Qantas sale

Mar 6th, 2007, 03:02 AM
  #1  
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Qantas sale

My feeling of outrage and unease has nothing to do with the survival of a well run airline. Nothing to do with whether it is Australian owned. Nothing to do with job losses.

It has absolutely everything to do with faceless individuals and funds borrowing money to buy an enterprise they think will make money for them.

Doesn't matter what the enterprise is - could be making cardboard boxes, or steel; could be a restaurant chain or a supermarket chain.

If it weren't for the REAL people involved I would wish these immoral, despicable and greedy people a big fall.

Trouble is there are real people involved and all the big cats always escape unscathed.

Capitalism gone completely, absolutely and totally mad.

Am I in alone in thinking like this.

A subsidiary question is why Howard has approved it. I find it difficult to understand why, in 2007, the govt of a first world country would still be following the failed policies of that witch Mrs Thatcher. It's 16 years since she went and still the leasons haven't been learned.

So sad.
chimani is offline  
Mar 6th, 2007, 09:14 PM
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He who pays the piper calls the tune!
Follow the litigation over whether Jetstar is covered by the Qantas Sale Act. If that fails get ready for asset stripping.
Saltuarius is offline  
Mar 6th, 2007, 09:31 PM
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I have no good feelings about this one, none at all. The institutional investors who these days control all large public corporations will vote with their calculators, and the body elected to look after the national interest, our federal government, has now let us know that it doesn't give two hoots. It will be a sad day when one of this country's greatest institutions is flogged off to MacBank and a bunch of anonymous Texans.
Neil_Oz is offline  
Mar 7th, 2007, 11:26 PM
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I don't like it one bit but capitalism rules these days. It'll be interesting to see if the safety record will remain unblemished. Also, I'm not surprised if the name will be changed to Quantas!
Cilla_Tey is offline  
Mar 8th, 2007, 03:05 PM
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Sorry, folks, what are you talking about?? Is Qantas being sold?
twoaussies is offline  
Mar 8th, 2007, 03:46 PM
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"Two Aussies" ... you must be a long way from home if you don't know. Yes.
To a consortium put together by Macquarie Bank. Google "Qantas Sale" and you'll be up to speed.
Bokhara is offline  
Mar 8th, 2007, 04:44 PM
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Hi, twoaussies. Yes, it's a private equity deal and as Bokhara says it's been orchestrated by Macquarie Bank, an octopus that already owns Sydney airport and the toll roads that lead to it, and a dizzying list of infrastructure around the world. One of the main partners is a Texas company.

To service the debt the consortium will take on, it looks like the outcome will be a sophisticated form of asset-stripping together with cost cuts. The consortium's spokesman, Bob Mansfield, a close associate of the Prime Minister, is making the usual reassuring noises, but from where I'm sitting it doesn't look good. "Hamburger Bob" Mansfield was formerly CEO of McDonalds Australia and Optus, and chairman of Telstra.

They've refused to deny that they'll send Qantas jobs off shore to low-wage countries, and the government has said it won't be "micro-managing" arrangements - translated, the new owners have a free hand.

I believe that as this is a private equity deal Qantas would be de-listed from the stock market and thus become much less publicly accountable.

The only thing that could stop the deal is existing institutional investors knocking back the $5.50 per share offer.

Neil_Oz is offline  
Mar 9th, 2007, 12:46 AM
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I am not happy about the sale of Qantas and can only hope that the shareholders reject the offer.
Neil you never miss a beat when it comes to knocking the Prime Minister. This time saying that he is a close associate of Bob Mansfield, do you know this personally or is it a belief? I suggest that he is not an associate of Bob Mansfield and when Mansfield stepped down from Telstra the Prime Minister was very pleased - not the form of a close associate I think. I suggest that you read the transcript from PM. The program is broadcast around Australia at 5:10pm on Radio National regarding Mansfield's resignation from Telstra. Whilst I wish that there was something that the Government could do about the sale of Telstra I am pleased that it does not step in over the heads of shareholders and stop them from doing what is their right to do seeing they are the stake-holders in the airline, not the Government.
LizzyF is offline  
Mar 9th, 2007, 03:29 AM
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Ah, Lizzy, spoken like a true believer in the "price of everything and the value of nothing".

As for shareholderes' rights. What we are talking about there is a system and a form of organisation invented in the 17th century. I guess it worked pretty well when the shareholders were people who invested in an enterprise because they knew at one remove or another the people who were going to run it.

It still worked, moreorless, when Stock Markets came along and people sold their shares to people they had never met, and who had never met the people who ran the business.

Then it got a bit more sophisticated; and people made a living as go-betweens between buyers and sellers.

I don't think I need to go on.

It's not a model that works very well for the 21st century.

One very obvious reason is that most people who own shares in a big corporation know nothing about it; don't understand how it operates; don't understand how the model operates. Their shares were bought for them by a "Fund Manager".

They don't vote except by proxy, which is in itself a tool invented so that a model that has passed it's time can still function.

I feel for the small suppliers, cos you can be sure as night follows day that one of the first things the new management team will do is to issue an edict that, where they can get away with it, debts will be settled after 60, or even 90 days.

Oh, yes, and they will asset strip like crazy.

As for Bob Mansfield - don't know - but will make it my business to find out.
chimani is offline  
Mar 9th, 2007, 11:32 AM
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Seeing that you know me so well that you can say I do not know the value of anything but think there is a price for everything may I suggest that you must be one of those tree hugging people who think that the world will stop for you if you don't like something and that anyone who does not agree with you 100% is a moron. Like death being inevitable there is really nothing we can do about the sale of Qantas whether we like it or not. Prior to a sale foreign ownership is 49%, after the sale foreign ownership will be 49% and the % that the Macquarie Bank will own should things go ahead will be 15%. Surely that is hardly anything to worry unduely about. We live in a democracy where people are able to invest in what they want to, within reason, and if you don't like it that way perhaps you would prefer to see a North Korean style government or a despotic South/Central American regime? I mean fancy people thinking they could invest their money in something that may make them money!!!!!!!! For SHAME
LizzyF is offline  
Mar 9th, 2007, 08:24 PM
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Good grief, Liz, I was convinced that you'd seen the light and become a tree-hugging disciple of Bob Brown when you moved to Tasmania.

Actually, I miss plenty of chances to bag our about-to-be-ex PM, partly because he's doing such a good job on himself that he doesn't need my help.

Yes, I do know that "Burger Bob" Mansfield is pretty thick with the PM, unless they've had a falling out very recently. It was in fact the Telstra board that levered him out of the job, along with his (and the PM's pal) Ziggy Switkowski, who was recently rewarded for coming up with a predetermined conclusion on nuclear power by being made chairman of ANSTO.

I must say I'm surprised to learn that our system has reached such a state of perfection, and its outcomes are so uniformly beneficial, that the only conceivable alternatives are those of North Korea or certain unsavoury Latin American regimes.

"...fancy people thinking they could invest their money in something that may make them money!!!!!!!! For SHAME"

- You seem to have made chimani's point very nicely, mon ami.
Neil_Oz is offline  
Mar 10th, 2007, 11:44 PM
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Neil, now you are just being naughty and if you keep it up I will tell everyone your wife wears men's socks!
LizzyF is offline  
Mar 15th, 2007, 03:25 PM
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Just by way of an update, it seems some large institutional investors are holding out, because Qantas was sitting on very positive profit forecasts that have now been released. To me this highlights the conflict of interest involved in Qantas directors and senior managers recommending a sale which would see them rewarded handsomely.

I read also that there's growing uneasiness in many countries about the proliferation of debt-fuelled private equity takeovers, partly because they're fundamentally a huge tax evasion scheme (the interest payments being deductible, of course).

I for one do think governments need to be more vigilant in regard to major national assets like the national flag carrier. Qantas has been a hugely successful and unusually profitable airline, and being based in Australia means that it has contributed considerably to employment in the aviation industry, foreign exchange earnings and tax payments. It is the world's second oldest international airline and its unrivalled safety record alone is a cause for pride.

Anyone for outsourcing maintenance work to Garuda? How about China Eastern standards of food and cabin service?

Even if the company remained 51% Australian-owned it would not be listed on the stock exchange and therefore lose the public accountability that confers.

Just have a look at what's happened at Sydney Airport since it was privatised and flogged to the ubiquitous Macquarie Bank, under a company headed by that other great mate of the Prime Minister, Max Moore-Wilton.
Neil_Oz is offline  
Mar 16th, 2007, 02:20 AM
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Well said, Neil.

And, of course, I do care that it's Qantas and not ABC cardboard box company. But you can't make a case using emotion.

As far as I am concerned the whole model is so outdated and so fragile that it's a health risk.

I guess none of us was around during the Great Crash. We had the mini "correction" in Asian markets in the late 90s. Something similar seems to be happening now.

Does anyone out there really know what will happen when the whole house of cards collapses?

The current (and to a non participant in the stock market, sudden) "proliferation of debt-fuelled private equity takeovers" (to use your words, Neil) is quite possibly a bigger threat to global security than anything the lunatic Islamist fringe can come up with.

Governments need to do something; and quickly.

Here's some thoughts from the Gruaniad in case anyone is interested.

http://business.guardian.co.uk/story/0,,2032860,00.html

http://business.guardian.co.uk/story/0,,2033122,00.html

Lizzy your faith in stakeholder power is touching. But there's something going on here that we all ought to pay attention to.
chimani is offline  
Mar 20th, 2007, 05:44 PM
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Have followed the philosophical debate with interest.
Now there is this issue of maintanence http://www.abc.net.au/news/newsitems...3/s1877613.htm
Saltuarius is offline  
Mar 20th, 2007, 06:30 PM
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And the issues that Saltuarius raises is before the sale!!!!!!!!!!!
LizzyF is offline  
Mar 20th, 2007, 07:52 PM
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Darn it, I keep seeing this heading "Qantas Sale" and thinking, oh! There's a ticket sale! No such luck.

Doesn't matter anyway because the tickets are now purchased (yes, on Qantas) and we will arrive on the Fatal Shore November 23 (okay, go ahead and groan, I know it is a bad one but I couldn't resist!)
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May 4th, 2007, 10:41 AM
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Well, the deadline for shareholder acceptance of Airline Partners Australia's offer passed last night. The minimum response wasn't met, so the deal is officially dead in the water, at least for the moment.
Neil_Oz is offline  
May 4th, 2007, 03:17 PM
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I may have spoken too soon - the consortium received a late offer which would take them over the necessar 50% mark and will apply to extend the offer period. Oh, well. It's only Australia's national flag carrier, after all.
Neil_Oz is offline  
May 5th, 2007, 07:26 AM
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Neil,

I am counting on you to know. How come a publicly listed company can be sold when only 50% of shareholders agree? Who sets the threshold?

I ask because I once worked for a small listed company that was eaten up by a very BIG company, and the threshold was a lot higher than 50%.

Do we know where the "late offer" came from?

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