. However the cash generation of CLA, pick up in the airline industry, meant that I took a very small position. My anxiety is that i will only ever be a minority shareholder, and I dont really understand depreciation of airplanes, if you compare an airplane to a piece of industrial property, then recently the industrial property is appreciating in value. At some stage the market will appreciate the value in CLA, the question is how long?

[davydoo] 01/12/2010 20:46

timanglin do you hold either CLA or AVAP?

[gosgos] 01/12/2010 09:49

Hi DD
Not sure if I'll go, it depends on other commitments. The question I would ask is what benefit does Jeff see to the CLA listing now that AVAP has a main market listing.

[davydoo] 30/11/2010 20:22

Probably because very few of the shareholders in CLA would want one.

It wouldnt serve AVAP any purpose to receive a dividend from CLA considering it already controls the company.

[timanglin] 30/11/2010 18:28

AVAP pay a dividend - why not CLA?

[davydoo] 30/11/2010 18:24

Im planning to go to the CLA agm so i contacted my broker about getting a letter of respresentation for the shares i hold as i hold them in a nominee account. I hadnt realised the shares are 10p shares, so at the current price of 14.5p we're not actually that far away. Im not sure whether it means the shares cant trade below that value, or just whether the company cant issue new shares below that value. A kind of protection against dilution. Anyway it doesnt really matter, I just thought it was interesting in this day of so many shares with par/nominal values of 0.005p. It doesnt change the performance or the prospects.

Gosgos and anyone else who might be interested, are you going? do you have any questions you'd like asked?

[gosgos] 12/11/2010 07:54

I agree but really they should want a higher AVAP price before they do that. I imagine a limited AVAP buyback would also achieve that. They have the cash flow available.

[davydoo] 11/11/2010 22:09

I agree that the original investors will be looking for at least 24p.

I cant see CLA doing a dilutitive (nice word) fundraising because AVAP would have to buy in too to maintain their 51% control, so why not just do an AVAP fundraising instead, which must be an easier sell, being main market, div paying, no controlling parent etc.

The answer has to lie in an AVAP fundraising to buy out a depressed CLA, and therefore buy more aircraft per $ that way than buying new aircraft.

[gosgos] 11/11/2010 18:52

Fair point DD but it is a fairly specific mandate so they must have an idea for how they might use it. Also current price does not help them since I imagine they would need to offer Vidacos at least the 24p they paid previously given that the net asset value is above this. I don't believe they could buy in the rest of CLA at the current price but issuing more equity at either the CLA or the AVAP price would be quite dilutitive (if that's a word)

[davydoo] 11/11/2010 17:37

It will be interesting. But i cant see the point in CLA buying upto 10% and pushing the price up if AVAP want the other 40% too. I just want AVAP to come in with a decent buyout price either cash or avap stock, that the major CLA holders will accept, and the deal will complete, my holding and vote is too small to count.

AVAP have had a mandate to buy back for the last few years and never used it, despite the shares being at 30p, when they had been buying back shares in the early years at upto 80p.

I'd sell some of mine for 25p for a quick return, but not for much less. That price would put their nav and p/e ratio back inline with AVAP.

[gosgos] 10/11/2010 13:58

Hi DD. My CLA report has only just arrived from Singapore (not sure why it is sent from there). Reading through I was reminded that only 6.62% of shares are held outside the named five which is about 6.5m shares or just under £1m worth at current prices. It would be incredibly easy and cheap for CLA to send the price up very quickly if they exercise their buy back mandate under Resolution 5. Interesting that they have put a ceiling of 25p per share on the mandate too.

[gosgos] 01/11/2010 15:11

I agree that there are many permutations DD, however, I cannot see how an under-valued share price for both AVAP and CLA helps in any situation. Therefore if they want to expand their leasing fleet significantly they should want to boost one of the two share prices prior to raising more equity and debt. AVAP seems the more obvious share price to boost although CLA clearly has plenty of cash flow and more tightly held shares so it would not take much of a buy back to boost the CLA price significantly.

[davydoo] 01/11/2010 13:40

Excellent. same day as AVAP, so maybe they'll just do back to back agm's. Suits me, I would have struggled to attend on two separate dates.

Interesting to note the resolution for a share buy back mandate. They didnt have that last year. (Upto 10% of shares up to 25p) so without that they wouldnt have been able to buy back any this year. It would be interesting to see whether this is planned to give a route out to an existing major holder, or to sweep up the few shares left in the market.

I need to shuffle this all in my head, but if CLA buy back shares and cancel them, this then increases AVAPs holding, and reduces the amount of shares AVAP need to buy themselves later to take it all out, but that wouldnt be very helpful if CLA's purchases push up the price for AVAP later.

im still puzzled at the various ways this could all pan out.

[gosgos] 01/11/2010 13:13

Well the AGM is in London

[gosgos] 29/10/2010 10:41

One would have to say no ;-( I am a little perplexed as to why they do not do more to bolster the AVAP share price since at these valuations a share buyback would seem a more effective way to deliver shareholder value than the dividend. A higher share price would obviously also make it easier to acquire the rest of CLA and raise new funds.

At the moment acquiring CLA for AVAP stock seems quite tricky. No doubt Jeff has a plan though ...