rojo
Posts: 2258
Joined: Tue Sep 05, 2000 6:08 am

AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Thu Jul 27, 2006 3:59 am

AeroMexio just posted the following numbers for the First Half 2006:

Revenues: MXP$9,846.8 Million (around USD$900 Million)
Operating Loss: MXP-$360.5 Million (around USD-$33 Million)
Net Loss: MXP-$265.7 Million (around USD-$24 Million)

The most important news released yesterday during the shareholder meeting is that AM could be sold for anything above US$100 million, therefore, if someone has at least US$100 million, they could make an offer for 100% of shares and they can get it. A shame to see this price, since AM was considered to be more expensive than MX when they were both offered last year!! But the real world says that at current AM share price, AM is only worth US$100 million...

http://www.eluniversal.com.mx/notas/364807.html

http://www.eluniversal.com.mx/finanzas/53202.html

http://www.reforma.com/editoriales/negocios/670952/
 
EddieDude
Posts: 6241
Joined: Fri Nov 14, 2003 10:19 am

RE: AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Thu Jul 27, 2006 5:45 am

Many articles in the Mexican press make reference to the low price that the RG sale commanded as if the RG price were a factor of why the IPAB/Hacienda/Nacional Financiera/creditor banks no longer want to pursue an immediate sale of AM. It is hard to see the connection because, while AM is bleeding red ink again, it is nowhere near the position of RG in the past few months. Nonetheless, it is interesting that this may be a factor affecting AM's valuation.

Something else mentioned by several articles is that the adjustment to the MX purchase price that Grupo Posadas has requested from Consorcio Aeroméxico (f/k/a CINTRA) is a factor affecting the valuation of AM. I am not sure I am understanding this correctly because the articles are poorly written and I am unfamiliar with the terms of the sale of MX, but it seems as though Consorcio Aeroméxico, which is the legal entity that used to own the MX shares, is somehow expecting the Posadas claim to have merit and, therefore, knows that it has to reimburse (or not receive, in case the money is still in escrow) a certain amount to Posadas (probably because of misrepresentations) and, therefore, it has an added liability.

Finally, it seems from some of the editorials that appeared today in the press that if an interested party wants to contact Nafin with a formal proposal, and Nafin finds it attractive, Nafin may recommend to the Board and the shareholders of Consorcio Aeroméxico to outright sell a portion or all of the shares of AM to said third party without going through a new public bidding. The usual suspects (UX' parent Globalia, 6A and Grupo Ángeles) were again mentioned. Finally, Nafin is also going to continue exploring the possibility of having the shareholders sell a portion of the shares of the company via a secondary public offering in the Mexican Stock Exchange.

I think that, for as long as oil prices remain so high, the electoral court does not uphold the results of the Presidential election and the MX purchase price adjustment is not finalized, the sale of AM should be postponed.
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
juventus
Posts: 2017
Joined: Tue Dec 07, 2004 11:12 pm

RE: AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Thu Jul 27, 2006 7:35 am

Quoting EddieDude (Reply 1):

Well said Eddie.

What a shame to see that price. Felipe Calderon should be confirmed as the official president as soon as possible. That stupid idiot AMLO is driving investors away and prices down with his shit.
 
ghost77
Posts: 4461
Joined: Wed Mar 01, 2000 2:07 pm

RE: AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Thu Jul 27, 2006 8:31 am

Isn't it nice?!!! AM is still loosing money and they're thinking on changing it's livery on its 97 aircraft fleet!!! Rojo, I'm surprised you mention AM was over MX. Since the beggining of the process, MX was valued and estimated to be sold for 500M usd opposite to AM's low 400M usd plus debt obligations. OTOH, MX had a nice 110M cash flow opposite to AM's 0 cash flow. Anyway, AM should be hold a little more... but not much.. we can have a RG II on our way in the next 5 years.

ghooost77 APM
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
rojo
Posts: 2258
Joined: Tue Sep 05, 2000 6:08 am

RE: AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Thu Jul 27, 2006 9:43 am

Quoting Ghost77 (Reply 3):
Isn't it nice?!!! AM is still loosing money and they're thinking on changing it's livery on its 97 aircraft fleet!!! Rojo, I'm surprised you mention AM was over MX. Since the beginning of the process, MX was valued and estimated to be sold for 500M usd opposite to AM's low 400M usd plus debt obligations. OTOH, MX had a nice 110M cash flow opposite to AM's 0 cash flow. Anyway, AM should be hold a little more... but not much.. we can have a RG II on our way in the next 5 years.

You are correct... But remember that IPAB, Nafin and SHCP thought that AM was worth more that MX on the first place, because of the brand recognition, routes to Europe and South America etc. It was obvious that MX had the building and more cash on hand, which made MX's valuation higher, but now we have a different story. Posadas is fighting to get back US$40 million, which will reduce the price of MX to US$120 MM, therefore, I don't see anyone offering US$100 MM for AM. And if you consider that AM's net loss was reduced thanks to the tax benefit AM got from SHCP after MX sale, it is a incredible they can't turn a profit... competition is tough!!!!!!

It is obvious AM's management is desperate and they will try to lure some buyers by saying they will give the airline to anyone willing to pay US$100 million
 
Fly2HMO
Posts: 7207
Joined: Sat Jan 24, 2004 12:14 pm

RE: AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Thu Jul 27, 2006 11:36 am

Quoting Rojo (Reply 4):
It is obvious AM's management is desperate and they will try to lure some buyers by saying they will give the airline to anyone willing to pay US$100 million

And you'd think that AM's larger fleet (compared to MX's) would up the price a bit.

Correct me if I'm wrong, but a 24 million loss doesn't sound too horrible, compared to what other airlines abroad have lost.
 
rojo
Posts: 2258
Joined: Tue Sep 05, 2000 6:08 am

RE: AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Thu Jul 27, 2006 1:50 pm

Quoting FLY2HMO (Reply 5):
Correct me if I'm wrong, but a 24 million loss doesn't sound too horrible, compared to what other airlines abroad have lost.

For the size of AM, US$24 million is a lot. Remember that other airlines in the US have 500+ planes and a lot more revenues than AM. Additionaly, you have to see the operating loss which was higher than the net loss. As I said before, AM is getting the tax benefit which helps reduce the loss... AM should be making money now, since LCC are still developing routes. If they can´t make money today, I don´t see AM making money when Volaris, Interjet, Alma, AeroCalifornia, Avolar, Aerobus, etc. start hurting yields on most of the domestic routes!! And if they go international, it will be tough competition!!
 
ghost77
Posts: 4461
Joined: Wed Mar 01, 2000 2:07 pm

RE: AeroMexico: 1H Loss Of $24MM / US$100MM Base Price

Fri Jul 28, 2006 6:31 am

Quoting Rojo (Reply 4):
Posadas is fighting to get back US$40 million, which will reduce the price of MX to US$120 AM (Colombia)">MM, therefore, I don't see anyone offering US$100 AM (Colombia)">MM for AM. And if you consider that AM's net loss was reduced thanks to the tax benefit AM got from SHCP after MX sale, it is a incredible they can't turn a profit... competition is tough!!!!!!

Right, Posadas if fighting for 35 plus the 41 gotten from the building... a total of 76M usd back in less than 6 months for a total of 89.5M usd paid for MX!!! Isn't it nice???!!! Of course.. plus the big debt they had for 294M usd... AM's debt isn't public but it's near 350M at the minimum!!!! And more over, they're spending big money now on a livery change!!!!!

Quoting Rojo (Reply 4):
It is obvious AM's management is desperate and they will try to lure some buyers by saying they will give the airline to anyone willing to pay US$100 million

And they will end up giving the airline in 100M!!! Conesa just received it's 1M stake from MX sale now he's looking forward to that other 1M for AM!!!

Quoting FLY2HMO (Reply 5):
And you'd think that AM's larger fleet (compared to MX's) would up the price a bit.

AM's larger fleet isn't owned!!! AM's fleet doesn't count...!!! OTOH, MX now owns nearly 15 Airbuses!!!

Quoting FLY2HMO (Reply 5):
Correct me if I'm wrong, but a 24 million loss doesn't sound too horrible, compared to what other airlines abroad have lost.

It is a BIG loss for an airline of it's size...!!! Things doesn't look that good!!! And the more they take to sell AM the more the airline will loose in all aspects.

ghooost77 APM
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!