Bank of America

"Kaiser was unconvinced by industry representatives’ claims that, with plants operating at 28 percent of capacity in the throes of the Depression, price fixing was inconceivable. 69 However, he was so busy with dams and other jobs in 1933 that he postponed building his own cement plant. Losing the Shasta job provided him the incentive he needed. The “Big Five” cement producers confidently expected a lucrative contract at Shasta; who could challenge them? Kaiser entered the list. Time was one ally; he knew it would be more than a year before Pacific Constructors required cement deliveries at Shasta. Still, Bureau of Reclamation officials were incredulous when Kaiser informed them he intended to bid on the cement contract. From his office in Denver, Chief Engineer R. F. Walter opposed Kaiser’s plan on several counts. His most significant objection was based on disbelief that a single plant could maintain steady deliveries of cement over three years, in the face of possible labor problems, machinery breakdowns, and faulty batches of cement. Kaiser noted that the bureau planned to obtain sand, gravel, and other materials from single suppliers; if the chief’s logic applied to him, it should also affect other potential vendors. Bureau engineers also stressed that Kaiser had neither experience nor a cement plant. 70 Kaiser informed Walters that he had already taken steps to enter the industry. Engineers located plentiful limestone deposits along Permanente Creek in Santa Clara County, and Kaiser leased the land with an option to purchase. Kaiser’s assistants also arranged financing from the Bank of America for plant construction, and arranged with railroads for delivery to Redding, which was close to Shasta. 71 Kaiser faced a tough battle persuading government officials to take him seriously, but he had one significant advantage. West Coast cement suppliers had established a pattern of submitting nearly identical bids on contracts. Kaiser learned that this practice had alienated Ickes, who abhorred even the hint of price-fixing. A month before bids were opened, Kaiser presented a list of the “monopoly’s” trangressions to Ickes’ office. In addition to its usual activities, the cement trust had allegedly interfered with construction of his cement plant, organizing neighborhood protests against his planned facility, pressuring railroads to hike rates for shipment of Kaiser’s cement, and engaging in other restraints of trade. 72 Despite Kaiser’s bold initiative, industry officials were still surprised at the outcome of the bidding for cement at Shasta in the summer of 1939. The West Coast combine came in at $ 1.41 per barrel, close to negotiated prices on many other jobs. They were shocked when Kaiser bid $ 1.19 per barrel and tried to convince bureau officials that accepting Kaiser’s bid was far too risky. Bureau officials wavered. Combine leadership included some of the West Coast’s most powerful men: A. E. Wishon of Pacific Gas and Electric; George Cameron, publisher of the San Francisco Chronicle; and others. Yet government officials signed papers in June 1939 for $ 6.9 million worth of cement from Kaiser. A few years later, a California railroad man observed: “If Kaiser’s life can be said to have a turning point, it was then. He licked a tough bunch. From then on, he wasn’t afraid to tackle anything.”"

"In February 1985 Peter Munk had announced his strategic goal for Barrick Resources: in three years its mines would be producing 300,000 ounces of gold a year. In 1984 the production was 34,000 ounces. As 1985 closed out, Peter Munk was beginning to maximize the leverage that only ownership of the gold reserves of producing mines could bring. He borrowed (at 2-percent interest) 77,000 ounces of gold against Mercur’s reserves. He then sold that bullion on the open market for US$25 million. Those funds were used to pay off the total short-term debt to the Bank of America, leaving only $8 million in long-term debt for the Mercur acquisition."

"Kaiser was unconvinced by industry representatives’ claims that, with plants operating at 28 percent of capacity in the throes of the Depression, price fixing was inconceivable. 69 However, he was so busy with dams and other jobs in 1933 that he postponed building his own cement plant. Losing the Shasta job provided him the incentive he needed. The “Big Five” cement producers confidently expected a lucrative contract at Shasta; who could challenge them? Kaiser entered the list. Time was one ally; he knew it would be more than a year before Pacific Constructors required cement deliveries at Shasta. Still, Bureau of Reclamation officials were incredulous when Kaiser informed them he intended to bid on the cement contract. From his office in Denver, Chief Engineer R. F. Walter opposed Kaiser’s plan on several counts. His most significant objection was based on disbelief that a single plant could maintain steady deliveries of cement over three years, in the face of possible labor problems, machinery breakdowns, and faulty batches of cement. Kaiser noted that the bureau planned to obtain sand, gravel, and other materials from single suppliers; if the chief’s logic applied to him, it should also affect other potential vendors. Bureau engineers also stressed that Kaiser had neither experience nor a cement plant.70 Kaiser informed Walters that he had already taken steps to enter the industry. Engineers located plentiful limestone deposits along Permanente Creek in Santa Clara County, and Kaiser leased the land with an option to purchase. Kaiser’s assistants also arranged financing from the Bank of America for plant construction, and arranged with railroads for delivery to Redding, which was close to Shasta.71 Kaiser faced a tough battle persuading government officials to take him seriously, but he had one significant advantage. West Coast cement suppliers had established a pattern of submitting nearly identical bids on contracts. Kaiser learned that this practice had alienated Ickes, who abhorred even the hint of price-fixing. A month before bids were opened, Kaiser presented a list of the “monopoly’s” trangressions to Ickes’ office. In addition to its usual activities, the cement trust had allegedly interfered with construction of his cement plant, organizing neighborhood protests against his planned facility, pressuring railroads to hike rates for shipment of Kaiser’s cement, and engaging in other restraints of trade.72 Despite Kaiser’s bold initiative, industry officials were still surprised at the outcome of the bidding for cement at Shasta in the summer of 1939. The West Coast combine came in at $1.41 per barrel, close to negotiated prices on many other jobs. They were shocked when Kaiser bid $1.19 per barrel and tried to convince bureau officials that accepting Kaiser’s bid was far too risky. Bureau officials wavered. Combine leadership included some of the West Coast’s most powerful men: A. E. Wishon of Pacific Gas and Electric; George Cameron,…"

"But of course the moment I was seen to be back in the game, the calls began again. For me, it happened suddenly, almost as if it was on the flip of a coin. In late 2013, Jamie Dimon, chief executive of JP Morgan, rang me and said that he was personally at my disposal if I needed any help with a $1 billion bond issue being undertaken by Play, the Polish telecoms operator that I had set up back in 2005. The bank was very keen to handle it, and we were glad to oblige. Then I got a call saying the same thing from Brian Moynihan, chief executive of Bank of America. JP Morgan and Merrill Lynch ended up getting the mandate to act for Play on the bond issue. And as part of the process, which other global bank should be back at my office offering to lend us $1 billion but Deutsche Bank? That was ironic. Some of the bankers we dealt with this time were the same ones who had put all that debt into Actavis, very nearly losing a good deal of it. I rang them to say that they weren’t going to get the bond issue mandate, and then got a text message back saying that they were prepared to underwrite the whole issue. I couldn’t believe they were prepared to do the same thing that ended up with us both in trouble the last time we did a deal together."