Already buckling under heavy debts, airports operator BAA suffered a further
blow when its credit rating was slashed to BB-, relegating it to junk status.
Credit rating agency Standard & Poor’s said poor quality service and high
staff turnover in senior management had prompted the cut.
BAA, which operates Heathrow, Gatwick and Stansted, was acquired by a
consortium led by Spanish group Ferrovial for £16.3bn. The deal was highly
leveraged and the group has since encountered refinancing delays that could lead
to ‘liquidity tensions’ S&P warned.
The high leverage allowed the consortium to take advantage of generous tax
relief on interest on debt, but the company, with earnings of £879m, now has
little headroom to cover the £820m debt on BAA’s books.
The BAA rating cut will raise concerns over foreign acquisitions of key UK
assets and the risks using of heavy leverage to make acquisitions.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Baldwins Accountancy Group has continued investment in the north-east and appointed David Fish as a director in its corporate finance team