New out of PN17 option without selling AA Aviation business to AAX:

Action 1:
Assume excess valuation for each plane of US$3.8mil. Or may be higher! LOL
Total 219 air planes yield excess value gain of RM3,821mil (1US$ to RM4.5915)

Action 2:
Don't give free CAPI shares to CapA investors, but instead use it to double the goodwill from US listing.
Goodwill RM2.36 bil to RM4.72 bil.

Action 3:
Make agressive profit target for 2024: RM2 bil net profit after tax. LOL

Action 4:
Stop buying new planes for one year. LOL


To get out of PN17:
Total Equity Deficit = - 10,469.5 mil (RM)
Valuation gain = 3,821.0 mil (RM)
US Listing Goodwill = 4,720.0 mil (RM) [Note: No free CAPI share to CapA investors.]
2024 Profit target = 2,000.0 mil (RM)
--------------------------------------------------------------
Net Cap-A Equity = 71.5 mil (RM)
== 1.7c NAPS

Tony should not be too aggressive on expansion plan, instead should concentrate on improving the balance sheet, or else it is not different from building an empire of debts.

Actually, I have a question for Tony & the Board,
instead of selling AA aviation business to AAX, in turn put heavy burden on AAX,
can CapA do a revaluation on its aviation business as material costs, building costs for plane, and also the second hand value for plane had risen, and then realized its excess value as goodwill, therefore improves the balance sheets without even selling the aviation business?
After all, CapA is making hefty money, if given sufficient time I'm sure it can pay off all its debts.

Are you high on drug or what?
If CapA don't have planes lease business, where are those income from?

Merger Offer to AAX:
US$ 600 mil == Cash (US$200 mil bond) + AA Equity (US$400 mil)
[Note: Transfer of planes without the transfer of accounting (i.e.lease debt) would be totally nonsense!!]

AA only paid CapA = RM918.3 mil (1US$ to RM4.5915) cash
*** AAX (or AA?) to raise US$200mil bond (or could be RI)
the balance is in the form US$400mil EQUITY of new entity AA Group

Because the NOSH and PRICE of the new entity AA Group is not determined, that is causing the current chaotic price moving of AAX. This is likely to continue until things are known.

Why would lessors not agree to transfer the planes lease from capA to AAX (actually is AA Group, the new entity)?

The new entity AA is the combined business of AAX airline and the CapA plane lease business. Hence, the combined entity AA had higher earning with the combined earnings from both businesses eliminating lease operation costs. Therefore, the new entity is even more stronger. Transfer of planes are just matter of legal documents.

Furthermore, the AA merger will removed
Leasing service charges (by CapA)
Leasing service taxes (by Government)
Leasing operation costs at both sides (Processing, IT, Accounting, HR, etc by AAX & CapA)
Income taxes (by Government)
Hence, it helps increase AA efficiency and profits.


Recall that AA Equity given US$400mil (=RM1,836mil) vs AAX's RM1,618mil market cap! (AAX to rise US$200mil bond & AAX@1.70)

CapA most probably will get higher AA profits sharing from AA merger (due to higher equity holding!!).

Conclusion, after AA merger, CapA is better position when out of PN17. Profit wise should not be much different, or may even have positive surprise!

After gone through the numbers, here is my take! Please do your own DD!


Total fleet of 219 aircrafts (12 under maintenance)
Estimate cost of each 2nd handed plane US$25 mil
Take exchange rate of 1US$ to RM4.5915
That's entire fleet of 219 aircrafts worth at least RM25 bil (rough est.) will come back to this later.




That said, refer to Q4FY23 financial statements,
Assets associated with AA leasing:
Non-current Liabilities = -13,434.5 mil (RM)
Current Liabilities = - 5,259.6 mil (RM)
Right to Used = 12,066.8 mil (RM)
------------------------------------------------
Net assets = - 6,627.3 mil (RM)
Note: This amount is to be removed from Cap-A statement.

Merger Offer to AAX: US$ 600 mil
Cash (US$200 mil bond)
AA Equity (US$400 mil)
(1US$ to RM4.5915) = 2,754.9 mil (RM)
Note: This amount will add to Cap-A statement.


Hence, Total AA Leasing assets considered:
= 13,434.5 mil (RM) + 5,259.6 mil (RM) + 2,754.9 mil (RM)
= 21,449.0 mil (RM)
= US$ 4,671.458 mil (=219 aircrafts)
OR Each aircraft = US$21.33 mil (***** vs at least US$25 mil per aircraft for a 2nd handed A320 aircraft)


Back to Cap-A, now how do to get out of PN17?
Total Equity Deficit = - 10,469.5 mil (RM)
AA Leasing Asset removed = 6,627.3 mil (RM)
AA Merger Offer get = 2,754.9 mil (RM)
US Listing Goodwill = 2,360.0 mil (RM)
--------------------------------------------------------------
Net Cap-A Equity = 1,272.7 mil (RM)
== 30c NAPS

@Sslee
If what you said is true, then it is very study move isn't it? Because investors are worried about its hefty debt level and PN17 status. It would be a lot easier if CapA could turn this equity into capital injection into CapA in order to get out of PN17 early, as well as reduce its debt level.
As soon as PN17 lifted, with its EPS of 30c, or even higher, share price of CapA could have easily doubled! That's the reward investors are hoping for!

A big miscalculation by Tony!!! He does not understand typical Malaysian!
Giving freebie to Malaysian is okay. But if you asks Malaysian to fork out money..... hmmmm.... that's not a good idea! LOL ..... especially Ringgit is at its lowest against USD. But at the very least, he did give the FIRST offer to CapA investors. Those with big pockets would still take up.

On the other hand, the plans did not explain:
1. How it solves CapA big debts.
2. How it helps CapA get out of PN17.
3. How is the future of CapA looks like, i.e. the EPS prediction. Especially on CapA's percentage holding on new AA group.

Hopefully a prospectus to be issued can explains all these questions.

Tony is very aggressive in expanding the fleet (currently at 200) to 300. He has been in level 3 difficulty and now only at level 1 difficulty so to speak if you are familiar with computer game!
You should see the Depreciation figures looming up (more new A320) hence probably affecting the profit margin during first 2 years. But it is okay as this is accrual accounting principle. Most importantly are fuel price, revenue, cash flow, operating fleet and debt level (and its PN17). You will see the fleet (operating asset est. USD $25 mil per used A320) is growing faster than the debt level (growing new A320 as not fully paid), hence gaining the ability to generate more cash flow in the future (as air travel is recovering at higher airfare). Hence, when Depreciation going down, the Profit will exponentially going upward.