Government looking at plans to buy shares in BA and other airlines
https://www.dailymail.co.uk/news/art...us-crisis.html
Good news for BA, bad news for BA shareholders |
UK Government and Taxpayers send hundreds of millions of pounds to Spanish company is not something the DM would normally approve of.
There are NO BA shareholders. People own shares in IAG. Something the DM appears not to recognise. Or is the DM advocating nationalising BA without compensation to its owners? Not even the Leader of Her Majesty's Most Loyal Opposition suggested that. |
Originally Posted by UKtravelbear
(Post 32214218)
UK Governmentand Taxpayers send hundreds of millions of pounds to Spanich company is not something the DM would normally approve of.
There are NO BA shareholders. People own shares in IAG. Something the DM appears not to recognise. Or is the DM advocating nationalising BA without compensation to its owners? Not even the Leader of Her Majesty's Most Loyal Opposition suggested that. |
Originally Posted by UKtravelbear
(Post 32214218)
UK Government and Taxpayers send hundreds of millions of pounds to Spanish company is not something the DM would normally approve of.
There are NO BA shareholders. People own shares in IAG. Something the DM appears not to recognise. Or is the DM advocating nationalising BA without compensation to its owners? Not even the Leader of Her Majesty's Most Loyal Opposition suggested that. sorry you are factually incorrect here and the press are correct. There is one BA shareholder. It is IAG. BA is a subsidiary entity of IAG and a separate legal entity. It is therefore quite possible that the U.K. government provides new funds - as equity (probably preferred equity with higher voting rights), and dilutes down the IAG stake in BA, possibility to a minority. It would then be - at a later stage - for the U.K. state to decide what to do: Hold, sell back to IAG (if they say had a rights issue), or sell in the market themselves. BA behaviour so far isn’t helping: Cruz’s failure to take a salary cut, and the way how BA handles its staff after some clear government messages means that perhaps a government role is more likely - and like the US state involvement in key banks in 2009, the government might decide that participation is compulsory for every systemic player in an industry it provides funds to. |
Originally Posted by UKtravelbear
(Post 32214218)
Or is the DM advocating nationalising BA without compensation to its owners?
|
astute observers will recall that even though not needed, jPMorgan was forced to take US government equity in the 2008/09 bank bail out - with the controls that came with that. Could it be that HM Treasury will be looking at that model?
|
Every private company that accepts public money to get them through the crisis should expect to give something back when things recover, whether in the form of higher corporation tax or the government taking a stake in the company.
In particular, BA has made huge profits in recent years and frittered them all away on salaries, bonuses and dividends. They can't expect something for nothing. |
I expect international travel to be one of the last sectors to return to normal. After a domestic situation becomes manageable the last thing a government will want to do is import the virus again from overseas.
What IAG/BA management currently believe as realistic may not be in the future. Any UK government involvement in IAG is likely to be restricted to BA provided it can be ring fenced. I would expect it to be a minority equity stake with perhaps a golden share but IAG obviously has to accept the terms. |
A point for another day, this, but could the UK government taking a stake in BA result in IAG encountering ownership issues due to the amount of shares owned by a non-EU (from 01 January 2021) party?
Or, would this be a moot point given that ownership of the parent is (presumably) unaffected? |
BBC News version
This also appeared on the live CV19 thread on BBC News
https://cimg9.ibsrv.net/gimg/www.fly...0ee17d7d48.png |
Originally Posted by Rubecula
(Post 32214429)
I expect international travel to be one of the last sectors to return to normal. After a domestic situation becomes manageable the last thing a government will want to do is import the virus again from overseas.
. I wish people would sit still for a while. I know it’s tough and unprecedented, maybe you need to get somewhere for emergency purposes but if you don’t stay put! Anyway back to the topic... |
Originally Posted by rockflyertalk
(Post 32214456)
... I wish people would sit still for a while ... In times of extreme uncertainty, who wants to be thousands of miles from home and family? It's bad enough when my adult children are only a few hundred miles away, elderly parents ditto, but at least if really necessary, I have the option to jump in the car... It would be absolute torture to be on the other side of the world :( |
Originally Posted by OverTheHorizon
(Post 32214542)
I appreciate the sentiment but also understand why people might fly.
In times of extreme uncertainty, who wants to be thousands of miles from home and family? It's bad enough when my adult children are only a few hundred miles away, elderly parents ditto, but at least if really necessary, I have the option to jump in the car... It would be absolute torture to be on the other side of the world :( But I am disgressing from the point of the thread so I’ll shall stop. I do wonder what BA/IAG post-CV19 era will look like. Will we still have low-cost fares? Will IAG remain IAG or be split... |
Originally Posted by Misco60
(Post 32214371)
Every private company that accepts public money to get them through the crisis should expect to give something back when things recover, whether in the form of higher corporation tax or the government taking a stake in the company.
In particular, BA has made huge profits in recent years and frittered them all away on salaries, bonuses and dividends. They can't expect something for nothing. As far as BA's profits are concerned and what BA is doing with them. First, I don't understand some people's obsession with counting other people or businesses' money. Second, I think BA has a lot of cash. But this situation is not about how much cash any particular company has, even though many don't have enough to survive the next few weeks. This is about a simple fact that you can't keep a business open, incur expenses and pay your staff if you don't have any customers. Therefore, the governments should be compensating every business that had to close for each day that they remain closed with absolutely no strings attached. Same as they should be compensating every person who has lost their job or was forced to take unpaid leave. Again, it is only fair. |
Think a few may wish to be careful of what they wish for were the government to acquire shares in BA to keep it running.
I know the causes aren't the same, but look at RBS since the government took over - downsized substantially. The government isn't going to buy shares as an act of charity; it wants its money back and to reprivatise. Cost cutting is very much in the government's DNA, after all. Bear in mind that whilst it is right action is taken to prevent a total meltdown, we will end up paying for this in years to come. In the meantime I don't see BA requiring an imminent bailout and the government likely won't step in unless it really has to. I wouldn't be surprised to see Virgin requiring quick attention however. |
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