TheChek News Flow

The company’s debut follows several large public offerings in Japan this fall

Kioxia Holdings’ shares rose in their trading debut following a $800 million initial public offering, as the memory-chip maker seeks to raise capital to meet growing demand for chips used in artificial intelligence and data centers.

Shares were recently at 1,522 yen, equivalent to $9.92, or 4.6% higher than the offering price. Shares briefly rose as much as 6.7% earlier Wednesday after opening 1.0% lower.

The Japanese chip maker issued new shares while two of its largest shareholders—Bain Capital and Toshiba Corp.—sold part of their stakes.

Kioxia makes NAND flash-memory chips used in smartphones, computer servers and other devices. The company expects growth in the flash-memory market, driven by demand for AI applications and data centers.

Formerly part of Toshiba and known as Toshiba Memory, Kioxia was acquired in 2018 by a group led by Bain Capital for around $18 billion. Toshiba retained a 40% stake in the chip business, which was renamed Kioxia the following year.

Kioxia’s debut follows several large public offerings in Japan this fall and comes after the market benchmark Nikkei Stock Average climbed to record highs earlier this year, driven by stronger corporate earnings and a weak yen.

In October, Tokyo Metro raised about $2.31 billion in Japan’s biggest IPO in nearly six years, while Carlyle Group-backed Rigaku Holdings raised about $850 million that same month.

The Spanish beauty brand will assume full ownership of the makeup and skin care label by the start of 2031.

PARIS — Puig and Charlotte Tilbury have extended their partnership, whereby the Spanish beauty and fashion company will progressively assume full ownership of the label by the start of 2031.

Puig acquired a majority stake in Charlotte Tilbury Ltd., a brand with a large digital footprint, in 2020 in a deal valued at an estimated 1.2 billon pounds. The namesake makeup artist meantime has maintained a minority share in her color cosmetics and skin care brand.

Since Puig’s acquisition, Charlotte Tilbury Ltd. has more than tripled its net sales, according to Puig in a statement Tuesday. Puig said Charlotte Tilbury enlarged the group’s portfolio of brands and helped make the company the fastest-growing multibrand beauty player.

“The agreement includes call and put options exercisable at different periods between 2026 and 2031 and valued at a multiple of key financial metrics of the Charlotte Tilbury business,” Puig said in a statement, which added that Tilbury will continue to have an active role in driving the brand’s business.

Charlotte Tilbury is currently ranked number one among makeup brands in the U.K. and the first beauty brand globally for influencer advocacy, despite its highly selective distribution, according to Puig.

“In 2020, we established a partnership that has been pivotal in shaping our success,” said Tilbury, who serves as chairman, chief creative officer and founder of Charlotte Tilbury Ltd. “I am fully convinced of the value and potential that is still to be created and captured in the upcoming years by Charlotte Tilbury Ltd.

“Continuing this collaboration with my team and Puig feels like a natural progression, driven by the same innovation, vision and ambition that have defined this iconic brand over the years,” she continued. “This extended partnership is a significant step forward, enabling us to further grow and solidify the brand’s position as a leader in the world of beauty.”

Marc Puig, chairman and chief executive officer of Puig, said: “Charlotte has a unique, pioneering vision, differentiated from other makeup artist brands, and was already redefining the future of makeup and skin care when we first started to work together in 2020.”

On Jan. 1, 2021, Puig reorganized its business structure, establishing three divisions: Beauty and Fashion, Charlotte Tilbury and Derma.

When Puig released its third-quarter earnings on Oct. 29, it said the makeup category had in the period returned to positive growth territory.

“The sell-out for the largest brand within makeup, Charlotte Tilbury, remains strong with double-digit growth in its largest markets, EMEA and the Americas,” the company said.

In the fourth quarter, the segment’s growth was expected to face a tougher comparison because of the pipeline sell-in related to the entry of Charlotte Tilbury into Ulta at the end of 2023.

Puig’s 11.6 percent like-for-like sales gains to 1.26 billion euros in the three-month period ended Sept. 30 beat market expectations. The Barcelona-based company owns brands such as Jean Paul Gaultier, Rabanne, Carolina Herrera, Dries Van Noten and Byredo.

Eric Sadi, copresident of Simon's mall properties, details how the company's shopping centers have increased their power to draw shoppers.

Not long ago malls were thought to be a dying breed, succumbing to e-commerce, Amazon and the oversaturation of retail square footage — but recent traffic figures at Simon Properties tell a different story.

Following a third-quarter report listing gains in funds from operations, occupancy and rents, Simon touted a 6.4 percent year-over-year increase in portfolio traffic on Black Friday weekend, with a 7.1 percent gain at Simon’s malls.

Executives at the real estate investment trust say they’ve been seeing traffic increases for awhile and that there’s more to it than just enthusiastic holiday season turnouts and Americans wanting to get out of the house more often since the pandemic ended.

“The main thing is that years ago we decided to look at each of our properties and create a unique strategy to merchandise and densify each, and to really fit into the community as opposed to maintaining a one-size-fits-all approach,” said Eric Sadi, copresident of Simon malls platform, in an interview. “That meant in some properties adding residential as a part of a larger redevelopment of a department store, adding a significant amount of food and beverage, and figuring out which brands are needed to create the right mix assorted specifically to an individual market,” Sadi said.

Simon also began investing more in the “experiential,” Sadi said, citing family and kids play areas, mommy and me yoga and music performances. “We have a lot of programming at the mall level. They’re unique [marketing] strategies by market. Santa activations, community events, new restaurants and entertainment are all reasons to get people out to shop,” Sadi said.

“I do think a lot of malls in America started to look like each other,” he said. “There has been a lack of newness in a lot of the malls out there, but ours have a uniqueness to them and the biggest regional draws. We are really focused on investing in creating unique environments.”

There’s another reason why the traffic is there: Simon malls are accessible. It’s a portfolio composed of “good real estate off the main highways,” Sadi said.

Investing in Redevelopments

Sadi said Simon has committed $1.3 billion for major redevelopments over the next few years including Brea Mall in Brea, Calif., where construction is underway for new retail and dining options, a Life Time athletic club and luxury apartments. The Southdale Center in Edina, Minn., is undergoing a multiyear “complete transformation” creating a luxury wing scheduled to open in 2025, and adding dining and entertainment venues and luxury apartments.

The Briarwood Mall in Ann Arbor, Mich., is being redeveloped with residential units, additional retail and community-driven, mixed-use offerings, including a Harvest Market restaurant and grocery offering locally sourced products. Northgate Station in Seattle is in the process of adding luxury residential units and recently broke ground on its first on-property hotel, Residence Inn by Marriott. It’s set to open in spring 2025. And the Tacoma Mall in Tacoma, Wash., is adding new restaurants and retail, and “The Village,” an expansion with new retailers, cafes and restaurants with outdoor dining terraces.

While Simon’s traffic gains can be attributed to how the addition of new brands, services, entertainment concepts, housing and food and beverage transforming several of their properties into greater mixed-use destinations, macro and industry trends are also factors. For one, consumers this year have been spending at levels higher than expected despite inflation. Retailers promoted early Black Friday deals well before the actual day and stimulated traffic at shopping centers through the fall. Either these promotions have done their trick or the willingness to shop reflects a consumer base willing to readily open their wallets. In addition, Americans apparently to want to socialize more in the aftermath of the pandemic. One way to do that is to meet friends and family in the mall for a movie, a restaurant, for shopping or to meet Santa. In addition, retailer’s push to offer buy online, pickup in store options has brought more people into the stores and malls.

According to Placer.ai, a provider of location analytics and traffic counts, all mall formats experienced year-over-year visit growth in November, with indoor malls, open-air shopping centers and outlet malls seeing foot traffic increases of 6.4 percent, 4.8 percent, and 3.8 percent, respectively.

“While much of the November boost is likely due to the malls’ strong Black Friday performance, foot traffic data indicates that early deals also drove visits before the big day,” Placer.ai indicated in a statement. “Comparing daily visits during the week before Black Friday to visits during the equivalent days in 2023 reveals that malls received more pre-Black Friday mall visits this year than in 2023.” Placer.ai analyzes data from 100 top-tier indoor malls, 100 open-air shopping centers and 100 outlet malls across the country, in both urban and suburban areas. Placer.ai says it leverages a panel of tens of millions of devices and utilizes machine learning to make estimations of shopping visits across the country.

As copresident of Simon’s mall platform, Sadi oversees about 100 properties including regional enclosed malls such as Roosevelt Field mall in Garden City, N.Y., and The Galleria in Houston, as well as lifestyle centers such as The Domain in Austin, Tex., and open-air centers such as The Falls in Miami. Simon’s Premium Outlets business is managed separately.

The Simon agenda involves adding “local flair” to its centers with specialty retailers. For example, Wilkes Bashford, a San Francisco designer store, opened last month at the Stanford Shopping Center in Palo Alto, Calif. Milton’s, a local family-owned menswear store in Massachusetts, opened stores at Simon’s Burlington Mall and South Shore Plaza in the last few years. And Southdale Center in 2023 brought in Kowalski’s, an upscale local grocer that filled the first floor space occupied by a former Herberger’s department store.

“Differentiation by localization is critical,” Sadi said. “We really like to have our leasing folks in the market, either living in or visiting a market almost on a weekly basis,” Sadi said. “We need to have a hand in the market and make sure that our sales teams are in the market, visiting and communicating.”

A Busy Year Ahead

Sadi said 2025 will be a “really busy year. We’ve got a lot of store openings coming in. We’re going to see a lot of new brands, which are what Gen Z and mom and dad want. We’ve got a dozen with just five or six stores that want to be 100-unit chains. Our biggest focus is to insure we have the newest brands coming in.”

Sadi cited Skims, the brand co-founded by Kim Kardashian, which has locations in two Simon malls, Lenox Square in Atlanta and The Galleria in Houston, as well as Garage, Mango, Camp and Lululemon. Additionally, Princess Polly, Edikted, Reformation and Rowan are already open in Simon centers or under construction, and Simon sees potential for more penetration into the portfolio for the future.

Asked what demographic is most responsible for the lift in shopper traffic, Sadi said: “We’re seeing it from all ages. Our properties are pretty broad as to who they serve.”

But he added that Gen Z is “a big growth consumer for us throughout our portfolio. These younger consumers have some dollars and want to hang out with their friends. Sephora, Lululemon, Apple and Vuori are brands they strive to be a part of.”

Simon’s current marketing campaign, dubbed “Meet Me @ The Mall,” blends ‘80s and ‘90s nostalgia with videos and ads depicting Gen Zers meeting up in the mall, taking selfies, applying cosmetics and trying on clothes as their Millennial or Gen X parents watch on. While there are no set definition for each generation, members of Gen Z are in their tweens to mid-20s and were born roughly between 1997 and 2012. Millennials were born in the early 1980s to the mid-1990s. Meet Me at The Mall, said Sadi, “really speaks to that younger Gen Z consumer. They want to be out with their friends at the mall. The mall is pretty cool right now. It’s in a really great place right now.”

So is Simon’s overall business.

Limited availability of good real estate has helped Simon to keep rents and occupancy levels high. And various redevelopment efforts will support long-term growth.

Simon — which is considered the nation’s largest owner and operator of shopping, dining, entertainment and mixed-use destinations — is also demonstrating it wants to be a bigger player in the e-commerce world. This year, the company revamped its e-commerce website for a much broader selection of sale-priced items, and changed the name of its website to ShopSimon, replacing the Shop Premium Outlets name. The ShopSimon digital marketplace includes on-sale and discounted merchandise, while continuing to offer outlet products from brands. The old website offered only products from Simon’s network of outlets around the country.

Officials from Simon described ShopSimon as providing “a single, comprehensive source of premium and luxury sale-priced products” offering hundreds of brands including American Eagle, Cole Haan, Adidas, Etro, Hugo Boss, MCM, Puma, Steve Madden and Tod’s. Officials emphasize that ShopSimon enables brands to get more “eyeballs” on discounted and marked-down merchandise, and opens up space on their selling floors and on their websites to display a greater amount of fresh, full-price merchandise.

The business is not without concerns, however. Consumers continue to increase shopping via the e-commerce channel, in particular by their mobile devices, because of the convenience factor and because they are already very attached to their cell phones.

Continued uncertainties about the macro economic environment and the spectre of tariffs are also a concern across the fashion industry.

In the past few years, outlet centers, off-price and value retailers have been generating greater traffic and outperforming traditional, full-price and upscale retail destinations, but that’s where Simon executives see change.

Black Friday Rush

“On Black Friday and throughout the weekend, we saw even more evidence of what we already knew: Malls are thriving,” said David Simon, chairman, chief executive officer and president of Simon, last month. “Popular brands throughout our portfolio reported double-digit sales increases over the weekend compared to last year.…We look forward to a continued strong holiday season.”

“There used to be 40 million square feet of retail real estate built every year,” said Simon, on a call with analysts. “Now there’s essentially less than a few million here and there. And then there’s been obsolescence, too, which makes the supply shrink as well,” which adds to the demand for space at Simon properties. “The importance of brick-and-mortar has never been higher. Don’t get me wrong, e-commerce is critically important, but all of this stuff about e-commerce, cost of customer acquisition, returns, stickiness, etc., it all continues to be a challenge. If you’ve looked at the [pure online] marketplaces, they run into problems, so they really need to be connected to a brick-and-mortar for survivability. So all of those things are pointing to a positive picture.”

Sadi said Simon measures traffic in different ways, including using Wi-Fi beacons, traffic counters and cameras providing data on the number of people entering and exiting their properties.

“We’re not into more complicated measures of demographics. Traffic is one thing, but really the proof in the pudding is in sales,” Sadi said. “I have spoken to a bunch of retailers and have heard nothing but high single digit or double digit increases from Black Friday — at least a dozen.”

Asked how significant Black Friday is considering all the early Black Friday promotions triggered by retailers before the actual day, Sadi answered: “I think instead of the visuals of 100,000 people lined up trampling to get into the mall, what we have now is an orderly process [on Black Friday]. It is still a pretty significant experience. It’s still very relevant. The proof is in the numbers this year and the fact that a lot of retailers were doing unique things this year. Retailers have gotten more promotional, but their goal is to the sell more at less promotional pricing except for the key holiday periods.”

Nonstop promoting, “desensitizes consumers as to what a sale is,” he said.

Sadi added that retailers are generally strategic in their price promoting, “not margin degrading. The salient point is that more people showed up this year. Yes, Thanksgiving was later [this year], but at the end of the day, the shopping was there. The bodies were there. A lot of key items were looked for and found. Having very good traffic on Black Friday tells me this consumer is out there and they are still spending.That bodes much better for having a good holiday.”

Malls, he concluded, “are more than just about walking in and buying a new skirt of sport coat. They’re doing more than just traditional soft goods transactions.”

Liquidity risks in markets are not intractable

With today’s big data tools, conditions can be anticipated and actively managed

Financial markets promise to be one thing but often end up delivering something quite different.

When an asset is listed on a stock market it should be tradable without a discount. Prices of securities appear in real time on terminals but they are only valid if you can trade at them. Increasingly, you often cannot. 

The villain of the piece? Liquidity. Or rather the lack of it when you need it most. We are seeing liquidity “shocks” that are more powerful than before, and sharper. Amundi research has found the impact of trading $50mn of an equity, where that trade is within 10 per cent of the daily volume, has been doubling during episodes of stress since 2021 and quadrupled on certain days during the Covid pandemic.

The change is similar to hurricanes in the US — where the frequency is the same, but the force is greater — and damage correspondingly worse. Remember the UK gilt markets crisis in September 2022 when gilt yields moved from about 3.5 per cent a couple of days before the mini-budget to about 4.5 per cent two days later, a 28 per cent change in five days.

Or when the Japanese yen “carry” trade — borrowing in a low-interest-rate country to fund investment in assets elsewhere that offer higher returns — unwound in August 2024. The Nikkei 225 fell 19 per cent between July 31 to August 5 while the yen strengthened more than 7 per cent against the dollar in that period.

Added to this today’s investor must grapple with long-lasting crowded trades and momentum-driven investing at a scale we have never seen before. Those trades can disguise thin fundamental trading liquidity — either the trades are one way and you cannot find liquidity in a crisis, or it might seem there is plenty of liquidity but it is driven by momentum or quantitative driven investors and dries up when the market turns.

We are now at the stage where a portfolio manager must see liquidity as a dedicated fundamental of investing as they do credit risk, volatility or correlations. Sure, this adds complexity. But if they miss-estimate and mismanage liquidity on their portfolio, their investment performance could crater in 48 hours as they face investor redemptions while clutching insufficiently liquid holdings.

So far, so alarming. But it is not all bad. Extreme liquidity events, and the mispricings that come with them, bring opportunity to the active investor. A forced seller of an otherwise good asset is handing future value to the bold investor. 

Because liquidity shocks hit different types of investment unevenly investors can use them as a way of rebalancing their portfolios at a cost that, in normal times, would be prohibitive. Alternative investments in areas that can be tough to access, such as distressed debt or private equity, may become available on more attractive terms. In the same way discrepancies in asset pricing can arbitrage opportunities — to seek gains or lock in downside protection while most investors are looking the other way — become affordable.  

An important but less discussed effect of these sharp new liquidity shocks is how they weaken competitors by straining less-prepared investors.

It is now possible to be the better prepared investor. While liquidity risks are still underestimated and under-researched, liquidity is no longer intractable. With today’s big data tools, liquidity conditions can be anticipated, and actively managed. Models of future liquidity and trading costs can be built. These estimate the liquidity of each individual security by assigning bid/ask extremes. This gives the manager information on how much of the portfolio is saleable at acceptable cost. 

This modelling demands (very) big data sets and AI-type technology and the crunching of billions of data points and the running of complex simulations. No liquidity crisis is the same as another and bid/ask extremes vary from one security to another. Doing this is neither simple nor cheap, but it is effective and increasingly necessary given the way markets are evolving.

Historically this analysis was just not possible. The data wasn’t available, nor were the tools to predict what will happen liquidity-wise.

Investors who actively anticipate changes in liquidity may be accused of “reckless conservatism” looking for the worst-case scenario and allowing for it and in the process wrecking the prospect of a decent return. But efficient liquidity management is a source of returns as well as sound risk management. Fully analysed stress testing is a way to avoid being caught by surprise.

Inconsistent liquidity is damaging to investors. But the means to turn it to advantage exist. They just need to be adopted.

Microsoft acquires twice as many Nvidia AI chips as tech rivals

OpenAI’s biggest backer buys nearly half a million GPUs this year in global race to build artificial intelligence systems

Microsoft bought twice as many of Nvidia’s flagship chips as any of its largest rivals in the US and China this year, as OpenAI’s biggest investor accelerated its investment in artificial intelligence infrastructure.

Analysts at Omdia, a technology consultancy, estimate that Microsoft bought 485,000 of Nvidia’s “Hopper” chips this year. That put Microsoft far ahead of Nvidia’s next biggest US customer Meta, which bought 224,000 Hopper chips, as well as its cloud computing rivals Amazon and Google.

With demand outstripping supply of Nvidia’s most advanced graphics processing units for much of the past two years, Microsoft’s chip hoard has given it an edge in the race to build the next generation of AI systems.

This year, Big Tech companies have spent tens of billions of dollars on data centres running Nvidia’s latest chips, which have become the hottest commodity in Silicon Valley since the debut of ChatGPT two years ago kick-started an unprecedented surge of investment in AI.

Microsoft’s Azure cloud infrastructure was used to train OpenAI’s latest o1 model, as they race against a resurgent Google, start-ups such as Anthropic and Elon Musk’s xAI, and rivals in China for dominance of the next generation of computing.

Omdia estimates ByteDance and Tencent each ordered about 230,000 of Nvidia’s chips this year, including the H20 model, a less powerful version of Hopper that was modified to meet US export controls for Chinese customers.

Amazon and Google, which along with Meta are stepping up deployment of their own custom AI chips as an alternative to Nvidia’s, bought 196,000 and 169,000 Hopper chips respectively, the analysts said.

Omdia analyses companies’ publicly disclosed capital spending, server shipments and supply chain intelligence to calculate its estimates.

The value of Nvidia, which is now starting to roll out Hopper’s successor Blackwell, has soared to more than $3tn this year as Big Tech companies rush to assemble increasingly large clusters of its GPUs.

However, the stock’s extraordinary surge has waned in recent months amid concerns about slower growth, competition from Big Tech companies’ own custom AI chips and potential disruption to its business in China from Donald Trump’s incoming administration in the US.

ByteDance and Tencent have emerged as two of Nvidia’s biggest customers this year, despite US government restrictions on the capabilities of American AI chips that can be sold in China.

Microsoft, which has invested $13bn in OpenAI, has been the most aggressive of the US Big Tech companies in building out data centre infrastructure, both to run its own AI services such as its Copilot assistant and to rent out to customers through its Azure division.

Microsoft’s Nvidia chip orders are more than triple the number of the same generation of Nvidia’s AI processors that it purchased in 2023, when Nvidia was racing to scale up production of Hopper following ChatGPT’s breakout success.

“Good data centre infrastructure, they’re very complex, capital intensive projects,” Alistair Speirs, Microsoft’s senior director of Azure Global Infrastructure, told the Financial Times. “They take multi-years of planning. And so forecasting where our growth will be with a little bit of buffer is important.”

Tech companies around the world will spend an estimated $229bn on servers in 2024, according to Omdia, led by Microsoft’s $31bn in capital expenditure and Amazon’s $26bn. The top 10 buyers of data centre infrastructure — which now include relative newcomers xAI and CoreWeave — make up 60 per cent of global investment in computing power.

Vlad Galabov, director of cloud and data centre research at Omdia, said some 43 per cent of spending on servers went to Nvidia in 2024.

“Nvidia GPUs claimed a tremendously high share of the server capex,” he said. “We’re close to the peak.”

While Nvidia still dominates the AI chip market, its Silicon Valley rival AMD has been making inroads. Meta bought 173,000 of AMD’s MI300 chips this year, while Microsoft bought 96,000, according to Omdia.

Big Tech companies have also stepped up usage of their own AI chips this year, as they try to reduce their reliance on Nvidia. Google, which has for a decade been developing its “tensor processing units”, or TPUs, and Meta, which debuted the first generation of its Meta Training and Inference Accelerator chip last year, each deployed about 1.5mn of their own chips.

Amazon, which is investing heavily in its Trainium and Inferentia chips for cloud computing customers, deployed about 1.3mn of those chips this year. Amazon said this month that it plans to build a new cluster using hundreds of thousands of its latest Trainium chips for Anthropic, an OpenAI rival in which Amazon has invested $8bn, to train the next generation of its AI models.

Microsoft, however, is far earlier in its effort to build an AI accelerator to rival Nvidia’s, with only about 200,000 of its Maia chips installed this year.

Speirs said that using Nvidia’s chips still required Microsoft to make significant investments in its own technology to offer a “unique” service to customers. 

“To build the AI infrastructure, in our experience, is not just about having the best chip, it’s also about having the right storage components, the right infrastructure, the right software layer, the right host management layer, error correction and all these other components to build that system,” he said.

Industry veteran Brian Gilvary says government policies force oil and gas explorers to seek opportunities in other markets

Oil and gas explorers in the UK are operating with “hands tied behind” their backs, according to the chair of Ineos Energy, with “punitive” government tax policies forcing them to seek opportunities in other markets.

Ineos Energy, the four-year-old oil and gas arm of chemicals group Ineos, said it had bought $3bn of US assets rather than investing in the North Sea and would continue to look for deals abroad. 

“In our initial strategy we wanted to expand in the UK, particularly gas. And what has happened is that the tax regime makes that impossible,” said Brian Gilvary, Ineos Energy chair and a former chief financial officer of oil major BP. 

The industry veteran described the current taxes on North Sea oil and gas, brought in by the then Conservative government and increased by Labour in its most recent budget, as “the most unstable fiscal regime in the world”.

Gilvary said Ineos Energy shelved a “series of transactions” in the UK after the Energy Profits Levy was introduced in 2022 in response to the jump in oil and gas prices that followed Russia’s full invasion of Ukraine.  

The current government raised the levy from 35 per cent to 38 per cent in October, creating a headline tax rate for North Sea oil and gas companies of 78 per cent, and removed a 29 per cent investment allowance. 

“We’ve done three deals in the US, and those came in pretty quick succession off the back of the EPL,” said Gilvary. “We’ve looked at two potential transactions in the past 15 months in the UK and both of them were precluded going forward because of the EPL. The economics don’t stack up when you have the alternative to move that money to the Gulf of Mexico.” 

He continued: “If you speak to anyone in the industry, everyone is looking for a partner right now, but there’s nothing we looked at that we thought we could move forward on, simply because of the prohibitive tax.” 

US-based Apache last month announced plans to wind up its North Sea operations by 2029, blaming the UK tax regime. Shell and Equinor have merged several of their UK assets into a new company to be more tax-efficient. 

“Every oil and gas producer in the UK will be looking at opportunities outside the UK right now,” said Gilvary, whose company has negotiated a deal to buy a share of a Gulf of Mexico deepwater field operated by Shell from China’s Cnooc International for an undisclosed sum.

“The frustration for those players in the North Sea in the UK is we’ve sort of got our hands tied behind our backs because [we cannot get] new licences. So we cannot extend the life of what we have, even at these punitive tax rates. And so you end up in a run-off position.”

“Basically we’ll try to harvest the assets as best we can and focus elsewhere,” he said. 

Gilvary said the government did not “appear to wish to engage” on the North Sea’s fiscal regime, although he expected that the taxes would eventually be cut, but that companies may be unwilling when that time comes.

The market value of the UK’s top 25 independent oil and gas companies has fallen from £27.8bn in 2011, when oil prices averaged $110 a barrel, to £9.8bn at the end of last year, when oil prices averaged $80 a barrel, according to Deloitte, as the sector steadily lost its appeal to UK investors. 

Kosmos Energy, a New York-listed independent oil explorer, this week said it would not proceed with a proposed deal to buy Tullow, the West Africa-focused UK producer. Tullow, which was worth as much as £14.5bn in 2012, is currently worth £342mn, with a net debt of $1.7bn.