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Taxpayers to dig for £20M for Liverpool Dock


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1 hour ago, Two-lane said:

The statement further up the page is attributed to Allinson (although I did not find the original). Allinson is Treasury Minister, so he knows a bit about money. Surely the Treasury Minister could not have made a mistake of that magnitude.

If it had regularly been making £20 million, the UA buyout part of the purchase price, after early receipt discount, would have been north of £100 million. It wasn’t.

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Is the SP a manx registered Co.? Is the one mil a shareholder div with out any further tax due???

Even some of the staff are not paying Manx tax, are they?

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4 minutes ago, Kopek said:

Is the SP a manx registered Co.? Is the one mil a shareholder div with out any further tax due???

Even some of the staff are not paying Manx tax, are they?

Yes, it’s Manx registered. Taxation would be a circula inextrabilis.

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2 hours ago, John Wright said:

Plus I’m not so sure the £20 million figure was correct. You’ll recall that SPCo was owned by an infrastructure investment fund, managed by McQuarrie, and had borrowings from Banco Spirito Santo. The interest and capital repayments weren’t being made and the Bank, a rescue bank set up to hold assets after the collapse of the Portuguese banking industry in 2008, seized the the shares due to non performance. That doesn’t happen if you have £20 million profit.

Macquarie’s business methods have always been shady, and generally involves loading a company up with debt. Look at what they’ve done to Thames Water.

So it’s possible that the operational profit was heading towards that level and it still not be enough to pay the debt, and that having taken their fill they’d got their investment back and didn’t care if the shares were seized. Macquarie have an uncanny ability to walk away and leave everyone else holding the baby. They’re not called the Vampire Kangaroo for nothing.

 

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1 hour ago, John Wright said:

If it had regularly been making £20 million, the UA buyout part of the purchase price, after early receipt discount, would have been north of £100 million. It wasn’t.

I did read an article around 2018 that the SPCo was averaging a £10m annual profit over several years. The article called it a zombie company, as its profits were solely paying off a debt which was owed by McQuarrie to Banco Spiroto Santo. That's why it was transferred to them. 

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9 hours ago, Max Power said:

I did read an article around 2018 that the SPCo was averaging a £10m annual profit over several years. The article called it a zombie company, as its profits were solely paying off a debt which was owed by McQuarrie to Banco Spiroto Santo. That's why it was transferred to them. 

The Isle of Man Steam Packet is registered as a foreign company at Companies House so anybody can view the filed accounts for free.

https://find-and-update.company-information.service.gov.uk/company/FC006682

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41 minutes ago, Garteth T said:

The Isle of Man Steam Packet is registered as a foreign company at Companies House so anybody can view the filed accounts for free.

https://find-and-update.company-information.service.gov.uk/company/FC006682

Yes. And they show that in the decade before acquisition it never made £20 million. Profit bounced around between £5 and £14 million. Averaging about £9-10 million

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1 hour ago, John Wright said:

Yes. And they show that in the decade before acquisition it never made £20 million. Profit bounced around between £5 and £14 million. Averaging about £9-10 million

In the 1970s SPC pref shares were the thing to have - 10% every divi.

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9 minutes ago, Harry Lamb said:

In the 1970s SPC pref shares were the thing to have - 10% every divi.

I had 1000 ordinary shares. Inherited from my gran. Got a couple free returns a year.

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14 hours ago, Ringy Rose said:

Macquarie’s business methods have always been shady, and generally involves loading a company up with debt. Look at what they’ve done to Thames Water.

So it’s possible that the operational profit was heading towards that level and it still not be enough to pay the debt, and that having taken their fill they’d got their investment back and didn’t care if the shares were seized. Macquarie have an uncanny ability to walk away and leave everyone else holding the baby. They’re not called the Vampire Kangaroo for nothing.

 

What we saw with the Macqarie structure was just the latest in a long line of variants of the 'leveraged buy out'.  You are right to mention the UK water companies, because the financial engineering is obscene and almost never called out by the media (either through lack of investigative journalism skills or complicity in the 'capitalism is good in any form' mantra).

The banks, private equity houses etc. doing these deals maximise their return while minimising their risk - it is always someone else's problem if anything goes wrong.

To avoid corporation tax in the country where the acquisition target operates, debt is loaded in to make profits negligible and the interest on that debt is then syphoned away to a low/no tax jurisdiction via the beneficial clauses in double taxation treaties.  The debt itself may be artificial, but governments seem to go along with it rather than legislating against it.  Ask yourself where Sunak and Rees-Mogg made their money before becomimg MPs...

Imagine me trying to explain this to the average MHK!

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  • 2 weeks later...
9 minutes ago, doc.fixit said:

Bit off topic but can anyone recommend a decent hotel for a few days stay in the centre of Liverpool?

Depends on your budget.

Heywood house hotel is decent value.  I would avoid the Dolby hotel, awful rooms and the bathroom looks like it was reclaimed from the lady of mann

 

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