Remaining 49% of NATS to be privatised

[rodan]

The Telegraph (http://www.telegraph.co.uk/finance/autumn-statement/12016833/Autumn-Statement-2015-RBS-privatisation-stepped-up-as-Government-looks-to-offload-other-state-owned-assets.html) reports that the government intends to sell off the remaining 49% of NATS.

[zonoma]

From the actual Spending Review:
2015 Corporate and financial assets
1.302 The government is seeking up to a further £5 billion of corporate and financial asset sales by March 2020, building on successes in the last Parliament. Through the Spending Review up to £4.6 billion of assets have been identified. Subject to a value for money assessment, the government will:
•allow Network Rail to sell assets and re-invest proceeds in rail infrastructure
•press ahead with the privatisation of the Green Investment Bank with a sale expected to be concluded during 2016-17
•explore the sale of the government’s 49% shareholding in NATS (air traffic services)
•consult on options to move operations of the Land Registry to the private sector from 2017
•develop options to bring private capital into the Ordnance Survey before 2020
•sell Department of Health (DH) corporate and financial assets: Community Health Partnerships subordinated debt and Credit Guarantee Finance lending to Private Finance Initiative projects

[anotherthing]

They have 'explored' the possibility before... It is an asset to them, they would be stupid not to declare it in a spending review and to state they will 'explore' the sale.

Doesn't mean they will do it.

Given the current security climate, it would be difficult for them to justify selling off the control of sovereign skies

[AyrTC]

Our skies are not for sale. I think I may have heard that before somewhere:=

[Gonzo]

I've always wondered about that....

If, for example, NATS was fully privatised, in what way would the UK not have 'control' of its 'sovereign skies'?

Would the commerical shareholders of NATS magically have a say in whether the UK ADIZ is no longer monitored? Or a say in scrambling QRA?

Fully commercial companies have provided aerodrome and approach services for years, has there been a problem with that, or do UK 'soveriegn skies' only exist above FL100?

Or are we saying that the CAA would no longer have any oversight of civil ATC procedures?

Or that new, privately owned NATS would ignore DfT policy?

Not saying I'm in favour of the UK government divesting their stake by any means, just curious. What do people think would happen?

[Sir George Cayley]

Depends on who buys it.

SGC

[Marchettiman]

Does anyone know what the Chinese for "cleared to climb and maintain 6000ft" is?

[ZOOKER]

Ey'up.......
Non-standard phraseology alert.

[Gonzo]

Sorry, thought there might have been sensible debate to be had.

One has learned one's lesson.

[Ceannairceach]

No doubt if the sale goes ahead that we'll become another of our national assets used to increase the income of another country's government.

[Jimmy5616]

What's 49% of NATS actually worth........Maybe £300 million based on current share price alone. Maybe more if there are a number of interested parties.

Even if it made £600 million it hardly seems a financially prudent move by the government to sell considering NATS makes reasonable profits.....potentially £80 million per annum into the governments coffers in the past few years.

[Murty]

I do love Labours criticism (which is a concern) of the governments possible sale of the remaining 49% stake in NATS, who quickly Labour take the moral high ground .



But deputy prime minister John Prescott was pressing ahead with the sell-off at the beginning of this week despite a threatened revolt by Labour MPs. Prescott wants to sell 51 percent of the state-owned National Air Traffic Service (NATS) to private businesses.
The move flies in the face of a clear pledge given by New Labour before the 1997 general election that "our air is not for sale".

[Max Angle]

If, for example, NATS was fully privatised, in what way would the UK not have 'control' of its 'sovereign skies'?
Precisely, its a non argument, it is the RAF and the rest of the UK's air defence organisation that controls and maintains the sovereignty of our airspace. NATS provide air traffic control services, two very different things.

[EastofKoksy]

NATS (en-route) is essentially a regulated utility. The principle that these organisations can make profits, pay dividends and have non-UK shareholders with very substantial stakes has been accepted for many years. In practical terms this makes ownership of the shares currently belonging to the UK government irrelevant.

[Gonzo]

Headset19,

Do you think Spanish ATCOs feel the same way about FerroNATS? They work for a company part owned by a British organisation.

Gatwick airport management don't seem to be worried that they've awarded the contract to a subsidiary of a German company, which is a relationship far closer than that of a partial shareholder.

I like to be presented with both sides of the story. I don't believe I've seen a cogent, descriptive case for why it would all end in tears. A lot of those against just seem to say 'because I said so, and if you don't agree with me you're stupid'.

If we have a more articulate case for the status quo, should we not be using it?

[saintex2002]

Well said, Gonzo !..

And, BTW, isn't it in the air to privatize the whole 9 FABs and turn them all into a Friends' Big One privatized ATM Co. ?..

Or are we ready to take it over and sell our skills to manage ourselves that f***in' SES they made for their freinds ?..

#EUATCOsCOLLECTIVE

#UnikKINDofSTUFF

@saintex2002

[tbwtg]

NATS (en-route) is essentially a regulated utility. The principle that these organisations can make profits, pay dividends and have non-UK shareholders with very substantial stakes has been accepted for many years. In practical terms this makes ownership of the shares currently belonging to the UK government irrelevant.


This principle may have been accepted in the UK for many years. The other "regulated" utilities in the UK have led to more-expensive energy, and fragmented and expensive public transport and water supply, all of which have acted as a brake on widespread development of these services in the UK, compared to those in other better-run European countries.

The German President, no less, took a different view on handing over air navigation services in that country to a completely private company.

FWIW.

[Del Prado]

Gonzo, I'm sure there are many roles and tasks that NATS undertakes that are of a sensitive nature as far as civil defence and intelligence are concerned. Would it really be in the UK's best interests to have that information passed to a foreign government?
Wasn't there a spying/bugging scandal with Huawei or another Chinese mobile phone manufacturer in the U.S.? (Implying clear links with commercial companies and state espionage agencies)

I'm with the poster above, why sell a company for half a billion when your getting a 10% dividend? The risk/reward benefit just isn't there.

[DC10RealMan]

Politics!

Private good, State owned bad.

Repeat again and again and again.

With apologies to George Orwell's Animal Farm.

[Gonzo]

So are our security processes in such a poor state that, say, a group of executives from the Universities Superannuation Scheme can walk into Swanwick and come away with sensitive documents?

Where do we think these future shareholders will be getting all this classified information from?

[The Many Tentacles]

I'd be slightly more concerned about the prospect of the pension scheme disappearing.

[zonoma]

How would the pension scheme be disappearing?

[The Many Tentacles]

It would disappear on the basis that a DB scheme wouldn't be in the best interests of whoever took it over and if I understand correctly, and it's possible I haven't, (in which case ignore this whole post) that a new employer only has to undertake to maintain the terms and conditions you were working under before.

The DB scheme would be a bit of a millstone to any prospective buyers though so it works both ways

[zonoma]

The DB scheme isn't in the best interests of the current share holders but they still have to maintain it. Any new share holders will not be able to close the scheme or stop paying into the scheme, so I don't see how it could "disappear"?

[hangten]

It would disappear on the basis that a DB scheme wouldn't be in the best interests of whoever took it over and if I understand correctly, and it's possible I haven't, (in which case ignore this whole post) that a new employer only has to undertake to maintain the terms and conditions you were working under before.

I think you're getting mixed up with the laws of TUPE. A new owner of 49% of NATS' shares is not a new employer, it's the same employer with a new shareholder. Every time IAG shares are bought and sold on the stock exchange the staff don't have to worry about a new employer.

A shareholder with that big a holding could put pressure on to the board to make any number of changes that might improve their return on investment, but they would have to know what they were getting themselves into when they first bought. That also assumes that one investor would buy the 49% as a whole, which I think is unlikely.

Finally, nobody 'takes over' the pension scheme. The responsibility for it rests with the trustee. The money in the pension scheme cannot be removed by anyone for any other purpose and hence it cannot 'disappear'. If a new shareholder did not demonstrate as much support for the scheme in the future then it could result in some difficult conversations between NATS and the trustee about making good any deficit that might exist.

[jmmoric]

I don't get it, how can a privately owned company have any interrest in stocks from a company, that's not allowed to generate a profit? Other than what is needed for investments in future upgrade/development?

Doesn't ICAO state you're not supposed to take more from the airliners than needed to keep operations running (included future investments)?

(Enroute that is, I suppose TWR/APP part is a little more on normal business terms)

[The Many Tentacles]

I think you're getting mixed up with the laws of TUPE. A new owner of 49% of NATS' shares is not a new employer, it's the same employer with a new shareholder. Every time IAG shares are bought and sold on the stock exchange the staff don't have to worry about a new employer.

You're right, thanks for correcting me :O Ignore me.

[anotherthing]

All this getting our knickers in a twist over whether or not security would be compromised is just noise... the fact is, as mentioned above, that the money raised by a sale of NATS is peanuts compared to the money the government will get if they hold onto their share and continue to get dividends.

The sale price would be surpassed almost within the term of a government. The sale does not, apart from getting a quick buck, make any financial sense.

[kcockayne]

And that, anotherthing, is exactly why they will go ahead & do it !

[LostThePicture]

....the fact is, as mentioned above, that the money raised by a sale of NATS is peanuts compared to the money the government will get if they hold onto their share and continue to get dividends.

The sale price would be surpassed almost within the term of a government. The sale does not, apart from getting a quick buck, make any financial sense.

An alternative view: NERL is continuously having its future profits squeezed from all sides, NSL are failing to compete profitably against other ANSPs in the airports environment. Arguably, the government will never get a better chance to sell their holding at a premium price.

I'm not saying it would be a great decision but I can understand why they would give it some careful consideration.

LTP

[RomeoTangoFoxtrotMike]

Gonzo, I'm sure there are many roles and tasks that NATS undertakes that are of a sensitive nature as far as civil defence and intelligence are concerned. Would it really be in the UK's best interests to have that information passed to a foreign government?
Wasn't there a spying/bugging scandal with Huawei or another Chinese mobile phone manufacturer in the U.S.? (Implying clear links with commercial companies and state espionage agencies)

So are our security processes in such a poor state that, say, a group of executives from the Universities Superannuation Scheme can walk into Swanwick and come away with sensitive documents?

Where do we think these future shareholders will be getting all this classified information from?
They'll be getting it from all of the backdoors built into network infrastructure, supplied by the cheapest bidder, probably Huawei, regardless of who owns NATS :E

[3miles]

If you don't see any problem with a country like China owning NATS and the potential problems this creates for national security then you really are management material.

What like all of our power, water and other utilities are already owned by non U.K. Companies? We don't own a single utility anymore - think more risk that they turn the juice off and water than I cant go on my holidays.

Not saying think it good idea - don't think it good we sold all of those off to Germans, Spanish, French and Chinese already - even just down to fact that all those profits go out of the country, but in reality there no issue who owns air traffic and remember already NATS is partly privatised - there many options as to how it could be sold and split up. And the regulation of it always be government.