TheChek News Flow

US LNG industry poised to expand as Donald Trump vows to lift restrictions

S&P finds ramp-up of exports could add $1.3tn to American economy in next five years with capacity expected to double

Donald Trump’s plan to ramp up liquefied natural gas exports could provide a $1.3tn boost to the US economy, with the oil and gas industry poised to get the green light to build new export facilities and pipelines on the Gulf of Mexico.

The forecast from S&P Global is based on expectations the industry will double LNG export capacity over the next five years, as the president-elect follows through with a pledge to lift a pause on approvals, expedite new export terminals and turbocharge the industry. 

“We already have large contracts in place with major LNG suppliers and we certainly expect to get more of that,” said Alan Armstrong, chief executive of Williams, one of the largest gas pipeline companies in the US.

Still, regulatory hurdles and litigation by green campaigners could slow the LNG expansion, according to analysts.

The US already boasts the world’s biggest LNG sector and the industry is set to be among the biggest beneficiaries of the change in administration. Trump has vowed to roll back regulations and has appointed former North Dakota governor Doug Burgum as secretary of the interior, tasked with slashing red tape. 

Venture Global, one of the biggest US LNG developers, is planning to raise $2.3bn in an IPO this month, which would value the company at up to

$110bn as it aims to take advantage of investor enthusiasm over a potential boom in energy exports under Trump.

The first of a new wave of US LNG supply hit the market last month when Venture Global shipped a maiden cargo from its new Plaquemines facility in Louisiana to Germany. A few days later Cheniere Energy announced it had produced its first LNG from a new facility in Texas.

Anatol Feygin, Cheniere’s chief commercial officer, told the Financial Times the US would remain the world’s biggest LNG exporter for decades to come.

Despite record exports of 11.9bn cubic feet a day in 2023, the industry has had a fractious relationship with President Joe Biden’s administration, which paused new licenses for export terminals in January to carry out an analysis of the costs and benefits of continued expansion. Trump has vowed to lift the pause on the first day of his administration — but there could be hurdles. 

“Even though President Trump said on the first day he’ll lift the pause . . . you have regulatory risk and litigation risk, so it's not clear sailing,” said Mark Bononi, an analyst at Wood Mackenzie. 

The Department of Energy analysis released in December found the continued rapid growth of the US LNG industry risked driving up domestic fuel prices and imperilling climate targets. While Trump is expected to throw out the report, it could provide legal grounds for green campaigners to target new projects. 

“If the Trump administration disregards these facts . . . that’s something we can challenge in court,” said Nathan Matthews, a senior attorney for the Sierra Club. 

Gillian Giannetti, a senior attorney for the Natural Resources Defense Council, said the DOE must incorporate and use the findings in the studies because they were in the official record, or else give a reasoned, logical and non-arbitrary reason for why they were not applying them. 

“If they do not do that then they would be expressly violating American law,” Giannetti said. 

S&P expects LNG export capacity to double over the next five years and that future export activity is anticipated to generate more than $2.5tn in total revenues for US business and $166bn in federal and state tax revenue.

S&P Global has warned that if new or currently halted LNG capacity does not come online, 100,000 jobs will be at risk and $250bn of contributions to GDP will go unrealised as rivals Qatar, Canada and Mozambique accelerate their own projects. 

EU reassesses tech probes into Apple, Google and Meta

Tech groups have urged Donald Trump to intervene against overzealous European regulation

Brussels is reassessing its investigations of tech giants including Apple, Meta and Google, just as the US groups urge president-elect Donald Trump to intervene against what they characterise as overzealous EU enforcement.

The review, which could lead to the European Commission scaling back or changing the remit of the probes, will cover all cases launched since March last year under the EU’s digital markets regulations, according to two officials briefed on the move.

It comes as the Brussels body begins a new five-year term amid mounting pressure over its handling of the landmark cases and as Trump prepares to return to the White House next week.

“It’s going to be a whole new ballgame with these tech oligarchs so close to Trump and using that to pressurise us,” said a senior EU diplomat briefed on the review. “So much is up in the air right now.”

All decisions and potential fines will be paused while the review is completed, but technical work on the cases will continue, the officials said.

While some of the investigations under review are at an early stage, others are more advanced. Charges in a probe into Google’s alleged favouring of its app store had been expected last year.

Two other EU officials said Brussels regulators were now waiting for political direction to take final decisions on the Google, Apple and Meta cases.

The review comes as EU lawmakers call for the commission to hold its nerve against US pressure, while Silicon Valley chiefs hail Trump’s return as the start of an era of lighter tech regulation.

Mark Zuckerberg, Meta’s chief executive, on Friday called on the president-elect to stop Brussels from fining US tech companies, complaining that EU regulators had forced them to pay “more than $30bn” in penalties over the past 20 years. 

Zuckerberg, who recently announced plans to abolish fact-checking on Facebook and Instagram — potentially running foul of EU rules — said he was confident the incoming Trump administration wanted to defend American interests abroad.

The implications of Trump’s presidency were a factor in the review, one of the officials said, while insisting his victory had not triggered it.

The commission said it “remains fully committed to the effective enforcement” of its rules. “There is no delay in finalising the opened non-compliance cases, and especially not due to any political considerations,” an EU spokesperson said.

The ongoing cases were “not yet ready at technical level”, the spokesperson added, arguing that such investigations took time because of their complexity, novelty and the “need to ensure that commission decisions are legally robust”.

Before Trump’s victory, EU regulators had been pursuing aggressive action against the world’s biggest tech groups, passing a clutch of reforms aimed at opening markets and setting a regulatory framework for Big Tech.

Under the Digital Markets Act, a law seeking to curb the market abuse of big platforms, Brussels launched investigations last March into Apple, Google and Meta.

The commission has also come under pressure to use the full powers of the Digital Services Act, a set of rules aimed at policing content online, to curb the growing influence of tech billionaire Elon Musk in European affairs. 

In addition to the similar investigation of Google’s owner Alphabet, the commission has been looking at whether Apple favoured its own app store, as well as Facebook owner Meta’s use of personal data for ads.

Brussels is also consulting Apple’s rivals on the tech giant’s proposals to make its iOS operating system compatible with connected devices.

Denmark’s Margrethe Vestager and France’s Thierry Breton, both of whom took a tough line against US tech companies, stepped down from the commission in November.

“Priorities may be shifting,” said one. “The [digital rules] come from the previous commission.”

EU lawmakers have called for regulators to hold firm. Stephanie Yon-Courtin, an MEP who was involved in drafting the tech rules, said EU probes could not be sacrificed to avoid diplomatic fallout.

In a letter to Ursula von der Leyen, the commission president, Yon-Courtin said the DMA “cannot be taken hostage”.

She added: “Please reassure me that your cabinet and yourself are fully supporting the effective implementation of the DMA, without further delay.”

Cost of Sizewell C nuclear project expected to rise close to £40bn

Final price tag for building new power plant is likely to be double 2020 estimate

The final price tag for building the planned Sizewell C nuclear power station in Suffolk is likely to reach close to £40bn, according to people close to the negotiations over the flagship energy scheme. 

The sum is double the £20bn estimate given by developer EDF and the UK government for the project in 2020, reflecting surging construction costs as well as the implications of delays and cost overruns at sister site Hinkley Point C. 

The higher estimate is likely to raise questions over the government’s strategy for a nuclear power revival, at a time of stretched government finances and cost of living concerns. 

EDF says that once up and running, Sizewell C should be able to supply low carbon electricity to the equivalent of about 6mn homes for 60 years.  

The Treasury is due to decide whether to go ahead with the project in this year’s multiyear spending review, according to officials. 

The UK government and French energy group EDF were the initial backers of Sizewell C but they are trying to raise billions of pounds from new investors, a process that is dragging on longer than planned.  

Earlier this month the Department for Energy Security and Net Zero (Desnz) said it could not reveal the current cost estimate for the project as it was “commercially sensitive”. 

But one senior government figure and two well-placed industry sources said that a reasonable assumption for the cost of building Sizewell C would be about £40bn in 2025 prices.

The government has already awarded £3.7bn of state funding to the project. Ministers had planned to reach a final investment decision by the end of 2024 but were forced to delay this until spring 2025. Now there is industry speculation that any deal could slip beyond the autumn.

Potential investors in Sizewell C include Centrica, Schroders Greencoat, Emirates Nuclear Energy Corporation and Amber Infrastructure Group.

According to accounts published at Companies House last week, Sizewell C is “continuing to make good progress in negotiations with private investors”.

Alison Downes, executive director of campaign group Stop Sizewell C, urged the government to “come clean” on the “massive true cost” of the project given that households would be paying upfront for its construction via a levy on energy bills. “This secrecy around Sizewell C is inexcusable.”

Dale Vince, a big Labour party donor and founder of green energy company Ecotricity, has written to the government’s new Office for Value for Money warning that the construction of Sizewell “will saddle consumers with higher bills long before it delivers a single unit of electricity”. 

Speaking to the Financial Times, he added: “Nuclear is too expensive, too slow — and very expensive to contain at the end of its life.”

Nuclear power currently supplies about 14 per cent of the UK’s electricity and many experts say it will be critical to push to cut carbon dioxide emissions to net zero by 2050.

However, all but one of Britain’s current ageing fleet of plants is due to close by March 2030, potentially sooner if planned life extensions cannot go ahead. 

Only one new nuclear power station, Hinkley Point C in Somerset, is currently being built in the UK but it is delayed and over budget.

The project is due to start generating in 2029 at the earliest, and cost up to £46bn. That compares to initial expectations from 2016 that it would start at the end of 2025 and cost £18bn. 

Sizewell C uses the same European Pressurised Water technology as Hinkley Point C. EDF has said Sizewell C should be much cheaper partly because lessons will have been learned and supply chains will be more developed. 

It is also being built using a different financial structure, the regulated asset base model, which is used in the water sector including to finance the new Thames Tideway sewage tunnel. Developers start getting paid during construction from consumers’ bills, rather than having to wait for the plant to be finished.  

But there is scepticism inside government about how much lower Sizewell C’s price tag would be compared to Hinkley Point C.

Progress on the project has partly been knocked by the recent resignation on health grounds of Rob Holden as chair of Sizewell C Limited. 

A spokesperson for Desnz said he did not recognise the “speculative” figure of £40bn for the cost of Sizewell C. 

“The project is expected to reduce the cost of the electricity system, boost our supply of secure homegrown power and generate major investment nationwide.”

Bill Ackman’s plan to become baby Buffett

Bill Ackman has a lot of balls in the air.

A few years ago he invented Pershing Square SPARC Holdings, a listed “special purpose acquisition rights” company aimed at eventually taking a large prominent company such as Elon Musk’s X or SpaceX public.

Ackman also wants to take his hedge fund Pershing Square public and last year attempted to raise a $25bn fund in the US.

Now the billionaire investor is taking his dreams a step further, stating on Monday that he plans to recreate his own Berkshire Hathaway from a hodgepodge of real estate assets that have languished on public markets for a decade.

On Monday, Ackman unveiled a more than $1bn deal for Pershing Square to take control of Howard Hughes Holdings, a real estate developer he created in 2012 from the carcass of mall operator General Growth Properties.

Under his control, Ackman aims to turn Howard Hughes into an acquisition vehicle that uses its cash flows and balance sheet to buy other public and private companies.

Ackman said the gambit was part of his efforts to build a “modern-day Berkshire Hathaway”.

The billionaire investor has always dreamt big and promised epic returns from his financial alchemy.

A decade ago, he fixated on “platform companies”, where an acquisitive chief executive could conjure blistering returns from flipping companies. Unfortunately, during that obsession he bet billions on Valeant Pharmaceuticals. But instead of a 45x return, Pershing Square lost billions.

Now an ascendant keyboard warrior on X and vocal backer of president-elect Donald Trump, Ackman is aiming to seize the moment by transforming Pershing Square into a large financial group with the capacity to compete with powerful private equity buyers on large takeovers, starting with his takeover of Howard Hughes.

Afterwards, he aims to revive his US fundraise, which was pulled last year after raising less than 10 per cent of the $25bn Ackman targeted, and eventually will take his firm public.

It all sounds exciting on paper, but Ackman has a history of coming up short.

Can Howard Hughes really generate much cash? It hasn’t for its decade-long history. It’s even unclear if Howard Hughes shareholders will accept Ackman’s $85-per-share purchase price.

In a presentation on Monday, Ackman pointed to Pershing Square’s “long-term track record in raising equity capital from institutional and retail investors”, and mentioned a record-sized $4bn acquisition vehicle he raised in 2020.

Left unsaid was that the vehicle was unwound two years later due to regulatory complications — just another in a long line of Ackman dreams left unfulfilled.

Stephen Miran, nominated to advise Trump, has suggested high tariffs could be the price allies pay for U.S.’s defense umbrella

To serve as an economic adviser to Trump, it helps to share his belief that tariffs make the U.S. richer. Not many economists meet that criterion.

Stephen Miran has made just that case. Miran, nominated to chair Trump’s Council of Economic Advisers, has written that the U.S. could be better off with average tariffs of around 20% and as high as 50%, compared with the current 2%.

Miran’s views are worth studying, and not just because he’s going to advise Trump. He has described tariffs as a tool, and international intervention to weaken the dollar as another, that could address a longstanding global tension: the U.S.’s economic and military support for other countries have contributed to an overvalued dollar, wide trade deficit and hollowed-out industrial base.

“Sweeping tariffs and a shift away from strong dollar policy can have some of the broadest ramifications of any policies in decades, fundamentally reshaping the global trade and financial systems,” Miran wrote in a November report for Hudson Bay Capital, where he is senior strategist.

Miran wrote the report “A User’s Guide to Restructuring the Global Trading System” before he was named in late December as Trump’s choice to chair the CEA, the White House’s in-house economic think tank.

The report, Miran wrote, reflected his views, not Trump’s, and is intended not as policy advocacy but to “understand the range of possible policies that might be implemented.”

Miran, 41, earned his Ph.D. in economics from Harvard University in 2010 and he has since worked in financial markets and is a fellow at the conservative Manhattan Institute.

While novel, his arguments—including for tariffs—are grounded in orthodox economics. Miran is not a contrarian who assumes “all academics must be wrong,” said David Cutler, a Harvard economist who served in the Clinton administration and was one of Miran’s Ph.D. advisers. He’s “guided by the theory and evidence.”

That doesn’t mean his proposals would work. His report acknowledges a high risk that they won’t: “There is a path by which these policies can be implemented without material adverse consequences, but it is narrow.”

Economists agree that trade enables a country to both consume and produce more, and tariffs leave it worse off. Yet in the decades after Adam Smith made the definitive case for free trade in 1776, economists identified conditions under which a country might be better off imposing a tariff.

Suppose an importer is a monopsonist—a dominant enough buyer to influence the price it pays (just as a monopolist influences the price at which it sells). It could impose a $10 tariff on an imported widget, and its price, instead of rising $10, would stay the same because the exporter lowered its own price by $10 to avoid losing market share.

So consumers are unscathed. Even if they pay a bit more, that might be more than offset by tariff revenue. The rate that maximizes this net benefit is called the “optimal tariff.” Miran cites research by Arnaud Costinot of the Massachusetts Institute of Technology and Andrés Rodríguez-Clare of the University of California, Berkeley, that a tariff of around 20% is optimal, and up to 50% could still leave the U.S. better off.

This represents an argument for higher tariffs as a goal in and of themselves, in contrast to some Trump allies’ defense of tariffs as a negotiating tactic.

An optimal tariff policy is explicitly “beggar-thy-neighbor”: one country benefits only by hurting another. Since World War II, as the world pursued reciprocal tariff reductions, “it’s hard to find real life examples of countries motivated to pursue it in a systematic, and deliberate, way,” said Doug Irwin, a trade historian at Dartmouth College.

Optimal tariff theory has some real-world drawbacks. It doesn’t seem borne out by Trump’s tariffs on China. In an interview, Costinot noted that studies found the tariffs were mostly passed through to American importers. (Miran’s report disputed those studies.)

f other countries retaliate, as China, the European Union, Mexico and Canada did in 2018, the tariff is no longer optimal: Both sides lose. “Retaliatory tariffs by other nations can nullify the welfare benefits of tariffs for the U.S.,” Miran acknowledged.

To deter retaliation, he wrote that the Trump administration could “declare that it views joint defense obligations and the American defense umbrella as less binding or reliable for nations which implement retaliatory tariffs.” In other words, the U.S. might not defend Japan, South Korea or a fellow NATO member that retaliated.

Another problem: Tariffs only leave the U.S. better off if import prices barely rise. But in that case, consumers have no incentive to switch from imported to domestic goods, which nullifies Trump’s aim of boosting American manufacturing.

Yet another caveat is that tariffs might not reduce the trade deficit because the dollar rises in response, which makes imports cheaper and exports less competitive.

As an alternative to tariffs, Miran said the U.S. could weaken the dollar through a “Mar-a-Lago Accord,” modeled on the 1985 Plaza Accord in which the U.S. and its allies jointly acted to drive down the dollar. “After a series of punitive tariffs, trading partners such as Europe and China become more receptive to some manner of currency accord in exchange for a reduction of tariffs,” he wrote. Or, the U.S. could impose a user fee on buyers of Treasury debt.

If this triggers selling of long-term bonds, the Federal Reserve might have to buy them to limit upward pressure on long-term interest rates, Miran wrote. The Fed is more likely to cooperate with the Treasury on currency and bond interventions in return for independence on monetary policy, he wrote. (Trump has demanded more say on monetary policy. Miran has elsewhere proposed the president and state governors have more control over the Fed’s governance.)

A major question is whether a threat to withhold the defense umbrella from countries that don’t cooperate would be effective. The U.S. has no defense alliance with Mexico, Vietnam or China which account for half the U.S. trade deficit.

On Tuesday, Trump declined to rule out military force to pry Greenland from Denmark, and that he would use “economic force” to annex Canada. Both are fellow NATO members. Allies may conclude from Trump’s repeated threats against them that the U.S. defense guarantee no longer exists. Russia and China may draw the same conclusion, and seize the opportunity to increase aggression against their neighbors.

Miran himself dryly acknowledged “potentially volatile…consequences.”

La marque aux 300 points de vente doit passer par une procédure de sauvegarde accélérée pour avaliser sa restructuration financière et éviter l’impasse de trésorerie.

Le bout du tunnel n’est peut-être plus très loin pour Ba&sh. Fragilisée par une forte baisse de sa rentabilité entre 2022 et 2023 (-35%), l’enseigne de mode aux 300 magasins n’est pas passée loin de la faillite. Pour éviter la catastrophe, la chaîne a du arracher une bouffée d’air à ses créanciers en ouvrant des négociations en mai 2024 sous la protection du tribunal de commerce de Paris - dans le cadre d’un mandat ad hoc, puis d’une conciliation dès juillet. Des discussions fructueuses puisqu’un accord de principe autour d’un plan de restructuration financière a pu être trouvé. Reste maintenant à l’entériner formellement, dans le cadre d’une procédure de sauvegarde financière accélérée*, comme l’a révélée le site Fashion Network. L’Informé s’est procuré les détails du plan envisagé : il prévoit des efforts significatifs de la part des actionnaires, en particulier de ses fondateurs et, d’un degré moindre, de la holding HLD (majoritaire), pour soutenir la trésorerie. En contrepartie, les banques et les fonds qui détiennent la dette mise en place pour l’opération de LBO de 2022 consentent à des reports d’échéance.

Dans le cas de Ba&sh, c’est précisément Muse, la société de tête du groupe, qui a été placée en sauvegarde financière accélérée. La papesse des administrateurs judiciaires, Hélène Bourbouloux, est ici à la manœuvre après avoir assumé le rôle de conciliatrice. Créanciers et actionnaires devront s’exprimer en faveur ou non du plan selon le système dit de classes de parties affectées qui, en gros, répartit les prêteurs par groupes en fonction des types de dette octroyée (à hauteur des deux tiers), une majorité de classes devant ensuite approuver le plan. Mais l’issue du vote semble assez certaine : le schéma négocié lors de la conciliation jouit déjà d’un large soutien, puisque les créanciers sont 83 % à l’approuver - une seule banque s’y est opposée : le Crédit Agricole d’Île-de-France. Le plan table sur une progressive hausse de l’Ebitda d’ici à 2027, ce qui le ferait atteindre les 29 millions d’euros. À titre de comparaison, ce résultat ressortait à 37 millions d’euros en 2022 pour 310 millions de chiffre d’affaires. Il était descendu à 23 millions en 2023 (pour un niveau de ventes quasi inchangé).

Concrètement, les actionnaires acceptent de remettre au pot 15 millions d’euros. Les plus gros contributeurs seront les fondatrices Barbara Boccara et Sharon Krief (qui ont donné les premières lettres de leur prénom respectif à la marque) ainsi que l’entrepreneur Dan Arrouas, lui aussi présent depuis la première heure - ils se partagent tous les trois 30 % du capital actuellement. De son côté, HLD, va limiter sa réinjection de cash à 3 millions d’euros. Mais l’effort des actionnaires ne s’arrêtera pas à un apport d’argent frais, puisqu’ils vont également convertir en actions les 55 millions d’euros d’obligations qu’ils avaient mises en place dans le montage du LBO d’il y a trois ans.

De leurs côtés, les banques accepteront d’attendre un peu leur dû : les dettes concernées par le plan, qui s’élèvent 110 millions, ne seront remboursées que d’ici fin 2028. Le report concerne 40 millions de prêts LBO amortissables et 10 millions d’euros de crédits renouvelables contractés auprès de BNP Paribas, du Crédit Agricole d’Île-de-France et du CIC : leur maturité actuelle avait été fixée à mai 2027. Le reste de la dette, soit 60 millions d’euros dus à des fonds de dette d’Eurazeo, Tikehau et Allianz, correspond à un prêt remboursable à leur terme - ces fameuses « tranches B » incontournables dans les opérations de LBO. Le report d’échéance se limite ici à seulement 7 mois, puisque la maturité court aujourd’hui à mai 2028.

Un autre acteur - et pas des moindres - devra lui aussi faire un léger effort, le fonds L Catterton de la galaxie Bernard Arnault. Ce dernier est un ancien propriétaire de Ba&Sh : il avait cédé la majorité du capital de l’enseigne à HLD en 2022. À sa sortie, il avait bénéficié d’un crédit-vendeur de 10 millions d’euros - sorte de facilité de paiement (assortie d’intérêt) permettant à un acheteur de payer plus tard une petite partie du prix d’acquisition. Selon le plan qui sera soumis au vote, le crédit vendeur sera converti en actions de préférence. Ces titres donneront la possibilité à L Catterton de percevoir une partie des produits de cession lorsque Ba&Sh sera revendu dans quelques années (probablement en 2027 ou 2028).