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View Full Version : The Demise of Air Macau?


bushveld
9th Jul 2008, 12:51
Air Macau crashes PDF Print E-mail
Wednesday, 09 July 2008

by Rodolfo Ascenso

Air Macau is close to bankruptcy. With losses up to MOP 100 million just within May and June, following another MOP 100 million during the first quarter of this year, chairman of the Board of Directors Zhao Xiaohang, had no choice but to ask for a meeting of shareholders “in order to have a resolution”.
In a letter dated July 1, 2008 Zhao stated he, “with deep regret” is forced to inform the shareholders “that since April 30, 2008 the net worth of the company had fallen below half of the value of the company’s capital”, and had triggered the Macau Commercial Code Article 206.
Article 206 of the Commercial Code states that when a company administration apprehend to have losses up to half of its capital, the body must propose that “the company be dissolved or that the capital be reduced, unless shareholders, within 60 days from the resolution that arises from such a proposal, pay amounts in money that replenish the assets to a measure equal to the value of the company capital”.
Air Macau’s authorised capital is supposed to be MOP 400 million. However, a search in the Trade Register shows that the decision to upgrade from 200 million to 400 million was never registered. Nevertheless a decision in that direction was made and approved by shareholders and the capital realised.
This question is important if the shareholders’ decision is carried out via the third option.
With losses of MOP 220 million accumulated over the past years, as well as MOP 105 million during the first quarter of 2008, and more than MOP 100 million during the past two month, it is still not clear how much shareholder have to input.
Nevertheless, it is already clear that the decision will be made by the main shareholder of Air Macau, Air China Limited.
Owning 51 percent of the capital, Air China Limited has the final word as they hold the responsibility for the present situation.
In fact, the actual board of directors, with David Fei as CEO, was named and supported by Air China Limited for the last year despite the accumulated losses.
Macau Daily Times understands that other shareholders are not keen to inject more money into a company that has a record of losses in a region where business is flourishing.
Thus, the future of Air Macau is in the hands of Air China Limited and it is still unclear if they wish to inject more money or just allow Air Macau to go into bankruptcy.
Air Macau is owned by Air China Limited (51 percent), SEAP – an investment fund of Portuguese airline TAP – (20 percent), Stanley Ho’s STDM (14 percent), Evergreen Airways Service (Macau) (5 percent), Macau SAR Government (5 percent) and several others (5 percent).
So far the shareholders’ meeting (EGM) requested by the chairman of the Board of Directors had not been appointed.
An ordinary meeting of directors is scheduled for July 31.

Bored_as
10th Jul 2008, 04:25
Sounds like a walking disaster. Will they make payroll this month?

Bored_as
11th Jul 2008, 02:08
Air Macau is facing bankruptcy without fresh capital injection according to a report in the South China Morning Post.



The newspaper says the 14 year old old carrier is facing its biggest financial crisis on the back of soaring fuel costs.

Air Macau's largest shareholders are Air China, (51%), an investment fund of Portuguese airline TAP, (20%) and interests of casino magnate Stanley Ho Hung-sun (14%). The balance of shares are split between a variety of organisations including the Macau SAR government.

The South China Morning Post says shareholders have been called to a meeting later this month to discuss options for the airline's future.

"Air Macau said yesterday Air China and the Civil Aviation Administration of China had committed their support, ensuring the company would be sustained through the critical period," the newspaper reported. "Its pilots had also expressed support."

The carrier has been aggregating significant losses - estimated at US$13 million in the last two months, and the same amount in the first quarter of this year - about the equivalent of its capital.

Air Macau flies from Macau to 20 destinations including Taipei, Bangkok, Manila, Osaka, Seoul, Beijing, Shanghai and Kunming. But it has been facing increased competition from low-cost start-up Viva Macau and from other regional carriers, such as Bangkok Air which has just commenced flights to Bangkok. It is also facing a substantial loss of business as a transit point between Chinese cities and Taipei now that the Chinese government has allowed direct flights to Taiwan and the mainland.

One analyst told the South China Morning Post there was no chance of Air Macau going into bankruptcy.

"It is a matter of reputation and face for Air China to be present in Macau and Macau needs a home carrier as long as it has an airport," said Karen Chan, RCM transport analyst.

drool69er
11th Jul 2008, 03:40
Wow.....do you guys have singaporean snakes as managers as well???

tonylollo
11th Jul 2008, 05:48
and what about VIVA Macau, why are they not targetted they are loosing far more I bet:ok:

Bored_as
12th Jul 2008, 12:53
Fuel prices push Air Macau to cliff edge
Air Macau Company, the city's largest carrier, is on the verge of bankruptcy, a result of soaring fuel prices, according to agency reports.

It is the biggest financial crisis the carrier has faced in its 14 years of operation.

Shareholders in Air Macau include Air China, who holds a 51 percent stake, the investment fund of Portuguese airline TAP with a 20 percent, and Stanley Ho Hung-sun's Sociedade de Turismo e Diversoes de Macau (STDM) which owns 14 percent. The balance comes from Evergreen Airways Service (Macau), the Macau government, and several others investors.

The investors will meet later in the month to decide the fate of the carrier, which could involve either winding up the airline or injecting fresh capital.

The Civil Aviation Administration of China has also pledged its support for the airline.

Air China may buy out shareholders who are reluctant to commit further funds to the ailing carrier.

The airline lost around US$12.4m in the past two months, and the same around during first quarter 2008.

Earlier in the year, fuel prices forced Oasis Hong Kong Airlines into liquidation after only three years after it was founded.

Bored_as
16th Jul 2008, 03:43
Air Macau has become another victim of surging oil prices and is clinging to survival as it awaits help from parent Air China Group. According to China Business News, the Macau carrier posted a net loss in excess of MOP200 million ($24.6 million) in the first six months of this year, more than half of its registered capital of MOP400 million. Under Macau law, exceeding that threshold requires the company to either inject new capital or declare bankruptcy.
Air China Board Secretary Huang Bin acknowledged Air Macau's request for help and said CA will determine a solution with other NX stakeholders, including TAP Portugal's SEAP investment fund (15%), casino company Sociedade de Turismo e Diversoes de Macau (14%), the Macau government and EVA Air. CA holds a 51% stake.
In a company statement cited yesterday by the Macau Daily News, Air Macau said it has reached a strategic cooperation agreement with CA and that aid will be extended soon. Industry analysts are suggesting that the recently inaugurated flights across the Taiwan Strait will join oil prices in impacting NX's performance, especially when, as expected, regularly scheduled service begins (ATWOnline, July 9) (http://atwonline.com/news/story.html?storyID=13289). Currently, 60% its operating revenue is generated by transfers between the Chinese mainland and Taiwan. But Air Macau noted in the statement that CA will support its effort to secure "special routes" from CAAC after the regular cross-strait flights begin.

by Katie Cantle