Re: Monday 7th July: Panorama on Heathrow

Lansbury wrote:
> On Fri, 4 Jul 2008 21:21:12 +0100, "tim....."
<tims_new_home@[EMAIL PROTECTED]
>
> wrote:
> 
>> If it is claimed to be a commercial venture then it should be paid for
in 
>> the same way that every other commercial venture is paid for - by
borrowing 
>> money in the markets
> 
> 
> Problem with that is Ferrovial borrowed so much to buy BAA, and are
> desperately trying to restructure those loans, that I doubt especially
in the
> current financial climate that anyone is going to lend them money to
make
> improvements with.

This is the technique of so-called private equity take over, usually by 
companies with putting very little equity in. They borrow loads of 
money, put that on the target companies balance sheet, and then the 
profits of said company are used both to provide a return to the PE 
company and pay the interest on the huge loan.

This was the way of the world till credit became tighter and more 
expensive. Now as you say, there are frantic attempts to "restructure" 
these enormous debts the companies never asked for in the first place.

BAA is caught in that trap at the moment.

-- 
John Wright

"What would happen if you eliminated the autism genes from the gene pool?

You would have a bunch of people standing around in a cave, chatting and
socialising and not getting anything done!" - Professor Temple Grandin