Power

Alstom’s growth train has Chinese twist

6 May 2015

The French group’s focus on transport is paying off, with train orders up 10 pct and rising margins. But the merger of two larger Chinese rivals intensifies competition in Alstom’s global markets. Teaming up with Bombardier or Siemens may be its next destination. 

Wall Street bids slow farewell to GE fee darling

13 Apr 2015

The U.S. conglomerate has been the best corporate client for investment bankers since 2000, spending some $5.1 bln for assistance. Shrinking GE Capital will keep M&A dealmakers happy. The unit’s borrowing, however, is the biggest moneymaker. Much of that could now be at risk.

GE finally exorcises Jack Welch’s financial demons

10 Apr 2015

It took a near-death experience and flat-lined shares, but Jeff Immelt is ditching banking and returning GE to its industrial roots. The timing works on many levels: asset values are high and lending businesses can be funded. Immelt also keeps a step ahead of prowling activists.

Immelt’s SIFI escape route is tough to follow

10 Apr 2015

The $280 bln GE is offloading most of its finance unit and should be able to ditch the systemic tag imposed by watchdogs. That will free CEO Jeff Immelt’s remaining empire from onerous rules. Big U.S. banks might fancy similar liberty, but they are more tightly hemmed in.

GE shows way by ending wait for tax Godot

10 Apr 2015

The U.S. conglomerate is bringing home $36 bln and will pay $6 bln in taxes on it. The move helps GE deliver a capital return plan with sufficient heft to make a mark. It also should be big enough to be noticed by other companies paying a price for leaving some $2 trln overseas.

BG board has reasons to cut CEO’s $48 mln payout

8 Apr 2015

Helge Lund faced a pay controversy before he even joined the British firm. After Shell’s $70 bln takeover, he could be tens of millions richer. Lund only just arrived, he won’t stay post-close, and he didn’t craft the deal. BG might at least trim his reward to match his tenure.

Water woes could open taps on corporate risk

5 Jan 2015

Two-thirds of the world’s biggest companies are worried about access to water. But few are well prepared for problems. That should change as ways to track and address concerns grow. And if bosses don’t take the initiative, activist investors may force them to.

UK faces risk of cold-weather blackouts

30 Dec 2014

Britain’s electricity system is ageing and the mix of generating technology is changing. Both factors increase the danger of power cuts at peak times. Contingency plans include paying companies to accept temporary grid outages. New capacity can’t come soon enough.

San Antonio plots $3.3 bln U.S. water-war strike

7 Oct 2014

The drought-prone Texas city plans to spend about that much on a project for moving H20 140 miles. It’s the controversial next leg of a strategy for securing enough water to keep business in the home of the Alamo. It’s also part of a national battle for economic survival.

Dynegy’s $6.25 bln grab marks return of ambition

22 Aug 2014

The U.S. power company once tried to buy Enron and eventually went bust after a spat with activist Carl Icahn. Two years out of bankruptcy, Dynegy is roughly doubling its business with two deals. They look sensible, but the lesson from the past is to avoid getting carried away.

GE’s new Alstom bid makes Siemens a distant second

28 May 2014

The U.S. conglomerate pledged new jobs and an asset swap to improve its $16 bln offer for Alstom’s power units. France seems to be warming to a bid already backed by the board. Rival bidder Siemens looks increasingly like a stalking horse, used merely to wring more out of GE.

ABB shocker raises questions about profit target

29 Apr 2014

The Swiss engineering company’s shares tanked 7 percent on news that its power systems unit faces bigger problems than thought. Persistent operational issues and increased restructuring efforts will make it hard for the group to meet its 2014 profit target.

RWE, E.ON gain little from German energy revamp

8 Apr 2014

Coal and gas power generators might hope to profit from a reform of costly subsidies for solar and wind power. But while the government is trying to cut costs, the target - almost doubling the share of renewables by 2025 - hasn’t changed. RWE and E.ON will continue to suffer.

RWE stock electrified by misguided overconfidence

4 Mar 2014

The power generator endured an awful 2013, culminating in a net loss of 2.8 bln euros. The shares are up 41 pct since August, but Germany’s move to green energy remains a challenge and RWE might need a capital hike. This is still a risky stock.

Hong Kong power IPO less generous than it looks

13 Jan 2014

Li Ka-shing’s utility spinoff is luring shareholders with a dividend yield of more than 6 percent. Though the business itself is stable, its debts make earnings vulnerable to higher borrowing costs. Rising rates will also give investors a bigger choice of income-earning assets.

Hong Kong tycoons diverge in power plays

19 Nov 2013

The Kadoorie family’s CLP Holdings is buying local electricity assets from Exxon Mobil for $1.8 billion. That’s a contrast with rival Li Ka-shing who is reducing his exposure. CLP’s struggle to build an international business gives it an incentive to double down in the territory.

Opening oil sector could spur other Mexico reforms

25 Jul 2013

The nation’s ban on foreign investment in crude is almost a sacred cow. Overturning it might boost output while creating momentum for fundamental change in the telecom and power industries as well. That could lead to faster economic growth and attract big money from abroad.

Edward Hadas: Static in the electricity market

24 Jul 2013

It’s hard to assess banks’ legal and moral culpability in the allegations of manipulation made by the U.S. power industry watchdog. But the difficulty in reaching a judgment has much to do with the fundamental futility of using financial markets to set the price of electricity.

Obama’s African power plan echoes 1930s U.S. moves

2 Jul 2013

The president is providing $7 bln to boost access to electricity in a continent where only 31 pct of people can plug in and charge up at present. President Roosevelt’s electrification projects eliminated much rural poverty in America. Obama’s initiative is similarly well aimed.

Buffett needs luck for Las Vegas gamble to pay off

30 May 2013

Berkshire Hathaway’s $5.6 bln bet on NV Energy suggests billionaire investor Warren Buffett is coming up short on decent ways to deploy his cash. With utility mergers offering meager synergies thanks to regulators, Berkshire will struggle to cover its cost of capital.