Predator

by Wilbur Smith

  “Right,” said Bendick, only too happy to be in agreement for once.

  “So that means they lost money twice over, once from the cost of the rig and a second time from all the oil they can’t be drilling no more. Right?”

  “Uh-huh.”

  “Now, what if the same thing happened right here, in Angolan waters? What if they lose another rig, and they lose the chance to make money from getting to all that sweet African crude? I mean, once is bad enough, but twice? C’mon! They gonna be screwed.”

  “In theory, yeah, but the Bannock board already know the risk they’re facing and they’ve taken steps to protect themselves. Bigelow’s been on TV, spoken to the Wall Street Journal, given briefings to all the top financial bloggers just letting everyone know there’s never been an offshore field in history had the kind of defensive systems they’re putting in place here. Listen, you’re not the only one around here knows about Bannock Oil. You think when I go after a corporation I don’t get dossiers on all its top people? Hector Cross is in command of the whole operation, and he knows what he’s doing. He’s kept the oil flowing out of Abu Zara for years and if any wise guys ever try to disrupt production there, Cross and his men just whack ’em. What makes you think he’s gonna mess it up, just because he’s killing Africans instead of Arabs?”

  “Let’s say I got my reasons,” Tumbo replied. “I’d like to tell you what they are, but you don’t want me to do that.”

  “Why not?”

  “It’s for your own protection. If’n you don’t know what’s going to happen, you can’t be responsible or accountable when it does. You can say, ‘Hey, I didn’t know they was gonna do that. I just figured, Africa’s a dangerous place, something might go wrong and I’m going to be ready when it does.’ And no one can do anything, ’cause you’ll be telling the truth. But if certain, ah, unfortunate events take place, and you knew about them all along, then that might make you an accomplice, or a conspirator, and you don’t need that, my friend, ’cause believe me, you’d be easy meat the moment you stepped inside a jail.”

  “This is you giving me deniability, huh?”

  “Exactly. Now, one more thing: you suggested I was manifesting ignorance about the ways and means of making money from a corporate meltdown. Go ahead, then, enlighten me.”

  “OK,” said Bendick, relieved to be back on his own territory. He gave Tumbo a brief lecture in the basics of leveraged trading. First he talked about stock options: how it was possible to pay for the right to buy stock at a set price, at a set future date, if you thought the stock was going to rise above that price; or pay for the right to sell at a set price, at a set future date, if you thought it was going to fall below that price. But Tumbo was not impressed.

  “I know that long and short shit, man. ‘Put options’ and ‘call options’ ain’t no more than a fancy way of calling up a bookie and placing a bet. What else you got?”

  “Well, do the initials CDS mean anything to you?”

  “I know they are one letter away from a TV network, that’s for sure.”

  Bendick laughed politely, not wanting to offend. “Yeah, CBS, that’s a good one . . . but it’s not what I had in mind. A CDS, or credit default swap, is basically a form of insurance. Say you loan someone a million bucks and you think to yourself: Man, what if that sonofabitch goes bust and can’t pay his debt? . . .”

  “Then I go around there and whup on him till he pays me, or dies, I ain’t bothered which,” Tumbo said casually.

  “Or . . . or you could buy a credit default swap,” Bendick suggested. “Basically, it was invented as a way of insuring a debt. So you loan the million bucks, then you go to someone else, who sells you a million-dollar CDS, in return for an annual premium, just like a regular insurance policy. You pay them a set amount every year for the full term of the agreement. If the money you loaned is paid back, then you’ve spent the premium money, but you don’t care because you were probably getting more in interest from the guy who took your money.”

  “Damn straight I am.”

  “But if the guy who took your money defaults, then the one who sold you the CDS has to pay you the million you just lost. It’s exactly like an insurance company paying you if your car is written off or your house burned down, except for one big difference. In regular insurance, you can’t insure something you don’t own. I mean, say you live next to a guy and you know he’s a smoker, plus he gets wasted every night. You figure, sooner or later he’s gonna burn his damn house down. So you know something the insurance company doesn’t know and if you could buy insurance on this neighbor’s house, then you’d collect a ton of cash when the house burned down. You with me?”

  “All the way.”

  “OK, so, back to that burning house . . . the problem here is, you can’t buy that insurance, not if you don’t own the house. But, and here’s the thing, you don’t have to own shit to buy a CDS. If you think a business is going to fail, you can buy a CDS secured on that business—strictly speaking, on its corporate bonds—and when it goes under, you collect on the full value of the CDS. Now, if you’re looking at a triple-A-rated corporate bond, then the premium rate is real low, not much more than ten basis points—that’s one tenth of one percent. So you can buy a billion dollars” worth of coverage for a million bucks a year. That means you stake a million to win a billion.”

  “Oh, I like those odds.”

  “Yeah, well, they won’t be so good for Bannock. The whole world knows it’s had a rough ride lately, so the premium will be higher, maybe even as much as one hundred bps, which is one percent, so now you’re staking ten mill to make that billion. But that’s still terrific odds, am I right?”

  “Damn straight.”

  “And here’s the real beauty of it: Bannock doesn’t have to go bust. Suppose it gets hit real bad, so it’s not flat out on the canvas, but it’s definitely taking a standing count. Well, then the premium price of a CDS goes up and up, in line with the risk. I mean when it looked like Greece was gonna default on its loans, the price of a CDS on Greek government bonds went up to ten thousand bps. That was one hundred percent, the full value of the loan, payable every year. So if you’re holding a billion-dollar Bannock CDS with a really low premium, someone who’s got Bannock bonds and is in danger of losing every cent of them is gonna pay you a whole lot of money to take that CDS off your hands, just so they’re covered if Bannock goes under. Still with me?”

  “Oh yeah, I sure am,” Tumbo purred. “And I’m thinking to myself, maybe you should take that hundred mill I put into your fund and into that escrow account and go buy every cent you can of credit default swaps on Bannock Oil for me, and as many as you want for yourself with your own money, too.”

  “No, that’s not how it’s going to work,” Bendick said. “What’s going to happen is I’m going to put your money into those CDSs and we’re gonna split the proceeds fifty-fifty.”

  Tumbo looked at him, frowning, then burst into laughter. “You’re kidding me, right? You’re just busting my balls, ’cause you can’t possibly be serious ’bout taking half my money offa me, just to be my damn broker.”

  “Absolutely I am. My guess is, you would have a hard time as an individual finding anyone willing to take your business. They might want to know your real name for a start. So I’m taking a risk, right from the off, and I need to be compensated. In addition to that, I operate very publicly and if people see me, the famous Aram Bendick, taking a massive short position against Bannock Oil, they’re gonna think they should be in on the action, too. So the price of Bannock CDSs will rise and the price of Bannock stock will fall and I’ll have created a self-fulfilling prophecy. So I figure that’s worth half your money. Plus whatever I put in for myself, as well.”

  “You’re forgettin’ two things,” Tumbo said. “In the first place, none of this happens unless something goes wrong for Bannock out at sea on that rig, and you ain’t having nothin’ to do with that. And second, you really don’t want to mess with me. I mean,
I thought we established that already. But still, I’m gonna be generous. You can have ten percent of my action, plus whatever you add for yourself. I’m in for two hundred mill. That’s pretty much all my spare capital, but I have faith in this proposition and I know you won’t let me down, now, will you?”

  Bendick gulped. “No, I won’t, but I must have twenty-five percent of the upside. Hell, that’s pretty much standard hedge-fund rates.”

  “Fifteen, and I ain’t going any higher.”

  Bendick thought about it. He was getting $30 million worth of CDS action for nothing more than being himself—maybe $3 billion in potential profit on a single deal. What kind of fool said no to that? “I’m in,” he said.

  “Then we got a deal. Now I’ll get you back on that plane. The sooner you land in New York, the sooner you can start buying that CBS, CDS, whatever-you-call-it shit, and the sooner you’n’me start making money.”

  Five minutes later, Bendick was back in the Range Rover, heading for the airport, wondering what the hell he’d got himself into, and how the hell he was going to get out the other side.

  The Cross Bow operation at Magna Grande would require two complete teams of boat crews and armed security personnel, so that they could operate a three-weeks-on/three-weeks-off rotation between the offshore field and dry land. There wasn’t enough room at sea to train both groups simultaneously, so Cross and his core staff would have to spend six weeks on the water, so that they could make sure everyone was up to standard. Meanwhile, they were working sixteen-hour days, selecting enough top-class personnel from existing Cross Bow staff and contract operatives to man this operation without stripping their operations on Abu Zara bare. They also had to find and recruit men with the specialist skills required for maritime work, which was another way of saying ex-SBS, Navy SEALs and Marines, as well as sorting out the complex logistics required to provide all the supplies needed by a large number of people on a long-term mission at sea.

  At the same time, studying detailed schematics of the Bannock A and the oil platform, they had to work out strategies for dealing with all the various crises that could possibly occur aboard two of the world’s biggest floating petrol-bombs. Every conceivable contingency from a long-range missile strike to a single man with a bomb was considered and appropriate responses prepared. New equipment was required, including drysuits that could be worn in the water and on the installations, and the special carbon-fiber helmets whose streamlined shape and ridged surface made them resemble giant shells that are used by waterborne Special Forces.

  All Cross Bow’s standard weaponry had to be reviewed in the light of the particular problems caused by operating in an environment where a singe stray around could spark a fatal conflagration. Under those circumstances the use of firearms had to be a last resort and even then they would have to use ammunition with less penetration, and thus less stopping power than Hector would normally consider acceptable. Furthermore, if the rig or the FPSO ever fell into the hands of terrorists any operation to recover them could well involve a swim, which severely limited the weight of gear that anyone could carry.

  By far the best option in these circumstances was the Ruger Mk II semi-automatic pistol. Though its moral standing had been somewhat diminished by its popularity among hitmen, who loved it for its reliability and the lack of mess caused by the lightweight .22 rounds it fired, the good guys liked the Mk II as well. The U.S. Navy SEALs used its long-barreled AWC TM-Amphibian “S” format, which came with a built-in suppressor and a love for water so great that the makers even suggested pouring a tablespoon or two into the suppressor to make it super silent. In this Special Forces format the Mk II was accurate to seventy meters, an excellent distance for a pistol and far more than was ever likely to be needed in the confines of an oil platform or ship. It weighed just 1.2 kilos, which was much lighter than any rifle, and was still small enough to be holstered against the body or leg without impeding the ability to swim. Cross put in his order without delay, sourced ammunition and holsters and then left the world of gun-dealers for one final, essential requirement: a large box of condoms.

  As he told Agatha, who was far too unflappable to be shocked by the arrival of a gross of contraceptives, “I don’t care how amphibious this gun is supposed to be, a man should always keep both his weapons dry.”

  Just in case conventional methods were not enough, Cross did have one last trick up his sleeve, and to discover how to play it he needed another long session in Harley Street with the ever-reliable Rob Noble. From there he returned to the office for yet more hours of planning. Well after midnight, Hector and Nastiya were scraping the last bits of food from the cartons of Chinese takeaways scattered between them on the conference table when she said, “You need a break, just a little time away from all this.”

  “No, I can’t,” Cross said automatically. “There’s too much to do.”

  “But you can’t do it all yourself. Why don’t you come to lunch with me and Paddy on Saturday? You’ve never even been to our house, and we’ve had it ever since we got married.”

  “If I take any time off this weekend, it’ll be with Catherine Cayla. Nanny Hepworth is bringing her across from Abu Zara.”

  “Well, bring her too! We have some friends who have a little son. Maybe she can meet her first boyfriend.”

  “Over my dead body!” said Cross with mock indignation, his mood lightening up a little.

  “Don’t worry, there’ll be plenty of women to act as chaperones. Come on, it’ll do you good. And there’s someone I want you to meet—someone who’s done you a big favor.”

  Despite himself, Cross was intrigued. “Really, who’s that?”

  “My sister Yevgenia. She was Maria Denisova’s personal assistant on that da Cunha business, and if it wasn’t for her, I’d never have thought of persuading my father to get some of his associates to be my imaginary business clients.”

  “You know, I’d been wondering how you did that.”

  “Aha! Well, you can ask Yevgenia all about it, and if you ask her very nicely and are very charming, she may let you call her Zhenia and then you’ll know that you are her friend.”

  “Is she as dangerous as you?”

  Nastiya laughed. “With a gun or her fists, no. In other ways . . . possibly. Come on, Mr. Spoilsport! We’re only in Barnes, so you won’t have to come far.”

  “Barnes!” Cross exclaimed, as if the charming south-west London suburb were some barely civilized, distant corner of the globe. “But that’s miles away.”

  Nastiya laughed. “It’s five miles, Hector, that’s all! Catch a train at Waterloo. You’ll be here in no time.”

  “If I do come, I’ll drive.”

  “If you drive you can’t drink, and then it’s not so much fun for you. Take a taxi.”

  “I’ll think about it,” Cross prevaricated. But Nastiya was a hard woman to refuse. So at one o’clock on Saturday afternoon he paid off a cabbie and walked up the path to the front door of the O’Quinns’ terraced house in Barnes.

  He had Catherine, still strapped into her portable baby seat, in one hand and a bag of essential nappies, toys, and spare clothes, specially packed by Bonnie Hepworth, in the other. Nastiya bade him a cursory hello and then swooped on the little girl, whom she had adored almost from the day she was born, billing, cooing and then unstrapping her from the seat and carrying her off into the living room to be admired by the other female lunch guests.

  “Now you’ve dropped me right in it,” said Paddy O’Quinn, who’d appeared at Cross’s side, wearing a chef’s apron and carrying a very welcome Bloody Mary, made hot and spicy, exactly as Cross liked it. “I’ll be getting earache all night about why don’t we have a baby? Believe me, boss, it isn’t for the want of trying.”

  “Thanks, Paddy, but I don’t need to hear the sordid details of your sex life,” Cross said as he took a sip of the Bloody Mary and cast his eyes around the room. The O’Quinns had invited some near-neighbors called the Parkers over to join the lunch
party, along with their two-year-old son Charlie, who was currently toddling across the room, sporting a spectacularly runny nose, toward the corner where Miss Catherine Cayla Cross was holding court.

  “So, I understand that there are two women present that I don’t know and one of them is your sister-in-law,” Cross said to O’Quinn. “I’m guessing it’s not the one currently wiping her little nipper’s snotty nose, which leaves the one in the skintight jeans . . . Just as a general observation, they really know how to turn out beautiful women in the Voronov family, don’t they?”

  “Oh, you’ve noticed, have you?” Paddy smiled. “Now, if you’ll excuse me, I have a joint of beef to check.”

  As Daddy Parker joined the clean-up operation on Junior, Hector took a proper look at Yevgenia Voronova. She very clearly came from the same stock as Nastiya. Cross could see it in the cool, blue eyes set beneath quite straight eyebrows that suggested strength of purpose and character. And yet Yevgenia was quite different, too. Her body, though beautifully proportioned, was a fraction fuller and softer, more curvaceous than Nastiya’s lean, athletic figure, but this did not strike Cross as any kind of disadvantage. Yevgenia’s rich chestnut hair was parted to one side of her face and fell across her forehead and down in glorious waves that broke over her shoulders before tumbling down her back. Her nose was fine and straight, tilted upward from her mouth. And oh, Cross mused, what a mouth that was.

  Nastiya O’Quinn had walked over to Cross while he was carrying out his inspection. He kissed her casually hello and then nodded in her sister’s direction and said, “She’s almost as good-looking as you are.”

  Nastiya smiled. “You’re a very flattering English gentleman, but Yevgenia is ten years younger than me and, as the French say, ‘ravissante.’”

  “We say ‘ravishing,’ same thing. And yes, she is. So, you’re a woman, you tell me . . . are they real?”