Tuesday, December 23, 2008

The Loan of Your Dreams

That would be a government guarantee like the one MK just got. Perhaps you will remember that it was the presence of a government guarantee that enabled the infamous Illovo Deal to go forward.

And it's not just any loan we're talking about here: it's the best you can get in the land for no one should be able to borrow at a rate the goverment does because of its monopolies to print legal tender paper and tax us to death. But it's definitely not a substitute to lapses in corporate governance. 

It appears that Air Mauritius seriously messed up its liquidity with its hedging and has been bailed out with the guarantee. As such we need to know what has happened, who did what and what is the downside so that the decisions which are in the best interests of the citizens are taken.

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