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The review is part of shareholders’ efforts to raise capital to pare debt accumulated in the last few years due to acquisitions

Frasers Property’s majority owners could sell the company or some of its assets as part of a strategic review, people familiar with the situation said.

One of the people said the review is in its initial stages and there is no assurance of any outcome.

The review is part of shareholders’ efforts to raise capital to pare debt accumulated in the last few years due to acquisitions.

Charoen Sirivadhanabhakdi, one of Thailand’s wealthiest people, owns an 87.0% stake in the Singapore-listed company through Thai Beverage Y92 -0.93%decrease; red down pointing triangle and unlisted TCC Assets and related entities.

Thai Beverage and Frasers Property declined to comment, while TCC Assets didn’t reply to email seeking comment.

Frasers Property’s total assets were approximately 39.8 billion Singapore dollars (US$29.91 billion) as of end-September.

The company is engaged in hospitality, operates industrial and logistical parks, and has real-estate investment trusts, besides residential, retail and commercial business. It has over 500 properties with operations in over 70 cities, including Australia, Vietnam, China and the U.K.

Charoen has spent billions of dollars to buy various assets through his entities, including Thai Beverage. In 2017, he paid nearly US$5 billion for a 53.6% stake in Vietnam government-owned Saigon Beer Alcohol Beverage or Sabeco. In 2016, he paid nearly US$3.5 billion to buy French retailer Groupe Casino’s nearly 59% stake in Big C Thailand.

Thai Beverage’s total liabilities at end-September stood at 253.03 billion baht (US$7.24 billion), according to the company’s latest annual report. It has THB61.92 billion of interest-bearing debt due within a year, and another THB119.63 billion due within five years.

Charoen has been looking to raise funds through stake disposals. In 2022, the company planned to list its brewery unit in Singapore, but the plan was deferred due to weak market conditions.

Shares of both Frasers Property and Thai Beverage were recently flat at S$0.92 and S$0.54 on the Singapore Exchange.

Chief of Google’s AI unit and Isomorphic Labs spells out targets following $3bn Eli Lilly-Novartis partnerships

The head of Google DeepMind believes its drug discovery spinout will halve the time taken to find new medicines, attracting the attention of the world’s biggest pharmaceutical companies which are looking to artificial intelligence to revolutionise the lengthy process.

Speaking to the Financial Times, Demis Hassabis, who co-founded Google’s AI unit and also leads the drugs offshoot Isomorphic Labs, said the goal was to reduce the discovery stage — when potential drugs are identified before clinical trials — from the average of five years to two. “I think that would be success for us and be very meaningful,” he said.

Hassabis stated the goal days after announcing Isomorphic Lab’s first two pharmaceutical partnerships with Eli Lilly and Novartis, which came to a combined value of up to $3bn, in deals set to transform the finances of the unprofitable group.

Isomorphic Labs uses an AI platform to predict biochemical structures, which aids the creation of new drugs by recommending which potential compounds will have the desired impact in the body.  

Including clinical trials, it often takes up to a decade to discover and develop a new drug, costing on average about $2.7bn, according to research by the Tufts Center for the Study of Drug Development. 

Large drugmakers, under pressure to fill their pipelines with new potential medicines while existing ones face patent cliffs, when they will face far cheaper generic competition, are eager for new ways to shorten the process. As healthcare systems around the world put pressure on drug prices, pharma companies are also looking for ways to cut costs in research and development. 

Hassabis said that many drugmakers had also been eager to partner with Isomorphic but the company wanted to focus on collaborations that could improve its technology. “We could probably sign up a dozen partnerships today, if we wanted to, but then it will cause us to fragment too much, to make more bespoke solutions for the individual programmes,” he said. 

Instead, Isomorphic chose to sign deals with just two pharmaceutical companies. On Sunday, it announced Lilly would pay $45mn upfront, with another $1.7bn to be paid when the project reached performance milestones, such as drugs reaching trials or approval.

Novartis would pay $37.5mn upfront with an additional $1.2bn in performance-based incentives.

Isomorphic said it planned to build up in-house experimental facilities or “wet labs” at some point in the future, and intended to partner these assets with pharmaceutical companies. 

Isomorphic’s deals come as Google faces fierce competition on the development of AI software from the likes of Microsoft-backed OpenAI and smaller start-ups such as Anthropic and Cohere. Last year, the search giant merged its internal AI unit Brain with DeepMind, in an effort to concentrate its efforts and resources in the fast-moving technology.

The partnership deals follow several others in the industry. Oxford-based Exscientia is working with Sanofi and Bristol Myers Squibb, among others, and Insitro has a deal with Bristol Myers, while Owkin is also collaborating with Sanofi. 

But even drugs discovered by artificial intelligence can fail in clinical trials, as human biology is hard to predict. Several start-ups specialising in AI for drug discovery have had to abandon drugs after studies showed they were not as effective as hoped.

Isomorphic Labs’ AI platform builds on the scientific breakthroughs achieved by DeepMind’s AlphaFold technology, AI software that can predict the structure of nearly all existing proteins from their DNA sequence.

New generations of the technology use deep learning to predict interactions between proteins and other molecules, including DNA and RNA, and therefore the side effects and efficacy of new chemical structures in the body.

Isomorphic Labs was founded in 2021 as a subsidiary of Alphabet, to advance DeepMind’s initial breakthroughs with an exclusive focus on using AI for drug discovery. The company in 2022 widened its loss to £16.9mn from £2.4mn the year before, according to Companies House filings.

Hassabis said that, although Isomorphic was not “focused on” when it would generate a profit, “the two deals we have done are pretty meaningful from a financial point of view too”.

Interest in using AI in drug discovery is soaring, with companies in the sector raising $4.4bn in 2022, up from $1.8bn in 2018, according to research firm PitchBook.

But Hassabis said Isomorphic was “pretty unique” in trying to build fundamental models of biology and chemistry, rather than using AI for analysis of existing data.

​​“It’s almost like a generative model that is designing the compounds with the different constraints,” he said. “But those constraints are modelling real biochemistry constraints. So that’s what we’re really good at.” 

Also in this newsletter: How the EU is trying to soothe concerns of belligerent farmers

Laura explains why Belgium’s newfound responsibilities as the holder of the EU’s rotating presidency could complicate the issue of tapping immobilised Russian assets to help Ukraine. And our environment correspondent puts on her wellies to assess anti-EU feelings on the farm.

Deep freeze

To seize, or not to seize Russia’s frozen assets?

While the G7 group of nations considers how to use some €260bn belonging to Russia’s central bank for the benefit of Ukraine, European countries are taking baby steps towards using the assets’ unforeseen spoils, writes Laura Dubois.

Context: Officials are working on how to transfer to Kyiv the Russian sovereign assets immobilised by western sanctions. But EU countries fear adverse effects, and are instead working on seizing only extraordinary profits that financial institutions are making by holding the assets.

Today, representatives of member states meet to discuss a recent proposal that would pave the way for this latter option, stopping short of touching the actual assets.

Countries like Germany, France and Belgium — where the bulk of the €210bn frozen in Europe is held — have been wary of moving from just ringfencing the profits being made at the financial institutions, to actually confiscating them.

“I hear a lot of prudence on the topic of what you would call the second tranche [of seizing the profits],” Belgian Prime Minister Alexander De Croo told reporters this week.

“Let’s listen to the experts on that topic, in the sense that there is the obligation of repairing the damage [to Ukraine] at some point, but there is of course a need for a legal framework.”

Belgium has just assumed the rotating six-month presidency of the European Council and is leading the talks. Some officials, however, worry that the country, where €191bn belonging to Russia is stuck, might not be the best middleman.

“Belgium has promised to proceed with the work but one can sense they are not eager to do that,” one EU diplomat said.

De Croo suggested Belgium would not veto using the assets if the other countries agreed. “Blocking is really the last resort and I don’t think we need to do that. We can convince others.”

The European Central Bank has warned that touching the profits made by Euroclear, the central securities depository holding the assets in Belgium, could destabilise the financial system. Seizing the assets themselves would be even more risky.

Yet while European countries grapple with technical details around the profits, that is exactly what the G7 — led by the US — is discussing.

“The hope is that this will at some point increase the realisation among the member states that this is only one small piece of the puzzle,” one EU official said.

Average costs to ship containers have nearly doubled since late November

Western importers are reporting a steep rise in ocean-shipping rates and weekslong delays as carriers divert ships from the Red Sea to avoid Houthi rebel attacks.

Some companies shipping goods on the crucial trade lane are starting to chafe at the rising prices and extra fees that ocean carriers are imposing for the higher cost of routing containerships on longer voyages around the Horn of Africa following drone and missile attacks by Houthi rebels in Yemen.

Average worldwide costs to ship 40-foot-long containers have nearly doubled since late November, according to London-based Drewry Shipping Consultants.

The increases have also accelerated in the past two weeks on routes that traditionally use the Suez. The spot-market price to move containers between China and Rotterdam in the Netherlands reached $3,577 in the week ending Jan. 4, a 115% increase from the week before.

“What every shipper is trying to figure out is if the current proposals are in line with the carrier’s added costs, and not simply a move to offset softer rates in other lanes or raise rates across the board,” said Colin Yankee, chief supply chain officer at Brentwood, Tenn.-based retailer Tractor Supply.

Houthi rebels, since November, have launched roughly two dozen attacks on commercial ships navigating the Red Sea, which provides access to the Suez and trade routes to Western Europe and the U.S. The Suez is used by about one-third of global container cargo and about 30% of freight bound for U.S. East Coast ports, according to Everstream Analytics, a supply-chain risk management company.

The rebels have said their attacks are a response to the fighting between Israel and Hamas in Gaza. The attacks have grown less frequent in recent days, following warnings from a U.S.-led naval coalition and military responses from the U.S. and other countries. Ship operators including A.P. Moller-Maersk and Hapag-Lloyd have said their vessels would continue avoiding the region.

Shipping executives estimate that the 10 largest boxship operators have shifted around $200 billion in cargo away from the Red Sea since early December.

“We will not put our crews and ships in harm’s way under any circumstances,” said Nils Haupt, a spokesman for Germany’s Hapag-Lloyd.

The new cost increases are renewing tensions between importers and ocean carriers after shipping rates skyrocketed during the pandemic, when freight demand outstripped the supply of ships and helped fuel record profits for carriers. The recent increases still leave prices far below those pandemic-era levels.

“There is a certain element of mistrust given where we have come from,” said Goetz Alebrand, head of ocean freight at DHL Global Forwarding Americas.

The higher costs are hitting even importers that negotiate longer-term contract rates, industry experts say, because operators are imposing surcharges ranging from hundreds of dollars to more than $1,000 per box to cover rising costs as a result of the Red Sea diversions. Some shippers’ woes are being compounded by restrictions at the Panama Canal where a drought is limiting the number of vessels that can transit the waterway.

The shift to longer shipping routes around Africa is raising fuel and insurance costs and reducing containership availability, said Lars Jensen, chief executive of Denmark-based consulting firm Vespucci Maritime. But Jensen said the rate increases are “substantially above” what is needed to cover the extra costs.

“What we have right now from a carrier’s perspective is a blessing in disguise,” said Jensen.

Shipping executives say the higher pricing and surcharges are the results of the higher costs to operate vessels on longer voyages and reduced capacity because ships are out at sea for longer stretches.

Overall Red Sea containership crossings were down by around 20% in December compared with November, according to Singapore and London brokers.

“Services will continue to have to run late and with longer transit times in the short term,” said Jonathan Roach, a container shipping analyst at Braemar, a London-based shipping advisory firm. “As a consequence freight rates on the whole will remain elevated and volatile.”

Nathan Strang, director of ocean freight at San Francisco, Calif.-based freight forwarder Flexport, said one customer who brings cargo into the Port of New Orleans has seen import times double to 60 days after the company’s shipments were rerouted.

“How do you tell your end customer when their stuff is going to arrive and when they can put stuff on shelves?” he said.