By selling to Nanshan AIZ has avoided the possible $1 billion capital raising, but at what cost?
AIZ are receiving 33 cents per share [A nice premium to the 30c price paid by HNA and the 28c share market price]
This gains $232 million, plus lets assume that AIZ are able to sell their remaining 2.5% stake for the same 33c price.
That provides a total of $261 million for the sale of AIZ's total stake in VAH.
BUT "The Kiwi carrier has spent an estimated A$373 million building up and maintaining the Virgin stake since 2011." This deal to sell the AIZ stake at 33 cents realizes appox. a $112 million dollar loss for AIZ and its shareholders.
This equates to a 30% loss on the investment in VAH in 5 years.
I can't help wondering how many better investments AIZ could have made with their $373 million.
Even QAN has made a 60% gain in SP since 2011.
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