Engineering

Another head rolls at MG Tech

22 Oct 2004

Stark is the second CEO in 18 months to quit after a row with the German engineering group s largest shareholder, Happel. It will be hard for MG Tech to find anyone that suits Happel. The latter s influence is destabilising the group.

Aircraft subsidy dispute could have happy ending

7 Oct 2004

That would be a stronger WTO and less government support for air travel. The industry is grown up enough to do without it. This needs the governments to play along. If they don t, trade confidence could be shaken, with fallout far beyond Boeing and Airbus.

Alstom warning raises mid-term risks

18 Jun 2004

The French engineer's current E1.8bnplus bailout may be in the bag although the underwriters won't be happy with the share price slide. But if Alstom can't stop clients cancelling orders, it will be staring at bankruptcy. Siemens might then have another chance to break it up.

Private equity merry-go-round not much fun

31 May 2004

BC Partners' sale of Germany's Grohe for $1.8bn offers a clean and timely exit. But it won t set records for return on investment. Texas Pacific Group and CSFB may have got a bargain. But their plans to expand Grohe internationally will take time and money.

Finmeccanica seeks to buy GKN out of helicopter JV

20 May 2004

This would make industrial sense. AugustaWestland is noncore for GKN, and Finmeccanica wants to focus on defence. The difficulty is likely to be price. GKN will want a fat premium while Finmeccanica can t justify paying much of one.

Alstom deal blow to the EU, banks

18 May 2004

Nicolas Sarkozy has pulled off a huge political coup in keeping the engineer intact and French. But Mario Monti looks weakened. Meanwhile, banks have missed out on merger mandates and may have to swap debts for equity.

European champion role mulled for Alstom

3 May 2004

A deal with Siemens is only one of several options to save the French engineer. But it has been flagged in case it is needed. Consummating the marriage would be fraught with difficulty. But the alternatives for saving Alstom look equally challenging.

Sony Ericsson cashes in on Nokia trouble

19 Apr 2004

The mobile phone joint venture has feasted on the Finnish company s difficulties in releasing stylish phones. But Nokia is likely to slash prices to fight off competitors. Smaller fry such as Sony Ericsson are the most likely to be hurt.

Technology sales momentum slowing

14 Apr 2004

Intel, Philips and Nokia have all disappointed investors expectations for sales. But tech stocks are still pricing in earnings growth that can only come from an increasing top line.

Is Alstom manageable?

10 Mar 2004

New CEO Patrick Kron has worked wonders on rebuilding the order book. But he is still finding bombshells in the continuing business. These now threaten the French engineer s debt covenants. The recovery story is in the balance.

How much is not having to buy Fiat Auto worth?

9 Mar 2004

Fiat still seems to believe that it can get a lot of money out of GM for killing its option to force the US group to buy its car unit. But while Fiat might be able to get some compensation, it shouldn't count on striking gold.

Alstom recovery could be for real

20 Feb 2004

The French engineer appears to have turned around the business that nearly bankrupted it. The broader question is whether the leopard has changed its spots. Alstom's balance sheet cannot withstand another accident.

Invensys launches £2.7bn refinancing

5 Feb 2004

The shares and loans package makes more sense for the UK engineer than the alternative selling assets at distressed prices. But Invensys owes its survival more to the risk appetite of the financial markets than to its own recovery efforts. Deutsche Bank has made a massive bet on the UK engineer. Early signs are that it will pay off. But the bank will be biting its fingernails for a while.

Fee bonanza from Invensys refinancing

5 Feb 2004

Paying £109m in fees for a £2.7bn deal looks indefensible. But strip out legal costs and an oddity and the banks get about £79m. That s still chunky, but the deal digs Invensys out of a potentially more costly liquidity trap.

Signs of froth emerge in semiconductors

22 Jan 2004

The most telling is the rush to sell stock. Four giant IPOs are expected in the next six months worth as much as $4.5bn.

Invensys plans £500m rights issue – reports

19 Jan 2004

The issue would have to be horribly dilutive to succeed. But it is not obvious that the distressed UK engineer has any better financing options available.

Sony raises cheap cash with E1.9bn convertible

2 Dec 2003

The group's stock looks fairly valued, making it unlikely the bond will be exchanged for equity. It is hard to see why bonds paying no interest and convertible at more than a 60% premium are desirable for anyone except Sony.

Alstom offers arbitrage opportunity

28 Nov 2003

The rights available at the French engineer's rescue deal offer a cheap way into the shares and convertible bonds. Arbs are struggling to borrow shares. But Alstom shareholders can sell shares for rights and lock in a juicy gain.

Nokia doubles mobile phone market

25 Nov 2003

The Finnish mobile phone company raised the estimated size of the mobile phone market from E90bn to E200bn by expanding the definition. While it will take more than a new definition to bring back explosive growth, any success in new markets will make the shares look cheap.

Alstom says doesn’t need Siemens

13 Nov 2003

CEO Patrick Kron would say that, wouldn't he? A deal would make sense, but would be hard to structure except as a German takeover. Quarterly results from both companies underline their divergent financial fortunes.