Auckland International Airport Limited (AIA)

[Balance]

Yes, dilution of small shareholders, but that's seems to be the way that such things are done these days.

Disc: Holding - and expect to have a nibble at the SPP.

Only for some shareholders - institutional placement these days are normally offered in the main to the existing institutional shareholders of the company in the first instance to participate. Up to them whether they participate or get diluted by the institutions/underwriters taking up the placement.

In the case of AIA, it appears that around 82.5% of shareholders are institutional shareholders (including Auckland Council with its 22%) so the numbers for Mum & Dad investors are about right - 17.5% of $1.2 billion = $210m via the SPP.

So do not feel too hard done by.

[ratkin]

Sounds good, 4.50 seems pretty reasonable considering. Not too big a discount to the current price.
Those comparing it to the 9.50 price are missing the point, those days are gone. This is a new reality.

[Balance]

Sounds good, 4.50 seems pretty reasonable considering. Not too big a discount to the current price.
Those comparing it to the 9.50 price are missing the point, those days are gone. This is a new reality.

With over $2 billion of debts, AIA does not have much of a choice but to do this capital raising.

We will not see $9.50 again in a long long time - the heady days of maxing out on debt to gain ROE leverage are gone.

[steveb]

At $5.04 current market before the halt you could say the dilution has already happened after all .50c a share is not really going to make much difference.

[peat]

Struggling to see the value in an airport right now. Yes I know things will change but its going to be quite a few years before things recover so I think I would want this asset even cheaper now.
Investing in this company has to be a super long term view now. It used to be one of the primary stocks but I just cant see it anymore.

Edit
Puts the AKL Council in an invidious position too, probably not keen to stump up at present and yet as a cornerstone stakeholder that is not going to look good.

[whatsup]

With over $2 billion of debts, AIA does not have much of a choice but to do this capital raising.

We will not see $9.50 again in a long long time - the heady days of maxing out on debt to gain ROE leverage are gone.

IMHO, AIA has been totally mismanaged, borrowing to pay divs is not a way to run a successful business, how long will their business model last before the fish heads change their ways ?

[ratkin]

Struggling to see the value in an airport right now. Yes I know things will change but its going to be quite a few years before things recover so I think I would want this asset even cheaper now.
Investing in this company has to be a super long term view now. It used to be one of the primary stocks but I just cant see it anymore.

Edit
Puts the AKL Council in an invidious position too, probably not keen to stump up at present and yet as a cornerstone stakeholder that is not going to look good.

Right now it seems like nothing will ever get back to normal, but it will. Already signs Europe may be getting past the peak, Australia too seem to be putting the brakes on it. In a month the US will have the worst of it behind them. China ramping up and clearing inventories etc.
Plus by September there should be effective therapies in place.

[Beagle]

I for one do not want my ratepayer money, (or future ratepayer money if the Auckland Council borrow to fund this rights issue) going into this sector. I agree Peat, it will be many years before AIA are earning an acceptable return on investment again.

[Arthur]

AIA was about $2 10 odd years ago, and $4.50 about 5 years ago when all was rosy and there was a "clear runway for growth ahead" . Good on them if they can get this capital raise away at these prices.

[Balance]

AIA was about $2 10 odd years ago, and $4.50 about 5 years ago when all was rosy and there was a "clear runway for growth ahead" . Good on them if they can get this capital raise away at these prices.

Underwritten so they will get the money.