A BIDDING battle is under way as shareholders jockey for best position ahead of the release of Skywest’s prospectus on October 11.
Singaporean-based takeover suitor CaptiveVision Capital announced its bid had risen to 23 cents from 20 cents a share.
As that news was filtering in, one or more shareholders were buying shares at 24 and 25 cents a share.
About 1.1 million shares were traded at the 25-cent/share mark.
Skywest managing director Scott Henderson said 6.4 million convertible notes had been converted, about one quarter of the notes issued.
He said about 500,000 options had also been exercised.
The Skywest prospectus aims to raise at least $4.1 million for a 21 cent/share offer that comes with an attaching 1 cent option, making a total 22 cent parcel deal.
The offer is fully underwritten by Patersons Securities.
The money will be used for working capital and to pay out a $1.3 million loan from the Ansett administrator.
Mr Henderson said he was heartened by the amount of activity prior to the release of the regional airline’s prospectus.
"The level of jockeying reflects the performance of the company at the moment," he said.
The company’s results did take a pounding, with profit downgraded considerably from $2.4 million to about $700,000.
That downgrade was largely due to problems with bedding down the company’s jet fleet.
However, in the first quarter the company enjoyed extremely high passenger numbers and, Mr Henderson said, the costs of the jet fleet was now behind the company.
The issue of the prospectus has not, however, dampened the ardour of the airline’s takeover suitor.
CVC managing director Jeff Chatfield told WA Business News that the company was "fairly relaxed" as to whether Skywest was a listed entity or not.
He is also sticking to his belief that Skywest may not become listed.
"There are a lot of conditions that still have to be met before Skywest is listed," Mr Chatfield said.
"We, as the largest shareholder, don’t support Skywest being listed."
He said CVC’s stake in Skywest was now about 36.5 per cent, something disputed by Mr Henderson given the recent convertion of notes and exercise of options.
Mr Henderson put CVC’s stake at about 31 per cent.
Mr Chatfield said CVC planned to grow Skywest through its links with Asian travel industry and airline operators.
Two of CVC’s shareholders, A-Sonic Aerospace and China Xpress, are behind the formation of a low-cost airline flying into China.
China Xpress is establishing a network of travel agencies around the world. It is understood to own about 4,000 agencies.
Mr Chatfield said CVC had no plans to merge Skywest with another airline but did have plans to make the best use of the networks it had to grow the regional airline’s business.
He said CVC also intended to make investments in Skywest to help grow the airline.
