Friday, 5 Mar 2021

Business Insider: Greg Foran’s year ahead: Dealing with an image problem

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Foran's image problem

A year into the job as chief executive of Air New Zealand, Greg Foran will be left in no doubt about what the role is all about.

First, airlines are fiendishly complicated businesses to run – exponentially so during a pandemic.Second, being boss of the national carrier comes with an expectation that he’s going to face scrutiny from its majority owners: The hard-working taxpayers of New Zealand.Through the Government, the public owns 52 per cent of the airline and more if the latest state loan is converted to equity.

Foran has limited his public exposure during what has been the worst financial crisis in the airline’s history.The shock around the last time it nearly went under in 2001 before being rescued by a Government bailout was a relatively short one. This time around (and the Government has stepped in again with a $900 million loan) the path back promises to be much bumpier as the entire airline and travel industry is in crisis.

Air New Zealand fell from consumer darling last year, slow to pick up on the PR damage being done by the credits and refunds crisis. It became the Commerce Commission’s most complained about company up to the middle of last year.

Marketing expert Mike Lee says, after all the negative publicity, the airline appeared to have disappeared “like a naughty kid that’s been sent to their room or the spouse that’s been banished to the dog box”.

The Auckland University academic says a new year is a good time for new beginnings.

“The public might be ready to see them come out of their naughty corner, remind the nation of our valuable partnership, and explain to us what they have been thinking, and what they intend to do.”

Foran headed Walmart in the US before starting at Air New Zealand and is on what the airline describes as a “normal permanent contract”.

Lee reckons there’s plenty of scope to brush up the airline’s image.

“They should play to the narrative of Kiwis being the underdog punching above our weight. They can juxtapose the incredible success story of our nation’s team of five million Covid response alongside Air NZ’s humble beginnings from underdog to a globally awarded airline.”

And he reckons the growing taxpayer stake can work in its favour.

“In essence, the campaign would build/reclaim the relationship with the NZ public (which theoretically are shareholders) by displaying our common origins, but also communicate to the public what Air NZ is doing with our support/funding.”

This could even include talking up what holding on to customers’ money in credit rather than refunds has allowed this to do, Lee says.

The PR job will be done with a changed media team at Air New Zealand with the latest departure being Anna Cross who has followed the airline’s former revenue boss Cam Wallace to MediaWorks where she is head of corporate communications.

Jersey Ben(eficiar)ies

After long-winded legal action in the British Virgin Islands, then London, the epic saga of Watson v Glenn now looks to have spread to the tax-haven Isle of Jersey. There Sir Owen Glenn, seeking £46.5m in compensation and costs awards, recently sought to break open three trusts which named Eric Watson as beneficiary.

Referencing the findings of English courts of his both Spartan deal and his recent accommodations at Pentonville Prison, the ruling from the Jersey Royal Court noted: “By way of background, at the suit of Kea, Mr Watson is an adjudicated fraudster in and contemnor of the Courts of England and Wales.”

These three trusts – Kowhai, Glacier and Libra – all have Watson’s right-hand-man William Gibson as protector and Watson as beneficiary. Lawyers for Glenn argued there was “a strong basis for saying that Watson is engaged in an unlawful conspiracy with the [Gibson], his ‘right hand man’, to defeat his creditors”.

The Jersey judges said victory for Glenn here would have likely have cut short the opportunity for this legal warfare to further bloat.

“This application, if successful, may provide [Glenn] with a shortcut to what would otherwise be expensive causes of action available to it in Jersey against the trusts, namely a proprietary claim and fact-intensive claims that at least some of the corporate assets within the trusts are in fact held on resulting trusts for Watson.”

As it turned out, Glenn’s action was largely unsuccessful (aside from claims made against loans made by Watson to the trusts), with the court ruling creditors are not entitled to compel trusts to satisfy debts even if the debtor is a beneficiary.

But this defeat is likely only the first skirmish in a new front in one of the most expensive legal wars in New Zealand history. To date the parties have combined to spend around $60m on lawyers, with Glenn outspending his opponent two to one.

John Moore's new gig

Technology-focused investment bank and corporate advisor North Ridge Partners has appointed investment banker John Moore as its New Zealand partner.

For the last seven years, Moore has helped a wide range of small and medium-sized New Zealand companies raise equity and undertake strategic transactions at the corporate advisory firm he founded, Miro Capital.

Moore has previously held senior equity capital markets and mergers and acquisitions roles at Craigs Investment Partners, ABN AMRO and Jardine Fleming across New Zealand and Asia.

North Ridge said it is already working with a wide range of New Zealand technology companies with offering strategic advice, capital raising and merger and acquisition services. It most recently assisted with the recapitalisation of New Zealand tourist media company Magic Memories.

North Ridge was founded in 2003 by Roger Sharp, a former ABN AMRO staffer, who is also chair of ASX-listed Webjet, NZX-listed Geo and Lotto New Zealand. He is also deputy chair of Tourism New Zealand.

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