French billionaires said to eye truce in battle for Qatar-backed Lagardere

Bernard Arnault, CEO of LVMH Moet Hennessy Louis Vuitton, attends the company's shareholders meeting in Paris. (Reuters)
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Updated 26 April 2021

French billionaires said to eye truce in battle for Qatar-backed Lagardere

  • Qatar's sovereign fund holds 13 percent of media group
  • Saga transfixes top political circles in France

PARIS: Two of France’s richest businessmen are close to a deal over media and publishing company Lagardere that would hit pause on their attempts to cherry-pick its assets for several years, three sources close to the discussions said on Sunday.
Vincent Bollore, the top shareholder in Lagardere via his Vivendi group, and luxury goods tycoon Bernard Arnault, also a Lagardere investor, have been at the center of a tussle over the firm and its influential media outlets for months.
The saga has transfixed top political circles in France a year ahead of a presidential election, with some in President Emmanuel Macron’s camp fearing that Bollore could seize assets like Lagardere’s Europe 1 radio and build up a powerful ring-wing outlet that would go against his campaign.
The three sources familiar with the talks said that Bollore, LVMH boss Arnault and Lagardere’s CEO Arnaud Lagardere are finalizing a deal that would include a five-year pact not to dismantle the company.
The details of the agreement and shareholder alliances as well as what would happen to some Lagardere assets, such as Europe 1 and the Journal du Dimanche (JDD) newspaper, have not yet been finalized, the people added.
They cautioned that the deal had not yet been signed and that the talks could come off the boil at the last minute.
Lagardere is due to hold a board meeting on Monday, the sources said.
Arnaud Lagardere, who runs the indebted company founded by his late father, would be ready to let go of an arcane “commandite” structure as part of the deal, the three sources added.
That set-up gave him the power of veto over many key decisions despite holding only 7 percent of the shares, and had been a major obstacle to any takeover attempts of the company.
The “commandite” has been the target of criticism from hedge fund Amber Capital, which has waged an activist campaign against Lagardere’s management over its governance.
Vivendi holds 27 percent of Lagardere, ahead of Amber with 20 percent and Qatar’s sovereign wealth fund with 13 percent, while Bernard Arnault has just under 8 percent and has also invested in Arnaud Lagardere’s personal holding company.
“This deal would help clarify the governance problem. There were two layers before, now there would only be one,” one of the people close to the talks said.
It is not yet clear, however, how the pact can be cemented to avoid takeover bids on Lagardere, including by Vivendi, and whether there will be get-out clauses. Sources have previously said that Amber and the Qataris are keen to eventually sell out.
Under the deal being discussed, Bollore could be a big winner. Vivendi could get three Lagardere board seats, one of the sources said.
Arnaud Lagardere would get to run the company for five years, the three source said. Les Echos newspaper reported on Saturday that his stake could also be increased to 14%.
Bernard Arnault had been keen to snap up the JDD newspaper or Paris Match magazine, sources previously told Reuters.
The truce would at least meet one of the billionaire’s goals, which had been to help Arnaud Lagardere keep his job at the top and avoid a full break-up of the group, another of the sources familiar with the talks said.
Arnault’s investment has so far been profitable, this second source said.


Egypt to implement eighth increase in household electricity prices in July

Updated 20 sec ago

Egypt to implement eighth increase in household electricity prices in July

  • Prices will increase between 8 percent and 26 percent
  • Subsidies phase out extended from 2021/2 to 2024//5

RIYADH: Egypt’s Ministry of Electricity and Renewable Energy is preparing to the eighth increase in electricity prices for domestic consumption since it began phasing out subsidies in 2014.

From July 1, prices will increase between 8 percent and 26 percent, depending on the consumption segment, Minister of Electricity Mohamed Shaker said in an interview on Al-Balad TV.

In 2014, a decision was taken to eliminate state subsidies within five years, which was subsequently extended earlier this month to eight years to reduce the burden on customers and will now end in the fiscal year 2024/5, he said.

“When the economic reform took place in 2016, the dollar exchange rate changed dramatically, jumping from 7 Egyptian pounds to 18 Egyptian pounds, and this turned the scales completely,” said Shaker.

Fuel affects the cost of electric power the most, and whenever the dollar exchange rate changes, the fuel prices change, he said.


Agreement in principle reached over Suez Canal ship

Updated 23 min 41 sec ago

Agreement in principle reached over Suez Canal ship

  • Ship has been anchored in a lake between two stretches of the canal
  • Owners have disputed the claim and the ship's detention

CAIRO:  A representative for the owners and insurers of a giant cargo ship that blocked the Suez Canal in March on Wednesday said that an agreement in principle had been reached in a compensation dispute with the canal authority. Work was under way to finalize a signed settlement agreement as soon as possible and arrangements for the release of the Ever Given vessel would be made after formalities had been dealt with, Faz Peermohamed of Stann Marine said in a statement.
The Ever Given container ship has been anchored in a lake between two stretches of the canal since it was dislodged on March 29. It had been grounded across the canal for six days, blocking hundreds of ships and disrupting global trade.
The Suez Canal Authority (SCA) demanded $916 million in compensation to cover salvage efforts, reputational damage and lost revenue before publicly lowering the request to $550 million.
The Ever Given's Japanese owners, Shoei Kisen, and its insurers have disputed the claim and the ship's detention under an Egyptian court order.
SCA lawyer Khaled Abu Bakr on Sunday told a court hearing over the ship's detention that the vessel's owners had presented a new compensation offer and negotiations were ongoing.


IMF secures pledges worth $1.42bn for Sudan debt relief

Updated 23 June 2021

IMF secures pledges worth $1.42bn for Sudan debt relief

  • The pledges will clear Sudan's debts with the IMF
  • Sudan received debt relief from the Paris Club group of creditors in May

WASHINGTON: The International Monetary Fund (IMF) has secured sufficient pledges to clear Sudan’s debt with the lender after 101 member countries promised 992 million Special Drawing Rights (SDR), equivalent to $1.42 billion.

“Today’s financing milestone marks a historic opportunity for Sudan to move toward comprehensive debt relief from the IMF and the international community,” Managing Director Kristalina Georgieva said in a statement on Tuesday. “The Fund will continue to support Sudan in its recovery from a long period of instability and economic hardship.”

Sudan’s total external debt amounted to $50 billion at the end of 2019, according to the IMF. The country is still working with its creditors to reconcile its debt up to the end of last year, and officials say the final total could be as high as $60 billion, Reuters reported last month.

Sudan owes the Paris Club creditors group about $19 billion, mainly to France, Austria and the US.

In May, several countries agreed to write off Sudan’s debts during the Paris Conference to support Sudan, including $5 billion from France, which also approved a loan of $1.5 billion.


Oil hits more than two-year high on US inventories

Updated 23 June 2021

Oil hits more than two-year high on US inventories

  • “The uptrend is regaining momentum,” said Stephen Brennock at oil broker PVM

LONDON: Oil rose above $75 a barrel on Wednesday, reaching its highest since late 2018, after an industry report on US crude inventories reinforced views of a tightening market as travel picks up in Europe and North America.
The American Petroleum Institute reported that crude stocks fell by a bigger than expected 7.2 million barrels, two market sources said. Official inventory figures from the Energy Information Administration are due at 1430 GMT.
Brent crude rose 81 cents, or 1.1 percent, to $75.62 by 0824, having touched its highest since October 2018 at $75.64. US West Texas Intermediate added 49 cents, or 0.7 percent, to $73.34 and is close to its highest since October 2018.
“The uptrend is regaining momentum,” said Stephen Brennock at oil broker PVM. “Overnight, the API set a bullish backdrop.”
Brent has gained more than 45 percent this year, supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and as easing coronavirus restrictions boost demand. Some oil industry executives are even talking of crude returning to $100.
“Underlying demand in the physical market means that any corrections lower will remain shallow and short,” said Jeffrey Halley, analyst at brokerage OANDA.
OPEC and allies, collectively known as OPEC+, meet on July 1. They have been discussing a further unwinding of last year’s record output cuts from August but no decision has been made on exact volumes, two OPEC+ sources said on Tuesday.
Global demand is set to rise further in the second half of the year, though OPEC+ also faces the prospect of rising Iranian supply.
A retreat in the US dollar has also helped to prop up oil, making crude less expensive for holders of other currencies.

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Dubai’s Meydan to hold talks on $2.6bn debt restructure plan

Updated 23 June 2021

Dubai’s Meydan to hold talks on $2.6bn debt restructure plan

  • PwC has been appointed to work on a proposal
  • Meydan's total debts amount to about $4 billion

RIYADH: Dubai developer Meydan will meet its creditors next week to discuss a $2.6 billion debt restructuring plan, Bloomberg reported citing people familiar with the matter.

PricewaterhouseCoopers (PwC) has been working with the company to put together a proposal, the people said, asking not to be identified for information confidentiality.

Meydan’s total debt amounts to about $4 billion, of which $2.6 billion needs to be restructured, the people said.

Under the plan, the company will ask creditors to extend repayments on that amount for an expected period of 8 to 10 years, they said.

The company also intends to sell assets to raise fresh funds, they added.

Spokespeople for PwC and Meydan declined to comment.