Saturday, September 16th, 2017

 

‘Lively’ investor interest in Air Berlin: CEO

BERLIN: Bidding ended Friday for bankrupt Air Berlin, after a raucous battle for Germany's second-largest airline that could see the carrier broken down for parts.

“The lively interest from investors speaks well for Air Berlin,” chief executive Thomas Winkelmann said, as the firm announced “several” bids had arrived before the deadline.

Some 8,500 employees, 140 aircraft and a string of precious landing slots at German airports are in the sights of potential buyers, who range from airline behemoth Lufthansa to maverick challengers like Austrian Formula One legend Niki Lauda.

“We will make sure to reach the best solution for the firm and its employees as we examine the offers” ahead of a decision at a September 25 board meeting, Winkelmann said.

“Our goal is to bring as many jobs as possible to safe harbour.”

Air Berlin carried 36 million passengers in 2016 but has long struggled for survival, booking losses amounting to 1.2 billion euros (RM6 billion) over the past two years.

After main shareholder Etihad Airways withdrew its financial support in mid-August, the airline triggered bankruptcy proceedings and gave potential buyers a month to submit offers for its assets.

Economy Minister Brigitte Zypries declared that “no one company will be able to buy Air Berlin for competition reasons”.

Lufthansa, by far Germany's biggest carrier, appears hungry for Air Berlin's planes.

It already leases 38 aircraft from its smaller competitor, and could be interested in up to 90, according to media reports.

A spokesman for Lufthansa confirmed to AFP it had made an offer, but declined to comment on the details.

Competitors in the bidding have accused the behemoth of seeking a monopoly over the German skies.

Stitch-up

Michael O'Leary, outspoken chief executive of Ireland's no-frills carrier Ryanair, called a stormy Berlin press conference two weeks ago to denounce a German “stitch-up” in favour of Lufthansa.

He told journalists he would not be joining the fray — although some analysts thought the wily businessman might be bluffing.

Meanwhile, Bavarian aviation investor Hans Rudolf Woehrl has already published a 500-million-euro offer to buy Air Berlin as a whole entity — and invited his rivals to team up with him on the offer.

And Austrian Formula One champion Niki Lauda announced a bid with Thomas Cook Wednesday to buy 38 Air Berlin planes, along with those belonging to the airline's low-cost subsidiary that bears his first name.

Britain's low-cost EasyJet confirmed Friday it too had made an offer, while press reports suggested others would come from tourism operator TUI, the Chinese owner of Parchim cargo airport in northeast Germany Jonathan Pang, and Utz Claassen, the former head of German power supplier EnBW.

Air Berlin boss Winkelmann — a former Lufthansa executive — has admitted to talks with around 10 potential investors even before the deadline passed.

But pilots added a spate of turbulence to the final approach, staging a two-day “sick-out” this week that saw some 300 flights cancelled and left more than 10,000 furious passengers waiting to find out if they will be compensated.

Running on empty

Aircrew were “playing with fire” with their protest, which had cost the company “several million euros”, CEO Winkelmann charged.

But Germany's giant services sector union Verdi expressed solidarity with the protest action.

“All the conversations surrounding insolvent Air Berlin are always about its economic interests, never about the jobs of its more than 8,000 employees,” said Verdi board member Christine Behle on Tuesday.

Insolvency administrators and executives fear one thing above all: dissolution of the company, which is out of cash and running on fumes.

Chancellor Angela Merkel's government granted a 150-million-euro emergency loan to keep Air Berlin's planes in the air for three months, including on routes to Germans' beloved Spanish holiday island of Majorca.

The funds helped save millions of people's holidays in the last months before a late September general election.

Meanwhile, the carrier has already struck off many long-haul flights to North America or the Caribbean, but claims on its website that it will keep serving other routes. — AFP


Shunning dollar, Venezuela lists oil prices in Chinese yuan

CARACAS: Venezuela on Friday began listing the price of its oil in the Chinese yuan, following President Nicolas Maduro's announcement last week that he would rid the economy of the “US imperialist system.”

The move was seen as a bid to weather US-imposed sanctions on the embattled country.

The country's petroleum ministry listed the week's closing price per barrel at 306.26 yuan on its website, equivalent to US$46.7 (RM196), up from 300.91 yuan the week before.

But economist Cesar Aristimuno said the yuan figure had little meaning beyond reference value, “because at the end of the day, the market continues to be quoted in dollars.”

Washington's tough new sanctions on Caracas bar US banks from trading in new bonds issued by the government or the state run oil company PDVSA. The goal is to restrict Venezuela's access to vital bond and equity markets.

The aim is to “deny the Maduro dictatorship a critical source of financing to maintain its illegitimate rule,” the White House said.

Maduro railed that they amounted to a financial and economic blockade, as ratings agency Fitch downgraded Venezuela and warned default was now likelier.

The country has to make US$3.8 billion in debt payments in October and November, while its foreign currency reserves have sunk under US$10 billion. — AFP


Petronas denies blogger’s claims of laying off 5,000 employees in 2018

KUALA LUMPUR, Sept 16 — Petronas today denied an allegation made by a blogger saying that it planned to terminate 5,000 employees next year in what was claimed as another round of “staff reduction” exercise, group-wide. In a statement, the…


Wall Street Journal: Toys ‘R’ Us mulls bankruptcy filing

NEW YORK, Sept 16 — Toys ‘R’ Us Inc could file for bankruptcy in the coming weeks as pressure from skittish suppliers intensifies, the Wall Street Journal reported yesterday, citing people familiar with the matter. The company and its…


First cracks emerge in EU plan to raise online giants’ tax bill

TALLINN: First signs of open skepticism appeared on Saturday over a European Union plan to raise the tax bill of digital multinationals, as some finance ministers from smaller EU states raised concerns about the economic impact.

France is pushing for a new way of taxing online giants on the basis of their turnover, rather than their profits, to increase tax revenues from companies such as Google or Facebook, which are accused of paying too little in Europe.

It has gathered the support of about a third of the 28 EU governments but would need the backing of all member states to reduce risks of legal challenges.

“We should be very careful,” Denmark's Finance Minister Kristian Jensen said, warning of the risks of pushing innovative companies away from Europe.

Speaking on his arrival at a meeting of EU finance ministers in Estonia, which will focus on taxation of the digital economy, he said that he was “always sceptical of new taxes.”

His remarks were echoed by Luxembourg's Finance Minister Pierre Gramegna, who acknowledged there was an issue with online giants' taxation, but said a tax on turnover would hit loss-making companies which are otherwise exempted from paying.

He said any EU solution would need to be backed at global level to avoid affecting Europe's competitiveness. “It does not make any sense” for Europe to move without a global agreement, he said.

The Czech Republic and Malta both said technical work on a turnover tax would be very complicated.

Estonia, which holds the EU's rotating presidency, pushed an alternative plan to tax companies where they have a digital, and not only physical, presence in a country.

Estonia's Finance Minister, Toomas Toniste, said a global solution “would be the best”.

Other EU member states were more supportive, with Dutch Finance Minister Jeroen Dijsselbloem calling France's plan “a very good initiative”.

Belgium also backed it, though Finance Minister Johan Van Overtveldt said technical work was necessary. Germany has already come out in support.

France's Finance Minister Bruno Le Maire urged the EU Commission, which is in charge of making legislative proposals, to come up with a formal text by mid 2018.

The Commission will set out the possible legal options in the coming days, before a summit of EU leaders on Sept. 29 dedicated to digital issues.


EU ministers make push for Google, Facebook tax

TALLINN, Sept 16 — Google and Facebook may face higher tax bills in Europe as the EU rushed today to change rules so that more of Silicon Valley’s mega profits fall into public coffers. Public anger against the billions of euros earned by…


Ant Financial to try again for US approval of MoneyGram deal – Source

CHINESE payments company Ant Financial is planning to resubmit its application for US review of its deal to buy MoneyGram International Inc for $1.2 billion (RM5.03 billion), a source familiar with the matter said on Friday.

Ant Financial and MoneyGram have already refiled for clearance from Committee on Foreign Investment in the United States (CFIUS) when they were unable to secure it within an assessment period after the first application, Reuters reported in July, citing sources.

“We are not commenting on the CFIUS process, but we are continuing to work with the various regulatory agencies and remain focused on closing the transaction by the end of the year,” the company said in a statement.

Ant Financial's latest attempt for approval would be its third as the maximum time of 75 days for assessing such applications nears completion.

CFIUS is a secretive government panel which reviews acquisition by foreign entities for potential national security risks.

A CFIUS refile indicates increased government scrutiny and more deals have been resubmitted to CFIUS since the inauguration of US President Donald Trump in January.

CFIUS had objected to at least nine acquisition of US companies by foreign buyers by July 20, Reuters reported, citing people familiar with the matter said.

Ant Financial finalized its deal to buy Dallas-based MoneyGram in April, after it sweetened its bid by over a third to beat a rival offer from US-based Euronet Worldwide Inc .

MoneyGram, and CFIUS could not immediately be reached for comment.

Ant Financial's plans were earlier reported by Bloomberg. — Reuters


Trump move to block chipmaker deal bad for America – Xinhua

SHANGHAI: US President Donald Trump's decision to block a Chinese-backed firm from buying a US-based chipmaker this week is detrimental to America's growth and the global economy, China's state news agency Xinhua said in a commentary on Saturday.

Canyon Bridge Capital Partners' planned $1.3 billion (RM5.45 billion) acqUStion of Lattice Semiconductor Corp was one of the largest attempted by a Chinese-backed firm in the US microchip sector and was the first announced deal for the buyout fund, which launched last year with a focus on technology investment.

US regulatory scrutiny grew after Reuters reported in November that Canyon Bridge was funded partly by capital from China's central government and had indirect links to its space program.

Trump said in an executive order on Wednesday that Lattice and Canyon Bridge “shall take all steps necessary to fully and permanently abandon the proposed transaction” within 30 days.

“The move, which is detrimental to both America's growth and global economic recovery, also rUScounter to the mutually-beneficial and win-win nature of China-US relations,” the Xinhua commentary said.

Security reviews of investments in sensitive sectors “should not be used as a tool to implement protectionism”, it added, echoing comments by a Commerce Ministry spokesman last week.

Citing analysts who said Trump's decision was made with an eye to the 2018 midterm election, Xinhua called it “penny wise and pound foolish … It is a short-sighted move to take protectionist measures amid sluggish global growth.”

“Chinese investment is not 'Trojan Horse' with hidden purposes,” it said.

Trump is set to visit China in November.

“The two countries need to strengthen dialogue and communication, promote cooperation and exchanges in various fields and properly handle issUSof common concerns. Only then can China and the United States push forward the world's most important bilateral relationship,” Xinhua said.


Fed meeting could trigger stock sector rotation

NEW YORK, Sept 16 ― US equity investors could rotate out of high-yielding sectors and into stocks of banks, which would benefit from the next leg up in interest rates, after the Federal Reserve’s policy-setting meeting wraps up on Wednesday….


Oil holds near five-month high in most bullish week since July

NEW YORK, Sept 16 ― Brent oil prices held near five-month highs yesterday and were on track for the biggest weekly gain since late July, on forecasts for rising demand and the gradual restart of US oil refineries. The Organization of the…