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.
Energy market bailout is cheaper of two evils 18 Mar 2022 Europe’s gas producers and utilities want state support to offset the wild swings in commodity prices since Russia invaded Ukraine. Given this could aid big oil companies like Shell, that sounds wrong. But a market breakdown would be worse, and states can levy windfall taxes.
Oil self-sanctioning is unstable weapon for West 3 Mar 2022 Traders and utilities are refusing to buy crude and gas from Russia, even though sanctions allow it. Insofar as this turns up the heat on the Kremlin, U.S. and EU leaders may not mind. The danger is that spiking prices alarm voters and lead to strains in the Western alliance.
Naturgy split may be less than sum of its parts 11 Feb 2022 The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.