Account: (login)

More Channels


Share |
Are you the publisher? Claim this channel

Search in 109,681,955 RSS articles:

Channel Description:

Tim Webb is industrial editor of the Guardian and Observer, covering industry and energy

Latest Articles in this Channel:

  • 03/24/11--02:59: Retail investors shrug off the gloom (chan 1603316)

    • Retailers were the strongest performers in the FTSE 100 in early trading today, after Kingfisher and Next boosted their dividends when they unveiled their full year results

    Retailers were the strongest performers in the FTSE-100 in early trading today, after Kingfisher and Next boosted their dividends when they unveiled their full year results.

    Kingfisher, Europe's biggest home improvement retailer, also posted a 23% rise in pre-tax profits and said it was planning to open more stores in countries where it already has a presence. The retailer said that it could also expand into new markets like China, adding it would boost group trading margins as it battles with higher costs and cash strapped consumers.

    Next, which runs over 500 stores in Britain and Ireland, reported that profits were up by 9%, as expected, but warned that conditions on the high street would get worse before they get better. Chief executive Simon Wolfson soberly told the City: "Retailing will feel like walking up a down escalator – we will have to work hard to stand still."

    Analysts at Investec warned that Next may have to cut prices in stores, despite surging inflation for things like cotton, because customers are looking for cheaper purchases and as stores are ordering more stock.

    Shares in Marks & Spencer, Associated British Foods and Tesco were also up strongly. Stockbroker Arden Parners warned that more profit warnings by non-food retailers was possible before Easter, although this is partly because the Easter bank holiday weekend – traditionally a busy time for retailers - falls later this year. It said in its "Daily Retailer" note this morning:

    "In yesterday's Budget the Chancellor tried hard to talk up economic growth prospects, but there was obviously no room for tax cuts, so the embattled UK consumer will remain under pressure, as Simon Wolfson of Next concedes today in his eagerly-awaited macro-overview with the final results. Given the tough trading on the High Street since early January and the adverse calendar shift, there is still a risk of more non-food retailer profit warnings before Easter. The shadow of higher interest rates remains, given the scary inflation figures, and we remain cautious in the short term about the General Retail sector, particularly on the household goods stocks like Home Retail, Dunelm and Carpetright, but global DIY giant Kingfisher is in a better place, as they have revealed today."

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 03/24/11--07:20: Market hangs up on Cable & Wireless (chan 1603316)

    • Shares in Cable & Wireless were down by around 15% in early afternoon trading after the telecoms company issued a profits warning.

    Shares in Cable & Wireless were down by around 15% in early afternoon trading after the telecoms company issued a profits warning.

    It said it expected that underlying earnings for the next financial year, starting on April 1, would be flat.

    The company is now worth a third less than it was after spinning off its Caribbean operations at the start of last year. It is forecasting a faster-than-expected decline in its traditional fixed line voice business and added it was seeing tough competition in the data services market, which is forcing prices down on contract renewal.

    It would be hit by an extra £30m bill because of inflation and higher energy costs in the next financial year. This would wipe out all the forecast increase in earnings that the City had pencilled in.

    Steve Malcolm, analyst at the stockbroker Evolution, summed it up succintly when he wrote in a note:

    "This ends a miserable first year as a separately listed company."

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 03/24/11--08:08: AssetCo boss ousted as company fights for survival (chan 1603316)

    • The saga at AssetCo, the owner of London's fire engines, has taken another dramatic twist.

    The saga at AssetCo, the owner of London's fire engines, has taken another dramatic twist. Chief executive and co-founder John Shannon has been ousted by the board, the company told the stock market today.

    Shannon had threatened to derail the company's planned emergency fundraising and looks like he has paid the price with his job.

    AssetCo's shares were suspended on Monday after Shannon said he was "not bound" to support the move to tap shareholders for £16m. Shannon owns 30% of the company, which leases fire engines to the London Fire Brigade in a highly unusual PFI type contract lasting 20 years. The company also has a contract to provide back-up fire crew during strikes and was hoping to buy and leaseback fire engines from fire authorities all over the country.

    AssetCo needs the cash to repay lenders like Lloyds Banking Group by a deadline of this week and warned that without the bail-out it might not survive. Shannon instead backed a takeover approach from Arcapita, a Bahrain-based investment bank.

    The company said in a statement to the City this afternoon:

    "The Board of AssetCo announces that following the request of the board John Shannon has today resigned with immediate effect as a Director of the Company and all subsidiary companies."

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 03/24/11--11:31: Invensys tight-lipped after ditching chief executive (chan 1603316)

    • Engineering electronics company announces departure of Ulf Henriksson with immediate effect

    British engineering electronics group Invensys has stunned the City by ditching its chief executive, Ulf Henriksson, with immediate effect. The company announced that finance director Wayne Edmunds is taking over.

    At one point shares plunged by 8% on the shock news, but later recovered some of their losses.

    The company did not say why Henriksson had been replaced. In November he was quoted in the Daily Telegraph as saying China Southern Rail could buy the British company, shares in which rose by almost 10% as a result. The remarks forced the company to rush out a statement to the Stock Exchange denying it was in takeover talks.

    Sir Nigel Rudd, the City veteran who chairs Invensys, said on Thursday: "I am delighted that Wayne has agreed to take on the role of chief executive to lead Invensys through the next stage of its development. We have three world-class businesses and a management team to match, and I am confident that Invensys is well positioned to continue to deliver value to shareholders."

    Invensys makes rail signalling systems as well as controls for nuclear reactors, industrial plants and domestic appliances. Henriksson has been credited with saving and rebuilding Invensys since becoming chief executive in 2004, as Rudd acknowledged: "I would like to thank Ulf for his hard work and achievements which have delivered a transformation of Invensys. We wish him well for the future."

    The company said that its results for the current financial year, ending at the end of month, will be "broadly in line with market expectations". The comments reassured nervy City investors worried that Henriksson's abrupt departure could be down to undisclosed financial problems at the group. Some analysts speculated that a profits warning could be in the pipeline.

    Invensys was formed in a merger of Siebe and BTR in 1999, and has undergone restructuring in the past decade to cut costs. A disposal programme, combined with debt restructuring in 2004, saved the firm from collapse.

    Manufacturing firms are benefiting from a surge in infrastructure projects coming on stream in emerging markets which had been delayed by the global financial crisis. The market for rail equipment is thought to be worth $100bn (£61bn) globally.

    Some analysts in the City have been talking up the possibility that Invensys could become a bid target as larger rivals emerge from the slowdown with large amounts of cash after cutting costs.

    Tim Webb
    Graeme Wearden

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 03/24/11--12:36: BP's Russian deal with Rosneft blocked by court (chan 1603316)

    • • Oligarchs from BP's present venture in TNK-BP triumph
    • BP to try to proceed with $16bn share swap, Arctic venture off
    • Decision a blow to new chief Bob Dudley after 2010's Gulf spill

    BP's controversial alliance with the Kremlin-controlled oil company Rosneft is in tatters after a tribunal backed the company's Russian partners in blocking the deal.

    The London tribunal, called to settle the dispute between BP and its Russian oligarch partners AAR over the proposed deal, ruled that the temporary high court injunction preventing it from being consummated should remain in place. The deal involved BP and Rosneft swapping $16bn (£10bn) of shares and forming a joint venture to explore the Arctic for oil.

    BP issued a statement on Thursday night saying it was "disappointed" that the deal could not go ahead as proposed and that it would try to proceed with the share swap without forming the Arctic venture.

    But it is likely that AAR will also seek to block this plan unless it wins key concessions from BP. AAR owns half of TNK-BP, which is BP's existing joint venture in Russia. AAR claims that BP's proposed rival joint venture with Rosneft breaches the terms of its shareholder agreement governing TNK-BP.

    Under the terms, BP is required to offer any business opportunity in Russia to TNK-BP first, rather than pursue it unilaterally. AAR is keen to turn TNK-BP into a global oil major and sees the Arctic joint venture with Rosneft as an opportunity to achieve its ambitions. AAR fears that if the two companies swap shares, even without forming the Arctic venture, it makes it more likely that it will be excluded from future projects in Russia.

    AAR's CEO Stan Polovets said: "AAR welcomes the decision of the arbitration tribunal, which we expect BP to honour fully and absolutely."

    The ruling from the tribunal is a serious blow to Bob Dudley, BP's new chief executive, who announced the proposed alliance at a press conference in January. Dudley, himself a former chief executive of TNK-BP before he was hounded out of Russia by AAR in 2008, presented the alliance as a transformational deal as the company recovers from the Deepwater Horizon crisis.

    It is not clear how BP's investors would view a standalone share swap with Rosneft even if AAR did not succeed in blocking it. BP has raised more than $20bn from asset sales since the Gulf Crisis to focus on boosting production and finding new reserves. Its record in Russia has been marked by disputes with its partners.

    BP said it was hopeful that it would be able to resurrect its plan to explore the Arctic. Dudley, along with executives from Rosneft, has pointed out that TNK-BP has no experience of offshore exploration, let alone in an environment like the Arctic, which makes it an unsuitable partner. AAR hopes that the tribunal ruling will persuade both companies to find a way for it to participate.

    "BP looks forward to finding a way to resolve its differences with its Russian partners to allow these important Russian Arctic developments to proceed in future," a statement from BP said.

    "BP has a long history as a leader in oil and gas exploration and the development of new technologies. BP intends to continue in that role for decades to come as the world looks to satisfy its increasing demand for secure, affordable energy supplies. BP has the scale and experience to use these new technologies to develop frontiers like the Russian Arctic.

    "BP is disappointed that these agreements, which are important for Russia, for Rosneft and for BP, cannot for now go ahead in the form intended, due to legal challenge by AAR. BP intends to continue to honour the TNK-BP shareholders' agreement to which it is a party with AAR, and will respect the decision of the arbitrators. BP has always been and remains, fully committed to investing in Russia. TNK-BP is BP's primary business vehicle in Russia and BP fully supports its strategy and investment programme. BP is also continuing with its exploration programme with Rosneft offshore Sakhalin."

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 03/29/11--12:36: BAA breakup gets fresh look from Competition Commission (chan 1603316)

    • Airport operator breakup moves step closer as Competition Commission asks interested parties to look again at ruling on BAA's monopoly

    Ferrovial, the Spanish industrial group, could on Wednesday move one step closer to the break-up of BAA, the British airports operator it bought five years ago for £10bn.

    Almost exactly two years ago, the Competition Commission ordered BAA to sell Stansted, Gatwick and either Glasgow or Edinburgh, arguing that the group had a monopoly. BAA, backed by Ferrovial, successfully appealed on a technicality, but the competition watchdog overturned it and the court of appeal reinstated its original ruling.

    The Competition Commission will now ask interested parties if anything has changed in the intervening two years to make its ruling invalid. Ferrovial has spent the last two years selling off assets – including Gatwick – which has helped it avoid producing a second consecutive annual loss. Selling more BAA airports will boost the coffers further.

    Ferrovial is also in talks with potential investors to offload a 10% stake in BAA. The sale would take its current 56% stake below the crucial 50% level, allowing it to deconsolidate the debt, wiping €14bn of debt from its balance sheet at a stroke.

    Ferrovial may be best known in Britain as the owner of BAA, but it also builds roads, bridges, railways and other infrastructure, as well as large commercial buildings such as hotels and offices. Almost two-thirds of its revenues come from outside recession-hit Spain.

    It has been a torrid couple of years for Ferrovial. Its share price has slumped in over concerns about higher debt costs and slumping public spending on infrastructure projects in Spain in particular and, to a lesser extent, Britain. Construction activity has also severely contracted in Spain because of the economic downturn.

    Ferrovial president Rafael del Pino recently urged the Spanish government, since it had got the deficit under control, to loosen the purse springs for public investment in infrastructure, citing Brazil and Britain as examples to imitate.

    The Spanish government has announced a €70bn programme to kickstart the economy with new infrastructure projects, such as more high speed rail links bypassing the capital, in line with the trend for the increasing regionalisation of Spain. But these projects are a long way off. The government also recently announced as part of the privatisation of its airports that it will invite companies to bid to run two of Spain's biggest airports – Madrid's Barajas and Barcelona – which could interest Ferrovial.

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 03/30/11--10:37: Spain's financial crisis claims another victim: the solar power industry (chan 1603316)

    • The Spanish government has slashed its solar power subsidies

    Spain had one of the world's most ambitious – and generous – plans to boost the amount of electricity it generates from the sun. That dream, for the solar industry at least, has turned sour. Just days before Christmas, the government slashed the level of subsidies that all new and existing photovoltaic (pv) solar projects will receive. But even the powerful utility companies, who opposed the solar industry, are now warning that the fallout could be long-lasting and reach far beyond the energy sector.

    The row has pitted the renewable lobby against Spain's three biggest utilities – Iberdrola, Endesa and Gas Natural – which have been urging the government to take action to stem the wave of subsidised renewable projects being built, particularly solar ones.

    Carlos Salle, Iberdrola's director for regulation, told the Guardian that divisions between the renewable lobby and the rest of the energy industry are even deeper in Spain than elsewhere as a result. "We have more controversy here in Spain with renewables against non-renewables … this is an aspect of our system – it provokes problems."

    Another Madrid-based businessman, from one of Spain's leading companies, was franker, likening relations, only half-jokingly, as a "war". The Asociación de la Industria Fotovoltaica (Asif), Spain's solar industry body, accuses politicians of telling lies, exaggerating the costs of generating electricity using solar pv to justify the cut in subsidies.

    It is more than just bragging rights between rival generators at stake. The solar pv industry alone received subsidies last year of €2.6bn (£2.28bn), a sum neither the country – nor the utilities – can afford. The utilities have paid out €20bn to subsidise solar and wind projects, and are still waiting for the government to pay them back.

    Credit rating agencies threatened to downgrade the companies if something was not done to address the "tariff deficit". Salle recalled: "The situation was horrible a year ago – €20bn for three companies was an amount comparable to an entire budget for some countries."

    The utilities also complain that their coal and gas plants, which the government wanted them to build a decade ago after several black-outs, are losing money because they are now only needed for half the time. But the Spanish regulator forces the firms to keep them on standby for times when the wind stops blowing or at night when solar does not generate.

    Asif argues that solar projects, which last summer provided a maximum of 4% of the country's electricity, have been sacrificed to keep profits from dirty coal and gas plants high. The solar industry had enjoyed phenomenal growth due to a subsidy regime which, even Asif admits, was too generous. Companies were able to cut costs too quickly – 70% since the original subsidies were introduced in 2004. Investors poured in and about two-thirds of the current capacity was installed in 2008 alone, before a planned tariff cut came into force the following year.

    This has left Spain with 10 times the amount of solar pv capacity the government had planned for by 2010 – and a much bigger bill than it had envisioned.

    Javier Anta, Asif's president, said that the industry will challenge the cut in the courts, but admitted that this would take years, by which time many solar project owners could have gone to the wall. He added that some investors will not back new projects because they fear the tariff could be cut again retrospectively. "There are some people who say this is not a one-off. They do not trust the government," he said.

    This is one point on which both the renewable lobby and the power industry agree: by taking the unprecedented step of retrospectively cutting subsidies promised to projects which have already been built, the government risks scaring off investors of all kinds.

    Salle says that "even if we recognise that the situation is better than a month or a year ago, the problem is [a lack of] confidence. The uncertainty and [risk] premium does not apply only to that sector [solar pv] but to the whole industry and the rest of the country in some cases. Everyone appreciates the relevance of having regulation which does not make any retroactive decisions because you will have to attract new people [to invest]. The new people will say 'hey, in the history of this country and this sector these people who have been new in the past and have invested, the government has changed the rules'."

    Reflecting change

    Abengoa, a Spanish engineering firm celebrating its 70th year, is pushing ahead with solar-thermal projects. Unlike the schemes involving reflectors heating a salt water mixture running through pipes, Abengoa has developed towers of pipes that look like mini skyscrapers. It employs 23,000 workers in its solar unit, which had a turnover of more than €3bn (£2.6bn).

    The firm has conducted sustainability audits of its business for several years and says projects that can't meet sustainability criteria are modified or abandoned. Controversially, it has championed the refining of biofuels, something anti-poverty campaigners have cited as denying food sources to poor people in the developing world.

    Carlos Bousoño, director of corporate social responsibility, said the debate had moved on after technology allowed for seeds and fruit to be separated from plants before processing. He said only the stalk and waste material was used in second generation biofuels fermentation, allowing corn, soya or other foodstuff to be saved for making food.

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/01/11--08:31: Holidaymakers flock to Spain amid strife in Egypt and Tunisia (chan 1603316)

    • Spanish tourist industry is forecasting hotel occupancy rates will rise by 12% this summer compared with last year

    For Antonio Arce, owner of a stall selling trinkets such as children's flamenco dresses, toy bulls and Barcelona football club replica shirts near the Prado museum in Madrid, there is good news and bad.

    The number of tourists coming to Spain so far this year is rising, albeit slowly, after a two-year slump sparked by the global financial crisis. The recent turmoil in north Africa, where Egypt and Tunisia are prime holiday destinations, has also provided an unexpected boost for Spanish tourism. The industry is forecasting that hotel occupancy rates will rise by 12% this summer compared with last year, based on bookings made so far. Ramón Estalella, secretary-general of the Spanish hoteliers' confederation, la Confederación Española de Hoteles y Alojamientos Turísticos (CEHAT), told the Guardian he believes about two-thirds of this increase is down to holidaymakers cancelling their trips to north Africa and opting for safer – and familiar – Spain.

    The problem for Arce's souvenir business is that tourists are not returning to places like Madrid but to the country's coastal resorts, primarily the Canary Islands. "Cultural tourism is different. People can live without the Prado but not the beach," he says. Trade started to nosedive in August and although it has picked up a little this year, things are still bad, he says.

    A stone's throw from his stall, on the busy Plaza de Cánovas del Castillo, José María Sánchez, director of the Objetos de Arte Toledano, a large arts and craft store, tells a different story. He's much more optimistic about business, which he says has been boosted recently by many more Spanish people visiting Madrid on day trips or for the weekend, thanks to new high-speed rail links connecting the capital, the latest being the Madrid-Valencia line, which opened in December.

    The tourism industry generates nearly 11% of Spain's GDP and employs 2 million people, 11.3% of the workforce in a country where the official unemployment rate is 20%. A record 58 million tourists came to Spain in 2007 but slumped by almost 10% the following year and numbers have yet to recover.

    Tourism is even more vital to the economy of Spain's islands. In 2006, tourism accounted for 31.8% of the economy of the Canary Islands – which include Tenerife, Fuerteventura, Gran Canaria and Lanzarote – and 34% of all jobs, according to umbrella trade association Exceltur. But by 2009 the industry had shrunk by a tenth. Almost 50,000 people – a sixth of those employed by the tourism industry there – lost their jobs, contributing to an unemployment rate on the islands of almost 28%, the highest in Spain. The number of British tourists – who make up 37% of all foreign visitors to the islands – slumped by 15% in 2009 as the economic squeeze at home, the stronger euro and more expensive air travel put them off. Ricardo Fernández de la Puente, vice-minister of tourism of the Canary Islands, admits: "The downturn ruined our economy. It is dependent on tourists. It has been very difficult for our businesses and companies. But we began to see a recovery in the second half of last year."

    In February, foreign tourist numbers rose by 13.5% compared to last year, and accounted for almost a third of all trips to Spain. But the type of tourism is also changing. More tourists are now travelling independently, and not on package holidays. It's a change that Gonzalo Ceballos Watling, a director of development and sustainability at the government's TourSpain agency, welcomes. The agency is promoting activity holidays like horse riding in Spain, particularly at its coastal resorts and islands. "No one is ever going to reject package tourism but we believe we have to go onto a higher segment of tourist. Not only in the economic capacity of tourists but also the tourist experience. We are trying to offer a different type of tourism – not just lying on a beach."

    The tourism industry is not expecting a return to the boom times soon. Between 2006 and 2008 the number of hotel beds in Spain increased by a quarter from an ill-timed construction boom. It left the industry with an average occupancy rate last year of only 60%. As a result, Ramón Estalella from CEHAT says that many hotels will not be able to raise prices even as numbers pick up. "So there is a lot of cannibalism on prices and benefits offered for customers," he says.

    Nevertheless, Spain's tourism industry looks to be over the worst. TourSpain says it is no thanks to the EU, which offered to bail out stricken carmakers like General Motors Europe during the economic crisis but were less ready to help Spain's tourism industry. As Watling says: "They [Brussels] still guarantee financial aid to building cars and why not more to us? Tourism is not seen as a first-class industry or sector." His colleague, Álvaro Blanco Volmer, a director of planning and co-ordination, notes: "Many people think tourism develops by itself only because the sun shines."

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/10/11--10:47: Glencore poised to publish plans to become a public company (chan 1603316)

    • The stock exchange listing is expected to raise up to $12bn when it floats a fifth of its shares, valuing the group at $60bn

    Glencore is expected to fire the starting gun on its $60bn (£37bn) float this week after months of speculation that the commodities trader was close to selling part of the business.

    The privately owned company, which is based in Baar, Switzerland, will list shares in London and Hong Kong, handing each of its 485 traders who collectively own the firm an average windfall of $103m.

    According to reports this weekend, Glencore will publish its formal "intention to float" on Thursday and shares could begin trading next month. A spokesman for the company declined to comment.

    The flotation is the most eagerly awaited for years. The company is expected to raise up to $12bn when it floats approximately a fifth of its shares, valuing the group at $60bn, which would make it one of the FTSE 100's most valuable companies. Part of the reason behind the move is so its partners can cash in their shares in the company, whose value has rocketed in the last few years as commodities prices have soared.

    But it is thought that its partners have agreed strict "lock-in" agreements which mean they will not be able to sell their shares for several years.

    Glencore is the world's largest commodities trader. It trades metals such as copper and iron ore, as well as "soft commodities" sugar, wheat and barley, and also buys and sells about 3% of the world's oil. It also operates more than 200 ships, has extensive mining operations, owns grain export elevators in Russia, stakes in oil fields off Equatorial Guinea and owns 34.4% of Xstrata, the FTSE 100 mining company, and 8% of Oleg Deripaska's Rusal, the world's top aluminium producer.

    Bankers are already considering the possibility of a merger between a newly floated Glencore and Xstrata. Xstrata shareholders are unlikely to sanction a combination if Glencore was not listed, as it would be hard to value the company.

    Glencore's chief executive, Ivan Glasenburg, will gain most from the flotation, as he is thought to own about 15% of the company. He is still looking to recruit a City grandee to chair the board.

    Hong Kong-based businessman Simon Murray, chairman of Asian private equity firm GEMS, is thought to be the frontrunner. Tony Hayward, the former BP chief executive, has been lined up as senior independent director.

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/10/11--11:52: Soaring commodities prices push China's trade balance into the red (chan 1603316)

    • Demand for consumer goods from abroad pushes up import bill

    The commodities boom has pushed China's trade balance into the red for the first time since 2004.

    Official figures released on Sunday show that the world's biggest exporter posted a trade deficit of just over $1bn (£611m) for the first three months of the year.

    Surging prices for commodities - as well as strong demand for imported consumer goods such as cars for China's growing middle classes - were responsible for pushing up the country's import bill.

    "The value of imports in the first quarter hit a record high for the first time of more than $400bn," the government said.

    It added that China had imported more mechanical and electrical equipment, including cars, as well as iron ore and soya beans than a year ago and that the prices of those commodities had all soared.

    Despite the first quarter figures, analysts expect China to post a global trade surplus of up to $200bn, but if oil and commodity prices stay at current levels the figure will be lower.

    Last year, China ran a trade surplus of about $16bn a month.

    A smaller trade surplus might help to ease trade tensions with the US government and other countries who complain that Beijing is giving its exporters an edge with currency controls and other policies. They argue that keeping the value of the yuan artificially low makes Chinese exports unfairly cheap.

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/12/11--12:17: Russian Helicopters to launch in London (chan 1603316)

    • Kremlin-controlled firm will become first Russian defence company to list on LSE

    The Kremlin-controlled company whose helicopters were used in the 1979 invasion of Afghanistan is coming to London.

    Russian Helicopters will become the first global Russian defence company to list on the London Stock Exchange after it announced plans to raise $500m (£307m).

    The company has about 8,500 machines in operation and accounts for 13% of the global helicopter fleet.

    A valuation has not yet been set for the company, which had revenues last year of $2.7bn. It is thought it will follow the example set by other Russian listings in London, such as Rosneft, which floated 15% of its shares in 2006. If investors' appetites meet expectations, this could give Russian Helicopters a valuation of over $3bn.

    The listing is set to take place by the end of June, with Bank of America Merrill Lynch, BNP Paribas and VTB Capital appointed to handle the deal.

    State-controlled defence group Oboronprom, which owns the majority of Russian Helicopters' shares, will sell about $250m-worth. A further $250m of equity will also be issued. The money will be used to pay off debts and increase stakes in other subsidiaries.

    The company will launch an investor roadshow this month. Shares will be listed only as GDR deposits, meaning the company will not earn a full FTSE listing and will require a lower level of disclosure.

    The company's helicopters appeared in the ill-fated invasion of Afghanistan. Today it makes the world's most widely used medium-lift helicopter, the Mi-8, and competes against British firm AugustaWestland, now part of the Italian defence group Finmeccanica. Military sales make up about 60% of its revenues.

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/13/11--11:34: BP faces shareholder revolt as Rosneft deal hangs in balance (chan 1603316)

    • As the Deepwater Horizon crisis continues, new chief executive Bob Dudley battles to turn the oil group around

    Bob Dudley, chief executive of BP, will face hostile shareholders on Thursday and, barring an 11th-hour breakthrough, the humiliating prospect of his controversial proposed alliance with Kremlin controlled oil company Rosneft collapsing.

    It was reported late on Wednesday that BP had broken off talks to buy out its Russian partners, the oligarchs who make up AAR and stand in the way of the Rosneft alliance being consummated. It is thought that AAR demanded too high a price for its 50% share in the joint venture TNK-BP in return for not blocking the alliance. A source close to AAR said: "It is up to BP to make a sensible proposal to get out of the mess it has created.One has not been forthcoming... They [BP directors] now face the consequences of their actions." BP and AAR declined to comment.

    Almost a year on from the Deepwater Horizon accident in the Gulf, the present situation hardly represents the turnaround that Dudley, or BP, had hoped for. Dudley took the helm on 1 October, after his predecessor, Tony Hayward, paid the price for what is officially the world's biggest offshore accidental oil spill.

    Less than four months into the job, Dudley announced an audacious proposal to transform the fortunes of BP, looking not west to the US but east: a $16bn share swap with Rosneft – the first of its kind between an oil major and a national oil company – to cement a new joint venture to explore the Arctic.

    BP has had its fingers burnt in Russia before. In the late 1990s, it lost out in a dispute with AAR. The two sides made up to eventually form TNK-BP, the Russian joint venture at the heart of the impasse over the proposed Rosneft deal. Last month an independent arbitration tribunal upheld an injunction, secured by AAR, which prevents the two companies consummating the deal.

    AAR had successfully argued that the Rosneft deal contravened the TNK-BP shareholder agreement, which requires BP to offer the joint venture first refusal over any business opportunity in Russia. Dudley claimed that AAR had been properly consulted on the deal when analysts queried him days after he had unveiled the Rosneft alliance. It soon transpired that AAR felt otherwise.

    But BP still looked secure, with the proposed Rosneft alliance seemingly having the blessing of the Kremlin. Rosneft chairman Igor Sechin was also deputy prime minister and in charge of Russia's energy policy, a key player to have onside. At a dramatic Friday night press conference at BP's St James' Square headquarters in London in January, when the deal was announced, those listening in by phone overheard Dudley quietly thank Sechin, after his speech, for his "very nice words".

    Dudley calculated that AAR would not dare to challenge the deal. The last oil oligarch to cross the Kremlin – Mikhail Khodorkovsky, ironically the boss of the dismantled oil company whose assets went to Rosneft – is still languishing in a Siberian prison cell.

    But Russian politics, particularly involving energy, are unpredictable at the best of times. Dudley, it seems, guessed wrong and BP is paying the price. To make matters worse, on Monday, Sechin quit his Rosneft post in a Kremlin reshuffle, leaving BP more isolated than ever. Iain Armstrong, analyst at stockbroker Brewin Dolphin, said: "It's such a political misjudgment by Dudley. If it wasn't for the fact that the chief executive position of BP is a poisoned chalice right now, he would be out. BP is lurching from one crisis to another."

    BP's two-month period of exclusivity with Rosneft – during which it was supposed to formally sign the alliance – expires on Thursday. It seems unlikely Rosneft would extend the deadline, which means it is free to seek other partners for the proposed deal. Now the tough negotiations will begin in earnest.

    All is not lost for BP however. It still has an advantage over other rivals wanting to become Rosneft's partner, since the two companies have been in talks for years about exploring the Arctic. And AAR, which claims it wants to be involved in the Arctic exploration, would also lose out if BP was not able to form the alliance, whether through TNK-BP or not. But it is clear that if Dudley wants the deal to go ahead, he will have to cut a deal with AAR. It will not come cheap and could take weeks to negotiate.

    If BP cannot resurrect the Rosneft alliance, it will have little impact on the business in the short term. Exploration was not due to begin for several years and the chances of success are uncertain in any event. But it would be a major blow for Dudley, particularly as BP had championed the alliance as "historic" and an example for the rest of Big Oil wanting to team up with national oil companies to follow. Brewin Dolphin's Armstrong says: "If the deal did not happen it would be a blow to Bob Dudley's reputation. It would represent a setback for BP's rehabilitation."

    The Rosneft debacle is terrible timing for BP. The annual general meeting, at the ExCel centre in East London, was always going to be a stormy affair because of the Deepwater Horizon disaster. A protest by environmental activists is planned outside the conference centre before the meeting begins.

    Investors are also angry that the company paid bonuses to its finance director and head of refining last year, and about the £1m golden goodbye for Hayward. Big funds such as the California state pensions fund Calpers and Florida's equivalent SBA, who own 0.4% of BP, as well as activist funds such as the Christian Brothers Investment Services group, will vote against the approval of BP's report and accounts.

    The less environmentally and corporate governance-minded investors also have reasons to be unhappy. BP's share price is still almost a third lower than it was just before Deepwater Horizon at a time when oil prices have surged and it lags behind rivals such as Shell.


    Hayward plots his City comeback

    Former BP chief executive Tony Hayward paid the price for the Deepwater Horizon disaster, leaving the company on October 1 last year. But he is already plotting his City comeback.

    He has been lined up as senior independent director of commodities group Glencore in its $60bn flotation. The role could be announced on Thursday when, as expected, Glencore formally fires the starting gun on the listing.

    Hayward is also reported to be setting up an oil and gas investment fund which could list in London through a £1bn flotation this year.

    Hayward was appointed as a non-executive director of BP's Russian joint venture, TNK-BP, soon after he stepped down as BP chief executive. He joined just before the full-blown row erupted between BP and its Russian partners, who co-own the venture, over the proposed alliance with Rosneft.

    But even if it ends in tears for Hayward at TNK-BP, his wife Maureen could keep his BP association alive. She is reported to be writing a book in his defence of her husband, who was villified for such gaffes during the Gulf crisis last year such as "I want my life back", and telling the Guardian: "The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume."

    The comments were made in mid-May, when the official size of the spill was still estimated at 5,000 barrels a day. By the following month, it was increased to up to 40,000 barrels a day. BP is now contesting the official figures, which are likely to be one of the factors determining how much it will have to pay in fines.

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/14/11--02:34: BP gets extra time to rescue deal with Russia's Rosneft (chan 1603316)

    • Protesters gather at annual meeting in London as oil company tries to keep share swap deal on track

    BP has won a crucial one-month extension to its troubled share swap with Russia's Rosneft, as shareholders and protesters gather in London for what is expected to be a stormy annual meeting.

    The deal with Rosneft, which gives BP access to the Arctic, was due to expire on Thursday. However, following last-ditch talks, the deadline has now been pushed back to 16 May.

    Analysts said the move suggested BP may yet be able to reach an agreement with its existing partners in Russia – the four oligarchs behind the AAR consortium, Viktor Vekselberg, Mikhail Fridman, German Khan and Len Blavatnik. BP and AAR each own 50% of TNK-BP.

    The Rosneft deal, which was announced to much fanfare in mid-January, swiftly hit difficulties when AAR claimed the tie-up contravened the TNK-BP shareholder agreement. Last month, an independent tribunal ruled in AAR's favour, effectively blocking the Rosneft venture.

    Under the deal, BP and Rosneft would swap $16bn (£9.8bn) of shares and create a joint venture to explore the Arctic for oil.

    BP has been attempting to resolve the impasse by buying AAR out of TNK-BP, but has apparently balked at the price being demanded by the quartet of billionaires, rumoured to be as much as $70bn. As one source close to AAR said on Wednesday: "It is up to BP to make a sensible proposal to get out of the mess it has created. One has not been forthcoming."

    Bob Dudley, BP's chief executive, faces humiliation if the Rosneft deal cannot be revived. He is also expected to come under heavy criticism at BP's AGM, taking place at the ExCel Centre in London. Some protestors are dressing up as an oil slick, with slogans referring to the Deepwater Horizon disaster in the Gulf of Mexico.

    Within the building, investors are expected to vent fury over bonuses paid to BP's finance director and head of refining last year, and the £1m payoff handed to Dudley's predecessor, Tony Hayward.

    Corporate governance group Pirc has recommended that City investors should oppose BP's report and accounts and the remuneration report.

    Shareholders, who missed out on several dividend payments last year, are also upset that BP's share price remains about a third lower than it traded a year ago, before the Deepwater rig exploded and sank to trigger one of the worst environmental disasters ever.

    Graeme Wearden
    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/14/11--05:54: Protesters target BP annual meeting (chan 1603316)

    • • Anger at executive pay deals in wake of gulf disaster
    • Protest includes fishing boat owners and climate activists

    BP executives faced angry protesters as shareholders prepared to vote at its annual meeting in London, which is taking place a few days before the first anniversary of the Deepwater Horizon explosion.

    Fishermen and women from the Gulf coast affected by the spill, some of whom had bought BP shares to allow them to attend the annual meeting, joined climate change activists and artists protesting against the oil company.

    Institutional investors, angry at what they claim are excessive executive pay deals, urged shareholders to vote against the remuneration package.

    As BP's chairman, Carl-Henric Svanberg, described a year of "unprecedented crisis" and remembered the families of the 11 who died in the explosion, protesters spoke of their lost livelihoods.

    "I am coming to articulate the anger of thousands of Gulf coast residents whose lives and livelihoods have been destroyed while the BP board continues to prosper," said Diane Wilson, a fourth-generation fisherwoman from Texas, one of several who bought shares in BP in order to attend the meeting at the ExCeL centre.

    She was ejected from the conference centre lobby, having covered her face with a dark syrup intended to resemble oil. "This is the only thing they understand," she said.

    The explosion last April caused a spill that polluted fishing areas and fouled hundreds of miles of beaches. Byron Encalade, president of the Louisiana Oystermen Association, said he planned to tackle the company over its compensation process, claiming many oystermen have been denied payments or given insufficient payouts.

    "We've not been made whole: our fishing grounds have been depleted, our oysters are dead and we're not receiving the funds we need to support and sustain ourselves," Encalade said. "We're seeing money going everywhere but at ground zero. We're the communities at ground zero – the first to be put out of work and we're going to be the last to be able to go back to work and sustain ourselves."

    Tracy Kuhns and Mike Roberts from Grande Isle in Louisiana own a shrimping boat. They have not fished since the spill. They are reluctant to go out when the season starts next month because they are not sure it is safe, even though most of the waters have been declared open.

    Kuhns, executive director of Louisiana Bayoukeeper, which works to protect the Gulf habitat, said: "The oil is still there – it's just sunk to the bottom."

    Roberts added: "Opening the fishing grounds was just a way for BP to limit their liability."

    The couple put in a compensation claim for $100,000 (£60,000), based on typical earnings for a poor season, but received only $6,000 from BP. They worked for BP on its clean-up programme, but that lasted only three months, so money is tight.

    Roberts said that even if fishing resumed, "the market is ruined because no one thinks it's safe. People have common sense."

    BP shareholders have been urged to vote against the company's remuneration report by Pirc, the corporate governance watchdog, over "excessive" payouts to outgoing executives.

    Tony Hayward, BP's former chief executive, who got £1m compensation for loss of office, has share awards yet to vest worth as much as £8m.

    Glass Lewis, a large US shareholder advisory firm, is also urging a vote against BP's report and accounts.

    The Association of British Insurers (ABI), which does not issue voting advice, warned investors of possible concerns about BP's discretionary use of share-based bonus awards. The ABI has issued an "amber top" alert to fellow institutional investors, warning them to examine the issues surrounding bonuses of more than £100,000 awarded to two of BP's top executives – its finance director Byron Grote and downstream chief Iain Conn.

    Critics view the payments as inappropriate in the wake of the environmentally catastrophic oil spill. BP argues that the executives met targets in their particular roles and that neither played any part in its offshore exploration division.

    Members of first nation tribes in Alberta, northern Canada, where BP is developing its oil sands projects, also staged a demonstration.

    Melina Laboucan-Massimo, from the Lubicon first nation, said that her father, a hunter, has started to find tumours inside animals he had killed. She blames the use of natural gas by BP in its "in-situ" projects, where steam is used to extract oil from the sands, for polluting the air and water.

    Laboucan-Massimo accused BP of not explaining to shareholders the full environmental impact of these projects.

    Tim Webb
    Karen McVeigh

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


  • 04/14/11--12:17: BP faces storms of protest at annual meeting (chan 1603316)

    • • Gulf coast workers and green activists barred
    • Investors also grill board over Rosneft controversy

    Oil company BP has come under fire from both shareholders and protesters at its annual meeting as the anniversary of the Gulf of Mexico oil disaster looms.

    Activists wearing T-shirts emblazoned with the slogan "No Tar Sands", in protest against BP's oil extraction operations in Canada, were dragged out of the ExCeL Centre in London as they tried to stage a demonstration. A group of fishermen and women from the Gulf coast who say their livelihoods have been destroyed by the oil spill that followed the explosion of BP's Deepwater Horizon rig last April were denied entry to the meeting despite holding proxy documents for the event which should have allowed them in.

    A quarter of investors voted against the re-election of BP's safety committee in a damning indictment of the recent record of accidents.

    The meeting also saw the board grilled over its delayed £10bn share-swap and exploration deal with Russian state-controlled oil company Rosneft. BP said it had been given a one-month extension to hold further talks over the troubled joint venture.

    The protesters had flown in from the US to draw attention to what they say is evidence that the Gulf continues to be badly affected by last year's spill. Louisiana fisherwoman Diane Wilson was arrested for breach of the peace after she smeared herself in an oil-like substance as she tried to gain access to the conference centre.

    During a tense meeting, BP chairman Carl-Henric Svanberg tried to prevent Antonia Juhasz, an activist promoting a book about the Gulf spill, from reading a statement from Keith Jones, whose son Gordon was one of the 11 workers to die when the Deepwater Horizon exploded.

    "His son died aboard the rig and you don't want to hear his voice?" she interrupted, before she read out the statement: "This was not an act of God. BP and Halliburton could have prevented the blow-out. You were rolling the dice with my son's life and you lost."

    She also claimed the large parts of the sea bed were dead zones because of the oil and dispersant that she said had sunk to the bottom.

    In response to her comments, BP chief executive Bob Dudley read out the names of the 11 men who died when the rig exploded. He said nothing could be done to bring the 11 men back, that the accident had "shocked and saddened us all", and the company would do everything it could to make sure it did not happen again.

    Dudley continued: "I disagree with your assessment that the BP oil spill has ruined life on the bottom of the ocean. It's a lifeless zone in some of these areas because of the fertiliser coming down …You say it's because of the oil, which you can't see and I can't see."

    Mike Roberts, one of the three Louisiana shrimpers barred entry, told the Guardian outside: "That is typical tactics from BP – they say something that sounds good. When you have got that kind of money you write your kind of history and make your own reality."

    Roberts, from Grande Isle on the coast, has not been fishing since the spill and says few people in the Gulf feel confident about eating fish caught there. He added: "We came all the way from Louisiana. We weren't going to be rowdy. We were here, dignified and respectful, on their terms.They looked at our passports and asked us if we were all from Louisiana. They didn't let us in because they didn't want the truth to be told."

    Some 25% of shareholders voted against the re-election of Sir William Castell, BP's senior non-executive director and head of the safety, ethics and environment assurance committee. The remuneration report was also unpopular, with an 11.1% vote against due to the bonuses paid to the finance director and the head of refining last year, as well as the £1m golden goodbye for former chief executive Tony Hayward. Another 7.1% voted against the re-election of Svanberg as chairman, who rebutted criticism that he took a hands-off approach to the crisis last year.

    BP said it hoped the extra month would enable it to salvage its controversial alliance with Rosneft which is being blocked by AAR, which represents the interests of three Russian oligarchs who are partners with BP in their TNK-BP venture.

    Dudley said BP had made a "fair offer" to buy out half of TNK-BP, as well as offering it involvement in the Rosneft deal, but added: "We are not going to offer a large amount or significant shareholdings."

    Stan Polovets, chief executive of AAR, responded: "BP has never made a constructive proposal to turn the Rosneft deal over to TNK-BP as our shareholder agreement requires. AAR is not interested in the selective parts of the deal that BP feels it can give up."

    Tim Webb

    guardian.co.uk © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds