The Motley Fool Discussion Boards
Stocks B / Berkshire Hathaway
|Subject: Re: NetJets||Date: 8/7/2012 5:48 PM|
|Author: StevnFool||Number: 193097 of 212871|
I could be wrong, but my read of this would be:
The orders include cancellable commitments for 125 aircraft:
I expect cancelling these would involve a cancellation fee payable to the supplier so this part of the deal favours (or provides some protection to) the supplier. I presume the cancellation fee would be structured in some way based on the quantities and timing of the cancellations.
and options to purchase an additional 300 aircraft, with respect to which, NetJets is not presently obligated to acquire.
I expect that this part of the deal favours Net-Jets in that it can purchase up to 300 aircraft at a predetermined price (which presumably has some escalation clauses built in dependent on the purchase / delivery date).
So I think there is something for both parties in this deal as you would hope (win-win).
|Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|