Restructuring

Flights to safety in a dangerous world are on sale

20 Oct 2023

Fears of war, pestilence or financial collapse usually drive demand for safe assets like US treasuries or gold, making them a gauge of unease. Yet amid spiraling global threats, that isn’t happening. Whether from calm or complacency, the price of geopolitical insurance is cheap.

Siemens is case study in China de-risking dilemma

4 Oct 2023

The $110 bln conglomerate trades well below the sum of its parts. The normal fix would be to offload low-margin areas like its legacy railway division. But Siemens has a patchy record on M&A, and its growth story largely depends on China – from which it is obliged to de-risk.

Alibaba spinoff can deliver two recovery packages

4 Oct 2023

Logistics unit Cainiao’s name may mean “rookie”, but the group is profitable and weaning itself off dependence on its parent. A successful IPO valuing it at $10 bln or more would warm up Hong Kong’s market and show Alibaba’s overhaul is on track after CEO Daniel Zhang’s exit.

Asia’s breakup party is happening under duress

4 Oct 2023

India’s Anil Agarwal is splitting his $10 bln mining company Vedanta into six. As with China’s Alibaba, the carve-up is spurred by external problems, namely debt at its unlisted parent. Tycoons are unlocking value for weary shareholders, but mostly because they have no choice.

Retailer ‘shrink’ becomes too big to box up

3 Oct 2023

American stores lost $73 bln to theft last year, a nearly 20% rise from 2021, while Target just blamed crime for nine closures. Few chains report specifics, however, stirring doubts about anecdotal evidence. Consistent disclosure would help keep investors from getting fleeced.

China has reason not to let Evergrande rejig rot

3 Oct 2023

Its chairman is suspected of crimes. Offshore creditors may hope a proposal to restructure their $19 bln holdings is still on the table. A forced liquidation will see them recover as little as 2%. Their fate will offer a clue to whether Beijing still values overseas debt markets.

Toilet maker artfully unclogs bondholder backup

29 Sep 2023

Embattled Ideal Standard has struck a $640 mln deal to be bought by Germany’s Villeroy & Boch. The key was persuading creditors to accept less than par on 2026 debt. Other struggling companies could make use of similar financial plumbing.

Uncle Sam risks recession by a thousand cuts

22 Sep 2023

A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.

Capital Calls: Disney, Cazoo

20 Sep 2023

Concise views on global finance: Boss Bob Iger’s $60 bln splash on theme parks and cruises invites further scrutiny of the Magic Kingdom’s wild cash flow ride; the UK-based online car retailer, valued at $7 bln in a SPAC deal two years ago, is handing the keys to bondholders.

Capital Calls: Citi shakeup

13 Sep 2023

Concise views on global finance: Boss Jane Fraser is restructuring divisions and slashing jobs, calling the moves the most “consequential changes” to how the mega-bank has been organized in 20 years. Given its tortured history, that's a big claim to live up to.

Capital Calls: Warner Bros’ Max, GameStop

7 Sep 2023

Concise views on global finance: The HBO-parent intends to offer live sports and news to its streaming package. Customers will end up footing the bill; the $6 bln video-game retailer turned itself from a meme stock to a viable company by recovering through cost cuts.

Body Shop sale may give Natura skin-deep makeover

30 Aug 2023

After offloading Aesop for top dollars, the Brazilian beauty giant may struggle to fetch the cosmetics brand’s original $1 bln price tag in a sale. The M&A spree reversal will simplify Natura’s structure. But sprucing up its surviving Avon arm and other labels looks hard.

Alphabet moonshots are ready for launch

29 Aug 2023

Google’s parent lost $6 bln last year on experimental ventures, such as health-data cruncher Verily and self-driving outfit Waymo. As CFO and former tech banker Ruth Porat takes charge of the unit, it’s probably a good time to consider carving out some and refocusing on others.

Tupperware preserves lessons for Mark Zuckerberg

25 Aug 2023

The iconic food-storage company narrowly avoided collapse after becoming a meme stock. Ironically, viral buzz, often from stay-at-home moms, has been its secret sauce, just as it is for the Facebook founder’s $780 bln empire. Fickle influencers also can spoil the party.

China Evergrande throws its creditors a brick

18 Jul 2023

The world’s most indebted property developer released results for 2021 and for 2022, a last-ditch move to keep its stock listing. Any resumption in the trading of its shares will also provide a clue on the value of its restructuring plan for some $20 bln of offshore debt.

UK water meltdown resurrects bank crisis dilemmas

29 Jun 2023

The government may take over indebted 18 bln pound utility Thames Water. Funding a big potential capital hole via bills and taxpayer cash injections could be as politically toxic as 2008-era bailouts of RBS and peers. But imposing losses on creditors may spark even more turmoil.

Capital Calls: US IPOs

29 Jun 2023

Concise views on global finance: Thrift store chain Savers Value Village is the latest consumer goods company to enjoy a successful stock market debut in New York.

Swire’s Coca-Cola sale gives investors sugar rush

29 Jun 2023

Handing its US drinks subsidiary to its parent for $3.9 bln allows the Hong Kong conglomerate to pay a tasty dividend, cut net debt and still run the division for a fee. It’s a sweet deal for investors, as long as property, airline Cathay Pacific and other holdings recover soon.

Capital Calls: Intel Outside, Amazon Prime beef

21 Jun 2023

Concise views on global finance: The chipmaker struck a deal to sell 20% of a tool-making subsidiary, which should benefit from being put on a path to independence. Meanwhile, the $1.3 trln e-commerce company’s subscription service is unlawfully hard to cancel, says the US FTC.

Capital Calls: Zee, Embracer

13 Jun 2023

Concise views on global finance: India’s securities regulator banned the media group’s CEO from holding any key managerial positions, putting its merger with Sony’s local unit under a cloud; the $3 bln video-game group’s new strategy hits the right buttons.