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it might be worth reading the financial statement from the Q2 update - it notes the amount of cash the company as access to (cash and loans), then there the Amex money (not included due to the accounting period), the RI (same point) and then you see the size of the cash they have access to (understand all this spending will mean high debt levels, however it's cash they have access to) - this excludes the Union agreement and other income generated from 1/7/20 onwards
However the virus is still unpredictable so this could all change, but a pragmatic view would see that IAG have access to a lot of finance to support them over the next 6 months+, the RI increases this protection and also reduces the amount of debt they're taking on which would need to be paid back (RI's aren't paid back)
Understand you point, however the £2.5bn is only part of the cash/finance IAG have access to my - my point is that the company has access to a large amount of finance and based upon a £140m, £178m, or £200m number the burn rate (with all other points being equally, which we all know is not the case) the company could continue for 12months+ before running out of money - the hope is the virus is contained and the travel industry recovers within that 12month period to a point where income is greater than outgoing
My overall point is the company is not in a situation where it's running out of money regardless of the Noise in the News, the balance sheet (from 30-June-20) and the updates since regarding Amex, RI and Union agreements have all had a positive impact which gets overlooked due to the Noise - DYOR :)
So you say they had 500days cashrun and raised £2.5Bn at emergency rate of 84p for fun???
You sure this £10bn liquidity is not restricted entirely or most of it???
Article from June
https://m.marketscreener.com/quote/stock/INTERNATIONAL-CONSOLIDATE-7233512/news/British-Airways-boss-says-burning-through-cash-urges-unions-to-engage-30723431/
Burning £178M/week so I made a mistake
So 2.4Bn will run for 13.5 weeks
I believe it's £20m per day (so £140m per week) from the CEO who noted the problems facing the group (this number should also be coming down due to the other points I noted) - the 600 days of cashflow is based upon £12bn divided by £20m - understand this is a simple way of looking at the cashflow, it doesn't take into account the ups/downs in flight volumes or other income opportunities/spending problems, but it does show that the business can run for a while longer before it really runs out of cash
I also suspect that the forward booking view (Spring/Summer next year) is looking a lot better as the general population are thinking more about summer 2021 holidays than anything else this year - so the cash (RI) will help with the under-booking until the Spring/Summer - obvious Covid dependent - DYOR :)
Isn't cash burn ~£200m/week???
So proceeds from rights issue will be gone in ~12weeks or by end of the year?
Does that solve their liquidity issues???
2nd wave kills it completely...
Heathrow is working at under 20% capacity I gather.
Longterm pain for investors here sadly no matter how you dress it
Thanks guys
7th October
Hi, I think is about the 7/10, however those who are taking up the RI will know more than me
fab analysis mate
well worth a look here - big buys on Friday
Question...when do the new shares issued flood the market?
Understand there's a lot of News/Noise out currently, and this will mean the SP will move up and down in an exaggerated fashion, however it's worth noting some key fundamentals regarding the companies balance sheet and fair value, as when the virus passes (as all these things eventually do), the financial position of the company will become more important
Looking at the accounts up to the end of June-20 the following can be seen; Total Assets (net Liabilities) was £725m, add the Amex payment (noted in July-20) of £755m, and the RI (noted for Oct-20) of £2.5bn then Total Assets are about £4bn - Shareholder fair value would be (post RI) about 81p per share (historically the total asset value as always been lower than the SP) - so any price below 81p could be seen as good value (understand the current SP is 111p however it helps provide context)
Regarding the Cash position - post RI it will be about £2.5bn (RI) + £755m (Amex) + £6.8bn (Balance sheet Jun-20) - £10bn (excluding the £2bn in unused loans) - £12bn in funds.
At a burn rate of £20m per day (which should be lower following some increase in flights, and the agreements with Unions regarding wages/contracts) would equally about 600 days of cover (again this is only for context as future flight volumes are difficult to predict) - all of this was taken from the Q2 results document so there's no basis, it's just a view on the finances of the company, which on the face of it are in better shape then most airlines and probably better then what some think on this board
DYOR :)