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Re: British Steel is state-owned once more
Quote:
Originally Posted by Carth
I once worked at a profitable UK company that was taken over by a foreign business with similar businesses elsewhere. Funnily enough we were soon declared to be losing £100 million a year and asset stripped  |
What they do is borrow billions of pounds/dollars to buy the company, using its assets/profit margins as collateral*, then have to spend all the profits paying back the loans, which leaves little to invest in the company, which means they have to cut costs (people/sites), which leads to customers dissatisfaction, reducing sales/profits more, then they sell off the loss-making company to another subsidiary, which can then write off the losses and cannibalise the assets.
* all the while taking management fees at every step of the way…
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