Wed, Jan25, 2011
A commissioner at PT Adaro Energy Tbk (ADRO), Indonesia’s second-largest coal producer, has purchased 300,000 shares of the company at Rp 1,830 per share to increase his ownership of the growing company.
Malaysian national Lim Soon Huat, who has been a commissioner at Adaro since October 2008, made the deal on Friday, Jan. 20, when the firm’s stock price closed at Rp 1,820 a share, according to a file submitted to the Indonesia Stock Exchange (IDX).
The stock purchase was done for investment, the file said, without disclosing the total shares Soon Huat owned. Soon Huat has over 15 years experience in the financial industry and corporate management in Singapore, Thailand, Malaysia, Hong Kong, China and Indonesia.
Major international ratings agency Fitch Ratings recently said it might upgrade Adaro’s credit rating to investment grade from the current BB+ with stable outlook, on the company’s strong financial fundamentals amid rising demand for coal.
Adaro’s shares traded at Rp 1,840 at 10:23 a.m. on Wednesday, gaining 0.55 percent from the previous day’s close when the broader stock index was in the red.
sourced: The Jakarta Post
Showing posts with label shares. Show all posts
Showing posts with label shares. Show all posts
Wednesday, January 25, 2012
Wednesday, January 18, 2012
Russia Severstal's Nord Gold Q4 output up 14 pct q/q
Wed Jan 18, 2012
MOSCOW Jan 18 (Reuters) - Russian steelmaker Severstal's Nord Gold mining unit said it produced 204,000 gold equivalent ounces in the fourth quarter, up 14 percent on Q3.
The gold unit, which plans to list its shares in London on Thursday following a share swap with parent-company Severstal, in December lowered its 2011 production forecast to 745,000-755,000 gold equivalent ounces.
Nord Gold's final total for the year was 754,000 ounces, up 28 percent from 2010.
Russia's second-largest steelmaker in November announced that it would list Nord Gold global depository receipts (GDRs) in London if Severstal shareholders representing at least 5 percent of Nord Gold share capital agreed to exchange their Severstal shares.
Severstal, controlled by billionaire Alexei Mordashov, said investors exchanged a total of 20,374,385 securities, equal to 10.6 percent of Nord Gold's share capital, and that it expects to list the GDRs on Jan. 19.
MOSCOW Jan 18 (Reuters) - Russian steelmaker Severstal's Nord Gold mining unit said it produced 204,000 gold equivalent ounces in the fourth quarter, up 14 percent on Q3.
The gold unit, which plans to list its shares in London on Thursday following a share swap with parent-company Severstal, in December lowered its 2011 production forecast to 745,000-755,000 gold equivalent ounces.
Nord Gold's final total for the year was 754,000 ounces, up 28 percent from 2010.
Russia's second-largest steelmaker in November announced that it would list Nord Gold global depository receipts (GDRs) in London if Severstal shareholders representing at least 5 percent of Nord Gold share capital agreed to exchange their Severstal shares.
Severstal, controlled by billionaire Alexei Mordashov, said investors exchanged a total of 20,374,385 securities, equal to 10.6 percent of Nord Gold's share capital, and that it expects to list the GDRs on Jan. 19.
Friday, November 18, 2011
Mundra Port up; bulk cargo to be growth driver
Friday, 18 Nov, 2011 Sourced:Reuters
Shares in Adani group company Mundra Port rose 3.7 percent on expectations that bulk cargo and containers handled by it to become group's key growth drivers over the next two years, an institutional sales person with a local brokerage said.
In May, Mundra Port agreed to buy Abbot Point Coal Terminal (with handling capacity of 50MMT) in Australia for $2 billion in an all-cash deal to tap into growing coal traffic in overseas market, which in analyst view was a good deal for Mundra port.
"Mundra Port handled 16.9 million tonnes of cargo in Q2 FY12 and management expects the port to handle 80 million tonnes in FY12 and 100 mn tonnes in FY13. In line with the strong growth in its cargo volumes, Mundra Port's revenue and net profit is expected to grow 39.1 percent and 16.6 percent respectively in FY12," First Global said in a note.
At 1.29 p.m., the stock was at 136.70 rupees, up 3.29 percent, bucking the trend in a weak Mumbai market, which was down 1 percent.
Shares in Adani group company Mundra Port rose 3.7 percent on expectations that bulk cargo and containers handled by it to become group's key growth drivers over the next two years, an institutional sales person with a local brokerage said.
In May, Mundra Port agreed to buy Abbot Point Coal Terminal (with handling capacity of 50MMT) in Australia for $2 billion in an all-cash deal to tap into growing coal traffic in overseas market, which in analyst view was a good deal for Mundra port.
"Mundra Port handled 16.9 million tonnes of cargo in Q2 FY12 and management expects the port to handle 80 million tonnes in FY12 and 100 mn tonnes in FY13. In line with the strong growth in its cargo volumes, Mundra Port's revenue and net profit is expected to grow 39.1 percent and 16.6 percent respectively in FY12," First Global said in a note.
At 1.29 p.m., the stock was at 136.70 rupees, up 3.29 percent, bucking the trend in a weak Mumbai market, which was down 1 percent.
Thursday, November 17, 2011
Peabody Energy on path to full Macarthur Coal acquisition
Thursday, 17 November 2011
St. Louis, Missouri-based Peabody Energy, the world's largest private-sector coal company, announced Wednesday that its subsidiary PEAMCoal Pty Ltd has acquired over 90 percent of all of the shares of Australian metallurgical coal producer Macarthur Coal. By acquiring 90 percent of the shares, PEAMcoal is compulsorily able to purchase the remaining shares.
Other shareholders such as South Korea's POSCO, which owns a 7.25 percent stake, will be forced to sell its shares to Peabody. The purchase price will also increase to A$16.25 (US$16.39) per share, up from A$16.00 (US$16.14) per share--Peabody had previously agreed to increase its offer price per share if it was able to acquire a 90 percent stake.
Tags: Met Coke , Korea S. , USA , Australia , Korea , Macarthur Coal , POSCO , raw mat , East Asia and Pacific , Oceania , Far East , North America , mining , M&A
Sourced:SteelOrbis
St. Louis, Missouri-based Peabody Energy, the world's largest private-sector coal company, announced Wednesday that its subsidiary PEAMCoal Pty Ltd has acquired over 90 percent of all of the shares of Australian metallurgical coal producer Macarthur Coal. By acquiring 90 percent of the shares, PEAMcoal is compulsorily able to purchase the remaining shares.
Other shareholders such as South Korea's POSCO, which owns a 7.25 percent stake, will be forced to sell its shares to Peabody. The purchase price will also increase to A$16.25 (US$16.39) per share, up from A$16.00 (US$16.14) per share--Peabody had previously agreed to increase its offer price per share if it was able to acquire a 90 percent stake.
Tags: Met Coke , Korea S. , USA , Australia , Korea , Macarthur Coal , POSCO , raw mat , East Asia and Pacific , Oceania , Far East , North America , mining , M&A
Sourced:SteelOrbis
Sunday, November 6, 2011
African Minerals loads first Tonkolili iron ore shipment
Sunday, 06 Nov 2011
It is reported that shares in African Minerals rose after revealed that it had started loading the first iron ore shipment from its Tonkolili project. This is the first such shipment from Sierra Leone in more than 30 years.
The 40,000 tonne shipment will be delivered to Shandong Iron and Steel Group and constitutes the trial cargo to be tested prior to the closing of its USD 1.5 billion investment, which remains on track for the year end.
AML said that the shipment was the result of an integrated mine, rail and port infrastructure built by the firm within 14 months of receiving the mining lease and environmental impact assessment license.
Edenville has completed drilling at the Mkomolo and Namwele basins at the Rukwa coal field project in south western Tanzania. Edenville said eight holes were completed at Namwele for 934.30 meters and 2,585.10m in 22 holes at Mkomolo.
Samples results are being analyzed by international consultant Wardell Armstrong International for an initial resource estimate at Mkomolo by the year end.
Mr Simon Rollason chairman said that "The completion of core diamond drilling at the Mkomolo and Namwele basins should allow us to prove up an initial JORC compliant coal resource at the Rukwa coalfield in Tanzania. We confidently await the results of the analyzed samples from the laboratory and we will keep our shareholders up to date with the company's progress as and when we receive further news."
(sourced from Sierraexpressmedia)
It is reported that shares in African Minerals rose after revealed that it had started loading the first iron ore shipment from its Tonkolili project. This is the first such shipment from Sierra Leone in more than 30 years.
The 40,000 tonne shipment will be delivered to Shandong Iron and Steel Group and constitutes the trial cargo to be tested prior to the closing of its USD 1.5 billion investment, which remains on track for the year end.
AML said that the shipment was the result of an integrated mine, rail and port infrastructure built by the firm within 14 months of receiving the mining lease and environmental impact assessment license.
Edenville has completed drilling at the Mkomolo and Namwele basins at the Rukwa coal field project in south western Tanzania. Edenville said eight holes were completed at Namwele for 934.30 meters and 2,585.10m in 22 holes at Mkomolo.
Samples results are being analyzed by international consultant Wardell Armstrong International for an initial resource estimate at Mkomolo by the year end.
Mr Simon Rollason chairman said that "The completion of core diamond drilling at the Mkomolo and Namwele basins should allow us to prove up an initial JORC compliant coal resource at the Rukwa coalfield in Tanzania. We confidently await the results of the analyzed samples from the laboratory and we will keep our shareholders up to date with the company's progress as and when we receive further news."
(sourced from Sierraexpressmedia)
Wednesday, October 12, 2011
Russia Evraz revives dividends, shares soar
Wed Oct 12, 2011
* H1 net $263 mln, Reuters poll forecast $614 mln
* H1 EBITDA $1.62 bln, poll forecast $1.65 bln
* Shares up more than 10 percent in London
* Will pay interim, special dividend
Oct 12 (Reuters) - Russian steelmaker Evraz on Wednesday announced its first interim dividends since the global financial crisis hit in 2008, sending its shares sharply higher despite missing estimates with its first half results.
"As a result of the 1H 2011 performance and the strength of our balance sheet the directors have decided to resume the payment of dividends to shareholders," chief financial officer Giacomo Baizini said in a statement.
"We are declaring an interim dividend of US$89 million or 34 percent of our net income in 1H 2011. We are also declaring the payment of a special dividend of $402 million."
The payout is equivalent to $0.60 a share, and the special dividend equals $2.70 a share.
At 1656 GMT, the shares were up 10.4 percent or $1.63 at $17.25.
Evraz, part-owned by billionaire Roman Abramovich, has improved its liquidity position this year by reducing total debt to $6.04 billion at the end of the first half, compared to $7.81 billion at the end of 2010.
Fitch Ratings last month upgraded Evraz's debt rating to 'BB-' from 'B+' on the back of the company's successful refinancing and debt reduction efforts.
"All in all, the much improved balance sheet with no significant short-term maturities makes the results decent and the company less vulnerable in case of weak market conditions," VTB analysts wrote in a note.
Although the shares surged, the company's first-half net profit and earnings before depreciation, taxation and amortisation (EBITDA) came in below market expectations.
First half net profit was $263 million, while analysts polled by Reuters expected $614 million, up from a year-earlier loss of $270 million.
Evraz also said one-off losses related to the conversion of debts had reduced the figure from $494 million.
First half EBITDA was $1.63 billion, up from $1.15 billion in the year-earlier period and just below the $1.65 billion poll forecast.
Sales were $8.4 billion, up from $6.38 billion and more than the $8.14 billion poll forecast.
CHALLENGING MARKET
Evraz also warned that it has experienced weaker trading in recent weeks due to lower production and export prices in part caused by the challenging global economic environment.
"The group's recent trading has been impacted by scheduled repairs, lower production volumes, a weak market environment in the Czech Republic and a change in product mix in South Africa," Chief Executive Alexander Frolov said in a statement.
"In addition, in recent weeks, there have been some decreases in export prices," he added.
In China, the world's leading steel producer, Shanghai rebar prices dropped 11 percent in September.
The company, which does not ship significant volumes there, earned 34 percent of its revenues in Russia last year and 24 percent in the Americas, with another 10 percent of sales to the European market.
In a separate interview with Reuters Insider, Baizini said the company is prepared for any market slowdown.
"We make sure that we are not producing any steel which is unsold," he said.
"We do keep monitoring the situation, early days, but we're ready for it."
(sourced Reuters)
* H1 net $263 mln, Reuters poll forecast $614 mln
* H1 EBITDA $1.62 bln, poll forecast $1.65 bln
* Shares up more than 10 percent in London
* Will pay interim, special dividend
Oct 12 (Reuters) - Russian steelmaker Evraz on Wednesday announced its first interim dividends since the global financial crisis hit in 2008, sending its shares sharply higher despite missing estimates with its first half results.
"As a result of the 1H 2011 performance and the strength of our balance sheet the directors have decided to resume the payment of dividends to shareholders," chief financial officer Giacomo Baizini said in a statement.
"We are declaring an interim dividend of US$89 million or 34 percent of our net income in 1H 2011. We are also declaring the payment of a special dividend of $402 million."
The payout is equivalent to $0.60 a share, and the special dividend equals $2.70 a share.
At 1656 GMT, the shares were up 10.4 percent or $1.63 at $17.25.
Evraz, part-owned by billionaire Roman Abramovich, has improved its liquidity position this year by reducing total debt to $6.04 billion at the end of the first half, compared to $7.81 billion at the end of 2010.
Fitch Ratings last month upgraded Evraz's debt rating to 'BB-' from 'B+' on the back of the company's successful refinancing and debt reduction efforts.
"All in all, the much improved balance sheet with no significant short-term maturities makes the results decent and the company less vulnerable in case of weak market conditions," VTB analysts wrote in a note.
Although the shares surged, the company's first-half net profit and earnings before depreciation, taxation and amortisation (EBITDA) came in below market expectations.
First half net profit was $263 million, while analysts polled by Reuters expected $614 million, up from a year-earlier loss of $270 million.
Evraz also said one-off losses related to the conversion of debts had reduced the figure from $494 million.
First half EBITDA was $1.63 billion, up from $1.15 billion in the year-earlier period and just below the $1.65 billion poll forecast.
Sales were $8.4 billion, up from $6.38 billion and more than the $8.14 billion poll forecast.
CHALLENGING MARKET
Evraz also warned that it has experienced weaker trading in recent weeks due to lower production and export prices in part caused by the challenging global economic environment.
"The group's recent trading has been impacted by scheduled repairs, lower production volumes, a weak market environment in the Czech Republic and a change in product mix in South Africa," Chief Executive Alexander Frolov said in a statement.
"In addition, in recent weeks, there have been some decreases in export prices," he added.
In China, the world's leading steel producer, Shanghai rebar prices dropped 11 percent in September.
The company, which does not ship significant volumes there, earned 34 percent of its revenues in Russia last year and 24 percent in the Americas, with another 10 percent of sales to the European market.
In a separate interview with Reuters Insider, Baizini said the company is prepared for any market slowdown.
"We make sure that we are not producing any steel which is unsold," he said.
"We do keep monitoring the situation, early days, but we're ready for it."
(sourced Reuters)
Tuesday, October 4, 2011
CIL profit to be hit by about INR 2000 crore post new mines law
Tuesday, 04 Oct 2011
Maharatna Coal India today Profitability would be eroded by about INR 2,000 crore per annum post enactment of new mines legislation which mandates coal miners to share 26% of their profits with project affected people.
Mr NC Jha Coal India Chairman said "It would hit the profitability of the company by about INR 2,000 crore.”
He added that added that if the government wanted to maintain the profit of the state run PSU, it would have to resort to hike in coal prices. Mr Jha said "If the profit of the company has to be maintained it has to be done by increasing the prices of coal. Therefore, it is for the government which is the major shareholder of the company to decide whether to go for price hike or not."
Mr Jha earlier this month had said that the additional cost impact, due to the new act will eventually be passed on to the consumers. The Federation of Indian Mineral Industries too had said recently that prices of all minerals will go up due to the new Mines Bill.
He confidence that despite a dip in company profit post enactment of the new law, the state own firm would stand benefited in the long term by getting land without hindrances and would improve its bottomline.
Mr Jha said "In the short term Coal India would of course witness a dip in its profit but in the long term it would be beneficial as with more land with the public sector firm the business volume would increase and the profit would automatically increase."
The state owned miner which accounts for about 80% of the country total production of coal had reported a consolidated net profit of INR 10,867 crore in 2010-11.
(Sourced from Economic Times)
Maharatna Coal India today Profitability would be eroded by about INR 2,000 crore per annum post enactment of new mines legislation which mandates coal miners to share 26% of their profits with project affected people.
Mr NC Jha Coal India Chairman said "It would hit the profitability of the company by about INR 2,000 crore.”
He added that added that if the government wanted to maintain the profit of the state run PSU, it would have to resort to hike in coal prices. Mr Jha said "If the profit of the company has to be maintained it has to be done by increasing the prices of coal. Therefore, it is for the government which is the major shareholder of the company to decide whether to go for price hike or not."
Mr Jha earlier this month had said that the additional cost impact, due to the new act will eventually be passed on to the consumers. The Federation of Indian Mineral Industries too had said recently that prices of all minerals will go up due to the new Mines Bill.
He confidence that despite a dip in company profit post enactment of the new law, the state own firm would stand benefited in the long term by getting land without hindrances and would improve its bottomline.
Mr Jha said "In the short term Coal India would of course witness a dip in its profit but in the long term it would be beneficial as with more land with the public sector firm the business volume would increase and the profit would automatically increase."
The state owned miner which accounts for about 80% of the country total production of coal had reported a consolidated net profit of INR 10,867 crore in 2010-11.
(Sourced from Economic Times)
China’s Hanlong Resources to acquire 100 percent of Sundance shares
Tuesday, 04 October 2011
Hanlong Mining, a subsidiary of Chengdu-based Chinese private sector industrial conglomerate Sichuan Hanlong Group, has announced that it has reached an agreement with Australian miner Sundance Resources to acquire 100 percent of Sundance shares.
Hanlong has increased its initial offer to A$0.57 cash per Sundance share, totaling A$1.65 billion. The Sundance board has unanimously recommended the offer in the absence of a superior proposal.
The offer is subject to approval from Australia’s Foreign Investment Review Board and China’s National Development and Reform Commission and also to Hanlong securing approved financing.
As SteelOrbis previously reported , Hanlong Mining had previously acquired a 19 percent stake in Sundance Resources, becoming the largest shareholder in the miner.
Tags: Australia , China , Oceania , Far East , Southeast Asia , M&A , mining , East Asia and Pacific
sourced steelorbis
Hanlong Mining, a subsidiary of Chengdu-based Chinese private sector industrial conglomerate Sichuan Hanlong Group, has announced that it has reached an agreement with Australian miner Sundance Resources to acquire 100 percent of Sundance shares.
Hanlong has increased its initial offer to A$0.57 cash per Sundance share, totaling A$1.65 billion. The Sundance board has unanimously recommended the offer in the absence of a superior proposal.
The offer is subject to approval from Australia’s Foreign Investment Review Board and China’s National Development and Reform Commission and also to Hanlong securing approved financing.
As SteelOrbis previously reported , Hanlong Mining had previously acquired a 19 percent stake in Sundance Resources, becoming the largest shareholder in the miner.
Tags: Australia , China , Oceania , Far East , Southeast Asia , M&A , mining , East Asia and Pacific
sourced steelorbis
Tuesday, September 6, 2011
Glencore Raises Optimum Stake to 23.9% as It Boosts Price Paid for Shares Q
Tue,Sep 6, 2011
By Jesse Riseborough
Glencore International Plc, the largest publicly traded commodities supplier, raised its stake in Optimum Coal Holdings (OPT) Ltd., buying shares at 12 percent above the price it proposed last week.
Glencore’s Piruto BV unit purchased 24.6 million shares on the market yesterday at 38 rand ($5.34) apiece, taking the Baar, Switzerland-based company’s stake to 23.9 percent, it said today in a statement. Glencore acquired 14.1 percent of Optimum on Aug. 29 and on Sept. 1 proposed a cash offer of 34 rand a share that valued the South African company at $1.2 billion.
Under takeover regulations, “if an offer is made by Glencore or any of its concert parties for the remaining shares in Optimum within a period of six months from the date of this announcement, the offer consideration will not be lower than 38 rand per share,” according to the statement.
Optimum Coal is South Africa’s fourth-largest coal exporter and owns mines and port capacity. Glencore said last week it had secured agreements that may expand its holding to 43.5 percent.
Glencore gained 2.3 percent to 385.2 pence at the 4:30 p.m. close in London trading. Optimum fell 2.6 percent to 37.01 rand in Johannesburg. An offer of 38 rand a share would value the company at about $1.34 billion.
(sourced Bloomberg)
By Jesse Riseborough
Glencore International Plc, the largest publicly traded commodities supplier, raised its stake in Optimum Coal Holdings (OPT) Ltd., buying shares at 12 percent above the price it proposed last week.
Glencore’s Piruto BV unit purchased 24.6 million shares on the market yesterday at 38 rand ($5.34) apiece, taking the Baar, Switzerland-based company’s stake to 23.9 percent, it said today in a statement. Glencore acquired 14.1 percent of Optimum on Aug. 29 and on Sept. 1 proposed a cash offer of 34 rand a share that valued the South African company at $1.2 billion.
Under takeover regulations, “if an offer is made by Glencore or any of its concert parties for the remaining shares in Optimum within a period of six months from the date of this announcement, the offer consideration will not be lower than 38 rand per share,” according to the statement.
Optimum Coal is South Africa’s fourth-largest coal exporter and owns mines and port capacity. Glencore said last week it had secured agreements that may expand its holding to 43.5 percent.
Glencore gained 2.3 percent to 385.2 pence at the 4:30 p.m. close in London trading. Optimum fell 2.6 percent to 37.01 rand in Johannesburg. An offer of 38 rand a share would value the company at about $1.34 billion.
(sourced Bloomberg)
Monday, August 29, 2011
Xtract Energy to raises GBP 3 million to fund Elko Energy acquisition
Monday, 29 Aug 2011
Xtract Energy announced it has raised GBP 3 million from institutional shareholders to help fund the acquisition of the outstanding 50% of shares it does not own in Elko Energy, an explorer of oil and gas offshore Denmark. Its shares have been restored from suspension.
The fundraiser comprises a placing of 240,000,000 new Xtract shares at a price of 1.25 pence, raising approximately GBP 3 million before expenses. Some of the funds raised will be used as working capital for the enlarged group.
Xtract also announced that it has entered into a conditional agreement with YA Global Master SPV to provide potential future funding of up to GBP 12.5 million as part of an equity line facility.
The Elko deal involves Xtract acquired outstanding Elko Energy for 350,245,343 new Xtract shares, which represents approximately 23.3 per cent of the enlarged share capital.
Re admission of the enlarged share capital is expected to take place on September 13th 2011. Following completion of the Elko acquisition, Xtract will no longer be an investing company for purposes of the AIM Rules.
The acquisition remains conditional on approvals by its shareholders. Irrevocable undertakings to vote in favour of the acquisition have already been given by Cambrian Investment Holdings, which holds 37.2% of the existing shares.
A number of directors have agreed to subscribe for, in aggregate, 17,600,000 placing shares at the placing price.
Mr Peter Moir CEO of Xtract Energy said that "We are very pleased to have successfully raised GBP 3 million, the net proceeds of which will be used to fund the costs associated with acquiring Elko Energy Inc and the ongoing working capital requirements of the company.
He added that “Since the new management team have come in, we have strengthened the balance sheet, appointed a new chairman and focused on core projects, while negotiating royalty arrangements for our non core assets, with significant upside potential. The acquisition of Elko and re listing of the company as an operating business completes the turnaround and we anticipate drilling the high impact Luna exploration well in Denmark during the fourth quarter of 2011.”
(sourced proactiveinvestors)
Xtract Energy announced it has raised GBP 3 million from institutional shareholders to help fund the acquisition of the outstanding 50% of shares it does not own in Elko Energy, an explorer of oil and gas offshore Denmark. Its shares have been restored from suspension.
The fundraiser comprises a placing of 240,000,000 new Xtract shares at a price of 1.25 pence, raising approximately GBP 3 million before expenses. Some of the funds raised will be used as working capital for the enlarged group.
Xtract also announced that it has entered into a conditional agreement with YA Global Master SPV to provide potential future funding of up to GBP 12.5 million as part of an equity line facility.
The Elko deal involves Xtract acquired outstanding Elko Energy for 350,245,343 new Xtract shares, which represents approximately 23.3 per cent of the enlarged share capital.
Re admission of the enlarged share capital is expected to take place on September 13th 2011. Following completion of the Elko acquisition, Xtract will no longer be an investing company for purposes of the AIM Rules.
The acquisition remains conditional on approvals by its shareholders. Irrevocable undertakings to vote in favour of the acquisition have already been given by Cambrian Investment Holdings, which holds 37.2% of the existing shares.
A number of directors have agreed to subscribe for, in aggregate, 17,600,000 placing shares at the placing price.
Mr Peter Moir CEO of Xtract Energy said that "We are very pleased to have successfully raised GBP 3 million, the net proceeds of which will be used to fund the costs associated with acquiring Elko Energy Inc and the ongoing working capital requirements of the company.
He added that “Since the new management team have come in, we have strengthened the balance sheet, appointed a new chairman and focused on core projects, while negotiating royalty arrangements for our non core assets, with significant upside potential. The acquisition of Elko and re listing of the company as an operating business completes the turnaround and we anticipate drilling the high impact Luna exploration well in Denmark during the fourth quarter of 2011.”
(sourced proactiveinvestors)
Saturday, August 27, 2011
Rio Tinto increases its stake in Ivanhoe Mines to 45pct
Saturday, 27 Aug 2011
Rio Tinto exercised its right to subscribe for and acquire common shares in Ivanhoe Mines Limited under its Subscription Right. As a result, Ivanhoe Mines will issue 27,896,570 million new shares to a wholly owned subsidiary of Rio Tinto, Rio Tinto International Holdings Limited increasing Rio Tinto's ownership in Ivanhoe Mines by 2.0% to a total of 358,158,442 common shares or 48.5%.
The price paid per share was CAD 18.98 and the total consideration for the exercise of this Subscription Right was CAD 529.5 million. The subscription was made in accordance with existing contractual arrangements between Rio Tinto and Ivanhoe Mines that permits share purchases in certain circumstances and subject to certain limits. Under the terms of these agreements and subject to certain exceptions, Rio Tinto's current maximum permitted shareholding in Ivanhoe Mines is 49%.
The subscription was made in order to increase Rio Tinto's ownership of Ivanhoe in accordance with its contractual rights. Depending upon its assessment of Ivanhoe's business, prospects and financial condition, the market for Ivanhoe's securities, general economic and tax conditions and other factors, Rio Tinto will consider availing itself of its rights to acquire additional securities of Ivanhoe.
Today's subscription reinforces Rio Tinto's commitment to the Oyu Tolgoi project, which is a natural fit with its strategy of focusing on cost competitive, long life assets with significant growth potential. Together with Ivanhoe and the Government of Mongolia, Rio Tinto is determined to develop Oyu Tolgoi in a sustainable, mutually beneficial manner for the people of Mongolia.
Rio Tinto exercised its right to subscribe for and acquire common shares in Ivanhoe Mines Limited under its Subscription Right. As a result, Ivanhoe Mines will issue 27,896,570 million new shares to a wholly owned subsidiary of Rio Tinto, Rio Tinto International Holdings Limited increasing Rio Tinto's ownership in Ivanhoe Mines by 2.0% to a total of 358,158,442 common shares or 48.5%.
The price paid per share was CAD 18.98 and the total consideration for the exercise of this Subscription Right was CAD 529.5 million. The subscription was made in accordance with existing contractual arrangements between Rio Tinto and Ivanhoe Mines that permits share purchases in certain circumstances and subject to certain limits. Under the terms of these agreements and subject to certain exceptions, Rio Tinto's current maximum permitted shareholding in Ivanhoe Mines is 49%.
The subscription was made in order to increase Rio Tinto's ownership of Ivanhoe in accordance with its contractual rights. Depending upon its assessment of Ivanhoe's business, prospects and financial condition, the market for Ivanhoe's securities, general economic and tax conditions and other factors, Rio Tinto will consider availing itself of its rights to acquire additional securities of Ivanhoe.
Today's subscription reinforces Rio Tinto's commitment to the Oyu Tolgoi project, which is a natural fit with its strategy of focusing on cost competitive, long life assets with significant growth potential. Together with Ivanhoe and the Government of Mongolia, Rio Tinto is determined to develop Oyu Tolgoi in a sustainable, mutually beneficial manner for the people of Mongolia.
Friday, August 26, 2011
Rio, Mitsubishi Raise Coal & Allied Bid to A$1.53 Billion
August26, 2011
Aug. 26 (Bloomberg) -- Rio Tinto Group, the world's second- biggest mining company, and Mitsubishi Corp. raised their offer for the rest of the shares of Coal & Allied Industries Ltd. by 2.5 percent to take the company private.
Coal & Allied accepted the offer of A$1.53 billion ($1.6 billion), or A$125 a share, 6.1 percent more than its close yesterday, the Brisbane-based-company said today in a statement. Rio and Mitsubishi, which own stakes of 75.7 percent and 10.2 percent respectively in Coal & Allied, made an initial offer of A$122 a share on Aug. 8.
"This indicates that they weren't going to get the level of acceptances that they were looking for," Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. "Once they get to 90 percent within one entity they can compulsorily acquire the remaining 10 percent and effectively they can take it private."
Buying Coal & Allied gives London-based Rio and Tokyo-based Mitsubishi full control of three coal mines in the Hunter Valley in Australia's New South Wales state as prices surge. The move comes as global mining companies take advantage of a four-week market equity rout that wiped about $8 trillion off the value of global equities.
Coal & Allied shares gained 3.6 percent to A$122.02 at the 4:10 p.m. close of the Australian stock exchange in Sydney. The revised offer, made after Coal & Allied dropped 30 percent from its peak this year, values the company at A$10.8 billion.
Power Houses
"The offer is obviously well within the investment matrix for these two powerhouses," said McCarthy. "They both have far greater financial resources."
Rio generated $18 billion in cash from its operations in the year to Dec. 31, compared with a cash flow of $9.6 billion a year earlier, according to data compiled by Bloomberg. Rio has worked to repair its balance sheet, with the help of surging commodity prices as well as more than $11 billion in asset sales, after debt ballooned 19-fold with the purchase of aluminum producer Alcan Inc. in 2007.
Rio, which paid A$3.4 billion to acquire Riversdale Mining Ltd. this year, raised its bid two days after Glencore International Plc offered A$270 million for the shares in Australian nickel producer Minara Resources Ltd. it doesn't already own.
"The revised proposal has been unanimously recommended by the proposal response committee members subject to the independent expert concluding that the scheme is in the best interests of Coal & Allied's minority shareholders and there being no superior proposal," Coal & Allied said in the statement.
Perpetual Ltd., Coal & Allied's third-largest shareholder, has supported the bid in the absence of a higher offer.
sourced sfgate
Aug. 26 (Bloomberg) -- Rio Tinto Group, the world's second- biggest mining company, and Mitsubishi Corp. raised their offer for the rest of the shares of Coal & Allied Industries Ltd. by 2.5 percent to take the company private.
Coal & Allied accepted the offer of A$1.53 billion ($1.6 billion), or A$125 a share, 6.1 percent more than its close yesterday, the Brisbane-based-company said today in a statement. Rio and Mitsubishi, which own stakes of 75.7 percent and 10.2 percent respectively in Coal & Allied, made an initial offer of A$122 a share on Aug. 8.
"This indicates that they weren't going to get the level of acceptances that they were looking for," Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. "Once they get to 90 percent within one entity they can compulsorily acquire the remaining 10 percent and effectively they can take it private."
Buying Coal & Allied gives London-based Rio and Tokyo-based Mitsubishi full control of three coal mines in the Hunter Valley in Australia's New South Wales state as prices surge. The move comes as global mining companies take advantage of a four-week market equity rout that wiped about $8 trillion off the value of global equities.
Coal & Allied shares gained 3.6 percent to A$122.02 at the 4:10 p.m. close of the Australian stock exchange in Sydney. The revised offer, made after Coal & Allied dropped 30 percent from its peak this year, values the company at A$10.8 billion.
Power Houses
"The offer is obviously well within the investment matrix for these two powerhouses," said McCarthy. "They both have far greater financial resources."
Rio generated $18 billion in cash from its operations in the year to Dec. 31, compared with a cash flow of $9.6 billion a year earlier, according to data compiled by Bloomberg. Rio has worked to repair its balance sheet, with the help of surging commodity prices as well as more than $11 billion in asset sales, after debt ballooned 19-fold with the purchase of aluminum producer Alcan Inc. in 2007.
Rio, which paid A$3.4 billion to acquire Riversdale Mining Ltd. this year, raised its bid two days after Glencore International Plc offered A$270 million for the shares in Australian nickel producer Minara Resources Ltd. it doesn't already own.
"The revised proposal has been unanimously recommended by the proposal response committee members subject to the independent expert concluding that the scheme is in the best interests of Coal & Allied's minority shareholders and there being no superior proposal," Coal & Allied said in the statement.
Perpetual Ltd., Coal & Allied's third-largest shareholder, has supported the bid in the absence of a higher offer.
sourced sfgate
Optimum Coal shares rise 6 percent on bid talk
Fri Aug 26, 2011
JOHANNESBURG (Reuters) - Shares in South African miner Optimum Coal soared six percent higher in early trading on Friday after the company confirmed reports that unnamed third parties were interested in buying out the firm.
Its share price at 0705 GMT was 31.80 rand, its highest in about four months, according to Thomson Reuters' data. On Thursday, sources close to the deal said commodities trader Glencore was eyeing the miner.
Wednesday, August 24, 2011
Australia's Macarthur Coal meets forecasts, in bid talks
Aug24, 2011
* Says bid talks may yield better offer
* Year operating profit inches up after floods
* Warns costs to go up 15% in FY2012 on flood impact
* Shares hold 0.8% above bid
MELBOURNE, Aug 24 (Reuters) - Australia's Macarthur Coal , facing a $5 billion takeover offer, is in talks on potential counteroffers, it said on Wednesday, after meeting forecasts for a slight increase in annual operating profit as it was hit by floods.
Peabody Energy and ArcelorMittal have made a A$15.50 a share offer, which Macarthur is due to respond to by the end of next week. Any white knights would have to show their hands by then.
"Macarthur notes that it is in continuing discussions with a number of interested parties in relation to possible alternative proposals that may result in a superior offer to shareholders," the company said.
Anglo American is studying Macarthur's books for a possible counterbid, sources familiar with the matter have said. However, sources played down media reports of a possible tie-up between Anglo and China's Citic Group, Macarthur's top shareholder with a 24.5 percent stake.
Macarthur's shares closed at A$15.62 on Tuesday, less than 1 percent above the offer price, suggesting investors doubt a higher offer will emerge.
It declared a final dividend of 16 cents a share, in line with Peabody and ArcelorMittal's offer, which was to be reduced by the amount above 16 cents.
Macarthur's profit before one-offs rose to A$142.4 million ($149 million) for the year to June from A$139.1 million a year earlier. That compared with analysts' forecasts around A$144.6 million, according to Thomson Reuters I/B/E/S.
Its second half profit was hit by a five-month disruption to coal production after heavy rains and flooding in Queensland, saved only by record prices for coal used in steel-making.
Macarthur warned output at two of its mines would take some time to return to normal due to water discharge restrictions, and operating costs would rise by 15 percent to $115 per tonne in the year ahead as it restored the pits to normal.
Macarthur's net profit including the sell down of its Middlemount and Codrilla stakes nearly doubled to A$241.4 million.
Tuesday, August 23, 2011
Essar Energy hit by project delays
Aug22,2011
* Still awaiting forest clearance for some coal blocks
* Says minor delays to three power projects
* Analysts say company faces a trust deficit after project hold-ups
* H1 EBITDA $477.9 million vs $467 mln consensus
* Shares fall 4.4 pct
* Still awaiting forest clearance for some coal blocks
* Says minor delays to three power projects
* Analysts say company faces a trust deficit after project hold-ups
* H1 EBITDA $477.9 million vs $467 mln consensus
* Shares fall 4.4 pct
LONDON (Reuters) - India-focused refiner and power generator Essar Energy said three projects would be delayed as it continues to battle hold-ups from regulators, hurting its shares.
The company said on Monday there would be "minor delays" to its Salaya I, Mahan I and Vladinar phase 2 power projects and that it is still awaiting forest clearance from the Indian government for its Mahan, Chakla and Ashok Karkata coal blocks which will provide fuel for the Mahan I and Tori power stations.
Shares in Essar traded down 4.4 percent to 246.3 pence, paring earlier losses of as much as 6 percent, and making the company the biggest loser on Britain's bluechip index .
"We believe that Essar Energy now faces a trust deficit and therefore there will be an even greater investor focus on project delivery times," said analysts at JP Morgan in a note.
Essar Energy said in its statement: "Delays to regulatory approvals and delays to the access of fuel supplies are a cause for concern."
"Not only do these delays impact the economic returns on projects, but they are acting to discourage investment in the sector from project sponsors, debt providers and equity investors."
For the six months ended June 30, the company posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $477.9 million, up from $320.2 million last year, boosted by higher refinery margins.
This compared with a company-supplied anlayst consensus figure of $467 million.
JP Morgan said in a note that when measured on a current price basis, earnings missed consensus, having been negatively impacted by a foreign exchange loss in the company's oil and gas unit.
The FTSE 100 company was positive on the future of its refining business, saying it expected margins to stay at their current high levels to the end of 2011.
"Strong global demand, the earthquake in Japan and events in the Middle East and north Africa pushed up refining margins in the first half of 2011," the company said.
The company, which agreed to buy Royal Dutch Shell's (RDSa.L) Stanlow refinery in northwest England for $350 million in February, said its focus was on its Indian power projects and integrating Stanlow into its business.
"We do not have any plans for any further acquisitions of refineries in Europe or elsewhere," chief executive Naresh Nayyar said in a conference call with reporters.
Essar Energy, the majority shareholder in India-listed Essar Oil , is itself 77 percent-owned by privately-held Indian conglomerate Essar Group.
The company said on Monday there would be "minor delays" to its Salaya I, Mahan I and Vladinar phase 2 power projects and that it is still awaiting forest clearance from the Indian government for its Mahan, Chakla and Ashok Karkata coal blocks which will provide fuel for the Mahan I and Tori power stations.
Shares in Essar traded down 4.4 percent to 246.3 pence, paring earlier losses of as much as 6 percent, and making the company the biggest loser on Britain's bluechip index .
"We believe that Essar Energy now faces a trust deficit and therefore there will be an even greater investor focus on project delivery times," said analysts at JP Morgan in a note.
Essar Energy said in its statement: "Delays to regulatory approvals and delays to the access of fuel supplies are a cause for concern."
"Not only do these delays impact the economic returns on projects, but they are acting to discourage investment in the sector from project sponsors, debt providers and equity investors."
For the six months ended June 30, the company posted earnings before interest, tax, depreciation and amortisation (EBITDA) of $477.9 million, up from $320.2 million last year, boosted by higher refinery margins.
This compared with a company-supplied anlayst consensus figure of $467 million.
JP Morgan said in a note that when measured on a current price basis, earnings missed consensus, having been negatively impacted by a foreign exchange loss in the company's oil and gas unit.
The FTSE 100 company was positive on the future of its refining business, saying it expected margins to stay at their current high levels to the end of 2011.
"Strong global demand, the earthquake in Japan and events in the Middle East and north Africa pushed up refining margins in the first half of 2011," the company said.
The company, which agreed to buy Royal Dutch Shell's (RDSa.L) Stanlow refinery in northwest England for $350 million in February, said its focus was on its Indian power projects and integrating Stanlow into its business.
"We do not have any plans for any further acquisitions of refineries in Europe or elsewhere," chief executive Naresh Nayyar said in a conference call with reporters.
Essar Energy, the majority shareholder in India-listed Essar Oil , is itself 77 percent-owned by privately-held Indian conglomerate Essar Group.
European shares extend gains; miners jump
Tue Aug 23, 2011
LONDON (Reuters) - European equities gained further on Tuesday, with miners rising on the back of stronger metal prices following China's factory sector data, while investors bet that the Federal Reserve might signal fresh measures to support the economy later this week.
The STOXX Europe 600 basic resources index, up 2.6 percent, was the best performer. At 0711 GMT, the FTSEurofirst 300 index of top European shares was up 1.5 percent at 930.85 points after rising 0.8 percent on Monday.
"Any data that just hints that the world is not ending is going to be well received by the market. We had better-than-anticipated Chinese factory data overnight and some of the corporate results this morning were also good," said Ian Richards, European equity strategist at RBS.
"You have also got a potential catalyst coming through on Friday and the Jackson Hole meeting is going to be in focus for the markets all this week."
Investors waited for the Fed Chairman Ben Bernanke's key speech at an annual central bank conference in Jackson Hole to see if he would provide hints for further measures to revive the struggling economy.
(sourced Thomson Reuters)
LONDON (Reuters) - European equities gained further on Tuesday, with miners rising on the back of stronger metal prices following China's factory sector data, while investors bet that the Federal Reserve might signal fresh measures to support the economy later this week.
The STOXX Europe 600 basic resources index, up 2.6 percent, was the best performer. At 0711 GMT, the FTSEurofirst 300 index of top European shares was up 1.5 percent at 930.85 points after rising 0.8 percent on Monday.
"Any data that just hints that the world is not ending is going to be well received by the market. We had better-than-anticipated Chinese factory data overnight and some of the corporate results this morning were also good," said Ian Richards, European equity strategist at RBS.
"You have also got a potential catalyst coming through on Friday and the Jackson Hole meeting is going to be in focus for the markets all this week."
Investors waited for the Fed Chairman Ben Bernanke's key speech at an annual central bank conference in Jackson Hole to see if he would provide hints for further measures to revive the struggling economy.
(sourced Thomson Reuters)
Thursday, August 18, 2011
Exxaro H1 profit up 53 pct on strong coal unit
Thu Aug 18, 2011
* H1 headline EPS up 53 pct to 1,045 cts
* H1 revenue up 22 pct to 9.6 bln rand
JOHANNESBURG Aug 18 (Reuters) - South African diversified miner Exxaro on Thursday reported a 53 percent rise in first-half profit, boosted by higher sales and prices at its coal business.
Exxaro, South Africa's second-largest coal producer and a major supplier to power utility Eskom, said headline earnings per share for the six months to the end of June rose to 1,045 cents compared with 683 cents the previous year.
"The coal and mineral sands business were the main contributors to the increase," said Sipho Nkosi, Exxaro's chief executive officer.
Headline EPS are the main profit gauge in South Africa and strip out certain one-time items.
The earnings exclude an impairment charge of 439 million rand ($62 million) for its Zincor refinery, which the company plans to close. Exxaro has said it plans to exit the zinc business and focus on growing other, more lucrative, parts of its operations, especially coal and iron ore.
The company said the outlook for both coal and mineral sands remained strong.
"The positive market recovery for coal in terms of price and demand are set to continue in the second half of 2011," it said, but added that constraints on the rail line leading to the export terminal remained.
"Market conditions on the mineral sands business are favourable and the demand for all products is strong."
First-half revenue rose 22 percent to 9.6 billion rand ($1.36 billion).
The company declared an interim dividend of 300 cents.
Shares in Exxaro are up nearly 30 percent so far this year, compared with a 6.6 percent fall in Johannesburg's Top-40 index of blue chips . ($1 = 7.073 South African Rand)
Monday, August 15, 2011
African Minerals seeks tighter takeover protection
Mon Aug 15, 2011
* Vote on provisions to be taken at AGM in September
* Protection will be similar to UK Takeover Code
By Julie Crust
LONDON, Aug 15 (Reuters) - African Minerals (AMIq.L), the largest company on London's junior AIM market, will ask shareholders next month to vote on increasing its takeover protection with the company's corporate profile likely to rise once it starts producing iron ore.
The provisions will be a diluted version of the UK's Takeover Code, which regulates the way acquisitions are done. The Bermuda-registered miner is not covered by the code.
African Minerals, which last month appointed Deutsche Bank as its nominated adviser and broker, said it is not looking to lift its protection in response to any specific interest.
"It is appropriate to protect shareholders given that the company is moving from exploration to producer in Q4 this year," a spokesman told Reuters.
African Minerals expects to start producing iron ore at its flagship Tonkolili project in Sierra Leone this year. Shandong Iron & Steel, the world's ninth-largest steel group, is paying $1.5 billion for a 25 percent stake in the project.
Shares in the company have risen about 30 percent this year, valuing it at some $2.9 billion.
African Minerals is led by Chairman Frank Timis, a self-made billionaire with drugs convictions who fled communist Romania.
Timis owns 12.4 percent of African Minerals with Timis Diamond Corp holding 12.6 percent. He is committed to remaining a director of African Minerals until Phase III development of the project has been completed.
Tonkolili is expected to produce 12 million tonnes of iron ore a year at full capacity, rising by 23 million tonnes and by 45 million a year following planned Phase II and III expansions. ($1 = 0.614 British Pounds)
(sourced Reuters)
* Vote on provisions to be taken at AGM in September
* Protection will be similar to UK Takeover Code
By Julie Crust
LONDON, Aug 15 (Reuters) - African Minerals (AMIq.L), the largest company on London's junior AIM market, will ask shareholders next month to vote on increasing its takeover protection with the company's corporate profile likely to rise once it starts producing iron ore.
The provisions will be a diluted version of the UK's Takeover Code, which regulates the way acquisitions are done. The Bermuda-registered miner is not covered by the code.
African Minerals, which last month appointed Deutsche Bank as its nominated adviser and broker, said it is not looking to lift its protection in response to any specific interest.
"It is appropriate to protect shareholders given that the company is moving from exploration to producer in Q4 this year," a spokesman told Reuters.
African Minerals expects to start producing iron ore at its flagship Tonkolili project in Sierra Leone this year. Shandong Iron & Steel, the world's ninth-largest steel group, is paying $1.5 billion for a 25 percent stake in the project.
Shares in the company have risen about 30 percent this year, valuing it at some $2.9 billion.
African Minerals is led by Chairman Frank Timis, a self-made billionaire with drugs convictions who fled communist Romania.
Timis owns 12.4 percent of African Minerals with Timis Diamond Corp holding 12.6 percent. He is committed to remaining a director of African Minerals until Phase III development of the project has been completed.
Tonkolili is expected to produce 12 million tonnes of iron ore a year at full capacity, rising by 23 million tonnes and by 45 million a year following planned Phase II and III expansions. ($1 = 0.614 British Pounds)
(sourced Reuters)
Saturday, August 13, 2011
Euro zone crisis reaches France, turns existential
Aug12, 2011 |By Paul Taylor, Reuters
PARIS (Reuters) - It was the week the euro zone debt crisis reached France, one of the twin pillars of the European currency alongside Germany.
As jitters over Paris' prized top-notch AAA credit rating took hold, President Nicolas Sarkozy returned from the beach to order up new austerity measures. Then panic selling of French bank shares and an abrupt halt to economic growth added to France's plight.
The sight of the euro zone's number two economy buffeted by rumours and investor anxiety in the midst of the holiday season raised existential questions about European monetary union that will confront Sarkozy and German Chancellor Angela Merkel when they meet in Paris next Tuesday.
The fragile edifice of support for weaker European states would start to crumble if France, the second contributor to the euro zone's rescue fund, were to face a debt downgrade.
All three major ratings agencies reaffirmed this week that no such downgrade was in the works, but that didn't suffice to calm markets.
Up to now, Sarkozy has projected himself as an energetic statesman orchestrating the rescue of the euro zone. Suddenly he had to turn to crisis management at home.
This week's perfect summer storm wiped 10 billion euros off French banks' market value and left France looking at times like the country in need of help itself.
The disclosure that the economy failed to grow at all in the second quarter, after a healthy 0.9 percent spurt in Q1, amplified concerns about the government's ability to meet its target of cutting the deficit to 5.7 percent of GDP this year.
Worryingly, household consumption fell by the biggest amount in a decade, suggesting consumers are reining in spending because they fear hard times and higher taxes ahead.
UNPALATABLE CHOICES
Just eight months before the first round of a presidential election, Sarkozy faces unpalatable choices between removing more tax breaks to increase revenue and cutting public spending, both of which could further depress anaemic growth.
The centre-right president has tried to upstage his Socialist opposition by proposing to introduce a German-style fiscal rule on deficit reduction in the constitution. Socialist votes would be needed to achieve the required super-majority.
Socialist leaders have refused so far to cooperate with what they call Sarkozy's "trap" and sought instead to blame him for increasing the deficit with tax give-aways for the rich.
The issue is bound to be one of the major battlegrounds of the campaign for the presidential election next April and May.
Sarkozy's approval ratings have improved since Socialist front-runner and former IMF head Dominique Strauss-Kahn was forced out the race after his arrest in New York on sexual assault charges.
But both main contenders for the Socialist nomination, Francois Hollande and Martine Aubry, are still ahead of the president in the polls at the moment.
IRRATIONAL AND RATIONAL
French authorities are still not entirely sure what hit them this week. There were both rational and irrational reasons for the market attack.
When Standard & Poor's knocked the United States off its triple-A perch last Friday, markets started looking for who else might be in line, turning a spotlight on France, with the biggest debt and deficit ratios among the six AAA-rated euro zone countries.
Economist Jacques Attali, a former top aide to President Francois Mitterrand, noted that S&P had specifically compared France with the United States, saying it was the only other AAA country that would have a similar debt ratio in 2015.
"Contrary to what everyone says, we are explicitly singled out," Attali told the daily Le Monde in an interview.
"Hence we must a bring our debt down below 85 percent of GDP by the end of 2013, and get back to 70 percent in this decade. That won't be easy."
The cost of insuring French public debt against default reached a new peak during the week yet by Friday, France's 10-year bond yield had fallen back below 3 percent for the first time since November 2010, hardly a sign of imminent meltdown.
The country does have an Achilles' heel: stress tests have shown that its banks are among the most heavily exposed to debt in the euro zone periphery, particularly Greece and Italy.
The sight of the European Central Bank buying Italian bonds on the secondary market to prevent Rome's borrowing costs rising to unsustainable levels, and reports that Greece's debt swap would be extended to bonds maturing up to 2024, combined with wild market rumours to hit French lenders.
Shares in Societe Generale plunged as much as 23 percent on Wednesday before closing 15 percent lower. BNP Paribas and Credit Agricole suffered lesser hits.
A senior SocGen executive told Reuters the bank was worried that heightened market tensions culd lead to a 2008-type credit crunch in which banks stop lending to one another.
French regulators, joined by their Italian, Spanish and Belgian counterparts, banned short-selling of financial shares on Thursday in a temporary response to try to halt rumour-driven herd behaviour. Bank shares rose modestly on Friday.
A senior risk manager at a large European bank, speaking on condition of anonymity, said one reason for the losses on French and European bank shares was that short sellers were targeting banks instead of government bonds.
"Because it's increasingly difficult to trade CDS on sovereign debt, short sellers take bank shares as proxy for sovereign bonds of the respective countries. If you bet on losses of French sovereign bonds for instance, short selling of French banks is very promising," he told Reuters.
Under cover of anonymity, several traders and government officials suggest hedge funds had shorted French debt in anticipation of a downgrade and turned on the banks when it became clear this was not going to happen.
A French fund manager said he clearly witnessed a "France bashing session" on Wednesday.
He said a U.S. bank had sent a market-wide message citing six reasons to sell shares of a French investment firm. The reasons invoked were "because it is French", six times.
PARIS (Reuters) - It was the week the euro zone debt crisis reached France, one of the twin pillars of the European currency alongside Germany.
As jitters over Paris' prized top-notch AAA credit rating took hold, President Nicolas Sarkozy returned from the beach to order up new austerity measures. Then panic selling of French bank shares and an abrupt halt to economic growth added to France's plight.
The sight of the euro zone's number two economy buffeted by rumours and investor anxiety in the midst of the holiday season raised existential questions about European monetary union that will confront Sarkozy and German Chancellor Angela Merkel when they meet in Paris next Tuesday.
The fragile edifice of support for weaker European states would start to crumble if France, the second contributor to the euro zone's rescue fund, were to face a debt downgrade.
All three major ratings agencies reaffirmed this week that no such downgrade was in the works, but that didn't suffice to calm markets.
Up to now, Sarkozy has projected himself as an energetic statesman orchestrating the rescue of the euro zone. Suddenly he had to turn to crisis management at home.
This week's perfect summer storm wiped 10 billion euros off French banks' market value and left France looking at times like the country in need of help itself.
The disclosure that the economy failed to grow at all in the second quarter, after a healthy 0.9 percent spurt in Q1, amplified concerns about the government's ability to meet its target of cutting the deficit to 5.7 percent of GDP this year.
Worryingly, household consumption fell by the biggest amount in a decade, suggesting consumers are reining in spending because they fear hard times and higher taxes ahead.
UNPALATABLE CHOICES
Just eight months before the first round of a presidential election, Sarkozy faces unpalatable choices between removing more tax breaks to increase revenue and cutting public spending, both of which could further depress anaemic growth.
The centre-right president has tried to upstage his Socialist opposition by proposing to introduce a German-style fiscal rule on deficit reduction in the constitution. Socialist votes would be needed to achieve the required super-majority.
Socialist leaders have refused so far to cooperate with what they call Sarkozy's "trap" and sought instead to blame him for increasing the deficit with tax give-aways for the rich.
The issue is bound to be one of the major battlegrounds of the campaign for the presidential election next April and May.
Sarkozy's approval ratings have improved since Socialist front-runner and former IMF head Dominique Strauss-Kahn was forced out the race after his arrest in New York on sexual assault charges.
But both main contenders for the Socialist nomination, Francois Hollande and Martine Aubry, are still ahead of the president in the polls at the moment.
IRRATIONAL AND RATIONAL
French authorities are still not entirely sure what hit them this week. There were both rational and irrational reasons for the market attack.
When Standard & Poor's knocked the United States off its triple-A perch last Friday, markets started looking for who else might be in line, turning a spotlight on France, with the biggest debt and deficit ratios among the six AAA-rated euro zone countries.
Economist Jacques Attali, a former top aide to President Francois Mitterrand, noted that S&P had specifically compared France with the United States, saying it was the only other AAA country that would have a similar debt ratio in 2015.
"Contrary to what everyone says, we are explicitly singled out," Attali told the daily Le Monde in an interview.
"Hence we must a bring our debt down below 85 percent of GDP by the end of 2013, and get back to 70 percent in this decade. That won't be easy."
The cost of insuring French public debt against default reached a new peak during the week yet by Friday, France's 10-year bond yield had fallen back below 3 percent for the first time since November 2010, hardly a sign of imminent meltdown.
The country does have an Achilles' heel: stress tests have shown that its banks are among the most heavily exposed to debt in the euro zone periphery, particularly Greece and Italy.
The sight of the European Central Bank buying Italian bonds on the secondary market to prevent Rome's borrowing costs rising to unsustainable levels, and reports that Greece's debt swap would be extended to bonds maturing up to 2024, combined with wild market rumours to hit French lenders.
Shares in Societe Generale plunged as much as 23 percent on Wednesday before closing 15 percent lower. BNP Paribas and Credit Agricole suffered lesser hits.
A senior SocGen executive told Reuters the bank was worried that heightened market tensions culd lead to a 2008-type credit crunch in which banks stop lending to one another.
French regulators, joined by their Italian, Spanish and Belgian counterparts, banned short-selling of financial shares on Thursday in a temporary response to try to halt rumour-driven herd behaviour. Bank shares rose modestly on Friday.
A senior risk manager at a large European bank, speaking on condition of anonymity, said one reason for the losses on French and European bank shares was that short sellers were targeting banks instead of government bonds.
"Because it's increasingly difficult to trade CDS on sovereign debt, short sellers take bank shares as proxy for sovereign bonds of the respective countries. If you bet on losses of French sovereign bonds for instance, short selling of French banks is very promising," he told Reuters.
Under cover of anonymity, several traders and government officials suggest hedge funds had shorted French debt in anticipation of a downgrade and turned on the banks when it became clear this was not going to happen.
A French fund manager said he clearly witnessed a "France bashing session" on Wednesday.
He said a U.S. bank had sent a market-wide message citing six reasons to sell shares of a French investment firm. The reasons invoked were "because it is French", six times.
Friday, August 12, 2011
Tata Steel Q1 net more than triples
Fri Aug 12, 2011
MUMBAI (Reuters) - Tata Steel on Friday said first-quarter net profit more than tripled, beating estimates, helped by stronger volumes at its Indian operations, better prices in Europe and a one-time gain from a stake sale.
Excluding a one-time gain of 28.8 billion rupees ($634 million) from the company's sale of its stake in Australian coal miner Riversdale to Rio Tinto, Tata Steel reported a profit of 24.7 billion rupees.
Shares in Tata Steel, valued at about $10 billion, have fallen nearly 29 percent so far in 2011, compared with a nearly 17-percent fall in the BSE Sensex.
MUMBAI (Reuters) - Tata Steel on Friday said first-quarter net profit more than tripled, beating estimates, helped by stronger volumes at its Indian operations, better prices in Europe and a one-time gain from a stake sale.
Excluding a one-time gain of 28.8 billion rupees ($634 million) from the company's sale of its stake in Australian coal miner Riversdale to Rio Tinto, Tata Steel reported a profit of 24.7 billion rupees.
Shares in Tata Steel, valued at about $10 billion, have fallen nearly 29 percent so far in 2011, compared with a nearly 17-percent fall in the BSE Sensex.
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