'Five elephants in the room

[melb78]

just read the story in SMH about virgins ownership I wonder if this will be the year it be brought out. to me it will be great to see Singapore buys it out
Five elephants in the room': Virgin Australia dances ownership tango

 

[docjames]

With publicly tradeable shareholdings under 10%, privatization is no doubt likely (pending international air licencing permit workarounds).

 

[Dannyism]

Privitisation will result in a lack of transparency for punters like us though right? No more profit-loss statements?

 

[grubbidok]

Oh god, I hope it isn't Etihad that takes it over. I wonder if Delta are considering jumping in if it gets privatised?

 

[QFflyermelbourne]

Etihad are having enough trouble just keeping their lights on. You can safely assume ti won't be them....

 

[AustraliaPoochie]

Maybe the China based airlines might take up more up to the max shares they are allowed.

 

[melb78]

be great if Singapore takes over would give them a good footprint in Aust

 

[pauly7]

Privitisation will result in a lack of transparency for punters like us though right? No more profit-loss statements?

Certainly VA’s governance and pesky ASX reporting will change dramatically - which is what they are dying for, less scrutiny and people commentating on their performance or lack thereof...

 

[AustraliaPoochie]

If they go the privatisation way, does this mean/this means they reduce their operating costs, no?
No more paper or emailed dividend statements if they do make a dividend payment again, no more reporting satements, paper or emailed...
Am not 100% sure, but maybe going the privatisation way could be good, they "might" just put more of that $ to our benefit, while I am not a VA shareholder, I am now happy flying their Y(X) "class".

 

[Melburnian1]

AustraliaPoochie, Deloitte accountants have a good summary page of why companies choose to go 'public' rather than stay 'private.' I am also not a shareholder as it's best to avoid airlines.

Access to capital is one key reason.

Existing shareholders would have to agree to take VAH private. Quite possible but who knows what the 'elephants' would think. All you'd need is one major dissenting voice and it's be a non starter.

If it went private, SQ would be by far the best prospective owner.

 

[codash1099]

be great if Singapore takes over would give them a good footprint in Aust

It's fun to imagine how different the Australian picture might be different if SIA had succeeded in taking over Ansett when they tried.

 

[AustraliaPoochie]

To askew this thread a bit, take a look at the share buyback with QF as to what happened end of was it year 2015/2016.
They took my shareholding down from 165 to 154, of course they called it a capital dividend.
They didn't ask us either.
So, if VA wanted, they could compulsorily acquire any small shareholding, calling it unmarketable shares.
This is all presupposition of course, ideally, the mix right now is about right, but of course, to reduce costs, they would have to do something.
I am sure someone ends up paying Advanced Share registry or who ever VAH has for their shareholder services are.
Wait and see I guess.
I have a sneaking suspicion, small one as it is, that maybe QF is rubbing their hands in glee that VA is in the situation it is at the moment.
Edit: VAH shares are only Aud$0.26 at the moment, and if shares were issued at $1, 500 shares to buy, at $0.26, its 1923 shares to close to value Aud$500.

 

[Vic]

Well No virgin can't just compulsorily by any small shareholding. A marketable parcel is $500 in value. Unmarketable is less than $500. I'm not sure if there is a restriction or otherwise in purchasing unmarketable parcels of shares. But I have been given the opportunity to reject such a purchase for a couple of other companies.

 

[burmans]

Well No virgin can't just compulsorily by any small shareholding. A marketable parcel is $500 in value. Unmarketable is less than $500. I'm not sure if there is a restriction or otherwise in purchasing unmarketable parcels of shares. But I have been given the opportunity to reject such a purchase for a couple of other companies.

Sure, but there are other provisions that allow compulsory acquisition, e.g. Ch 6A of the Corporations Act 2001

 

[AustraliaPoochie]

I have seen where in some cases, for a relo who does adhoc trading, esp for mining shares, for no reason, a cheque or statement arrives, and the explanation is that his share holdings, (seeing mining shares can sometimes be $0.01 or $0.02 or there abouts), he just gets a cheque for say $145, and his 14,500 shares are gone, and when I have a look online, the shares are valued at $0.01.
Granted, VA might or might not go this way, but never say never when it comes to companies trying to save money.
They are now $0.26, the same as the last time I looked, but its grim.
Truthfully, all the best I hope/wish for VAH, but in the end, if they don't or can't make dividend payments, in the end, it could go the AN way, sad to say.
They last paid dividends in 2008!
AN got very ambitious, flying to may international destinations, and VA is now quite the same.
They should just stick with the niche markets and not go off too far.

 

[moa999]

I think keeping their International rights will be the biggest issue.

The current position is skating very close to the line imho... The International division reportedly has a different ownership (grandfathered) yet from what I can tell limited distinct management and no separate financials.

 

[AustraliaPoochie]

If you go and download and read ASIC Regulation Guide 10, and 90% of the shareholders want to do a compulsory acquisition of the remaining 10%, they can do it.
If it does come to fruition, and if its true the 5 major airlines already own 90% of
VAH, they could do it to save a tonne of $.
Of course, I am speculating, and as usual, thats bad, but its all possible.
If they offer $0.30 per share, or $0.35 per share, which is over the current market trading value per share, it could happen.
Eg, like how DownerEDI got hold of Spotless.
IF VAH does not pay any dividend this year, it would 10 years without one.

 

[Boof1]

I think keeping their International rights will be the biggest issue.

The current position is skating very close to the line imho... The International division reportedly has a different ownership (grandfathered) yet from what I can tell limited distinct management and no separate financials.

This is the biggest issue for VAH, and for the life of me I can't work out how they have got away with this for so long. The grandfathered ownership is a nonsense, the theory being that VAI is 100% owned by the 10% that is free floated and that free float is majority owned by Australian interests. There is no scrutiny of the floated shares that confirms this is the case, and the entire blended operation of VA would suggest that the 90% that is foreign owned is calling the shots.

 

[Vic]

Sure, but there are other provisions that allow compulsory acquisition, e.g. Ch 6A of the Corporations Act 2001

Sure, but do they impact the difference between a small share holding and an unmarketable parcel?

If cheques are just turning up in the mail, perhaps someone needs to pay more attention to those letters from the companies.

 

[Must...Fly!]

This is the biggest issue for VAH, and for the life of me I can't work out how they have got away with this for so long. The grandfathered ownership is a nonsense, the theory being that VAI is 100% owned by the 10% that is free floated and that free float is majority owned by Australian interests. There is no scrutiny of the floated shares that confirms this is the case, and the entire blended operation of VA would suggest that the 90% that is foreign owned is calling the shots.

I will agree with you on this one. Like you I am unsure how this has been allowed to continue on, someone somewhere must have a good reason. A monopoly isn't good for anyone, I guess.