Cargolux in a Chinese deal

My Orchids. Cattleya. Photo ET

Cargolux in a Chinese deal

 Cargoforwarder summarizes the latest newsquite accurately. In a nutshell, the new government has made the decision to go ahead with the planned deal with HNCA. It also gave the employees most of the guarantees they wanted, though not yet in writing. One sticky point was remaining for OGBL, the largest union: the 35% ownership for HNCA comes with an effective veto right in the decision making, and the union sees there the potential for irreparable harm.

This is indeed a matter of trust, that usually doesn't come as a free gift, but is something that builds gradually. Before that, one has to get the legal ducks in a row.

So by now the decision to go ahead is more of a political decision than a commercial one at this stage. Alarms went off when in the background of the agreement, TNT emerged as a competitor with a piece of the local market, several months ahead of CV's flights. It went against the assumption that in the local Henan economic practice, that should not have happened. Is it therefore that another piece of the market, the X-Box has been allocated to CV? It helps to complain, isn't it?

Two more things:

- the contract is expected to be signed by February - March. So, tell me again, what was the rush attempting to get this signed even before the elections? The delay is welcome, because the legal counsel has a list of details to iron out.

-this one makes me chuckle: one reason for the pressure to rush this, was the argument that the government could not hold on to its shares, because of the nasty looks from Brussels. The government however will stay on as a 10% shareholder. So either the former government lied, and there was no need at all for it to get out of CV. Or Brussels still has that nasty look, but the new government has decided that it doesn't care. In that case, good for them! What is good for Fortis-BIL is good for Cargolux.