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Friday, 30 August 2013

Revenge is mine

Over 20 years ago I worked on a deal to fund a Spanish airline, well actually let's not beat about the bush, it was Iberia, and the deal was quite complicated, but it was probably the lowest cost source of funds that the Spaniards could have found anywhere in the world (seriously sub-LIBOR), but it entailed a certain amount of risk.

The downside would be that if the deal was terminated early Iberia would have kept their annual savings to date but would have to refinance under a different structure, probably with the same funders. As it happened I closed the same deal a few months later with an American airline, OK, let's not beat about the bush, it was American Airlines, to fund two MD-11 aircraft for about $146 million, a sweet deal for them and a $2 million fee for us as I recall, but let's not dwell on that.

Back to Iberia.  After several trips to Madrid explaining the deal, faxes (those were the days) of term sheets, mark ups and negotiations between the airline and the investor, a big party of lawyers, arrangers and investors set off for a meeting in Madrid with the airline, and in particular with the fairly recently appointed CFO, Sr Enrique Dupuy De Lômé Chávarri, to finalise terms.

As we are about to start the meeting, Sr Dupuy stood up and said he had read the term sheet and he had decided that while he liked the low cost funding on offer, he wanted the investor to take all the risks. At which point the lawyers, arrangers and investors all stood up, shook hands (they were, if nothing else, polite), walked out and went home. The shortest meeting I have ever attended.

But yesterday, I received notice of an Extraordinary Shareholders Meeting of International Airlines Group (the holding company for BA and Iberia), with five items on the agenda, the fourth being the appointment of the very same Enrique Dupuy De Lômé Chávarri as an executive director of IAG.

Will he get my vote? Dream on, pal.

Wednesday, 28 August 2013

Syria: follow the money

There is lots of waffle in Westminster circles about Syria, military action/intervention, chemical weapons and a whole lot more, but what is it really all about?

The UK government and quite a few others are up in arms about supposed chemical weapons used by the Assad government and they may be right about them, but they were less up in arms when rebel forces allegedly used sarin bombs four months ago. But why would they want to get involved in a civil war in a foreign country thousands of miles away?

On the one hand we have a Russian backed Alawite-regime that is strongly allied to Iran, while on the other we have a Sunni-muslim rebel/opposition front, financially supported by Qatar and Saudi, but mostly Qatari.

Neither side is likely to be particularly friendly to the west.  Anything that keeps Russia and Iran away from the Mediterranean is probably a good thing while the rebels are filled with revolutionary elements that are abhorrent to their sponsors, so do we really want to help either side?

Well to get the answer we have to look at the interests of the sponsors, particularly the Russians and the Qataris.  The Qataris would like to build a gas pipeline to Europe, which would reduce the cost of gas in Europe and would eliminate the Russian monopoly on supply.  The Russians obviously would not like that, and thus happily support the Assad regime that is willing to keep out the Qatari pipeline.

So there you have it.  What this is really about is that both the Qataris and the Russians are quite willing to oversee the deaths of 100,000 civilians in Syria in order to maximise their respective gas revenues.

However parliament votes tomorrow, they will be focussing on the wrong targets.

Friday, 9 August 2013

The organisation whose hypocrisy knows no bounds

is the BBC of course.

The organisation that is willing to criticise the salaries and bonuses of bankers but not the pay-offs paid to its own staff (currently under investigation by the SFO according to Reuters, but not reported on the BBC ho actually claim there was no crime, and I don't remember any police investigation of bankers' pay), the organisation that is willing to criticise the phone tampering of other journalists but is curiously uncensorious about the kiddie fiddling of its own staff, which it is quite likely they had know about for years, has done it again (if you can follow the logic of such a long sentence).

The ASA has decided to investigate the banners on the back the Home Office's "go home or face arrest" vans following 60 complaints, although the ASA say that since the BBC started reporting the story they have received many calls of support.  The BBC run with the idea that even though the vans clearly say that they only apply to illegal immigrants, they are clearly threatening.

Now let us compare that with the behaviour of TV Licensing, like this:

A fairly common letter from TV Licensing, and typical of the letters they send, but one which is clearly threatening the recipient, even though the only reason for sending a letter is that the recipient doesn't have a TV license, which of course he is not obliged to have if he doesn't have a TV.  Nor is he obliged to answer the BBC's persistent mail.  But that doesn't stop the BBC sending  people an "Official Warning" that they are being "investigated".

Wednesday, 7 August 2013

Batting rule #1

Duck if you can get out of the way, hook if you really must, but never slash at a bouncer, Mr Panesar.

Where is Bongo-Bongo land?

The President of Gabon from 1967 to 1973 was Albert-Bernard Bongo.  On his conversion to Islam he changed his name to Omar Bongo, and remained president for another 30 years. He was succeeded by El Hadj Omar Bongo.

There were two acting presidents in 2009, Didjob Divungi Di Ndinge and Rose Francine Rogombé. Didjob did the job for 5 weeks and Rose blossomed for the next five months before the current president, Ali Bongo Ondimba, took office.

On that basis Bongo-Bongo land is Gabon..

Sunday, 4 August 2013

Gibraltar border row

The Spanish say that they are considering imposing a €50 fee for border crossings into Gibraltar.

There is of course only one sensible response to that.  Move the border 50 km further into Spanish territory.