Restructuring

HNA journey lurches to fitting return home

20 Feb 2020

The Chinese conglomerate was already cash-strapped before the coronavirus hammered travel. Selling assets has been a struggle, leaving $80 bln of debt piled up. A government bailout in the making should imprint a strong reminder about the risks of costly overseas adventures.

RBS’s new strategy has sadly familiar ring

14 Feb 2020

CEO Alison Rose will rename the $34 bln lender NatWest, shrink its investment bank, hike returns and focus on social purpose. Good idea, but RBS has been trying something similar for years. There’s little to trigger a share-price leap that would help the state make a noble exit.

Atlantia charts tentative path to road truce

24 Jan 2020

The $19 bln infrastructure group’s new boss wants outsiders to invest into its units. These include embattled motorway operator ASPI, which risks losing a rich road concession after a bridge collapse. Opening ASPI’s capital to state investors offers a way out of the crisis.

UniCredit pays up for tricky Turkish escape

2 Dec 2019

The 28 bln euro Italian bank trimmed its holding in Turkish lender Yapi Kredi. Break fees and a steep discount suggest local partner Koc Group got a good deal. Yet CEO Jean Pierre Mustier frees up capital, and paves the way for a proper exit, if markets and regulators play along.

Sinking Thyssenkrupp needs more than a quick lift

21 Nov 2019

The German group’s shares fell after it cut its dividend. Selling its elevator unit will raise cash but leave a loss-making rump. With restructuring, the steel-to-ships maker could be worth much more than the current 7.5 bln euros, but boss Martina Merz faces an arduous climb.

Aviva’s drift to mediocrity may tempt an activist

20 Nov 2019

The UK insurer pledged to simplify its business. Yet new CEO Maurice Tulloch’s strategy review disappointed hopes for asset sales, and mostly reaffirmed older aims. The $21 bln group’s sprawling structure, and discount to peers make it a juicy target for an uppity investor.

Russian tech investors see benefits of state grip

19 Nov 2019

Internet group Yandex’s shares jumped after it tweaked its governance to avoid a clampdown on foreign ownership. The new setup hands power to a fuzzy Russian entity, and could enable government meddling. But shareholders have less to worry about than peers in China, or America.

Viewsroom: General Motors strike runs on hot air

10 Oct 2019

Workers downed tools over three weeks ago, despite last-minute concessions by the U.S. carmaker. Job-security fears are a sticking point. So is the union’s need to prove its worth after a kickbacks scandal. Plus: U.S. basketball plays smart defense on China’s Hong Kong backlash.

Commerzbank’s new plan is more sputter than bang

23 Sep 2019

CEO Martin Zielke plans a revamp whose 1.6 billion euro price tag will be funded by selling a Polish bank stake. Investors may welcome cost cuts. But a measly return on tangible equity target of over 4% cements his company’s status as one of Europe’s least profitable big lenders.

Deutsche equities exit breathes life into rivals

8 Jul 2019

CEO Christian Sewing is hacking back the 15 bln euro bank’s unit that sells and trades shares in a bid to boost profitability. That makes sense given the sector’s stagnant revenue and low margins. Rivals should follow, but having one less player will reduce the pressure to act.

Deutsche Bank retreat depends on uber optimism

7 Jul 2019

CEO Christian Sewing will exit equities trading, shed assets worth 288 bln euros and slash jobs. The belated rethink of Deutsche’s global investment banking ambitions makes sense. But the plan requires other divisions to pick up the revenue slack, and no more unforeseen losses.

Chinese booze behemoth distills a sobering reality

24 May 2019

Kweichow Moutai’s state-owned parent may be planning to sell liquor directly through a separate unit. It could help usurp some $6 bln of value from shareholders, Breakingviews estimates. For new and growing MSCI index investors, it’s a stark reminder of China’s governance risks.

Blackstone’s conversion is less than it seems

18 Apr 2019

Turning into a corporation should broaden the buyout shop’s investor base and win inclusion in indexes. Yet a similar move hasn’t done much for rival KKR, and power stays in hands of boss Steve Schwarzman and insiders. They, not passive investors, will decide Blackstone’s value.

Larry Culp struggles to get new GE off the ground

14 Mar 2019

The $90 bln company’s CEO is warning investors to brace for a dismal first quarter and cash flow turning negative this year. His plan to sell more assets and overhaul the troubled power unit could eventually help, but it’s slow going. And a number of risks are out of his control.

The Gap stitches together an M&A opportunity

28 Feb 2019

The $10 bln clothier is spinning out faster-growing Old Navy from its other brands, saying they serve different customers. It’s not like the struggling retail sector needs another listed company. But it might not have one for long, if the more successful arm can attract a buyer.

Hard times favor skinny conglomerates

28 Feb 2019

Kraft Heinz’s stumble has dealt another blow to the notion of the diversified roll-up M&A machine. United Technologies, GE and Newell Brands had already got that message. Conglomerates can still work if they stay lean and keep cash on hand. Take Kraft investor Berkshire Hathaway.

Lampert tightens grip in slow strangle of Sears

16 Jan 2019

The hedge-fund manager’s $5.2 bln bid won the bankruptcy auction for the embattled retailer. That may keep the doors open for now. But in his 13-year tenure atop Sears, Lampert has starved it of cash and sold assets. Unless he changes tack, a slow-motion liquidation looks likely.

New Look makeover is bad trend for UK high street

14 Jan 2019

The ailing retailer is writing off three-quarters of its 1.35 bln pounds of debt in an effort to repair its finances. Like rival Debenhams, it can only survive if UK high street sales pick up. But after a bleak Christmas and with Brexit looming, a revival looks far from assured.

Ford’s European repair job may need outside help

10 Jan 2019

If boss Jim Hackett hits long-term profit targets, the carmaker’s market value could rise by $10 bln. Yet that requires implausible cost cuts. Partnering with or selling to a continental rival might be better. Peugeot’s purchase of GM’s European arm shows both sides can benefit.

General Electric can go from bad to worse in 2019

11 Dec 2018

The industrial group led by Larry Culp is mostly being propped up by its aviation arm as its power business sucks wind and its finance unit consumes cash. The risk is that cyclical, financial and competitive headwinds kick the strongest leg of the stool out from shareholders.