Monday, May 17, 2010

Karl's already highlighted what should by of major concern to everyone about this - although Enterprise dusts it off as tickety boo cash raising this a dangerously expensive way to pay off debt.

What really is happening here is disinvestment on a grand scale. The cash raised is immediately soaked up in a gargantuan debt sponge creating a huge amount of further punishing long term debt left payable. This does nothing for the estates or the business other than stave off imminent corporate financial collapse. It's a spreadsheet exercise that works on paper but which defies all rationality and cannot succeed in the long term. Very few people seem very concerned about this and that, really, should be the gravest concern of all. Why are practices such as this acceptable at all?

Where do the trade journals sit in all of this? Why does no one rigorously question these short term business practices in the main pages? Why is the trade press so passive in reporting? Where is the deep comment and analysis in this industry? At times, on a couple of online forums. Where is robust analysis of the pub market really done in this industry? Occasionally it seeps through in the odd article in the Business or Society pages of the Broad Sheet press and less so in the Red Tops. Once in a while a ten minute slot on TV. Apart from that there's scant little evidence of there being anyone taking the pubcos to task at this level.

Has any trade journal thought to ask the leaseholders of these properties what they think? Does the leaseholder's view hold any value whatsoever? NO clearly not. Do the leaseholders even know their freeholder has changed? Do they even know their building is being flogged off at auction? Were they offered first refusal to be paid to buy the freehold of their own business? Of course not. They are cash cows they are units they are of no value to the pubco other than as an asset and income stream.

The people who run businesses out of these buildings pay Enterprise handsomely for the privilege. How do they feel about this blatant proof that the pubco makes so much money out of their endeavour that it can afford to PAY other people to buy the freehold and do so just to pay off unsustainable debt?

What does it say about the attitude of the press and this pubco towards its tenants?

What, really does this all say about this industry?

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