Saturday, May 10, 2008

The Credit Crunch is Biting Big Business

Ferrovial forced to put £400m into BAA as debt talks stall

Ferrovial, the Spanish parent of BAA, was forced to put £400m of new cash into the beleaguered airport operator to convince its creditors to start talks on its massively delayed £9bn debt refinancing that has been hit hard by the credit crunch and doubts about its future as a group. Last month, Standard & Poor's, the credit rating agency, slashed its rating of ADIL to just one grade above junk. All part of the bigger picture !

Posted by plato @ 07:53 PM (639 views)
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3 thoughts on “The Credit Crunch is Biting Big Business

  • Just to follow on : There seem to be an increasing number of risky bonds around, not least government bonds swapped on potentially risky mortgage debts.IMO confidence is beng eroded. What will be the effect on the Stock Market which has held relatively steady so far?

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  • mark wadsworth says:

    This FDI can be a fine scam if you play it right, you get Johnny Foreigner to buy up UK assets at overinflated prices and then expect him to pile in loads more money for years to some. It’s a real money spinner. A pity that the utility price regulators haven’t woken up to this – it’s a victimless crime.

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  • Naff all relevance to HPC, but………

    Totally agree with Mark*, Ferrovial have bitten off more than they could chew on the BAA deal. I also think investing in aviation with $120 oil is rather foolish.

    The FDI scam happens across the world. The US banking industry pulled the same trick – Dubai invested a few zillion in Citigroup recently, only to see the value of their share plummet. It can work against us too: BP (that’s British Petroleum) invested squillions in Russian oil-fields, only to see their stake usurped by the Russian government. Foreign investors have learned quickly though. Nowadays instead of buying 100% of one company, they prefer to buy 10% of ten different companies. That offers protection from random acts of government while still earning a steady revenue stream.

    * (Mark and I are on the same wavelength for most things)

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