August 11, 2011
http://sakmongkol.blogspot.com
Sting is in the Air?
by Sakmongkol AK47
We will let the boss of Khazanah (Azman Mokhtar) contend anything he wants during the moment as well as have his 5 mins of fame. At leas, we have been spared his brand new found religiosity. Everyone would be forgiven to consider which this is the last word upon the issue because the boss of Khazanah says the whatever we called it of the understanding in between MAS-AirAsia, it is defensible. Among alternative things he says, this is not the bailout of MAS.
We will take him upon these issues. The first question we wish to ask, why is this understanding worked out in the first place? Why AA (AirAsia)? It is handling during how most times the PE? 40 times? Looking during the numbers as well as the fundamentals, the high PE could meant the stocks have been overpriced. That means the little boys could be cooking up the numbers to set up the marketplace as well as make killings.
Maybe.If the reason as Dr Mahathir says, MAS can sense from AA upon ways to cut costs, we meant the practice carried out by Idris al Dunlap Jala wasnt enough? Why dont we sense from Singapore Airlines or Qatar Airlines? Oh we wish to sense from the home grown bent will be the likely answer.
I know this is the BAD understanding because Dr Mahathir said so. Dr Mahathir always contend something when he essentially meant the reverse. What can we sense from AA? How about the home grown talents jot down then?
As of the 1st Quarter of 2011, AA debts amounted to RM7.7 billion with income balances amounting to RM1.7billion. In August 2010, AA announced the deferment of their due aircraft purchases though someday in June 2011 th! ey topsy -turvy their decision as well as proceeded to place an sequence for an the single more 200 brand new aircraft during the Paris Air Show. No large deal! , we can sequence as most as we want. Possibly the commissions warranted from the purchases dwarf the the single warranted from the Scorpene submarines.
As of 31 March 2011, as we can see from the 1st Quarter report, AAs collateral commitments stood during RM19 billion. With the above announcement, an the single more RM54 billion will be added as Capital Commitments. The due Capital Commitments of rounded off RM74 billion will be widespread over the 15 year period ending 2026.
In alternative words, AA has to increase the earnings to an normal of RM 5 billion per annum to encounter the future dues. From 2006 to 2010, AAs income grew by 10 overlay from RM110 million to rounded off RM1.1billion, an normal expansion of RM 200 million per annum. How will it reach RM5 billion? We will see in the coming months when they rationalize all the routes as well as what not.
Its income pot rose 6 overlay from we estimate RM 300 million to 1.7 billion though the debts skyrocketed from RM1.05 billion in 2006 to RM .7 billion in 2010, an increase of 700%.Surely this looks like the debt burden which is spiraling out of control.
This understanding is signed, hermetic as well as delivered during an toilsome as well as meaningful time. The world economy including Asias will be in to an additional maelstrom as well as air transport will invariably be hit. So what can be done?
One, AA can cancel orders though contract penalties will be onerous. Air Asia would not wish to compensate penalties would it? The debt with MAB too is dragged upon what seems to be forever. That option is no go as well as why does any the single wish to pledge commissions.
Also, Tony (Fernandes) is probably meditative along what Keynes said- when we have been the large 
borrower, the banks have been frightened of you. So as the large borrower Tony feels which size does matter after all it will shield him from foreclosure as banks will be leery of temperament heavy losses! !
But also, the sizeable chunk of those loans have been being held by Malaysian banks as well as in the misfortune box scenario, the government as well as the taxpayers will have to pick the add-on to turn aside the financial meltdown cascading down the AA slope. So maybe what the blogger said about enriching AA upon taxpayers income is loyal after all.
Let me speak to the little financial expert kids to see the understanding from the opposite perspective. No, we am not starting to dignify the single writer with an answer stating which we am the extremist for essay this article. If it were which the Meranun chap inking this deal, we will belt him the same. Who cares what race Tony is? You meant we cannot criticize dear Tony because he is of the opposite race as well as if we do, it amounts to racism?
Take the demeanour during MAS, the defeat child presently, which is instrumental to serve the diversion being played by Azman Mokhtar as well as his cohorts. MAS has the paid up of RM 3.384 billion as well as has fixed item valued during RM 8.4 billion. Its net item is RM6.962 billion, of which RM 2.086 billion is cash.
Compare which to the position of Air Asia which has borrowings up to RM 7.7 billion as well as income of RM 1.7 billion. AirAsia has the jot down of being the bad debtor; it once owed Malaysia Airports Berhad over RM 65 million as well as at your convenience action was being contemplated opposite ! them, th ey run to their arch counsel, afterwards Prime Minister Abullah Badawi.
Now, of march AA has Tun Dr. Mahathir upon the side as well as the disintegrating as well as assertive Chairperson Rafidah Aziz who can be counted to be the enforcer upon the other.
Malaysia Airlines value is essentially the network, brand, as well as position in the Tier-5 airline market. Malaysia Airlines annual handling turnover is RM12.98 billion versus Air Asias RM 3.948 billion. MASs handling income from airline ope! rations is during RM RM 11.649 billion opposite Air Asias RM 2.839 billion.
This is whatever we wish to call it- merger, cooperation, or collaboration is the mystery hidden takeover with the elements of manipulation as well as failure of disclosure. What is function to the position of minority shareholders?
Khazanah is giving away 20.5% of the holding in the association which had the bigger network, acclaimed higher standard of service, most bigger handling revenue, stronger assets, obtuse debts, more income as well as better paymaster lane jot down to an additional association with obtuse lane record, though the single which excels in hyped up selling as well as display it can make the lot net income in shorter time.
Also, we find it bizarre to see the single merchant bank acting as usual adviser to this deal. Then we remembered the present capo dei capi of Khazanah is cheese compared to chalk of an additional progressing Khazanah boss.
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