a corporate raider would have sold off every division they could make money out of and trousered the lot. Step 2 is to load the company up to its eyeballs in debt, float the company back onto the exchange selling the shares at hugely inflated shares and trousering the the rest after maybe a year or so in private hands.
When the proverbial hit the fan they'd be long gone (sop for foreign restructures).... Indamiddle
I alluded to this earlier. A private equity play would do just that; pay themselves off, asset strip, refinance, float and run! My connections at the Silver doughnut let slip that ultimately it mattered little what happened as the public were on the hook anyway, national interest and all that!
- The Frequent Flyer business was segmented by Mr Dixon in 2004,
My suspicion is that although the liability for a Frequent Flyer business is in the airline seats, sold off to another 'investor' the loss was borne elsewhere, should the airline collapse
- APA consortium use the money from this sale (FF) to pay themselves out, further reducing their exposure.
- The covenants on the short term debt would likely have required refinancing within twelve months or so.
- Debt load increases as new debt is higher priced
- Cash flow demands are higher to service debt load.
- Business 'management' chainsaw workers conditions
- A chopped down version refloated
- They all run away with wheel barrows full of money.
Sitting on the outside of this transaction is hard to gauge the debt load and cash flow projection. Suffice to say any negative impact on cash flow, say like a GFC may have destroyed the company.
As they are fond of saying in private equity
'
Privatise the profit and socialise the loss'