AIR - Air NZ.

[Beagle]

Hope you're right Roger, I just felt like venting a little.
Couta1, I'm with Roger and everyone else. 50% in any one stock is bonkers, in my humble opinion.

Guilty of that myself lately so I can totally relate to the reasons why you'd feel like that !

Hi Roger, thanks for all your informative posts, certainly take note when you are posting. Just a quickie did I read today that AIR's shareholding is currently below 25 percent in VAH after the recent Capital Raising? (now 22.50%)

Hi TTG,

Thanks for the vote of confidence. A binding heads of agreement is (not pretending to be an Australian securities lawyer here) in my opinion a legal document that set's out the terms of an agreement reached. It has not been put into legal effect yet and as far as I am aware for a company to do a cash issue of that size this would normally require what's known as a special resolution by the company. A special resolution requires the approval of 75% of the existing shareholders and as AIR presently own more than 25% of the shares the way forward for VAH may effectively be at the behest of AIR N.Z. who in my opinion could veto this capital raise. More likely they will use their power as leverage.
(I am basing my opinion on knowledge of the N.Z. securities laws not Australian. DYOR not to be considered a professional recommendation or advice)

[macduffy]

That's Roger's point. AIR's 25% won't be affected/diluted if the Chinese placement doesn't receive endorsement by existing shareholders.

Badly timed. Replying to Tony TG's post!

[winner69]

I think you will find unless new capital is greater than 15% shareholder approval NOT needed

It's not that straight forward - probably why the announced amount is a rather odd percentage

[workingdad]

Guilty of that myself lately so I can totally relate to the reasons why you'd feel like that !


Hi TTG,

Thanks for the vote of confidence. A binding heads of agreement is (not pretending to be an Australian securities lawyer here) in my opinion a legal document that set's out the terms of an agreement reached. It has not been put into legal effect yet and as far as I am aware for a company to do a cash issue of that size this would normally require what's known as a special resolution by the company. A special resolution requires the approval of 75% of the existing shareholders and as AIR presently own more than 25% of the shares the way forward for VAH may effectively be at the behest of AIR N.Z. who in my opinion could veto this capital raise. More likely they will use their power as leverage.
(I am basing my opinion on knowledge of the N.Z. securities laws not Australian. DYOR not to be considered a professional recommendation or advice)

I did some research and still cant answer the 75% special resolution thing but it would surprise me for VAH to have a heads of agreement if they needed AIR's approval without first getting it, where is the benefit in that for them to announce it knowing AIR wouldn't support it?

The answer may be in this but I haven't got time to look at it in depth right now.
http://www.asx.com.au/documents/rules/Chapter07.pdf

[Beagle]

You guys could well be right. I can't be bothered trying to wrap my head around the ASX rules...have to draw a line somewhere with this company (which is a bit of a black hole for me in terms of time spent at present for no reward).

[Snow Leopard]

I think you will find unless new capital is greater than 15% shareholder approval NOT needed

It's not that straight forward - probably why the announced amount is a rather odd percentage

This is correct, shareholder approval is not required to issue up to 15% of new capital in a 12 month period.

And when you do this little bit of maths:

15%/115% = ?

you get 0.13 or 13%.

Best Wishes
Paper Tiger

[winner69]

This is correct, shareholder approval is not required to issue up to 15% of new capital in a 12 month period.

And when you do this little bit of maths:

15%/115% = ?

you get 0.13 or 13%.

Best Wishes
Paper Tiger

Does save all that bother not having to go through that process of getting shareholder pprovals

Still have feeling all this not good for Air NZ

[winner69]

PT - you flown on any of these HNA planes of many guises?

[workingdad]

This is correct, shareholder approval is not required to issue up to 15% of new capital in a 12 month period.

And when you do this little bit of maths:

15%/115% = ?

you get 0.13 or 13%.

Best Wishes
Paper Tiger

Thank you PT.

I was coming back to it, had a late invite to a fishing trip to get sorted for an early start and one must prioritise these things not to mention the usual time taken for delicate negotiations with the other half to allow such a thing

Had a look at the link I posted and yes the 15% thing is in there, also of note with relevance to the intent signalled for HNA to go to 19.9%. I think they will want to go further than this down the line but the ASX requirements for a share issue like this have a restriction "An entity must not issue or agree to issue equity securities without the approval of holders of ordinary securities for 3 months after it is told in writing that a person is making or proposes to make a takeover for securities in it".

Reading this, (and correct me if I am wrong - knowledge of ASX is limited) 2 things come to mind, firstly HNA cant give notice of intent to wanting to undertake a takeover which as we know is >20% as it would void the ability to VAH to issue the shares. Secondly regarding Air's sale of their holdings, if they or perhaps an interested party had signalled to VAH that they were to purchase all of AIRs holdings (or >20% of) this in itself would constitute a takeover meaning VAH couldn't actually issue these shares....... I am not sure how this would play out if it was a party that already had a decent stake in VAH purchasing further but suspect if it met the takeover rules the same would apply.

ADDED: If AIR's legal team are reading this, perhaps a way to block the issue of the shares from VAH to HNA is to simply have a potential buyer issue a notice of intent of takeover by meeting takeover requirements and then VAH cant take the share issue to HNA any further than its current stage.... if I am reading it right but seems a bit too easy and I am not that smart

Anyway, hopefully I have better luck with the snapper than my ability to catch knives of late.

[Snow Leopard]

Does save all that bother not having to go through that process of getting shareholder pprovals

Still have feeling all this not good for Air NZ

I am not 100% sure about this but:
VAH can still do a pro-rata issue, should the board so decide, without needing shareholder approval.

PT - you flown on any of these HNA planes of many guises?

Not knowingly but the balance of probabilities is that I have.

Best Wishes
Paper Tiger