Quote:
Originally Posted by Mudge
Buy an oil refinery or other assets to leverage debt against in times like this. Diversify the business. I.e., amazon just isnt direct sales. They sell cloud space etc.
Buy an oil refinery? Like Delta? Then put the refinery in an LLC (Monroe Energy LLC) so those refinery losses (and they're not small for Delta) can be kept off balance sheet? Then have management BS everyone and tell the public that it's a success?
Well, I guess that strategy would make United less of a takeover target.
Unfortunately, we now have Apollo Global Management (vultures) circling United. They bought $2B of secured debt. If United goes chap 11, this would give them significant leverage in the creditors committee. It's a takeover strategy that scumbag vultures use; Icahn's used it in the past as have other dirtbags.
Quote:
Originally Posted by AxlF16
BTW I wonder how Deltas refinery business is going now? The price of jet fuel seems pretty low.
The refinery is basically a hedge on the crack spread. And the crack spread has collapsed. Even in normal times, the refinery was a money loser. Now it's an albatross around Delta's neck.
In addition, Delta's Monroe Energy LLC has bought a ton of crude hedges so they're taking a second beating on those hedges.
All of this is off balance sheet so it would take a lot of digging to figure out the magnitude of losses for that refinery.