AIR - Air NZ.

[Master98]

So possibility might not be all settled by June 30th as AIR were aiming for?

Answer is here:

The sale to Nanshan is likely to occur after Virgin’s A$159 million equity placement to HNA Group which will dilute Air New Zealand’s 25.9 percent stake to 22.5 percent. That means it will have a residual 2.5 percent shareholding in Virgin following the Nanshan sale which Air New Zealand chairman Tony Carter said would be considered “in due course”.

[Balance]

Answer is here:

The sale to Nanshan is likely to occur after Virgin’s A$159 million equity placement to HNA Group which will dilute Air New Zealand’s 25.9 percent stake to 22.5 percent. That means it will have a residual 2.5 percent shareholding in Virgin following the Nanshan sale which Air New Zealand chairman Tony Carter said would be considered “in due course”.

Looks like HNA Group and Virgin are the ones played out by Air NZ - contrary to all the Aussie media reports!

[winner69]

Looks like HNA Group and Virgin are the ones played out by Air NZ - contrary to all the Aussie media reports!

Google Nanshan and Song Zuowen (in particular) and if you dig a little one can work out who might really control Nanshan

Could be interesting times for Virgin

Maybe Luxon has the laugh last

[skid]

No Skid, I was just comparing the nature of the Aircoaster to that of the Xrocoaster, I'm long on Air, happy to collect the divvies and ride this blue chip. PS-There was touch of humour incorporated in case you didn't pick up on that.

With me as well--thought we needed a bit of lightning up---I agree with you regarding the NZ Herald--Its almost as if some over there are intentionally trying to whack AIR(not that they dont have a point,but sometimes it seems a bit excessive)

[Snow Leopard]

Google Nanshan and Song Zuowen (in particular) and if you dig a little one can work out who might really control Nanshan

Could be interesting times for Virgin

Maybe Luxon has the laugh last

Of more interest to AIR shareholders now should be the apparent quote from Chairman Carter yesterday that:

"The sale will allow Air NZ to focus on its own growth opportunities"

Although it would be pure speculation at this point but is this all/most/some/none of the recovered cash going to be re-invested and in what?

Best Wishes
Paper Tiger

[skid]

Not really the jump everyone was hoping for eh.

Im not making any predictions but this does bring to mind a few times that there has been a lag,before a jump or fall,in several share I have seen over the years---Ive always been puzzled by that..almost as if the market needed a bit of time to digest.

Ill never forget when NZO hit the Tui oil field and the sP went DOWN a few cents--It was just a negative atmosphere at the time--it of course raced after (no comparison intended)

Whatever the SP ,I suppose the divi has to be factored in(whatever that is)

[Beagle]

Headline in the NBR yesterday Air NZ makes loss of hundreds of millions on sale of Virgin stake The implication was that there is a further loss to be booked of at least $200m and potentially much more. Usually one of the more reliable sources but this didn't look right so I did some digging.

I know for a fact AIR have already taken a write-down on the value of their stake, IIRC this was $50m in a previous year but as at 30 June 2015, see note 12 on page 20 of last years accounts the carrying value of their stake in Virgin was listed at $360m Kiwi.

Looking through Virgin's last annual report AIR are listed as having 913,503,208 shares, (see page 126). If we assume they can get 33 cents Australia for all their shares in due course, (they are selling circa 90% of their stake at this price) that would give a value of $A301,330,606 or based on Friday's interbank exchange rate of 0.9560 = $N.Z.315,330,606, thus a further write-down of $44,669,394 plus whatever their transaction costs and advisor fees are is what we are looking at in the financial year in which this proposed deal goes unconditional.

I note this further write-down amount is less than the proposed settlement of the air cargo matter in America which was just on $51m Kiwi. I think that puts the further loss required to be accounted for into its proper perspective.

If they hadn't taken this further circa $50m (after transaction costs) hit then a bit like the American cargo matter how much more could they have been on the hook for in terms of a capital raise ?
When one is in a black hole, its best to stop digging and climb out rather than buying a new spade and digging harder. Most investors are old enough to remember the Ansett fiasco and the last thing we need is a repeat of that.

Its my sincere hope that this post gives investors some comfort...after all the roller coaster ride has been pretty severe.

[mikeybycrikey]

Of more interest to AIR shareholders now should be the apparent quote from Chairman Carter yesterday that:

"The sale will allow Air NZ to focus on its own growth opportunities"

They have been saying that all along.

In the original document where AIR announced the VAH review they say "Mr Carter says Air New Zealand does not want a large minority equity position in Virgin Australia as it focuses on its own growth opportunities."

I'm certainly not expecting the VAH money to be distributed via a special dividend (although that not to say that there won't be a special).

[Beagle]

An exchange rate over $U.S.70c lowers their balance sheet footings in terms of overseas debt and capitalised lease obligations and will improve their gearing.
Again reported in the NBR that their capex is just over $2b in the next few years but as previously mentioned this is only circa $600 - $700m more than the normal rate of fleet depreciation over that timeframe so net capex is really not such a frightening figure at all especially viewed in the context that they had paid $520m in aircraft deposits already as at 30 June 2015.

Further, we know this is the peak of the earnings cycle. Provided the VAH sale gets the necessary Chinese authorities approval I think we can take it as a given that there will be a special dividend this year, (management were stung by shareholder criticism that there wasn't one last year and I am sure they don't want widespread contempt to reveal itself at the next annual meeting) and there is the very real prospect it'll be bigger than the usual 10 cps paid in various years in the past. The sale proceeds by my calculations, (again not relying on media reports) are 25 cents Kiwi per share less transactions costs so taking into account its been a record year for profit anyway with low oil prices and the fairly miserable interim dividend I see no reason why they can't pay the lot out but they probably won't. Management will probably have some "highly desirable" environmentally friendly pet project they want to fund so maybe us lowly shareholders, (you know the poor sods that they're actually supposed to be running this business for) might be lucky to get a special of 10 - 15 cps ?

Prospects for a final dividend. I think 10-12 cps. Best guess of total, 20-27 cps..risk is probably skewed slightly to the upside. Full imputation credits will apply to dividend(s) paid, that's the one and only thing you can be absolutely certain of.

[axe]

Uncle John and uncle Bill still might want a special divvy.

They have been saying that all along.

In the original document where AIR announced the VAH review they say "Mr Carter says Air New Zealand does not want a large minority equity position in Virgin Australia as it focuses on its own growth opportunities."

I'm certainly not expecting the VAH money to be distributed via a special dividend (although that not to say that there won't be a special).