Journalists
Fiona Maharg-Bravo is breakingviews´ Madrid correspondent. Fiona joined breakingviews in 2003 in London, covering media, transport, energy and Spain. Previously she spent a few months at the Financial Times as winner of the 2002 Nico Colchester Fellowship. Before becoming a journalist, Fiona worked nearly five years in banking, first at JP Morgan in equity capital markets and leveraged finance groups and then at the European Bank for Reconstruction and Development. She gained a BA/MA (Phi Beta Kappa) from the University of Chicago in Political Science and International Relations and a Diploma in Economics from Cambridge University.
Contrary to popular belief, the UK airline’s pension scheme is not ring-fenced and could pose a threat to Iberia’s cashpile in their proposed merger. The pension fund trustees will have to play current negotiations with BA carefully if they do not want to scare Iberia away.
The loss-making UK and Spanish airlines are close to a deal after 16 months of on-off talks. The intervening fall in BA’s shares means Iberia shareholders will now enjoy more of the value created. But both groups have their work cut out to demonstrate the scale of the synergies.
The Bank of Spain has run the numbers and says the country’s banks are profitable enough to write off 40% of loans to property developers. But the exposure to the dodgy loans varies widely. Santander looks fine, but some savings banks could have trouble coping.
The budget airline says it may abandon its aggressive growth strategy from 2012 and start paying dividends. This may be a tactic to scare Boeing into sweetening terms on a massive order for planes. Either way, the discipline of dividends could support Ryanair’s drifting shares.
The Spanish construction group will take a E142m hit selling the London airport to infrastructure rival GIP at below regulated asset value. The deal is the cost of Ferrovial being allowed to keep flagship airport Heathrow. And it's a reminder of the crazy prices paid in the boom.
That doesn’t mean gloomier. Quite the contrary. Tax dodging, always big in Spain, seems to be booming in the recession. But it’s a dangerous habit that may make the government’s task of balancing the budget harder when growth returns.
The Spanish operator is boosting next year’s dividend by 22% - another bullish sign from an operator that has outperformed its peers by a wide margin. The shares have done well, but there could be more upside, as long as Telefónica keeps hitting its targets.
Like Air France/KLM before them, the UK and Spanish flag carriers have devised a convoluted structure to circumvent regulatory hurdles. The snag is that neither party has real control. Extracting the claimed E400m of synergies will be tough. This deal is off to a bad start.
Caja Castilla la Mancha will be taken over in an opaque, politically influenced deal. The country’s savings banks have too many connections for anything else. But the new structure may at least open a window for the healthier commercial banks to buy into this weak sector.
The UK airline is haemorrhaging cash and frantically cutting costs to deal with a probable £1bn fall in sales this year. It is hard to see how BA can pull off its long-discussed merger with Spain’s Iberia in this state. But while progress is slow, BA’s fortunes may be bottoming.
The 47% drop in the oil giant’s Q3 earnings was less than feared, thanks to impressive cost control. BP is promising further efficiency gains by the year-end. Long-term strategic issues persist. But for now, BP is reaping the benefits of past investments and a stronger oil price.
Spanish infrastructure group Ferrovial postponed the sale of the London airport in May. The conditions for an auction are now more favourable and BAA, the subsidiary that owns Gatwick, is in better shape. Still, that doesn’t mean the asset will fetch the £1.6bn its vendor wants.
Mayor Boris Johnson’s plan for a new airport on the Thames Estuary doesn’t tick enough boxes. Construction would be hugely expensive and the area’s birds could be a crippling problem. Then there’s the fate of Heathrow and its 72,000 employees. The idea is a distraction.
The Spanish bank has floated a minority stake in its Brazilian business. Most of the proceeds are to be reinvested in the region. But the temptation will be to go shopping. With future capital needs unclear, and its home market still troubled, Santander must exercise caution.