I have an alibi - when did it happen ?
Quote:
Originally Posted by
Roger
LOL for someone who said they weren't going to comment I think you might have tripped over your own paws there Paper Tiger :)
It was not me - it must have been written by another Paper Tiger.
Not sure there is any point in such speculation but seeing as you asked
Quote:
Originally Posted by
Joshuatree
What if the Govt are selling their shareholding?. Any negatives there?
LOL You've been reading too many of Marilyn Munroe's posts Joshuatree.
As you know already the Government's majority controlling interest protects Kiwi's national interests and provides a reliable source of new capital if for some unknown reason the airline needed it in the future. Something many people aren't aware of is that Government approval is required before any shareholder can own more than 10% of the airline.
This is purely speculative but in my opinion if for some reason the Govt wanted to remove those safeguards, (not that I think this is a good idea and is counter intuitive to protecting our national interest) you can well imagine a carrier like Singapore Airlines being able to borrow cheaply on the international debt market at 2-3% acquiring the airline at a significant premium to the current market price and based on a PE of say 10 giving an earnings yield of 10% this would be strongly EPS accretive for them from the get-go.
Disclaimer: I am not aware of any speculation in business or Govt circles or in any media channell which might suggest this is even a vague possibility.
Only our dear friend Marilyn Munroe's posts suggest this is the best strategy for the Govt.
Marilyn explains why the Govt. should sell without the jibber-jabber.
Have you heard of the Greenspan Put? This refers to an implicit understanding that should things go pear shaped for Wall Street Banks US Federal Reserve Chairman Alan Greenspan would flood the financial system with so much money these banks would be able to survive. Many commentators blame the "Alan's got our back" meme for banks trading recklessly leading to the Global Financial crisis.
Many of you will be aware that I have urged the Government sell its share in Air NZ. The colourful language I used may have lead some of you to conclude I was a loud mouthed troll. Maybe I am, but there is some serious thinking going on behind the noise.
Why do I want the Government to sell? Because the airline operates under the protection of a Cullen Put. Some believe the government has an obligation to shovel cash into the airline to keep it flying if we have an Ansett MK II.
Why should the government be called on for this financial support when it has more pressing calls on its cash for things such as mental health treatment debt repayment and adequate policing. Should the airline go down does it really matter? International routes are already well served by other airlines and I am sure there would be others willing to step into the void left by the airline domestically.
By selling the government would gain a descent wad of cash and free itself from the contingent liability of the Cullen Put.
Boop boop de do
Marilyn