Marketing Artist L.L.C.

Corporate Communications Consulting by Andrew Tytla

Author: Andy Tytla

Published: 237 articles

Digest-Size Debt Load

Reader’s Digest is filing for bankruptcy? Why? Such a strong publishing organization, it practically had a license to print money. Well, then again, so did many other print media.

Was it the cost of paper and postage or was it the Internet revolution? Partially, yes. I’d think most would agree the company was overly leveraged:

I remember wondering why it was a good idea to take a struggling company and load it up with leveraged buyout debt. But buyers were there for the debt, at interest rates that were not very high, and the deal was done.

Today Reader’s Digest said it will skip interest payments on a bond issue and file a prepackaged bankruptcy. The deal will give equity to some creditors, and slice debt from $2.2 billion to $550 million. The L.B.O. investors are wiped out, and creditors take large losses. Some creditors have agreed to put more money in. The publication will stay in business.

Add “The Digest” to the modern pantheon of P.E. failures.

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Desert Riches

I can’t help but to think of Frank Herbert’s Dune series when I came across this massive project. It’s called Desertec and it intends to harness solar thermal energy from the Sahara:

The DESERTEC Concept describes the perspective of a sustainable supply of electricity for Europe (EU), the Middle East (ME) and North Africa (NA) up to the year 2050. It shows that a transition to competitive, secure and compatible supply is possible using renewable energy sources and efficiency gains, and fossil fuels as backup for balancing power.

A close cooperation between EU and MENA for market introduction of renewable energy and interconnection of electricity grids by high-voltage direct-current transmission are keys for economic and physical survival of the whole region. However, the necessary measures will take at least two decades to become effective. Therefore, adequate policy and economic frameworks for their realization must be introduced immediately. The role of sustainable energy to secure freshwater supplies based on seawater desalination is also addressed.

In order to find a viable transition to an electricity supply that is inexpensive, compatible with the environment and based on secure resources, rigorous criteria must be applied to ensure that the results are compatible with a comprehensive definition of sustainability. A central criterion for power generation is its availability at any moment on demand. Today, this is achieved by consuming stored fossil or nuclear energy sources that can provide electricity whenever and wherever required. This is the easiest way to provide power on demand. However, consuming the stored energy reserves of the globe has a high price: they are quickly depleted and their residues contaminate the planet.

With the exception of hydropower, natural flows of energy are not widely used for power generation today, because they are not as easily stored and exploited as fossil or nuclear fuels. Some of them can be stored with a reasonable technical effort for a limited time-span, but others must be taken as provided by nature. The challenge of future electricity supply is to find a mix of available technologies and resources that is capable of satisfying not only the criterion of “power on demand”, but all the other criteria for sustainability too.

Deutsche Welle did a nice report on the project last month…

[youtube=http://www.youtube.com/watch?v=FKmUALFRhhs]

Awesome project. How can you argue against it? The U.S. should attempt something similar in the Southwest.

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