focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
OK Manchego,
You obviously think that TCG is undervalued. Let me try understand where my analysis is missing.
Airline Valuation - No doubt the current malaise is negative, you think Lufthansa will protect its home market by buying TCG Airlines - I accept this is a possibility, but I think the most recent profit warning reduces the likelihood.
Tour Operator - Split between the Nordic - I accept the Nordics is a valuable business - nearly all online so competes well on price and has a good reputation. A sale of the Nordic business is a risk for my short.
Remaining business - Fosun is the great hope and merger/combination with Club Med is a possibility. As I have stated I don't understand the Fosun angle - but just because I don't understand it doesn't mean it won't happen.
Hotel valuation - I think this is a red herring as they don't own as many hotels as some think
Am I missing any other bull arguments?
(Also - why does Castleford Tiger's messages appear and then disappear?)
OK - so you accept there is no error. Then this forum is working. Making investors better informed.
I have shared the positive news also and corrected the inaccurate information from the other side also.
Who I work for is irrelevant.
Manchego,
Can you please point out the error in what I typed today.
So from your statement - they have 7 assets with total value of 250m. Incorrect. They don't own the 7 outright, the fund does, which they own half off. Plus you need to account for borrowings at the fund.
The borrowings in the fund is 91m - so net value of the fund is 160m which they own half, so 80m (I said it was valued at September 2018 at 62m, so I am 18m out)
And the other 183 hotels are owned by the owners - TCG just uses them. Please point to where the value of the 183 hotels are on TCG balance sheet - I don't think you will find it - because they don't own them.
Manchego,
I am not deramping - I pointed to the company's announcements and their Annual Report and helped jedclampit with his understanding of the assets TCG have.
So I don't know what you would expect. Do you want misinformation to be out there?
Jedclampit,
I feel like I am always criticising you but I have to correct your assumptions on TCG hotel assets.
An examination of the balance sheet from their annual accounts September 2018 and it will state they don't have own any hotels directly.
pg 145 points to the JV they have with LMEY, which is worth net of debt at the JV c. £62m. They have substantially no other hotel assets. The JV annoucement was made in March 2018 when they transferred in some assets into the JV.
ON pg 144 - shows non aircraft assets to be £150m, split between Short leaseholds (52m), Other Fixed Assets (68m) and Freehold land and Buildings £30m.
I think when they say they have 190 hotels they have partnerships with hotel owners for that amount.
Apologies Sfletcher -
I feel like I am justifying myself here all the time. As stated previously I use this website in names where I am not as well informed and take take take, so feel like I should contribute here. Apologies.
you have to pay to get the Everest note - we haven't paid for it. You can log onto Everest website and pay the money yourselves. (But I would advice not posting the note on here - they are a start-up independent research firm trying to make a living. Me posting it here would be detriment to them.
New world of Mifid etc don't have contact with JPM - are you a professional investor - you ask a lot of questions without sharing any information.
Some, not great to be honest.
Buyers are hedge funds - think the value of the business is covered by the bonds at 35-40c. They believe they will also make money from a new money requirement (i.e. in a scenario where an airline sale does not happen).
Not seen the bullish Everest note which states the bonds and the equity have value at current levels.
The Fosun is a difficult one for people to analyse - they have lost significantly, on a mark to market basis, so far. They could make a separate bid for the Tour operator (i.e. bid for that business for an amount and walk away from their equity involvement.
Timing is the big issue - Cashflow should be improving over the summer. But some analysts think you need to sell the Tour Operator (TO) first, not the airline. The reason been, any buyer for the Airline would need to know the TO is properly capitalised before putting a value on the 7/8million passengers the TO provides to the Airline.
Jedclampit,
I have consistently stated I am negative on the name - am short both the equity and the bonds - but I think I have always given the basis for my reasoning for the posts. Outlining the logic I use to get to my conclusion. I try not to descend into name calling but will point out where I think errors are in other people's logic.
(I point to the whole debate about net debt and it not including Working capital movements as the Company reports it).
I don't think I have said they will never sell the airline - If I did I apologise - I think I stated it is becoming more unlikely.
I also post positive comments as well - (the Everest research etc)
Ambly,
If you read the reports from the EU competition authority re: Air Berlin slots it appears to be an opaque area. Any discussion with management of other airline companies point to the same thing. (Slots, in Germany, are suppose to go back into the pool). I have read several notes from the EU on this - simple google of Lufthansa or easyjet with Air Berlin will come up with some links - and it isn't straightforward. As you point out there is debate on the topic.
With that debate ongoing, unlikely to get banks to lend against the German slots is what I am saying.
I would caution using these numbers for German slots as it is questionable whether slots can be grandfathered.
I am using an assumption that the airline does not get sold and they try to securitise the value of (UK) slots. Also note LHR are most valuable slots in Europe.
This transaction could possibly be replicated by another entity (Not government).
https://timesofmalta.com/articles/view/air-malta-received-58m-for-its-airport-slots.673780
If it is suggested that Lufthansa put out a profit warning to aid their bid for TCG it would mean jail for the Lufthansa management - there is no way they would do that. No way.
TCG are not really in a position to negotiate - who else will buy them. Lufthansa profit warning points to the fact that Ryanair and Easyjet can compete without making further acquisitions. So the list of buyers for the airline is limited.
I don't think it will be sold to be honest.
Gareth
Firstly I stand by the statement it is less likely now than earlier this year.
Lufthansa confirmed their guidance in mid April and at their conference call on 30th April. So to put out a profit warning yesterday means conditions have worsened since April. To suggest that Lufthansa management were aware they were going to issue a profit warning is suggesting they were ok manipulating the stock market and releasing inaccurate information in April. The reported bid was from before end of April.
your suggestion for the airlines to be sold off by division and then Fosun buy it is possible (your last post),but Fosun will not buy the airline. We had the same issue with Air Berlin with Etihad were 29% shareholder.
We can have all the nuts we want (And I would say some on here ARE nuts) but unless you outline a brief description of how you envisage it working, stop writing fantasy on the board.
Remember we don't operate the Company - it is the Company and the Board of Directors who will have to implement any transaction you envisage. I repeat my view that Fosun will not buy the whole Company -
And after the profit warnings from Lufthansa, the possibility of an airline sale has declined substantially.
https://caa.co.uk/Commercial-industry/Airlines/Licensing/Licence-types/Operating-licences/
Have a read - I can't say it any clearer - you need to be UK or European majority owned. Fosun isn't.
Bkkbkk,
please inform us how they maintain a license? Or are you just hoping - heart over mind?
They would lose their license to operate - so all the planes would be grounded. Each state within the EU needs to license aircraft operators - if Fosun bought it they would not get a license.
End of discussion - point to me a situation where this hasn't been the case.