Should I take my allocation?, page-25

6 months ago a large broker had a target price of 65c. Who knows where VAH is going. There is little transparency on its fuel and forex hedging. Even actual operational cashflow is hard to gauge. Who could have predicted a crash to 20c?

Nevertheless, I think its a great punt at the current price. The majors have done the heavy lifting in the past by pumping $2b in the company at higher share prices. Some of the money has been lost but a big chuck went into capex, better lounges, better planes, seats, etc. Newcomers can now piggy back on this plus another $1b that the majors are pumping in. Basically, there is no dilution as the SP is the same as the CR.

The other good thing is the huge write off for 2016. The decks are being cleaned up for the new guy. It looks like what AJ did at Qantas ie. massive loss in one year and profit in the next. If all goes well with the restructure, I am expecting a big profit in 2017. DYOR