Virus inflates allure of Abu Dhabi gas pipelines 23 Jun 2020 The emirate’s oil giant ADNOC has sold 49% of its infrastructure arm to investors including GIC and Brookfield. A $21 bln valuation is higher than mooted before Covid-19. That’s probably because the virus has made a combination of secure assets and leverage even more appealing.
Amazon’s climate fund is a worthy sideshow 23 Jun 2020 The $1.3 trln e-commerce giant’s new $2 bln fund could invest in everything from energy storage to farms. Google’s green-energy experience shows even better focused bets often don’t pay off. Investing to deploy existing technology does. Jeff Bezos’ outfit will do that too.
The Exchange: Pehr Gyllenhammar 23 Jun 2020 Long-time Volvo CEO Pehr Gyllenhammar was pushing radical environmental and social changes at the carmaker long before they became fashionable. One of Sweden’s most admired businessmen argues why CEOs should be paid less and how it felt to become a father again at 81.
Lufthansa bailout rebel has jobs trump card 23 Jun 2020 Billionaire Heinz Hermann Thiele may nix the airline’s $10 bln rescue if Berlin doesn’t sweeten its terms. It looks rash: blocking the deal would crash the 79-year-old’s 16% stake. Yet insolvency could cost jobs and dent Germany’s reputation. The government may be first to fold.
Corona Capital: SpongeBob, Cirque du Soleil 23 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Cinema chains raring to reopen may find that movie studios have already made other plans. Meanwhile, Cirque du Soleil may get new financing, but with strings.
UK stimulus exit talk may do more harm than good 23 Jun 2020 Central bank boss Andrew Bailey is talking about how monetary easing will be unwound, while finance minister Rishi Sunak may later this year unveil deferred tax rises. Payback is inevitable. But when flagged so clearly, it undermines recovery efforts.
Sovereign funds are having their rainy-day moment 23 Jun 2020 Temasek is stepping in to support Singapore Airlines and a marine group. It makes sense to shore up strategic assets at home when global valuations are high and cash is on hand. Peers from Abu Dhabi’s Mubadala to Malaysia’s Khazanah are likely to follow.
Chinese gay dating IPO makes rainbow connection 23 Jun 2020 BlueCity, valued at $300 mln in 2014, wants to go public in New York. Its Grindr-meets-Facebook app caters to low-key but thriving LGBTQ communities. Fast growth has enabled founder Ma Baoli to expand in Asia. Sustained success depends on shifting political and social attitudes.
SEC chair becomes political toy at his own expense 22 Jun 2020 Jay Clayton’s nomination for U.S. Attorney is in trouble amid a fight over the office. Democrat Chuck Schumer says the ex-corporate lawyer could become Donald Trump’s “accomplice” in unwanted probes. Wall Street ties also hurt. The controversy risks undermining his good work.
Bad omens for U.S. mall owners come in threes 22 Jun 2020 Brookfield is pushing back on tenants and skipping mortgage payments. Simon Property is ditching its merger with a rival. Both mall owners are suing the Gap for rent and may team up to bid for bankrupt J.C. Penney. Taken together, it looks like landlords are in for a reckoning.
Argentina drama comes down to politics and Pac-Man 22 Jun 2020 Talks between the serial defaulter and its largest creditor group have stalled. The remaining gap is not huge. But the government seems intent on scoring a political win and may deploy an unusual strategy to do it. Rising frustrations may make an agreement hard to reach.
Wirecard’s bankers might as well keep it alive 22 Jun 2020 ABN Amro, Commerzbank and others could tip the payments group into insolvency by calling in 2 bln euros of loans. Given Wirecard’s lack of cash and tangible assets, they might not get their money back. Better to see if new CEO James Freis can salvage something from the wreckage.
New City watchdog head fits UK’s Brexit challenge 22 Jun 2020 The financial regulator’s next CEO will be Nikhil Rathi, an ex-Treasury official who runs London’s stock exchange. His background suggests PM Boris Johnson sees the need to help Britain’s hub after the EU exit. That may also make it harder to resist pressure for lower standards.
GE’s audit switch wipes away another layer of dust 22 Jun 2020 The company is switching to Deloitte after a century with KPMG, exiting a club of audit lifers that includes U.S. Steel and P&G. It took too long and a radical new approach is unlikely given auditing remains an oligopoly. Still, fresh eyes should make for sharper housekeeping.
PG&E’s $58 bln bankruptcy exit is no clean sheet 22 Jun 2020 America’s largest utility emerged from Chapter 11 for the second time with about $16 bln more debt, a torched reputation, continuing political demands, and reduced but not eliminated wildfire liabilities. PG&E is out of court, but not necessarily out of trouble.
Corona Capital: Payments systems, Shale 22 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Payments systems get some good news, shale oil drilling’s double whammy.
Wirecard could prove a nail in BaFin’s coffin 22 Jun 2020 Despite repeated allegations of fraud at the payments group, the German watchdog until recently focused on short-sellers and journalists. The scandal poses big questions about its oversight of Wirecard’s bank unit - and about financial regulation in Europe’s largest economy.
Breakup pledge will keep Unilever boss on his toes 22 Jun 2020 Alan Jope promised to list the consumer giant’s food and drink unit in Amsterdam if it’s spun off. That’s not happening now: Unilever shares largely reflect the division’s 50 bln euro value. But the hypothetical vow gives investors ammunition if the Dove maker underperforms.
Ancient Chinese governance tech stymies SoftBank 22 Jun 2020 The Japanese firm’s Chinese chipmaking venture can’t get rid of its CEO because he won’t return the company seal. It’s a common problem in the People’s Republic. Still, it puts 20% of Arm revenue at risk and adds to a list of investment headaches for SoftBank boss Masayoshi Son.
Virgin Australia suitors strain to soar like TPG 22 Jun 2020 Buyout shop Bain and hedgie Cyrus are jostling to buy the carrier out of bankruptcy. The industry has foiled everyone from Warren Buffett to Gordon Gekko. David Bonderman’s TPG is one of the few with happy tales to tell. Replicating its success will require some fancy flying.
Cox: Companies can go first on reparations 19 Jun 2020 As Pepsi’s move to retire Aunt Jemima shows, corporations are grappling anew with America’s original sin. The soul-searching should lead them to their archives to quantify the role slavery or other forms of racism played on their income statements. It’s complicated but doable.
U.S. racism’s $13 trln legacy is just the start 19 Jun 2020 The world’s wealthiest country built its economy on unpaid black labor. Centuries of discriminatory policies, like redlining and mass incarceration, compounded the inequity. There are many ways to weigh what reparations might be due. The racial wealth gap offers just one way in.
FOMO draws a crowd to Reliance’s Jio club 19 Jun 2020 Mukesh Ambani has delivered on a promise to make his group net-debt free after raising $22 bln. Most of that came from selling pricey stakes in tech unit Jio to KKR and others. A fear of missing out on India’s next big thing will have helped. Still, the frenzy is rational.
Corona Capital: UK debt, Oaktree, KKR, Chanel 19 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: UK government borrowing surges past GDP; Howard Marks is sceptical about the stock market revival; KKR bets on cheap and local European holidays; Chanel takes a gloomier view than rivals on the luxury rebound.
Goldman uses virus to become a preferred tenant 19 Jun 2020 The Wall Street giant and hedge fund backers of hotel chain Travelodge are trying to slash their rent bill by over a third. Normally, landlords would only play ball if the tenant was at death’s door. Covid-19 is inverting that pecking order – to real estate owners’ detriment.
Ray-Ban mogul’s late financial quest is baffling 19 Jun 2020 Leonardo Del Vecchio is building his shareholding in Mediobanca. The investment bank’s stake in insurer Generali puts it at the heart of Italian corporate power. The 85-year-old may be motivated by financial gains or prestige. Equally unclear is who inherits his expanded empire.
Crisis patience will reward buyout barons in Asia 19 Jun 2020 Private equity dealmaking in the region is up, defying a global slump, thanks to big purchases by Bain, KKR and others. Funds are hunting for bargains, but some of the worst deals were done during the last crisis. Sitting it out and delaying exits may help to avoid past mistakes.
Virtual vouchers offer digital-payments stimulus 19 Jun 2020 Taiwan is issuing $1.7 bln of coupons to goose its economy. These types of handouts have worked to varied effect elsewhere, but often just replace one kind of spending with another. Making them electronic instead of paper should at least help accelerate efforts to go cashless.
SoftBank Sprint win is mostly currency and debt 18 Jun 2020 Masayoshi Son's group may sell up to two-thirds of its now $31 bln stake in T-Mobile US. After a long wait for Sprint to merge with its rival, the risky bet made just a 5% annualized return in dollars. The rest, a 25% IRR according to Son, is down to luck and leverage.
Silicon Valley VCs perform balancing act in China 18 Jun 2020 Covid-19 has boosted delivery, robotics and e-commerce technology. U.S. investors want to back Chinese startups capitalizing on those trends. But firms investing in the People’s Republic risk Washington's ire. The trick is to pair high potential ROIs with a low profile.