Wirraway
17th Apr 2004, 04:34
Sat "Weeekend Australian"
Skywest takeover looms
By Geoffrey Thomas
April 17, 2004
CONSOLIDATION of Australia's often turbulent regional airline sector has drawn closer, with a looming $10 million-plus takeover of Perth-based Skywest Airlines.
Skywest chairman Pat Ryan confirmed yesterday that the airline's board had received a letter of intent from an existing shareholder to mount a takeover bid at 20c a share for all the airline's privately traded shares.
Mr Ryan said the offer was conditional on confidentiality but Skywest was required to make disclosures to the Australian Securities & Investments Commission and had done so.
Industry sources suggest the buyer is Singaporean Lim Kim Hai, who is understood to be a shareholder in Skywest and is part of a consortium of investors which controls Sydney-based regional airline Rex Aviation.
The Singaporean interests are thought to own up to 20 per cent of the stock after buying shares from other Skywest investors.
"At this time the board advises shareholders to seek professional advice in relation before any dealings with their shareholdings," Skywest said last night.
Skywest and Rex rose from the ashes of Ansett Australia. Rex is the new face of the merged Hazelton and Kendall Airlines. Skywest and Rex have held discussions over the past year on various levels of co-operation to cut costs.
Skywest chief executive Scott Henderson has also held discussions with Virgin Blue executives but those were termed more a "courtesy call" than serious discussions.
Skywest is in an alliance with Qantas, which includes frequent flyer redemption.
At the same time, Perth-based Skippers Aviation, owned by Stan Quinlivan, has been approached by Singaporeans expressing interest in his airline.
"I will listen to any serious proposition but no formal offer has been made," he said.
Skippers has more than 18 turbo-prop aircraft ranging up to 36-seat Dash 8s and mainly operates mining charters. It has recently been granted services from Perth to Monkey Mia and Geraldton, putting it in direct competition with Skywest.
Skywest has five 46-seat Fokker 50s and one 100-seat Fokker 100, with another for delivery in early May.
The airline operates a number of routes in Western Australia's southwest, where it enjoys a government monopoly that will be reviewed later this year.
The Fokker 100 is used on an Argyle Diamond mining contract and operates an RPT service to Broome.
Skywest will use the new Fokker 100 to expand its RPT flights to include Perth-Karratha-Port Hedland-Darwin.
The airline plans to double its Broome services and will introduce three weekly Broome-Darwin flights and new services between Perth, Karratha and Port Hedland.
The later flights may strain its relationship with Qantas as Perth-Karratha is Qantas's most profitable West Australian route.
Skywest recently posted a half-year net profit of $1.8 million on revenues of $24.2 million. Mr Ryan recently told shareholders the airline was on track to record a full-year net profit of $2.4 million on revenues of $46.6 million.
Last year the airline restructured its debt with a $4.2 million capital raising through a convertible note issue.
For the year to June 30, 2003, Skywest posted a $546,000 net profit, which included a $3.7 million gain from the restructure of the lease liability on its fleet of Fokker 50 aircraft.
The Australian
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Skywest takeover looms
By Geoffrey Thomas
April 17, 2004
CONSOLIDATION of Australia's often turbulent regional airline sector has drawn closer, with a looming $10 million-plus takeover of Perth-based Skywest Airlines.
Skywest chairman Pat Ryan confirmed yesterday that the airline's board had received a letter of intent from an existing shareholder to mount a takeover bid at 20c a share for all the airline's privately traded shares.
Mr Ryan said the offer was conditional on confidentiality but Skywest was required to make disclosures to the Australian Securities & Investments Commission and had done so.
Industry sources suggest the buyer is Singaporean Lim Kim Hai, who is understood to be a shareholder in Skywest and is part of a consortium of investors which controls Sydney-based regional airline Rex Aviation.
The Singaporean interests are thought to own up to 20 per cent of the stock after buying shares from other Skywest investors.
"At this time the board advises shareholders to seek professional advice in relation before any dealings with their shareholdings," Skywest said last night.
Skywest and Rex rose from the ashes of Ansett Australia. Rex is the new face of the merged Hazelton and Kendall Airlines. Skywest and Rex have held discussions over the past year on various levels of co-operation to cut costs.
Skywest chief executive Scott Henderson has also held discussions with Virgin Blue executives but those were termed more a "courtesy call" than serious discussions.
Skywest is in an alliance with Qantas, which includes frequent flyer redemption.
At the same time, Perth-based Skippers Aviation, owned by Stan Quinlivan, has been approached by Singaporeans expressing interest in his airline.
"I will listen to any serious proposition but no formal offer has been made," he said.
Skippers has more than 18 turbo-prop aircraft ranging up to 36-seat Dash 8s and mainly operates mining charters. It has recently been granted services from Perth to Monkey Mia and Geraldton, putting it in direct competition with Skywest.
Skywest has five 46-seat Fokker 50s and one 100-seat Fokker 100, with another for delivery in early May.
The airline operates a number of routes in Western Australia's southwest, where it enjoys a government monopoly that will be reviewed later this year.
The Fokker 100 is used on an Argyle Diamond mining contract and operates an RPT service to Broome.
Skywest will use the new Fokker 100 to expand its RPT flights to include Perth-Karratha-Port Hedland-Darwin.
The airline plans to double its Broome services and will introduce three weekly Broome-Darwin flights and new services between Perth, Karratha and Port Hedland.
The later flights may strain its relationship with Qantas as Perth-Karratha is Qantas's most profitable West Australian route.
Skywest recently posted a half-year net profit of $1.8 million on revenues of $24.2 million. Mr Ryan recently told shareholders the airline was on track to record a full-year net profit of $2.4 million on revenues of $46.6 million.
Last year the airline restructured its debt with a $4.2 million capital raising through a convertible note issue.
For the year to June 30, 2003, Skywest posted a $546,000 net profit, which included a $3.7 million gain from the restructure of the lease liability on its fleet of Fokker 50 aircraft.
The Australian
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