Yeggerman From Canada, joined Mar 2005, 143 posts, RR: 0
Reply 2, posted (10 years 10 months 4 weeks 14 hours ago) and read 2470 times:
Very interesting article, I wonder how the shareholders are going to take this news. I mean what's the point of holding shares in a company that may never make money. As for ditching there business plan because of this, where does it leave them? Will the eventually go back into bankruptcy because of this?
AC7E7 From Canada, joined Oct 2004, 679 posts, RR: 20
Reply 3, posted (10 years 10 months 4 weeks 14 hours ago) and read 2450 times:
I don't think the company will go back into bankruptcy protection. But this isn't good news. Shares are already down $0.50 to $34.10 on the TSX as of 14:00. Fuel prices are not helping any of the airlines though, but Jetsgo's demise will help both Westjet and AC.
AC320 From , joined Dec 1969, posts, RR:
Reply 5, posted (10 years 10 months 4 weeks 14 hours ago) and read 2429 times:
Well the AC release states the quotes and information may have been used out of context, which is possible considering the information used seems to point to the necessity of timely and new aircraft deliveries to ensure growth and profit. Their finances this year will be very telling.
Sebring From Canada, joined Jul 2004, 1677 posts, RR: 14
Reply 6, posted (10 years 10 months 4 weeks 14 hours ago) and read 2397 times:
This is so boring. The Bloomberg article reached into the risk factors section of the MD&A that was written a month ago, and all businesses are required to express great candor in discussing risks. It's part of the boiler-plate of financial documents in this era of full disclosure. That doesn't mean that the risks are probables... Nor did Bloomberg discuss all risks, for example, a stronger than expected Canadian dollar. They discussed theoretical delays in the fleet restructuring - sure, it's theoretically possible that Embraer could be late delivering the E175 or E190. You have to state that risk. And the discussion of debt is automatic. However, just today, AC announced a new debt/equity issue and line of credit that actually lowers its interest costs and adds to its cash reserves, bringing them up to the C$2 billion level even after AC has made progress payments and equity payments on the regional jets delivered and being manufactured.
Of significance, AC said it still hopes to make its EBITDAR and is taking action to generate additional cost savings/revenues. AC could miss its EBITDAR but still make money, only less money than it had forecast.
Of significance, the MD&A was written before Jetsgo went under.
So it's wildly premature, even ridiculous, to take the MD&A risk analysis and spin that into a money losing year or discussion of a return to creditor protection.
And the reason the stock is off today is just as obvious: the issuance of new shares always dilutes everyone else's holdings.
Think of it another way. A consortium of leading Canadian financial institutions today entered into a pair of transactions to give AC a combination C$1 billion in new equity and investment grade debt and credit (not junk rates). There aren't two many airlines, certainly not traditional airlines, that can say that.
YUL332LX From Canada, joined Feb 2004, 820 posts, RR: 1
Reply 7, posted (10 years 10 months 4 weeks 13 hours ago) and read 2286 times:
''The Circular provided an EBITDA projection of $1.6 billion for 2005, which was based on an assumed average 2005 crude oil price of approximately US $35 dollars per barrel for West Texas Intermediate (WTI) crude oil''
Looks like they need a new prediction model to project future oil prices...
E volavo, volavo felice più in alto del sole, e ancora più su mentre il mondo pian piano spariva lontano laggiù ...