Utilities

Dialing it down would help overamped utility

27 Apr 2023

After a busted $2.6 bln takeover deal, expansion into Chile and a huge share slump, Algonquin Power is now contending with two pushy investors. Steady returns are the main appeal of such businesses. Spinning off the renewable energy arm would help restore some boring value.

Capital Calls: FedEx delivers, for now

17 Mar 2023

Concise views on global finance: Shares in the delivery company shot up over 10% on Friday, as cost-cutting measures pay off. Those benefits could easily dwindle.

UK bailout has energy bosses walking on eggshells

13 Feb 2023

Power suppliers like Centrica took billions of pounds of government cash to help customers pay high bills. That leaves them open to charges they pocketed gains and handed losses to taxpayers. For an industry intertwined with the state, pay restraint is vital to self-preservation.

Capital Calls: Centrica

10 Nov 2022

Concise views on global finance: The 5 bln pound UK energy group launches a 250 mln pound buyback despite a struggling supply business and windfall tax threats.

Capital Calls: Uniper

3 Nov 2022

Concise views on global finance: The German utility’s 40 bln euro loss for the first nine months of 2022 has turned its equity negative and implies a much larger bailout.

UK energy bailout leaves key details in the dark

8 Sep 2022

New Prime Minister Liz Truss plans to cap power bills for two years at a likely cost of over 100 bln pounds. It’s unclear how the scheme works, who pays the bill, or what restrictions suppliers will face. What’s certain is Britain has moved further away from a free energy market.

Tough love is best fix for energy cash crunch

7 Sep 2022

Utilities and power traders face a $1.5 trln surge in collateral demands due to swings in gas futures. The answer could be bailouts, halts in trading and collateral tweaks. Yet radical changes may increase risk. And government help, if properly priced, needn’t be a freebie.

Singapore deal offers template for offloading coal

6 Sep 2022

Banks’ aversion to fossil fuels makes it hard for companies to sell dirty assets. So Temasek-backed Sembcorp is financing its own $1.5 bln Indian disposal with an interest rate that falls if emissions do and guaranteeing loans. It’s a more responsible way to get the job done.

Capital Calls: Uniper’s credit request

30 Aug 2022

Concise views on global finance: the German utility asks for a 4 billion euro credit line just weeks after securing a 15 billion euro bailout. But with gas demand easing and a German government levy on consumers yet to go into force, Uniper’s situation may improve.

UK energy’s looming bailout implies a quid pro quo

22 Aug 2022

Britain may subsidise EDF, Centrica and others to curb customers’ utility bills. Power groups are largely not to blame for the mess. But with taxpayers possibly on the hook for over 100 bln pounds, the industry could face blowback like pay curbs and dividend restrictions.

Berlin spreads pain in 15 bln euro Uniper bailout

22 Jul 2022

That’s how much equity and debt the government may pump into the gas importer driven to near-bankruptcy by reduced Russian supplies. Diluted shareholders, Finnish owner Fortum, and German taxpayers will share the burden. So will consumers who will pay higher prices for gas.

Capital Calls: Hasbro’s inflation transformation

19 Jul 2022

Concise views on global finance: The Monopoly maker is scrambling to offset input cost increases and a stronger dollar – but while these pressures might be temporary, increased prices to consumers will last.

France Inc could turn a profit from EDF takeover

7 Jul 2022

President Macron’s administration may have to fork out 7 bln euros for full control of the energy giant. But spinning off its renewable arm could recoup that cash. And the nuclear branch’s long-term investment needs and associated risks are more suited to public ownership.

Uniper investors head for bailout they don’t merit

5 Jul 2022

The 4 bln euro German utility’s value has been smashed by its need to expensively replace Russian gas. Given Berlin is mulling a way to spread this cost, Uniper shares may yet rebound. The outcome may wind up being more generous than its main Finnish shareholder deserves.

Aussie energy crisis demands both carrot and stick

23 Jun 2022

Electricity trading restarted after a week-long hiatus. Canberra wants to pay generators to guarantee supply from 2025. Until then, outages will linger. A windfall tax, or the threat of one, on coal miners and gas drillers like Exxon Mobil and Santos could spark short-term fixes.

How the UK can cut power bills and go green

3 May 2022

The government is so scared of the cost-of-living crisis that it doesn’t want consumers to pay for low-carbon wins like heat pumps, even though this cuts energy bills in the long run. Instead utilities could do the job and spread the cost over 20 years, argues Hugo Dixon.

Capital Calls: Dubai listings, Epic Games

12 Apr 2022

Concise views on global finance: State-owned utility DEWA defies the global IPO gloom as its shares jump 20% on their debut; Sony is pumping another $1 bln into privately held metaverse evangelist Epic Games at an epic $32 bln valuation.

National Grid gas sale has green edge on Macquarie

28 Mar 2022

The $54 bln UK company is selling 60% of its gas pipelines arm to a group led by the Australian finance house. The $13 bln deal has financial benefits for both. But National Grid’s switch to electricity is more immediate than the buyers’ plan to pump hydrogen through the pipes.

Dubai’s $34 bln utility float tees up IPO drive

25 Mar 2022

State-owned DEWA will be the emirate’s largest listing since 2007. Its pricing muscle and generous dividend are drawcards, as is the cheap valuation. That reflects the political desire for the debut to set the stage for follow-up IPOs, and puts rival regional bourses on notice.

Energy windfall taxes are messy, unfair, and vital

23 Mar 2022

Europe can theoretically raise hundreds of billions of euros from utilities benefitting from soaring energy prices. To get near that this year, some utilities could be shaken down inefficiently or unjustly. Public anger at rising energy bills means states still have to try.