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1969-12-31 00:00:00 UTC

Montpelier Re Holdings Ltd. (MRH): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

MRH

http://www.zacks.com/stock/research/MRH/equity-research

Zacks

2006-10-20 00:00:00 UTC

Inco's Net Soars on Higher Metal Prices, Breakup Fee

http://www.bloomberg.com/news/2006-10-20/inco-s-net-soars-on-higher-metal-prices-breakup-fee-update4-.html

Dale Crofts

Inco Ltd., the Canadian nickel producer being bought by Brazil 's Cia. Vale do Rio, said third-quarter profit soared 11-fold, boosted by surging metal prices and fees paid by Falconbridge Ltd. after a failed takeover. Net income jumped to $701 million, or $3.08 a share, from $64 million, or 29 cents, a year earlier, Toronto-based Inco said today in a statement. Results included $109 million in net fees from the failed deals with Falconbridge and Phelps Dodge Corp. Sales jumped to $2.32 billion from $1.08 billion. Inco sold nickel at double the price last year on average, and output jumped 13 percent. Demand for the metal, used in stainless steel, surged as global economic growth fueled demand, especially in China . Mines have failed to keep pace, prompting a buying spree by producers seeking to bolster ore deposits. Vale outbid Phelps Dodge and Teck Cominco Ltd. with its $17.3 billion bid. ``Record quarterly earnings reflect the unprecedented sustained strength we've seen in the nickel market, combined with strong production,'' Inco Chief Executive Officer Scott Hand said in the statement. Shares of Inco gained 27 cents to C$85.85 at 4:10 p.m. on the Toronto Stock Exchange. They have gained 80 percent in the past year. Rio de Janeiro-based Vale, the world's largest iron-ore producer, has offered C$86 a share for Inco. Breakup Fees Inco got $450 million from Falconbridge as a fee for their failed merger, and made payments when deals failed with Phelps Dodge and LionOre Mining International Ltd. A strike by workers at Voisey's Bay in September led to a $24 million charge in the third quarter, Inco said. Phelps Dodge, the world's third-biggest copper producer, in September dropped its offer of cash and stock for Inco, whose shareholders supported an unsolicited cash bid from Vale. Inco's nickel production climbed to 125 million pounds in the quarter as prices jumped on average to $29,552 a metric ton. The company had cut its output forecast from as much as 140 million pounds because of strikes and equipment failures. Cash costs for nickel sales fell 30 percent to $2.12 a pound, Inco said. Inco is the world's second-biggest nickel producer by 2005 output behind Russia 's OAO GMK Norilsk Nickel. Copper output rose 1.7 percent to 27,669 metric tons and prices jumped 90 percent on average to $7,465 a ton. Nickel today reached the highest since at least 1987 as supplies lag behind demand. Inventories monitored by the London Metal Exchange plunged 86 percent this year. Mine output fell short of demand by 70,000 metric tons in the eight months ended August, the World Bureau of Metal Statistics said. LME Nickel Nickel for delivery in three months gained $375, or 1.2 percent, to $32,050 on the LME after reaching $32,625, the highest in at least 19 years. Extended repairs at operations in Indonesia and reduced output at a smelter in Sudbury, Ontario, forced Inco to cut its original production forecast for the quarter on Sept. 20. Inco has restored full production at Sudbury and a unit in Manitoba has returned to ``stable operations'' after a damaged furnace hurt output, Inco said. The company had said Sept. 21 it expected to return to full production at Manitoba by early October. Inco declined to provide a forecast on earnings or production before the expiration of the CVRD offer on Oct. 23. Inco said it is ``continuing to review'' the cost and schedule for the $2.15 billion Goro nickel project in New Caledonia that's been slowed by a general strike in the country. Inco expects to announce a ``revised cost estimate'' and schedule by the end of the year. ``There is a global shortage of skilled workers, which is felt even more acutely in New Caledonia with its population of 230,000 people,'' said Jeff Zweig, deputy general manager at Goro, in an e- mail on Oct. 16 ``To execute a project of this size and complexity, a significant number of skilled workers are required.'' To contact the reporter on this story: Dale Crofts in Chicago at dcrofts@bloomberg.net . To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

2006-10-21 00:00:00 UTC

Jim Cramer: Diageo, Anheuser-Busch, Monster Worldwide, Google

http://www.bloomberg.com/news/2006-10-21/jim-cramer-diageo-anheuser-busch-monster-worldwide-google.html

Steven Bodzin

Jim Cramer recommended that viewers buy shares of liquor maker Diageo Plc (DGE) because of its dividend and its growth in China . Diageo is similar to Guess? Inc. (GES) as a ``company that preys on natural human weakness,'' said Cramer, a market commentator and former hedge-fund manager on his ``Mad Money'' television program on CNBC. ``Think of Diageo as Philip Morris with a great dividend and no tobacco,'' he said. In response to a caller, Cramer said to avoid Anheuser-Busch Co. because he expects it to report a weak quarter. Monster Worldwide Inc. (MWW) stock is cheaper than it should be because of a stock options backdating investigation and concerns about a weak job market, Cramer said. He said Monster may be a takeover target for Yahoo! Inc. (YHOO) if Yahoo tries to grow through acquisitions. Other possible targets include Bankrate Inc. and Knot Inc., he said. Yahoo needs to grow to compete with Google Inc. (GOOG) , he said. In an interview with Chicago Bears player Muhsin Muhammad, Cramer said he liked Muhammad's portfolio of FedEx Corp. (FDX) , Exxon Mobil Corp. (XOM) , International Business Machines Corp. (IBM) , Bank of America Corp. (BAC) and MetLife Inc. (MET) He also said the portfolio was well diversified. Oregon Steel Mills Based on Union Pacific Corp. (UNP) 's statement that shipment of steel pipe had increased, investors should buy Oregon Steel Mills Inc. before the company reports earnings, Cramer said. He said to buy stock in Alaska Air Group Inc. (ALK) based on strong quarters at AMR Corp. (AAMRQ) and Continental Airlines Inc. He said Corning Inc. (GLW) is likely to rise after it reports earnings, based on 3M Co. (MMM) saying that liquid-crystal display trends are positive. He said to buy shares of Comcast Corp. (CMCSA) before the company reports earnings and to buy shares of General Motors Corp. if they decline after Ford Motor Co. reports earnings Oct. 23. He said to avoid Bristol-Myers Squibb Co. (BMY) Cramer recommended ASV Inc., Bare Escentuals Inc., Oracle Corp. (ORCL) , Merck & Co., SAIC Inc. (SAI) , DivX Inc., Akamai Technologies Inc. (AKAM) , Apple Computer Inc., Under Armour Inc. (UA) , Mattel Inc. (MAT) , BB&T Corp. (BBT) and Wells Fargo & Co. (WFC) , in response to questions during the show's ``Lightning Round'' segment. He told viewers to avoid Occidental Petroleum Corp. (OXY) , Dow Chemical Co., Commvault Systems Inc. (CVLT) , Broadcom Corp. (BRCM) and Sony Corp. (6758) To contact the reporter on this story: Steven Bodzin in San Francisco at sbodzin@bloomberg.net . To contact the editor responsible for this story: Aimee Sullivan at asullivan@bloomberg.net .

2006-10-23 00:00:00 UTC

Ex-Plant Worker Shuster Pleads Guilty in Trading Case

http://www.bloomberg.com/news/2006-10-23/ex-plant-worker-shuster-pleads-guilty-in-trading-case-update1-.html

David Glovin

A former worker at a Wisconsin printing plant pleaded guilty to charges that he leaked the names of stocks mentioned in Business Week before the magazine was mailed out. Nickolaus Shuster, who worked at Quad Graphics Inc. in Sussex, Wisconsin, told a judge today in Manhattan federal court that he tipped two other people, whom he didn't name, to the names of the stocks that were to be favorably mentioned in the Inside Wall Street column. ``I would steal pre-publication copies of Business Week and call these two people and relay to them the contents of the Inside Wall Street columns,'' Shuster, 25, told U.S. Magistrate Judge Debra Freeman. Shuster, who pleaded guilty to conspiracy and securities fraud, will be sentenced in January. The guilty plea is the third in what prosecutors said was a three-prong conspiracy involving two ex-employees at Goldman Sachs Group Inc., Eugene Plotkin and David Pajcin. In Wisconsin, Shuster stole advance copies of Business Week for Plotkin and Pajcin, prosecutors said. In New York , former Merrill Lynch & Co. mergers analyst Stanislav Shpigelman, who pleaded guilty in July, leaked secret information about a pending deal to the pair, authorities said. In Newark, New Jersey , Jason Smith , a mailman sitting on a grand jury, tipped Pajcin and Plotkin to details of a confidential U.S. probe of Bristol-Myers Squibb Co. accounting, prosecutors said. Smith pleaded guilty in August. ``I knew what I was doing was wrong,'' Shuster said. Union Square Shuster told Freeman that, during an October 2004 meeting in the Union Square section of Manhattan, his two conspirators asked him to travel to Wisconsin and get a job at the Business Week plant. In January 2005, one of Shuster's conspirators bought 3,500 shares of Arbitron Inc., the biggest radio-ratings supplier in the U.S., after learning of a forthcoming mention in the column, Assistant U.S. Attorney Benjamin Lawsky said in court. Shuster agreed to forfeit $20,000 paid to him as part of the scheme. The judge said Shuster, who previously lived in New Jersey, has been cooperating with prosecutors. Charges are pending against a second printing-plant worker, Juan Renteria, along with Plotkin. Pajcin has been cooperating with investigators. New York-based Merrill Lynch is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News . The case is U.S. v. Shuster, 06-cr-389, Southern District of New York. To contact the reporter on this story: David Glovin at the federal courthouse in New York at dglovin@bloomberg.net . To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net .

2006-10-23 00:00:00 UTC

EU Energy Chief Backs German Plan for Price Controls

http://www.bloomberg.com/news/2006-10-23/eu-energy-chief-backs-german-plan-for-price-controls-update1-.html

Thomas Bauer

European Union Energy Commissioner Andris Piebalgs backed German government plans to give antitrust authorities powers to challenge energy price increases. Germany's Economy Ministry is considering steps to keep utilities from charging prices that exceed costs ``excessively'' after E.ON AG and RWE AG attracted attention for posting record earnings while increasing costs for private and business clients. ``There's this problem in Germany that there're suspicions about too little competition driving electricity prices too high,'' Piebalgs said in an interview in Berlin. The German antitrust office ``must be enabled to verify this.'' Utilities in Europe are being scrutinized by the European Commission and national regulators for shutting out competitors and driving up prices. The four largest utilities in Germany generate 80 percent of the country's power and E.ON has more than 50 percent of the natural-gas market. RWE, Germany's second-largest utility, said on Sept. 28 that replacing market prices for power with regulated charges would curb competition in Europe's largest economy. Regulated prices would discourage investors and utilities from building new power plants , according to the company. Piebalgs rejected industry complaints, saying the German government's plans keep clear of ``fixing prices'' and ``solely aim to verify'' whether power companies are overcharging their customers. ``Why do utilities have to complain about it if it's carried out in a transparent and appropriate way,'' said Piebalgs. ``This is going in the right direction and I support (Economy) Minister Michael Glos's steps in that respect.'' Oil Prices Piebalgs said current oil prices of around $60 per barrel are still ``fairly high.'' Still, with supply holding ``stable'' and tensions in the Middle East abating, oil costs may not pose marked swings in either direction, he said. ``The oil price will probably continue hovering around the $60 level,'' he said. ``I don't believe there will be a distinct drop. Supply is stable and conditions aren't particularly tense, so I don't see a large increase either.'' The Organization of Petroleum Exporting Countries agreed last week to lower output by 1.2 million barrels a day starting Nov. 1. The cut is designed to prop up prices which have fallen by about 25 percent from the record high they reached in July. Turning to Russia, Piebalgs said Europe faces ``a great opportunity'' to create stable energy ties with the world's largest fuel exporter once the country opens up its electricity and gas industries. `` Russia 's energy sector needs great investments,'' the commissioner said. ``That's where I believe our investment opportunities are.'' Europe and Russia must strive to achieve ``an open investment climate'' that bars monopolistic structures, Piebalgs said at a press briefing, noting even OAO Gazprom with its monopoly on Russia's gas network and exports would then find it ``easier'' to foster its business links inside the 25-nation EU. ``If there's no such situation, there's the danger of a monopolistic situation which we want to avoid,'' he said. To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net ; Thomas Bauer in Berlin at tbauer@bloomberg.net To contact the editor responsible for this story: Eddie Buckle at ebuckle@bloomberg.net .

2006-10-24 00:00:00 UTC

Huaneng Power's Third-Quarter Profit Rises on Demand

http://www.bloomberg.com/news/2006-10-24/huaneng-power-s-third-quarter-profit-rises-on-demand-update1-.html

Wing-Gar Cheng

Huaneng Power International Inc. (902) , the largest Chinese power producer listed in Hong Kong , said third-quarter profit rose 2.7 percent as demand grew at a faster pace than fuel costs. Net income rose to 1.47 billion yuan ($186 million), or 0.13 yuan a share, from 1.43 billion yuan, or 0.12 yuan, a year earlier, based on domestic accounting standards, the Beijing- based company said in a statement to the Shanghai stock exchange today. Sales rose to 11.6 billion yuan from 10.2 billion yuan Chinese power producers are increasing capacity to supply electricity in the world's fastest-growing major economy. Huaneng Power benefited after the government allowed it to raise tariffs and as coal failed to sustain the pace of price increases that caused record costs for generators. China , the world's largest electricity consumer after the U.S., increased electricity prices in May last year and again in June to help power companies pass on the higher cost of coal. Huaneng Power raised tariffs as much as 7.3 percent this year. Increases averaged 25 yuan per megawatt-hour, according to the National Development and Reform Commission, the nation's top economic planner. China sets power prices to curb their impact on inflation and shield consumers from rising energy costs. Huaneng Power generated 5.3 percent more electricity in the first nine months, because of new capacity and higher demand in coastal provinces. Power production reached 117 million megawatt-hours, up from 111 million megawatt-hours a year earlier, the company said on Oct. 11. Huaneng Power shares rose 1.52 percent to close at HK$6.00 today. The earnings were announced after the market close. The shares have risen 17.7 percent this year, compared with the 22 percent gain in the benchmark Hang Seng Index . The nation's generators produced 13 percent more electricity in the first nine months, at 2 billion megawatt- hours, according to the National Bureau of Statistics. To contact the reporter on this story: Wing-Gar Cheng in Beijing at wgcheng@bloomberg.net . To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net .

2006-10-24 00:00:00 UTC

Vale Buys Control of Canadian Nickel Miner Inco

http://www.bloomberg.com/news/2006-10-24/vale-buys-control-of-canadian-nickel-miner-inco-update4-.html

Heloiza Canassa

Cia. Vale do Rio Doce paid $13.3 billion to acquire control of Inco Ltd., the world's second-largest nickel maker, putting the Brazilian company on course to become the top nickel miner by 2009. Rio de Janeiro-based Vale, the world's largest iron-ore producer, said in an e-mail statement today that 75.66 percent of Inco shares were tendered in the offer, for which Vale paid C$15 billion ($13.3 billion). Vale said it's extending the offer until midnight Nov. 3 to acquire the remaining shares. ``Vale's move has a great strategic impact because the company will be much better positioned to meet the growing demand for metals worldwide,'' Demian Fiocca, president of Brazil 's Development Bank , said in an interview in Rio de Janeiro. The bank owns 7 percent of Vale's total capital and an 11.5 percent stake in Valepar, the holding company that controls the miner with a 52.3 percent stake. The acquisition, part of Chief Executive Officer Roger Agnelli 's plan to expand the company outside Brazil and into markets other than iron-ore, allows Vale to add new nickel capacity in Brazil, Canada and Indonesia , as well as the $2.15 billion Goro nickel project in the French overseas territory of New Caledonia in the South Pacific. Valued at C$19.4 billion once complete, the takeover is the biggest foreign acquisition by a Brazilian company. Fiocca said the bank has no plans to divest Vale shares because of its ``great value and potential for gains.'' Vale shares today rose 1.49 real, or 3.35 percent to 45.99 reais while the benchmark Bovespa index rose 272.22 points, or 0.7 percent, to 39,498.98. Inco's shares rose 13 cents, or 0.2 percent, to C$86.00. S&P Downgrade Shares held on to gains even after Standard & Poor's Ratings Services lowered its corporate credit rating on Vale, citing concern that the company's debt will jump after the all-cash acquisition. S&P said in a statement today that it cut Vale's rating to BBB from BBB+ and put it on CreditWatch with negative implications. ``The CreditWatch negative reflects our uncertainties as to the definitive structure to refinance the initial bridge loan and the resulting capital structure projected for CVRD in the next two years,'' S&P said. Vale said it will hold a press conference tomorrow in Toronto at 9:45 a.m. New York time to detail the acquisition. Nickel Supplies Agnelli, 47, said acquiring Inco will allow Vale to gain supplies of nickel to deliver alongside iron ore to steelmaking customers such as ThyssenKrupp AG. Inco, which employees 10,000 people, has 19 percent of the world's nickel market. Russia's OAO Norilsk is the No. 1 producer. Nickel is a key element for the production of stainless steel, which is used in a variety of products, from surgical instruments and cutlery to skyscrapers and airplanes. The metal has doubled in price this year and quadrupled since the 1990s. Vale on Oct. 13 extended its offer for Inco to Oct. 23 to give regulators in Canada time to review the bid. The offer of C$86 ($75.57) a share for Toronto-based Inco was extended to midnight Toronto time from an earlier Oct. 16 deadline. ``It wasn't our first choice but that's the way it goes,'' said John Kinsey , who helps manage $800 million at Caldwell Securities Ltd. in Toronto and tendered Inco shares to Vale. ``CVRD was the only one standing at the end.'' Inco spent $93 million this year for legal and investment banking fees related to its failed takeover bid for rival Falcon bridge Ltd. and competing bids from Phelps Dodge Corp., Teck Co minco Ltd. and Vale, the company said in a regulatory filing. Toronto-Based To demonstrate to Canadian regulators that the acquisition would benefit the country, Vale pledged to base its global nickel division, called CVRD Inco, in Toronto. A Canadian chief operating officer will be appointed to head CVRD Inco, along with a senior executive team comprised largely of Canadians, Vale said in a statement on Oct. 19. The company will have ``a mandate to expand its businesses as a global leader in the nickel industry,'' Agnelli said in that statement. ``CVRD will transfer management responsibility for its interest in existing and future nickel projects to CVRD Inco, including its interest in the Onca Puma and Vermelho projects in Brazil,'' Vale said in the statement. The miner, which employees 10,000 people, said there will be no layoffs at Canadian operating facilities for at least three years, ``and in any event total employment at such facilities will not fall below 85 percent of current levels.'' Asset Battle With the Inco purchase, Vale gets nickel mines in Canada, including at Voisey's Bay in Newfoundland and the nickel-rich Sudbury Basin in Ontario, as well as a majority stake in PT Inco in Indonesia, which has nickel mines and plants. In Canada alone, Inco said it had 220 million metric tons of total proven and probable mineral reserves, according to its annual report. To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net To contact the editor responsible for this story: Laura Zelenko at lzelenko@bloomberg.net

2006-10-24 00:00:00 UTC

Russia, Ukraine End Dispute That Cut Gas Supplies

http://www.bloomberg.com/news/2006-10-24/russia-ukraine-end-dispute-that-cut-gas-supplies-update2-.html

Daryna Krasnolutska

Russia 's state-run OAO Gazprom, the world's biggest natural gas exporter, agreed to charge Ukraine about $2 billion more for the fuel in 2007, ending a dispute that cut supplies to Europe at the start of this year. Ukraine will pay $130 per 1,000 cubic meters of gas next year, compared with $95 now, Ukrainian Prime Minister Viktor Yanukovych said today at a press conference in Kiev after meeting his Russian counterpart. The accord covers sales of 55 billion cubic meters of gas, which would generate about $7.2 billion of revenue at the agreed price. Russia cut off gas shipments to its former Soviet Union partner in the first three days of January after Ukraine rejected Gazprom's demand to quadruple the price, leading to shortages to Europe. The Jan. 4 agreement to pay $95 per 1,000 cubic meters for Russian gas in 2006, almost twice the price of the year before, undermined President Viktor Yushchenko's support before elections in March where his party lost support. ``The price of $130 won't cause any crisis,'' said Olena Bilan , an analyst at Kiev-based largest brokerage Dragon Capital in a phone interview before the announcement. ``Companies that consume much gas started their modernization and they are ready for a gas price increase.'' Ukraine depends on imports for about 80 percent of its energy needs, mostly from Russia, and Russia supplies a quarter of European gas, 80 percent of which is shipped via Ukrainian territory. To contact the reporter on this story: Daryna Krasnoslutska in Kiev at dkrasnolutsk@bloomberg.net . To contact the editor responsible for this story: Chris Kirkham on ckirkham@bloomberg.net

2006-10-24 00:00:00 UTC

Jim Cramer: Bare Escentuals, Allergan, Medicis, Avon

http://www.bloomberg.com/news/2006-10-24/jim-cramer-bare-escentuals-allergan-medicis-avon-correct-.html

Steven Bodzin

Bare Escentuals Inc.'s cosmetics are a fad, making the stock likely to decline, Jim Cramer said on his ``Mad Money'' television program on CNBC. Cramer, a market commentator and former hedge-fund manager, said the stock was reminiscent of Sealy Corp. in that the initial public offering aimed to make money for a leveraged buyout company, rather than for small investors. Sealy's stock has declined since he recommended it. Allergan Inc. and Medicis Pharmaceutical Corp. are better investments because the medicines they make, which are injected in order to get rid of wrinkles, are ``more drastic than cosmetics and face less cutthroat competition,'' Cramer said. Cramer said to avoid cosmetics makers including Estee Lauder Cos., Elizabeth Arden Inc. (RDEN) , Revlon Inc. (REV) and Avon Products Inc. (AVP) International Flavors & Fragrances Inc. (IFF) is a lucrative way to own cosmetics stock because the biggest maker of fragrances lets other companies do the marketing while it provides the products, Cramer said. International Flavors & Fragrances' 2.1 percent dividend, consistent growth and low ratio of price-to-next-years-earnings made it a good buy, Cramer said. Its customers include PepsiCo, Inc., Unilever NV, Procter & Gamble Co ., Estee Lauder and Colgate-Palmolive Co., Cramer said. In response to a caller, Cramer said to buy shares of Palomar Medical Technologies Inc. Caterpillar Inc. (CAT) stock has bottomed out and should be bought, Cramer said. He said the company's concerns about slower growth was already priced into the stock before a 10-point drop Oct. 21. He said Cummins Inc. and other makers of products similar to Caterpillar's had more upbeat assessment of their market's future. Schlumberger Schlumberger Ltd. (SLB) has yet to hit its bottom, he said. He recommended selling shares of the oil service company. He said investors would be better served moving their money into Halliburton Co. (HAL) , which he owns for his charitable trust. In response to callers, he said to sell shares of Deere & Co. (DE) and to sell United Technologies Corp. (UTX) , as he did for his charitable trust. In a comparison of FedEx Corp. and United Parcel Service Inc., he said that while ``you won't get hurt owning UPS,'' FedEx as a smaller, faster-growing company would rise faster. Cramer recommended Advanced Micro Devices Inc. (AMD) , Symantec Corp. (SYMC) , Rite Aid Corp. (RAD) , SAIC Inc. (SAI) , OM Group Inc. (OMG) , Allegheny Technologies Inc. (ATI) , Brush Engineered Materials Inc., Rockwell Automation Inc. (ROK) , Whirlpool Corp. (WHR) , Boston Scientific Corp. (BSX) , Johnson & Johnson, Rare Hospitality International Inc., Electronic Arts Inc. (EA) , Altria Group Inc. (MO) , Life Time Fitness Inc. (LTM) and Level 3 Communications Inc. (LVLT) in response to questions during the show's letters, ``Sudden Death'' and ``Lightning Round'' segments. Valero Energy He also told viewers to avoid Secure Computing Corp., Cameco Corp. (CCO) and Valero Energy Corp. (VLO) He said to hold onto shares of Crystallex International Corp. He said he owns Johnson & Johnson (JNJ) and Altria Group Inc. stock for his charitable trust. To contact the reporter on this story: Steven Bodzin in San Francisco at sbodzin@bloomberg.net . To contact the editor responsible for this story: Aimee Sullivan at asullivan@bloomberg.net .

2006-10-25 00:00:00 UTC

Ambac 3rd-Quarter Profit Rises, New Premiums Fall

http://www.bloomberg.com/news/2006-10-25/ambac-3rd-quarter-profit-rises-new-premiums-fall-update1-.html

Christine Richard

Ambac Financial Group Inc. (ABKFQ) , the world's second-largest bond insurer, said third-quarter profit rose 22 percent even amid a drop in new business as a reduction in reserves related to Hurricane Katrina bolstered results. Third-quarter net income rose to $213.5 million, or $1.98 a share, from $175.1 million, or $1.61 a year earlier, the New York-based company said in a statement today. Profit excluding investment gains was $1.92 a share, the company said. The company said it was releasing $35.6 million of its reserves that were set aside in the third quarter of 2005 to cover exposure to credits affected by Hurricane Katrina. ``The decrease is primarily due to significant state and federal support recently provided to the region, particularly the greater New Orleans area,'' Ambac said in the statement. Ambac's so-called credit enhancement production, a measure of all new business, fell 16 percent to $216.2 million in the quarter amid less public finance issuance and more competition, sending the company's shares down the most in more than a year. The production decline was due to a 36 percent drop in upfront premiums from insuring U.S. public finance deals, Ambac said. Ambac shares fell as much as 3.7 percent earlier today in New York Stock Exchange composite trading, the biggest one-day drop since April 20, 2005. The shares were down $1.96 or 2.3 percent, to $82.70 as of 12:25 p.m. ``There is some disappointment with their production'' said Andrew Wessel, a JPMorgan Securities Inc. analyst in New York. ``The public finance market has been extremely competitive.'' MBIA Inc., the world's biggest bond insurer, is scheduled to report third-quarter results tomorrow. Excess Capital Credit enhancement production, which doesn't adhere to generally accepted accounting principles, is defined by Ambac as gross upfront premiums and the present value of estimated installment premiums on insurance policies and structured credit derivatives . A slowdown in new business written means that the company will build up the amount of capital it has in excess of what's needed to maintain a triple-A debt rating, Ambac Chief Financial Officer Sean Leonard said on a conference call with investors. The company may use excess capital to buy back shares rather than boost its dividend as that provides it with more flexibility, Leonard said. Ambac said today that its board authorized the buy back of as many as 6 million more shares. Premium Income Accelerated premiums dropped 50 percent to $24.5 million amid less demand from issuers to refund outstanding bonds. Refundings allow bond insurers to accelerate the recognition of premiums into the quarter in which those deals are refinanced. Analysts largely discount refundings because the boost in income is offset by a reduction in future earnings. Taking that into account, the company reported profit from operations, minus the refundings and investment gains, of $1.79 a share. The bond insurance industry is awaiting a draft proposal from the Financial Accounting Standards Board which will give guidance on how insurers should recognize premiums and reserve against potential losses. Practices vary widely, making comparisons between companies difficult. At its last meeting on Sept. 13 in Norwalk, Connecticut , FASB tentatively agreed with how Ambac sets aside reserves based on deterioration of individual credits. The methodology differs from that used by MBIA, which sets aside 12 percent of scheduled earned premiums each period. To Early The accounting board also reached a preliminary decision to require bond insurers to report premium income at the same pace as the bonds they insure pay down. Currently, bond insurers recognize premiums more rapidly. The new rule, for example, would mean that bond insurers wouldn't be permitted to recognize any income on a zero coupon bond until the final maturity date. Currently, bond insurers recognize income over the life of the bond even though no payments are made. Leonard said it's too early to estimate the effect of the FASB guidelines on future earnings. ``Shrinking supply and an aggressive competitive environment are causing declines'' in the public finance segment, Leonard said. He added that the company had closed two stadium finance transactions in the third quarter. FASB is still working on a final proposal which is expected to be released in the fourth quarter. To contact the reporter on this story: Christine Richard in New York at crichard5@bloomberg.net To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net

2006-10-25 00:00:00 UTC

Wheeling-Pitt, Defying Gendell, Agrees to CSN Merger

http://www.bloomberg.com/news/2006-10-25/wheeling-pitt-defying-gendell-agrees-to-csn-merger-update3-.html

Dale Crofts

Wheeling-Pittsburgh Corp., a West Virginia-based steelmaker, said it agreed to merge with Brazil 's Cia. Siderurgica Nacional SA in defiance of opposition from some shareholders including hedge fund manager Jeffrey Gendell. Wheeling-Pittsburgh, based in Wheeling, West Virginia , will hold 50.5 percent in a new company to be formed with Cia. Siderurgica Nacional. CSN will invest $225 million and add its steel processing facility in Terre Haute , Indiana , to the new business, Wheeling-Pittsburgh said today in a statement. The announcement comes over the objections of Wheeling-Pittsburgh's third-largest shareholder, the Tontine Management LLC hedge fund run by Gendell. The deal undervalues Wheeling-Pittsburgh, said Gendell, owner of stakes in at least 10 steel companies, and U.S. Steel Corp's largest shareholder. Gendell, who holds about 9.5 percent of Wheeling-Pittsburgh's shares, said in an Oct. 13 letter to the company's board that the steelmaker should remain independent ``absent dramatic enhancements'' to ``change-of-control proposals'' from CSN and from Esmark Inc. He also urged the board to begin searching for a new management team ``immediately.'' Esmark's Proposal Esmark, a Chicago-based steel distributor, is proposing to elect an alternative slate of directors at Wheeling-Pittsburgh's annual shareholder meeting on Nov. 17 and aims to strike down the proposed combination with CSN in favor of its own offer to merge. Shares of Wheeling-Pittsburgh fell 12 cents to $19.82 at 4:22 p.m. in Nasdaq Stock Market trading. They have gained 53 percent from a year ago. CSN dropped 60 centavos, or 0.9 percent, to 67 reais in Sao Paolo . ``The board of directors and executive management has once again revealed their lack of business judgment and disregard for shareholders, employees and retirees by entering into a shotgun marriage,'' Esmark said today in a release. Esmark wants to be acquired by Wheeling-Pittsburgh in a deal that includes getting $200 million from Esmark investors, including funds controlled by Franklin Mutual Advisers LLC. The United Steelworkers union also opposes the merger with CSN, preferring a deal with Esmark. It's already had labor contract negotiations with Esmark and says a special clause in its contract with Wheeling-Pittsburgh gives it the power to block the CSN agreement. Wheeling-Pitt says the union isn't able to block the deal. Tontine Financing Offer Tontine has offered as much as $100 million in financing to Wheeling-Pitt through a share sale. ``Significant and immediate change is necessary to enable the company to address the operating challenges it still faces and embrace the opportunities emerging in the global marketplace,'' Tontine said in the Oct. 13 letter. Tontine is the biggest shareholder of AK Steel Corp., the third-largest U.S. steelmaker by 2005 revenue, with a 10 percent stake as of June 30, according to data compiled by Bloomberg. Gendell has about 6.3 percent of U.S. Steel, and a 4.8 percent stake in steel distributor Ryerson Inc. ``Together, we will create an integrated, value-added production chain that will result in a more flexible cost structure, broader value-added product offerings and significant incremental earnings potential,'' said Marcos Lutz, CSN managing director for infrastructure and energy, in the statement. To contact the reporter on this story: Dale Crofts in Chicago at dcrofts@bloomberg.net . To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

2006-10-27 00:00:00 UTC

Singapore Airlines 2nd-Quarter Net Falls 15% on Fuel

http://www.bloomberg.com/news/2006-10-27/singapore-airlines-2nd-quarter-net-falls-15-on-fuel-update1-.html

Chan Sue Ling

Singapore Airlines Ltd. (SIA) , the world's second-largest carrier by market value, said profit fell for a sixth quarter in seven, as higher fuel costs eroded gains from increased travel demand . Net income dropped 15 percent to S$293 million ($187 million), or 23.9 cents a share, in its fiscal second quarter ended Sept. 30, the company said today. That compared with the S$300 million median estimate of five analysts surveyed by Bloomberg News. Sales increased 7.7 percent to S$3.6 billion. Chief Executive Officer Chew Choon Seng has been raising surcharges and hedging fuel to cope with higher fuel costs, the airline's single-biggest expense. As travel demand in the region rises, the airline has been ordering new planes, including the delay-plagued Airbus SAS A380. ``The fuel prices are off around about 17 to 18 percent of their highs in August but they are still by historical standards very high and are a major challenge for the airlines,'' said Derek Sadubin, the Sydney-based general manager of the Centre for Asia Pacific Aviation. ``What the carriers can face for the next twelve months is just relentless focus on cost reduction and competition.'' Jet fuel traded in Singapore at an average of $85.84 a barrel in the three months to September, almost 15 percent higher than a year earlier, according to Bloomberg data. The price of jet kerosene surged to a record $93 a barrel on Aug. 8. Shares of the carrier rose 1.3 percent, to S$15.60 today ahead of the earnings announcement. The stock climbed 15 percent in the quarter, compared with the 8.1 percent advance in the nine-member Bloomberg Asia Pacific Airlines index. Fuel Surcharges The carrier cut fuel surcharges on Oct. 13 by as much as 10 percent, citing lower oil prices . The price of jet kerosene closed at $73.35 today in Singapore, 21 percent lower than its $93 peak in August. It fell 12 percent to $76.75 at the end of September from $87.15 at the end of June. Losses at airlines worldwide this year may be less than expected as carriers sell more tickets and fuel prices drop, according to the International Air Transport Association . The group, which represents about 260 network carriers, said the industry may perform better than its $1.7 billion loss estimate. Singapore Airlines said fiscal first-half profit rose 50 percent to S$868 million, spurred by an increase in travel demand and one-time items including the sale of a building. That compared with the S$875 million median estimate of seven analysts surveyed by Bloomberg News . Sales increased 10 percent to S$7.03 billion. The airline booked a one-time gain of S$223 million from the sale of a building in downtown Singapore in the first quarter. The carrier, 57 percent owned by the Singapore government's investment company Temasek Holdings Pte., said it's paying shareholders a dividend of 15 cents compared with 10 cents a year earlier. To contact the reporter on this story: Chan Sue Ling in Singapore slchan@bloomberg.net To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net ; Bret Okeson at bokeson@bloomberg.net

2006-10-27 00:00:00 UTC

Balda Says Investor Asks to Open Books for Buyers

http://www.bloomberg.com/news/2006-10-27/balda-says-investor-asks-to-open-books-for-buyers-update1-.html

Stefanie Haxel

Balda AG (BAF) , which cut its profit forecast last month, said its largest shareholder asked to give investors interested in buying the company access to its books. Cycladic Capital LLP wrote a letter to the supervisory board, claiming only access to the books would allow investors to assess Balda's restructuring plans, the Bad Oeynhausen, Germany-based company said in a statement to OTS newswire today. Audley Capital Advisors LLP is among the potential buyers of the world's second-largest maker of plastic handset parts. The London-based investment company run by Julian Treger may offer to pay as much as 8 euros ($10.14) per share. The bid would include a premium of 40 percent to 60 percent on the current stock price, Balda said. The company cut its 2006 pretax profit forecast to a loss of as much as 50 million euros, from an earlier prediction of 20 million euros in profit. Balda said on Oct. 24 it to plans to sell three German factories and cut its workforce in the country by 63 percent after sales slumped. Shares of Balda rose 0.2 percent to 5.06 euros in Frankfurt , after gaining as much as 5 percent earlier. To contact the reporter on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net To contact the editor responsible for this story: Malcolm Fried at mfried@bloomberg.net

2006-10-27 00:00:00 UTC

MPC Third-Quarter Net Doubles on U.K. Property Sale

http://www.bloomberg.com/news/2006-10-27/mpc-third-quarter-net-doubles-on-u-k-property-sale-update3-.html

Aaron Kirchfeld

MPC Capital AG, a German financial- services company, said third-quarter profit more than doubled as it booked a gain from the sale of a London office building. Net income climbed to 15.8 million euros ($20.7 million), or 1.49 euros a share, from 7.15 million euros, or 0.67 euros a share, a year earlier, the Hamburg-based company said today on its Web site. Sales more than doubled to 68.6 million euros. MPC is investing in new products such as private-equity funds to add to its real estate and ship-related funds. The company is also selling real estate and last month raised its full-year profit forecast 11 percent to 50 million euros because of the sale of the U.K. property. MPC is ``on track'' to reach these goals, Chief Executive Officer Axel Schroeder said today. ``The earnings were positively influenced by the property sale,'' said Werner Eisenmann, an analyst at DZ Bank AG in Frankfurt , who has a ``buy'' rating on the stock. ``Still, even without it, the figures were in line with our expectations.'' MPC booked a 7 million-euro gain after its U.K. real-estate fund sold the London building. The company also plans to sell 99 properties in the Netherlands worth about 1 billion euros to institutional investors. MPC expects to receive the first payments from the sales of the properties by the end of the year. The company's shares rose 42 cents, or 0.6 percent, to 69.42 euros in Frankfurt. The stock has gained 5.5 percent this year, trailing the 18 percent rise in the SDAX Index, which tracks the 50 biggest companies in the so-called small-cap sector. MPC was knocked out of the MDAX Index of medium-size companies by Wacker- Chemie AG in June. Approaching Target MPC created Assentus Bank in July to handle its management- based capital investments such as opportunity and private-equity funds, as well as structured products such as notes and certificates. Its main business consists of buying assets such as ships, property and life-insurance policies, which it places in closed-end investment funds for private investors. The company placed 228 million euros in equity in the third quarter, bringing it to within 278 million euros from reaching its full-year target of at least 1 billion euros. ``We're in a great position to reach our goal of 1 billion euros,'' said Schroeder. ``We'll let the market know right away if we see there's a chance to exceed the 2006 profit targets.'' MPC reiterated plans to pay a dividend of at least 4 euros per share for 2006. The sale of the Dutch property is under way and will have a positive effect on full-year profit, Schroeder said. To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Katherine Snyder at ksnyder@bloomberg.net

2006-10-27 00:00:00 UTC

Baoshan's 3rd-Quarter Profit Gains on Steel Demand

http://www.bloomberg.com/news/2006-10-27/baoshan-s-3rd-quarter-profit-gains-on-steel-demand-update4-.html

Janet Ong

Baoshan Iron & Steel Co., China's biggest steelmaker, said its third-quarter net income rose 42 percent and reversed three straight quarters of declines as demand recovered. Net income rose to 4.7 billion yuan ($595.7 million) in the quarter ended Sept. 30, or 0.27 yuan a share, from last year's 3.31 billion yuan, or 0.19 yuan a share, the company said in a statement today. Sales rose 22 percent to 42.1 billion yuan. Steel prices have stopped falling since August because of a recovery in demand and as a government push to shut obsolete plants slowed output growth. China is encouraging steelmakers to form bigger companies overseas amid an industry drive to combine. India 's Tata Steel Ltd. agreed to buy U.K.'s Corus Plc last week, and Mittal Steel Co. acquired Arcelor SA for $38 billion to form the world's biggest steelmaker earlier this year. ``Baoshan will be the major consolidator in China 's steel industry,'' said Wu Pengfei, a Beijing-based steel analyst with Guotai Junan Securities Co. ``It will benefit from industry mergers with the government shutting small mills.'' Baoshan Steel shares rose for the fifth day today, gaining almost 3 percent to 4.51 yuan in Shanghai before earnings were announced. The stock has risen 9.5 percent this year, lagging behind a 55 percent gain in the Shanghai Composite Index. Auto-Steel Baoshan's nine-month profit fell 13 percent to 9.1 billion yuan, according to the company's statement. Sales climbed 35.4 percent to September from January to 113.2 billion yuan. The company sold 1.9 million tons of steel sheets in the first nine months to make autos, a rise of 22 percent from a year ago, the statement said. In the fourth quarter, production will fall by 200,000 tons because the company's No. 2 furnace is closed for maintenance, Baoshan said. Baosteel Group Corp., the parent, plans to more than double output to 50 million tons by 2012 as Chairwoman Xie Qihua wants the company to rank in the world's top three producers. Baoshan Steel contains most of the parent's steel assets. Expansion will boost the company's bargaining power with suppliers of raw materials, and help it spend more on higher- grade production. Baosteel allied with Chinese steelmakers including Magang (Group) Holding Co. and Xinjiang Ba Yi Iron & Steel Group, and intends to merge with them ``when conditions mature,'' the company's president Xu Lejiang said in April. Raising Prices Baoshan Steel, which supplies half the alloy used by the country in cars and appliances, raised prices from the third- quarter by as much as 13 percent for local units of General Motors Corp., Volkswagen AG and Electrolux AB as demand recovers. Still, prices for hot-rolled coil were 16 percent lower than a year earlier; while cold-rolled sheets were 14 percent lower. The company cut prices of carbon steel products, it said. China's crude steel output rose 21 percent to 272 million metric tons in the first eight months of this year after rising 27 percent in 2005. The nation's mills, which supply one third of the world's steel, gained 5.7 percent in aggregate profit in the first nine months after falling 2.5 percent through August, the National Bureau of Statistics said on October 24. `Best Time' ``This is the best time to increase holdings of steel shares since 2006 is the worst for the industry.'' said Wu. Brokerages including Credit Suisse Group and JPMorgan Chase & Co. have raised ratings on steel stocks including Maanshan Iron & Steel Co. on an improved outlook for prices. Still, Baoshan and other Chinese mills may fail to prevent a further increase in prices of iron ore , the main steelmaking ingredient, next year, analysts have said. Soaring demand and limited mine expansion have driven ore prices to rise for four consecutive years, with a 19 percent gain this year. Prices may climb a further 10 percent next year on stronger-than-expected demand from China, Credit Suisse Group said in a report yesterday. Baosteel will start negotiations for next year's prices with global suppliers including Australia 's BHP Billiton and Rio Tinto Group and Brazil 's Cia. Vale do Rio Doce late next month, Baosteel's chief negotiator Liu Yongshun said Oct. 15. The price agreed upon will be effective from April 1, 2007. To contact the reporter for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net To contact the editor responsible for this story: Keith Gosman at kgosman@bloomberg.net

2006-10-30 00:00:00 UTC

U.S. Newspapers Losing Readers at Accelerating Rate

http://www.bloomberg.com/news/2006-10-30/u-s-newspapers-losing-readers-at-accelerating-rate-update4-.html

Cecile Daurat

U.S. daily newspapers are losing readers at an accelerating rate, led by big-city publications such as the Miami Herald and Los Angeles Times. Circulation at 770 daily newspapers declined 2.8 percent in the six months ended Sept. 30, the Newspaper Association of America said today in a statement, citing data from the Audit Bureau of Circulations . In the year-ago period, circulation fell by 2.6 percent. The drop in readership adds to concerns about a decline in advertising sales as readers migrate to the Internet. At Tribune Co., which is evaluating takeover proposals, average paid circulation at the Los Angeles Times fell 8 percent in the six- month period while the Chicago Tribune declined by 1.7 percent. ``The financial performance of newspaper companies will continue to be pressured by an accelerating shift of advertising dollars,'' Michael Simonton, an analyst with Fitch Ratings, said today in a research note. While few big-city newspapers produced gains, New York's warring tabloids both advanced with the New York Post surpassing the Daily News. Circulation at the Boston Globe, owned by New York Times Co. (NYT) , fell by 6.7 percent. ``The losses were greater at the metropolitan-size newspapers,'' Newspaper Association Chief Executive Officer John Sturm said on a conference call. 20-Year Slump Newspapers had average daily circulation of 43.7 million in the six months ended Sept. 30, down from 45 million in the year- earlier period, when circulation tracked by the Audit Bureau declined by 2.6 percent. The most recent slide extends a 20-year slump, from an average of 62.3 million papers sold each weekday in 1985. Circulation suffered consecutive declines over the last five years, Sturm said today. Sunday circulation fell 3.4 percent to 47.6 million, the Vienna, Virginia-based newspaper association said, citing an analysis of Audit Bureau figures. Shares of Tribune, the second-largest U.S. newspaper publisher, fell 2 cents to $33.45 at 4:01 p.m. in New York Stock Exchange composite trading. McLean, Virginia-based Gannett Co., the largest newspaper chain, dropped 29 cents to $60. New York- based New York Times declined 4 cents to $24.06. Web Site Growth Newspaper owners have bolstered their Web sites to attract online readers and advertisers, helping to make up for the loss of readers, the association said. It said newspaper Web sites serving the 100 largest markets reported an average 8 percent growth in their online audiences. Almost 57 million Web users visited a newspaper site in the third quarter, up 24 percent from the year-ago period, the association said. Tribune last week received competing initial takeover proposals from buyout firms Bain Capital LLC and Thomas H. Lee Partners LP, people familiar with the matter have said. Average paid circulation Mondays through Fridays fell to 775,766 at the Los Angeles Times, according to Audit Bureau data. At the Chicago Tribune , the average weekday paid circulation declined to 576,132. Long Island , New York-based Newsday, also owned by based Tribune, saw circulation drop 5 percent to 410,579. Other Declines At the New York Times, the average weekday circulation declined 3.5 percent to 1.09 million, while the Boston Globe's circulation fell to 386,415, the Audit Bureau said. Paid subscribers fell 3.3 percent to 656,297 at the Washington Post, owned by Washington Post Co. (WPO) New York's tabloids both showed gains, with News Corp. (NWSA) 's Post rising 5.1 percent to beat rival Daily News, owned by Boston Properties Inc. (BXP) Chairman Mortimer Zuckerman. Daily News weekday circulation rose 1 percent to 693,382 from 686,274. The Rupert Murdoch-controlled Post, rising to 704,011 from 669,663 in the year-ago period, advanced to the fifth-largest U.S. daily, based on circulation, after USA Today , the Wall Street Journal, the New York Times and the Los Angeles Times. To contact the reporter on this story: Cecile Daurat in New York at cdaurat@@bloomberg.net. To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net .

2006-10-30 00:00:00 UTC

Amerigroup Defrauded U.S., Must Pay $144 Million

http://www.bloomberg.com/news/2006-10-30/amerigroup-defrauded-u-s-must-pay-144-million-update3-.html

Andrew Harris

Amerigroup Corp. (AGP) , which manages government health plans for the poor, must pay at least $144 million in damages for wrongfully denying coverage to pregnant women eligible for Medicaid, a jury found. The jury today awarded the plaintiffs, which included the U.S. and Illinois governments and a whistleblower former employee, $48 million. That amount will be tripled under federal law. The company may also be liable for a total of as much as $199 million in penalties for more than 18,000 instances of fraud found by the federal jury in Chicago . ``They were getting paid for serving people they weren't in fact serving,'' private attorney Fred Cohen of Chicago said after the verdict. Amerigroup contracted with Illinois to provide services to Medicaid patients. Cohen's client, Cleveland Tyson who was in charge of government relations for the company in Illinois filed the suit four years ago, after he was fired. Tyson accused the company, which has operations in nine states and the District of Columbia , of maximizing its profit by keeping pregnant women and others with expensive medical conditions off its rolls. The case was filed under the federal False Claims Act and a parallel state law. The panel of four men and three women deliberated for less than six hours before returning its verdict, ending a three-week trial. ``We respectfully, but strongly, disagree with the jury's finding, and we will appeal,'' Amerigroup spokesman Kent Jenkins said outside the courtroom. Eighth-Largest Verdict The verdict is the eighth-largest jury award in any trial in 2006, according to data compiled by Bloomberg. The largest, for $699.5 million, came in August in a contract dispute over the building of natural-gas processing plants in Louisiana . ``This is not a case that the company should have taken to trial,'' said Patrick Burns , spokesman for Taxpayers Against Fraud, a Washington non-profit group that tracks such cases. Under federal law, the company could be barred from future government contracting, Burns said. ``Today's verdict sends a strong message that companies who contract with the State of Illinois to provide healthcare to its neediest residents cannot discriminate against those residents who need care the most,'' Illinois Attorney General Lisa Madigan said in a statement today. The company stopped doing business with the state in August for reasons unrelated to the lawsuit, Jenkins said. The company estimates its 2006 revenue will be $3 billion, Jenkins said. Amerigroup took in $2.3 billion in 2005, he said. Amerigroup's shares rose 67 cents to $35.41 at the close of New York Stock Exchange composite trading today. The lawsuit is U.S. ex rel. Tyson v. Amerigroup Illinois Inc., No. 02-C-6074, in the Northern District of Illinois, Eastern Division (Chicago). To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan , at 2947 or mcfisk@bloomberg.net . Andrew Harris at the federal court in Chicago, at 5474 or aharris16@bloomberg.net To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net .

2006-10-30 00:00:00 UTC

Porter to Begin Flying to Montreal in December

http://www.bloomberg.com/news/2006-10-30/porter-to-begin-flying-to-montreal-in-december-update1-.html

Doug Alexander

Porter Airlines Inc., the commuter carrier that began flying between Toronto and Ottawa a week ago, will add Montreal as its second destination starting on Dec. 11. The airline will offer four weekday flights as well as weekend service to Montreal and will at least double that frequency after getting a fourth aircraft in January, Chief Executive Officer Robert Deluce said today at an Economic Club of Toronto speech. Porter launched daily flights on Oct. 23 from Toronto's island airport, offering people in the financial district an alternative to the 45-minute commute to Pearson International airport. Deluce said he plans to fly to 17 cities within a 575- mile (925 kilometer) radius of Toronto using 70-seat Q400 turboprop planes made by Bombardier Inc. (BBD/B) New York may be the next destination, starting in 2007, he said. Porter may fly to more than one airport serving New York, which could include Newark and LaGuardia, Deluce said in an interview after his speech. Jazz Air, the Halifax-based regional carrier operated by ACE Aviation Holdings Inc. (ACE/H) , stopped flying to Montreal from the city airport about four years ago. Jazz, which seeks to return to the airport after an eight-month absence, said July 6 it will resume flights to Montreal and Ottawa. To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net To contact the editor responsible for this story: David Scanlan at dscanlan@Bloomberg.net

2006-11-01 00:00:00 UTC

ACE Must Lift Pay for Air Canada Pilots, Jazz Workers

http://www.bloomberg.com/news/2006-11-01/ace-must-lift-pay-for-air-canada-pilots-jazz-workers-update1-.html

Doug Alexander

ACE Aviation Holdings Inc. (ACE/H) must give raises to pilots at Air Canada, the country's largest airline, and flight attendants at the company's regional carrier, two arbitrators ruled. The 3,100 pilots represented by the Air Canada Pilots Association will get a 2 percent wage increase effective July 2006, 1.75 percent in July 2007 and 1.75 percent in July 2008 in a settlement handed down by arbitrator Douglas Stanley, Montreal-based ACE said today in a statement. The pilot award is the third arbitrated settlement for Air Canada, which had scheduled wage talks with all its major labor groups this year. Mechanics received 5 percent over three years in an August settlement, and sales and service employees got a 4.5 percent wage increase over the same period in a July award. Jazz, the regional airline 80 percent owned by ACE, must pay the 740 flight attendants represented by Teamsters Canada 1 percent more effective July 2006, 1.75 percent on July 2007 and 1.75 percent on July 2008, Halifax-based Jazz said today in a statement. The raises were ordered by arbitrator Michel Picher, matching those he issued to 1,660 other Jazz employees in July. ACE is awaiting an arbitrated settlement with the Canadian Union of Public Employees, which represents 6,000 Air Canada flight attendants. Shares of ACE fell C$2.51, or 6.5 percent, to C$36.24 at 4:10 p.m. on the Toronto Stock Exchange. Units of Jazz Air Income Fund, which owns 20 percent of ACE's regional carrier, fell C$1.78, or 19 percent, to C$7.50 after the Canadian government said yesterday it planned to tax income trusts. Income trusts avoid paying most corporate taxes by distributing most of their cash flow to investors. To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net To contact the editor responsible for this story: Dave Versical at dversical@bloomberg.net

2006-11-01 00:00:00 UTC

Comstar to Spend $300 Million on Regional Purchases

http://www.bloomberg.com/news/2006-11-01/comstar-to-spend-300-million-on-regional-purchases-update1-.html

Lyubov Pronina

OAO Comstar United Telesystems plans to spend $300 million of the proceeds from its initial public offering on acquisitions this year and in 2007, Chief Executive Officer Eric Franke said. Comstar UTS, Russia 's largest alternative phone operator, will spend $150 million to complete six acquisitions this year, he said in Moscow today. The company will spend another $150 million next year. ``My priority is Russia, the Commonwealth of Independent States and Eastern Europe,'' Franke said. The company also plans to buy shares in OAO Moscow City Telephone, the dominant fixed- line phone company in the Russian capital, on the market. Moscow-based Comstar UTS, controlled by Russian billionaire Vladimir Yevtushenkov , raised more than $1 billion in an IPO in February this year and has tried to find assets to buy with the proceeds. Comstar UTS said Oct. 30 it will team up with Intracom Holdings SA to acquire Greek phone company Hellas Online. The company said yesterday it paid $4.7 million for two telecommunications operators in Ukraine, DG Tel and Technologic Systems. Comstar UTS said on Oct. 28 that it bought 75 percent plus one share of CallNet, an alternative operator in Armenia , for an undisclosed sum. Comstar UTS will further expand in Ukraine to include cities with a population of one million people such as Dnipropetrovsk, Kharkiv, Lviv and Donetsk, Franke said today. The country is the company's most important market after Moscow in terms of company development, he said. Plan B Comstar UTS also plans to buy shares in Moscow City Telephone on the market, Franke said. Comstar said last week it raised its stake in Moscow City Telephone to 66.9 percent. Franke said Comstar UTS will continue buying shares on the market as it awaits for the government to decide on the sale of its stake in Moscow City Telephone now held by Syvazinvest. Comstar UTS planned to use most of its proceeds from the IPO to take part in the sale of the government's controlling stake in OAO Svyazinvest, the country's national fixed-line operator, which has been delayed repeatedly. ``We have changed the course: if Svyazinvest was plan A, it is now plan B,'' Franke said. Comstar UTS has a list of 20 regions where it is looking at companies to pursue acquisitions, he said. Separately, Comstar UTS plans to cut 300 jobs in Moscow by the end of 2006, reducing its Moscow staff to 1,200, Franke said. That includes reducing the number of managers from 340 to 200, he said. The company will also cut the chain of management to four from eight levels. To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net . To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net

2006-11-01 00:00:00 UTC

Russian Stocks Gain the Most in Three Weeks; Led by Gazprom

http://www.bloomberg.com/news/2006-11-01/russian-stocks-gain-the-most-in-three-weeks-led-by-gazprom.html

Maria Ermakova

Russian stocks rose, with the RTS Index gaining the most in more than three weeks, led by OAO Gazprom and OAO Unified Energy System. Kommersant reported President Vladimir Putin may discuss gas and electricity price increases with the heads of the two energy companies. OAO Mobile TeleSystems, eastern Europe 's biggest mobile- phone company, climbed after a report that parent company AFK Sistema wants a stake in Deutsche Telekom AG. Rambler Media Ltd., which runs Russia's second-biggest Internet search engine, gained after billionaire Vladimir Potanin's company bought 49 percent of the company. The dollar-denominated RTS Index advanced 1.9 percent to 1644.86 at the close of trading in Moscow, rising for a second day and posting the biggest one-day gain since Oct. 9. The ruble- based Micex Index increased 2 percent to 1456. Shares of Gazprom, the biggest natural-gas producer, soared 4.8 percent to $11. Unified Energy, the national power utility, gained 3.6 percent to 78 cents. Alexei Miller , Gazprom's Chief Executive, and Anatoly Chubais , CEO of Unified Energy, will meet with Putin in the Kremlin on Nov. 3, Kommersant reported, citing an unidentified person with knowledge of the meeting. The companies have requested increases in gas and electricity prices. Gazprom loses money on domestic gas sales and says the 15 percent price rise the government approved for 2007 isn't enough to ensure production can keep pace with demand. Shares of OAO Novatek, Russia's second-largest gas producer, gained 2.4 percent to $59.60 in London, rising for a sixth session and reaching an all-time high. Mobile TeleSystems advanced 4 percent to $7.85. Financial Times Deutschland reported in its print edition today that Sistema may seek between 10 percent and 20 percent of Deutsche Telekom. Sistema denied the report, Financial Times Deutschland said on its Web site, citing an unidentified spokesman. Deutsche Telekom Stake Rambler Media shares gained 4 percent to $32.50 in London, rising for a sixth session. Billionaire Vladimir Potanin 's PM Invest Company Ltd. acquired about 48.8 percent of Rambler, Rambler said yesterday. PM Invest also applied to the Russian Federal Anti-Monopoly Service to buy a further 6 percent of the media company. ``The transaction is a significant milestone in the development of Rambler and opens up new opportunities for broadening its reach and advertising base,'' Natasha Zagvozdina and Alexei Yazykov, analysts at Renaissance Capital in Moscow, wrote in a report. OAO Rosneft, the state oil producer, added 1.1 percent to $8.69 in London. Deutsche Bank AG's Russian brokerage raised is recommendation on the stock to ``buy'' from ``hold'' and increased its price estimate by 16 percent to $9.4. Rosneft Rosneft will benefit ``from participating in the sale of OAO Yukos Oil Co.'s assets,'' analysts led by Stephen O'Sullivan at Deutsche UFG in Moscow wrote in a report released yesterday after the market closed. The acquisition of Yukos's biggest oil unit in 2004 allowed Rosneft to become the third-largest producer in Russia . Rosneft is the second-largest creditor of bankrupt Yukos, with about $9.6 billion worth of court-approved claims. Uralsib bank shares advanced 5.1 percent to 1.85 cents on the RTS. The bank's parent Uralsib Financial Corp. is in talks with OAO Trading House Kopeyka, a Russian grocer that's 50 percent-owned by the bank, to buy the rest of the company, Vedomosti said, citing Kopeika spokeswoman Anastasiya Schukina. Schukina declined to elaborate before the purchase closes, according to the Russian newspaper. Uralsib may pay as much as $600 million for the stake, Vedomosti said, citing an unidentified official at the company. To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net . To contact the editor responsible for this story: Balduin Hesse in London at bhesse2@bloomberg.net .

2006-11-02 00:00:00 UTC

Coles Myer Raises Performance Targets for Bonuses

http://www.bloomberg.com/news/2006-11-02/coles-myer-raises-performance-targets-for-bonuses-update3-.html

Robert Fenner

Coles Myer Ltd., Australia 's second-largest retailer, raised the targets management must reach to be paid bonuses, after pressure from its biggest shareholder to use forecasts cited to reject a A$18.2 billion ($14 billion) buyout. Chief Executive Officer John Fletcher must now boost earnings 35 percent over the next two years to earn his full long-term bonus, Coles Myer said in a statement today. Fletcher stood to get the bonus even if he missed targets used to justify knocking back the buyout from a group led by Kohlberg, Kravis Roberts & Co. Solomon Lew, biggest shareholder and former executive chairman, said the original performance targets suggested the forecast was ``unachievable.'' The change is a victory for Lew, who has warred with Coles Myer Chairman Rick Allert since being ousted from the retailer's board in 2002. ``It gives a great deal more credibility to the forecasts and to management,'' said Atul Lele, who helps manage the equivalent of $307 million at White Funds Management in Sydney, including Coles Myer shares. ``There is now much greater alignment of management to shareholder interests in terms of those earnings forecasts.'' Fletcher was paid A$4.6 million last year, which included salary of A$2.3 million and long-term incentives worth A$651,326. Coles Myer shares rose 6 cents to A$13.87 at the 4:10 p.m. market close in Sydney, lifting this year's gain to 36 percent. KKR offered A$15.25 a share for the company. The stock has risen 18 percent since first revealing the KKR approach Aug. 17. Incentives While Coles Myer adjusted short-term bonus hurdles for Fletcher, 55, and other management when it issued the new forecasts on Sept. 21, it didn't change those for the long-term incentives. ``These amendments correct that oversight,'' Allert said in the statement. Under the new plan, Fletcher and his management team will get half their long-term bonus for growth between 12.5 percent and 15 percent. Below 12.5 percent, they get nothing. Lew, Coles Myer's biggest shareholder with about 5.8 percent of its stock, said the performance targets showed a ``disconnect'' between targets for management and forecasts. ``The decrease in performance hurdles for senior management is a disappointing indictment of the board's lack of protection of shareholders interests,'' Lew said in an Oct. 24 statement. ``Alternatively, the earnings guidance provided to the market is unachievable. Or both.'' `Totally Destabilize' Fletcher's two-year A$910 million spending program, which will drop brands such as Bi-Lo and Kmart in favor of the Coles name and improve inventory handling, failed to convince investors when it was first announced in July, sending the stock sliding 10 percent in three days. Trying to reach the 2008 profit forecast may ``totally destabilize'' the retailer, David Errington, Merrill Lynch's Melbourne-based retail analyst, said in an Oct. 20 report. With A$34 billion in sales from almost 3,000 supermarkets, liquor outlets and Kmart stores, Coles Myer has about 35 percent of Australia's A$70 billion grocery and liquor market, compared with 40 percent for larger rival Woolworths Ltd. New York-based KKR and a group of buyout firms scrapped their bid Oct. 19 after Allert twice rejected approaches. The takeover to would have been Australia's biggest. To contact the reporter on this story: Robert Fenner in Sydney rfenner@bloomberg.net To contact the editor responsible for this story: Peter Vercoe pvercoe@bloomberg.net

2006-11-02 00:00:00 UTC

Korea Electric Net Rises on Rate Gain, Nuclear Power

http://www.bloomberg.com/news/2006-11-02/korea-electric-net-rises-on-rate-gain-nuclear-power-update5-.html

Meeyoung Song

Korea Electric Power Corp. (015760) , the country's largest utility, said third-quarter profit rose 19 percent because of higher electricity prices and increased generation of lower-cost nuclear power. Net income climbed to 1.21 trillion won ($1.3 billion) from 1.02 trillion won a year earlier, the Seoul-based company, which supplies almost all the power in Asia 's third-biggest economy, said in a statement today. The median estimate of seven analysts surveyed by Thomson Financial was 1.17 trillion won. South Korea 's government in December approved the company's first power price increase in five years to cope with higher oil and natural gas costs. Liquefied natural gas prices are linked to oil, which surged to a record in July. ``The results were satisfying especially when you consider the pressure of fuel costs,'' said Lee Young Ah, who helps manage about $1.8 billion in equities at SH Asset Management Co. in Seoul . ``LNG should drop more in the fourth quarter due to lower crude prices.'' The company ran its nuclear reactors at full capacity in the third quarter after shutting them down for maintenance earlier this year, said Ji Chang Young, a manager at the utility's investor relations team. LNG burned at its plants accounted for 49 percent of Korea Electric's fuel costs in the third quarter and coal made up 29 percent, Ji said. Fuel oil accounted for 13 percent and nuclear fuel 9 percent. Shares Gain Crude oil prices in New York have fallen 25 percent from an all-time high of $78.40 a barrel on July 14. The company's shares rose 200 won, or 0.6 percent, to 36,200 won at the market's 3 p.m. close in Seoul. The stock has gained 7 percent in the past year, less than the 16 percent increase in the benchmark Kospi index. Korea Electric's fuel costs increased 10 percent from a year earlier to 2.2 trillion won, Ji said. Operating profit, including its six power generating units, gained 7 percent to 1.86 trillion won, he said. Nuclear plants generated 40 percent of Korea Electric's power in the first half of this year, coal-fired plants produced 38 percent, gas-fired plants generated 17 percent and fuel-oil generators produced 4 percent of electricity, Yoo Young Kuk, an analyst at Meritz Securities Co. said. Operating profit for the third quarter increased 28 percent to 1.44 trillion won and sales gained 7.4 percent to 7.56 trillion won, the company said. To contact the reporter on this story: Meeyoung Song in Seoul at msong2@bloomberg.net . To contact the editor responsible for this story: James Poole in Singapore at jpoole4@bloomberg.net

2006-11-03 00:00:00 UTC

N. Korea Cargo-Screening May Miss Nuclear Contraband

http://www.bloomberg.com/news/2006-11-03/n-korea-cargo-screening-may-miss-nuclear-contraband-update3-.html

Jeff Bliss

The radiation detectors at the heart of U.S.-backed cargo inspections aimed at stopping the spread of North Korea 's nuclear technology may miss some contraband while mistaking harmless materials for dangerous ones. The detectors used at border crossings and in major ports serving North Korea may be triggered by items as innocent as kitty litter, ceramics or bananas, said Parney Albright, who created the science and technology unit at the U.S. Department of Homeland Security . At the same time, they won't pick up sensitive non-radioactive technology that North Korea might try to sell. North Korea has in the past threatened to sell its nuclear knowledge, with the U.S. and other nations expressing the fear that its know-how might wind up in the hands of other rogue states or terrorists. After North Korea's Oct. 9 nuclear test, U.S. Secretary of State Condoleezza Rice shuttled among the capitals of Asian nations and Russia , urging the use of radiation and imaging detectors to check cargo crossing land borders and coming into ports. Such detectors ``can't be the system,'' said Albright, managing director of Civitas Group LLC, a Washington-based homeland-security consultant. While detectors may be ``goaltenders that are there when all else fails,'' he said, ``at the end of the day, none of these systems is leak-proof.'' UN Resolution North Korea's agreement earlier this week to return to talks aimed at ending its nuclear weapons program won't affect the cargo inspections or financial sanctions the Oct. 14 United Nations Security Council resolution calls for. President George W. Bush said the system would remain in place until North Korea verifiably abandons its program. UN members have until Nov. 13 to report on how they are implementing the sanctions under the resolution. The cargo-inspection effort aims to make use of an existing U.S.-funded program to install state-of-the-art detectors in allies' ports and border posts. Weapons experts say the nuclear-detection net surrounding North Korea is full of gaps; for instance, while Russia has U.S.-supplied radiation monitors along its 12-mile (19-kilometer) border with North Korea, China doesn't have any along the 880-mile border it shares with the country. Plastic Scintillation Most of the detectors deployed overseas are based on a technology known as plastic scintillation. While the detectors are ``better than nothing,'' they can't distinguish between radiation from a natural source and material used in a nuclear weapon, said Gene Aloise, director of natural resources and environment at the Government Accountability Office, Congress's non-partisan investigative arm. The detectors which are made by San Diego-based SAIC Inc. (SAI) , Longmont, Colorado-based TSA Systems Ltd., Sweetwater, Texas-based Ludlum Measurements Inc. and the Aspekt Scientific Production Center in Dubna, Russia contain a piece of specially molded plastic whose atoms emit glimmers of light when struck by gamma rays emitted by a radioactive source. The light glimmers are then amplified by the machine. The detectors may produce false positives because certain harmless materials contain low levels of naturally occurring radiation. The potassium in bananas is radioactive, and any products created from dirt or clay including kitty litter and ceramics include small amounts of radioactive minerals; some pottery glazes contain minute amounts of thorium and uranium. Hiding Contraband While such shipments might trigger false readings, they might also help smugglers hide contraband by inserting nuclear material the size of a baseball into a shipment of ceramics, for example. The detectors can also be fooled if uranium, which the North Koreans have been mining for some time, is wrapped in lead, said David Albright , president of the Washington-based Institute of Science and International Security, a Washington-based nuclear-nonproliferation group. TSA President Allan Frymire said plastic scintillators have limits yet their relatively low cost means large numbers can be used. He compared them to metal detectors in airports which ``cannot distinguish between your car keys and a gun but in both cases sound the alarm.'' When used with other screening methods, they are a ``very cost-effective means'' of detecting nuclear and radioactive materials, he said in an e-mailed statement. Bill Huckabee, a distribution sales manager for Ludlum, declined to comment, as did SAIC spokesman Thomas D. Hampton. `Layered Defense' Edgar Vasquez, a State Department spokesman, said the detectors are just one element in a strategy that includes training and sharing intelligence with regional allies. ``We are building a layered defense against North Korean proliferation,'' Vazquez said in a statement responding to a request for comment. Since 1994, the U.S. has spent $178 million to provide radiation detectors to 36 countries to stop the spread of nuclear material, according to a March 2006 GAO report. Earlier this year, the Homeland Security Department awarded $1.2 billion in contracts to Waltham, Massachusetts-based Raytheon Co. (RTN) and Thermo Electron Corp. and Paris-based Areva SA (AREVA) 's Canberra Industries Inc. to develop detectors capable of distinguishing the sources of radiation. Flawed Data Deployment overseas of such next-generation detectors aren't scheduled to begin until the end of next year, maybe later. The GAO last month said the department's Domestic Nuclear Detection Office used flawed data in awarding the contracts, and that it isn't clear the machines will work. Congress has limited funding for the project until that question is answered. Thomas Loewald, president of Thermo Electron's environmental instruments division, said in an e-mailed statement that the new technology ``represents a significant improvement,'' and the GAO report ``does not provide a complete picture.'' Stephen Mettler, senior product manager for Canberra, said the nuclear detection office has plans for testing ``to prove'' the detectors will work. ``I certainly think our technology will be effective,'' he said. Raytheon spokesman Jon Kasle declined to comment, referring questions to the nuclear detection office. Jenny Burke, a spokeswoman for the nuclear detection office, said efforts to improve the detectors will continue so lawmakers will realize the machines are worth buying. The office ``plans to subject systems to additional high fidelity testing prior to full-scale production,'' she said. Gamma Rays The U.S. also has helped place in foreign ports machines such as SAIC Inc.'s VACIS systems, which use gamma rays to create images of shipping containers and what's inside them. The Homeland Security Department in September awarded $1.35 billion in contracts to SAIC, New York-based L-3 Communications Corp. and Billerica, Massachusetts-based American Science and Engineering Inc. to provide 300 imaging machines that would be able to detect nuclear or ``dirty'' bombs shielded by lead or other materials. They're scheduled to be deployed over the next six years. ``Dirty'' bombs use conventional explosives to disperse radiological material. Port-security experts such as Stephen Flynn, a senior fellow at the Council of Foreign Relations in New York , say the imaging machines are most effective when used in combination with the radiation detectors. That's only being done in Hong Kong , where a pilot project scans all cargo in two out of the 40 lanes of traffic coming into the port. Selling Technology Another concern for experts is that North Korea might export technology rather than nuclear material itself, said Jon Wolfsthal, a fellow at the Washington-based Center for Strategic & International Studies. The North Koreans initially won't part with the little plutonium they have, although they may be prepared to sell uranium, weapons experts say. Instead, they might market aluminum tubes, pumps and special chemicals such as tributyl phosphate, which is used to extract radioactive material from spent nuclear fuel rods, said David Albright. Some of those products have other, more peaceful purposes: The pumps, for example, could be used in oil fields , and tributyl phosphate can be used as a solvent or an ingredient in aircraft hydraulic fluid. Chinese border guards have been getting U.S. help in spotting so-called dual-use products for a year, and more training is planned. The training ``is helpful, but by no means is it enough,'' said Albright. ``It's doubtful the Chinese border guards are up to the task.'' To contact the reporter on this story: Jeff Bliss in Washington at jbliss@bloomberg.net To contact the editor responsible for this story: Ken Fireman at kfireman@bloomberg.net

2006-11-03 00:00:00 UTC

Nielsen Postpones Offering Ratings for TV Commercials

http://www.bloomberg.com/news/2006-11-03/nielsen-postpones-offering-ratings-for-tv-commercials-update2-.html

Michael White

Nielsen Media Research , which provides television ratings used to set advertising prices, postponed for a second time a service that measure viewership of commercials after cable networks questioned its accuracy. Clients also had concerns about how to count replays on digital recorders, Nielsen spokesman Gary Holmes said today in an interview. The service was delayed indefinitely, after an original start date of Nov. 18 was moved to Dec. 11. Cable networks aren't convinced Nielsen's system can properly distinguish between local and national advertisements, said Chris Jones , a spokesman for the New York-based Cabletelevision Advertising Bureau. The bureau has advised its members, cable networks that depend on advertising revenue, not to participate. ``We think that's probably a good idea'' to delay the start, Jones said in an interview. ``It allows the industry to debate the issue, to fix the current issues with the data.'' Nielsen plans to meet with clients later this month to try to reach consensus on the use of devices including recorders made by TiVo Inc. Nielsen, which had planned to measure viewing on the day of broadcast and replays within seven days, may consider a shorter period for replays, Holmes said. ``There is some tension over what data stream to use,'' Holmes said. ``This is an issue we really need to discuss further with clients.'' To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net . To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net .

2006-11-03 00:00:00 UTC

Schneider Shares Rise on Speculation of LBO Interest

http://www.bloomberg.com/news/2006-11-03/schneider-shares-rise-on-speculation-of-lbo-interest-update2-.html

Nicolas Johnson

Shares of Schneider Electric SA (SU) , the world's biggest maker of circuit breakers, rose the most in four months on speculation that the French company may be a takeover target for private-equity companies. The stock climbed 3.05 euros, or 3.7 percent, to 86.4 euros, the sharpest gain since June 30, for a market value of 19.6 billion euros ($24.9 billion). That was the sharpest gain on France 's benchmark CAC 40 Index and the sixth-biggest on the Dow Jones Stoxx 600 Index of Europe 's top companies. Buyout firms have announced an unprecedented $493 billion in takeovers this year, up from $265.5 billion in all of 2005, according to data compiled by Bloomberg. They've also raised a record $170 billion for new takeover funds, according to London-based researcher Private Equity Intelligence Ltd. Schneider Chief Executive Officer Jean-Pascal Tricoire said on Oct. 12 that he was aware of interest in his company. ``The scale of any such transaction would be highly unusual and groundbreaking in the European industrial space,'' said Ben Uglow , an analyst in London at Morgan Stanley. ``Sooner or later in industrials, we are going to have a knock-out bid. We are in an advanced stage of the stock market cycle, and that's usually when unusual things happen.'' Schneider's shares fell 7.2 percent on Oct. 30 after the French company agreed to buy American Power Conversion Corp. for $6.1 billion to become the largest maker of equipment that protects computers and factories from power outages. The purchase might have been a defensive move and may act as a ``poison pill'' to deter suitors, said Uglow, who has an ``equal-weight'' rating on the shares. A bid for Schneider at the current price would be one of the biggest private-equity offers. ``In theory, might private-equity companies be looking at a company like Schneider? The answer is yes,'' Uglow said. ``Investors are also coming back to the market to take advantage of the recent pullback in the stock.'' To contact the reporter on this story: Nicolas Johnson in Paris nicojohnson@bloomberg.net . To contact the editor responsible for this story: Christopher Jasper in London at cjasper@bloomberg.net .

2006-11-07 00:00:00 UTC

Ceridian Wins Tennessee Trial Over Gift-Card Patent

http://www.bloomberg.com/news/2006-11-07/ceridian-wins-tennessee-trial-over-gift-card-patent-update1-.html

Susan Decker

A Ceridian Corp. unit didn't infringe a Tennessee company's patent on gift cards sold at store checkout stands, a federal jury said. The jury in Memphis also found on Nov. 3 that Barry Fiala Inc.'s patent was invalid, because it covered an obvious variation of an earlier invention, and unenforceable because an inventor was omitted. Barry Fiala, named after its founder, will ask U.S. District Judge Samuel H. Mays Jr. to overturn the verdict, company lawyer Barry Bretschneider said today. ``Before he put the activated gift cards in Sam's Clubs and Wal-Marts in late 1995 and 1996, there was no market,'' Bretschneider said in a telephone interview. ``Barry Fiala created this market.'' Barry Fiala Inc. had sought at least $10 million in damages from Stored Value Systems, part of Ceridian's Comdata unit. Stored Value makes gift cards for companies including Target Corp., J.C. Penney Co., Lowe's Cos. and Toys `R' Us Inc., said the unit's lawyer, Alan Fisch of Kaye Scholer in Washington . ``Comdata is delighted with this victory,'' the unit's president, Gary Krow, said in a statement. Minneapolis-based Ceridian provides U.S. companies with payroll services and reported sales of $1.46 billion last year. Barry Fiala was part of Memphis packaging company Milton Sternberger and patented a means of activating gift cards in the 1990s, said Bretschneider, of Morrison & Foerster in McLean, Virginia. More than a dozen companies have licensed the patent, he said. Shares of Ceridian rose 19 cents to $25.14 in New York Stock Exchange composite trading at 4:01 p.m., valuing the company at about $3.5 billion. The case is Barry Fiala Inc. v. Stored Value Systems Inc., 02cv2248, U.S. District Court for the Western District of Tennessee, Western Division. To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net . To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net .

2006-11-07 00:00:00 UTC

Shimao Hires Goldman, Morgan Stanley for Bond Sale

http://www.bloomberg.com/news/2006-11-07/shimao-hires-goldman-morgan-stanley-for-bond-sale-update1-.html

Patricia Kuo

Shimao Property Holdings Ltd. (813) , controlled by China 's fifth-richest man Xu Rongmao, hired Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) to sell $500 million of bonds, the company said in a statement. Shimao plans to meet investors on Nov. 9 in Singapore, before moving to Hong Kong and the U.S. next week, said a person with knowledge of the deal, who declined to be named. The Hong Kong-listed company will use as much as $160 million from the sale to repay existing debt and the remainder to buy land and build new projects, according to the statement. The Shanghai-based developer joins rivals such as Greentown China Holdings Ltd. and Agile Property Holdings Ltd. in selling dollar bonds. Property prices in China have more than doubled since 2000. Real-estate investment grew 24.3 percent in the first nine months of the year to 1.29 trillion yuan ($164 billion), according to the National Development and Reform Commission. The bond sale ``represents a timely opportunity for the company to raise additional funds for the operation, and further expansion, of the group's property development business'' in China, Shimao said in the statement. The company currently has 18 projects in Beijing, Shanghai, Harbin, Fuzhou, Wuhan and Yantai, it said. The developer plans to sell at least $200 million of 10-year fixed-rate notes and at least $200 million of five-year fixed- rate or floating-rate securities, said the person. Shimao Chairman Xu wasn't immediately available to comment. The company's first-half profit more than doubled to 703.6 million yuan from 305.8 million yuan a year earlier, after sales surged to 2.2 billion yuan from 181.5 million yuan. At the end of September, it had 1 billion yuan of short-term debt and 2.6 billion yuan of long-term borrowings, according to the statement. Its stock has gained 68 percent since an initial share sale in Hong Kong that raised HK$3.72 billion ($478 million) in July. The benchmark Hang Seng Index rose 16 percent during the period. To contact the reporter on this story: Patricia Kuo in Hong Kong at pkuo2@bloomberg.net To contact the editor responsible for this story: Beth Thomas at bthomas1@bloomberg.net

2006-11-07 00:00:00 UTC

Stillwater Posts Profit on Processing Recycled Metals

http://www.bloomberg.com/news/2006-11-07/stillwater-posts-profit-on-processing-recycled-metals-update1-.html

Choy Leng Yeong

Stillwater Mining Co. (SWC) , the only U.S. producer of palladium and platinum, had its most profitable quarter in two years as prices of recycled metals rose and processing increased. Profit was $6.86 million, or 7 cents a share, Billings, Montana-based Stillwater said today in a statement. A year earlier, it had a loss of $9.11 million, or 10 cents a share. Revenue rose 51 percent to $180.8 million as proceeds from processing recycled metals jumped fourfold to $104.2 million. Platinum and palladium are used in catalytic converters to control air pollution. The metals also are used in jewelry. Stillwater ``has been recycling increasing volumes of spent platinum-group metal from automotive catalytic converters and petroleum refiners,'' Chief Executive Officer Francis R. McAllister said in the statement. ``The impressive growth in demand for palladium jewelry, beginning about 30 months ago primarily in China ,'' has become broader based, he said. Shares of Stillwater rose 7 cents to $11.44 in New York Stock Exchange composite trading. They had climbed 22 percent in the past year. Stillwater processed 90,000 ounces of recycled metals through its smelter and refinery, more than double from a year ago. It said it expects the volume for this year to exceed 325,000 ounces, compared with about 203,000 ounces last year. Higher Selling Prices Stillwater sold palladium 4.2 percent higher at an average $370 an ounce, and platinum at $877 an ounce, up 7 percent. The average palladium price in New York rose 74 percent to $327.37 during the quarter while platinum averaged $1,224.91, up 36 percent. Stillwater had locked in palladium and platinum prices in forward contracts to automakers. Production rose 18 percent to 151,300 ounces during the third quarter. The company has two mines that stretch over 28 miles (45 kilometers) in Montana 's Beartooth Mountains. Wildfires in September led the company to close both mines briefly as a precaution. Stillwater estimates the total lost production for 2006 due to the closures at between 7,000 and 10,000 ounces. ``Because mine production generally has been strong this year, this lost output has not resulted in any change to the company's production guidance for 2006,'' McAllister said. ``But the loss is expected to reduce fourth-quarter earnings modestly.'' Cash costs fell 26 percent to $245 an ounce. ``The company does not expect the third-quarter level of total cash costs to be sustainable at current production rates, although total cash costs may likely come in lower than the company's earlier guidance of $300 to $315 per ounce for the full year 2006,'' McAllister said. To contact the reporter on this story: Choy Leng Yeong in Seattle at clyeong@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

2006-11-07 00:00:00 UTC

Russia May Cancel Licenses Held by Unit of BP Venture

http://www.bloomberg.com/news/2006-11-07/russia-may-cancel-licenses-held-by-unit-of-bp-venture-update1-.html

Todd Prince

Russian Prosecutor General Yuri Chaika's office is seeking to cancel extraction licenses held by a unit of BP Plc (BP/) 's local venture, the latest setback for foreign companies in the nation's oil industry. The country's top law enforcement body asked the Federal Subsoil Agency to cancel two licenses held by ZAO Rospan International for ``systematic violations,'' the Prosecutor General's Office said on its Web site today. Nobody at the Subsoil Agency could be reached for comment immediately. Rospan, a subsidiary of OAO TNK-BP Holding (TNBP) , currently produces 2.5 billion cubic meters of the fuel a year and output could rise to 15 billion cubic meters if TNK-BP can reach an accord with the other license holders in the region, including OAO Gazprom, TNK-BP Chief Operating Officer Viktor Vekselberg said in March. Russia has been urging investors in projects led by Royal Dutch Shell Plc, Total SA, Exxon Mobil Corp. and Chevron Corp., as well as TNK-BP, to cede some of the control given to them in the 1990s, when oil prices and government revenue were low. Russia in September threatened to annul a key permit for the Shell-led $22 billion Sakhalin-2 project, citing environmental and safety concerns. The Prosecutor General's Office said today its request to annul the Rospan licenses was filed ``in connection with systematic violations of the law on resources, license conditions, and ecological safety, including the carrying out of works without licenses.'' Rospan, once controlled by OAO Yukos Oil Co., is TNK-BP's second biggest gas project, after Kovykta in eastern Siberia. OAO Yukos Oil Co. sold its 56 percent stake in Rospan to TNK-BP in 2004 to help pay off $30 billion in back taxes and fines levied by the government. TNK-BP spokesman Alexander Shadrin said he couldn't comment on the matter immediately. To contact the reporter on this story: Garfield Reynolds in Moscow at greynolds1@bloomberg.net Todd Prince at To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

2006-11-08 00:00:00 UTC

Qatar Petroleum Offers 980,000 Tons of '07 Condensate

http://www.bloomberg.com/news/2006-11-08/qatar-petroleum-offers-980-000-tons-of-07-condensate-update1-.html

Trisha Huang

Qatar Petroleum , the country's state- run oil and gas company, offered to sell three different types of condensate, totaling 980,000 metric tons, for loading in the year from January, according to offer documents. The refiner offered to load a total of 148,000 metric tons of Al-Khaleej Gas plant condensate liquids in shipments of 18,000 tons in the twelve months from January. The oil is produced at the Al-Khaleej Gas plant operated by Ras Laffen Liquefied Natural Gas Co., or RasGas, a Qatar Petroleum venture with Exxon Mobil Corp. (XOM) Separately, Qatar Petroleum offered to sell 247,000 tons of Qatar Return condensate natural gas liquids in lots of 19,000 tons. The gas liquids are from the natural gas plant operated by Qatar Liquefied Gas Co., or Qatargas, the offer document said. Additionally, Qatar Petroleum invited bids for 585,000 tons of RasGas plant condensate. The refiner asked potential buyers to load the fuel in lots of about 19,000 tons. All the cargoes will load at Ras Laffan port between Jan. 1 and Dec. 31, 2007. Potential buyers were to submit bids against Persian Gulf quotes for naphtha by oil-pricing service Platts, and to keep their bids valid until Nov. 13, according to the documents received by Bloomberg News . Condensate, a type of light oil produced in association with natural gas production, can yield as much as 60 percent of naphtha and gasoline. To contact the reporter on this story: Trisha Huang in Singapore at Thuang14@bloomberg.net . To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net .

2006-11-08 00:00:00 UTC

Russian Stocks Drop; Severstal Slides as Share Sale Falls Short

http://www.bloomberg.com/news/2006-11-08/russian-stocks-drop-severstal-slides-as-share-sale-falls-short.html

Michael Heath

Russian stocks fell from a five-month high, pushed lower by OAO Severstal, after the country's biggest steelmaker by sales raised a less-than-expected $1.06 billion in a public share offering. The dollar-denominated RTS Index lost 0.7 percent to 1663.19 in Moscow, sliding from its highest since May 12. The ruble-based Micex Index fell 0.2 percent to 1477.37. Severstal slid 7.3 percent, or 95 cents, to $12.05. Billionaire owner Alexei Mordashov sold 85 million shares, or 9.1 percent of the company, at $12.50 each. Mordashov had sought to raise as much as $1.89 billion. Russian companies, prompted by a six-year stock market rally, have raised $16.5 billion in share sales this year, one- and-a-half times the amount raised in the previous five years. Mordashov wants to raise Severstal's profile with foreign investors after the company lost out to Mittal Steel Co. in a contest to combine with Arcelor SA earlier this year. OAO Pharmstandard, a drugmaker co-owned by Russia 's richest man Roman Abramovich , said today it's postponing an initial public offering until the first half of next year as it reviews the structure of the sale. OAO Surgutneftegaz, Russia's fourth-largest oil producer, fell 1.7 percent to $1.30, reversing yesterday's 2.7 percent gain. OAO Gazprom, the country's biggest natural-gas producer, declined 1.4 percent to $10.88. OAO Polyus Gold, Russia's biggest producer of the precious metal, fell 1.1 percent to $47, extending yesterday's 1 percent loss. The company said today it completed a $1 billion share buyback at a 35 percent premium. Jenington International Inc., a Polyus unit, bought 17.2 million Polyus shares for $58 each. The price was 35 percent higher that the stock's closing price in Moscow yesterday. Shares of OAO VSMPO-Avisma, the world's biggest titanium producer, advanced 6.9 percent to $249, after adding 5 percent in the previous session. Russian state arms exporter Rosoboronexport completed its purchase of 66 percent of VSMPO-Avisma yesterday. To contact the reporter on this story: Michael Heath in Moscow at mheath1@bloomberg.net To contact the editor responsible for this story: Edward Buckle at ebuckle@bloomberg.net

2006-11-08 00:00:00 UTC

Dynegy Reports Third-Quarter Net Loss of $69 Million

http://www.bloomberg.com/news/2006-11-08/dynegy-reports-third-quarter-net-loss-of-69-million-update6-.html

Edward Klump

Dynegy Inc., owner of power plants in 10 U.S. states, reported a third-quarter loss of $69 million after writing down the value of a Kentucky power plant and recording costs for a debt exchange. The net loss was equivalent to 14 cents a share and compared with net income of $29 million, or 6 cents a share after payment of dividends on preferred stock, a year earlier, Houston-based Dynegy said today in a statement. The per-share profit of 6 cents excluding one-time items fell short of analysts' estimates. ``It's a little bit less than we anticipated,'' said Daniele Seitz , an analyst at Dahlman Rose & Co. in New York who expected Dynegy to earn 8 cents a share. The average estimate from seven analysts surveyed by Thomson Financial was 9 cents. Shares of Dynegy fell 20 cents, or 3.2 percent, to $6.02 in New York Stock Exchange composite trading. The stock, which has three buy ratings from analysts and seven holds, still is up 24 percent for the year. Seitz rates the stock a buy and owns none. The third-quarter results included a $61 million impairment for the reduced value of the 576-megawatt Bluegrass peaking plant in Kentucky because of changes in the market, the company said. Peaking plants are used during periods of strongest power demand. Dynegy also recorded costs of $23 million for the exchange of subordinated debt held by Sithe Energies Inc., which it acquired in November 2004, and $14 million in litigation costs. LS Power Chief Executive Officer Bruce Williamson, 47, sold assets and unwound a failed energy trading business to avoid bankruptcy after the collapse of Enron Corp. in 2001. In September, he agreed to buy plants from LS Power Group for $2.3 billion to expand Dynegy's generating capacity by 69 percent and make the it the third-largest U.S. power producer that doesn't own utilities. Overall sales fell 25 percent to $581 million, the company said. At Dynegy's power-generation business, third-quarter earnings before interest, taxes, depreciation and amortization, or EBITDA, fell to $92 million from $177 million a year earlier because of the plant writedown. The division also was hurt by lower prices, the company said. Midwest Excluding the asset impairment, EBIDTA from power generation in the U.S. Midwest rose 25 percent as the business benefited from financial transactions used to lock in prices, the company said. Dynegy said it will issue its forecast for 2007 earnings on Dec. 13. The acquisition of the LS Power plants will extend Dynegy's operations to 15 states and give it more than 20,000 megawatts of generation, enough to supply 16 million U.S. homes. The transaction is expected to close early next year. Closely held LS Power, based in East Brunswick, New Jersey, will get 40 percent of Dynegy's stock and $375 million in cash and notes for the plants. The companies will create a joint venture to build new plants and expand existing ones. Calpine Corp., which is reorganizing in bankruptcy, is the largest so called independent power producer and NRG Energy Inc. is second largest. (Dynegy held an earnings conference call for investors and analysts at 9 a.m. New York time. A replay is available on the company's Web site at http://www.dynegy.com .) To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net . To contact the editor responsible for this story: Robert Dieterich at rdieterich@bloomberg.net .

2006-11-08 00:00:00 UTC

Namibian Investors Buy Absa's 34% Stake in Capricorn

http://www.bloomberg.com/news/2006-11-08/namibian-investors-buy-absa-s-34-stake-in-capricorn-update1-.html

Vernon Wessels

Namibian investors have bought Absa Group Ltd. (ASA) 's 34.4 percent stake in Capricorn Investment Holdings Ltd., a Windhoek-based financial services company, for an undisclosed amount. Johannesburg-based Absa agreed to sell its stake in Capricorn, which owns banks in Botswana and Zambia, after it sold a controlling stake to Barclays Plc (BARC) , making Absa and Capricorn rivals, Johan Swanepoel, the managing director of Capricorn, said in an e-mailed statement today. The investors weren't identified. Absa, South Africa 's biggest consumer bank, plans to buy nine Barclays units in sub-Saharan Africa, including its operations in Botswana and Zambia, by the end of next year. Capricorn, which owns a controlling stake in Bank Windhoek, the fourth-biggest Namibian bank, opened a bank in Botswana in September and owns a stake in Zambia 's Cavmont Capital Bank. Absa's ``investment in CIH no longer falls in line with its wider African strategy owing to CIH's planned regional expansion program,'' Absa said in a statement to South Africa's stock exchange. Cooperation between CIH, Absa and Bank Windhoek will continue in ``structured finance, syndication of large and complex corporate finance transactions and settlement accounts.'' Absa will have first rights to buy CIH's stake in Bank Windhoek should the company decide to sell it, the company added. To contact the reporter on this story: Vernon Wessels in Johannesburg at vwessels@bloomberg.net Chamwe Kaira in Windhoek via the Johannesburg bureau on pmrichardson@bloomberg.net To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net

2006-11-09 00:00:00 UTC

FirstRand Says Law May Pare Fees by 788 Million Rand

http://www.bloomberg.com/news/2006-11-09/firstrand-says-law-may-pare-fees-by-788-million-rand-update4-.html

Vernon Wessels

First National Bank , the consumer banking unit of FirstRand Ltd. (FSR) , said it may lose as much as 788 million rand ($107.5 million) in fees after South Africa introduces a new credit law to protect consumers next year. The National Credit Act, scheduled to come into effect next June, will limit transaction fees, penalty charges and interest rates that can be charged on loans and credit agreements. The new law is aimed at preventing consumers from being over-indebted and protecting them from reckless lending. ``About 788 million rand in fees will actually be wiped off'' on an annualized basis, Michael Jordaan, chief executive of FNB, said in an interview after an antitrust hearing on bank charges in Pretoria today. FNB, the nation's No. 3 consumer bank, plans to spend between 140 million and 230 million rand in the fiscal year through June, 2007, implementing requirements for the National Credit Act, adding to regulatory compliance costs that amounted to almost a 1 billion rand last year, he said. FirstRand will compensate for the loss in fees by cutting costs, selling new products and providing small loans not backed by assets of less than 10,000 rand, Jordaan said. The company will compete against African Bank Investments Holding Ltd., the No. 1 small-loans provider, Capitec Bank Holdings Ltd. (CPI) , and 9,700 other micro-loans companies, Jordaan said. Shares Fall Shares of FirstRand, South Africa's second-biggest financial services company by market value, fell 22 cents, or 1.1 percent, to 19.58 rand. The six-member FTSE/JSE Africa Banks Index also dropped 1.1 percent. The National Credit Act for the first regulates loans under 10,000 rand, making FirstRand ``more comfortable selling products and services into that market,'' Sizwe Nxasana, the chief executive of FirstRand's banking unit, said. ``It's created an opportunity for us.'' FirstRand will rather keep building its own small loans business through FNB than buy an existing company, he said. ``If there is an opportunity to acquire a book from a micro-lender, and we assessed it, and it's of the kind of quality that we happy with, then we'd certainly do that,'' Nxasana said. Public Hearings South Africa 's competition regulator is holding public hearings into bank charges after a study raised concerns about fees and the lack of competition among the nation's biggest lenders including Johannesburg-based Absa Group Ltd. (ASA) , controlled by Barclays Plc. ``The credit act is introducing enormous amounts of extra administration work and costs into the system at a time when banks are under pressure to cut banking fees,'' said Neville Chester, who helps manage the equivalent of $13 billion at Coronation Fund Managers, including FirstRand, in Cape Town . ``It's limiting their revenue opportunities.'' Banks plan to spend between 150 million rand and 200 million rand each on information technology systems, loans will take longer to be approved and the scrapping of credit history records will limit the ability of banks to provide customers with competitive interest rates , he said. Fees and penalties charged by the nation's banks are hitting the poor the hardest and deterring them from saving in a nation where less than half the adult population, or about 13 million people, don't have bank accounts, Gabriel Davel, the national credit regulator, told the inquiry on Nov. 3. Scrap Fee FNB is proposing that all South African banks scrap a fee that customers are charged for using another lender's automatic teller machine, Jordaan said. A customer who uses another bank's automated teller machine is typically charged a transaction fee and the so-called SASWITCH fee to their bank, which then pays a portion to the bank that owns the machine. A change may cost FNB as much as 140 million rand a year, and save customers of South African banks more than 500 million rand a year. To contact the reporter on this story: Vernon Wessels in Johannesburg at vwessels@bloomberg.net To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Katherine Snyder at ksnyder@bloomberg.net

2006-11-09 00:00:00 UTC

China Stocks Will Rise 30% in 2007, ABN Amro Predicts

http://www.bloomberg.com/news/2006-11-09/china-stocks-will-rise-30-in-2007-abn-amro-predicts-update1-.html

Zhang Shidong

China's stock market will rally as much as 30 percent next year as surging exports boost profits and a strengthening yuan encourages overseas speculative capital to buy properties, according to ABN Amro Teda Fund Management Co. Machinery makers, banks and property developers are likely to lead gains, Liu Qingshan, chief investment officer at the Beijing-based firm, said yesterday at a conference in Shanghai. He didn't name specific stocks. ``The market gain may range between 20 percent and 30 percent next year,'' said Liu. ``The themes of rising exports and the yuan revaluation will continue to prop up the market.'' Both the Shanghai Composite Index and the Shenzhen Composite Index have jumped 63 percent this year, making them the best-performing benchmarks in the Asia-Pacific region. The measures are at the highest they've been in more than five years. The Shanghai Composite, which tracks yuan-denominated A shares and foreign-currency B shares, rose 29.67, or 1.6 percent, to 1896.48 at the 3 p.m. close today. The Shenzhen Composite, which tracks the smaller of China's two stock exchanges, gained 5.39, or 1.2 percent, to 455.04. Beijing-based ABN Amro Teda is a venture between ABN Amro Holding NV, the largest Dutch bank, and Tianjin Teda Investment Holding Co., an investment arm of the Tianjin government. The company manages six funds with about 9 billion yuan ($1.1 billion) of assets. Machinery Play Machinery manufacturers will sustain their earnings growth next year as overseas sales increase and economic expansion at home spurs local demand, Liu said. ``The valuation of machinery stocks isn't high and they will face a revaluation,'' he said. ``China's machinery makers have the edge over technology and costs'' against foreign rivals. Exports are expected to account for as much as 50 percent of total sales of China's machinery industry over the next five years, up from 20 percent, according to Orient Securities Co., the country's eighth-largest brokerage in terms of assets. China 's trade surplus surged to a record $23.8 billion last month, according to the customs bureau. Some machinery manufacturers have already jumped this year on improved earnings. Yuan-denominated shares of Shanghai Zhenhua Port Machinery Co., the world's biggest maker of container cranes, have more than doubled this year. Net income for the three months through Sept. 30 rose 34 percent from a year ago. Sales will jump 50 percent this year, said President Guan Tongxian at a conference last month. Faster Growth Shares of Changsha Zoomlion Heavy Industry Science & Technology Development Co., a manufacturer of construction machinery, have advanced 107 percent this year. Third-quarter profit climbed 66 percent, the company said last month. China's economy , which overtook the U.K. as the world's fourth largest last year, expanded by 10.4 percent in the third quarter after growing 11.3 percent in the previous three months. Expectations of a stronger Chinese yuan will continue to lure speculative money and push up domestic property prices, benefiting listed real-estate developers, Liu said. Government measures to rein in property prices that have more than doubled since 2000 don't seem to be working, he said. ``No matter how the government cracks down on the property market , the upside trend cannot be reversed amid the backdrop of the yuan's revaluation,'' said Liu. Banking Stocks China Vanke Co., the nation's biggest property developer, last month said profit in the three months to September more than doubled on a 20 percent rise in property prices in the southern city of Shenzhen during the quarter. Shares of Vanke have doubled this year. Poly Real Estate Group Co., China's largest state-owned developer, said last month third-quarter profit rose more than fivefold as housing sales increased. The stock has surged 128 percent since its debut in July. Banking stocks are also among Liu's investment options as lenders are expected to run more diversified financial businesses, such as setting up asset management units. ``That will act as a catalyst for lenders,'' he said. Liu said he will also allocate some of his funds to consumer, steelmaking and power stocks next year. ABN Amro Teda is marketing an equity fund that will allocate as much as 95 percent of its assets to stocks. The company plans to raise as much as 5 billion yuan from the new fund, Chief Executive Walter Lin said in an interview on Nov. 2. The mainland fund industry was worth 511.4 billion yuan on June 30, an increase of 9 percent from the end of last year, according to China Galaxy Securities Co., the country's second- largest brokerage by assets. To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net To contact the editor responsible for this story: James Regan at jregan8@bloomberg.net

2006-11-09 00:00:00 UTC

Vale Third-Quarter Net Profit Rises 47% on Ore Price

http://www.bloomberg.com/news/2006-11-09/vale-third-quarter-net-profit-rises-47-on-ore-price-update1-.html

Jeb Blount

Cia. Vale do Rio Doce, the world's largest iron-ore producer, said third-quarter profit rose 47 percent to a record after it raised iron-ore prices 19 percent from a year ago and beefed up output from its mines. `Consolidated net income at the Rio de Janeiro-based company rose to 3.97 billion reais ($1.85 billion), or 1.64 real a share, from 2.71 billion reais, or 1.18 real, a year earlier. Net sales rose 27 percent to 11.23 billion reais in the quarter from 8.82 billion reais in the third quarter of 2005. Chief Executive Officer Roger Agnelli , 47, is preparing for talks with customers, led by Chinese steelmakers, that are expected to begin this month. On Oct. 5 he said world ore demand outstrips supply and that without increased revenue for mine expansion, steelmakers face shortages. Rising costs for energy and mine equipment are also making growth more expensive. ``We believe the company will show strong profit in the third quarter,'' said Cristiane Viana, steel and mining analyst with Agora CTVM, Brazil 's largest stock brokerage, in Rio de Janeiro . ``We believe that the company's results will principally reflect the increase in the volume of sales of iron ore and the impact of higher mineral prices.'' Viana said she expected profit of 3.57 billion reais in the quarter and net sales of 10.35 billion reais. Vale preferred shares were little changed, rising 1 centavo to 48.49 reais in Sao Paulo trading. Vale has gained 16 percent while the Bovespa index of the 55 most-traded stocks on the Sao Paulo stock exchange, of which Vale is part, rose 24 percent. Other Metals Vale's profit also benefited from expansion and higher prices for its other metals and minerals such as bauxite and alumina, two of the main ingredients in aluminum, said Elaine Rabelo, steel and mining analyst at Coinvalores CCVM, a Sao Paulo stock brokerage. ``We expect firm results from the strong prices the company has been able to charge for iron-ore and alumina,'' Rabelo, who expects a third quarter profit of 3.9 billion reais. ``With aluminum-related businesses bringing in about 10 percent of revenue and high world prices for nickel, the importance of products other than iron-ore should increase.'' Vale purchased Canada 's Inco Ltd., the world's second- largest nickel producer on Oct. 24. When it finishes buying all the outstanding stock of the company, the purchase is expected to cost about $17 billion. Inco results were not included in the third-quarter results. Profit growth was restrained by the stronger real, which rose more than 7 percent gain against the dollar from a year a year earlier, said Rabelo. The currency gain has sliced an average of 16 million reais of revenue from each $100 million of company exports in the last year. To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net To contact the editor responsible for this story: Laura Zelenko in New York at lzelenko@bloomberg.net

2006-11-10 00:00:00 UTC

Evraz's Raspadskaya Raises $317 Million in Share Sale

http://www.bloomberg.com/news/2006-11-10/evraz-s-raspadskaya-raises-317-million-in-share-sale-update2-.html

Samantha Shields

OAO Raspadskaya, among the world's 10 biggest coking-coal producers, raised $317 million in a share sale as Russian stock offerings this year climb to a record. Raspadskaya sold 140.8 million shares, or 18 percent of its stock, at $2.25 apiece, valuing the company at $1.76 billion, according to an e-mailed statement received today. Credit Suisse Group, Deutsche UFG and Morgan Stanley managed the transaction. Appetite for Russian share offerings may be waning after more than $16.5 billion of sales this year, 50 percent more than in the previous five years combined. Raspadskaya, 50 percent owned by Russia's biggest steelmaker, Evraz Group, in which billionaire Roman Abramovich has a 40 percent stake, was valued by the sale arrangers at between $1.6 and $2.2 billion. ``It was expensive because it's not diversified and we expect coking coal prices to fall,'' Kyrill Chuiko, a metals analyst at UralSib in Moscow, said in a telephone interview. ``They obviously convinced investors their profits will rise because it was a successful sale.'' Prices for Russian coking coal, which rose to an all-time high of $80 a metric ton in 2005, may drop as much as 19 percent to an average $60 a ton this year and another 10 percent in 2007, according to Chuiko. Shares of Raspadskaya began trading on Moscow's Russian Trading System at noon local time and had fallen 5.3 percent to $2.13 by 4:32 p.m. local time. They are listed solely on the Russian exchange, the first time a major company from the country has chosen not to list shares abroad. Offerings Soar Russian share offerings have soared after a six-year stock market rally. OAO Severstal, the nation's biggest steelmaker, sold $1.06 billion of stock two days ago. OAO Rosneft, Russia 's state oil company, raised $10.4 billion on July 14 in Europe 's biggest initial public offering in seven years. Raspadskaya's is the first by a Russian coal miner. Raspadskaya, based in the west Siberian region of Kemerovo, plans to mine 10.4 million tons of coking coal next year, rising to 17 million tons by 2010, according to Credit Suisse. The coalminer's audited reserves are enough to last 72 years at current output levels, the bank said, citing the Australasian Joint Ore Reserves Commission, or JORC. Net income rose 30 percent to $166 million last year on sales of $541 million. More than 95 percent of Raspadskaya is owned by Corber Enterprises Ltd., in which Evraz and Raspadskaya management each own 50 percent. Extracting coal costs Raspadskaya about $19 a ton, according to Deutsche Bank AG, about a third cheaper than the Russian industry average. To contact the reporter on this story: Samantha Shields in Moscow at sshields2@bloomberg.net To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

2006-11-10 00:00:00 UTC

Mills Sets Shareholder Meeting After Gazit-Globe Sues

http://www.bloomberg.com/news/2006-11-10/mills-sets-shareholder-meeting-after-gazit-globe-sues-update2-.html

Sharon L. Crenson

Mills Corp., a U.S. mall developer struggling to build a $2 billion shopping and entertainment complex in New Jersey, set its annual shareholder meeting for next month after an investor sued the company on the matter. The meeting is planned for Dec. 21, Chevy Chase, Maryland- based Mills said today in a statement. It may be moved to the last week of December if Mills isn't able to complete the proxy solicitation process by Dec. 21. Gazit-Globe Ltd. (GLOB) , which owns a 9.7 percent stake in Mills, sued in Delaware on Nov. 8 and warned Mills not to pursue a sale. Gazit said it wants the meeting to air its own proposal to invest as much as $1.2 billion in Mills and to propose a new slate of directors. In its statement today, Mills said its board planned the meeting before Gazit's suit. In August, Mills said it was out of money for the 104-acre project known as the Meadowlands Xanadu. The company invested $380 million so far in a complex that is supposed to include a luxury hotel, office buildings, runway fashion shows, fine dining and the U.S.'s first snow dome for indoor skiing. It's designed to be 600,000 square feet bigger than Mall of America in Bloomington, Minnesota , the largest U.S. mall. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are advising Mills on a possible sale and the company has attracted interest from ``very substantial players in the industry,'' Mills Chief Executive Officer Mark Ordan said in an interview Nov. 8. Gazit's actions show it's seeking an ``inside track'' on buying Mills, Ordan said. To contact the reporter on this story: Sharon L. Crenson in New York at screnson@bloomberg.net . To contact the editor responsible for this story: Rob Urban at robprag@bloomberg.net .

2006-11-10 00:00:00 UTC

Wheeling-Pittsburgh Union Files to Block CSN Deal

http://www.bloomberg.com/news/2006-11-10/wheeling-pittsburgh-union-files-to-block-csn-deal-update2-.html

Christopher Donville

A union representing workers at Wheeling-Pittsburgh Corp. filed a grievance to block the steelmaker's merger with Brazil 's Cia. Siderurgica Nacional SA and said it favors a hostile offer made by Esmark Inc. Under a collective bargaining agreement, Wheeling-Pittsburgh may not enter into a transaction that changes control of the company without the union's consent, Dave McCall, district director for the United Steelworkers, said in a Nov. 9 letter to James Bradley, the company's chief executive officer. ``While we did not want to take this step, the company has left us no choice,'' McCall wrote. Wheeling-Pittsburgh, which posted a net loss of $33.8 million last year, is seeking a cash infusion to help cut $398 million of debt that the company has failed to reduce since emerging from bankruptcy in 2003. Steel producers are merging to reduce operating costs and increase bargaining power with buyers at a time of rising demand and prices. Jim Kosowski, a spokesman for Wheeling, West Virginia-based Wheeling-Pittsburgh, did not immediately return a call seeking comment. Wheeling-Pittsburgh said Oct. 25 it signed a final deal to hold 50.5 percent in a new company to be formed with Cia. Siderurgica Nacional. Under the agreement, CSN would invest $225 million and add its steel processing facility in Terre Haute, Indiana , to the new business. Reverse Takeover Esmark, a Chicago-based steel distributor, has proposed a reverse takeover that would raise as much as $200 million by selling shares of Wheeling-Pittsburgh to existing shareholders, including Tontine Management LLC, a hedge fund run by Jeffrey Gendell. Tontine owns 9.5 percent of the shares and has said it favors a deal with Esmark. Wheeling-Pittsburgh and Esmark have proposed rival slates of directors that will be voted on by shareholders at the annual meeting Nov. 17. Esmark Chief Executive Officer Jim Bouchard said in an interview that the letter shows how concerned the union is about the proposed deal with CSN. ``The current board has taken the company in the direction of a transaction it cannot consummate,'' Bouchard said. Shares of Wheeling-Pittsburgh rose 3 cents to $18 at 4 p.m. in Nasdaq Stock Market trading. The stock has gained 98 percent in the past year. Rio De Janeiro-based CSN fell 1.6 percent to 67.16 reais in Sao Paulo. CSN has gained about 55 percent in the past year. Esmark, which is privately held, wants to be bought by Wheeling-Pitt for about $273 million and then merge the two companies. It also has a loan agreement for $350 million from banks led by J.P. Morgan Chase. To contact the reporter on this story: Christopher Donville in Vancouver at pmckiernan@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

2006-11-13 00:00:00 UTC

Sacyr Shares Post Record Gain as Roads Boost Earnings

http://www.bloomberg.com/news/2006-11-13/sacyr-shares-post-record-gain-as-roads-boost-earnings-update3-.html

Joao Lima

Shares of Sacyr Vallehermoso SA (SYV) , Spain 's fifth-biggest construction company, had their sharpest-ever gain after the company reported a 38 percent jump in third-quarter operating profit on increased orders for homes and roads. The stock closed up 7.13 euros, or 15 percent, at 54 euros, the highest since the company was formed in 2003. Shares of Sacyr have almost tripled in price this year for a market value of 15.4 billion euros ($20 billion). Sacyr gained building work as home sales rose by almost a third in the nine months through September and Spain introduced a 249 billion-euro plan to upgrade roads and railways. The company also expanded in France via a stake in builder Eiffage SA (FGR) and invested in toll roads and waste management to tap industries with steadier returns than construction. ``Earnings were quite good and domestic construction remains strong,'' said Marta Olba, an analyst at Banesto Bolsa in Madrid with an ``underweight'' rating on Sacyr shares. Earnings before interest, tax, depreciation, and amortization, or operating profit, rose to 254.1 million euros in the period. Revenue increased 31 percent to 1.11 billion euros. ``All business areas are having a very good year,'' Ana de Pro, Sacyr's managing director for corporate development, said on a conference call. ``The outlook for 2007 is good.'' Net Income Declines Net income fell 8.6 percent to 102.2 million euros after the company didn't repeat a year-earlier gain of 83.8 million euros from selling wind-energy assets in Portugal . Third-quarter figures were derived by subtracting first-half numbers from nine-month results published today on the Web site of Spain's market regulator. Banesto Bolsa's Olba said the stock price's rise ``is because of a very low free float and the level of shares borrowed is very high.'' Shares of Sacyr have advanced for nine straight trading sessions, boosting the company's value by 35 percent. Banesto Bolsa's Olba said gains have been aided by the company's low free float, with 75 percent of the stock controlled by board members, and by the settlement of ``short'' positions. People who sell short hope to profit by repurchasing securities later at a lower price and returning them to the holder, from whom they were borrowed. A Sacyr spokesman said he didn't know of any further reason for the stock's gain today and that the company isn't in talks about being taken over. To contact the reporter on this story: Joao Lima in Madrid at jlima1@bloomberg.net . To contact the editor responsible for this story: Chris Jasper at cjasper@bloomberg.net .

2006-11-13 00:00:00 UTC

Baltika Nine-Month Profit Gains 35%; Shares Advance

http://www.bloomberg.com/news/2006-11-13/baltika-nine-month-profit-gains-35-shares-advance-update3-.html

Maria Ermakova

OAO Baltika Breweries, Russia 's largest beer company, said nine-month profit rose 35 percent after acquisitions of three local competitors, sending the shares to their biggest gain in eight months. Net income climbed to 260.6 million euros ($335 million) as revenue reached 1.34 billion euros, the St. Petersburg-based company said today in an e-mailed statement that didn't give year-earlier figures for revenue. Operating profit increased 46 percent to 354.4 million euros. Baltika, which is jointly controlled by Carlsberg A/S and Scottish & Newcastle Plc, in July completed takeovers of brewers Pikra, Vena and Yarpivo, giving it respective 92 percent, 97.5 percent and 91.4 percent stakes. The company, which controls 36 percent of Russia's beer market, will own 10 plants in nine regions of the country after the merger closes this year. ``The so-called cross-brewing allowed it to use the plants' full capacity and widen its distribution network,'' Ivan Nikolayev, an analyst at Renaissance Capital in Moscow with a ``buy'' recommendation on Baltika, said of the company. The shares rose 45.60 rubles, or 4.3 percent, to 1,110.25 rubles on the Micex Stock Exchange at the close of trading in Moscow, reaching the highest since April 21 and posting the biggest one-day gain since March 16. Excise Stamps The company increased the amount of beer it sold by 8.8 percent to 28.2 million hectoliters (23.6 million barrels) in 2006's first nine months, in line with the market's 9 percent expansion. One hectoliter equals 100 liters. Third-quarter sales surged as excise stamps were introduced for imported spirits and wine in Russia, slowing sales of those products, Baltika said. The disruption allowed the company to raise sales 15 percent in the period, while total beer sales in Russia climbed 14 percent. Baltika also said it has raised its share of Russia's licensed beer segment by 2.2 percent to 22 percent. Sales of beer more than doubled under each of the Tuborg, Foster's and Kronenbourg 1664 brands. Baltika's share of the Russian market for premium beers rose to 44 percent. The company raised the amount of beer it exported by 12 percent to 1.3 million hectoliters in the year's first nine months. Sales in Ukraine gained 17 percent, lifted by the beginning of licensed production of Baltika beer by Ukrainian company Slavutich at the beginning of the year. Planned Expansion ``To keep their market share, they need to rise faster than the market,'' Nikolayev said. ``They are building new facilities and widening geographical coverage, and that is positive.'' Baltika has said it plans to spend $125 million to triple capacity at its Samara plant in central Russia to add 4.5 million hectoliters to overall annual capacity of 40 million. This year it has doubled capacity at a plant in Chelyabinsk in the Urals to 4.5 million hectoliters, spokesman Alexei Kedrin said today in a telephone interview from St. Petersburg. The company is considering constructing a brewery in Novosibirsk and will make a decision within two months, Kedrin said, citing Baltika President Anton Artemiev. The plant, to be completed by spring 2008, will have annual capacity of at least 2 million hectoliters and will cost at least 70 million euros. To contact the reporter on this story: Hannah Gardner in Moscow at hgardner3@bloomberg.net ; Maria Ermakova in Moscow at mermakova@bloomberg.net . To contact the editor responsible for this story: Keith Campbell at k.campbell@bloomberg.net .

2006-11-13 00:00:00 UTC

EU Outlines Expansion of Emissions Trading After 2012

http://www.bloomberg.com/news/2006-11-13/eu-outlines-expansion-of-emissions-trading-after-2012-update1-.html

Jonathan Stearns

The European Union outlined ways to widen its system for trading air-pollution credits, seeking to break the international deadlock over climate change. The EU said it may cap power plant and factory pollutants in addition to carbon dioxide and create links to countries such as the U.S. starting in 2013. New gases to be covered might include methane from coal mines and nitrous oxide from ammonia production. ``Climate change is the gravest challenge facing mankind and emissions trading is the most effective policy instrument for tackling it,'' EU Environment Commissioner Stavros Dimas said in a statement today in Brussels. ``The better its design, the easier it will be for other countries to adopt similar policies.'' The 25-nation EU wants global limits on emissions of gases such as carbon dioxide blamed for higher world temperatures, rising sea levels and more frequent heat waves, floods and storms. Poor nations say rich ones should lead the way with emissions cuts, while the U.S. says the refusal of developing countries to take part makes its participation too costly for American companies. EU Quotas The EU last year introduced carbon-dioxide quotas on 11,400 power plants and factories. Under the system covering companies such as German utility RWE AG (RWE) and British steelmaker Corus Group Plc, businesses that exceed their limits must buy permits from companies that emit less or pay a penalty. The system is part of an EU pledge under the global Kyoto Protocol to reduce greenhouse-gas emissions 8 percent in 2008- 2012. Existing caps cover an initial period from 2005 through 2007 and new allowance grants will be for 2008-2012. The EU says pollution-permit trade may facilitate a global accord to cut greenhouse gases after Kyoto expires in 2012. The 141-nation treaty doesn't impose reduction targets on developing countries where emissions are growing and is opposed by the U.S., the world's biggest polluter. EU cuts would have little impact without reductions elsewhere because the bloc's share of global emissions will fall to less than 10 percent in the coming decades, according to the European Commission. Carbon Trading ``The EU is committed to a global carbon market,'' the commission, the EU's regulatory arm, said in a strategy paper. ``The EU emissions-trading scheme is already a key driver of international carbon trading and provides a solid foundation for a global carbon market.'' The commission is talking about emissions trading with countries including China , Russia , Brazil and Norway and earlier this year endorsed the idea of linking the system to California after an accord between U.K. Prime Minister Tony Blair and California Governor Arnold Schwarzenegger. In today's paper, which goes to EU lawmakers and a working group for more analysis, the commission also mentions possible connections to northeastern U.S. states and Australian states that are planning emissions-trading systems. The commission said it is ``committed'' to continued EU recognition after 2012 of emissions credits allowed under Kyoto for energy-efficient projects in developing and other countries. It said ``regulatory certainty is important for companies.'' Slumping Prices The strategy paper comes as the commission tries to restore investor confidence after a price slump this year when it emerged companies had a surplus of permits from national governments in 2005. The surplus prompted the price of EU permits for 2006 to halve to about 15 euros ($19) a metric ton in mid-May from an April high. The drop in the price, which is now about 8 euros a ton for 2006, raised questions about how strict the commission will be in limiting allowance grants in 2008-2012. The price of permits for delivery in 2008 is about 16 euros a ton. The commission's paper also calls for an alignment across the EU of the types of installations covered and more ``robust'' compliance with the rules and enforcement of them. The paper says it may be necessary to establish an EU accreditation process for organizations that verify emissions reports by companies. In addition, the strategy paper mentions the possibility of setting a single EU-wide cap after 2012 rather than separate national caps. The review excludes plans to add airlines to the system because the commission is drafting separate legislation on this matter. The EU could impose emissions caps on airlines from ``about 2010'' after legislation is proposed in December, Dimas said last week. To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net To contact the editor responsible for this story: Edward Buckle at ebuckle@bloomberg.net

2006-11-13 00:00:00 UTC

Malone's Starz Unit to Form New Film Studio Overture

http://www.bloomberg.com/news/2006-11-13/malone-s-starz-unit-to-form-new-film-studio-overture-update3-.html

Cecile Daurat

Billionaire John Malone plans to start his own motion-picture studio through the Starz cable- television unit, budgeting as much as $360 million a year for his first foray into movie-making. Overture Films will distribute eight to 12 live-action films a year, with budgets of $10 million to $30 million, Chief Executive Officer Chris McGurk said in an interview. Overture may release the first between March and May. Malone chose to create his own studio after his bid to buy Universal Pictures fell through in 2003. He's venturing into the business as larger rivals such as Walt Disney Co. trim payrolls and distribute fewer films to save money. The new studio is a departure from Starz's traditional TV business. ``It's a good way for them to diversify their pipeline,'' said Andrew Baker, a Cathay Financial analyst in New York, who rates Liberty Capital shares ``neutral.'' The purchase also may help Starz cut costs to buy films as it competes with CBS Corp.'s Showtime and Time Warner Inc.'s HBO , he said. Shares in Liberty Capital fell 4 cents to $89.56 as of 4 p.m. New York time in Nasdaq Stock Market composite trading. They've gained 28 percent since the tracking stock started trading in May. Disney, based in Burbank , California , said in July it would cut 20 percent of its film unit's workforce and put out 10 Disney features and two to three Touchstone ones a year, down from as many as 16 under the two brands a year earlier. That leaves room for smaller studios such as Overture to gain a share of the market, McGurk said. Room for Overture ``There's an opportunity for a new distributor to set up shop,'' McGurk said in a telephone interview. The executive, a former chief operating officer of Metro-Goldwyn-Mayer Inc., joined Starz as a senior adviser in August when the company acquired animated-film company IDT Entertainment Inc. He pitched the idea for Overture to Starz executives and Malone. Malone made a fortune building up Tele-Communications Inc. into the second-largest U.S. cable-TV operator before selling it in 1999. In May, he separated his Liberty Media businesses into two tracking stocks. Overture's new chief operating officer, Danny Rosett, also worked for MGM. Overture will produce a mix of movies similar to the MGM ones McGurk and Rosett helped put out, such as ``Hotel Rwanda,'' ``Capote,'' ``Barbershop'' and ``Legally Blonde,'' Rosett said. Overture is at least the third attempt to create or revamp a movie studio in the past year, along with the Weinstein brothers' film company and Tom Cruise's plan to revive United Artists. To contact the reporter on this story: Cecile Daurat in New York at cdaurat@bloomberg.net . To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net .

2006-11-14 00:00:00 UTC

CSN Boosts Wheeling-Pittsburg Bid to Rival Esmark

http://www.bloomberg.com/news/2006-11-14/csn-boosts-wheeling-pittsburg-bid-to-rival-esmark-update5-.html

Choy Leng Yeong

Cia. Siderurgica Nacional, Brazil 's third-biggest steelmaker, sweetened its merger proposal for Wheeling-Pittsburgh Corp. to counter an opposing hostile bid from Esmark Inc. and objections from some investors. CSN said it will pay $50 million to the combined company, reduce its convertible debt and increase a payout on depositary shares to $32 from $30. Investors can back the deal by re-electing Wheeling-Pittsburgh directors at the annual meeting Nov. 17, Rio De Janeiro-based CSN said today in a statement. CSN Chief Executive Officer Benjamin Steinbruch has sought to buy mills in the U.S. and Europe to produce finished steel products that are more profitable because they avoid import tariffs. Wheeling-Pittsburgh, which has a market value of $283 million, said today its board endorsed the new CSN bid. ``We have addressed each aspect of offer, and have improved each component significantly,'' Marcos Lutz, CSN managing director for infrastructure and energy, said in the statement. ``Wheeling-Pittsburg shareholders will have more hard value, more options, more control and a stronger combined company.'' Shares of Wheeling, West Virginia-based Wheeling-Pittsburgh, which has rejected an unsolicited proposal by steel distributor Esmark, rose 74 cents, or 4.1 percent, to $18.98 in Nasdaq trading. The stock has more than doubled in the past year. CSN rose 1.5 reais, or 2.2 percent, to 68.9 reais in Sao Paulo. Esmark Bid Esmark Chairman and Chief Executive Officer James P. Bouchard said his Chicago-based company has no plans to counter with a higher offer. ``Obviously with our $20-per-share offer, we're not going to increase it,'' Bouchard said in an interview. He estimated the value of CSN's bid at $17.50 today, up from its previous offer of $16. ``We still have a superior offer on the table,'' Bouchard said. ``We talked to shareholders today. The shareholders view this offer as less than our offer, so the votes are still staying with us.'' Esmark has the support of the Wheeling-Pittsburgh union, which owns about 14.7 percent of the company, Bouchard said. Hedge-fund manager Jeffrey Gendell, who owns about 9.5 percent of Wheeling-Pittsburgh, has said he favors an Esmark deal. A union representing workers at Wheeling-Pittsburgh filed a grievance last week to block the CSN transaction. Boost Capacity Merging North American operations with Wheeling-Pittsburgh, which emerged from bankruptcy in 2003, would increase CSN's output capacity for rolled products in the U.S. fourfold from about 1 million tons at a Terre Haute, Indiana-based mill. ``The proposed combination of Wheeling-Pittsburgh with CSN's North American assets creates a strong company that is uniquely positioned to be successful in the U.S.,'' Wheeling-Pittsburgh Chief Executive Officer James G. Bradley said today in a statement. ``I believe, as does our Board of Directors, that CSN is the right partner for our shareholders, our company, our employees and our steel communities.'' Gendell declined to comment. Lutz of CSN didn't immediately return calls. CSN in August agreed to buy 49.5 percent of Wheeling-Pittsburgh and invest $225 million of cash in a new company. Under the original proposal, CSN would have the option to convert the investment into 11.8 million shares in three years, boosting its stake to about 65 percent. Wheeling-Pittsburgh earlier this month reported a third-quarter profit of $17 million on higher steel prices after a year-earlier loss. The company forecast a loss in the fourth quarter because of higher imports and slumping demand. To contact the reporter on this story: Carlos Caminada in Sao Paulo at ccaminada1@bloomberg.net ; Choy Leng Yeong in Seattle at clyeong@bloomberg.net To contact the editor responsible for this story: Laura Zelenko at lzelenko@bloomberg.net ; Steve Stroth at sstroth@bloomberg.net

2006-11-14 00:00:00 UTC

Temasek Acted in Accordance to Thai Laws on Shin

http://www.bloomberg.com/news/2006-11-14/temasek-acted-in-accordance-to-thai-laws-on-shin-update1-.html

Chan Sue Ling

Singapore said the purchase of Thailand's Shin Corp. by investors led by Temasek Holdings Pte was in accordance with the laws of the kingdom. ``Temasek undertook appropriate due diligence to ensure that it was in compliance with Thai laws and regulations,'' and ``it was not a reckless investment,'' Tharman Shanmugaratnam, Singapore's second minister for finance, said in parliament today. The purchase ``was a clean transaction.'' Probes into the sale of Shin to a group led by Temasek, a Singapore state-owned investment company, earlier this year have scared off investors, who are concerned long-practiced ownership structures using Thai nominees will be declared illegitimate by the country's government, which was appointed after a coup in September. Thailand will amend foreign investment and nominee laws in about 60 days and stop ``turning a blind eye'' to deals that may contravene rules, the country's Commerce Minister Krirk-krai Jirapaet said Nov. 10. Temasek and Thai nominee companies bought 96 percent of Shin, owner of Thailand's biggest mobile-phone company, from investors, including the family of former Prime Minister Thaksin Shinawatra. The deal exacerbated protests and a political stalemate in Thailand that led to Thaksin's ouster in a coup in September. Shanmugaratnam said the government isn't in favor of intervening in any way or setting guidelines when it comes to state-owned companies such as Temasek and Government of Singapore Investment Corp. investing abroad. ``Temasek made its own commercial decision,'' Shanmugaratnam said. ``What matters to the government is that Temasek should have a good governance framework, rigorous decision making processes and regular performance evaluation. I can assure the house that these are in place.'' To contact the reporter on this story: Chan Sue Ling at slchan@bloomberg.net To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net

2006-11-15 00:00:00 UTC

N.Z. Oil & Gas Gets NZ$135 Million Loan, Sells Shares

http://www.bloomberg.com/news/2006-11-15/n-z-oil-gas-gets-nz-135-million-loan-sells-shares-update2-.html

Gavin Evans

New Zealand Oil & Gas Ltd. (NZO) , a partner in the country's Kupe gas field, has arranged a NZ$135 million ($89 million) loan to fund its share of the offshore project. The loan from Westpac Banking Corp. includes a NZ$10 million credit line to support contractor guarantees, the company said. It also raised NZ$17.5 million selling shares and options to local institutions and will seek NZ$23 million from shareholders through a rights offer, New Zealand Oil & Gas said in a statement. Kupe, the nation's largest undeveloped gas field, is the largest of three projects worth NZ$1.5 billion New Zealand Oil & Gas has stakes in and needs to fund. The NZ$980 million Kupe project will receive a further NZ$25 million equity injection from New Zealand Oil & Gas, the company said today. ``These financings will fully fund the company's budgeted share of the Kupe development costs,'' Chairman Tony Radford said in a statement.'' New Zealand Oil & Gas shares fell 3 cents, or 2.9 percent, to NZ$1 at the 5 p.m. close of trading in Wellington. Institutions paid NZ$1 for the new shares and options. Existing shareholders will be offered the chance to buy one share with options for every 10 held at the same price, the Wellington- based company said. N.Z. Oil & Gas owns 15 percent of Kupe. It owns 12.5 percent of the $225 million Tui oil project being developed off the country's Taranaki coast, and 61 percent of the NZ$144 million Pike River coal mine on the country's South Island . Shares in Pike River will be offered publicly in February and N.Z. Oil & Gas holders will be entitled to a ``substantial portion'' of the sale at a rate of one Pike share for every eight oil and gas shares held, the company said. To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net

2006-11-16 00:00:00 UTC

Nationwide Profit Jumps 33% Amid `Fierce' Competition

http://www.bloomberg.com/news/2006-11-16/nationwide-profit-jumps-33-amid-fierce-competition-update1-.html

Ben Livesey

Nationwide Building Society , the U.K.'s biggest customer-owned lender, said first-half profit jumped 33 percent as it regained market share amid ``fierce'' competition for mortgages. Net income advanced to 233.4 million pounds ($440.87 million) in the six months to September 30, from 175.3 million pounds in the year-earlier period, the Swindon, South East England-based lender said today in a statement. Nationwide's net share of the British mortgage market rose to 10.5 percent from 8.3 percent. Nationwide will become Britain's second-biggest mortgage bank after it completes the $934 million takeover of Portman Building Society. Last year, Nationwide deliberately ``stepped back'' from mortgages amid concerns that U.K. borrowers were taking on too much debt, Finance Director Graham Beale said in an interview. ``We got the call wrong so we wanted to get back our market share,'' said Beale, who becomes chief executive officer in April. ``We feel very comfortable with the state of the market.'' Nationwide had 13.7 percent of U.K. mortgages at the end of the first half of 2004. Portman's members still must approve the takeover, which would help Nationwide leapfrog Santander Central Hispano SA's Abbey National and Lloyds TSB Group Plc in the U.K.'s market for home loans, trailing only HBOS Plc. Net mortgage lending jumped 50 percent to 5.9 billion pounds in the first half as the U.K housing market strengthened and the company priced its loans more competitively, he said. Personal Loans Nationwide is maintaining a ``low risk'' profile for its new lending amid ``fierce'' competition for mortgages, the bank said. U.K. mortgage lenders are trying to grow market share and improve cost controls amid increasing competition and rising interest rates that threaten to damp U.K. home loan demand. Personal loans fell 14 percent to 600 million pounds reflecting a ``cautious approach'' as bad debts rose, Nationwide said. Impairment losses on loans that may not be repaid increased 63 percent to 56.3 million pounds. The number of Nationwide credit cards in issue rose 20 percent to 1.1 million, the bank said. Beale, who succeeds Philip Williamson as CEO in April, said the company is ``totally committed'' to maintaining its customer-owned status after the purchase of Portman. Buying Portman will add wealth-management services to Nationwide's consumer banking business, which offers mortgages, checking and savings accounts as well as credit cards. The new company will have more than 150 billion pounds of assets and 13 million customers, Nationwide said Sept. 12. Acquisitions give Nationwide the scale to compete with rivals such as Alliance & Leicester Plc and HBOS, Beale said. ``It is going to be a good second half,'' he added. To contact the reporter on this story: Ben Livesey in London blivesey@bloomberg.net To contact the editor responsible for this story: Frank Connelly fconnelly@bloomberg.net ; Katherine Snyder ksnyder@bloomberg.net

2006-11-16 00:00:00 UTC

Wheeling-Pittsburgh Says Esmark Deal to Cause Default

http://www.bloomberg.com/news/2006-11-16/wheeling-pittsburgh-says-esmark-deal-to-cause-default-update1-.html

Dale Crofts

Wheeling-Pittsburgh Corp., a U.S. steelmaker fighting an unsolicited merger proposal from Esmark Inc., said a vote by investors to replace the board would force the company to default on $475 million of loans. Esmark, a Chicago-based steel distributor, is proposing a slate of directors to replace the board at a Wheeling-Pittsburgh shareholder meeting Nov. 17 in Wheeling, West Virginia. If Esmark's candidates are elected, they are likely to scuttle Wheeling-Pittsburgh's proposed merger with Brazil 's Cia. Siderurgica Nacional SA. The $475 million of loans would become due ``immediately'' because of ``change of control'' clauses in agreements with lenders, Wheeling-Pittsburgh said today in a statement. Esmark, in a separate statement, said it anticipates no problems in extending the loans. ``In the unlikely event that these credit facilities were no longer available to Wheeling-Pitt, we believe that replacement financing would be readily available,'' Esmark Chief Executive Officer James P. Bouchard said in the statement today. Esmark wants to be bought by Wheeling-Pittsburgh for about $273 million and then merge the two companies. It also has a loan agreement for $350 million from banks led by J.P. Morgan Chase. To contact the reporter on this story: Dale Crofts in Chicago at dcrofts@bloomberg.net . To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

2006-11-17 00:00:00 UTC

Bank of Communications May Sell $7 Bln Shares, Bonds

http://www.bloomberg.com/news/2006-11-17/bank-of-communications-may-sell-7-bln-shares-bonds-update4-.html

Luo Jun

Bank of Communications Ltd., China's fifth-largest, plans to raise as much as $7.4 billion by selling shares and bonds to domestic investors as it seeks funds to extend more loans and credit cards. The Shanghai-based bank will seek approval to sell as many as 4.5 billion yuan-denominated shares and 25 billion yuan ($3.18 billion) of subordinated bonds, it said in a statement to the Hong Kong stock exchange today. Based on yesterday's closing price in Hong Kong, its stock offering could raise $4.2 billion. Bank of Communications, 19.9 percent owned by HSBC Holdings Plc (HSBA) , follows bigger rivals Industrial & Commercial Bank of China and Bank of China Ltd. in tapping domestic investors after Shanghai's benchmark index surged 68 percent this year. The bank needs to replenish capital that's failed to keep pace with loan growth in the world's fastest-growing major economy. ``Chinese banking stocks are all the rage right now as investors bet on potential benefit from the robust economic growth,'' said Zhang Ling, who helps manage the equivalent of $2.4 billion at ICBC Credit Suisse Asset Management Co. in Beijing. ``Bank of Communications is expanding faster than the bigger rivals and therefore demand for capital is more urgent.'' Shares of Industrial & Commercial Bank of China Ltd., the nation's biggest, have gained 22 percent on the mainland since their Oct. 27 debut after an initial public offering. Bank of China, which also had an IPO this year, has risen 19 percent on the domestic market since July 5. Chinese banking stocks dropped today. Shares of Bank of Communications fell 2.9 percent in Hong Kong to HK$7.13 at 11:56 a.m. Capital Adequacy Proceeds from the share and bond sales will be used to shore up Bank of Communications' capital. The lender's capital- adequacy ratio, an indicator of its financial health, fell to 11.09 percent as of Sept. 30 from 11.52 percent at the end of 2005. Although above the minimum required, the ratio still lags behind those of Hong Kong banks, which are generally above 16 percent, said Victor Tsang, who helps oversee $50 million of assets at Quam Asset Management in Hong Kong. Increasing lending reduces the proportion of capital to risk-weighted credit, forcing banks to raise more funds to sustain growth. Bank of Communications had 911.2 billion yuan of outstanding loans as of Sept. 30, an 18 percent increase from the end of 2005. China's banking regulator requires a minimum capital adequacy ratio of 8 percent to protect depositors and absorb losses in case of bankruptcy. Growth Opportunities ``There's still ample opportunity for growth'' in China, Tsang said. Also bank stocks are currently trading at high valuations, he said, making this a good time to raise money through the markets. Chinese companies have sold $14.7 billion of A shares since a sales ban was lifted in May, according to data compiled by Bloomberg. The one-year restriction had been imposed to allow time for the conversion of mostly state-held non-tradable stock to common equity. Industrial & Commercial Bank of China last month raised $5.1 billion on the mainland as part of a $19.1 billion simultaneous offering that included a Hong Kong sale. Bank of China sold $2.5 billion of shares in China in June after an $11.2 billion Hong Kong IPO earlier in the same month. Mutual Funds, Credit Cards Bank of Communications' third-quarter profit rose 42 percent to 2.99 billion yuan as economic growth spurred demand for consumer loans and asset-management services. New yuan lending by China's banks rose 40 percent in the first nine months from a year earlier, even as the government tried to cool the fastest economic expansion in a decade. Its profit growth may average 33 percent between 2005 and 2008 as loans increase by 19 percent annually, according to Goldman Sachs Group Inc. analyst Ning Ma. Bank of Communications focuses on offering loans, mutual funds and credit cards to the wealthiest Chinese, those with savings of more than $50,000. The bank will hold a shareholders meeting on Jan. 9 to vote on the share offering, which is subject to approval by the China Securities Regulatory Commission, the China Banking Regulatory Commission and other relevant regulatory authorities, the announcement said. Shares of Bank of Communications, which raised HK$16.84 billion ($2.17 billion) in a Hong Kong initial public offering last year, have doubled in price since the sale. To contact the reporters on this story: Matthew R. Miller in Hong Kong at mmiller31@bloomberg.net Luo Jun in Shanghai at jluo6@bloomberg.net To contact the editor responsible for this story: Ben Richardson in Hong Kong at brichardson8@bloomberg.net

2006-11-20 00:00:00 UTC

Ameristar Casino Shares Rise on Buyout Speculation

http://www.bloomberg.com/news/2006-11-20/ameristar-casino-shares-rise-on-buyout-speculation-update2-.html

[bn:PRSN=15017728] Oliver Staley []

Shares of Ameristar Casinos Inc. (ASCA) , an owner of seven casinos, rose 11 percent after the death of largest shareholder and Chairman Craig Neilsen led to speculation the company may be acquired, analysts said. The stock of the Las Vegas-based company rose $2.86 to $28.54 at 4 p.m. in Nasdaq Stock Market composite trading and has climbed 26 percent this year. Ameristar operates casinos in Colorado , Iowa , Missouri , Mississippi and Nevada. Neilsen owned 55 percent of the company and his shares will be transferred to his charitable foundation, which could choose to liquidate them, said Eric Green , director of research at Penn Capital Management that owns shares in the company. ``We're in favor of the company selling itself and we think it should be at a much higher price than it's selling now,'' said Green, who is based in Cherry Hills, New Jersey . ``You have the hottest casino market ever and casinos are getting bid up ridiculous amounts.'' In a statement, Ameristar said it was Neilsen's wish for the Craig H. Neilsen Foundation, which is devoted to spinal-cord injury research and treatment, ``to retain a controlling interest in Ameristar for the long term.'' Neilsen was a quadriplegic since suffering a spinal injury in a car accident in 1985, spokeswoman Kathy Callahan said. Neilsen, 65, died in his sleep early yesterday. He is survived by his son Ray and stepdaughters Jaime and Amanda, the Las Vegas-based company said today in a statement. Ameristar's board met yesterday and named John Boushy, 52, the company's president, as CEO. Gordon Kanofsky, Ameristar's executive vice president, and Ray Neilsen, Neilsen's son, were named co-chairmen of the company. Drawing Interest In the past year, casino companies have drawn interest from other casino operators looking to grow and from private-equity firms. Ameristar was one of four bidders for Aztar Corp., which was won by privately held Columbia Sussex Corp. in May for about $2 billion. Harrah's Entertainment Inc., the world's largest casino company, is the object of a $15.5 billion buyout offer from private-equity firms Texas Pacific Group and Apollo Management LP. ``There are plenty of interested strategic buyers for Ameristar in our view,'' Mario Kontomerkos, an analyst at JP Morgan Securities Inc., wrote today in a note to investors. To contact the reporter on this story: Oliver Staley in New York at ostaley@bloomberg.net . To contact the editor responsible for this story: Michael Nol at mnol@bloomberg.net .

2006-11-20 00:00:00 UTC

Peru August Gold Output Declines on Yanacocha Drop

http://www.bloomberg.com/news/2006-11-20/peru-august-gold-output-declines-on-yanacocha-drop-update2-.html

[bn:PRSN=6685378] Alex Emery []

Peru 's gold production had its biggest drop in 19 months in August as output plunged by one- fifth at the country's largest gold mine. Gold production fell 6.1 percent from a year earlier to 16,222 kilograms, its lowest since June 2005, after output fell 20.2 percent at Denver-based Newmont Gold Corp. (NEM) 's Yanacocha mine, the Energy and Mines Ministry said in an e-mail statement. Copper output fell 1.8 percent to 85,035 tons on a 10 percent decline at Minera Antamina. Peru, the world's fourth-largest copper producer and fifth largest in gold, is counting on $10 billion in mining exports to drive a 6.6 percent economic expansion in 2006. The Andean country has benefited from copper prices that have jumped one- half over the past 12 months, while gold has risen 28 percent. ``Peru is barely tapping 10 percent of its mining potential,'' Cabinet chief Jorge del Castillo told reporters today after meeting with BHP Billiton Plc (BHP) Vice President Peter Worthington at the presidential palace in Lima . ``There are still many investment projects pending.'' Melbourne-based BHP Billiton holds a 33 percent stake in Antamina, the world's largest copper-zinc mine. Production at Yanacocha, the world's second-largest gold mine, will drop 30 percent to around 2.5 million ounces this year from 3.3 million ounces in 2005 as reserves deplete at the mine, according to Newmont. Newmont's shares fell for a third day, dropping 15 cents, or 0.3 percent, to $44.05 at 1:57 p.m., a four-week low. Shares have fallen 18 percent this year. Zinc, Silver Gain Peru, the world's largest producer of silver and tin and third in zinc , boosted zinc output by 6.7 percent to 110,307 tons, while silver rose 1.1 percent to 281,680 kilograms and lead fell 6.5 percent to 26,506 tons, according to the ministry. Iron output fell 3 percent, tin fell 29 percent and molybdenum production fell 16 percent. Copper futures for March delivery fell 0.80 cent, or 0.3 percent, to $3.0785 a pound at on the Comex division of the New York Mercantile Exchange . Gold futures for December delivery fell 40 cents, or 0.1 percent, to $622.10 an ounce. To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net To contact the editor responsible for this story: Laura Zelenko at lzelenko@bloomberg.net

2006-11-20 00:00:00 UTC

Real Madrid Agrees to Sell TV Rights for $1.4 Billion

http://www.bloomberg.com/news/2006-11-20/real-madrid-agrees-to-sell-tv-rights-for-1-4-billion-update3-.html

Alex Duff

Real Madrid, soccer's richest club by sales, agreed to sell television rights to its games through 2013 to production company Grupo Mediapro for 1.1 billion euros ($1.4 billion), in what it called a record deal for a sports team. ``This agreement is a new landmark in the history of this club,'' Real Madrid said in a statement on its Web site, adding it had accepted the biggest offer with ``the most solid'' guarantees. It's more than double what Madrid currently gets. Real Madrid, whose squad includes David Beckham and Ronaldo, is further increasing its income after last year ending Manchester United's eight-year stint as soccer's richest club. Sogecable SA, Spain's biggest pay-TV company which dominates coverage of soccer in the country through its Canal+ stations, will have to pay Mediapro more to transmit games, said Fabian Lares, a Madrid-based analyst at Espirito Santo. Sogecable had a contract with Madrid until 2008, though the Mediapro deal takes effect this season, the club said without going into detail. Sogecable is also paying more to air European champion Barcelona's matches after Mediapro in June bought the rights for about 1 billion euros for seven years. Sogecable shares rose 2.2 percent to close at 26.15 euros in Madrid , though are down 23 percent this year. Sogecable said it had no immediate comment on the new contract. The shares gained today because of a perception that Mediapro and Sogecable are working in conjunction, Lares said. In June, Sogecable had said it was consulting its lawyers after Barcelona announced its accord with Mediapro. ``The war is over,'' Lares said in a phone interview. Income Streams Mediapro also bought the rights of Sevilla, the UEFA Cup champion, on Nov. 16. Joan Bonareu, a spokesman for Barcelona-based Mediapro, which is closely held, wasn't immediately available for comment today. Television rights are one of the most important income streams for top soccer clubs, and Madrid's TV revenue is now challenging that of other leading European teams including Italy 's Juventus and AC Milan. Traditionally, the value of Spanish TV rights has been diluted because national legislation requires one league game per week on free-to-air TV. Real Madrid got 64.6 million euros from TV rights in the year through June 30 2005, 39 percent less than Juventus. The method of TV rights sales varies between countries. Unlike in the Spanish system, England 's Premiership TV rights are marketed by the league in multiteam packages of games rather than sold by individual clubs. Trophy Drought Manchester United had broadcast income of 72 million euros in 2004-05, according to accountant Deloitte & Touche LLP, with Chelsea on 82 million and Liverpool on 76 million. Leading the field was AC Milan with 138 million as it reached the Champions League final against Liverpool. Real Madrid didn't disclose what other offers it had for the new contract. The club's revenue in the year to June 30 2005 increased 17 percent to 275.7 million euros. It will disclose its earnings for the last financial year Dec. 3. Madrid is boosting income even after failing to win a trophy the last three seasons, its worst stint in 53 years. It's third in the Spanish league after 11 of 38 games, three points behind leader Barcelona. Sevilla is second. Mediapro shareholders include WPP Group Plc, the world's second-biggest advertising group, which has a 20 percent stake. Mediapro has a stake in La Sexta, Spain 's newest channel which shows one Spanish league game per week. To contact the reporter on this story: Alex Duff in Madrid at at aduff4@bloomberg.net To contact the editor responsible for this story: James Ludden in London at jludden@bloomberg.net

2006-11-21 00:00:00 UTC

Russian Stocks Rise, Led by Gazprom, Lukoil on Oil; X5 Surges

http://www.bloomberg.com/news/2006-11-21/russian-stocks-rise-led-by-gazprom-lukoil-on-oil-x5-surges.html

[bn:PRSN=3629307] Maria Ermakova []

Russian stocks advanced for the first time in three days. OAO Gazprom and OAO Lukoil, the country's biggest natural-gas and oil companies, gained with the price of crude in New York. OAO GMK Norilsk Nickel, the world's biggest nickel miner, and X5 Retail Group NV (FIVE) , Russia's biggest supermarket company, also increased. The dollar-denominated RTS Index climbed 1.3 percent to 1699.31 at the close of trading in Moscow, the biggest one-day gain in almost two weeks. The ruble-based Micex Index advanced 1.3 percent to 1509.87. Gazprom, Russia's natural-gas export monopoly, added 2.5 percent to $10.97. Lukoil, the country's biggest oil producer, climbed 2.5 percent to $84.65. Crude oil rose after the Trans-Alaska Pipeline System limited the amount of oil it will carry and a North Sea platform was shut because of a gas leak. Crude oil for January delivery advanced 1.1 percent to $59.44 a barrel on the New York Mercantile Exchange. ``The Russian market has lately been driven almost entirely by the oil price, and today is no different,'' said John Heisel, a trader at Moscow-based Sovlink Securities. ``We see crude up slightly on speculation supply will tighten, and speculative money is piling into liquid oil names, pushing our market up.'' Norilsk Nickel Gains Shares of Norilsk Nickel, Russia 's biggest mining company, gained 2.2 percent to $142.50. Norilsk Nickel agreed to buy OM Group Inc.'s nickel unit yesterday for $408 million in cash. Norilsk's existing nickel plants are in Russia. The OMG deal will give it manufacturing plants in Finland . They include the Harjavalta refinery with an annual production capacity of 60,000 tons of nickel, and mining assets in Western Australia that supply raw material to the Finnish plant. X5 Retail Group jumped 6 percent to a record $25.65 in London , the biggest one-day gain in a month. The company's sales may more than double from expected 2.2 billion euros ($2.8 billion) this year to 4.7 billion euros in 2008 on expansion in Russian regions, UBS AG wrote in a report released today. The retailer said today that it finished buying OOO Metronom AG, which operates the 16-store Merkado chain in Moscow and owns the right to the Merkadonna brand name. The $200 million purchase will take the company's number of stores in Russia, Ukraine and Kazakhstan to 1,126, the St.Petersburg-based company said Oct. 13. Shares of OAO Seventh Continent, a Russian supermarket chain, fell 2.4 percent to 670.82 rubles on the Micex Stock Exchange. The company said that profit rose 45 percent in the first nine months to $45.9 million as the company opened more stores and lured more customers. Sales advanced 36 percent to $669.6 million, less than the $679 million median estimate in a Bloomberg survey of four analysts. To contact the reporter on this story: Michael Heath in Moscow at mheath1@bloomberg.net Maria Ermakova in Moscow at mermakova@bloomberg.net . To contact the editor responsible for this story: Balduin Hesse at bhesse2@bloomberg.net .

2006-11-21 00:00:00 UTC

BP's Russian Unit Cuts Exports as Local Demand Rises

http://www.bloomberg.com/news/2006-11-21/bp-s-russian-unit-cuts-exports-as-local-demand-rises-update2-.html

[bn:PRSN=6963266] Torrey Clark []

TNK-BP (TNBP) , BP Plc's Russian unit, is cutting exports of crude oil and refined products such as gasoline and fuel oil as export taxes and surging demand make domestic sales more attractive. TNK-BP plans to decrease crude exports this year to 47.5 million tons (954,000 barrels a day) from 49 million last year, Jonathan Kollek, vice president for sales, trading and logistics, told reporters in Moscow today. Exports of refined products will fall 2 percent to 14.5 million tons this year. Fuel oil demand has risen this year, including in the first quarter, when a severe cold snap caused a surge from electricity producers. President Vladimir Putin said customers such as OAO Unified Energy System, the national power utility, should use more fuel oil and less natural gas as state-run OAO Gazprom increases European gas exports. TNK-BP cut fuel-oil exports by as much as 140,000 tons a month to feed demand from Russian power stations, Kollek said. He didn't specify the period. Exports of Russian crude fell in the first 10 months of the year as export duties soared to record levels. TNK-BP wants to export crude to China next year under contract with China National Petroleum Co., Kollek said. The company shipped 400,000 tons of Russian oil across Kazakhstan to China through the Atasu-Alashankou pipeline earlier this year. Because of ``technical problems,'' TNK-BP won't send more this year, Kollek said, without elaborating. Output Goals Crude production will probably match last year after the company sold a unit to China's Sinopec and state-controlled OAO Rosneft in August, TNK-BP Chief Executive Officer Robert Dudley said Oct. 3. The company pumped about 1.76 million barrels of oil a day last year. TNK-BP expects to refine about 34 million tons of crude this year within Russia , as much as a fifth more than last year, Executive Vice President Anthony Considine said today. The amount includes TNK-BP's share in refining at OAO Slavneft, which it owns equally with Gazprom's oil division. The company's refinery in Lisichansk , Ukraine, may refine 260,000 tons of oil this month after finishing an upgrade that started Oct. 1, the company said on its Web site. To contact the reporter on this story: Torrey Clark in Moscow at tclark8@bloomberg.net . To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net .

2006-11-21 00:00:00 UTC

News Corp. Sells Some Sites Acquired in MySpace Deal

http://www.bloomberg.com/news/2006-11-21/news-corp-sells-some-sites-acquired-in-myspace-deal-update1-.html

[bn:PRSN=3224909] Cecile Daurat []

News Corp. (NWSA) , the media company headed by Rupert Murdoch , sold some Web sites it acquired last year as part of its purchase of MySpace.com to Demand Media Inc. The sale of units including Cases Ladder Inc. and Social Labs LLC and 20 Web sites such as Grab.com and GameRival.com closed on Nov. 17, News Corp. said today in an e-mailed statement. Terms of the sale weren't disclosed. ``These assets weren't vital to our long-term plan,'' Ann Burkart, a spokeswoman for Fox Interactive Media, News Corp.'s Internet unit, said in the statement. News Corp. bought MySpace's parent company Intermix Network LLC in October 2005 for $580 million. Privately held Demand Media owns Web sites and domain names. Shares of New York-based News Corp. fell 14 cents to $20.96 at 4 p.m. in New York Stock Exchange composite trading . They have gained 35 percent this year. To contact the reporter on this story: Cecile Daurat in New York at cdaurat@bloomberg.net To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net .

2006-11-22 00:00:00 UTC

Exxon, Chevron Among Companies That May Join Pipeline

http://www.bloomberg.com/news/2006-11-22/exxon-chevron-among-companies-that-may-join-pipeline-update1-.html

Yuriy Humber

Russia will limit its stake in a $1 billion oil pipeline from Bulgaria to Greece to 51 percent, leaving room for oil companies working in Kazakhstan to join the project. Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) of the U.S., as well as Netherlands-based Royal Dutch Shell Plc (RDSA) and BP Plc (BP/) 's Russian unit, OAO TNK-BP, may negotiate for a stake in the pipeline, a Russian energy official said. The holders of the 49 percent stake currently allotted to Greece and Bulgaria have yet to be decided, said Deputy Energy Minister Andrei Dementiev, in a statement to Bloomberg News. ``If Greece and Bulgaria want to make sure that the pipeline is full from their side of the deal, they may invite oil producers operating in the Caspian Sea '' to join, Energy Ministry spokesman Yevgeny Trufanov said. ``We see the greatest interest from Chevron at the moment.'' Russia and Kazakhstan, which together sell more oil abroad than the world's biggest exporter, Saudi Arabia, face delays in getting products to Europe. Turkey's narrow Bosporus and Dardanelle straits limit oil tankers, pushing Russian and Kazakh companies to invest in pipelines. Russian President Vladimir Putin sealed a deal with his Greek and Bulgarian counterparts in Athens in September to build a 258- kilometer pipe from the Bulgarian city of Burgas to the Greek port of Alexandroupolis, bypassing the straits. Putin Allotments Putin has allotted the country's 51 percent share in the project to three state-controlled companies in a joint venture. Pipeline-owner OAO Transneft and oil producers OAO Rosneft and OAO Gazprom Neft will hold Russia's stake through OOO Pipeline Consortium Burgos-Alexandroupolis. The Kazakh energy minister said he was sure companies operating in the oil-rich former Soviet state will participate. ``We have officially informed Russia about this,'' Minister Baktykozha Izmukhambetov said today in an interview in London. While neither Greece nor Bulgaria are being pressured by Russia, the lack of oil companies from the two countries able to support the project is likely to mean Moscow's hint will be heeded, said Chris Weafer , chief strategist with Alfa Bank . Greece has put forward Hellenic Petroleum SA, the nation's biggest oil refiner, to hold part of its stake. The rest could go to major oil producers to discourage them from using competing Azeri pipelines and for Russia to forge closer energy ties with Kazakhstan. ``What we've seen in the past is that Russian companies, when they have a controlling stake, tend to have a larger influence on the project than their equity might allow,'' Weafer said. To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net . To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net .

2006-11-22 00:00:00 UTC

Norilsk Wants Tajik Silver Mine, One of the Biggest

http://www.bloomberg.com/news/2006-11-22/norilsk-wants-tajik-silver-mine-one-of-the-biggest-update2-.html

Samantha Shields

OAO GMK Norilsk Nickel (GMKN) , Russia's biggest mining company, asked the government of Tajikistan for the rights to survey and mine a silver deposit in the country's north that may be one of the world's biggest. The Bolshoi Konimansur deposit may contain as much as 50,000 metric tons of silver and some zinc, Deputy Chief Executive Officer Maxim Finsky said today in a telephone interview from Moscow. The Tajik government is expected to give the company an answer by the end of the year on what would be Norilsk's first silver project, Finsky said. Norilsk, based in Moscow, already mines about half the world's palladium, a fifth of its nickel and almost a sixth of its platinum from mines inside the Arctic Circle. It wants to expand its mining operations and has been searching for a world class silver deposit in Russia and abroad, Finsky said. ``This is one of the biggest silver deposits in the world,'' he said. ``It's difficult to estimate a potential investment figure because the last surveys are from the end of the Soviet era.'' Interfax said today that the project will need $2 billion of investment, citing unidentified Tajik Finance Ministry officials. Finsky declined to name a figure. Silver Rising Silver gained 44 percent in the last year. It reached a 25- year high of $15.22 an ounce May 11, as investors bought the metal as a hedge against inflation amid record oil prices. The metal is used to produce laptops and mobile phones and in the photography industry, as well as in jewelry and silverware. The price may more than triple in the next five years as new applications such as smart cards for shopping spur demand, Roland Jansen, whose Mother Earth Resource Fund has gained 12 percent this year, said on Oct. 10. The acquisition of Bolshoi Konimansur would make Norilsk one of the world's biggest silver producers, Finsky said. Norilsk spun off its OAO Polyus Gold unit this year and sold a $2.1 billion stake in Gold Fields Ltd. in March. Shares of Norilsk rose $2, or 1.4 percent, to $144.50 in Moscow. The stock has climbed 75 percent this year, compared with a 30 percent gain in the 17- member Bloomberg Europe Mining Index. The company has a market capitalization of about $27 billion. Norilsk's first-half profit more than doubled to $2.37 billion on rising metals prices and the sale of Gold Fields. Global demand for silver was 911.9 million ounces last year. Producing countries including as Peru, Mexico and Australia mined 641.6 million ounces of silver in 2005, according to statistics gathered by London-based research company GFMS Ltd. To contact the reporter on this story: Samantha Shields in Moscow at sshields2@bloomberg.net . To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net .

2006-11-23 00:00:00 UTC

Bank of China Confirms Bidding for Singapore Aircraft

http://www.bloomberg.com/news/2006-11-23/bank-of-china-confirms-bidding-for-singapore-aircraft-update1-.html

Susan Li

Bank of China Ltd. (3988) , the country's oldest bank, said it's bidding for a stake in Asia's biggest aircraft leasing business to expand its income source and reduce dependence on fees earned from interests. Bank of China is among four bidders for Singapore Aircraft Leasing Enterprise, according to Chew Choon Seng, chief executive officer of Singapore Airlines Ltd., which owns 35.5 percent of Singapore Aircraft Leasing. Dubai Aerospace Enterprise and Japan 's Mitsubishi Corp. are the other bidders. ``Bank of China is in the final bidding round for Singapore Aircraft and is very keen about the prospects of aircraft finance in China,'' Bank of China's Vice President Zhu Min, at an interview in Beijing today. ``We see a huge market in fee incomes and want to push thoroughly into these other areas instead of only focusing on the loan business.'' Bank of China, founded in 1912, is among the Chinese lenders that are trying to diversify their revenue sources and prepare for global competition when China fully opens its banking industry on Dec. 11. Foreign banks including Citigroup Inc., HSBC Holdings Plc and Standard Chartered will be allowed to tap the nation's $2 trillion in savings , taking yuan deposits and lending in the local currency to Chinese citizens. Bank of China is also facing increased competition from rivals including Industrial & Commercial Bank of China Ltd. and China Construction Bank. Loans to Aviation ICBC, as Industrial Bank is also called, has extended more than 70 billion yuan ($8.9 billion) of loans to the aviation industry, covering at least 100 aircraft loans and 200 guarantees, according to the bank's Web site. Bank of China's 8.25 percent shareholder Royal Bank of Scotland has an agreement to help develop aircraft finance. Royal Bank, Britain's second-biggest lender by market value, bought its stake in the Chinese bank last year. Zhu declined to elaborate whether Royal Bank of Scotland would be involved in any acquisition of Singapore Aircraft by Bank of China. Bank of China's stock has gained 27 percent in Hong Kong since its debut on June 1, performing better than the key Hang Seng Index, which rose almost 24 percent in the same period. Singapore Aircraft Leasing Singapore Aircraft leases planes to 34 airlines including Canada 's WestJet, China's Shandong Airlines Co. and Kenya Airways, earning profits every year since it started business in 1993. Earnings are rising even as airlines in the Asia-Pacific region, the fastest growing area for air traffic in the world, struggle with high oil prices. Morgan Stanley and UBS AG are advising Bank of China on the bid for Singapore Aircraft Leasing. Bank of China raised 20 billion yuan in the nation's largest domestic share sale in July, four weeks after an $11.2 billion global initial public offer. Bank of China, China Construction Bank, Industrial & Commercial Bank and Bank of Communications, four of the nation's five biggest state-owned banks, have raised more than $40 billion in initial public offerings since June 2005. To contact the reporter for this story: Josephine Lau in Beijing at jlau22@bloomberg.net To contact the editor responsible for this story: Ben Richardson in Hong Kong at brichardson8@bloomberg.net

2006-11-23 00:00:00 UTC

Remy to Exit Distribution Accord With Fortune in 2009

http://www.bloomberg.com/news/2006-11-23/remy-to-exit-distribution-accord-with-fortune-in-2009-update6-.html

Ladka Bauerova

Remy Cointreau SA (RCO) , Europe's fifth- largest liquor producer, withdrew from a venture with Fortune Brands Inc. to gain more control over distributing its cognac and champagne in Asia . Remy, the maker of Louis XIII cognac, said in a statement that it will leave Maxxium Worldwide BV in 2009. Maxxium was formed in 1999 by Remy, Scottish distiller Edrington Group Ltd. and Fortune, the maker of Jim Beam whiskey, aiming to secure sales as rivals expanded through mergers. Maxxium generates 40 percent of Remy's sales, spokeswoman Joelle Jezequel said. The shares jumped to a five-month high on speculation that the exit may make Remy a bid target as it competes with Pernod Ricard SA and Diageo Plc (DGE) , both more than seven times its size. Remy has sold units and focused on pricier products to fend off rivals. Chief Executive Officer Jean-Marie Laborde today said the company would create its own Asian distribution network. ``Some people may read this exit as a prelude to the sale of a majority stake by the family controlling Remy Cointreau,'' said Laurent Vallee, a fund manager at Richelieu Finance in Paris, which manages about $4.5 billion in stocks. The Heriard-Dubreuil family controls Paris-based Remy through holding companies. ``Cognacs, champagne and Cointreau have huge potential in China and southeast Asia,'' Laborde said in an interview. ``We want to have total control over all our brands. The market for cognac in China and southeast Asia is growing 25 to 30 percent a year. Our objective is to grow at least as much.'' Emerging Markets Remy's total sales rose 6.7 percent in the fiscal year ended March 2006. Revenue in the Americas advanced 14.9 percent, led by the U.S. European sales fell 0.1 percent, while sales in Asia and the rest of the world gained 1.6 percent. Louis XIII cognac, Remy's most prestigious brand, is aged in barrels the company says are several hundred years old. A 700-milliliter bottle sells for C$2,099 ($1,838) at the Liquor Control Board of Ontario, the world's biggest wine and spirit buyer, according to the Canadian retailer's Web site. The stock added 1.46 euros, or 3.4 percent, to 44.40 euros in Paris today, the highest closing price since May 11. Its market value is about 2 billion euros ($2.6 billion), compared with Pernod (RI) 's 15.7 billion euros and Diageo's 27.4 billion pounds ($52.5 billion). ``The current system is not able to build the premium brands in emerging markets ,'' Morgan Stanley analyst Alexandra Oldroyd said in a note. ``This removes one of the barriers to Remy's participation in mergers. The main barrier, family control, remains in place.'' Penalty Costs The company will have to pay penalties and will incur higher distribution costs from the exit, ``diluting'' earnings from 2010 onwards by 5 to 10 percent, she wrote. ``We will pay compensation to our partners, though I can't say how much at this point,'' Laborde said, adding that more details will be made available when Remy reports six-month results on Dec. 12. Leaving Maxxium is ``expensive in the short term, but profitable in the mid- to long-term.'' Maxxium was expanded in 2001 to include V&S Vin & Sprit AB, the Swedish maker of Absolut vodka, and operates in most major markets outside the U.S., South America , Africa and India . V&S Chief Executive Officer Bengt Baron said in a statement that his company won't be affected by Remy's retreat. Possible Buyers In January, Fortis analysts Philippe Ezeghian and Severine Ble said Remy may be of interest to Constellation Brands Inc. (STZ) and Bacardi Corp. In April, Exane BNP Paribas said the most likely acquirer of Remy is Brown-Forman Corp. (BF/A) , the maker of Jack Daniel's whiskey. ``It's not at all our intention'' to seek a takeover, Laborde said today. Press offices at Constellation, Bacardi, and Brown-Forman didn't immediately return calls in the U.K. and the U.S., which is celebrating the Thanksgiving holiday today. Maxxium was ``viewed as a poison pill for potential acquirors,'' UBS AG analysts Melissa Earlam and Araceli Strassburger said in a note today. They have a ``neutral 1'' rating on Remy's shares. Remy also ended U.S. and German distribution agreements when its last financial year closed in March. It reported a 2.1 percent drop in second-quarter revenue in October. Fortune Brands' Beam Global Spirits & Wine Inc. won't have a ``material adverse impact'' from Remy's exit, Beam Global Chief Executive Officer Tom Flocco said in a separate statement. Remy's brands account for about 15 percent of Maxxium's case volume, according to that statement. To contact the reporters on this story: Meera Bhatia in London at mbhatia2@bloomberg.net Ladka Bauerova in Paris at lbauerova@bloomberg.net . To contact the editor responsible for this story: Keith Campbell at k.campbell@bloomberg.net .

2006-11-24 00:00:00 UTC

Russian Stocks Advance, Led by Lukoil, Gazprom, Norilsk Nickel

http://www.bloomberg.com/news/2006-11-24/russian-stocks-advance-led-by-lukoil-gazprom-norilsk-nickel.html

Michael Heath

Russian stocks advanced. OAO Lukoil, the country's biggest oil producer, and OAO Gazprom, the state- run natural gas export monopoly, gained with crude oil prices. OAO Norilsk Nickel, the world's biggest nickel producer, increased as the precious metal rose to its highest since at least 1987. The dollar-denominated RTS Index advanced 0.6 percent to 1722.73 at the close of trading in Moscow, bringing its gain for the week to 2 percent. The ruble-based Micex Index rose 0.1 percent to 1518.06. Lukoil climbed 0.8 percent to $85.90, while Gazprom, Russia's biggest company, rose 0.6 percent to $10.97. OAO Surgutneftegaz, the country's fourth-largest oil producer, added 0.8 percent to $1.33. Brent crude oil for January delivery rose as much as 80 cents, or 1.4 percent, to $60.15 a barrel on London's ICE Futures Exchange. Prices moved higher after a report that Eni SpA halted delivery of some Nigerian crude because of a militant attack and because traders said heating fuel demand will increase in the U.S. Norilsk Nickel, Russia's biggest mining company, gained 0.4 percent to $145.70. Nickel climbed to its highest in at least 19 years because of concern supply will lag demand after a French court ordered construction to stop at a $2.15 billion mine belonging to Cia. Vale do Rio Doce. Nickel for delivery in three months climbed $1,000, or 3.1 percent, to $33,400 a metric ton, the highest since at least 1987, beating the previous 19-year high set yesterday by $650. Russia May Sell Shares of OAO VolgaTelecom, a provider of fixed-line telecommunications to Russia's Volga region, advanced 1.9 percent to $4.26, extending yesterday's 3.9 percent gain. Investors are speculating that Russia may sell its 75 percent minus one share stake in OAO Svyazinvest, the national fixed-line phone company that controls the country's seven regional phone companies including Volga, Kommersant reported. ``Market activity is low, the only notable exception is telecoms, likely because of renewed hopes of Svyazinvest's privatization,'' said Alex Kantarovich, head of research at Moscow-based MDM Bank. OAO OGK-3, one of six wholesale thermal power companies that may be sold by Unified Energy, gained 2 percent to 10.2 cents, a record. Investors are speculating it will sell shares to the public next year after President Vladimir Putin called for quicker reform of the power sector on Nov. 22. OAO Severstal, Russia's biggest steel company by sales, fell 1.6 percent to $11.51, extending yesterday's 0.4 percent loss. To contact the reporter on this story: Michael Heath in Moscow at mheath1@bloomberg.net To contact the editor responsible for this story: Balduin Hesse at bhesse2@bloomberg.net

2006-11-27 00:00:00 UTC

Corus Plans to Postpone Dec. 4 Shareholder Meetings

http://www.bloomberg.com/news/2006-11-27/corus-plans-to-postpone-dec-4-shareholder-meetings-update1-.html

Grant Smith

Corus Group Plc, the subject of a takeover battle between Tata Steel Ltd. (TATA) and Cia. Siderurgica Nacional SA (CSNA3) , plans to delay shareholder meetings set for Dec. 4 to allow CSN more time to prepare a formal offer. Corus will propose to shareholders at the Dec. 4 meeting to adjourn the extraordinary general meeting and court meeting until Dec. 20, the London-based steelmaker said today in a statement. ``The board want to be seen as doing the right thing for the shareholders, and that has to allow CSN a full look at their books,'' said Stephen Pope, head of equity research at Cantor Fitzgerald LP in London. CSN, based in Rio de Janeiro, offered Corus shareholders 475 pence a share on Nov. 17, subject to due diligence. Mumbai- based Tata Steel made a bid on Oct. 20, without such conditions. CSN's proposal valued Corus, the former British Steel Plc, at $8 billion. Tata's offer of 455 pence was rejected by Standard Life Plc, Corus's biggest shareholder, as too low. Shares of Corus fell 4.5 pence, or 0.9 percent, to 500.5 pence at 11:43 a.m. in London , having fallen as much as 1.5 percent to 497.25 pence. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net . To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net .

2006-11-29 00:00:00 UTC

Russian Stocks Advance to Highest Since May, Led by Lukoil

http://www.bloomberg.com/news/2006-11-29/russian-stocks-advance-to-highest-since-may-led-by-lukoil.html

Michael Heath

Russian stocks gained, with the benchmark RTS Index (RTSI$) reaching the highest since its record close in May. OAO Lukoil (LKOH) and OAO Gazprom (GAZP) led the advance after oil climbed. OAO Mobile TeleSystems (MTSS) , eastern Europe 's biggest mobile- phone company, surged to an all-time high after it said third- quarter profit rose 40 percent. The dollar-denominated RTS Index added 2.1 percent to 1765.20, 0.15 points lower than its record 1,765.35 close on May 6. The ruble-based Micex Index rose 1.7 percent to 1546.95. Lukoil, Russia 's biggest oil producer, climbed 2.6 percent to $87.80. OAO Rosneft, Russia's state-controlled oil company, increased 1.9 percent to $9.19. Gazprom, the world's largest natural gas producer, advanced 3.4 percent to $11.60. ``The strong performance of the Russian equity market over the past days should continue, as most drivers remain supportive,'' Moscow-based UralSib Financial Corp. said in a note to investors. ``Oil prices are still rising and expected to rise further as colder weather is forecast.'' Crude oil for January delivery increased as much as 1.8 percent to $62.10 a barrel on the New York Mercantile Exchange, the highest intraday price since Oct. 10. Oil advanced after a government report showed a decline in U.S. inventories of heating oil. Mobile TeleSystems jumped 4.9 percent to a record $8.29 after the company reported net income of $486.3 million, beating the $398 million median profit estimate in a Bloomberg survey of nine analysts. Sales rose 30 percent to $1.8 billion. Price Estimate Raised Shares of OAO Volga Telecom, a provider of telecommunications services to Russia's Volga region, climbed 4.8 percent to $4.35 after ING Groep NV, the largest Dutch financial- services company, raised the stock to ``buy'' from ``hold'' and increased its price estimate by 44 percent to $5.70. OAO Sberbank increased 1.8 percent to an all-time high of $2,500. Sberbank's government-dominated supervisory board will meet in the ``near future'' to vote on a share sale by Russia's biggest lender, central bank Deputy Chairman Alexei Ulyukayev said. State-run Sberbank is planning to raise as much as $8.8 billion in capital selling new shares to boost lending and needs unanimous consent by its supervisory board. The vote was delayed yesterday because two supervisors, Economy Minister German Gref and Finance Minister Alexei Kudrin, were out of town. `Delay Immaterial' ``The delay in itself is immaterial, but the issuance plan would definitely benefit from improvements,'' said Alex Kantarovich, head of research at Moscow-based MDM Bank. Investors may be hoping for a Western listing and a share split, he said. The stock of OAO Peter Hambro Mining Plc (POG) , Russia's third- biggest gold miner, plunged 15 percent to 1,015 pence in London after Russia's environmental watchdog said it may revoke five of the company's licenses. The environmental inspectorate asked the subsoil resources agency to revoke the permits for violating the terms they were awarded under, the ministry said in an e-mailed statement today. The inspectorate and agency are both part of the ministry. The ministry said the inspectorate will begin checking Peter Hambro's other 45 licenses ``soon,'' according to the statement. Peter Hambro has 50 licenses to explore and mine deposits of gold, titanium, chrome and other metals. To contact the reporter on this story: Michael Heath in Moscow at mheath1@bloomberg.net To contact the editor responsible for this story: Edward Buckle at ebuckle@bloomberg.net

2006-11-29 00:00:00 UTC

Remgro Says First-Half Profit Declines 42 Percent

http://www.bloomberg.com/news/2006-11-29/remgro-says-first-half-profit-declines-42-percent-update1-.html

Vernon Wessels

Remgro Ltd. (REM) , a South African holding company for banking, tobacco and mining interests, said first-half profit dropped 42 percent after last year's gains on the sale of stakes weren't repeated. Net income fell to 3.14 billion rand ($440 million), or 6.40 rand a share, in the six months through September, Stellenbosch, South Africa-based Remgro said today in a stock-exchange statement. That's down from a restated 5.44 billion rand, or 11.11 rand a share, a year earlier. Last year's earnings aren't comparable because of accounting changes, it added. The company last year sold its 9 percent stake in Absa Group Ltd. to Barclays Plc, the U.K.'s third-biggest bank. It also sold its 17.9 percent interest in Sage Group Ltd. to life insurer Momentum Group Ltd. Remgro made a first-half profit of 6 million rand by selling stakes in its investments compared with a profit a year ago of 3.04 billion rand. Net income declined ``mainly as a result of capital gains arising on the realization of investments accounted for during the comparative period,'' Remgro said. Remgro owns a stake in British American Tobacco Plc (BATS) , the world's second-biggest tobacco producer. It also owns stakes in FirstRand Ltd. (FSR) , South Africa's second-largest financial services company, and Impala Platinum Holdings Ltd., the world's No. 2 platinum producer. Currency Boost Shares of Remgro gained 1.01 rand, or 0.6 percent, to close at 159.20 rand, giving the company a market value of 77.1 billion rand. The earnings were released after trading closed. Earnings adjusted for one-time items and accounting charges rose 19 percent to 3.2 billion rand, or 6.60 rand a share, from 2.7 billion rand, or 5.44 rand, a year earlier, the company said. A drop in the rand against the British pound boosted income Remgro makes from its interest in British American Tobacco, helping lift profit before one-time items from its tobacco interests to 1.48 billion rand from 1.26 billion rand, it added. Earnings before one-time items from its industrial interests rose 45 percent to 729 million rand, boosted by its 41 percent stake in Unilever Bestfoods Robertsons LLC and 24.9 percent holding Total South Africa Ltd., the local unit of Total SA. To contact the reporter on this story: Vernon Wessels in Johannesburg at vwessels@bloomberg.net To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Katherine Snyder at ksnyder@bloomberg.net

2006-11-30 00:00:00 UTC

Russia's RTS Climbs to Record on Oil; Lukoil, Gazprom Advance

http://www.bloomberg.com/news/2006-11-30/russia-s-rts-climbs-to-record-on-oil-lukoil-gazprom-advance.html

Maria Ermakova

Stocks in Russia , the world's second-largest oil producer behind Saudi Arabia, rose after crude climbed to a two-month high in New York. The country's benchmark RTS Index reached a record . OAO Lukoil (LKOH) , Russia's biggest oil producer, and OAO Gazprom (GAZP) , the world's largest natural gas producer, led the advance. ``Oil prices will keep rising,'' said Sergei Ambartsumov, a fund manager at Hermitage Capital Management in Moscow, which has about $3.2 billion in Russian stocks. Most of the companies in the RTS are still undervalued, he said. The dollar-denominated RTS Index climbed 0.7 percent to 1776.68 at the close of trading in Moscow, rising for an eighth consecutive day, the longest streak of gains since April. The measure surpassed a previous record 1765.35 set on May 6. The ruble-based Micex Index added 0.2 percent to 1550.58. The Russian stock market, the world's biggest emerging market, is approaching $1 trillion in value, mostly because of the country's burgeoning oil industry. Crude oil for January delivery rose 0.7 percent to $62.90 a barrel on the New York Mercantile Exchange. Futures gained 2.4 percent to $62.46 yesterday, the highest close since Sept. 29, after a government report showed U.S. fuel supplies unexpectedly fell last week and on signs forecast cold weather may increase heating demand. Lukoil rose 1.4 percent to $89. Gazprom advanced 0.9 percent to $11.70. Oil Price Expectation ``There is an expectation that the oil price will rise into the year's end as a result of winter demand and more assertive OPEC action at its mid-month meeting,'' Russian broker Alfa Bank wrote in a daily market report today. The Organization of Petroleum Exporting Countries last month agreed to cut 1.2 million barrels of daily output, citing rising global stockpiles and slower than forecast demand growth. OPEC, which pumps about 40 percent of the world's oil, will consider output levels when the group meets in Abuja, Nigeria, on Dec. 14. Oil has gained 9.8 percent in the past 12 months, helping the RTS Index (RTSI$) surge 71 percent in the period. Energy producers make up more than half of the weighting of the RTS. Gazprom shares have soared 78 percent in the past year because of higher oil prices and after President Vladimir Putin ended restrictions on foreigners owning the stock. Gazprom's market value reached $276 billion as of today's close, making it the world's fourth largest public company behind Exxon Mobil Corp., General Electric Co. and Microsoft Corp. `Stimulating Fund Managers' The decline of the U.S. dollar against other currencies is also helping the Russian market because it ``is stimulating fund managers to invest in so-called real assets, such as the ruble, stocks and real estate,'' Hermitage's Ambartsumov said. The dollar dropped to a 20-month low against the euro and was the weakest in three months versus the yen this week on speculation a slowing U.S. economy will prompt the Federal Reserve to cut interest rates. The Russian ruble has gained 8.8 percent against the dollar over the past 12 months. Rubles for delivery tomorrow rose 0.2 percent to 26.30 rubles per dollar today on the Moscow Interbank Currency Exchange. Shares of AFK Sistema, a financial holding controlled by billionaire Vladimir Yevtushenko, advanced 2.2 percent to $27.75 in London , after surging 4.6 percent yesterday. Sistema owned by increased its stakes in two Bashkortostan petrochemical companies to more than 25 percent, as it tries to build a vertically integrated oil business, the company said Nov. 28. OAO VimpelCom, Russia's second-largest mobile-phone company, increased 3.1 percent to $75.29 in New York. Third- quarter profit rose 38 percent to $268.4 million as the company added more customers. That beat the $247 million median estimate of nine analysts surveyed by Bloomberg. To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net . To contact the editor responsible for this story: Balduin Hesse in London at bhesse2@bloomberg.net .

2006-12-01 00:00:00 UTC

Kuwait Finance Mulls Stake in Rashid Hussain, Banks

http://www.bloomberg.com/news/2006-12-01/kuwait-finance-mulls-stake-in-rashid-hussain-banks-update2-.html

Angus Whitley

Kuwait Finance House, the Persian Gulf 's largest Islamic investment bank, said it's considering buying a stake in Rashid Hussain Bhd. and other Malaysian banking groups, the latest overseas suitor to size up lenders in the Asian nation. ``We actually look at both organic and MNA as an opportunity for us and with the recent relaxation in the rules, we are talking to various people, not just RHB, for us to acquire a stake or actually increase our stake,'' Jamelah Jamaluddin, deputy chief executive officer of Kuwait Finance's local unit, said today in Kuala Lumpur . Malaysian lenders have become targets after the country's central bank last month said it will allow domestic banks to enter merger talks with more than one company at the same time. Australia & New Zealand Banking Group Ltd. this week agreed to pay A$833 million ($658 million) for 24.9 percent of AMMB Holdings Bhd. (AMM) , Malaysia 's fifth-biggest bank. While Rashid Hussain is ``one that we look at,'' Kuwait Finance isn't in talks with the banking group, Jamelah said, declining to say whether the Middle Eastern bank will seek central bank approval to start talks. Kuwait Finance is ``looking at the numbers. That's about it. We did our own analysis and assessment.'' Shares of Rashid Hussain, which controls the country's fourth-largest lender, jumped as much as 8 sen, or 5.5 percent, to 1.53 ringgit and traded at 1.51 ringgit at 12:29 p.m. in Kuala Lumpur, giving the bank a market value of 1.1 billion ringgit ($306 million). Kuwait Finance is considering acquiring assets or a stake in certain banking groups in Malaysia, Jamelah told reporters. ``We are talking to a few,'' she said, declining to name them. ``There are banks which we find'' could be ''a potential partner for us.'' The group is also interested in acquiring assets in countries like Indonesia , the Philippines and Vietnam , she said. To contact the reporter on this story: Angus Whitley in Kuala Lumpur at awhitley1@bloomberg.net ; Stephanie Phang in Kuala Lumpur at +60- sphang@bloomberg.net . To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net .

2006-12-01 00:00:00 UTC

Transneft's Crude Tariffs to Rise by 8.7% Next Year

http://www.bloomberg.com/news/2006-12-01/transneft-s-crude-tariffs-to-rise-by-8-7-next-year-update1-.html

Yuriy Humber

OAO Transneft, Russia 's state-owned pipeline monopoly, will charge 8.7 percent more on average for transporting crude oil next year, the Federal Tariffs Service said today on its Web site . About 3.6 percentage points of the increase will fund a pipeline from eastern Siberia to the Pacific Ocean , which is being built by Transneft to access Asian and U.S. clients. The tariff increase was ``slightly higher than expected,'' and was in line with inflation, said Natalia Kazakova, an analyst with Moscow-based MDM bank. It currently costs oil companies 55 cents to move a metric ton of crude 100 kilometers inside the country. Export crude is charged at 63 cents. All tariffs will be charged in rubles from Jan. 1, 2007, from U.S. dollars now, the service said. To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net . To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net .

2006-12-04 00:00:00 UTC

Equity One Appoints Olson Chief Executive Officer

http://www.bloomberg.com/news/2006-12-04/equity-one-appoints-olson-chief-executive-officer-update3-.html

Daniel Taub

Equity One Inc. (EQY) , a U.S. owner of neighborhood shopping centers, said Jeffrey Olson has become chief executive officer, succeeding Chaim Katzman, who resigned from the position four months earlier than originally planned. Katzman will continue to serve as Equity One's chairman, the North Miami Beach , Florida-based company said today in a statement. Katzman also is chairman of Israeli real estate developer Gazit-Globe Ltd. (GLOB) , which is proposing a $1.2 billion investment in Mills Corp., a Chevy Chase , Maryland-based shopping mall developer. Equity One, which owns about 200 shopping centers anchored by supermarkets, drug stores and other retailers, had said in August that Olson would join Equity One in January and become CEO in April. Olson ended up joining Equity One four months early and was named the company's president a month ago. ``Jeff Olson was only supposed to join us Jan. 1,'' Katzman, 57, said in a telephone interview. ``Everything got pushed forward three or four months.'' Katzman said leaving the CEO position will leave him ``more time to spend on other Gazit initiatives,'' such as real estate holdings in Canada and the pursuit of the Mills investment. ``My term was up at year-end, and I felt after 15 years it was time for someone else to come in.'' Gazit-Globe, the second-largest shareholder in Mills, the subject of a U.S. Securities and Exchange Commission accounting investigation, last month made a bid to buy $1.2 billion of Mills shares at $25.50 a share after its first proposal, for a dollar less a share, was rejected. Equity One is about 41 percent owned, directly and indirectly, by Gazit-Globe. Came From Kimco Olson joined Equity One after four years as president of the eastern and western shopping center regions of New Hyde Park , New York-based Kimco Realty Corp., the largest U.S. owner of community shopping centers. Equity One shares rose 58 cents to $28.05 as of 4 p.m. in New York Stock Exchange composite trading. They have gained 21 percent this year, less than the 33 percent increase in the Bloomberg REIT Index. Equity One also said Deborah Cheek has joined the company as vice president and director of finance. Before joining Equity One, Cheek was chief financial officer at closely held Landex Corp. and regional finance director at Kimco. To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net . To contact the editor responsible for this story: Rob Urban at robprag@bloomberg.net .

2006-12-05 00:00:00 UTC

Vale Opens 450 Megawatt Hydro Station in Brazil

http://www.bloomberg.com/news/2006-12-05/vale-opens-450-megawatt-hydro-station-in-brazil-update5-.html

Jeb Blount

Cia. Vale do Rio Doce , the world's second-largest mining company, opened a 450 megawatt hydroelectric complex in Brazil today, part of an effort to help power an expansion of mines, ports and refineries. Vale owns 48 percent of the Capim I and Capim II power stations, which cost about 1 billion reais ($463 million) to build. Rio de Janeiro-based Vale will run the power-generation complex with Cia. Energetica de Minas Gerais, Brazil's largest integrated power utility, pulp exporter Suzano Papel e Celulose SA (SUZB5) and the zinc unit of Grupo Votorantim. Roger Agnelli , 47, Vale's chief executive officer, has been expanding iron-ore, nickel and alumina mines and refineries to help meet soaring demand from China . The expansion has increased demand for energy from the company, Brazil's biggest industrial power consumer. Vale is the world's largest iron-ore and second- largest nickel producer. ``Energy today is a problem for all of humanity,'' Agnelli said at the opening of the complex, which is located in Brazil's central highlands near the town of Uberaba. ``Countries that don't have access to reasonably priced electricity will not be competitive.'' 360,000 Homes Capim Branco I has the capacity to generate 240 megawatts and Capim Branco II, which is about 90 percent complete, has the capacity of 210 megawatts. Together, that's enough electricity to power 360,000 average homes, based on U.S. Energy Department estimates. Construction on the two stations, which are located on the Araguari River, began in 2003. Capim Branco II will start producing electricity in January and will be fully operational by May, according to Celso Castilho de Souza, president of the joint venture between the companies built the complex. Agnelli said Vale will be unable to meet its goal of generating energy equal to half of its needs as environmental legislation and court challenges delay the construction of new dams and power plants. Vale currently produces about 15 percent of the energy it needs. The high cost of energy is hindering growth in Latin America 's biggest economy, Agnelli said. It costs about $80 per megawatt hour to produce energy in Brazil compared with about $43 dollars at a Vale plant in Dunkirk, France , he said. ``Brazil is losing competitiveness in a silent and continuous way because of the cost of energy,'' Agnelli said, adding that the company is seeking to build refineries and smelters in countries where energy is cheaper. Vale preferred shares , its most-traded class of shares rose 1.12 reais, or 2.14 percent, to 53.35 reais in Sao Paulo trading at 12:16 New York time. Votorantim, the nation's largest industrial group, has said the project will help its zinc mining and processing unit expand operations in Brazil. Votorantim owns a 13 percent stake in the complex, Cemig owns 21 percent and Suzano controls 18 percent. To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net To contact the editor responsible for this story: Robert Dieterich in New York at rdieterich@bloomberg.net

2006-12-06 00:00:00 UTC

ZiLog Sues Actel, Altera Over Chip-Programming Patent

http://www.bloomberg.com/news/2006-12-06/zilog-sues-actel-altera-over-chip-programming-patent-update1-.html

Jeff St.Onge

ZiLog Inc., a maker of computer chips for products including toasters and automobiles, sued competitors Altera Corp. (ALTR) and Actel Corp., alleging infringement of a patent covering a chip-programming technique. In a complaint filed Dec. 1 in federal court in San Francisco, ZiLog asked for a jury trial and unspecified cash compensation from Altera and Actel. The patent was granted in 1987 and U.S. patent regulators are taking a second look at it, ZiLog said in the filing. Stephanie Mrus, a spokeswoman for Mountain View, California-based Actel, and Anna Del Rosario, a spokeswoman for San Jose, California-based Altera, didn't return calls seeking comment on the suit. Perry Grace, a spokesman for San Jose-based ZiLog, also didn't return a phone message seeking comment. Shares of ZiLog, which had $78.8 million in sales last year and a $16.8 million net loss, fell 5 cents to $4 in Nasdaq Stock Market trading at 4:30 p.m. New York time. The shares have risen 64 percent this year. The case is ZiLog Inc. v. Altera Corp., No. 06cv7388, U.S. District Court, Northern District of California (San Francisco). To contact the reporter on this story: Jeff St.Onge in Washington jstonge@bloomberg.net . To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net .

2006-12-07 00:00:00 UTC

ReneSola Shares Surge, Giving Investors Sixfold Gain

http://www.bloomberg.com/news/2006-12-07/renesola-shares-surge-giving-investors-sixfold-gain-update3-.html

Renee Lawrence

Shares of ReneSola Ltd. (SOL) , a Chinese maker of wafers for solar-energy cells, climbed for a seventh consecutive trading session in London , giving investors in a share sale four months ago a sixfold return. The stock rose 14 pence, or 3 percent, to 477 pence in London. The shares were sold in August at $1.50 (79 pence) apiece. The Tortola, British Virgin Islands-based company is now valued at 477 million pounds ($936 million). The stock closed at 222 pence on Nov. 28, the day before the gains began. Global demand for solar panels is doubling every two years, according to Renesola. China's share of global cell manufacturing capacity has grown to more than 20 percent in 2005 from 1 percent in 2001, making it the world's third-biggest cell-making nation, according to the company. About 60 percent of Renesola's customers are based in China . ``The stock is still very cheap, the solar market is growing very strongly,'' Tien Yu Sieh, a Hong Kong based analyst at Merrill Lynch & Co., said in a phone interview today. ``They have effectively secured orders for their 2007 production and raw materials for that year. That makes us comfortable.'' The analyst rates the stock a ``buy'' with a 12-month price target of 800 pence. ReneSola plans to expand its production capacity by 47 percent next year. Directors of ReneSola held meetings with investors in the U.S. this week, the company said yesterday. To contact the reporter on this story; Renee Lawrence in London at rlawrence7@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

2006-12-08 00:00:00 UTC

N.Z. Oil & Gas Takes Control of Pike River Share Sale

http://www.bloomberg.com/news/2006-12-08/n-z-oil-gas-takes-control-of-pike-river-share-sale-update1-.html

Gavin Evans

New Zealand Oil & Gas Ltd. (NZO) said it will manage the sale of shares in its Pike River Coal Ltd. unit after three of the miner's directors resigned. Pike River, 61 percent-owned by New Zealand Oil & Gas (NZO) , is planning to sell shares in February to help fund the NZ$144 million ($99 million) development on the nation's South Island. Shareholders in the Wellington-based oil explorer will be offered one Pike share for every eight New Zealand Oil & Gas shares held. ``To ensure these objectives are met in the most effective manner, NZOG has taken direct control of the process,'' the company said in a statement to the New Zealand stock exchange. The Pike River mine, near Greymouth, is part-owned by Saurashtra Fuels Pvt. and India 's Gujarat NRE Coke Ltd. (GNC) It will become New Zealand's second-biggest export coal mine when full output of 1.3 million tons a year is reached after two years. Former Pike River Chairman Denis Wood and directors James Ogden and Graeme Duncan resigned from the board for personal reasons, New Zealand Oil & Gas said without elaborating. ``We're not prepared to say any more than that,'' Wood said in an interview. ``I just wish the project well.'' New Zealand Oil & gas shares fell 2 cents to NZ$1.02 at 1:35 p.m. in Wellington. Tunneling and site preparation has started at Pike River, which is scheduled to start producing low-ash and low-phosphorus coking coal late next year. The project is proceeding well and the board is confident the share-sale timetable will be achieved, Pike Chairman Ray Meyer said in the statement. To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net

2006-12-09 00:00:00 UTC

Taiwan Local Elections Show Chen Still Has Support

http://www.bloomberg.com/news/2006-12-09/taiwan-local-elections-show-chen-still-has-support-update3-.html

Yu-huay Sun

Taiwan 's voters delivered a split verdict in two important local elections today, electing a candidate of the ruling Democratic Progressive Party as mayor of the southern city of Kaohsiung, and choosing an opposition candidate as mayor of Taipei, the island's capital. In Kaohsiung, Chen Chu, a former chairwoman of the cabinet's Council of Labor Affairs, won. In Taipei, Nationalist Hau Lung-bin defeated former Premier Frank Hsieh of the DPP and James Soong , a former leader of the Nationalists, or KMT. The DPP's victory in Kaohsiung showed that President Chen Shui-bian and his party still have support in the country's south even after a recent series of corruption scandals. Chen is under pressure to resign over allegations that he and his wife, Wu Shu-chen, stole NT$14.8 million ($450,000) from a presidential fund. Wu was charged Nov. 3 with fraud, and prosecutors said they had enough evidence to charge Chen, who is immune from prosecution as a serving president. Chen and Wu deny wrongdoing and Chen has pledged to quit if his wife is convicted. ``The DPP can breathe more easily now,'' said Andrew Yang, secretary general of the Chinese Council of Advanced Policy Studies in Taipei, in a phone interview. ``Undecided voters cast their ballots in favor of Chen Chu. Chen Shui-bian's stumping for her in the last week worked.'' Relief for Chen Yang said the narrow margin of victory in Kaohsiung showed that the DPP's support is fragile, but winning such an important race could reduce pressure on the president to resign. ``Chen won't step down,'' he said. In Kaohsiung, Chen of the DPP beat Huang Jun-ying of the KMT by 49.41 percent to 49.27 percent, while in Taipei, the KMT's Hau beat Hsieh of the DPP by 53.81 percent to 40.89 percent, the Central Election Commission said on its Web site. Several KMT members of parliament, led by Lo Shih-hsiung, late today asked the Kaohsiung prosecutor to order a recount of the election in the city, citing the narrow margin. In an interview shown on television networks, they also said they will file a lawsuit seeking to annul the result. The KMT also has suffered from a recent corruption scandal, which was emphasized by the ruling party during the campaign. Ma Ying-jeou, Taipei's incumbent mayor and the KMT chairman, was questioned by prosecutors Nov. 23 for the second time over allegations he misused his office's special expense funds. Ma has denied the allegations and said Nov. 12 the investigation should find him innocent. Gauge of Sentiment The mayoral elections are considered a gauge of voter sentiment leading up to the next presidential election, which will be held in March 2008. The DPP won the last two presidential elections, in 2004 and 2000, by small margins. The DPP victory in Kaohsiung was a surprise: polls taken as late as Dec. 4 show the Nationalists leading in both cities. On Friday, Chen Chu accused her KMT challenger, Huang, of giving allowances to voters. President Chen, after voting in Taipei today, told reporters: ``In Kaohsiung, someone is suspected of buying votes. I call for prosecutors to investigate this.'' The KMT protested. ``The KMT strongly condemns President Chen's comment trying to influence the election results,'' KMT spokesman Huang Yu-cheng said in an e-mailed statement. Both cities elected new mayors because the incumbents have finished their second terms and can't run again. Taipei Mayor-elect Hau, 53, is a former minister of the cabinet's Environmental Protection Administration. Heavyweight Losers The losing candidates in Taipei were political heavyweights Hsieh and Soong. Hsieh, 60, resigned as premier on Jan. 17, the fourth leader in five years to quit the post, a month after the ruling party suffered a local election defeat because of strained ties with China . Soong, a former secretary general of the KMT, formed his People First Party in 2000 after losing an independent bid for the presidency. After conceding his loss today, Soong told reporters: ``I'll formally retreat from the political arena.'' Voters elected 52 new city councilors for Taipei: 24 from the KMT, 18 from the DPP, two from the PFP, two from the Taiwan Solidarity Union and six from smaller parties or independent candidates. Voters also elected 44 new councilors for Kaohsiung: 17 from the KMT, 15 from the DPP, four from the PFP, one from the Taiwan Solidarity Union, and seven independent candidates. To contact the reporter on this story: James Peng in Taipei at jpeng7@bloomberg.net Yu-huay Sun in Taipei ysun7@bloomberg.net To contact the editor responsible for this story: Mike Millard in Singapore at mmillard2@bloomberg.net Anthony Spaeth aspaeth@bloomberg.net

2006-12-11 00:00:00 UTC

Russian RTS Index Snaps 14-Day Gain; Gazprom and Lukoil Retreat

http://www.bloomberg.com/news/2006-12-11/russian-rts-index-snaps-14-day-gain-gazprom-and-lukoil-retreat.html

Maria Ermakova

Russian stocks fell, with the benchmark RTS Index (RTSI$) sliding from a record and posting its first loss in 15 sessions. OAO Gazprom (GAZP) and OAO Lukoil (LKOH) led the decline after crude oil dropped in New York. The dollar-denominated RTS Index lost 0.7 percent to 1,838.61 at the close of trading in Moscow. The measure today touched an intraday record of 1860.14. It gained 10 percent in the previous 14 trading days, its longest winning streak ever. The ruble-based Micex Index (INDEXCF) slid 0.1 percent to 1611.67. Gazprom, the world's biggest natural-gas company, fell 2.1 percent to $11.48. Lukoil, Russia's largest oil producer, decreased 1.3 percent to $89.50. Crude oil for January delivery lost as much as 1.3 percent to $61.25 a barrel on the New York Mercantile Exchange . Oil fell amid skepticism that any OPEC decision at a meeting in Nigeria on Dec. 14 will reduce a surplus in global supply. The Organization of Petroleum Exporting Countries, the producer of about 40 percent of the world's oil, will consider a second reduction in three months. Stockpiles in the U.S., the world's largest consumer, have risen 5.3 percent in the past year. Russia is the world's second-largest oil supplier and energy companies make up more than half of the RTS Index. The measure has surged 70 percent in the past 12 months, compared with a 28 percent gain for the Morgan Stanley Capital International's Emerging Markets Index, a global benchmark. Higher Price Estimate OAO Sberbank (SBER) , the country's biggest lender, climbed 2.4 percent to a record $2,861, valuing the company at $57 billion. Merrill Lynch & Co. raised its price estimate on the shares by 36 percent to $3,400 after increasing the forecast for the bank's earnings this year and next. Sberbank will benefit from surging mortgages in Russia and a planned sale of new shares, Merrill Lynch analyst Paul Tucker wrote in a report today. The lender aims to sell 198 billion rubles ($7.6 billion) of new shares early next year, Economy Minister German Gref said Dec. 6. ``The extra liquidity, and the proposed removal of some foreign ownership hurdles will be net positive,'' Tucker said. ``The country still has fewer than 200,000 mortgages and we think this will be the next great story.'' OAO Uralsvyazinform, Russia's fixed-line telephone monopoly in the Urals region, surged 8.5 percent to a record 5.35 cents, the biggest one-day gain in more than four months. OAO Central Telecommunication Company, which operates in central Russia, gained 3 percent to 68 cents. OAO VolgaTelecom, a provider of fixed-line services in the Volga region, advanced 1.8 percent to $4.55. Acquisition OAO Comstar United Telesystems approved the acquisition of a 25 percent plus one share stake in the operators' parent holding OAO Svyazinvest from billionaires Leonard Blavatnik and Viktor Vekselberg over the weekend, Reuters reported today, citing unidentified banking sources. The stake in the state holding is valued at $1.3 billion, according to the news agency . Irina Potekhina, a spokeswoman at AFK Sistema holding, which controls Comstar, said ``there is no purchase.'' Comstar's head of investor relations Maria Yeliseyeva could neither confirm nor deny the deal. The company will have a board meeting tomorrow, she said. Shares of Comstar increased 1.2 percent to $7 in London. To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net To contact the editor responsible for this story: Balduin Hesse in London at bhesse2@bloomberg.net

2006-12-11 00:00:00 UTC

CSN Raises Corus Bid to $9.6 Billion, Topping Tata

http://www.bloomberg.com/news/2006-12-11/csn-raises-corus-bid-to-9-6-billion-topping-tata-update8-.html

Matthew Craze

Cia. Siderurgica Nacional of Brazil SA raised its offer for Corus Group Plc, the U.K.'s largest steelmaker, to 4.9 billion pounds ($9.6 billion), topping a sweetened bid from Tata Steel Ltd. (TATA) CSN, Brazil's fourth-largest steelmaker, said it agreed to pay 515 pence for each share, 3 percent more than the 500 pence that Mumbai-based Tata offered yesterday. Corus's stock rose as high as 529.5 pence, signaling investors expect another bid. Tata and Rio de Janeiro-based CSN want to buy Corus, the former British Steel Plc, to add mills in Europe that supply automakers Ford Motor Co. and Volvo AB and to boost their bargaining power with raw material suppliers. Surging demand has spurred $78 billion of mergers in the industry this year. ``This is just a taster of what is shaping the steel industry as both suppliers and customers consolidate,'' said Stephen Pope, head of equity research at Cantor Fitzgerald LP in London. CSN Chief Executive Officer Benjamin Steinbruch's purchase of Corus would be the second-biggest in the industry this year, behind Mittal Steel Co.'s $38.3 billion takeover of Arcelor SA. The purchase will be made mostly through 4.35 billion pounds of debt underwritten by Barclays Plc (BARC) , ING Groep NV (INGA) and Goldman Sachs Group Inc. (GS) , CSN Chief Financial Officer Otavio Lazcano said on a conference call today. There is ``compelling logic'' to the merger, he said. Arcelor Mittal accounts for about 10 percent of world output and steelmakers want to get bigger partly to cut the costs of buying raw materials such as coal and iron ore. Cia. Vale do Rio Doce, BHP Billiton Ltd. and Rio Tinto Group control three-quarters of the global iron-ore trade. Undervalued Standard Life Plc, the biggest investor in Corus, said on Oct. 20 that Tata's first offer undervalued the Anglo-Dutch steelmaker. Standard said today in an e-mailed statement it's awaiting ``developments.'' Buying Corus would make Tata or CSN the world's fifth-largest steelmaker. Shares of Corus climbed 27.25 pence, or 5.5 percent, to 527.25 pence in London today. The stock has gained 79 percent this year. CSN's stock dropped 1 percent to 63.9 reais in Sao Paulo. Credit-default swaps based on 10 million euros of Corus debt rose by about 2,000 euros to 181,500 euros, according to data compiled by Bloomberg. An increase in the cost of the contracts indicates deterioration in credit quality. CSN's Lazcano said the company's net debt will rise $2.5 billion after the Corus purchase. Paying Too Much Bonds of Corus rose, with the yield on the 7.5 percent note maturing in October 2011 falling 4 basis points, or 0.04 percentage point, to 5.49 percent, according to Morgan Stanley prices. Investors said Tata Steel and CSN may be paying too much for Corus. Mittal's offer for Arcelor was 4.56 times the Luxembourg-based company's earnings before interest, taxes, depreciation and amortization, or Ebitda. CSN's bid is 5.73 times Corus's Ebitda, based on the U.K. steelmaker's earnings in the 12 months to June 30. Tata's offer is 5.03 times Ebitda. ``I don't see which party is going to stop,'' said Tom Muller, an analyst with Theodoor Gilissen Bankiers in Amsterdam. ``Both are going to finance the bid with loans using Corus as collateral, so they both have some room for maneuver.'' CSN's valuation of 4.9 billion pounds includes Corus's ``issued and to-be-issued share capital,'' the Brazilian company said today. Worst Performers Tata shares are the worst performers on India 's benchmark index in the past three months. The stock slumped 29 rupees, or 6 percent, to 453.4 rupees in Mumbai today, the sharpest decline since June 26. Tata Steel, which was borrowing 3.3 billion pounds for the initial bid, had said additional funding for its new offer would be provided for by Standard Chartered Bank Plc. and Standard Chartered First Bank Korea Ltd. Standard & Poor's had placed Tata's debt rating at ``BBB'' with negative implications and said a revision in the offer for Corus may have an ``adverse impact'' on the company's funds. Moody's Investors Service said Oct. 18 it may cut the company's Baa2 rating as the deal may ``constrain financial strength.'' Tata said today in its statement it will make an announcement on CSN's bid ``in due course.'' Deputy Managing Director T.K. Mukherjee declined to comment. Pensions Support CSN's offer hinged on getting the support of Corus's pension trustees, who could have refused to approve it to the U.K.'s pensions watchdog. Corus's pension plans have liabilities totaling 13 billion pounds. The Brazilian company said today it will pay 138 million pounds up front to fund the deficit in the Corus Engineering Steels Pension Scheme. It also will increase the contribution rate on the British Steel Pension Scheme to 12 percent from 10 percent until March 31, 2009, it said. CSN's debt is rated Ba2 by Moody's and BB with a negative outlook by S&P. A purchase of Corus by CSN will bring annual savings of $300 million by 2009, the Brazilian company said. A further $450 million will come from iron-ore sales to Corus by 2009, it said. `Very Segmented' ``The steel industry is still very segmented, and if companies consolidate, there will be a lot of benefits,'' said Park Sung Mee, a steel analyst at Deutsche Securities Korea Co., in Seoul . ``The effects are becoming greater as bigger consolidations occur.'' Both CSN's Steinbruch and Tata's Chairman Ratan Tata want to add finishing mills in Europe to local plants. CSN said Nov. 23 it's a better ``fit'' for Corus than Tata. Brazilian steelmakers, bolstered by record profits, are turning to North America and Europe for deals because of limited growth at home. CSN produces enough iron ore from its mines in Brazil to supply all of Corus's requirements, Steinbruch said in a statement on Nov. 17. CSN, which owns 3.8 percent of Corus, is developing its Casa de Pedra iron ore mine, which it expects to produce as much as 50 million tons a year by 2009. ``The CSN plan makes the most sense for Corus,'' said Rodrigo Barros, an analyst at Unibanco SA in Sao Paulo. ``The purchase will really change the scale of CSN and is a perfect combination.'' Prices of iron ore have risen for four straight years and gained 19 percent to a record this year, spurring companies to seek alliances that will cut costs and secure iron-ore supplies. Corus was created through the combination of British Steel and the Netherlands' Royal Hoogovens in 1999. Chief Executive Officer Philippe Varin, who took over in 2003, has returned the company to profit after job cuts and plant closures. Lazard Ltd. (LAZ) and Goldman Sachs Group Inc. are financial advisers to CSN. UBS AG is also CSN's corporate broker. Credit Suisse Group, JPMorgan Cazenove and HSBC Holdings Plc. (HSBA) are advising Corus. Deutsche Bank AG (DBK) and ABN Amro Holding NV are advising Tata. To contact the reporters on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net ; Matthew Craze in Buenos Aires at mcraze@bloomberg.net To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

2006-12-11 00:00:00 UTC

South Auto Says It's Seeking to Sell Shares Overseas

http://www.bloomberg.com/news/2006-12-11/south-auto-says-it-s-seeking-to-sell-shares-overseas-update2-.html

Irene Shen

China South Automobile Co., parent of the Chinese partner of Ford Motor Co. (F) and Mazda Motor Corp. (7261) , said it's aiming to sell shares in Hong Kong or the U.S. next year to fund its expansion plans. ``We're looking at raising stocks abroad because we need to tap the financial markets overseas,'' South Auto President Yin Jiaxu said today. ``We're aiming for that to happen in 2007.'' South Auto may follow SAIC Motor Corp. in tapping capital markets to fund expansion in the world's fastest-growing major vehicle market. Vehicle sales in the country rose 26 percent in the first 10 months of 2006 to 5.77 million units. South Auto has invited Ford, Mazda, Suzuki Motor Corp. (7269) and other companies to invest when it sells shares, the South China Morning Post reported on Oct. 20, citing Yin. The company may raise about $500 million in an initial public offering in Hong Kong as early as next year, the report added. The company could get approval to list in Hong Kong within 25 days of getting permission to sale shares from the Chinese regulator, Yin said today in a live telecast of an event to mark China's fifth anniversary as a World Trade Organization member. South Auto is the largest shareholder in Chongqing Changan Automobile Co. (200625) , which makes vehicles with Ford, Mazda and Suzuki in China. Changan Auto's net income more than doubled to 533.3 million yuan in the nine months to Sept. 30, it said on Oct 18. Changan Auto's yuan-denominated shares rose 5.4 percent to 6.81 yuan today. The stock has risen 87 percent this year. SAIC Motor received approval to sell 19.1 billion yuan of assets, including stakes in ventures with General Motors Corp. and Volkswagen AG, to its listed unit, Shanghai Automotive Co. last month. To contact the reporter on this story: Irene Shen in Shanghai at ishen4@bloomberg.net To contact the editor responsible for this story: Bret Okeson at bokeson@bloomberg.net

2006-12-12 00:00:00 UTC

China Vanke Gets Approval to Sell Shares to Expand

http://www.bloomberg.com/news/2006-12-12/china-vanke-gets-approval-to-sell-shares-to-expand-update2-.html

Jianguo Jiang

China Vanke Co. (000002) , the country's largest listed developer, said it received approval to raise as much as 4.2 billion yuan ($536 million) selling new shares to finance the construction of apartments in Beijing and Shanghai. Vanke's local-currency shares rose 1.3 percent to a record 12.95 yuan at the 3 p.m. close in Shenzhen. The company's shares have tripled this year. The company received China Securities Regulatory Commission approval to sell 700 million yuan-denominated shares, Vanke said in a statement to Shenzhen's stock exchange today. Vanke plans to sell the shares to biggest shareholder China Resources Holdings Ltd. and nine institutional investors, Vanke said on July 18. It will use the proceeds to build apartments in Beijing, Shanghai , Wuhan and other cities, the company, based in the southern city of Shenzhen, said. Vanke is taking advantage of demand for Chinese stocks to raise money. The Shanghai and Shenzhen 300 Index, a benchmark for shares on China's two exchanges, surged 95 percent this year, the world's fifth-biggest gainer. To contact the reporter on this story: Jianguo Jiang in Shanghai at jjiang@bloomberg.net To contact the editor responsible for this story: Tom Kohn at tkohn@bloomberg.net

2006-12-13 00:00:00 UTC

Dynegy Expects 2007 Profit After LS Power Acquisition

http://www.bloomberg.com/news/2006-12-13/dynegy-expects-2007-profit-after-ls-power-acquisition-update4-.html

Edward Klump

Dynegy Inc. (DYN) forecast a profit for 2007 after the acquisition of power plants from LS Power Group for $2.65 billion. Dynegy, in a statement today, forecast 2007 net income available to common shareholders of $190 million to $255 million. That compares with the Houston-based company's forecast in November for a 2006 loss of $305 million to $325 million. The 2007 forecast, which is equivalent to about 25 cents to 34 cents a share, reflects the impact of the acquisition of plants from closely held LS Power of East Brunswick, New Jersey, Dynegy said. The transaction is expected to close at the end of the first quarter of 2007, the company said ``It's pretty much in line with our expectations,'' said Daniele Seitz , an analyst at Dahlman Rose & Co. in New York who rates Dynegy shares a ``buy'' and owns none. Seitz said she expected 2007 profit of 39 cents a share based on a full year of results from the LS Power plants. Dynegy expects proceeds that may top $500 million from the sale of non-core assets in 2007 and will record pretax costs of about $40 million this quarter because of the reduced value of a plant in the U.S. Southeast, Chief Financial Officer Holli Nichols said on a conference call with analysts and investors. She didn't identify the plant that will be written down. Shares of Dynegy rose 15 cents, or 2.2 percent, to $6.85 in New York Stock Exchange composite trading. The stock has risen 19 percent since the acquisition of the LS Power plants was announced on Sept. 15. Heightened Capacity The acquisition will expand Dynegy's generating capacity by 71 percent to almost 20,000 megawatts, or enough to supply 16 million U.S. homes, slides prepared by Dynegy for the call showed. That will make the company the third-largest U.S. power producer that doesn't own utilities. Plants that will be put up for sale next year mostly are so- called peakers that are called into service only during times of maximum demand, Nichols said. The plant whose value will be written down this quarter also is a peaker, she said. LS Power will get 40 percent of Dynegy's stock and $375 million in cash and notes for the plants. The companies will create a joint venture to build new plants and expand existing ones. Dynegy's chief executive officer, Bruce Williamson, sold assets and unwound a failed energy trading business to avoid bankruptcy after the collapse of Enron Corp. in 2001. Calpine Corp., which is reorganizing in bankruptcy, currently is the largest independent power producer in the U.S. and NRG Energy Inc. is second largest. (A replay of Dynegy's conference call will be available on the company's Web site at http://www.dynegy.com .) To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net . To contact the editor responsible for this story: Robert Dieterich at rdieterich@bloomberg.net .

2006-12-14 00:00:00 UTC

Vale's Indonesia Nickel Unit May Cut Output on Power

http://www.bloomberg.com/news/2006-12-14/vale-s-indonesia-nickel-unit-may-cut-output-on-power-update1-.html

Chanyaporn Chanjaroen

Cia. Vale do Rio Doce, which bought Canadian nickel producer Inco Ltd. this year, may cut production at its Indonesian unit from around Dec. 20 because of a power shortage. PT International Nickel Indonesia (INCO) , the country's largest nickel producer, may miss the 2006 production target of 71,000 metric tons as lower-than-average rainfall since October reduced electricity at the company's hydroelectric power generator, according to an e-mailed statement. ``Given the unpredictability of weather patterns, it is not possible for PT Inco to estimate the production impact of current low reservoir levels at this time,'' the Jakarta-based company said in the statement. Prices of nickel, used in stainless-steel production, have more than doubled this year partly because of output disruptions around the world. Eramet SA, which owns the world's largest ferronickel smelter in New Caledonia , has reduced production by 50 tons a day because of a strike that started Sept. 25. PT Inco's production already dropped 13 percent in the third quarter from a year earlier after one of the company's furnaces was destroyed by a fire in May. The company resumed operations in mid-August. ``If lower-than-average rainfall persists over a period of several weeks, the company may need to make more significant production cuts in order to raise the levels of its reservoirs,'' it said. PT Inco said it produces around 1,400 tons to 1,500 tons of nickel-in-matte, or the material for refining, each week. The company may bring forward maintenance activities originally scheduled for during a planned shutdown at the end of the first quarter to mitigate the production decline. Nickel for delivery in three months on the London Metal Exchange advanced as much as $1,600, or 4.8 percent, to $34,850 a ton today, the highest since at least 1987. To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net . To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net .

2006-12-15 00:00:00 UTC

Bank of China Buys Aircraft Lessor for $965 Million

http://www.bloomberg.com/news/2006-12-15/bank-of-china-buys-aircraft-lessor-for-965-million-update2-.html

Chan Sue Ling

Bank of China Ltd., the nation's second-biggest bank, said it will buy all shares of Singapore Aircraft Leasing Enterprise for $965 million, the first major acquisition made by a state-owned Chinese bank. The Beijing-based bank will buy 100 percent of Asia 's largest plane lessor from the existing shareholders and assume $2.28 billion of debt, according to its press release today. The price represents 1.8 times to the company's equity value of $535 million as of Sept. 30. China 's commercial airline fleet flew 133 million people, more than the population of Japan , in the first 10 months of this year and will probably more than triple in size to 3,900 planes in the next two decades, according to Boeing Co. Leasing aircraft lets airlines expand and replace aging planes quicker with less of their own money. ``In the long run, there must be some sort of aircraft leasing company to serve the country's demand,'' said Winson Fong, who helps manage about $2.3 billion of assets at SG Asset Management in Singapore . ``Aircraft leasing will grow along with the fleet expansion in China.'' Bank of China said the acquisition is part of its strategy to diversify into non-interest income, and will provide a platform for it to expand into aircraft leasing. The lender will also get cross-selling opportunities with airline companies. ``Bank of China will leverage on its global client resources and institutional network in China and overseas to support Singapore Aircraft's global business development, and particularly in the Chinese aviation sector,'' the bank said. New Directors The Chinese lender said it will appoint directors to the board of Singapore Aircraft, which will be run by the company's existing management based in Singapore. Robert Martin will remain the company's chief executive officer. Singapore Airlines Ltd. (SIA) , the world's largest carrier by market value, said its share of the sale is about S$528 million ($342 million), based on current exchange rate . The book value of the unit was about S$306 million as at the end of September, the carrier said in an e-mailed reply to Bloomberg News queries. Singapore Aircraft said in September it wants to increase the number of planes it operates for airlines, earning management fees in addition to lease payments. The company manages 14 planes for third parties out of a fleet of 77, and has 28 planes on order. It also has an option to buy 20 additional aircraft. More Passengers Bank of China wants to expand into plane leasing and has an agreement with Royal Bank of Scotland Plc., which holds about 4.4 percent of the Beijing-based company, to develop aircraft finance. Rival Industrial & Commercial Bank of China Corp. has already loaned more than $8.9 billion to the aviation industry, covering at least 100 aircraft loans and 200 guarantees, according to its Web site. China's airlines flew 16 percent more passengers in the 10 months ended October than a year earlier, Yang Guoqing, vice minister at the Civil Aviation Administration of China, said on Dec. 11. Airlines in the country will buy 2,880 new airplanes till 2025, costing about $280 billion in the period, according to Boeing. Founded in 1912, Bank of China has been providing guarantees on almost all planes leased by Chinese carriers since the 1980s, according to its Web site. BOC International (Holding) Ltd., the investment bank of Bank of China, Morgan Stanley (MS) and UBS AG (UBSN) advised the Chinese bank. Officials of the investment banks are prohibited to comment before the announcement. Major Purchase ``This is the first major foreign acquisition by a Chinese bank,'' said David Chin, managing director of UBS in Hong Kong. ``It is also a unique opportunity for Bank of China to acquire a global leasing platform,'' said Chin. Singapore Aircraft leases planes to 34 airlines including Canada 's WestJet, China's Shandong Airlines and Kenya Airways, posting a profit every year since it began operations in 1993. The company had $3.1 billion of assets as of Sept. 30. Earnings are rising even as airlines in the Asia-Pacific region, the fastest-growing area for air traffic in the world, struggle with high oil prices . Singapore Airlines and German Bank WestLB AG, each own 35.5 percent owner of Singapore Aircraft. Temasek Holdings Pte, Singapore's state-owned investment agency, and GIC Special Investments, the private-equity unit of the Government of Singapore Investment Corp., each have a 14.5 percent stake. The shareholders hired Citigroup Inc. (C) in June to explore options including an initial public offering or a stake sale. The New York-based bank's spokesman in Hong Kong , Richard Tesvich, declined to comment. Singapore Aircraft, which reported a sevenfold jump in net income to $34.7 million in the year ended March 31, is planning to boost the number of aircraft it owns and manages to 300 in five years, Martin said in an interview in September. To contact the reporter on this story: Cathy Chan in Hong Kong at kchan14@bloomberg.net Chan Sue Ling in Singapore slchan@bloomberg.net To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net ; Bret Okeson at bokeson@bloomberg.net

2006-12-15 00:00:00 UTC

Gazprom, Ukraine in Talks on Raising Europe Gas Flows

http://www.bloomberg.com/news/2006-12-15/gazprom-ukraine-in-talks-on-raising-europe-gas-flows-update1-.html

Lucian Kim

OAO Gazprom (GAZP) , the sole Russian exporter of natural gas, is in talks with Ukraine on boosting shipments of the fuel to western Europe via Ukraine's pipeline network, a year after cutting supplies over a price dispute. Gazprom Chief Executive Officer Alexei Miller met with Ukrainian Energy Minister Yuri Boyko in Moscow today to discuss raising transit volumes to Europe next year, the state-run company said in an e-mailed statement today. No other details were provided. Gazprom supplies a quarter of Europe's gas, about 80 percent of which is shipped across Ukraine. It curbed deliveries in January after Ukraine rejected a threefold rise in prices, leading to shortages in countries including Germany and Italy. Ukraine has already agreed on the price for 2007 gas deliveries $130 per 1,000 cubic meters, a third more than it eventually agreed to pay this year. Gazprom's stock advanced 0.6 percent to $11.57 at 2:30 p.m. in Moscow, valuing the company at $273.8 billion. To contact the reporter on this story: Lucian Kim in Moscow at lkim3@bloomberg.net ; To contact the editor responsible for this story: Daniel Tilles at

2006-12-18 00:00:00 UTC

Shaw Shares Rise 8.6% on $5.3 Billion China Contract

http://www.bloomberg.com/news/2006-12-18/shaw-shares-rise-8-6-on-5-3-billion-china-contract-update4-.html

Margot Habiby

Shares of Shaw Group Inc. , a construction company for the energy industry, rose 8.6 percent after it was selected by China as part of a group to build four nuclear reactors in a project valued at $5.3 billion. Shaw , based in Baton Rouge, Louisiana, is teamed with Toshiba Corp.'s Westinghouse Electric Co., which will lead the effort to build the 1.1-gigawatt reactors. Two will be at Sanmen in China's Zhejiang province and two in Yangjiang in Guangdong, the U.S. Energy Department said Dec. 16. Shaw, which does about 40 percent of the modifications and maintenance at U.S. nuclear plants, said it will likely supply engineering, construction and procurement services to the China project, the biggest international nuclear reactor contract ever. Shaw owns 20 percent of Westinghouse, which builds and services nuclear reactors and was acquired by Japan's Toshiba in October. ``There's an expectation that this is just the beginning of a broader nuclear expansion plan, specifically in China,'' Steven Fisher, an analyst with UBS Securities in New York, said in an interview. ``There's ongoing interest in what the nuclear opportunity would be in the United States as well.'' Shaw shares rose $2.62 to $33.20 at 4 p.m. in New York Stock Exchange composite trading. Volume was about 4 million shares, more than quadruple the three-month daily average. Future Formula Construction of the reactors will start in early 2007, Shaw said in a Dec. 16 statement on its Web site. China plans to add at least 20,000 megawatts of nuclear power to China over the next 15 years, the company said. ``They have a long-term plan for 25 or 30 reactors, and we certainly have confidence that we will be part of that formula for the future,'' Chris Sammons , Shaw's vice president of investor relations, said in a telephone interview today. ``We believe this is a very positive development for the possibility of future developments there.'' Shaw will add skilled engineers to its workforce in Massachusetts, New Jersey, North Carolina and Louisiana because of the new contract, it said. The company didn't specify the number of jobs that will be created. The four reactors will be Westinghouse-designed AP 1000 units, the Energy Department said its statement. The plants should start operating by 2013, Westinghouse President Stephen Tritch said Dec. 16. Technology Transfer U.S. Energy Secretary Samuel Bodman and Mai Kai, head of China's National Development and Reform Commission, signed the agreement for the project in Beijing over the weekend during a five-nation energy summit. The contract ends about two years of negotiating and lobbying by Westinghouse. Westinghouse agreed to transfer technology to China that could be used in the construction of more nuclear reactors in China during the next 15 to 20 years, Bodman said. China's order is part of more than $200 billion forecast to be spent worldwide on nuclear power by 2030, according to the Paris-based International Energy Agency, an adviser to 26 of the world's largest energy users. A surge in oil and natural gas prices and concern that the carbon dioxide released by burning fossil fuels leads to global warming are driving the revival. China is the third-biggest nuclear energy user in Asia, after Japan and South Korea, according to the BP Statistical Review of World Energy June 2006 report. To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net . To contact the editor responsible for this story: Aimee Sullivan at asullivan@bloomberg.net .

2006-12-18 00:00:00 UTC

China Life Has Biggest Gain in 3 Years on Stock Sale

http://www.bloomberg.com/news/2006-12-18/china-life-has-biggest-gain-in-3-years-on-stock-sale-update3-.html

Patricia Cheng

China Life Insurance Co. (2628) and Ping An Insurance (Group) Co.'s Hong Kong shares had their biggest one- day gain in three years after the nation's biggest insurer won approval to sell stock in Shanghai . China Life's H shares jumped 10 percent to a record HK$22.70, the biggest increase since Dec. 29, 2003. The Beijing- based company on Dec. 15 won approval from the China Securities Regulatory Commission to sell yuan-denominated equities, known as A shares, that are restricted to domestic investors and a limited number of qualified foreign institutions. ``The A shares are expected to be traded at a premium to H shares because of scarcity and liquidity in the Shanghai market,'' said Bob Leung, an analyst at Merrill Lynch & Co. ``That expectation has been driving investors to add H shares aggressively in the past few days.'' China Life's next-biggest rival Ping An (2318) Insurance (Group) Co., also planning a domestic share sale, surged by a record 8.8 percent. Investors unable to buy directly into China's domestic stock markets, the best performing in Asia in the past six months, are chasing the Hong Kong shares of Chinese financial companies that may benefit from their holdings of domestic stocks and an expected rise in the value of the yuan. ``China Life and Ping An are the best-positioned financial stocks to ride on the capital market reforms,'' said Leung, who has a ``buy'' rating on China Life and a price target of HK$24.60. He estimated that China Life will post at least 12 billion yuan ($1.53 billion) in earnings from its equity investments for the full year. The insurer had a first-half profit of 8.97 billion yuan . Share Sale China Life plans to sell 1.5 billion A shares, an offer that may raise more than $4 billion based on the current price. The stock will be available to only 52 qualified overseas institutional investors. The company will be the first insurance stock to be listed in China. Its Hong Kong share have more than tripled this year, surpassing the 73 percent increase of the Hang Seng China Enterprises Index, which measures the performance of 37 state- owned companies traded in Hong Kong. The country's insurance companies are benefiting from the stock market rally in China and Hong Kong as they are allowed to invest more in domestic and overseas securities. China Life bought 651.5 million of shares in the initial public offer of Industrial & Commercial Bank of China in October. The stock of the nation's biggest bank has since risen 39 percent, handing China Life a gain of more than HK$770 million. China Life was traded at a price-to-book ratio of 6.82, the second-highest among insurance stocks in Asia after Australia 's AMP Ltd., which has a ratio of 6.87. Ping An was traded at 6.10, the third-most expensive. `Quite Reasonable' ``They are undoubtedly more expensive than other Asian insurance stocks,'' said Mandy Chan, who helps manage $6 billion of Asian shares outside Japan at ABN Amro Asset Management in Hong Kong. ``If premiums continue to grow at a high level, say 20 percent a year, assets continue to expand and they continue to benefit from capital gains on investments, the valuation is still reasonable.'' China Life reported earlier today that premium income for the year's first 11 months rose 16 percent to 172.5 billion yuan. ``The number was good,'' said Andrew Sullivan , head of Asian sales trading at Daiwa Securities SMBC Co. in Hong Kong. ``The insurance market is quite young and people should care about the longer term prospects.'' To contact the reporter on this story: Patricia Cheng in Hong Kong at pcheng9@bloomberg.net To contact the editor responsible for this story: Ben Richardson at brichardson8@bloomberg.net

2006-12-19 00:00:00 UTC

United Airlines, Three Carriers, Can Expand Alliance

http://www.bloomberg.com/news/2006-12-19/united-airlines-three-carriers-can-expand-alliance-update1-.html

John Hughes

UAL Corp.'s United Airlines and members of its Star Alliance , the world's largest airline grouping, can add three new carriers with antitrust immunity, the U.S. Transportation Department said. The three are Swiss International Air Lines Ltd., which is being taken over by Deutsche Lufthansa AG (LHA) ; Polskie Linie Lotnicze LOT SA, Poland's national airline; and TAP SGPS SA, Portugal's state-owned carrier. Government approval, which is not yet final, would let a total of eight airlines in North America and Europe act more like a single carrier, coordinating routes, fares and marketing, without fear of antitrust prosecution. The alliance has 16 international carriers, according to the department. ``The proposed alliance expansion will enhance competition,'' Andrew Steinberg, the assistant transportation secretary for aviation and international affairs, said in the decision today in Washington. The alliance also will expand airline service, he said. The decision also expands United's existing antitrust immunity with ACE Aviation Holdings Inc. (ACE/H) 's Air Canada (AC/A) to all international operations. Previously, United and Air Canada had antitrust immunity only to cooperate on flights between the U.S. and Canada. Along with United and Air Canada, the three newcomers have antitrust immunity to cooperate with Lufthansa, Austrian Airlines Group, owner of the country's largest airline, and SAS Group's Scandinavian Airlines, the Nordic region's biggest carrier. American, Continental The decision is a defeat for AMR Corp.'s American Airlines and Continental Airlines Inc. American argued that antitrust immunity for the carriers would reduce competition at major European hubs. Continental said the alliance would enhance market power in the U.S.-London and U.S.-Poland markets. The Transportation Department instead found that the immunized alliance would boost competition with other large airline alliances such as SkyTeam and oneworld. The Star Alliance carriers told the department the addition of the three airlines would add service to 25 cities, and the expansion of the United-Air Canada alliance would add 59 more. ``It enables us to cooperate more closely and efficiently with our Star Alliance partners,'' said Robin Urbanski, a spokeswoman for Elk Grove Township, Illinois-based United. ``We can offer our customer more international service options.'' The Transportation Department will take comments for 21 days before making the decision final. To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net To contact the editor responsible for this story: Dave Versical at dversical@bloomberg.net

2006-12-19 00:00:00 UTC

Wesfarmers Gains Clearance to Buy Linde Gas Assets

Robert Fenner

http://www.bloomberg.com/news/2006-12-19/wesfarmers-gains-clearance-to-buy-linde-gas-assets-update1-.html Wesfarmers Ltd., whose businesses range from mining to insurance, gained preliminary clearance from the antitrust regulator to buy Linde AG (LIN) 's Australian gas assets for about A$500 million ($392 million). The Australian Competition and Consumer Commission doesn't intend to oppose the bid, Perth-based Wesfarmers said in a statement to the Australian Stock Exchange today. The acquisition still requires formal approval, which is expected to be granted, the company said. Chief Executive Officer Richard Goyder is making acquisitions to give scale to existing businesses such as mining and insurance. He agreed to pay A$700 million for OAMPS Ltd. in September to add underwriting and broking to the insurance unit. The Linde Australian business produces oxygen, nitrogen, argon and hydrogen gas and will be run separately to Wesfarmers' 40 percent owned Air Liquide Australia business, which also produces gases for the industrial and medical market. Wesfarmers has complete terms with Linde and expects to complete the deal in February, the company said. Wesfarmers expects the acquisition will add to earnings in the first year of ownership. Linde Australia had 2005 earnings before interest, tax, depreciation and amortization of A$37 million on sales of A$100 million. Wiesbaden, Germany-based Linde is selling the assets to meet undertakings to Australia's antitrust regulator after its acquisition of BOC Group Plc. To contact the reporter on this story: Robert Fenner in Sydney rfenner@bloomberg.net To contact the editor responsible for this story: Jason Scott in Hong Kong jscott14@bloomberg.net

2006-12-19 00:00:00 UTC

Corus May Go to Auction If Bids Continue, Panel Says

http://www.bloomberg.com/news/2006-12-19/corus-may-go-to-auction-if-bids-continue-panel-says-update2-.html

Danielle Rossingh

Corus Group Plc, the subject of a takeover battle between Tata Steel Ltd. (TATA) and Cia. Siderurgica Nacional SA, would be put to an auction if the offers are still outstanding before Jan. 30, the U.K. Takeover Panel said. Should a ``competitive situation'' continue to exist shortly before Jan. 30, the panel may require ``any revised offers to be published in accordance with an auction procedure,'' it said today in a statement. Corus said in a separate statement that an extraordinary shareholder meeting planned for tomorrow was adjourned. CSN has no comment on the subject, Jose Marcos Treiger, the Brazilian steelmaker's head of investor relations , said by telephone from his office in Sao Paulo . ``This ruling will give us a clear winner by Jan. 30,'' Priya Viswanathan, a credit analyst at Frontline Capital Analysts Pvt, in Bangalore, India , said today in an e-mail. ``We continue to see a greater chance of a CSN buyout, as we believe they are likely to bid more aggressively than the Tatas.'' Brazil's CSN raised its offer for Corus on Dec. 11, to 515 pence a share. That's 3 percent higher than the 500 pence offered by Tata Steel. Tata initially offered 455 pence a share on Oct. 20, and CSN topped that on Nov. 17. Shares of Corus gained 3.5 pence, or 0.7 percent, to 531.5 pence in London today, valuing the company at 4.78 billion pounds ($9.39 billion). The stock has risen 80 percent this year. To contact the reporter on this story: Danielle Rossingh in London at drossingh@bloomberg.net . To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net .

2006-12-19 00:00:00 UTC

Frederick's of Hollywood Goes Public With Acquisition

http://www.bloomberg.com/news/2006-12-19/frederick-s-of-hollywood-goes-public-with-acquisition-update4-.html

Carol Wolf

FOH Holdings Inc., the parent company of intimate apparel chain Frederick's of Hollywood, agreed to merge with Movie Star Inc. (MSI) in a move that will make Frederick's a public company. Publicly held Movie Star, a maker of women's sleepwear and lingerie for retailers including Wal-Mart Stores Inc. (WMT) , will buy Frederick's parent in a $34.6 million deal that leaves Los Angeles-based Frederick's with a 60 percent stake in the combined company, the two apparel makers said today in a statement. The transaction effectively makes Frederick's a public company for the first time since 1997, when it was acquired by closely held Knightsbridge Capital Corp. for $67.4 million. The chain, which sells in 130 stores, through catalogues and on line, emerged from more than two years of bankruptcy protection in 2003. Frederick's shareholders will receive 23.7 million shares of Movie Star common stock, New York-based Movie Star said in a U.S. Securities and Exchange Commission filing today. The combined company will be called Frederick's of Hollywood Group Inc. (FOH) The transaction value is based on Movie Star's shares, which rose 18 cents, or 14 percent, to $1.46 at 4:23 p.m. in American Stock Exchange composite trading. Earlier, the stock reached $1.68, the highest since March 2004. Michael Tokarz, through his closely held Tokarz Investments LLC, holds a majority stake in Frederick's, whose only other shareholder is Fursa Alternative Strategies. Tokarz, a retired Kohlberg Kravis Roberts & Co. partner, also holds a 22 percent stake in Movie Star through his TTG Apparel LLC affiliate, making him its largest shareholder. Sells to Chains Movie Star will also offer its shareholders an additional $20 million in new shares. Tokarz and Fursa have agreed to buy any of the newly issued Movie Star stock not purchased by existing shareholders, the companies said. In the year ended July 29, Frederick's had revenue of about $139 million, compared with Movie Star's $51 million in the year ended June 30. Movie Star posted a loss of $1 million, or 6 cents a share, in the year through June. Movie Star sells its goods in chains and department stores, and also operates its own retail outlets. Last fiscal year, about 25 percent of its sales came from Wal-Mart, while Target Corp. accounted for about 15 percent of sales, according to the SEC filing . The combined company plans to open about 50 Frederick's of Hollywood stores in the next three years, the filing said. The transaction is expected to be completed in the second quarter of 2007. To contact the reporter on this story: Carol Wolf in Cleveland at cwolf@bloomberg.net . To contact the editor responsible for this story: Michael Nol at mnol@bloomberg.net .

2006-12-19 00:00:00 UTC

Peru Gold Output in September Fell Most in 19 Months

http://www.bloomberg.com/news/2006-12-19/peru-gold-output-in-september-fell-most-in-19-months-update2-.html

Alex Emery

Peru 's gold production in September tumbled 9.5 percent, the most in 19 months, led by a plunge at Newmont Gold Corp. (NEM) 's Yanacocha mine, the country's biggest source of the precious metal. Output fell to 16,437 kilograms from a year earlier, including a 40 percent drop at Yanacocha, because of declining ore grades, the Energy and Mines Ministry said today in a statement on its Web site. Copper output rose 1.4 percent to 85,074 tons, including gains at Antamina and Xstrata Plc (XTA) 's Tintaya mine, the ministry said. Peru, the world's fourth-largest copper producer and fifth- biggest in gold, is counting on $12 billion in mining exports to drive economic expansion of 7 percent this year. The Andean country has benefited from a 50 percent gain in copper prices from a year ago and a 24 percent rally in gold. ``Everyone keeps exploring, so we hope there will be more discoveries,'' Oscar Gonzalez Rocha, chief executive office of Southern Copper Corp., the world's fifth-largest copper producer, told reporters in Lima today. ``But all these projects aren't going to increase output until 2009.'' Newmont, based in Denver, is the world's second-biggest gold producer behind Barrick Gold Corp. The shares rose 66 cents, or 1.4 percent, to $47.23. Silver output rose 5.6 percent to 273,073 kilograms, while zinc fell 7.5 percent to 97,364 tons, and lead fell 8.3 percent to 24,447 tons. Tin fell 22 percent, molybdenum fell 4.8 percent, and iron rose 6.5 percent. Peru is the world's largest silver and tin producer and third in zinc. Southern Copper Southern Copper aims to invest $250 million next year in mine expansion, an upgrade of its Ilo smelter and engineering studies at its Los Chancas and Tia Maria copper deposits, Gonzalez said. The company also plans to invest $15 million in exploration in Peru and $20 million each in Mexico and Chile , he said. ``We believe prices will remain high next year, but not at the peaks reached in 2006,'' Gonzalez said. ``Average prices will probably be slightly less than this year, with copper prices at around $3 a pound.'' Gold for February delivery rose 1.3 percent to $626.10 per ounce on the Comex Division of the New York Mercantile Exchange . Copper prices fell 0.2 percent to 3.0165 per pound. To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

2006-12-20 00:00:00 UTC

Visto Patent Verdict Against Seven Networks Is Upheld

http://www.bloomberg.com/news/2006-12-20/visto-patent-verdict-against-seven-networks-is-upheld-update2-.html

Joel Rosenblatt

Seven Networks Inc., whose e-mail software is used in mobile phones, lost a bid to overturn a jury verdict that it infringed three patents owned by Visto Corp. U.S. District Judge T. John Ward in Marshall, Texas , today upheld the verdict, increased the jury award to a total of $7.7 million, and ordered Seven Networks to stop providing its Personal Edition, Server Edition and Enterprise Edition products. The sales halt was put on hold pending appeal as punishment for a Visto lawyer getting improper access to confidential Seven Networks information. ``We view these damages as compensation for years of unauthorized use of our product,'' Visto co-founder Daniel Mendez said in an e-mail. ``Visto has spent 10 years and millions of dollars to develop our technology. It is only right that others should not be allowed to use it for free.'' The same patents are the subject of a suit against Research In Motion Ltd. (RIM) , maker of the BlackBerry e-mail device. Visto, Seven Networks and Good Technology Inc., all software makers, are vying to challenge Research In Motion's supremacy in the market for wireless e-mail. Seven Networks will appeal the decision, which was expected, General Counsel Harvey Anderson said in an interview. Anderson said the appeal probably won't be completed until mid- 2008. A patent-infringement suit brought by Seven Networks against Visto is schedule to go to trial in June, he said. Mendez said he is confident Visto will prevail. The two companies, both closely held and based in Redwood City, California , provide e-mail software for cell-phone service providers including Cingular Wireless LLC and Sprint Nextel Corp. Visto also provides software to Vodafone Group Plc. The case is Visto Corp. v. Seven Networks Inc., 03cv333, U.S. District Court for the Eastern District of Texas, Marshall Division. To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net . Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net . To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net .

2006-12-20 00:00:00 UTC

Spain's Pasa to Buy Italian Soup-Cube Maker Star

http://www.bloomberg.com/news/2006-12-20/spain-s-pasa-to-buy-italian-soup-cube-maker-star-update1-.html

Sara Gay Forden

Spain 's Pasa Group plans to buy Italy's Star SpA to combine the bouillon cube makers into a business owned equally by the companies' controlling families. Star's owner, the Fossati family's Findim Investments, will invest in Pasa after the transaction to reach an equal partnership with the Spanish company's owners, the Carulla family, according to a joint statement issued today. Financial details weren't disclosed. ``The acquisition of Star will reinforce our position in the culinary aids on a pan-European level,'' Artur Carulla, president of Pasa Group, said in the statement. Pasa is the holding company that controls soup and bouillon-cube maker Gallina Blanca. Star is the biggest maker of bouillon cubes in Italy , where its other products include ready- to-use sauces and tomato products. The company also sells its products in the Netherlands. The Fossati family ended efforts to sell Star last year after offers were below its expectations. Il Sole/24 Ore said at the time the bids were worth about 800 million euros ($1.1 billion). Spanish financial Web site Bolsacino.com said today's transaction was worth 900 million euros, without saying how it got the information. Isabel Atkinson, a spokeswoman for the Carulla family's holding company Agrolimen said she couldn't comment on or disclose the value of the agreement. To contact the reporter on this story: Sara Gay Forden in Milan at sforden@bloomberg.net . To contact the editor responsible for this story: Keith Campbell at k.campbell@bloomberg.net .

2006-12-21 00:00:00 UTC

Growth in China Iron Ore Imports to Slow, Group Says

http://www.bloomberg.com/news/2006-12-21/growth-in-china-iron-ore-imports-to-slow-group-says-update1-.html

Helen Yuan

Overseas purchases of iron ore by China , the world's largest importer of the raw material, may gain 10 percent next year, about half this year's rate, as domestic production rises, an industry association says. Imports of the steel-making raw material may climb to 358 million tons from an estimated 325 million tons this year, Zou Jian, chairman of China Metallurgical Mining Enterprise Association, said at a conference in Beijing today. Iron ore imports in 2005 totaled 275 million tons. Rising ore demand from China, the world's biggest steel producer, has helped to push contract prices of the commodity to a record. The country makes about 80 percent of its steel in blast furnaces, which use iron ore , compared with a global average of 60 percent, according to consultant MEPS Europe Ltd. China's domestic iron ore production this year is about 550 million tons, with an iron content of about 33 percent or less, compared with 65 percent for ore from Australia , the world's biggest supplier, Zou said. China is to strictly monitor iron ore imports, restricting them from flowing to obsolete plants and the plants to be shut down by the government in a move to curd over capacity in steel making, Chen Xianwen, deputy director of marketing and research division of China Iron and Steel Association, said at the conference today. Benchmark for import qualification is to be raised and the number of licensed importers reduced, Chen also said, without elaborating on details. Currently there are 118 import license holders in China, according to Chen. To contact the reporter for this story: Helen Yuan in Beijing at hyuan@bloomberg.net To contact the editor responsible for this story: James Poole in Singapore at jpoole4@bloomberg.net

2006-12-25 00:00:00 UTC

China's Nov. Oil Processing Rises, Gas Output Gains

http://www.bloomberg.com/news/2006-12-25/china-s-nov-oil-processing-rises-gas-output-gains-update1-.html

Wing-Gar Cheng

China , the world's biggest oil user after the U.S., increased crude oil processing by 6.4 percent and gas production by 15 percent in November from a year earlier to meet rising demand, according to government data. Crude oil processing rose to 26.1 million metric tons last month while gas production reached 5.1 billion cubic meters, according to a faxed statement today from China Mainland Marketing Research Co., which compiles data for the National Bureau of Statistics. Chinese oil companies want to maximize domestic energy resources by opening new fields and extracting oil from sand and rock to meet demand without adding to a swelling import bill. Oil imports rose 15.6 percent to 133.6 million tons in the first 11 months, with the cost soaring 42.5 percent to $61.7 billion, according to customs figures. Crude oil processing rose 5.9 percent to 279.6 million tons from January through November, and gas production climbed 20 percent to 53.1 billion cubic meters in the 11 months, today's figures show. To contact the reporter on this story: Wing-Gar Cheng in Beijing at wgcheng@bloomberg.net . To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net .

2006-12-26 00:00:00 UTC

BHP Wins Agreement From Japan Smelters on Copper Fees

http://www.bloomberg.com/news/2006-12-26/bhp-wins-agreement-from-japan-smelters-on-copper-fees-update3-.html

Shigeru Fujimoto

BHP Billiton Ltd. (BHP) , the world's largest miner, has reached agreements on 2007 fees for processing copper in Japan , persuading at least one smelter to accept a reduction that highlights a global shortage of raw materials. Pan Pacific Copper Co. and Sumitomo Metal Mining Co. (5713) , Japan's biggest smelters, reached respective agreements with BHP on Dec. 20 and Dec. 22, officials at the two smelters said. Sumitomo accepted lower fees and agreed to terminate a clause that would have allowed it to benefit from any increase in copper prices, spokesman Hiromasa Ooba said by phone from Tokyo. A reduced supply of raw materials, combined with growth in smelting capacity, gave BHP a strong hand in the negotiations, which set a benchmark for other Japanese smelters and could reduce their earnings. Copper prices have fallen 26 percent from a record high close of $8,800 a metric ton on May 11. ``Copper smelting margins may fall by about 30 percent compared with this year,'' Hiroyuki Suzuki, a senior analyst at Mizuho Investors Securities Co. in Tokyo , said, adding that earnings of individual smelters would depend on the extent to which their businesses are diversified. Pan Pacific Copper Co., Japan's biggest smelter, is a joint venture between a unit of Nippon Mining Holdings Inc. and Mitsui Mining & Smelting Co. Etsuko Hanashima, a spokeswoman for Nippon Mining Holdings Inc., confirmed the agreement with BHP, while giving no details. Melbourne-based BHP Billiton spokeswoman Samantha Evans declined to comment. ``Price Participation'' BHP agreed last month with smelters in India and South Korea on treatment charges of $60 a metric ton and refining fees of 6.0 cents a pound. It also terminated the so-called ``price participation'' clause allowing smelters to benefit from any rise in copper prices. ``Our treatment and refining charges are similar to those of other smelters in India , China and South Korea,'' Sumitomo's Ooba said, adding that there would be no price participation. Smelters buy ore and concentrate at a price based on the London Metal Exchange benchmark minus the processing fees. Chinese smelters settled 2006 fees of $90 and 9 cents, while other Asian smelters, including Japan, agreed $95 and 9.5 cents. Under the price-participation clause for 2006 contracts, smelters charged an extra 10 percent of the increase in copper prices once they rose above 90 cents a pound. For mid-year contracts that started on July 1, Japanese smelters agreed to charge $60/6 cents and to cap the price- participation up to $1.80 a pound with a base price of $1.20. Raw Materials The market for copper concentrates, used to make refined copper, will remain in deficit in 2007 and 2008 as smelting capacity growth outpaces mine supplies, BHP Billiton said on Dec. 15. Smelting capacity has expanded in China and India to meet rising demand for copper, used in wires and pipes. Copper for delivery in three months on the London Metal Exchange, up 44 percent this year, closed at $6,325 a metric ton on Friday. There was no trading on Monday and Tuesday because of the Christmas and Boxing Day holidays. Shares of Nippon Mining Holdings rose 11 yen, or 1.3 percent, today to close at 860 yen on the Tokyo Stock Exchange. Sumitomo Metal Mining, which is also Japan's largest producer of nickel and gold, rose 75 yen, or 5.1 percent, to 1,542 yen. Shares of BHP closed down 1 percent at A$25.05 when they last traded on Friday on the Australian stock exchange. To contact the reporters on this story: Jae Hur in Singapore at jhur1@bloomberg.net ; Shigeru Fujimoto in Tokyo at sfujimoto@bloomberg.net To contact the editor responsible for this story: James Poole in Singapore at jpoole4@bloomberg.net

2006-12-28 00:00:00 UTC

Russia-Belarus Gas Row May Harmonize EU Energy Policy

http://www.bloomberg.com/news/2006-12-28/russia-belarus-gas-row-may-harmonize-eu-energy-policy-update1-.html

Katya Andrusz

A dispute between Belarus and OAO Gazprom that threatens to interrupt gas supplies to the European Union next week may lead to a more integrated EU energy policy and greater diversification of energy sources. Gazprom changed a June demand that Belarus pays four times more for its gas next year into a request this week that it sell half of Beltransgaz, the country's pipeline operator, in return for preferential pricing until 2011. Belarus broke off talks on Dec. 26 and threatened to halt or siphon off transit deliveries if Gazprom shut down supplies, before agreeing today to resume talks. ``Politically, there's an understanding among member states that a more coordinated energy policy is vital,'' European Commission spokesman Amadeu Altafaj said today by telephone. ``The EU is very dependent on foreign suppliers for both gas and oil, and so it's clear that a more integrated energy policy is needed and not only during a crisis.'' The EU became Russia 's largest energy market in 2004, when 10 countries joined the bloc. Some commentators, particularly in the former Soviet satellite states of Eastern Europe, say Russia is using Gazprom to put political pressure on the EU. ``Gas and oil have become instruments for Russia's imperialist policy,'' Bronislaw Geremek, a European parliamentary deputy and former Polish foreign minister, said in an interview with private broadcaster TVN24. German Concern Russia temporarily cut off gas deliveries to Ukraine in January over a similar price spat. The clash led to gas shortages in EU countries including Germany, France and Poland and dented Gazprom's reputation as a reliable supplier. The German government said it is concerned, though it gave assurances there was no danger of gas shortages in Germany should Gazprom supplies be halted. ``I appeal to both parties to reach a sustainable agreement about the price as quickly as possible,'' Economy Minister Michael Glos said in an e-mailed statement. Gazprom is taking advantage of its importance as a gas exporter to raise prices and demand concessions from client countries. Last week, Georgia agreed to pay more than double this year's prices for gas in 2007, while Moldova will pay $170 per 1,000 cubic meters next year, up from $160 at present. EU Energy Commissioner Andris Piebalgs pressed Belarus and Russia to find a solution quickly and said the commission, the EU's executive body, is monitoring the situation ``very closely,'' as it may disrupt gas supplies to EU member states. Supplies to Poland Yesterday, Gazprom told Poland's gas monopoly, Polskie Gornictwo Naftowe i Gazownictwo SA or PGNiG, that supplies may be disrupted from Jan. 1 if Beltransgaz tapped transit gas for Belarusian domestic use. Belarus pays $46.68 for 1,000 cubic meters of gas, about a fifth of West European prices. Gazprom Deputy Chief Executive Alexander Medvedev called Belarus's threat to stop or use transit supplies an attempt to ``blackmail'' Europe and Russia. Located between Poland and Russia, Belarus has been ruled for 12 years by President Alexander Lukashenko , who won a disputed third term this year in elections the U.S. and the EU criticized as undemocratic. Polish-Russian ties have been frosty since Gazprom signed a contract last year with two German companies to build a pipeline underneath the Baltic Sea , a deal compared by Polish Defense Minister Radoslaw Sikorski to the Hitler-Stalin Pact that carved up Poland before World War II. Relations cooled further in November when Poland vetoed EU trade talks with Russia until Russia lifted a year-old ban on Polish food products. `Extremely Dependent' ``Poland is extremely dependent on the gas coming from Russia,'' Altafaj said. ``It hasn't got the same stocks as other countries; Poland hasn't developed the availability of stocks that other countries have developed.'' While Germany has the fourth-largest gas reserves in the 25-member EU, according to German Economy Ministry spokeswoman Beatrix Brodkorb, Poland has reserves of only 1.6 billion cubic meters, estimated at enough to supply the country for just two to three weeks if the winter becomes more severe. ``We're still hoping the dispute is solved this week,'' said Magdalena Kicinska, a PGNiG spokeswoman. ``We do have plans to increase stocks, but that's an investment of months and not a few weeks.'' To contact the reporter on this story: Katya Andrusz in Warsaw at kandrusz@bloomberg.net To contact the editor responsible for this story: Chris Kirkham at ckirkham@bloomberg.net

2007-01-01 05:46:00 UTC

Kylie sees in 2007 with UK concert

http://www.reuters.com/news/video/videoStory?storyID=66890ecbb019835bbee2386a95cad2eee563a464

2007-01-01 05:59:00 UTC

Thailand says Thaksin backers may be behind blasts

http://www.reuters.com/article/worldNews/idUSBKK14775120070101

2007-01-01 06:09:00 UTC

Somali government vows to pursue fleeing Islamists

http://www.reuters.com/article/worldNews/idUSL0186366220070101

2007-01-01 06:29:00 UTC

Japan TV apologizes for "topless" New Year's Eve shock

http://www.reuters.com/article/entertainmentNews/idUST13300820070101

2007-01-01 07:09:00 UTC

Hundreds hurt in New Year revelry in Philippines

http://www.reuters.com/article/worldNews/idUSSP14166320070101

2007-01-01 07:17:00 UTC

Hispanics battle blacks in major Calif. prison riot

http://www.reuters.com/article/topNews/idUSN3144650620070101