So now it all becomes clear......
Some of the financial press today is interesting...
*APA to rip $4bn out of Qantas
THE
consortium bidding for Qantas plans to take $4 billion out of the company in the first 12 months after being forced by recalcitrant shareholders to lower its minimum acceptance level to 70 per cent of the national carrier's shares.
APA's revised plans would see Qantas
return capital totalling $2.5 billion for the first 12 months after APA gained control and
pay out retained earnings of $1.5 billion.
A capital return may require shareholder approval but
APA believes it can vote and if that's right the outcome is a fait accompli.
Under the restructured offer,
Qantas' debt level will rise "significantly", with APA's intended
capital management plan requiring the airline to return $6 billion.
*Qantas chief executive
Geoff Dixon and chief financial officer Peter Gregg would be invited to remain on the board.
*As part of its revised bid for the company, APA said it would replace existing external directors with its own nominees and
might seek payment for consulting services to Qantas.
"
APA would consider making available its expertise and providing assistance to Qantas on all aspects of its strategy under an advisory services arrangement," APA said in its supplementary bidder's statement.
"APA may charge for the services provided under any such arrangement if appropriate. The amount and basis of any such fee has not been formulated at this time and would be subject to discussion with the board of Qantas at the relevant time."
Mr Mansfield said "there would be no taking fees for taking fees' sake" but APA said any such fees would be on arms' length commercial terms.
*..... Qantas to date has paid fully franked dividends, the payment
foreshadowed by APA is likely to be "predominantly" unfranked,
*Mr Mansfield said there would "possibily be some changes" to senior management contracts if the company remained public.
But he added that no firm arrangements had been discussed with
Qantas executives who would have collectively stood to benefit from the company's privatisation through ownership of APA shares.
As part of the original APA offer, senior Qantas executives were being invited to roll shares accumulated during 10 years since the airline was privatised into a share in APA at the fully paid-up value.
Beyond that, they could access shares in a share bonus scheme.
Executives were to be provided with interest-free purchase loans by APA which would be limited-recourse. Under the original offer they also stood to receive increases in their annual salaries as well as bonuses of up to 200 per cent of the cash component of their base salary from next year.
But if Qantas remained listed, it would have to retain public company-style management incentive schemes.
Anyone else feel like participating in a latter day French style Revolution???
