SIA buys $700 million oz this week
 

Heard on 2GB that SIA has bought $700 million in aussie dollars. What are they waiting for

What is 2GB?

2GB is a Sydney radio station.

If they buy the thing now, they will get all it's debt too.

Why do that when you can wait for it to go belly up, pick up whats left in a fire sale and start again with all your 'variable' costs like pay and conditions slashed to the bone!! Hard choice. Work for 25% less or don't work at all.

Ain't pretty but it works for them!!

Buy A$ cheap, if you don't need them later sell back. Held for a little while and probably make a nice little profit.

Well, at least it will pay the redundancy packages!

And, just maybe, thats a positive in that they weren't Kiwi dollars.

[ 28 September 2001: Message edited by: backspace ]

Spot on Keg. I do not understand why the administrators are trying to keep up this charade that Ansett is a going concern and someone should buy it.

Let the old girl die with it's massive debt,then start from the ground up.

Mind you, it is in the interests of the creditors if some sucker were to buy it now, but there are no more Alan Bonds arouind these days!!!

Devils advocate response!

The reasoning behind an impending SQ bid could be twofold. The first reason would be the AOC issue mentioned on other threads. If AN is bought before they go belly-up, then the AOC is still valid, however once the company is liquidated, the AOC lapses. This alone would still not explain why SQ would want to acquire billions in debt for an AOC that can be re bought/built for a few million at worst. Time, however, is of the essence, and should SQ take the firesale option the would have to wait until AN is dissolved (a few weeks at best), and then, and only then, begin the task of constructing a new AOC from scratch (and we all know how long that takes). All this while QF and DJ continue to quietly cement their new positions in the market. If SQ waits this long it may be too late. This would mean that if SQ still wanted to cut in on the Australian market, their options would be limited to a QF takeover (I'll leave your imagination to the parliamentary and shareholder fireworks that would erupt should this even be so much as mentioned), or a bid for DJ, who has already announced their intention to float publicly (though if the right money is on the table I'm sure Dicky would bite). Whilst DJ would be far and away the most attainable of the two, they dont have anywhere near the level of infrastructure that AN or QF have scattered around the place. Do they pay way too much to get the show on the road quickly, or play "beat the bomb" and risk losing the lot? I believe that it really is a case of being caught between a rock and a hard place.
The other reason is because, like most airlines at the moment, SQ is hurting from, amongst other things, reduced loads, and need to find more people to get on aeroplanes to ensure continuous viability. AN might offer a very useful short term feeder in an effort to convert a percentage of the (swinging voter style) travelling public to a new airline, long term, once things simmer down a bit. ANZ cut AN adrift once it 'became redundant', unfortunately it is not inconceivable that SQ could do the same once they were done. Depending on how much of AN's debt is in $AU, it might be a good time to buy, considering the level of the 'Aussie Peso'.

Actually, the statement regarding the liability may not be true in Ansett's case.

Graeme McMahon stated at a meeting of the Ansett Pilots Association yesterday, that there are mechanisms in place for the administrator to effectively nullify Ansett's debts without resorting to liquidation.

I don't know how, but it seems that someone can buy the mainline operation without inheriting the debt.

I sure as hell hope so!

Lacov

Re your Devils advocate response.

I believe the AOC could be migrated across a liquidation scenario without too much difficulty: - even if there was a break between the old owners and the new (whoever they may be - hopefully SQ).

Over to you.

Strobes_on,

Just curious as to how that might happen.
If the business is sold pre-liquidation (i.e. as a going concern), then corporate structure potentially remains intact. If the business is sold post liqudation then essentially what is being sold is a group of, potentially unrelated, assets. That is, without any corporate structure linking them, as all management has been dissolved. One of the big conditions of an AOC is appropriate corporate structure, therefore if this does not exist, the AOC is null and void.
Thats just my reading of it, any thoughts?

The Administrator can create two companies. They put all the assets in the 'good' company and all the debts in the 'bad' company. They then liquidate the 'bad' company and sell the good one.

Learning that stuff is why some of us do MBAs!

Granted, but the whole point is that the original management structure is no longer there. As you said yourself, they create two new companies, not just new owners. This would mean a new AOC, unless the administration of the new company could sufficiently prove to CASA that it was essentially the same company.

Don't worry chaps, it's all part of SQ's impending airline "alliance" that it has been working towards for years. When the pieces are in place, it'll drop Star quicker than you can say "Gee, didn't see that coming!!" ;)

:rolleyes: It's fascinating to read all this sheer speculation. The title of the thread says SQ bought Oz dollars, that's all. Anyone with an eye on currencies at the moment probably saw that as a good move, given the plunge of the AUD. They'll probably sell them in a month for 10% profit and that'll be that.

knackered:- I'm glad you pointed out the blindingly obvious, I was wondering at the quantum leap from someone buying Aus dollars to the purchase of AN.

Kind regards,

TheNightOwl.