manshimajin Posted December 1, 2010 Share Posted December 1, 2010 The interview with Phil Gawne above was interesting. Have I got it right? Stripped to the basics his opinion seems to be that Macquarie overpaid for the company, the (Portugese?) bank that has financed the large loan has security over an asset that is not worth what it was and the company needs to reduce debt financing 'by some means or another' - presumably by converting debt to equity financing? At the same time, despite it being 'overvalued' it is a very profitable business and can reduce its pricing for passengers and freight without changing its basic operating model. So would the superannuation funds that ultimately own the company want to put in more capital? If they did they presumably would want value growth and dividends but this would have to be at a lower rate than interest servicing costs to make sense. Are they happy to dilute their holding as an alternative? Are they willing to accept low dividends over some time - presumably they currently see little cashflow because this goes to service the loans which means that they can currently use their own cash to acquire additional fund assets and keep their investments geared? Would they be happy to put capital into an 'overpriced' asset to allow freight and passenger fares to drop and to release the bank from some of its loan? Or can the company restructure its business in such a way as to make itself sufficiently profitable and effective for sustainable operations in a changed and more competitive market place? (The sleeeper from PG) - can they renegotiate a deal on the UA (by concentrating on the UK market only and/or changing service frequency?) to get more profit and to be able to offer lower fares (but how to monitor that too). 4&5 seem to make the most sense to me - maximise effectiveness, bring in some service changes to back up the 'seriousness' of the situation and then talk about renegotiating elements of the UA on the basis of 'if we can agree this we can reduce fares and maintain an acceptable service to you and us. But X,Y and Z have to change for us to be able to do that). That still leaves the selling option open whilst possibly improving profitability to boost value ahead of any sale. In other words a typial management challenge that managers are paid to manage. Quote Link to comment Share on other sites More sharing options...
manshimajin Posted December 1, 2010 Share Posted December 1, 2010 (edited) My friends and acquaintances in the Republic are making decisions about 2011 holidays now and over Christmas. Holidays?? Jeez, you should be wearing fookin sackcloth and ashes for the next 10 years!!! As an aside from the focus of this thread: Why? Am I missing something? The key export elements of the Irish economy, outside the banks and the fiscal situation (which BTW is in a better shape than the UK's on a per capita excluding the bank snarfu) is doing rather well - 10% up YoY. Looked at another way on the IOM we appear to be losing upwards of 20% of our tax revenue and we are not the least bit worried... Edited December 1, 2010 by manshimajin Quote Link to comment Share on other sites More sharing options...
The Raven King Posted December 1, 2010 Share Posted December 1, 2010 Why? Am I missing something? The key export elements of the Irish economy, outside the banks and the fiscal situation (which BTW is in a better shape than the UK's on a per capita excluding the bank snarfu) is doing rather well - 10% up YoY. The luck of the Oirish - clearly not. You'd best tell those suckers to take their money back before you p*ss all that up against the wall as well. Quote Link to comment Share on other sites More sharing options...
manshimajin Posted December 1, 2010 Share Posted December 1, 2010 The key export elements of the Irish economy... are doing rather well - 10% up YoY. The luck of the Oirish - clearly not. First in best dressed RK . Hard times still ahead for all - UK and IOM included - you can't drop 20% off the tax revenue side without doing some things on the expense side. But no reason to stop continue enjoying life is it? Quote Link to comment Share on other sites More sharing options...
The Raven King Posted December 1, 2010 Share Posted December 1, 2010 But no reason to stop continue enjoying life is it? As a result of the Celtic Tiger soaking up subsidies right, left and centre I guess you're right - there'll be some continuing to enjoy life to the full. Pity the folk who, through no fault of their own, are left on the sh*theap again. Ah well, they can always go back to begging on the street. Quote Link to comment Share on other sites More sharing options...
manshimajin Posted December 2, 2010 Share Posted December 2, 2010 As a result of the Celtic Tiger soaking up subsidies right, left and centre I guess you're right - there'll be some continuing to enjoy life to the full. Pity the folk who, through no fault of their own, are left on the sh*theap again. Ah well, they can always go back to begging on the street. replied here. Quote Link to comment Share on other sites More sharing options...
IOMRS97 Posted December 2, 2010 Share Posted December 2, 2010 "An MHK is to ask Tynwald to consider placing the Steam Packet Company in public ownership. David Cannan will table a motion at this month's sitting asking that a committee be set up to look into the matter. Mr Cannan believes the Island needs to be confident it has a reliable passenger and freight ferry service". ENERGY FM today. Which just goes to show that things can always get worse...... Quote Link to comment Share on other sites More sharing options...
Lost Login Posted December 2, 2010 Share Posted December 2, 2010 "An MHK is to ask Tynwald to consider placing the Steam Packet Company in public ownership. David Cannan will table a motion at this month's sitting asking that a committee be set up to look into the matter. Mr Cannan believes the Island needs to be confident it has a reliable passenger and freight ferry service". ENERGY FM today. Which just goes to show that things can always get worse...... Populistic bollocks. Surely the first question would be what would be the cost to nationalise and the second is can we afford it. The answer to the first must I presume be £200 million + if that is what the current owners paid for it. They are not going to sell for less than that unless it is a fire sale. The answer to the second should then be no we can not afford to nationalise. End of discussion! Quote Link to comment Share on other sites More sharing options...
Barrie Stevens Posted December 2, 2010 Share Posted December 2, 2010 "An MHK is to ask Tynwald to consider placing the Steam Packet Company in public ownership. David Cannan will table a motion at this month's sitting asking that a committee be set up to look into the matter. Mr Cannan believes the Island needs to be confident it has a reliable passenger and freight ferry service". ENERGY FM today. Which just goes to show that things can always get worse...... Well, I suppose we should not be surprised! How on earth do they think the Steampacket could be "placed" in public ownership? (Unless the owners wanted it to be taken off their hands) Bit hard to nationalise when the Island is neither a nation nor a state and its Governnent has no independent legal existence. It would need legislation and that would require pre-clearing of Royal Assent. Portugal might have something to say and the idea of a British sub-jurisdiction "nationalising" an Australian controlled asset would cause trouble in Canberra. (And look bad for an Island that sells itself on the "Freedom to Flourish" principle) So no Royal Assent then? Isn't the "Ben" Isle of Man flag/registry which is seen as a British sub-registry? I bet quite a few shipowners would be really encouraged to register if the Island threatened Socialist solutions! Companies are also "legal persons" having rights to their property and possessions under the First Protocol to the Human Rights Act/Convention. If you love the MEA, IRIS, Summerland, Noble's, the Isle of Man Post, you are gonna love the "Steampacket of the People". Still, I doubt it is a serious attempt. Is there an election due some time? Quote Link to comment Share on other sites More sharing options...
b4mbi Posted December 2, 2010 Share Posted December 2, 2010 "An MHK is to ask Tynwald to consider placing the Steam Packet Company in public ownership. David Cannan will table a motion at this month's sitting asking that a committee be set up to look into the matter. Mr Cannan believes the Island needs to be confident it has a reliable passenger and freight ferry service". ENERGY FM today. Which just goes to show that things can always get worse...... Arghhh. No No No No No. Worst idea ever. Quote Link to comment Share on other sites More sharing options...
Cambon Posted December 2, 2010 Share Posted December 2, 2010 not be surprised! How on earth do they think the Steampacket could be "placed" in public ownership? (Unless the owners wanted it to be taken off their hands) Bit hard to nationalise when the Island is neither a nation nor a state and its Governnent has no independent legal existence. It would need legislation and that would require pre-clearing of Royal Assent. Portugal might have something to say and the idea of a British sub-jurisdiction "nationalising" an Australian controlled asset would cause trouble in Canberra. (And look bad for an Island that sells itself on the "Freedom to Flourish" principle) So no Royal Assent then? Isn't the "Ben" Isle of Man flag/registry which is seen as a British sub-registry? I bet quite a few shipowners would be really encouraged to register if the Island threatened Socialist solutions! Companies are also "legal persons" having rights to their property and possessions under the First Protocol to the Human Rights Act/Convention. If you love the MEA, IRIS, Summerland, Noble's, the Isle of Man Post, you are gonna love the "Steampacket of the People". Still, I doubt it is a serious attempt. Is there an election due some time? It is already in public ownership as Macquarie is a publicly traded company, whose shares can be purchased by any person or legal entity. If the IOMG became the majority shareholder then ....... Job's a goodun. Personally, I don't think having the ferry company as a government controlled company is a good idea. However, I think having it controlled locally would be of great benefit to the Island. Quote Link to comment Share on other sites More sharing options...
P.K. Posted December 2, 2010 Share Posted December 2, 2010 I suspect, because I do not know, that Mr Gawne is of the opinion that if the SP wasn't having to service their £200m debt then they could compete with Mezeron. I wonder what his point is? If the SP was to be nationalised then they would have to bring on board (sorry) the debt with it. IMHO it would be a very bad idea. It's very very rare that a successful and profitable business can be run with a social conscience. Still no real reaction from the SP to all of this. Lot's of kite-flying but that's about it i.e. the words wind and pissing spring to mind here. I suppose it's possible that the route is just so profitable that they can absorb the recent losses but somehow I doubt it. I've seen it before where inaction is the result of not knowing what you can do so you don't actually do anything in the hope that things might improve somehow. Always fatal. Unless, of course, your profit margins are such that they're an embarrassment... Quote Link to comment Share on other sites More sharing options...
manshimajin Posted December 2, 2010 Share Posted December 2, 2010 (edited) I've seen it before where inaction is the result of not knowing what you can do so you don't actually do anything in the hope that things might improve somehow. Always fatal. Unless, of course, your profit margins are such that they're an embarrassment...[/font] Doing nothing is of course a management decision just as any other action is. At the end of the day talk of loans, nationalisation, competition etc etc... can't hide the fact that this is a management issue for the IOMSPC that needs some decisions to be made and actions taken. Hopefully that is what they are doing based on the strategy for the business (sell/hold) and the need to be competitive in service and price. Edited December 2, 2010 by manshimajin Quote Link to comment Share on other sites More sharing options...
P.K. Posted December 2, 2010 Share Posted December 2, 2010 Doing nothing is of course a management decision Are you sure that it's not a management indecision? The SP will have modelled profit seasonality to the n'th degree and right now it is heading into a peak. Come the new year perhaps some decisions will just have to be made. Wait and see mode. Quote Link to comment Share on other sites More sharing options...
manshimajin Posted December 2, 2010 Share Posted December 2, 2010 Doing nothing is of course a management decision Are you sure that it's not a management indecision? Absolutely sure that it is a decision Not necessarily a good one though... Quote Link to comment Share on other sites More sharing options...
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