Ultimately it is the holding company who'll bite the bullet on the combined group. Correct BA and IB are separate entities but at the end of the day either one could bring the other one down. IAG is the listed company on both stock markets and all profits and losses are quoted as one combined company.
It doesn't stop IAG selling BA or IB to the highest bidder though, or maybe a separate relisting on the UK or Spanish markets.
What if something horrible happened? For example, what if IB went bankrupt? If the holding company itself didn't co-sign on IBs debt, it isn't liable for the loss. Instead, IAG would record an approx £2 billion write-off in its net worth as a capital loss on IAGs shares of IB. That alone would destabilise confidence in IAG running BA.
Last edited by Watersidewonker; 30th Nov 2012 at 13:49.