Forum Archive Index - June 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

Snoopy,

 

As you know, there are so many variables, including majority control of the stock and assessment of the degree of competition by any Commission, being discussed at present.

 

For the purpose of the exercise, let us ignore these and maintain the present relationship between the A and B shares.

I only want to concentrate on the A shares, just now: There are 386 mill A shares. 

 

Your proposed 5:1 issue will result in the creation of another 1930 mill shares, some 70 mill more than the recent FSS Pref. issue. 

 

I agree that a direct comparison about the merits of the two stocks is not possible but to a Director of the Board ( Yes, you are that Director ), he will have thought about the massive dumping of stock at that time. 

 

The FFS issue was open to the whole world but the AIRVA issue will only be open to NZ'ers and you already know what their response will be: Start looking for a P/E of 6-7, instead of 8.

 

Another way is to proceed on the basis of 1 cash issue now and one later, say in year 3. Is that possible?

 

Whatever the outcome of these calculations and perceived feasibility, at this stage, there will need to be a deferment of any cash issue in my opinion.   

 

They will be exploring all avenues to ensure that, should there be a cash issue, it will be in the best interest of the Airline and shareholders. Any future cash issue and the size thereof, will be part of the discussions.

 

Both Governments will also take part in some of these negotiations.

 

Gerry

( Does not hold Air )