I have been searching for a reason for the 6% drop in AIZ SP today. Perhaps 2% could be explained by the very bad day on the XAO. The other 4% might be due to reports like this one from a Deutsche Bank analyst.
"According to Deutsche analyst Matt Peek, the divestment of Air New Zealand’s Virgin shares will realise 25c cash per share for the Kiwi airline which will help reduce its gearing levels by about 4 per cent. However, Mr Peek said that with $2.3 billion of new aircraft expenses until 2019, a special dividend may have to wait. “While there may be capacity for a special dividend we would not be surprised to see the board adopt a cautious approach to capital management for now,” he said."
The $262 million from the sale of the AIZ stake in VAH might be used to help pay for new planes and to help lower debt. Share holders might never see a special dividend, or a share buy back.
AIZ Price at posting:
$1.99 Sentiment: Hold Disclosure: Not Held
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