Melrose Industries Share Discussion Threads

[meanwhile] 06/4/2018 18:31

This Article from the Daily Mail, who have, of course, campaigned against the takeover.

GKN faces having its credit rating downgraded by City analysts over the £1.4billion debt the new owners Melrose plan to pile on the firm
• Moody’s has put the 259-year-old engineering company’s rating under review
• That could ability to raise cash, force it to pay more money in to i pension fund
• Melrose, a City turnaround firm, is borrowing £1.4billion to pay for the deal
By Rachel Millard City Correspondent For The Daily Mail
Published: 02:03, 6 April 2018 | Updated: 10:32, 6 April 2018
British defence giant GKN faces having its credit rating downgraded by City analysts over the £1.4billion debt that new owners Melrose plan to pile on the firm, it emerged last night.
Moody’s has put the 259-year-old engineering company’s rating under review amid concerns that it may struggle after its controversial takeover goes ahead.
Melrose, a City turnaround firm, is borrowing £1.4billion to pay for the deal, and is also taking out loans of £2.1billion to pay off existing debt.
Redditch-based GKN makes parts for cars, airplanes and fighter jets, employing 58,000 around the world, including 6,000 in the UK
A weaker credit rating could affect confidence in the firm, hit its ability to raise cash, and force it to pay even more money in to its pension fund.
It comes after several warnings from critics that Melrose’s ‘debt-fuelled’ takeover would be bad for GKN, which made sales worth about £10billion last year.
Tony Burke, assistant general secretary for manufacturing at the Unite union, said last night: ‘Moody’s warning that it may have to downgrade GKN’s credit rating following the Melrose takeover shows that there are still major concerns in the financial world about this takeover.
‘Unite is seeking guarantees on long-term job security and investment.’ Matthias Heck, Moody’s lead analyst for GKN, said: ‘Our review for downgrade stems from the takeover bid of Melrose, which has now been accepted by the majority of GKN shareholders, and the related uncertainties about GKN’s future shareholding structure, capital structure and business profile.
‘GKN’s rating is already weakly positioned on a standalone basis.’
He added that the review of the company’s debts would focus on the impact the takeover would have and ‘the proposed refinancing measures of GKN’s debt by Melrose’. Moody’s had already downgraded GKN in March after the firm announced plans to split itself up in the face of Melrose’s hostile bid.
Melrose is buying GKN after narrowly winning a fierce hostile takeover battle with 52 per cent of shareholder votes.
Redditch-based GKN makes parts for cars, airplanes and fighter jets, employing 58,000 around the world, including 6,000 in the UK.
Melrose aims to turn around under-performing firms and sell them on at a profit, often within three to five years, raising widespread concerns about GKN’s future.
Under its plans, the enlarged Melrose group would have a higher level of debt-to-profits ratio than GKN currently has. That can put the company at greater risk from rising interest rates and put stress on the company’s pension fund as trustees may take the view the company is less reliable.
Quizzed about debt in Parliament last month, Melrose’s vice-chairman David Roper, 67, said it was ‘prudent’;.
Mr Roper added: ‘We think the level of borrowings we are taking into this transaction is a prudent level of borrowings.
‘This is what we have done for the last 30 years.’
The concerns over debt come as the Government is under huge pressure to block the takeover on national security grounds, because GKN makes parts for key military contracts such as the F-35 and Eurofighter Typhoon fighter jets.
Former defence secretary Sir Gerald Howarth became the latest military figure to urge the Government to step in.
Melrose has pledged not to sell off GKN’s aerospace division, which does the defence work, for five years, and to keep Melrose’s headquarters in the UK.
But Unite’s Mr Burke said: ‘The assurances that Melrose gave to business secretary Greg Clark last week are insufficient and are not in our view legally binding. We also believe that the issues we have raised in regard to national defence and security issues have not been addressed.’

[meanwhile] 06/4/2018 16:50

What the hell do Moody's know about anything? Clueless.

[meanwhile] 06/4/2018 09:51

I assume it's from these 2, Minerve. I haven't seen their posts for 3 days now; I was just receiving stupid, irrelevant questions from getting and I'd had enough of the other's habitual boasting.

So now, I only see 'constructive dialogue'.

[brexitplus] 06/4/2018 09:13

Getting. Has been for a while. Nowhere to go in Snowdonia.

[gettingrichslow] 05/4/2018 23:57

Meanwhile, you have literally become Minerve's lapdog. Yes sir, No sir, three bags full sir! You need to get out more!

[meanwhile] 05/4/2018 22:16

Yes, Minerve.
If GKN, the company, were the loser, GKN shareholders who sold out at around your price were the winners here.
Selling out now at 424p looks not too good a deal, when compared to the potential from the Dana sale, the Powder Tech. sale & Project Boost under GKN.

[meanwhile] 05/4/2018 17:31

Has anyone an opinion on the cause of the last 2 days' falls in both MRO & GKN?

Could it be that MRO can be got 10p cheaper by buying GKN? Or just sentiment.

[minerve] 05/4/2018 13:13

4 April 2018

Moody's Places GKN Rating Under Review For Downgrade After Melrose Bid.

Looks like my sale at 450p and above was astute.

[brexitplus] 05/4/2018 11:09

Getting

I understand. But he must be lonely where he lives with his cats, chickens, abacus and Idiots Guide to Simple Sums. Mrs Meanwhile probably rules with a rod of iron, so he has to take it out on someone. Nothing else to do. Except, you may have heard the phrase

“Snowdonia, where men are men and the sheep are SCARED.”

Anyway, keep up the good work. Like me you must be starting to understand what missionaries were up against in the 1800s.

By the way, have just noticed GS have more than doubled their Melrose holding to near 7%. Well actually 6.86% to be precise, but I only work to two decimal places!!!

[gettingrichslow] 05/4/2018 11:02

B+, well I didn't really want to talk about anything like that but when someone calls you "a simpleton", and "frightened of numbers" there comes a point where you have to respond! And I was actually trying to be helpful to Meanwhile by giving him a simple equation that he could understand...but he got all angry again!

[meanwhile] 05/4/2018 09:58

Well put together, getting. You must have been up all night.

[brexitplus] 05/4/2018 09:39

Getting. No wonder you provide such good and informative posts.

But please don’t boast or you will be slapped down by the man with the Idiot’s Guide to Simple Sums, like me.

[meanwhile] 04/4/2018 22:39

getting,

Numbers really frighten you, don't they.
Let me recommend a book for you which is entirely free of numbers. You can read this book at bedtime instead of wasting your efforts, and other people's, on this board.
It's titled "Noddy and Bigears go to the seaside".

[gettingrichslow] 04/4/2018 21:48

Meanwhile, maybe you could send the Labour MPs a copy of that book you bought recently which you use to do your clever calculations!!

[meanwhile] 04/4/2018 17:03

getting,

"one could tell just by the questions that some of the left wing MPs were asking they hadn't got a clue how anything works."

This could be a great opportunity for you to tell them then.

[minerve] 04/4/2018 16:51

You forget that the whole thing was politicised and broadcast on TV and generally therefore the questions asked were pitched to appeal to the audience rather than get anything sensible back for real use from Melrose. Also, if the conservatives look to be the aggressors on the panel it may release them from having to move further left in the compromises later on - it steals the thunder from the left. It is sort of a bit like what the sailors use to do: offer yourselves for work whilst the ship is in port to save yourself from being the first for duty on more difficult tasks whilst at sea.

[brexitplus] 04/4/2018 16:44

Getting

I of course meant lefty liberals.

I agree about some of the Labour MPs. No idea. And when the not very bright unions came on the Labour crowd fed them leading questions to help them. Embarrassing really, but not unexpected.

[gettingrichslow] 04/4/2018 16:42

Minerve, I agree - she asked some sensible questions. But that rather accentuates the point because she stood out as being fairly astute/sensible and she was not one of the left wingers on the panel.

[minerve] 04/4/2018 16:36

gettingrichslow

Antoinette Sandbach was one of the panel who asked searching and difficult questions of Melrose and she is a conservative MP.

[gettingrichslow] 04/4/2018 16:26

I think B+ is right on that point re: socialists. Throughout this bid process they have shown themselves to be away with the fairies and out of their depth. The GKN Parliamentary Cttee was full of examples of this where one could tell just by the questions that some of the left wing MPs were asking they hadn't got a clue how anything works.

[brexitplus] 04/4/2018 15:05

Thanks Grahamburn

Hilarious. Surely it’s the 4th of April, not the 1st!!!!

That’s leftwing/socialists/liberals for you. Haven’t got a clue!!!

I had missed the Dana comment but found it now. They didn’t care and got £40million for not caring. Typical of Stevens and co.

"This has always been an opportunity, not a required or critical asset.”