REG - Amedeo Air Four Plus - Factsheet

Amedeo Air Four PlusAnnouncement

09/08/2024 07:00

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RNS Number : 8004Z  Amedeo Air Four Plus Limited  09 August 2024

9 August 2024

 

AMEDEO AIR FOUR PLUS LIMITED (the "Company")
(LSE: AA4, LEI: 21380056PDNOTWERG107)

Factsheet

 

The Company announces that its factsheet for the period to 30 June 2024 is
now available on its website at http://www.aa4plus.gg (http://www.aa4plus.gg)
. An extract from the Chairman's statement within the factsheet is reproduced
below.

 

The past year has seen rapid changes in the aviation industry with strong
airline performances from our two lessees, Emirates and Thai Airways, as
passenger traffic continues to improve. Boeing's travails are front page news,
less so are the continuing labour and parts supply issues which are hindering
efforts by equipment manufacturers to fill the supply gap left by COVID
shutdowns. Whilst some airlines are still paying off government financial
support from 2020, others are placing large orders for new generation
aircraft. There is increasing evidence that cost pressures, notably fuel and
staff costs, are causing excess capacity in some areas.

 

Your Company continues to show strong financial performance with the cash
flows from Emirates supporting the dividend payments to Shareholders. Whilst
the lease rentals from Thai do not provide dividend income to the Company,
nevertheless, due to the lower interest rates achieved by the existence of
highly favourable derivatives, they act to reduce outstanding debt.

 

The recent news that Emirates intends to upgrade all its A380 aircraft which
do not currently have Premium Economy seats should be supportive of values
especially since doubts continue over the entry into service date of the
largest available replacement, the Boeing 777X. Emirates financial results
were outstanding and the A380's biggest supporter, Sir Tim Clark is at the
time of writing still at the helm. However,  the residual value of the
Group's Assets is key to the value of the Group to shareholders. The only
empirical evidence of value lies in the transactions by other investment funds
that have reached maturity where sales have been concluded to Emirates. Recent
news concerning progress made by Boeing with the 777X, further increases the
uncertainty surrounding the future of the A380 and so your Board remains of
the view that these transactions are not persuasive.

 

Thai Airways has placed a large order for new Boeing aircraft and remains on
track to emerge from rehabilitation in 2025 with reduced debt, increased
capital and a slimmed down workforce.

 

To provide an update on our review of strategic options available to the
Company, I hope investors will not mistake our comparative silence on this
topic as lack of effort. A great deal of work is being done in assessing the
best way forward, with a number of different industry participants and
advisers including our asset manager, Amedeo Limited.

 

Whilst the Group's fleet is not the most complex, it is not the simplest,
either. One of our aircraft types, the A380, is less liquid given the shallow
operator base although the good news flow I refer to above should support
stronger valuations.  In addition, one of our lessees is still under
bankruptcy protection, and this is discouraging to investors. Consequently, in
weighing up the possible alternative ways forward - including running off the
leases as is or selling the whole or a part of the portfolio now or over time
- in terms of value to you, our shareholders, is not straightforward.  Your
Board remains committed to identifying the best value for you overall,
including assessing the return of cash to you, as we consider prudent, along
the way. We intend to provide an update to Shareholders later this year.

 

Finally, I would like to take the opportunity to thank our two outgoing
Directors, Laurence Barron and Mary Gavigan, for their diligence and
commitment during their time in office. We welcome Eithne Manning whose deep
leasing industry experience will be relevant in our ongoing review.

 

Robin Hallam

 

For further information, please contact:

 

JTC Fund Solutions (Guernsey) Limited

+44 (0) 1481 702 400

 

Panmure Liberum Limited

 

Chris Clarke / Darren Vickers

+44 (0) 20 3100 2000

 

About the Company

 

The Company is a Guernsey-domiciled company, with shares admitted to trading
on the Specialist Fund Segment of the London Stock Exchange's Main Market
(LSE: AA4).

 

The Company's investment objective is to obtain income returns and a capital
return for its Shareholders by acquiring, leasing and then selling aircraft.

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