AviaAM Leasing being taken under at PLN 5.62

Last year I initiated a small position in AviaAM Leasing AB that is now being taken under at PLN 5.62/share. While I never wrote about the company on my blog, I got a fair number of emails from people asking what the implications are and if there are any alternatives like I’m some expert on Polish securities laws (hint: no). Unfortunately, I don’t think there are any good options here. The group of insiders control 78.27% of the outstanding shares right now. Hitting the 80% threshold in Poland is enough to delist the shares from the stock exchange, and after hitting 90% ownership they can initialize a squeeze-out. I don’t know if there are even appraisal rights available for shareholders in a squeeze-out, but it’s a fair guess that it’s not worth the trouble for small foreign holders to go through that process.

So, as a (small) shareholder you can elect not to tender your shares in the tender offer. But the most likely result is that the only effect of that action is that you delay the payment for your shares. Additionally, sometimes getting paid through a squeeze-out procedure has negative tax consequences since in some countries it can be treated like a dividend (no idea how this works in Poland, but it is certainly a risk). So to summarize: I think we just got screwed and there is little we can do about it…

The only positive is probably that this confirms that it was indeed a cheap stock…


Author is long AviaAM Leasing

9 thoughts on “AviaAM Leasing being taken under at PLN 5.62

  1. pogonific

    Wow! That’s not even above the price of the last 7 days! Brutal!

    I’ve been keeping an eye on Unimot but this puts me off Poland.

    1. Alpha Vulture Post author

      Actually, I think I was a bit too fast in this post. AviaAM Leasing is listed in Poland, but the company itself is Lithuanian. So while the Polish rules apply for delisting from the stock exchange, Lithuanian laws will apply for the squeeze-out. And based on this: https://www.ibanet.org/Document/Default.aspx?DocumentUid=820DFB1E-692D-48A2-8C2F-518D0D730439 the situation in Lithuania isn’t so bad. The insiders will need to acquire 95% of the shares before they can initiate a squeeze-out, and shareholders do have appraisal rights (and apparently it is possible that one shareholder seeking appraisal is potentially enough to delay the whole squeeze-out and to receive fair value).

      So perhaps holding out is not such a bad idea after all.

      1. mark

        So that means you would hold out, seeing AviaAM getting delisted, speculating on other shareholders seeking appraisal? You would risk being stuck with shares in a Lithuanian company won’t be able to sell (easily).

  2. Basedshark

    Devastating result. I had high hopes for this one. Anyone who bought last week in the 6 PLN range must be furious right now.

  3. Ruerd Heeg

    Too bad this one did not work out. Thanks for letting us know these country specific take-over rules.

    I also found it interesting and very cheap but passed. I thought it was not cheap enough compared to other very cheap stocks. I investigated this company in June 2017. At that time the share price was 5.91 PLN. After discounting fixed but mobile assets as engines and aircrafts with 50% (somewhat arbitrary) my estimate for Liquidation Value/Market cap was 1.28. I suppose they have earned money since then and the price is lower now, so the undervaluation is even more outrageous.

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  5. Maciej

    They paid 1.20 PLN of dividend early this year and announced moving to HK stock exchange, also there was no squeeze out. Those who kept this paper have good insights for a future.


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