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London court approves UK's Thames Water Debt Lifeline
The court approved a debt relief of 3 billion pounds ($3.8 billion), preventing the nationalisation of Britain's largest water provider in the short-term and giving the company time to fix its finances. The government is ready to place Thames Water in special administration. Thames Water has 18 billion pounds of debt and needs temporary nationalisation in order to keep the taps running in the event of a financial collapse. The public is angry at the privatised water sector in the country, which they blame for polluting the rivers with sewage. The government is focused on reforming this sector and wants Thames to be free from administration. The judge approved the debt lifeline provided by senior creditor. It will provide Thames with an initial amount of 1.5 billion pounds, plus the possibility of another 1.5 billion. This will extend its funding to May 2026. The company had said that it would have been out of money in six weeks without the approval. However, the new debt package was controversial. The new debt package was controversial. A group of lower ranking creditors were against it. They called its interest rate of 9.75% too expensive. Thames Water has 16 million customers and despite the rescue package, it still faces multiple challenges in order to survive past 2026. To avoid millions of fines, it must raise more than 3 billion pounds as new equity and restructure debts. It also needs to improve its infrastructure and its environmental performance. The price that Thames Water can charge its customers in the next five-year period is a complicating factor for investors. The regulator said that the company could raise its bills by 35% in this time period, which is less than the 53% increase it claims it needs. The company filed an appeal on February 14, attempting to improve terms. The rescue package came from a group including Abrdn and Elliott Investment Management in London, M&G, PIMCO, M&G, and Invesco. $1 = 0.7931 pounds (Reporting and editing by Mrigank Dahniwala, Kate Holton and Sam Tobin in London; Yadarisa Shabbong in Bengaluru)
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Samurai loan raised by Czech investor Kretinsky’s EPH for the first time, $527 million
The Czech energy group EPH is controlled by billionaire Daniel Kretinsky. As part of its efforts to diversify access to funding, the company announced that it raised its first Japanese lending facility worth 80 billion Japanese yen (527 million dollars). EPH announced in a Monday statement that the so-called Samurai Loan matures in Febuary 2030, and will pay an interest margin 160 basis points above the Tokyo overnight average (TONAR) rate. The loan was coordinated by SMBC Group. In a press release, Vice-Chairman Pavel Horsky stated that "we are pleased to have raised our first Samurai loan. This is an important milestone for the diversification of EPH’s funding model." Horsky said that it was the biggest debut of a corporate borrower on the Samurai Loan market since the global economic crisis. Kretinsky is a 49-year old former lawyer in an investment bank who has grown Energeticky a Prumyslovy Holding into one of Europe’s largest energy groups. He also expanded his investments in retail, media, and other areas in Europe over the past few years. EPH reported earnings of 3.6 billion euro ($3.76 billion), before interest, taxes, depreciation, and amortization (EBITDA), on revenues of 24.2 billion euro in 2023. (1 dollar = 151.8500 yen; 1 euro = 0.9563 euros) (Reporting and editing by Clarence Fernandez).
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Indian exports are uncertain due to Trump's tariffs
Citi Research analysts estimate that potential losses could be as high as $7 billion per year. Officials from the government are waiting for details on how tariffs will work before they can fully assess their economic impact. They have also been working to develop a U.S. Trade Deal to reduce tariffs and increase two-way trading. The impact of reciprocal tariffs in India is summarized below. SECTORS at Risk Citi analysts state that chemicals, metals and jewellery are the most vulnerable, followed by pharmaceuticals, food products and automobiles. India's merchandise exported to the United States is estimated to be nearly $74 billion by 2024. This includes pearls, gemstones and jewellery valued at $8.5 billion; pharmaceuticals worth about $8 billion; and petrochemicals of around $4 billion. Citi estimates that India's tariffs for Indian exports will be around 8.2 points higher in 2023 than the U.S. US Exports to India U.S. manufacturing exported to India will be worth nearly $42 billion by 2024. The tariffs are significantly higher, from as little as 7% for wood products and machinery, to as high as 15%-20% on footwear, transport equipment and food. The White House stated in a factsheet last week that the average tariff applied by the U.S. on farm products was 5%, compared with India's 39%. It added that India imposed a tariff of 100% on U.S. Motorcycles, while the U.S. only imposed a tariff of 2.4% on Indian Motorcycles. AGRICULTURE SECTOR India's food and farm exports, where the tariff differentials are highest but the trade volume is low, would be the most affected if the United States decided to impose reciprocal duties on a wider range of agricultural products. PRODUCTS MADE FROM TEXTILE AND LEATHER, AS WELL AS WOOD Textiles, leather, and wood products, which are labour-intensive, face a relatively lower risk due to lower tariff differentials or the limited share of U.S. India trade. Many American companies also produce these products in South Asia, and they benefit from India's Free Trade Agreements. This allows them to sell the products on their domestic market with lower tariffs. WORST CASE SCENARIO Standard Chartered Bank's economists estimate that in the worst case scenario, if the United States imposes a uniform 10% tariff on all goods imported from India, the Indian economy would suffer a 50- to 60-basis point hit, assuming a drop of between 11% and 12% of imports. What India can offer India has reduced tariffs to ease tensions over trade. For example, it has cut the tariff on high-end motorbikes to 30% from 50%, and on bourbon whisky to 100% from 150%. It also promised to review other tariffs and increase energy imports and buy more defence equipment. (Reporting and editing by Clarence Fernandez; Manoj Kumar)
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Europe stocks continue record run on defence sector boost
The European share market reached a new high on Tuesday, as defence stocks rose on the prospect of higher military spending in the area. However, a Capgemini led drop in IT shares capped the gains. The STOXX 600 pan-European index rose by 0.2%, to a new record of 555.42. The aerospace and defense index jumped 1%. After European Commission President Ursula von der Leyen announced that the Commission would propose an exemption for defense spending from EU budget limits, the sector grew by 4.6% Monday. This is its largest one-day increase since Russia invaded Ukraine, in February 2022. Defense stocks gained on Tuesday. Italy's Leonardo rose 1.4%; Sweden's Saab increased by 1%; and Britain's BAE Systems advanced 0.5%. Thyssenkrupp's warship division is being spun off and Thyssenkrupp has gained 2.7%. Its shares had risen nearly 20% Monday. Capgemini, on the other hand, fell 6.2%, despite the fact that the French IT giant had reported an annual sales decline of 2%, which was above expectations. IHG, owner of Holiday Inns, has lost 1.3% since the release of its results for 2024. Antofagasta's core profit increased by 11%. (Reporting and editing by Savio d'Souza in Bengaluru, Pranav Kashyap from Bengaluru)
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Antofagasta mine's core annual profit increases by 11%
LONDON, February 18 - Chilean Copper Miner Antofagasta reported an 11% increase in annual core profits on Tuesday, thanks to higher metal prices. EBITDA (earnings before tax, depreciation, and amortization) for the entire year increased to $3.43 from $3.09 billion one year earlier. The proposed final dividend by the copper miner of 23.5 cents per share represents a payout of 50% of the underlying earnings. Antofagasta paid out a record amount of $1.4 billion to shareholders in 2021. This was 142.5 cents per share. Its policy is that at least 35% net profits are returned to shareholders. The company reported a capital expenditure of $2.4billion last year and expects this to rise to $3.9billion in 2025 as it works on the Centinela concentrator's peak. The Luksic family of Chile, which owns the majority of the company, operates four mines in South America. The share prices of pure-play miners will rise in 2024 due to the booming demand for copper used in solar panels, electric vehicles and other energy transition applications. Antofagasta shares rose 15% in the past year. In a recent statement, CEO Ivan Arriagada stated that he was encouraged by the prospects for copper, as global constraints such as ore hardness, grade decline and capex inflation are slowly limiting current supply expansions. (Reporting and editing by Clara Denina and Shashwat Arriagada)
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Anglo American sells nickel business up to $500 Million
Anglo American announced on Tuesday that it would sell its nickel mining business to an MMG Ltd unit listed in Hong Kong for up to $500m. A broader restructuring is underway to focus its operations on iron ore and copper. Nickel business in Brazil includes two ferronickel projects and two greenfields. Anglo will receive $350 million upon completion, up $100 million as a price-linked gainout, and an additional $50 million for potential project development, according to a company statement. Together, the assets produce around 38,000 metric tonnes of nickel each year. In January, the metal's price fell to a record low of four years as Indonesia became a major producer. Anglo American, a London-listed company, rejected a hostile bid of $49 billion from BHP in May. BHP was focusing on Anglo’s copper assets. Duncan Wanblad, CEO of Anglo American, said: "We unlock the inherent value in all of Anglo American by creating a simpler business that is more resilient and agile. This will allow full value transparency on the market." Anglo said this week that the spin-off from its platinum unit in South Africa would be completed by June, ahead of its financial results due on February 20. Anglo sold coal assets worth $4.9 billion as part of its restructuring and plans to divest De Beers.
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Iron ore prices rise as China's demand is a major factor.
Iron ore futures rose on Tuesday as expectations of a stronger stimulus package from China, the world's largest consumer, and improved downstream steel demand boosted sentiment. The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 2.51% higher, at 818 Yuan ($112.34) per metric ton. As of 0718 GMT, the benchmark March iron ore traded on Singapore Exchange recovered an earlier loss and jumped 1.18% to $106,95 per ton. Analysts in Shanghai and Singapore said that the volume of transactions for steel products in Hangzhou, east China, exceeded expectations. This boosted sentiment and sent ore prices up. They both requested anonymity because they were not authorized to speak with media. Analysts at ANZ also noted that there is speculation about the upcoming "Two Sessions", which will be held in China, providing more proactive policies aimed to stimulate consumption. Two parallel sessions of "Two Sessions" will be held in Beijing, China next month. "With the resumption in exports from Australia’s largest iron ore port the market has shifted its focus on broader demand dynamics," ANZ said. Prices fell on Monday as iron ore shipments to Australia increased after major ports reopened following the tropical cyclone Zelia. GF Futures analysts believe that a slow recovery of ore demand is likely to keep ore prices from rising. They also expect hot metal production, a measure of iron ore consumption, to remain at a level similar to the assessment of consultancy Mysteel as of February 14th. Coking coal and coke, which are used to make steel, also increased in price, by 1.34% and 1.61 %, respectively. The Shanghai Futures Exchange has seen a rise in most steel benchmarks. Rebar gained 1.3%, hot-rolled coil rose by 1.3%, wire rod grew by 0.31%, and stainless steel slipped 0.04%. Reporting by Amy Lv, Lewis Jackson and Sumana Nandy; Editing by Sumana Niandy. $1 = 7.2812 Chinese Yuan
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Copper prices are little changed as contract expires; US-Russian talks focus
The price of copper traded within a narrow range on Tuesday, as traders moved forward their positions in anticipation of a contract that expires this week. Meanwhile, the market's attention was shifted to U.S. efforts aimed at ending Russia's almost three-year long war in Ukraine. The London Metal Exchange's (LME) three-month copper traded flat at $9 398 per metric ton as of 0716 GMT. On Friday, the contract reached its highest level in three months at $9.684.50. A trader stated that "if the talks between the U.S.A. and Russia progress favorably, there will be an increase in the likelihood of lifting of the ban on metals from Russia, which would lead to a flood of Russian metals onto the western market." Russia is one of the world's largest producers of nickel, copper and aluminium. The LME has banned Russian metals that were produced after or on April 13, last year. Later in the day, senior U.S. officials and Russian officials are expected to meet in Saudi Arabia for the first time in many years. This is ahead of the meeting between U.S. president Donald Trump and Russian president Vladimir Putin. The spread between cash LME copper and benchmark 3-month futures For the first time since 19 months, prices spiked on Friday to $249 per ton. Investors and traders completed rolling forward positions in anticipation of the contract expiration this week. Three sources said on Saturday that the U.S. proposed to take ownership of 50% Ukraine's essential minerals. Aluminium prices on the LME were down 0.3% at $2,637 per ton. Zinc was also down 0.3%, to $2.864, while tin remained unchanged at $32,670. Lead was off 0.2%, to $1,988, and nickel was 0.7% lower, to $15,385. The price of aluminium at the SHFE fell 0.2%, to 20,665 Yuan ($2,839.18). SHFE copper was down 0.8%, to 76850 yuan. Nickel was up 0.2%, to 123 730 yuan. Zinc gained 0.3%, to 23,880 Yuan. Lead rose 0.1%, to 17,150 Yuan. Tin lost 0.8%, to 261,060 Yuan. $1 = 7.2785 Yuan (Reporting and editing by Sumana Nady and Subhranshu Saghu)
Ghana prepares gold board to increase earnings and suppress smuggling
Ghana prepares to introduce a Gold Board to streamline gold purchases from smallscale miners, increase incomes and decrease smuggling, the west African nation's newly designated finance minister Cassiel Ato Forson stated on Monday.
The Gold Board will allow Africa's leading gold manufacturer to increase its take advantage of the precious metal's sales and aid preserve the national currency's stability.
Data from Ghana's reserve bank showed that total gold exports for 2024 stood at $11.64 billion, a 53.2% year-on-year increase which helped almost double Ghana's trade surplus to $ 4.98 billion in 2024.
The minister said almost $5 billion worth of gold exported in 2015 was from legal small miners.
The time has actually come for Ghana to expand beyond royalties and taxes by utilizing the whole value chain of gold ... from extraction to refinery, worth addition and marketing, both locally and internationally, Forson stated.
The board will be introduced in early March, he included.
The gold programme will be executed with the objective of pursuing the stringent London Bullion Market Association accreditation, which restricts refiners from dealing with gold from sources adding to human rights abuses, dispute, criminal offense or ecological destruction.
Currently, the mayhem in the Ghana's gold purchasing sector prevents the nation from totally taking advantage of its gold resources, Forson stated.
The board will serve as the sole purchaser of gold through licence aggregators and local traders, moving away from the system where Ghanaians and foreign business with export licenses might purchase it without going through the authorized rules.
This fragmented, uncoordinated, and unregulated system has caused a widespread gold smuggling and denied the state of much-needed foreign exchange, Forson said.
(source: Reuters)