The Japanese air bag manufacturer Takata Corp is fighting to stay afloat after the car industry’s largest ever recall, and it has prompted the firm to take primary bids from a list of investors ready to come to the rescue.
According to several anonymous sources close to the company, Lazard Ltd will be receiving rescue plans from a host of potential investors on Takata’s behalf which include, but are not limited to, Brain Capital, chemical maker Daicel Corp, electronic giants Joyson and KKR & Co.
At least 15 deaths have so far been reported linked to the company’s disastrous mistake of putting a volatile chemical inside the propellant used in their air bag system. The chemical was exploding inside the car and sending a deadly spray of shrapnel around the front compartment.
Takata are desperately seeking financial clout as they face billions of dollars in liabilities in upcoming court cases.
None of the companies involved in the potential buyout commented after email and phone call enquiries, and the sources preferred to remain un-named due to the sensitive nature of the affair.
The sources say Takata will attempt to narrow the amount of bids down to two by the end of September by setting up a steering committee to eliminate suitors. Over thirty organizations and business showed interest in the bailout arrangement after Takata announced they required a financial backer.
The winner of the bidding war will be responsible for keeping in check growing costs at the company and funding the restructuring of the business. Takata shares have plummeted well over 80 percent in the last two years.
“It’s been a torrid episode,” said Stuart Poulson, Head of corporate trading at Nikko-Desjardins Asset Management in a TV interview. “But it does represent a major opportunity to get some new blood, and cash, into the company and turn it around. Of course, the shares being at rock bottom prices won’t hurt potential investors either.”
Takata is one of the few dominant air bag makers in the world and many Japanese auto-manufacturers depend on the company to organize and refit the continuing recalls and to keep air bag prices down by providing on-going competition in the industry. As such, they have just about managed to stay in the red while their liabilities are pending.
Wednesday, September 7, 2016
Tuesday, September 6, 2016
Warburg eager to pick up mutual fund stake
According to sources close to the matter, French banking giant Societe Generale are in final discussions with Warburg Pincus to offload their 49 percent stake in a mutual fund joint venture with Baosteel Group, a Chinese iron and steel company based in Shanghai.
China first allowed foreign firms to enter their mutual funds business in 2002 and SocGen, France’s second largest banking entity was first into the market. The company they formed with Baosteel in 2003 was named Fortune SG Fund Management.
In the intervening 13 years a plethora of foreign firms including Aviva, Value partners and Bank of New York Mellon Corp, who entered into similar ventures, have sold off their stakes citing an overly competitive marketplace. SocGen have finally given up hope, and Warburg Pincus, a U.S. private equity firm, are looking to take over the reins.
None of the firms involved commented on the news.
Fortune SG was in the top twenty mutual fund ventures by assets, with an estimated $20 billion in assets under their control as of the end of July, according to China’s Asset Management Association.
The sources who broke the news did not mention the value of the proposed deal, but in similar arrangements in the past, fund managers would typically pick up between 3 and 4 percent of their assets.
Warburg is playing the long game. They are betting that over the next 20-year period China’s mutual fund sector, which is worth over a trillion dollars, will deliver high returns. They are already very familiar with Baosteel, being investors in their gas subsidiary for the past two years.
“It’s well known that Warburg have been raising a kitty in the region of around two billion dollars,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management in a phone interview. “In the past they have put massive bets on the country’s financial industry, like with the 2014 investment in China Huarong, so they are continuing with that strategy.”
That $800 million China Huarong investment, which preceded the company’s IPO in Hong Kong, was not the first foray into foreign markets for Warburg. The previous year they built a mutual arrangement with London-based Santander Asset Management which manages over $100 billion across the euro zone and South America.
Under the country’s stringent regulations, 49% is the maximum stake allowed for foreign companies in China.
China first allowed foreign firms to enter their mutual funds business in 2002 and SocGen, France’s second largest banking entity was first into the market. The company they formed with Baosteel in 2003 was named Fortune SG Fund Management.
In the intervening 13 years a plethora of foreign firms including Aviva, Value partners and Bank of New York Mellon Corp, who entered into similar ventures, have sold off their stakes citing an overly competitive marketplace. SocGen have finally given up hope, and Warburg Pincus, a U.S. private equity firm, are looking to take over the reins.
None of the firms involved commented on the news.
Fortune SG was in the top twenty mutual fund ventures by assets, with an estimated $20 billion in assets under their control as of the end of July, according to China’s Asset Management Association.
The sources who broke the news did not mention the value of the proposed deal, but in similar arrangements in the past, fund managers would typically pick up between 3 and 4 percent of their assets.
Warburg is playing the long game. They are betting that over the next 20-year period China’s mutual fund sector, which is worth over a trillion dollars, will deliver high returns. They are already very familiar with Baosteel, being investors in their gas subsidiary for the past two years.
“It’s well known that Warburg have been raising a kitty in the region of around two billion dollars,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management in a phone interview. “In the past they have put massive bets on the country’s financial industry, like with the 2014 investment in China Huarong, so they are continuing with that strategy.”
That $800 million China Huarong investment, which preceded the company’s IPO in Hong Kong, was not the first foray into foreign markets for Warburg. The previous year they built a mutual arrangement with London-based Santander Asset Management which manages over $100 billion across the euro zone and South America.
Under the country’s stringent regulations, 49% is the maximum stake allowed for foreign companies in China.
Thursday, July 14, 2016
Danish energy firm in highest floatation of the year
Danish wind farm specialists Dong Energy completed a 10 billion pound IPO last week and began trading on the Nasdaq Copenhagen stock exchange today. The floatation is thought to be the largest that will happen in 2016.
Shares were selling higher than predicted, closing at DKK240 (£25.80) a share. The sale ended three days early as strong interest in the state-run energy firm spurred sales.
Nearly 40,000 new investors have been brought on as the Danish government; together with a consortium headed by Goldman Sachs sold an 18 percent stake in the business. Most of the new investors are private Danish interests with a small number of retail entities also buying in.
“We are delighted by the investor interest,” said Claus Hjort Frederiksen, Danish finance minister.
“I’m certain this will enable Dong Energy to push on as the sectors leading producer of green energy,” he added.
The floatation’s main aim was to raise capital for a monumental offshore wind farm project 80 miles off the UK coastline, near Grimsby. Insiders say the facility will include nearly 180 skyscraper sized giant turbines and will cover an area a sixth the size of Yorkshire.
Dong is also a very active player in the oil and gas industry around the North Sea with shares in the West of Shetland gas basin as well as multiple other locations and they will be hoping to invest additional funds to expand that side of the business in the near future.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management remarked on the IPO in an email to clients on Thursday, “Judging from the quick sale of shares and their better-than-expected price Dong Energy must be very happy. This will allow them to drive forward with their upcoming plans with renewed confidence.”
Meanwhile the listed oil firm BowLeven, a relatively low output producer, sold off a small portion of the company to private equity firm Crown Ocean Capital.
BowLeven are mainly focused on the African region and lack of new discoveries and declining oil prices have prompted the search for investment. Nearly 7 percent was sold off at 20.80p per share.
Shares were selling higher than predicted, closing at DKK240 (£25.80) a share. The sale ended three days early as strong interest in the state-run energy firm spurred sales.
Nearly 40,000 new investors have been brought on as the Danish government; together with a consortium headed by Goldman Sachs sold an 18 percent stake in the business. Most of the new investors are private Danish interests with a small number of retail entities also buying in.
“We are delighted by the investor interest,” said Claus Hjort Frederiksen, Danish finance minister.
“I’m certain this will enable Dong Energy to push on as the sectors leading producer of green energy,” he added.
The floatation’s main aim was to raise capital for a monumental offshore wind farm project 80 miles off the UK coastline, near Grimsby. Insiders say the facility will include nearly 180 skyscraper sized giant turbines and will cover an area a sixth the size of Yorkshire.
Dong is also a very active player in the oil and gas industry around the North Sea with shares in the West of Shetland gas basin as well as multiple other locations and they will be hoping to invest additional funds to expand that side of the business in the near future.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management remarked on the IPO in an email to clients on Thursday, “Judging from the quick sale of shares and their better-than-expected price Dong Energy must be very happy. This will allow them to drive forward with their upcoming plans with renewed confidence.”
Meanwhile the listed oil firm BowLeven, a relatively low output producer, sold off a small portion of the company to private equity firm Crown Ocean Capital.
BowLeven are mainly focused on the African region and lack of new discoveries and declining oil prices have prompted the search for investment. Nearly 7 percent was sold off at 20.80p per share.
Euro steel can’t compete with Chinese negative profit sales
The European Steel Association has said in a statement that Europe’s steel manufacturers will be “blown away” if the E.U. recognizes China as a fully-fledged market economy.
With China’s ability to sell steel for negative profit due to their vast excess, it is claimed they would flood the market and make competition impossible. The ESA feels China’s products will have much easier access to the euro zone market.
The issue has given the “leave” camp further ammunition with the British EU membership vote looming. Their opponents on the “remain” side say that China will never be granted special international trading status as they don’t meet the criteria, and there was a much better chance of the situation staying this way if Britain remains in the financial bloc.
Following the TataSteel sale in March, thousands of jobs are at risk in Wales, especially at their Port Talbot facility where as much as four thousand staff could be laid off.
Due to China’s authorities meddling in the market and deflating prices in order to give their production companies the ability to sell cheap steel, the E.U commission has so far not recognized the country as a market economy. This gives them the chance to impose higher taxes on imports coming into the continent.
This may change, however, as the commission have voiced plans to consider the nation as a market economy, and thus is would face significantly lower tariffs.
Karl Tachelet, spokesman for the ESA said, “It’s clear if new regulations come in we will simply be blown away by a Chinese storm. It is highly doubtful we would survive.”
Other observers admit the figures don’t look good for Europe’s steel producers. Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management commented in an email to investors on Thursday, “Let’s have a look at Chinese stockpiles at the moment; we are looking at about 450 million tonnes. What is Europe’s total steel demand, about 150 million tonnes? That is not great news for the ESA.”
Poulsen was quick to add, “This may just be a lot of hot air. I highly doubt that the euro zone officials will allow China to be seen as a bona fide market economy. I’m not the only one who believes China have failed to meet the criteria and have little hope of doing so by the end of 2016.”
With China’s ability to sell steel for negative profit due to their vast excess, it is claimed they would flood the market and make competition impossible. The ESA feels China’s products will have much easier access to the euro zone market.
The issue has given the “leave” camp further ammunition with the British EU membership vote looming. Their opponents on the “remain” side say that China will never be granted special international trading status as they don’t meet the criteria, and there was a much better chance of the situation staying this way if Britain remains in the financial bloc.
Following the TataSteel sale in March, thousands of jobs are at risk in Wales, especially at their Port Talbot facility where as much as four thousand staff could be laid off.
Due to China’s authorities meddling in the market and deflating prices in order to give their production companies the ability to sell cheap steel, the E.U commission has so far not recognized the country as a market economy. This gives them the chance to impose higher taxes on imports coming into the continent.
This may change, however, as the commission have voiced plans to consider the nation as a market economy, and thus is would face significantly lower tariffs.
Karl Tachelet, spokesman for the ESA said, “It’s clear if new regulations come in we will simply be blown away by a Chinese storm. It is highly doubtful we would survive.”
Other observers admit the figures don’t look good for Europe’s steel producers. Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management commented in an email to investors on Thursday, “Let’s have a look at Chinese stockpiles at the moment; we are looking at about 450 million tonnes. What is Europe’s total steel demand, about 150 million tonnes? That is not great news for the ESA.”
Poulsen was quick to add, “This may just be a lot of hot air. I highly doubt that the euro zone officials will allow China to be seen as a bona fide market economy. I’m not the only one who believes China have failed to meet the criteria and have little hope of doing so by the end of 2016.”
Australians want more trade with China, not US, data shows
A far reaching new opinion poll has shown that most Australians would prefer long term trading ties with China over the US. The survey, conducted by the University of Sydney, covered several Asia-Pacific nations and found that Australians were the least enthusiastic towards a large US presence with regard to trade in the region.
Significantly more Australians (75%) see China and the U.S. as “trading competitors” than even the Chinese that were surveyed (45%), though the data also revealed a surprising absence of political knowledge in Australian citizens, 44% of whom didn’t know that the US and Japan are trading allies in the form of the Trans-Pacific Partnership. This ignorance was identical in the Chinese poll.
Regionally the survey of 3,850 citizens in each of the five nations reflected that China would be the most dominant trading nation in Asia by 2027, with 70% of Australians saying that situation was already apparent. In comparison only 57% of Chinese thought their own nation was on top of the pile.
A couple of nations were more sceptical of that prospect, especially the Japanese, 77% of whom said China are behind the US in the number two spot.
Japanese also saw China’s role in the region as negative, with 60% espousing that view. Only 8% of Australians felt the same way, and many thought the US was more negative.
As far as a positive US role in Asia, only Japan and South Korea backed the number one world economy.
Australians were divided most on whether the nation should solidify trading ties with the US, with a 5% negative-positive score, while the rest of the countries had overwhelming majorities for working on US relations with South Korea (44%), China (49%), Indonesia (39%) and Japan (30%) leading the way.
Given the historical tensions between Japan and China, it was not surprising that Japanese surveyed were divided on whether to bolster trading ties with China with only a 7% majority in favour, compared to 54% in South Korea, 45% in Indonesia and 32% in Australia.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management attempted to summarize the data.
“Australians for the most part still think that the US is a declining trading power in the Asia-Pacific region,” Poulsen said in a phone interview. “Most Aussies seem pretty benevolent towards the China v US rivalry.”
He also remarked that the survey would “solidify many Americans fears that Australian support for a trading partnership with the US was waning,” and that “Australians are by no means expected to take political sides with Japan over China.”
Significantly more Australians (75%) see China and the U.S. as “trading competitors” than even the Chinese that were surveyed (45%), though the data also revealed a surprising absence of political knowledge in Australian citizens, 44% of whom didn’t know that the US and Japan are trading allies in the form of the Trans-Pacific Partnership. This ignorance was identical in the Chinese poll.
Regionally the survey of 3,850 citizens in each of the five nations reflected that China would be the most dominant trading nation in Asia by 2027, with 70% of Australians saying that situation was already apparent. In comparison only 57% of Chinese thought their own nation was on top of the pile.
A couple of nations were more sceptical of that prospect, especially the Japanese, 77% of whom said China are behind the US in the number two spot.
Japanese also saw China’s role in the region as negative, with 60% espousing that view. Only 8% of Australians felt the same way, and many thought the US was more negative.
As far as a positive US role in Asia, only Japan and South Korea backed the number one world economy.
Australians were divided most on whether the nation should solidify trading ties with the US, with a 5% negative-positive score, while the rest of the countries had overwhelming majorities for working on US relations with South Korea (44%), China (49%), Indonesia (39%) and Japan (30%) leading the way.
Given the historical tensions between Japan and China, it was not surprising that Japanese surveyed were divided on whether to bolster trading ties with China with only a 7% majority in favour, compared to 54% in South Korea, 45% in Indonesia and 32% in Australia.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management attempted to summarize the data.
“Australians for the most part still think that the US is a declining trading power in the Asia-Pacific region,” Poulsen said in a phone interview. “Most Aussies seem pretty benevolent towards the China v US rivalry.”
He also remarked that the survey would “solidify many Americans fears that Australian support for a trading partnership with the US was waning,” and that “Australians are by no means expected to take political sides with Japan over China.”
Sunday, June 26, 2016
High Street Chain to Sell after ‘running out of cash’
Officials overseeing the wind up of department store chain BHS may be interested in breaking up the business and selling it off part by part.
It was reported by the BBC they had received “several offers” from potential buyers including Edinburgh Woollen Mill, Sports Direct and Ikea. Interested parties were to put in solid offers before 4pm last Tuesday.
The demise of the retail chain will be the biggest high street collapse since the failure of Woolworths eight years ago, providing the government with another problem as it attempts to save thousands of jobs in the steel sector.
There is a long way to go however, with the company cascading into debts of over a billion pounds according to the administrator Duff & Phelps. They say the chain will continue to do business as the negotiations continue.
Another entity that has shown interest in purchasing parts of the embattled company is Yousuf Bhailok, a British businessman and the former general secretary of the Muslim Council Britain. The Preston based multimillionaire is understood to want to save at least three quarters of BHS’s 160 stores as part of a plan to buy the retail chain as a going concern. Although the company are in administration there is still some chance following Bhailok’s offer that the 10,000 staff can be kept on.
“BHS have basically been running out of cash in the last 2 years and this is the end result” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management on his blog Tuesday. “The first slip up that brought the situation about was down to Retail Acquisitions who famously bought the concern from Sir Philip Green for one pound, and proceeded to botch a hundred million pound funding strategy needed for development,” he added.
Failure to revaluate business rates is thought to have lost BHS over 14 million pounds in 2015.
Another factor facilitating the retail chains demise was a gigantic pension deficit. Sir Philip Green previously held talks with the Pension Regulator regarding a cash boost into the BHS pension plan. He is thought to have offered £80 in total equity in order to secure a loan against BHS’s assets but the deal fell through.
It was reported by the BBC they had received “several offers” from potential buyers including Edinburgh Woollen Mill, Sports Direct and Ikea. Interested parties were to put in solid offers before 4pm last Tuesday.
The demise of the retail chain will be the biggest high street collapse since the failure of Woolworths eight years ago, providing the government with another problem as it attempts to save thousands of jobs in the steel sector.
There is a long way to go however, with the company cascading into debts of over a billion pounds according to the administrator Duff & Phelps. They say the chain will continue to do business as the negotiations continue.
Another entity that has shown interest in purchasing parts of the embattled company is Yousuf Bhailok, a British businessman and the former general secretary of the Muslim Council Britain. The Preston based multimillionaire is understood to want to save at least three quarters of BHS’s 160 stores as part of a plan to buy the retail chain as a going concern. Although the company are in administration there is still some chance following Bhailok’s offer that the 10,000 staff can be kept on.
“BHS have basically been running out of cash in the last 2 years and this is the end result” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management on his blog Tuesday. “The first slip up that brought the situation about was down to Retail Acquisitions who famously bought the concern from Sir Philip Green for one pound, and proceeded to botch a hundred million pound funding strategy needed for development,” he added.
Failure to revaluate business rates is thought to have lost BHS over 14 million pounds in 2015.
Another factor facilitating the retail chains demise was a gigantic pension deficit. Sir Philip Green previously held talks with the Pension Regulator regarding a cash boost into the BHS pension plan. He is thought to have offered £80 in total equity in order to secure a loan against BHS’s assets but the deal fell through.
Tuesday, June 21, 2016
Crypto-Currency Could Change Cash Forever
It is "most probable" that the financial industry will embrace the innovations surrounding Bitcoin,” Head of Corporate trading at Nikko-Desjardins Asset Management, Stuart Poulson said.
"I'm pretty sure that the block-chain will change a lot of money related practice and trade," said Poulson on Tuesday from the Consensus 2016 event in Manhattan.
With respect to the crypto-currency's future, Poulsen said the government "will in any case implement laws," but that the sureness of Bitcoin's downfall is "not the definite position to take."
Block-chain innovation has been the subject of media and speculator interest as a potential fix for everything from hospital records to global ID. However many at the block-chain centred gathering told CNBC that there was an aura of over-confidence.
"We don't think the block-chain can do the greater part of what has been promised," Ripple Chief Chris Larsen said. "Yet, we're entering the web of quality — and that is especially under hyped.”
"While some speculators spent the block-chain centred meeting pitching how a safe, unchangeable worldwide ledger (a block-chain) could supplant the current worldwide money related framework, others believed it could play a more ironic role.
Some observers are of the opinion that the innovation behind Bitcoin could change cash forever, by helping fiat money be more productive. Rather than a trust-less system of financially incentivized database maintainers (called "miners" in Bitcoin circles), a variation of block-chain innovation would be utilized by the national banks that crypto-rebels advocate against.
Bitcoin determines its worth by some extent due to shortage. It's hard-wired into the code that there will only ever be a certain number of the crypto currency. National banks will need to have the capacity to make additional computerized resources as required.
Larsen added that central banks' digi-currencies, which he portrayed as a reasonable solution, are "just going to improve the government’s capacity to see what you're doing."
"I'm pretty sure that the block-chain will change a lot of money related practice and trade," said Poulson on Tuesday from the Consensus 2016 event in Manhattan.
With respect to the crypto-currency's future, Poulsen said the government "will in any case implement laws," but that the sureness of Bitcoin's downfall is "not the definite position to take."
Block-chain innovation has been the subject of media and speculator interest as a potential fix for everything from hospital records to global ID. However many at the block-chain centred gathering told CNBC that there was an aura of over-confidence.
"We don't think the block-chain can do the greater part of what has been promised," Ripple Chief Chris Larsen said. "Yet, we're entering the web of quality — and that is especially under hyped.”
"While some speculators spent the block-chain centred meeting pitching how a safe, unchangeable worldwide ledger (a block-chain) could supplant the current worldwide money related framework, others believed it could play a more ironic role.
Some observers are of the opinion that the innovation behind Bitcoin could change cash forever, by helping fiat money be more productive. Rather than a trust-less system of financially incentivized database maintainers (called "miners" in Bitcoin circles), a variation of block-chain innovation would be utilized by the national banks that crypto-rebels advocate against.
Bitcoin determines its worth by some extent due to shortage. It's hard-wired into the code that there will only ever be a certain number of the crypto currency. National banks will need to have the capacity to make additional computerized resources as required.
Larsen added that central banks' digi-currencies, which he portrayed as a reasonable solution, are "just going to improve the government’s capacity to see what you're doing."
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