Off Topic TF in trouble?

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qprbeth

qprbeth

Wicked Witch of West12
Forum Moderator
Jun 13, 2011
15,338
13,280
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near Oxford
I'm no expert but it looks really ugly for his credibility as a businessman. If his stake in Air Asia was 'levered' to buy QPR and Caterham, and is now essentially worth less than what he borrowed to the extent that he wants to take Air Asia off the Stock Exchange, I struggle to see what his source of income is as he will surely lose his share dividends. That means he can no longer keep on giving these open ended loans to the club.

I wouldn't worry about the Mittals, the last set of accounts showed that they have 'loaned' the club far less than the Malaysians and far less than their proportion of ownership.

Hopefully I am wrong and those who know better will correct me. If not, respect to IMAZ, right al along. The whole thing is beginning to look like a Ponzi scam.
 
sb_73 said:
I'm no expert but it looks really ugly for his credibility as a businessman. If his stake in Air Asia was 'levered' to buy QPR and Caterham, and is now essentially worth less than what he borrowed to the extent that he wants to take Air Asia off the Stock Exchange, I struggle to see what his source of income is as he will surely lose his share dividends. That means he can no longer keep on giving these open ended loans to the club.

I wouldn't worry about the Mittals, the last set of accounts showed that they have 'loaned' the club far less than the Malaysians and far less than their proportion of ownership.

Hopefully I am wrong and those who know better will correct me. If not, respect to IMAZ, right al along. The whole thing is beginning to look like a Ponzi scam.
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He's borrowed against shares that he doesn't directly own. Just indirectly in his position as founder and CEO.

He would never have received a dividend on the shares he doesn't directly own so his source of income there is unchanged

What we don't know is how much taking the company private will affect his cash flow and prospects of investing in the business and then by extension how much he has spare to invest in Rangers

But many of the doom-mongers on here want us to 'stop throwing money at it' anyway. So win win for them

Does explain the public emphasis on the need for promotion though

Like it or not ours and TF fortunes are tied.

We need promotion and won see a squad of individuals as good as these for decades potentially if we don't get it right.

Over to you Ramsey...
 
Peter Damage said:
He's borrowed against shares that he doesn't directly own. Just indirectly in his position as founder and CEO.

He would never have received a dividend on the shares he doesn't directly own so his source of income there is unchanged

What we don't know is how much taking the company private will affect his cash flow and prospects of investing in the business and then by extension how much he has spare to invest in Rangers

But many of the doom-mongers on here want us to 'stop throwing money at it' anyway. So win win for them

Does explain the public emphasis on the need for promotion though

Like it or not ours and TF fortunes are tied.

We need promotion and won see a squad of individuals as good as these for decades potentially if we don't get it right.

Over to you Ramsey...
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Does this story strengthen, weaken or make no difference to your view of TF's business capabilities? Serious question. It just strikes me that after a good run and an amazingly bold decision in setting up Air Asia in the first place it's been pretty downhill for some time.
 
An interesting one and it's curious just how many anonymous "people familiar with the situation" have spoken with Reuters.

The article suggests that Fernandes and Meranun have taken out personal loans using the value of their 19pc shareholding in the airline as security. All the time the airline's stock is quoted it's easy to ascertain the market value of 19pc and hence give the lenders comfort that there's sufficient value in the collateral to cover any default in the loans.

If F&M manage to find the money to take the airline private again, then they avoid further diminution in the value of the stock as far as a publicly quoted instrument is concerned, but it won't necessarily stop lenders carrying out their own valuation exercise. I would imagine that it's reasonably straightforward to value the company based on its ongoing financial performance and its net assets, as well as by comparison with similar airlines that are still publicly quoted.

If the airline continues to financially underperform after being taken private the lenders could still pull the plug, by which time F&M's personal debt is likely to be significantly higher than it is now.

Of course, we don't know who they might persuade to come in with them to take the airline private either, or what they will have to personally yield in the process.

It looks like Fernandes is building a deck of cards over the top of another deck of cards.

Good luck to him.
 
sb_73 said:
Does this story strengthen, weaken or make no difference to your view of TF's business capabilities? Serious question. It just strikes me that after a good run and an amazingly bold decision in setting up Air Asia in the first place it's been pretty downhill for some time.
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Think its just a combination of bad luck and market cycles that have caused the recent problems.

Cant blame him for the issue with the plane and actually think he personally dealt with the fall out very well considering.

He’s ridden crest of a wave with growth in Asia but the slow on the speed of that growth in flights and with the timing of the crash have been hard but don’t know enough to link that with any dig at his business capabilities.
 
It was pointed out when he 'bought' us that:

1) The price he paid the Goons was extortionate
2) Most of the purchase was through loans

Add to that £250 million spunked on mostly useless players and there's only one outcome looking increasingly inevitable. Mittal may be happy to let us go bust to eventually get use cheap, like Bates did at Leeds...
 
rangercol said:
Time for the Mittals to take over?
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Spot on, Col ...................... TF's loan margins to what is owed have effectively been clawed back to basically wipe out most of his collateral in the business, so he needs to sell a percentage of the business to maintain the original margins that the loans were offered at. No big deal in if you have a large holding but this may well change the landscape of his involvement of Queens Park Rangers.

In saying that, the Mitals are a supposedly sound base for our club. They have been prepared to sit back and watch things from a distance, knowing that should they wish to, step in and take the club as a whole. No problems there.

I'm thinking this may be the end of TF with our club .............. his hand has been forced.
Time will tell.

We as fans, need not worry ................ The Mitals were worth some 50 billion dollars so even after a market correction, I can live with 30 billion.
 
Eamon Holmes said:
Could have been worse. He could have had 100,000 shares in Volkswagen.
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Think both VW and Air Asia have been equally hard hit. Throw in a liability like our football club, which is not returning a profit and the avenues of income are drying up.
 
The start of the decline in profitability of the company (and the consequent share price drop) seems to have been the crash of the Air Asia airbus in January with the loss of all passengers and crew. Given that there's fierce competition on carriers in the Far East, it was an event that TF and his company could ill afford.
 
Peter Damage said:
He's borrowed against shares that he doesn't directly own. Just indirectly in his position as founder and CEO.

He would never have received a dividend on the shares he doesn't directly own so his source of income there is unchanged

What we don't know is how much taking the company private will affect his cash flow and prospects of investing in the business and then by extension how much he has spare to invest in Rangers

But many of the doom-mongers on here want us to 'stop throwing money at it' anyway. So win win for them

Does explain the public emphasis on the need for promotion though

Like it or not ours and TF fortunes are tied.

We need promotion and won see a squad of individuals as good as these for decades potentially if we don't get it right.

Over to you Ramsey...
Click to expand...

No pressure then.
 
I know nothing at all about what makes a good businessman. What I do know though is that anyone who makes a fortune by being in the right place at the right time to recycle someone else's idea has a long way to go to proving to me that he is a born successful entrepreneur. He needs to show that he has that Midas touch with completely new ventures which are out of his comfort zone. That he can weigh up the pros and cons - the costs of start up and the potential rewards. Air Asia? Great. What else have you done Tone that has been a wondrous success We talked about Tune Hotels a while back. Are they making any money yet? I'd be surprised given the ridiculously low prices they charge.
 
It certainly sounds rather bleak reading this article - Caterham & QPR were nice toys for Tony when the market was rosy, even when they were both accruing massive losses, but this is not the case now. I wonder if he might be be forced to cut and run if we're actually financed by loans against Air Asia's declining net worth?

AirAsia’s founder Tony Fernandes is looking for buyout as shares plunge

Reuters Oct 30, 2015, 04.11 PM

AirAsia founder Tony Fernandes began talks with bankers to take Asia's No.1 budget airline private after a plunge in its stock price put $200 million worth of loans borrowed against AirAsia's shares at risk, people familiar with the situation told Reuters.

The Malaysian entrepreneur and his business partner Kamarudin Meranun, respectively Group CEO and Chairman of AirAsia Bhd , borrowed the money against their 19 percent indirect holding in AirAsia from Credit Suisse and CIMB to help fund private ventures, people familiar with the situation said.

A fall in AirAsia's share price though has led to a breach of the loans' collateral terms, according to two sources, and is one reason why the two businessmen have begun talks for a possible management-led buyout.

Fernandes and Kamarudin did not reply to emails sent by Reuters or phone calls made to them. A Malaysia-based spokeswoman at AirAsia declined comment.

The existence of the loans, which has not been publicly disclosed as the transaction is private, shows how the future of the airline, a key client of Airbus in Asia, is tied to the other investments of its founders.

Two sources with knowledge of the situation said the loans were taken to help finance the 2011 purchase by Fernandes' holding company, Tune Group, of English football club Queens Park Rangers and to build up the Caterham Formula One team, two ventures which have subsequently struggled.

Share-backed loans, common among Asian tycoons, require a large amount of collateral as they are subject to stock market volatility.

It was not clear if Fernandes and his partners had been formally asked by the lenders to immediately provide more cash.

There is no evidence Fernandes and Kamarudin, who have built a business empire with a value that exceeds the worth of the share-backed loans, would be unable to repay the money, although some of their wealth is tied up in sports and other private ventures.

One source familiar with the situation said Fernandes would still be able to have a significant stake in AirAsia even after a privatisation and continue to lead it.

A Hong Kong-based spokesman at Credit Suisse declined to comment. A CIMB spokeswoman did not respond to requests for comment.

Fernandes and his businesses are also long-standing clients of Credit Suisse and CIMB, which are both involved in the privatisation talks, several sources said.

SPORTS VENTURES

Fernandes ceased funding the Caterham team last year and later sold it. The team eventually went into administration, while loss-making Queens Park Rangers were relegated from England's top league in May this year.

In June, research firm GMT Research said AirAsia used transactions with its associate companies to inflate earnings and said it needed to be recapitalised, triggering a sell-off in the carrier's shares that by late August had shrunk the value of the founders' stake to around $100 million.

AirAsia has responded by saying it has a strong balance sheet and does not need additional capital.

The fall and its impact on the loans caused Fernandes to discuss a privatisation and restructuring plan of AirAsia, the airline he had built over 10 years from a two-plane operation into a billion-dollar business, two sources said.

All sources interviewed by Reuters declined to be identified because the discussions are private.

AirAsia's shares have partially regained ground since the summer. Its market value is currently about $1 billion.

The privatisation plan, now under discussion, envisages Fernandes and his partner selling their AirAsia stake, held through holding company Tune, to a special purpose vehicle, to allow them to pay off the loans, said one of the sources.

Sources say AirAsia has also been in talks with lessors, including cash-rich Chinese companies, to sell a stake in its leasing subsidiary.

This comes as AirAsia has been selling portions of its related businesses, including half of its stake in a joint venture with online travel company Expedia Inc .

Fernandes, the face of the no-frills budget carrier's rise, has also built, through the Tune Group, a sprawling empire that includes a chain of budget hotels, an insurance firm, a mobile phone group and a school.

GMT Research's June report came when AirAsia, already under pressure from slowing tourist flows in Asia, was facing challenges from the December 2014 crash of an Airbus Group jet operated by AirAsia's Indonesian affiliate that killed 162 people.

The report helped push the airline's shares to their lowest levels since 2008.

Fernandes has steadfastly defended the company's finances and outlook and said the market was undervaluing AirAsia.
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http://www.businessinsider.in/AirAs...out-as-shares-plunge/articleshow/49596326.cms
 
The day he allowed Mark Hughes to 'Interview the club' I knew he was a bad news. No sane business man hands someone the contract the Hughes got then allows that same person to **** on their media face.

TF didn't bat an eyelid. Hughes should have been grovelling until the day he left. Coupled with the fact TF's Wet Spam and crap at all sport meant the warning signs of a clown were all there.

  • If it has floppy shoes, face paint and cant draw a hoop to save it's life, then it's probably a clown.

Phill Beard FFS, no experience looked edgy and refused to enter dialogue with fans after they scared him with questions about where they sit. If your owned by a ****, run by a **** and overpay a bunch of premadonna ****s, something has to give.

Amazed he's lasted this long to be honest. He's stained our reputation permanently.
 
Bush Rhino said:
The day he allowed Mark Hughes to 'Interview the club' I knew he was a bad news. No sane business man hands someone the contract the Hughes got then allows that same person to **** on their media face.

TF didn't bat an eyelid. Hughes should have been grovelling until the day he left. Coupled with the fact TF's Wet Spam and crap at all sport meant the warning signs of a clown were all there.

  • If it has floppy shoes, face paint and cant draw a hoop to save it's life, then it's probably a clown.

Phill Beard FFS, no experience looked edgy and refused to enter dialogue with fans after they scared him with questions about where they sit. If your owned by a ****, run by a **** and overpay a bunch of premadonna ****s, something has to give.

Amazed he's lasted this long to be honest. He's stained our reputation permanently.
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Get off the fence, Rhino.
 
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