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:
That same page carries
the following documents:
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.
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