Cargolux delayed, but that is welcome!

    My Orchids. Phalaneopsis Crimson Glory. Photo ET

Cargolux delayed, but that is welcome!

No, nothing about a flight. But the so urgent sale of 35% of Cargolux to HNCA has to wait a bit. Well, who wasn't aware of that?

In early October we all learned about a so successful negotiation, that was about to be completed, and the heavenly deal would be completed right away. I guessed HNCA was ready to buy 35% of CV for a multiple of QR's $117.5 million. By the way, in early October we also knew that there were elections coming up on October 20.

So people were asking: "what's the rush?"

Well, they were going to get an answer in an information meeting, scheduled for last Monday. But the meeting got canceled, and no one knows why. That's great, because now, with that official retreat from transparency, we can speculate that the reason may be: it's really not such a good deal, or,  it is so bad that you cannot even trust the next government with just staying quiet about it, mostly if there is a change in government.

So on Thursday a "Comité Mixte" was to meet, and actually on Friday the Board was ready to rubberstamp the deal on the table. Rubberstamp is the politically incorrect way to say that the agreement would be submitted to the Board's approval. Those two things fell flat also.

As of today, Mr. Wiseler, (who somehow became the top dog after Mr. Frieden) wrote a letter to Mr. Bettel, assumed to be the next Prime Minister. I told you there would be elections. Somehow Cargolux weighed on those by the way. But it is nice that Mr. Wiseler writes a letter to the future government. It is the right thing to do.

So if the proposed partnership with HNCA is so overwhelmingly great, I don't doubt that Mr. Bettel already answered giving it his unrestricted support. And then Zhengzhou, here we come. Unless the shareholders after that tell their boss, the government, to get a checkup. 

allAfrica.com: Liberia: President Sirleaf Applauds World Leaders

    My Orchids. Phalaneopsis. Photo ET

As seen in :

allAfrica.com: Liberia: President Sirleaf Applauds World Leaders

Unintended cruelty

Cargolux, the Inconvenient Truth.

 

    My Orchids. Phalaneopsis Chinensis. Photo ET.

    

Cargolux, the Inconvenient Truth.

So Minister Wiseler made a decision. He needed a partner for Cargolux. The new partner is said to be the Chinese candidate, HNCA, who had Minister Wiseler’s favors anyway.

He could have completed the deal before the elections, but was probably told to keep it quiet. The questions about why to search for a partner in the first place, why then to choose this partner, to accomplish what that would favor Cargolux in which way, and at what price (watch that one!) are indeed without good answers.

Even the unions represented at the Board level have to wait for the day after the elections to get their information package. This is in view of Thursday’s shareholder meeting, where “shareholders will decide”. You know, where all are government controlled entities that supposedly will decide whether they support or defeat the government’s plan.

In short, it was way too inconvenient to disclose the information let’s say Friday or Saturday. Because disclosure could have poisoned the elections. The potential for yet another embarrassment, just ahead of Sunday’s elections was too risky.

Or more extensively: 

http://egidethein.blogspot.com/2013/10/cargolux-plot-thickens.html

There is a way with elections, but it's unnecessary in Luxembourg

          My Orchids. Phalaneopsis Fuzzy 72.76%. Photo ET

Oops: Azerbaijan released election results before voting had even started (The Washington Post)

The Washington Post came across a nice story about the incredible advances of democracy in Azebaijan. The results were already known before voting started. Now there is nothing original about that. In Luxembourg we also know the results before voting starts, BUT we don't publish them.

There are of course numerous advantages with Azerbaijan's straight forward attitude. It is first of all proof of genuine honesty to come out with the strategy beforehand. Why hide what you are doing? The benefits are multiple: winners and losers may work on their winner/losers speeches before sunset. No need for anyone, public, journalists, and candidates to stay up late at night waiting for results. National electricity consumption stays flat. And innovative thinkers should ponder the idea to even further enhance the voters' experience and satisfaction in just simply cancelling the next election, as we know the outcome beforehand. Organizing elections, going to vote is a huge national harassment. By getting rid of it, the Administrative Simplification Reform wouldn't remain a vain word. Make that three words though.

Now I must live in fear not only that someone might be out there, who believes that I'm talking seriously, but that this person is from Luxembourg.

卢森堡避税天堂褪色，银行存款信息透明化

My Orchids. Getting in the Mood. Photo ET

I have no idea what they are talking about. Must be an old article about Luxembourg. Tomorrow I'll start my Chinese language courses.

卢森堡避税天堂褪色，银行存款信息透明化

ANDREW HIGGINS 2013年05月27日

Francois Lenoir/Reuters

“卢森堡将加入一个欧洲范围的计划，分享外国人的银行账户记录。”

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卢森堡——卢森堡不透明的银行系统从国外吸收了数千亿欧元，该国“我们希望维持原状”的国家口号也只是顽固抵制变革的宣言。对于这样一个国家来说，这是一条不留情面且令人不安的讯息。

“情况和以往完全不同了，”首相让-克洛德·容克(Jean-Claude Juncker)上个月告诉议会。他解释了为何经过数年抵制之后，卢森堡最终决定要开始与外国税务机构分享其银行存款信息。“并不是每件事都发生了改变，但很多事情都发生了改变。其他改变也是必要的，否则一切都将改变。”

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  The New York Times
  “卢森堡是一个重要的银行业和企业中心。”

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本周，人们对苹果(Apple)等其他知名美国公司通过离岸税务安排来逃避企业税的行为颇为关注，从而忽视了另一件或许更加重要的事情，卢森堡突然宣布不再实行银行保密的做法则突显了这一点：如今，各国纷纷开始声讨逃税行为和使这种行为得以存在的银行保密行为，于是世界各地不透明的银行中心正承受着不断上升的巨大压力。

“银行保密的做法是历史遗留下来的，”欧盟(European Union)负责税务的高级官员阿吉达斯·赛梅塔(Algirdas Semeta)说，“我们很快就会看到世界各地银行保密做法的消亡。”

从卢森堡首都大雨滂沱的街头，到加勒比海英属维尔京群岛(British Virgin Islands)波光粼粼的潟湖，各国官员都在手忙脚乱地抹除允许偷税的污点，并试图弄清楚该如何在不赶走可以为他们带来丰厚利润的外国客户的同时，改变自己守密的做法。

最近，与离岸避税天堂相关的大量机密文件被泄漏，进一步增加了这种压力。卢森堡经济发展局前局长埃吉德·泰恩(Egide Thein)说，这种压力“就像一台蒸汽压路机”。

如何使这台蒸汽压路机继续前进正是本周三于布鲁塞尔举行的欧盟峰会关注的焦点。大会没有做出任何引人注目的决定，但的确推动了奥地利（欧盟最后一个坚定支持银行保密做法的国家）接受分享外国人所持银行账户信息的意见——只要欧盟以外的国家也同意这么做，尤其是瑞士。

奥地利和卢森堡也做出有条件的承诺，同意在今年年底前加入一个扩大化的自动数据分享计划。该计划的涵盖范围将超出银行，把信托和基金会也包括在内，这些机构经常广泛被欧洲富人用来存放乃至藏匿财富。

在很多情况下，合法与非法避税都发生在相同的地方——遍布世界各地的、多数面积很小、“对商业友好”的偏远之地，长期奉行保密政策，税率低且灵活度高。

比如，卢森堡只有53.9万人，但却是许多大公司的地区总部，这些公司在这里对它们的利润进行登记，而不是在它们开展业务的国家。卢森堡也是一个金融中心，大约有130家银行，基本上都是大型国际机构的分支。去年年底，这些银行持有的存款约为3500亿美元（约合2.1万亿元人民币），大约相当于每个居民有65万美元存款。

这里的官员对“避税天堂”这种称法非常愤怒。他们坚称，卢森堡能吸引到这么多现金（大部分都来自外国人），只是因为这个国家政局稳定，监管机构诚实，而且还有一批会多国语言的金融专业人士。

 不论如何，对这个国家而言，承诺加入欧洲范围内交换银行信息的计划，是重要且危险的一步。因为曾长期坚决反对更透明化的操作，卢森堡被位于伦敦的研究机构税收正义网(Tax Justice Network)称为欧洲金融保密领域的“死星”（电影《星球大战》中虚构出来的一个巨型空间站、强大的超级武器——译注）。

泰恩预测说，“五年后，世界上不会再有避税天堂”，因为“从长远来看，一个国家不可能通过窃取他人的税收来实现繁荣”。

就连全世界最缄默不语的离岸避税天堂——开曼群岛、特克斯和凯科斯群岛(Turks and Caicos Islands)以及加勒比海其他英属领土——也于本月宣布，它们将开始分享银行账户信息，不过它们依然保留着极其不透明的企业登记制度。如今颜面尽失的法国前预算部长杰罗姆·卡于扎克(Jérôme Cahuzac)曾在新加坡藏匿过秘密资金，但就连在这里，外国人也更难存放资金而不受税务机构的监管了。

根据一项估计，有钱人在避税天堂持有的未申报资产至少价值21万亿美元，远高于美国全年的经济总产值。欧盟税务专员赛梅塔估计，每年，逃税和合法避税给欧洲造成的损失大大超过1万亿美元。合法避税则是一个更具争议的政治敏感问题。

处在共享信息压力下的卢森堡和其他一些金融中心面临的大问题是，多少储户会试图将资金转移到其他地方。

卢森堡财政部长弗里登(Frieden)淡化了会出现大规模资金出逃的风险。“一些小客户可能会离开，但许多大客户正在进入，”他说。

尽管如此，卢森堡希望确保更不透明的竞争对手，比如瑞士和新加坡，不会得到不公平的竞争优势。弗里登说，卢森堡支持透明操作，但“希望有一个公平竞争的平台”。

卢森堡的银行家表示，他们的大部分顾客都没什么可隐瞒的，但出于安全以及其他一些正当理由，这些顾客依然很重视隐私。卢森堡银行家协会(Luxembourg Bankers Association)首席执行官让-雅克·罗梅斯(Jean-Jacques Rommes)抱怨道，银行正被变成“税务机构伸长的触角。许多顾客不喜欢这一点。他们钱越多，就越不喜欢这样”。

翻译：陈柳、陈亦亭

本文内容版权归纽约时报公司所有，任何单位及个人未经许可，不得擅自转载或翻译。

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Cargolux, the plot thickens.

My Orchids. Phalaneopsis. Let a hundred flowers bloom. Mao Zedong. Photo ET

Cargolux, the plot thickens

This is going too fast. Many people didn't notice yet that we are now in a new movie. The goal is no longer to look for a "strategic partner" of the first type, another Cargo airline with "synergies". Such as QR or HNA were. Which is a difficult undertaking, as we all know by now. Because cannibalism is rampant.

The new movie is Mr. Wiseler goes to China, and builds an airport, and an airline, something like a startup, with as the new partner, HNCA, which as we understood is no longer HNA, the airline.  At HNCA they have no airline, no plane, but maybe some Renminbis to help creating one. It is a startup. The rest is Venture Capital from Cargolux, I assume? That's a change for once for BCEE and other shareholders, from the drab mortgages and subsidy business. One of these days, we'll probably get an explanation on how this works, and how this helps Cargolux.

One thing for sure resurfaced today. We needed to hear that story again about why the Luxembourg government has to sell its shares. As I repeatedly said, the argument goes that it is the European Commission. The unelected phalanx in Brussels spots an "unfair competition situation", if the Luxembourg government is a shareholder and participates in a capital increase next year to keep the company capitalized.

Hearing that nonsense again today, I was shaken by laughter. So we solve the problem that the Luxembourg government cannot be a shareholder, by substituting the Luxembourg government with a Chinese Provincial government? We lose control, and if things don't go our way, this weakens or puts out of business our struggling airline, because it would have an unfair advantage if our government keeps it from going under? If I save a man from drowning, he just had an unfair advantage?

Now, let's not be pessimistic. That marriage can work out perfectly to the great satisfaction of both parties, HNCA and the Province. If not, just go to court and get a divorce. The good news is, that the draft agreement says that the governing laws are the laws of China.

No doubt, Mr. Wiseler keeps the story interesting. Creating a new airline is exciting.

Cargolux, Groundhog Day again?

My Orchids. Phalaneopsis. Chinensis? Photo ET.

Cargolux, Groundhog Day again?

Oh, no! Several days ago, everything seemed so relaxed. Now RTL has gotten a draft of a "Commercial Cooperation Agreement between Henan Civil Aviation and Investment Co., Ltd, And, Cargolux International S.A." And people start worrying, again. But, don't worry say the people in the know. Here are the links to the background:

http://news.rtl.lu/news/national/475769.html#

That same page carries the following documents:

PDF: Internt Cargolux-Schreiwes, nodeems RTL den Draft fir en Agreement publik gemaach hat um Méindeg, 7. Oktober.

PDF: Deen net oder nach net signéierten "commercial cooperation agreement" aus dem Summer 2013.

PDF: Schreiwes vum OGBL mam Titel "Le bradage de Cargolux continue".

Not worrying is not a synonym for not being vigilant. People are vigilant this time, and let's face it: the Luxembourg Press has become more investigative. The more dissimulation there is, the keener they are at getting to your secrets. 

However, dissimulation of one's intents is a must in a negotiation. So also towards HNCA. I would have liked that HNCA:

-  would see itself now as one option, not the preferred option

-  would be aware that there are 5 and not 4 options, the fifth being that CV doesn't need a partner at all costs

-  is aware that the QR valuation of $117.5 million for 35% of CV is no longer available. It is much higher.

-  is aware that the future shareholder has no veto power of a majority vote.

That being said, obviously the draft agreement was HNCA's own, as you could tell at first analyzes. It was unrealistically lopsided in favor of HNCA, a bit like the prenuptial agreement of the old billionaire marrying a young cinema starlet. CV might need the money, and has all those gorgeous attributes that 40 years of experience give it. But is HNCA the billionaire? 

I would say that usually a good lawyer would shy away from such an aggressive proposal, for fear to damage the relationship from the start. But we learn that those "misunderstandings" have been ironed out, and HNCA is the preferred partner. Again, if CV needs one.

The deal remains asymmetrical though on two fronts. The draft reveals the most intimate desires of the prospective partner, develop itself and the Province. Therefore the initial proposal was so lopsided. Then we have on one side a sovereign government negotiating with a Chinese Province, that requires a number of green lights from Beijing.

Then there remain some challenges. Such as creating a new airline. And here is a twist, as I learnt from a friend: It was easy to confuse HNA and HNCA. The latter, the one we are talking about, has no planes, isn't really an airline. But it  looks at creating one. HNA is not in the picture. I would say, get Cargolux to fly first. And finally, there is also the obvious challenges of how to develop the Zhengzhou airport. It has only one 6.500 m landing strip. The airport is small and desperately encroached by surrounding habitation. But there can be radical solutions, that would be impossible in Luxembourg.

See here an aerial view of Zhengzhou airport. Do we go, or don't we go? Do we need to go?

Cargolux the good news

             My Orchids. Cattleya guatemalensis.. Photo ET

Cargolux the good news

Cargolux has had an unusual string of good news, from finding a two year agreement with unions, to announcing again and again the delivery of new 747-8 freighters, to adding ever more destinations around the globe. Example as seen in "Aviation Tribune"and indeed in many other publications:

"With a growing fleet of advanced, next-generation freighters, Cargolux is steadily decreasing its environmental footprint while benefiting from the aircraft’s lower operating costs and improved economics. Thanks to its new GEnx engines, enhanced aerodynamics and lighter materials, the Boeing 747-8 Freighter provides double-digit improvements in fuel consumption and carbon emissions – well below ICAO limits. The 747-8F is not just cleaner, but also significantly quieter than its predecessor."

As we see, Cargolux is steadily enhancing its brand, being able to cast itself as a the most modern, dynamic, cleanest, whispering worldwide airline. What a difference a year makes! Hopefully no one messes up again ...

Don't change anything for now.

Cargolux stuck in one place?

    Dripping drip Chinese torture on the Lotus Leaf. Photo ET

Cargolux stuck in one place?

Or feeling like Punxsutawney Phil in Groundhog Day!

"What would you do if you were stuck in one place and every day was exactly the same, and nothing that you did mattered?" That is a quote from the movie Groundhog Day you may have seen. Every morning the same day restarts from anew. Cargolux is fine, only the caretakers seem to obsessively tread the same water every day: sell 35% of shares held by the Luxembourg government. Why? I don't really know.

                         

So here we go again, but what is the rush to get a deal done by the end of the year?

Is it pressure from the European Commission, in a Quixotic battle against "unfair" competition? Just tell them enough. On a larger scale France, Germany and others have infringed on so many European rules, such as deficit spending to name a big one, that Luxembourg really should treat all Commission threats with benign neglect. Cargolux is a pillar of our post-bank secrecy economy. In addition, we had the lamentable experience with QR, that was indeed so bad that I won't call it proof of good will on the Luxembourg side to accommodate the Commission. If proof it was, then it was one of incompetence or choose any other characterization you may prefer.

So why do we go at it again? The Unions are right to be wary. Minister Wiseler was or pretended that he was associated in the QR deal. That would hardly count as a reference, don't you agree? The picture showing him recently in the press, sandwiched between two Chinese officials, led me to try to read from the body language, as a visual of what could go wrong this time. How would he out-negotiate those two Masters of Mahjong? I came away with a feeling that the best would be for him to play Mahjong solitaire. The unions are rightfully scared, not knowing what the new intentions are, and this time again not knowing  what Wiseler's mandate is. Of course someone will object to this that Cargolux is a private company. And the argument goes that in due time, a proposal would be submitted to all shareholders. I guess that suggests some kind of due (confidential) diligence. In the particular situation of a Cargolux however, where all shareholders are the government, this type of cat and mouse is laughable and dishonest.

Given all the above, why the urgency to get rid of the 35% of government shares? Cargolux has 40 years of experience, much more than most pretenders. Cargolux needs most of all funding, which is not achieved by replacing one shareholder by another one, who in addition is also a competitor. As for purely financial interests, there are some potential investors in Luxembourg, unless no one wants to talk to them.

Finally, a good deal is only a good deal, if it is a deal you cannot refuse. That's not at $117.5 million, nor at $175 million. That's also incredible synergies if a partner can be found in the cargo world.  One has to take into account that the company operates one of the newest fleets, and has the most experienced employees who could teach the junior partner. This pleads for additional value in the company. However for a sale, Cargolux is not adequately set up. It was when the issue was to content BIP during the last QR adventure. I would recommend to revisit ING and set up the company with the well proven preferred shares to keep a newcomer without a veto, so he can't veto a 51% decision. Then you might get a deal.