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Air Berlin Ipo

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1. ¿Por qué Air Berlin quiere hacer una IPO? The decision of Air Berlin to launch an IPO is based on three main reasons that go along with the company’s corporate strategy. The company wants to raise gross proceeds of €350 million in order to fund the growth of its aircraft fleet, to pay off debt and to invest in sustainable growth. Hereby, 50% of net proceeds (total: €290 million) will be invested into purchasing 55 new aircrafts. Air Berlin wishes to expand its fleet by Airbus 320 airplanes, which will incur economic benefits as well as enable access to a broader pool of pilots. The expansion increases Air Berlin’s growth prospects and is predicted to consolidate its position in the European airlines market. Another 10% of the fund …show more content…

If Air Berlin can use the public offering to reduce debt and become profitable as well as strengthen its positioning, there are future growth prospects and the IPO might be reasonable. For the company to grow the IPO is essential. Although growth prospects are only moderate and competition is high, we believe that the process of IPO is the right movement. Air Berlin needs to invest and therefore its is necessary to make funds available. 3. ¿Qué precio le pondrías a la acción de Air Berlin? Usá los múltiplos de sus comparables para llegar a ese valor (IMPORTANTE: justificar cuál o cuáles son los mejores comparables). In order to find a share price for Air Berlin we will first of all look at some multiples that compare the company with the industry-average or competing firms. P/E Ratio: The Price-Earnings-ratio gives an idea about the growth opportunities of a company. As to compare we used the Peer Analysis by Morgan Stanley that predicted a P/E ratio of 8.1 for 2007. Air Berlin is therefore much less valued as the competitors like Ryanair (13.6), easyJet (14.5), Southwest (19.4) or even Air Asia (73.9). The actual average of P/E ratio in air transport lies at 15.77 that does reflect Ryanair, easyJet and Southwest. Air Asia comes up with a high valuation as it was in times of high growth in 2006 and investors

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