Bond money could be used for Aurigny loan
AM I missing something? Aurigny is wanting to take out a loan of approximately £46m. and asking the States of Guernsey to act as guarantor for this loan. From the following quote it seems that Aurigny is fully owned by the SofG, ‘Cabernet Ltd is the 100% holding company for the Aurigny Group, which consists of Aurigny Air Services and Anglo Normandy Aero Engineering. The holding company is itself 100% owned by The States of Guernsey acting by and through the States Trading Supervisory Board’.
The SofG have a bond which has £190m. going spare (‘Bond money could go to private projects’, 9 November) and they are looking into the possibility of lending money to private companies.
Would it not be sensible to lend Aurigny the money from the bond, which was obtained when interest rates were very low, and charge Aurigny accordingly? Why should the 100% States-owned airline borrow money at a higher rate of interest when the States have a bond with money they don’t know what to do with at a much lower rate of interest?
The conclusion is that the SofG don’t think that Aurigny will ever be able to pay back the loan, which again is twisted thinking as the SofG will then have to pick up the tab anyway. Doesn’t make sense to me or anybody else methinks.
JOHN BUCHANAN SNR.