JoFMO From Germany, joined Jul 2004, 2211 posts, RR: 0 Posted (7 years 2 months 3 weeks 6 days 14 hours ago) and read 2109 times:
I read an interesting article in yesterday's Sydney Morning Herald.
It basically said that the current owner structure of Virgin Blue will change. Therefore Richard Bronsons stake will increase to 40% and the Toll Group, the current major owner of Virgin Blue will be minimise its stake to 10%. The other 49% will likelz go to Tamasek the major investment group behind SQ.
The article also said that Tamsek recetlz sold its 3% stake in Qantas, because they were unhappy that Australia did't grant SQ rights to USA. Through an investment in Virgin Blue Tamasek could now achive it's goal to serve the USA from Australia with Virgin Blue.
Can my Australien friends say how serious that described scenario is?
Antares From Australia, joined Jun 2004, 1402 posts, RR: 40 Reply 1, posted (7 years 2 months 3 weeks 6 days 13 hours ago) and read 2066 times:
Very serious. But be aware, Temasek has already shown it is an investor in aviation, not a single carrier cheerleader. It invested in SQ LCC Tiger, but also its arch competitor Jetstar Asia, and I'm not in a position to check, quite possibly ValuAir which has been 'folded' into Jetstar Asia.
Temasek is distancing itself from being Singaporecentric in general. It is this policy which has also adversely affected the stock price of Optus for example.
My instinct is that Temasek will invest in Singapore Airlines competitors as when it sees fit, as it did for a while in Qantas. It will move in and out of stock as it reads the market, not as its reads aviation. It would regard the views of most of us on this forum as being totally divorced from the only reality it knows which is churning shares here and there for a few cents over millions of shares and making heaps of money. It has an investment fund of around $85 billion and could if it wanted to, theoretically, buy Airbus and Boeing for cash. I did say theoretically.
I would pay especial attention to Temasek in relation to Virgin Blue not because of what that airline might do, but because it might take sides in the Toll hostile takeover bid for Patrick Corp which owns 62 % of Virgin Blue.
Virgin Blue is a side show in this play. Temasek will, if it participates, be in the hunt for the much larger upside to be made from buying into a very significant and expanded Toll operation after it absorbs those parts of Patrick it is allowed to buy under the terms of the amended bid as approved by the ACCC, the competition watchdog.
If anyone wants more detail do your own Googling. There is a lot of detailed information to be had with only a few mouse clicks.
Zeke From Hong Kong, joined Dec 2006, 7767 posts, RR: 73 Reply 2, posted (7 years 2 months 3 weeks 6 days 13 hours ago) and read 2062 times:
Quoting Antares (Reply 1): I would pay especial attention to Temasek in relation to Virgin Blue not because of what that airline might do, but because it might take sides in the Toll hostile takeover bid for Patrick Corp which owns 62 % of Virgin Blue.
Not sure if its Temasek or SQ that own 49% of VS, with 49% of VS and VB (either directly of via SQ) will give Singapore the ability to take away from QF on the Pacific route.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
Antares From Australia, joined Jun 2004, 1402 posts, RR: 40 Reply 3, posted (7 years 2 months 3 weeks 6 days 13 hours ago) and read 2044 times:
SQ owns 49 % of VS. At this stage. I have always thought it might reduce that stake if it saw the likelihood of a significant cash benefit from so doing, although when such circumstances might gel I hae no idea.
One reason for my opinion is that SQ is not a very liquid stock. Most of the shares are owned by the top 10 stake holders.
If SQ wants more liquidity in the market, so that more investors could hunt the stock and therefore in general give it a higher share price, it could, stress could, seek major shareholder approval to create more shares with a rights issue, or liberate value from selling off various assets, as it has been urged to do by Minister Mentor Dr Lee Kuan Yew, or going for an innovative bundling of value in such assets by way of a float. I am speculating on this. We have nothing to go on other than market fundamentals, Dr Lee, and the general tendency of high quality stocks like Singapore Airlines to contemplate strategies which will reward their stake holders with higher share prices.
Singapore_Air From United Kingdom, joined Nov 2000, 13711 posts, RR: 21 Reply 4, posted (7 years 2 months 3 weeks 6 days 13 hours ago) and read 2044 times:
I saw this article a few days ago. However, one has to question whether if this does happen, Sinapore Airlines will ever get its hands on the Transpacific route - facing a possible Temasek-Virgin Blue presumably low-cost entry and a protectionist Australian government which seems to have been able to quantify such protection as an opportunity cost of A$251M to the Australian economy.
SIA has been cool on Virgin Blue for a long while now. One could suggest that they would maintain such a stance.
Antares: could you drop me an e-mail please? You can find this in my profile. I would be very grateful.
Oz777 From Australia, joined Jun 2000, 521 posts, RR: 6 Reply 6, posted (7 years 2 months 3 weeks 5 days 17 hours ago) and read 1850 times:
The Poposed shareholdiing CANNOT happen under the existing Australian regulations.
Simply, for an Australian Airline to have flag status, (ie allow it to utilise the rights under the Australian bi-lateral arrangements with other nations with which it has air services agreements in place), the maximum foreign shareholding is capped at 49%.
That 49% is further structured by only allowing 'an airline' to have a single 25%, with a maximum 'airline' shareholding (ie two or more airlines) in the entity of 35%. This is in fact the same rules as are in place with QF. 49% of QF is owned internationally, and when BA had a stake, it was limited to 25%.
If, under the proposed takeover, Branson ends up with 40%, the maximum Temasek would be able to obtain would be 9%. SQ, per se could take up the 9%, but as an airline they have shown that they want a substantially greater stake than a minority one (and SQ's relationship with Branson is not that wonderful).
From my sources I am hearing a very different structure - assuming the Toll bid gets up, and there is a shortfall in the cash offer at the moment.
Remember this - Toll have a very big relationship with Railway interests, even more so with the NZ Government. The fact that QF is looking a taking some of Toll's (ie the Patrick) shareholding in Pacific National, and the NZ interests could see a VERY different shareholding in Virgin.
Flyjetstar From Australia, joined Feb 2006, 936 posts, RR: 0 Reply 8, posted (7 years 2 months 3 weeks 5 days 15 hours ago) and read 1792 times:
Quoting Oz777 (Reply 6): Remember this - Toll have a very big relationship with Railway interests, even more so with the NZ Government. The fact that QF is looking a taking some of Toll's (ie the Patrick) shareholding in Pacific National, and the NZ interests could see a VERY different shareholding in Virgin.
Can you spell this out some more?
I understood, from a newspaper article I think, that the relationship between the NZ Government and Toll was not that good at the moment with on going "discussions" over rail track in NZ.
Brendan03 From Australia, joined Aug 2005, 951 posts, RR: 3 Reply 9, posted (7 years 2 months 3 weeks 5 days 15 hours ago) and read 1777 times:
Well I'd definetly like to see some real competiton on the SYD-LAX runs.
It would be interesting to see how Virgin takes this up... What's Virgins Ops Australia Profit been like lately?
I mean Qantas and United provide 2 totally different products on that route and Virgin would totally throw those 2 carriers into Mayhem - Basically They'd have all the leisure travellers if they can provide a decent pricing structure for that route
Antares From Australia, joined Jun 2004, 1402 posts, RR: 40 Reply 10, posted (7 years 2 months 3 weeks 5 days 15 hours ago) and read 1747 times:
Look I give you 1 out of 10 for that effort. Do a bit more research man.
Temasek isn't an airline. If it buys 49 % the deal is legal, especially if there is some sort of offset with the Virgin Group, and Toll and SRB have issued statements annuling the original deal under which he would get 40 % of the shares, largely because they are trading at more than $1.80 so the jet so to speak has bolted when it comes to getting them for $1.40.
Your railway info is all over the platform so to speak, but we'll let you off detention on that one, since anyone would have reason to be confused as to exactly what is going to happen there.
Think ahead. Temasek may or may not be interested in a significant stake in Toll post a successful Patrick takeover, and may or may not be interested in a stake in a trans pacific airline in which Toll will find itself holding an interest.
Remember. The structure of long haul DJ may be quite different to that of domestic DJ. Or it may be a 100% owned entity. None of these details actually matter at the moment. What matters is that Temasek may take a position, simple or complex, in the future of the Toll bid, and may therefore make it work far more effectively than it would without its backing, and it may also end up with a substantial shareholding in both long haul DJ, and perhaps short haul DJ and definately retain a singificant interest in SQ in the future even if it reduces its holding as it does from time to time anyhow.
To cut to the chase, the big orangutan is said to be thinking of putting muscle into the Toll bid, whether it does so, or how it does so matters less at this stage.
JOFMO From Germany, joined Jul 2004, 2211 posts, RR: 0 Reply 11, posted (7 years 2 months 3 weeks 5 days 7 hours ago) and read 1615 times:
But I wonder what the real interests of Tamasek are. As far as I know DJ is not the success story anymore in the Australian skies it once was before Jetstar strated. DJ now seems to be a much more settled airline with a modest growth. If Tamasek is just interested in moking some money, aren't there better investment opportunities?
Or has Tamasek a real strategy of giving SQ an australian dometic feeder? But why doesn't SQ invest into DJ by themself like they did with VS?
Antares From Australia, joined Jun 2004, 1402 posts, RR: 40 Reply 12, posted (7 years 2 months 3 weeks 5 days 1 hour ago) and read 1540 times:
Virgin Blue is a runaway success at the moment, which is pretty painful for Qantas given that Jetstar was almost certainly intended to bring it to a shuddering halt (which is did for a while) while slashing the conditions of over paid underproductive Qantas staff in management's eyes. This process is still under way as you would know if you care to monitor the Aussie press, PPPPruined etc.
However as I've already pointed out, Temasek isn't an airline and its real interest in the trans Pacific situation is a consequence of the main game of taking a 'position' in Toll to make money out of the takeover of Patrick Corporation. Toll and Patrick have logistics interest, and these activities stand to make Temasek vastly more money for a potential Temasek play than indulging in the intellectually crippled concept of making money out of airlines.
In my opinion, Temasek should no longer be considered a long term player in any stock for any purpose other than profiting from the churning of shares. A conseqence of this will be for it to provide venture capital, like it did to Tiger and Jetstar Asia, where you can gamble on making a reasonable but comparatively short term profit, and I predict it will one day in the medium term reduce its until now dominant stake in Singapore Airlines just as it has been of late in other Singapore landmark companies.
There is a thought provoking but rather slanted profile of Temasek by Eric Ellis in the Business section of today's Sydney Morning Herald.
Oh, and why is Virgin Blue performing so well. Fasten your seat belts on this one. We believe that the next set of financial figures for all Australian carriers will continue the situation in which Virgin Blue makes more money per dollar of revenue than any of the other carriers except REX which is showing an awesome margin in the high 20% range, and with SAAB 340s. Blimey! as we say.
Anyhow I'm off to Melbourne for a day of fun, going down Virgin Blue and back up with Qantas.
Oz777 From Australia, joined Jun 2000, 521 posts, RR: 6 Reply 13, posted (7 years 2 months 3 weeks 4 days 22 hours ago) and read 1480 times:
Sadly Antares you need to go back and re-read my post.
I spoke about the proposed arrangements with Branson set to get 40% (ie an overseas shareholder), leaving just 9% available for any other off shore investor. At NO stage did I ever claim that Temasek was an 'airline'. I alluded to the existing arrangement between SQ and Branson, and that SQ - if they were interested in taking up a shareholding - would be looking at a 25% stake (ie the maximum permitted) rather than a small 'strategic' placement. They want to be on the Board.
IF you do your research properly, you will also understand that the same rules apply to parent organisations - if the proposed airline was a wholly owned subsidiary of Toll, then the foreign ownership rules still apply in respect of airline ownership.
The bit that really gets my back up is Branson's parroting on about the Pacific Airline. He is NOT a majority shareholder in Virgin Blue, is NOT permitted to have a majority shareholding under any guise, and yet is clearly vocalising about frequency, city pairs (and aircraft type) at odds with the ACTUAL planning going on in Patrick's at the moment.
As to the rail issue, go back and check facts.
QF is interested in taking up the Patrick shareholding in Pacific national (one of the undertakings required by the ACCC). The QF approach into the rail may be as a joint venture partner with AustPost. The alternative purchaser could be QR, but that has a whole raft of issues that would probably not get past the ACCC at the moment
Toll NZ have a relationship with the NZ Govt. In a briefing paper (internal) there was some disquiet about a potential QF involvement, given the planned synergies between Toll Aust and Toll NZ (manufacture of rolling stock, motive power, transfer of mngt) and the potential overlap in the full freight arena. Just think about it for a moment.
I agree with you to a certain extent over the Temasek propensity to invest for return. But they have shown themselves also prepared to look at longer term strategic placements. The thing is though, with Branson involved, SQ want to be in the immediate orbit. While Temask may be sleeping with the prime minister of Singapore, the longer term survival of the airline from a prestige perspective has just a little more clout in making a decision as to who should own the shares (and it all flows back to the SQ Govt, whether it is the Ministry of Finance who owns the shares or not).
Enjoy Melbourne - all I can say is it is a far more pleasant view in BNE and SIN at the moment.
Oz777 From Australia, joined Jun 2000, 521 posts, RR: 6 Reply 16, posted (7 years 2 months 3 weeks 4 days 17 hours ago) and read 1332 times:
Quoting Bill142 (Reply 15): Isn't the limit for a single shareholder 25% with no more then 49% being held by the combined foreign sharholders? or is that limited to Qantas?
Spot on - the rules apply to ANY airline that seeks flag status in Australia, with one small adjustment to your query. Share holding is NOT limited to 25%, that limit only applies to AIRLINES holding shares in an AUSTRALIAN airline.
So; Maximum SINGLE airline shareholding - 25%.
Maximum TOTAL shareholding by two or more OVERSEAS airlines is 35%
Maximum Overseas shareholding in an Australian Airline is 49%.
That was why Pacific Blue's aircraft were registered in NZ - no such controls there, but PB was a trading company in name only within Australia.