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UK minister rejects Thames Water rescue, nationalisation more likely
The British government rejected a PS10billion ($13billion) rescue plan for Thames Water. This increases the likelihood that the country's biggest water provider will be nationalised. Emma Reynolds, the Environment Minister said that she was "early in her assessment" of the proposals from creditors. She added that Ofwat would have the final word. The ruling should be made this summer before Thames runs out cash in the second half of this year. This is the only proposal on the table. The utility has been fighting off financial collapse for years, battling with PS20 billion in debt, heavy fines due to sewage pollution, and an aging infrastructure. BackLash Sewage Reynolds, a member of the House of Representatives, said that the plan would unfairly shift costs to consumers and delay environmental improvements. Reynolds was responding to public anger caused by years' worth sewage spills as well as rising bills. "We'll be ready for any eventuality, including SAR," said she, referring the special administration regime of the government, which is a temporary form of public ownership. The group of creditors, which included Invesco, Elliott Management, and Silver Point Capital?, said it didn't recognise Reynolds' characterisation. The spokesperson warned that SAR will require government support in the billions. SAR will keep the water flowing for Thames Water's 16,000,000 customers in London and Southern England. However, it could add to the public debt and discourage foreign investors from investing if there are large write-downs. Reynolds said that SAR can be triggered by either insolvency, or serious violations of license conditions including environmental standards. SYMBOLS OF FAILURE Thames Water is now a symbol of the failures in Britain's privatised sector for water. It has been blamed by some for the pollution of rivers, while its previous owners piled it up with debts and paid dividends. The government has declared the sector to be broken and is working towards a?overhaul, including plans for an alternative regulator that will replace Ofwat. Ofwat weighs the creditor plan, and balances record fines, including PS123 million in last year, against warnings of investment drying up without regulatory leniency. Last year, the U.S. Private Equity firm KKR walked out of a takeover offer amid uncertainty?over possible fines. Reynolds said that she is not convinced either by the creditors' demand to lower performance standards. The creditors plan would inject PS3,35 billion into Thames Water alongside a new PS6.55billion debt facility. PS9.4billion of debt will be written off. The plan, if approved by Ofwat, would need to be signed off by the High Court, and any changes in licences would have to go through a public consultation. Ofwat has not responded to the request for comment immediately. Thames Water stated that a market-led approach was the best solution to achieve its turnaround.
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U.S. gasoline drops below $4 per gallon for the first time since April
U.S. retail gasoline prices fell below $4 per gallon for first time since April, as optimism grew about a preliminary agreement between the U.S. and Iran, which could lead to a reopening of Strait of Hormuz - a vital passageway for oil supplies around the world. Crude oil prices fell by more than $4 per barrel after U.S. president Donald Trump announced the U.S.-Iran had signed a Memorandum of Understanding to end the near four-month conflict. However, it is still unclear whether this agreement will last. The drop in fuel prices may provide some relief for the Trump administration. They had promised to lower energy prices to consumers. Trump and Republican legislators, who are running to protect narrow majorities in the U.S. Congress during the midterm elections in November, have 'faced backlash due to the rising price of fuel. At $4 per gallon, consumers are viewed as having a psychological threshold that they must overcome before changing their behavior. Trump announced that the deal's text would be made public after the formal signing ceremony, which took place on Friday. He also stated that the Strait of Hormuz will be reopened in its entirety. Experts say that it may take several weeks before shipping activity returns to normal. This is because removing the mines from waterways?is an extremely complex process. Patrick De Haan is the head of GasBuddy's petroleum analysis. He said that the real test will be whether this relief can last. For now, the average national price could continue to fall, as long as there is no drastic reversal, and both the U.S.and Iran continue in a positive way. GasBuddy reports that the average U.S. retail gasoline price fell to $3.997 per gallon Sunday. This is the lowest it has been since mid-April. Prices are still 90.8 cents higher than they were at the same time last. According to the American Automobile Association, the national average price was $4.065 for Monday. According to De?Haan, Americans collectively spent $46 billion on gasoline more since the beginning of the war. Late March, gasoline prices surpassed $4 after Iran closed the Strait of Hormuz to most shipping. The Strait of Hormuz is responsible for nearly a fifth of all global oil flow. Consumer inflation surpassed 4% in 'May for the first three-year period. According to the Labor Department, falling gasoline prices have led to a moderated expectation of inflation among consumers this month. It is not yet clear if the relief will last. Bjarne Shieldrop, SEB's chief commodities analyst said: "This is fragile." It can easily fall apart. Schieldrop stated that there may be certain details in the U.S.Iran Memorandum which are impossible to overcome. U.S. gasoline is in a supply crunch. The'resilient domestic demand' and 'robust fuel exports" are threatening to put pressure on the already thin inventories, sending gasoline prices soaring. According to government data, in the first week of June, gasoline inventories fell to their lowest level for a decade. They were just 215.1 millions barrels. Tom Kloza is the chief energy advisor at Gulf Oil. He said that if no progress was made in clearing the strait and reinstating insurance for vessels, or in curbing the violence of Iranian proxy forces, then the reprieve could be short-lived. Reporting by Nicole Jao, New York; editing by Sanjeev Mikleni
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Trump's memo clearly states that Iran won't have nuclear weapons
Donald Trump, U.S. president, told reporters on Tuesday at the G7 meeting in France that Iran's memorandum with Iran clearly states that it will not possess a nuclear weapons. Trump announced that he would release the U.S. - Iran memorandum text in a 'formal' setting. President Trump also expressed his approval of the idea to send the Iran deal for review to Congress, as requested by some Republican legislators. Trump told reporters, "I've never sent it before, I never even considered it. But?I will," he said. "I'll send it to Congress." "I like the idea." Details of the U.S. agreement with Iran will be worked out in the next few weeks. Trump told reporters that he thought the next phase of negotiations with Iran would be completed within 60 days. "Iran is eager to make it happen. Trump said that he believes it will go quickly because they have to "get back to work" and their relationship has now been 'normalized. "It could go faster or a little longer, but it could also go quickly."
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Scientists find 64,000 sq. miles of coral reef that can survive climate crisis
Researchers found that scientists have discovered a coral reef area of nearly 166,000 sq km (64,00 sq miles) which is capable of recovering and surviving climate change. This was a?three-fold increase over what they had previously estimated. Scientists have identified a 'three-fold increase' in the area of coral reefs that are capable of surviving and recovering from climate change. A study of 45,000 coral surveys, along with decades of ocean and climate data, has revealed climate-resilient coral reefs in 71 countries. This includes parts of the Caribbean Ocean and Pacific Oceans. Emily Darling, director of the Wildlife Conservation Society's coral conservation and one of the report's authors, said that "coral reefs have often been framed as being beyond saving." This?research shows that it is not the case. We know where to look for hope and we only need political will. The countries are currently drafting action plans to protect 30% of their marine and land environments by the end of this decade. This target is known as "30 By 30". Darling stated at a press briefing that only 28% of reefs are currently protected or conserved. The opportunity and urgency is obvious, particularly as we prepare for a super El Nino. Stacy Jupiter, executive director and co-author of the WCS Global Marine Program said that the data would give governments the necessary information to determine where funds should be allocated and which reefs have the greatest chance of survival. She said that in certain cases where reefs fall below certain benchmarks of ecosystem function, we might need to triage and leave these places. (Reporting and editing by Lincoln Feast; Reporting by David Stanway)
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Russian exports of seaborne oil products down 15% m/m from June 1-15, according to data sources
According to LSEG and market sources, Russia's seaborne exports of oil products fell 15% a month on a monthly basis to about 3.3 mt in the first 15 days of June. This was due to?unplanned maintenance?following repeated ukranian drone attacks. Shipping data shows that the number of diesel loadings at the Baltic port Primorsk - Russia's main outlet for ultra-low sulphur fuel (ULSD) – dropped by 18% to 520,000 tonnes in the first half of June compared with the same period last year. Ukraine has intensified drone strikes on Russia's energy infrastructure, with the number of oil refining facilities targeted more than doubling since the beginning of the year. Alexander Novak, the Deputy Prime Minister, said that Russia's oil production was lower at the beginning of the year. He blamed unplanned refinery repairs. In May, the Kirishi refinery, owned by Lukoil, NORSI, and Rosneft’s Ryazan refinery all saw their crude processing and fuel production reduced. The traders also said that the increased domestic demand for agricultural products and holiday driving, as well as the increase in exports, has reduced export loads. Market sources predict that fuel exports will continue to drop by the end of June as drone strikes disrupt processing at TANECO Kuibyshev & Saratov refineries and other energy facilities. Novak said that a diesel export ban could be considered by Russia if it is necessary. Data from market sources revealed that Turkey, India and Saudi Arabia, as well as Singapore and other Asian countries, were the top buyers of Russian oil products by sea this month. Mark Potter, Mark Potter (Reporting in Moscow)
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First verdict of Milan urban planning investigation clears all defendants
Milan's court acquitted?eight defendants on Tuesday in the first of a dozen criminal cases into urban planning which slowed construction in Italy’s financial capital. The case concerned the construction of an 87 metre building, which was authorised based on a simple renovation permit. The approval was part a rapid-track process for building permits that the Milan municipality adopted in recent years, during a real estate bubble in the north city. Milan prosecutors sought convictions of all defendants with sentences up to?two years and four months in prison. The decision is a major win for developers and the Milan government. The prosecution argued that a full construction permit was needed, not just a renovation authorization. A permit of this kind would have meant a more lengthy approval process, and higher fees payable to the municipality. According to a statement from the Milan court, Judge?Paola?Braggion acquitted everyone on the basis that "the facts don't constitute a crime". The statement stated that the ruling meant the renovation permit had not been deemed illegal because "caselaw in criminal and administrative court, as well the Constitutional Court has offered different interpretations of the notion of renovation". FROZEN DEVELOPMENTS A committee representing families that bought homes on construction sites in Milan, which are still frozen because of the investigation by Milan prosecutors, welcomed the verdict. The committee issued a press release calling for a formal discussion with the government in order to establish a legal framework which would protect homeowners as well as their properties. Milan Mayor Giuseppe Sala who is being investigated in another case also welcomed this decision. He was "disappointed" by the tone of the prosecution in pressing charges. According to a judicial source, Milan prosecutors will wait until they have the full reasoning for the decision before deciding if they want to appeal. The acquittal of this case under Italian law does not affect any other proceedings. The final stages of two other?trials relating to construction sites are approaching, and verdicts should be expected by the end of summer. Around a dozen preliminary investigations are ongoing.
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Nordic Baseload Power asks for Swedish support in building nuclear plants near Denmark
The Swedish government announced on Tuesday that the energy company Nordic Baseload has applied for financial assistance to build two "full-scale" nuclear reactors in a region of southern Sweden near Malmo, just 22 km from Copenhagen. The application calls for two reactors that can produce 2,500 megawatts of electricity, which is equivalent to the annual power consumption of up to 2,000,000 households. "Sweden needs more stable electricity production." Niklas?Wykman, the Deputy Minister for Finance, stated that it is positive that there continues to be a high level of interest in investing in nuclear power. Sweden operated nuclear reactors in?Barseback between the mid-1970s and 2005. The location is controversial. Danish politicians have always been critical of Swedish nuclear energy so close to their border, and pushed for Sweden to shut down?Barseback. Greater Copenhagen, consisting of the Danish capital and Malmo in Sweden, is the most densely-populated area of the Nordics. It has 4.4 million people. This is the fourth application that the government has received for new nuclear plants. The government is planning 'four large-scale nuclear reactors with an installed capacity of?around 5,000 MW, or equivalent small modular reactors. The government plans to have half of them operational by 2035. (Reporting by Johan Ahlander; Editing by Alexandra Hudson)
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SpaceX shares set to surpass Amazon in terms of market value
Elon Musk’s SpaceX shares extended a 'post-IPO rally' and rose?more than 8% in Tuesday's premarket trading,?putting 'the company on track to surpass Amazon.com's market value in order to become the fifth largest company in the world. The stock rose 8.5% to $208.90. This is more than 54% higher than its $135 IPO and gives the company a total market capitalization of $2.75 trillion if these gains continue. Amazon is valued at $2.66 trillion and Microsoft at $2.95 trillion. The top three companies in the world are worth more than $4 trillion. "We can state with certainty that the valuation of this company today is completely absurd. "People are buying SpaceX with the expectation that other people will also buy and push up the price - this is speculation," said Ipek zkardeskaya senior market analyst at Swissquote Bank. The company posted sales of $18.67 Billion last year, and a loss of $4.94 Billion after combining with the money-losing xAI. This is in stark contrast to other big Wall Street technology companies who have reported bumper numbers. SpaceX's options activities are expected to start as early as Tuesday. The initial activity is expected to be volatile, heavy and expensive. Analysts and Portfolio Managers warned investors to expect volatility in the early days of SpaceX as a publicly traded company due to its small float and high valuation. SpaceX's inclusion on the Nasdaq 100 could lead to a further rally, as it will become a major holding of passive funds and ETFs that track the index. This would create a new source of demand for the company's shares. FTSE Russell, MSCI and other indexes are set to include the stock in their respective indices as of June 26?and 29?respectively. In a recent note, Zephirin Group stated that "Index inclusion alone is not sufficient to drive sustained repricing. We?see a combination of passive flows, momentum and limited float which are driving uplift beyond previous index-addition movements." SpaceX said that its underwriters exercised their "greenshoe option" to buy additional shares on Monday, bringing the total proceeds of?its initial IPO to $85.7 billion. This is an increase from the $75 billion it raised last weekend. As of?07 a.m., more than $3 billion in SpaceX shares had been traded. ET, this was more than?three times the volume of trading in Nvidia, Microsoft, Tesla and Apple combined. Nvidia, Alphabet and other heavyweight tech stocks were also trading lower. SpaceX shares lost some of their gains on Tuesday in premarket trade after the company announced that it would be acquiring software company Anysphere at a price of $60 billion.
Polish farmers march versus 'green poison' EU environment change guidelines
Countless protesters marched through the streets of the Polish capital Warsaw on Friday to reveal their opposition to European Union environmental guidelines that farmers state are driving them out of service.
Farmers were joined by representatives of other branches of the Uniformity trade union, which arranged the demonstration, such as miners and workers from the automotive sector.
Farmers in Poland and somewhere else in the bloc have been objecting in current months versus low-cost food imports from Ukraine and constraints placed on them by the EU's Green Deal to tackle climate change.
In a sea of red and white Polish flags and Solidarity banners, the protesters, numerous using yellow high-visibility vests, brandished placards with mottos like Down with the Green Offer, Down with the European Union and Green Toxin.
The only thing it benefits is including the bin, said retired farmer Wieslaw Czerwinski from Grojec, in central Poland, when asked about the Green Offer.
It raises the costs of production, raises expenses every day, costs of heating, costs of energy.
The protesters were signed up with by politicians from the previous nationalist federal government, who implicate Donald Tusk's pro-European administration of accepting Brussels at the cost of regular Poles.
Tusk's federal government states and dismisses such claims that their predecessors damaged Poland's relations with Western allies while failing to act to help sectors such as farming.
Farmers have actually currently won concessions from the EU and the Polish federal government, which said it would pay 2.1 billion zlotys ($ 526.74 million) in aids to compensate farmers for low grain costs, however they say it is not enough.
Last month they decided to unclog border crossings with Ukraine, lifting a blockade that had actually dragged out for months, soured bilateral relations and buffeted Ukraine's trade.
(source: Reuters)