Business news in brief
Best-paid former BHS executives gain most from Green pension deal
British retail tycoon Sir Philip Green’s deal with the regulator to plug a hole in the pension schemes of collapsed department store BHS will see a small number of the highest-paid former managers benefit the most, a parliamentary committee said yesterday. A report by the House of Commons’ Work and Pensions Committee also found billionaire Sir Philip could receive a £15m refund from the £363m payment he made to the BHS pension schemes last month.
Sir Philip owned BHS for 15 years before he sold the loss-making 180-store chain to Dominic Chappell, a serial bankrupt with no retail experience, for one pound in 2015. BHS went into administration in April 2016. Some 11,000 jobs were lost.
In a July report, MPs accused Sir Philip of greed and disregard for corporate governance that led to the collapse of BHS. Sir Philip said the report was biased and unfair. His deal with the pensions regulator gave
the 19,000 members of the BHS pension schemes the option of the same starting pension they were originally promised by BHS, and higher benefits than they would get from the lifeboat scheme, the Pension Protection Fund.
Reuters
888 surges as online gaming company presents income attractions
888 Holdings shares surged in London as the UK online gaming company promised more cash to shareholders and said revenue growth shows no sign of slowing. For a fifth year running, 888 will pay a special dividend, which combined with the ordinary distribution leaves the stock yielding about 6.7 per cent, almost double the average of the UK FTSE All-Share Index. The shares rose as much as 10 per cent yesterday. “There’s no point sitting on the cash,” chief executive Itai Frieberger said. “If we do, we don’t get any value on that. We’re relatively small and we have enough to do what we want to do.”
Constantly introducing new products and entering new countries has made 888 the UK’s top performer among listed consumer-facing gaming operators, according to Investec analysts. Revenue and earnings beat estimates last year, and the company said it’s made a good start in 2017, a year that is likely to see the continuation of a wave of industry consolidation. Mr Frieberger, who last year teamed up with Rank Group to make an unsuccessful takeover bid for bookmaker William Hill, said 888 has no immediate need for acquisitions. “The industry is speed dating, but we don’t feel compelled to do a deal right now,” he said. “The results coming out of the business are so strong.”
Bloomberg
Brazil tainted-meat probe triggers bans from China to Chile
Some of the world’s biggest protein buyers are slapping limits on supplies from Brazil as producers in the country become embroiled in a tainted-meat scandal. China, the largest importer of Brazil chicken and beef, has temporarily suspended shipments from the South American country, while the EU, Chile and Japan have restricted purchases. Singapore authorities said they’re monitoring meat shipments from Brazil, as South Korea lifted its short-lived ban on chicken imports from BRF SA after confirming that it never purchased rotten chicken from Brazil.
The move to protect meat supplies comes after Brazilian federal authorities said last week they’re investigating evidence that companies including BRF and JBS, the nations’ largest meat producers, bribed government officials to approve the sale of spoiled meat. Prosecutors allege some sausages and cold cuts contained animal parts such as pig heads, that some meat products were adulterated with cardboard, and that in some cases, acid was used to mask the smell of tainted meat.
Bloomberg
Co-Op Bank senior creditors jumping ship as maturity nears
Co-Operative Bank senior bondholders are losing their nerve in the final stretch amid concern the beleaguered UK lender will impose last-minute losses. Co-Op’s £400m of bonds due on 20 September fell to 86 pence on the pound, compared with 90 pence on 7 March and an average of 98 pence since they were issued in 2010, according to data compiled by Bloomberg. The yield has more than doubled since the start of the year to 39 per cent, the data show.
Investors are ditching Co-Op’s senior notes months before they’re set to be repaid as the Manchesterbased lender hasn’t ruled out imposing losses as part of a planned £750m recapitalisation. Co-Op’s September repayment date is seen as an informal deadline for the bank to raise new funds or ask senior creditors to share the burden if a private solution fails. “If it goes well, you make 10 points, but if it goes badly, you lose a lot and you lose face,” said Peter Doherty, the chief investment officer of Tideway Investment Partners, which manages more than $200m and considered buying Co-Op’s notes. “They probably will pay the senior but is it worth me taking that risk? Not really." Co-Op officials declined to comment on the bond moves or the bank’s plans to repay senior securities.
Bloomberg
Dong Energy wins order to sell onshore wind power in the UK
Danish utility and wind farm developer Dong Energy has signed an agreement with Britain's Banks Renewables, in what would be its first move into distributing onshore wind in the UK, the company said yesterday.
The 15-year order includes buying power from three onshore wind farms under development by Banks Renewables, a unit within UK land developer Banks Group, and reselling it on the UK's power market. “This is the first time Dong will manage the production of onshore wind farms and the biggest PPA (Power Purchase Agreement), we've entered. We consider the order an important milestone,” a Dong Energy spokesperson said.
Dong Energy declined to provide financial details about the order, which will enter into force when the wind farms in northeast England and Scotland have come online, due to be by early 2019. Dong Energy's Distribution and Customer Solutions accounted for around 37 per cent of the company's 2016 core profit.
Reuters
BMW fights back against Mercedes with biggest model launch ever
BMW plans the biggest roll-out of new and revamped models in its history as the luxury-car maker fights back after losing the sales crown to Mercedes-Benz. Over the next two years, the Munich-based manufacturer will unveil 40 variants, including the new X2 compact sport utility vehicle and full-sized X7 SUV. Chief executive Harald Krueger is seeking to revitalise growth after profitability fell to a six-year low in 2016 and sales slipped behind Mercedes for the first time in more than a decade.
“We are launching the biggest model offensive ever,” Mr Krueger said at the annual press conference. “We have started a transformation unlike anything our company has seen before.” The combative tone marks a turnaround after Krueger, who took charge in 2015, stumbled out of the gates. The revamped 7-Series sedan failed to challenge the Mercedes S-Class, while the redesign of the 5-Series was cautious. Krueger is focusing on profitability instead of sales to conserve resources for a costly shift to an era of self-driving, electric vehicles, with a plan to release the autonomous iNext in 2021.
Bloomberg
Volkswagen owner shrugs off impact of former patriarch Piech's exit
Volkswagen’s controlling shareholder downplayed the potential exit of former patriarch Ferdinand Piech as his relatives will retain their sway over the world’s largest automaker. A transfer of Mr Piech’s voting
stake will “not bring any major change,” Hans Dieter Poetsch, Volkswagen’s chairman and chief executive of Porsche, said yesterday at a press conference in Stuttgart. “It remains the case that the common stock will be held by the Porsche and Piech families.”
Volkswagen’s 18-month-old diesel-emissions cheating scandal has intensified a clash between Mr Piech, a former VW chairman and chief executive, and one of the most powerful members of the billionaire clan that controls the German automaker. Piech like other descendants of Ferdinand Porsche, the creator of the VW Beetle, control all of the voting stock of Porsche, which in turn owns 52 per cent of the carmaker’s common shares. Porsche said on 17 March that Mr Piech was in talks to sell the bulk of his stake in the holding company. Internal rules specify that he must first offer the shares to other members of the clan.
Bloomberg
BNP Paribas to cut investment bank staff in France, UK and Luxembourg
France's BNP Paribas plans to cut investment banking staff in France, the United Kingdom and Luxembourg by the end of 2018, although staffing levels at the business should remain stable in Europe overall, it said in its annual report. Many European banks from HSBC to Deutsche Bank are cutting costs to boost profitability, with mounting compliance and regulatory pressures weighing on higher risk activities such as investment banking.
In Europe, BNP Paribas' corporate and institutional banking workforce should remain stable up to the end of 2018, France's largest bank said, as it hires in lower cost countries, such as Poland, Portugal and Spain.“In France, the United Kingdom and Luxembourg, reductions in employment levels are planned,” the bank added, citing a presentation made to its European Works Council in May and November 2016.
BNP Paribas added in the report that its overall headcount rose to 192,419 by the end of 2016 from 189,077 a year earlier.
Reuters
Google affiliate offers tools to safeguard elections
An organisation affiliated with Google is offering tools that news organisations and election-related sites can use to protect themselves from hacking.
Jigsaw, a research arm of Google parent company Alphabet Inc., says that free and fair elections depend on access to information. To ensure such access, Jigsaw says, sites for news, human rights and election monitoring need to be protected from cyberattacks.
Jigsaw's suite of free tools, called Protect Your Election, is mostly a repackaging of existing tools. One helps websites guard against denial-of-service attacks, in which hackers flood sites with so much traffic that legitimate visitors can't get through. Others are meant to help prevent password stealing and unauthorised account access.
AP