tolipanebas wrote:Id say its exctly the opposite?
The present debt was guaranteed unrepayable for SN.
The creditors held a nice firm contract for sure, but they couldn't claim the money, or they'd risk having to a write off the money: Quite ridiculous to even have such things on the balance sheet....
However, they have now obtained drawing rights on future profits the company generates and those are not as imaginary as one may think, you know?
I'd say that is a significant revaluation of the liabilities held, hence I can tell you most creditors signed up for the rollover scheme, not just the FPM...
Once the balance sheet of SN Airholding is deposited at the NBB, you'll be able to see just now much of the outstanding debt has been rolled over and how much is only left...
BTW- this debt cancelation scheme is a copy paste of what happened at Austrian...
In fact, the entire turn around plan at SN is pretty much a copy paste of that of Austrian, so if you are looking for guidance, look to what happened at VIE.
I have experience investing capital.
From my experience, converting a loan into a share is what companies do in Chapter 11, the American bankruptcy system, when there is no other viable option to recoup your losses within acceptable amounts of time. So either the government was very generous or SN was very desperate or both.
SN is a long long long long loooooooong way from turning a profit.
Even if we are in the garden of Eden, and SN were to miraculously turn around and start making 20 million euro of annual net profits like in the best of the economy in 2007, with the government's 12.5% share in those profits, it's going to take them 20 years to get their 42 millions back.
If they liquidate SN today, they would get that back sooner.
Which brings me back to the question: why should the Belgian government forgive those loans when the largest shareholder Lufthansa doesn't contribute nearly as much?
Let's bring Ryanair back in the story. Sure Ryanair gets a huge amount of subsidies. But don't forget that Ryanair also invests money into new routes that no one ever thought would be possible nor sustainable from Belgium, allbeit with subsidies.
So they take their share of the risk in order to grow together with Wallonia and CRL.
Since LH is in control of SN, SN is going through restructuring after restructuring. There is no major evidence of growth, investments or progress. There is no plan for the future, only short-term survival in an unsustainable business model, lead by financiers who are tripping over dollars to save dimes.
Giving money away to consulting companies that tell them how they should save money at the cost of their employees.
So that 42 million is not an investment, it's a short-term bail-out.
Until they need the next one
That's the difference between the subsidies at SN and Ryanair.
SN needs to stop cutting costs in useless area's and start looking at ways to boost their revenues. The only airlines that are always making money are the airlines that have revenue under control. Ryanair do that through subisidies and marketing, SQ, CX and EK through the offering of a good product.
(this is madness)
