(ZH) Rolls-Royce In Talks To Build Mini-Nuke Plants In Ukraine

Rolls-Royce In Talks To Build Mini-Nuke Plants In Ukraine

While Germany shuttered the last of its nuclear power plants this year, like idiots, British aerospace and defense company Rolls Royce is in talks with Ukraine's largest power company to build a series of mini nuclear plants across the country - including two sites currently occupied by Russia, The Telegraph reports.

Ukraine's DTEK, owned by billionaire oligarch Rinat Akhmetov, has held early-stage, and obviously ambitious, discussions with Rolls about the small modular reactors (SMRs) at sites which are currently using coal power stations. CEO Maxim Timchenko says he expects nuclear power to constitute a vital part of DTEKs future portfolio amid the rebuilding of Ukraine, as the country shifts away from fossil fuels.

SMRs under development are a new and commercially-unproven technology that wouldn't be deployed until 2030 at the earliest.
DTEK and Rolls are examining whether up to eight existing coal power station sites, two of them currently in territory occupied by Russia, could eventually be converted to house SMRs in the 2030s.
It comes as Ukraine is scrambling to deploy less centralised and more renewable sources of energy, such as wind and solar farms, in the face of a targeted bombing campaign by Russia to take out grid infrastructure during the harsh winter months. -The Telegraph
DTEK began generating wind power in May at the Tyligulska wind farm, located around 60 miles from the frontline of the war. This month the company announced plans to quadruple the site's output capacity.
Timchenko went against the climate cult, saying that while renewables remain a key to boosting energy security in Ukraine - as wind turbines make for more difficult targets than large coal power plants, a large portion of Ukraine's power will need to come from 'less intermittent' sources such as nuclear.
"We are trying to find a way to install these SMRs," he told The Telegraph, adding "From our side, we have quite a big capacity of coal-fired power stations and we are in discussions with Rolls-Royce SMR to convert [them]."
Ukraine is already heavily reliant on nuclear, with four state-owned plants generating more than half of the country's power before the Russian invasion. One of the sites, the Zaporizhzhia Nuclear Power Plant, is currently sitting in occupied territory.
Via The Telegraph
As part of the current discussions, DTEK is seeking to establish some of the supply chain in Ukraine, which has significant expertise with nuclear engineering.
"The details of these discussions are commercially confidential," Rolls-Royce SMR told the outlet.
DTEK is also understood to have held talks with other companies developing SMRs.
The company provides one fifth of Ukraine’s electricity, largely through coal plants, but its infrastructure has come under heavy fire from Russian forces since the conflict erupted in February 2022.
Talks with Rolls emerged as bidders in the UK competition to fund SMR designs were told that the next stage is being pushed back.
Six companies including Rolls are vying to build government-funded SMR projects. They were expecting to submit a formal tender this month but have now been told the process will start in January. -The Telegraph
A spokesman for Great British Nuclear told the outlet that 'The next phase of the competition will launch as soon as possible and we look forward to receiving vendor bids."

>>> Accenture beats by $0.13, reports revs in-line; guides Q2 revs below consens

Accenture beats by $0.13, reports revs in-line; guides Q2 revs below consensus; reaffirms FY24 EPS guidance, revs guidance
  • Reports Q1 (Nov) earnings of $3.27 per share, $0.13 better than the FactSet Consensus of $3.14; revenues rose 3.0% year/year to $16.22 bln vs the $16.17 bln FactSet Consensus.
  • Co issues downside guidance for Q2, sees Q2 revs of $15.4-16.0 bln vs. $16.25 bln FactSet Consensus.
  • Co reaffirms guidance for FY24, sees EPS of $11.97-12.23 vs. $12.24 FactSet Consensus; sees FY24 revs of +2-5% yr/yr to $65.4-67.3 bln vs. $66.47 bln FactSet Consensus.
  • New bookings for the first quarter of fiscal 2024 were $18.45 billion, a 14% increase in U.S. dollars and a 12% increase in local currency over the first quarter of fiscal 2023.
  • For fiscal 2024, the company continues to expect operating cash flow to be in the range of $9.3 billion to $9.9 billion; property and equipment additions to be $600 million; and free cash flow to be in the range of $8.7 billion to $9.3 billion.

>>> Europe : Brokers Upgrades & Downgrades - 19th of December 2023 V2(+)

>>> Up
* Duerr Raised to Neutral at BNPP Exane; PT 23 euros
* Flutter Raised to Buy at Peel Hunt
* Stora Enso Raised to Buy at DNB Markets; PT 14 euros
* Worldline Raised to Neutral at Bryan Garnier; PT 19 euros (+)

>>> Down
* Equinor Cut to Sector Perform at RBC; PT 350 kroner
* Fortum Cut to Neutral at Oddo BHF; PT 15 euros (+)
* Lanxess Cut to Reduce at Baader Helvea; PT 26 euros
* PepsiCo Cut to Neutral at JPMorgan; PT $176
* Richemont Cut to Hold at SBG Securities; PT 133 Swiss francs
* Sartorius Stedim Biotech Cut to Add at AlphaValue/Baader
* Vaisala Cut to Reduce at Inderes; PT 40 euros
* Wacker Chemie Cut to Reduce at Baader Helvea; PT 109 euros

>>> Initiation
* 4aim Sicaf Rated New Outperform at EnVent S.p.A.; PT 410 euros
* ABB Assumed Neutral at UBS; PT 40 Swiss francs
* Ferguson Assumed Neutral at Citi; PT 15,100 pence
* KCC NO Rated New Buy at Pareto Securities; PT 105 kroner (+)
* Legrand Assumed Sell at UBS; PT 82 euros

>>> Call
* Citi’s Montagu Sees Profit-Taking Risks for US, Europe Stocks
* Duerr Loses Only Sell as BNPP Exane Upgrades on Limited Downside (+)
* Equinor Cut at RBC on Likely ‘More Modest’ 2024 Distributions
* Flutter Upgraded to Buy at Peel Hunt on Clearer US Momentum
* Lanxess Cut at Baader Helvea, Too Early to Be Optimistic
* Wacker Chemie Downgraded at Baader Helvea, Sees Slow Recovery

>>> Stoxx 600 Pre-Market Indications

  • Covestro (1COV TH) +3.1%
    • Adnoc Readying Sweetened Bid for Germany’s Covestro, Bloomberg Reports
  • Enagas (EG4 TH) +1.2%
  • BAT (BMT TH) +1.1%
  • Saab (SDV TH) +0.8%
  • Tomra (TMRA TH) +0.7%
  • BE Semiconductor (BSI TH) +0.7%
  • ASML (ASME TH) -0.6%
  • Shell (R6C0 TH) -0.6%
  • Yara (IU2 TH) -0.8%
  • TUI (TUI1 TH) -0.9%
  • Danone (BSN TH) -1.1%
  • Rubis (BYN TH) -1.1%
  • Wacker Chemie (WCH TH) -1.7%
    • Wacker Chemie Downgraded at Baader Helvea, Sees Slow Recovery
  • Bayer (BAYN TH) -1.9%
    • Monsanto Hit With $857 Million Verdict Over PCBs in Washington State School
  • Lufthansa (LHA TH) -2.1%
    • Lufthansa to Cut Down Planned Flight Schedule for FY24
  • Lanxess (LXS TH) -3%
    • Lanxess Cut at Baader Helvea, Too Early to Be Optimistic

>>> TradeGate Pre-Market Indications

DAX:
  • Covestro (1COV TH) +3.2%
    • Adnoc Is Said Preparing to Increase Takeover Offer for Covestro
  • Siemens Energy (ENR TH) +0.8%
    • Siemens Transfers 8% Stake in Siemens Energy to Pension Fund
  • Rheinmetall (RHM TH) +0.6%
  • Bayer (BAYN TH) -1.9%
    • Monsanto Hit With $857 Million Verdict Over PCBs in Washington State School
MDAX:
  • Thyssenkrupp (TKA TH) +0.8%
  • Nordex (NDX1 TH) +0.6%
  • Aroundtown (AT1 TH) -0.5%
  • Lufthansa (LHA TH) -1.3%
    • Lufthansa to Cut Down Planned Flight Schedule for FY24
  • Wacker Chemie (WCH TH) -1.5%
    • Wacker Chemie Downgraded at Baader Helvea, Sees Slow Recovery
  • Lanxess (LXS TH) -2.7%
    • Lanxess Cut at Baader Helvea, Too Early to Be Optimistic
SDAX:
  • Thyssenkrupp Nucera AG & Co KGaa (NCH2 TH) +3.3%
  • Duerr (DUE TH) +2.1%
    • Duerr Raised to Neutral at BNPP Exane; PT 23 euros
  • Adtran Holdings (QH9 TH) +1.6%
  • Ceconomy (CEC TH) +1%
  • Suedzucker (SZU TH) +0.8%
  • PVA TePla (TPE TH) -1.7%
  • Grenke (GLJ TH) -1.8%

WWD : Coupang to Rescue Farfetch, Injecting $500 Million Into Troubled Firm

Coupang to Rescue Farfetch, Injecting $500 Million Into Troubled Firm
Richemont's pending agreement to sell a majority stake in Yoox Net-a-porter to Farfetch and Alabbar has been terminated as a result of the sale.

LONDON — Farfetch has found its rescuer in Coupang, which has agreed to pump $500 million in emergency funding into the company as part of a “pre-pack” administration process.

According to Farfetch, the fresh capital will allow it “to continue providing exclusive brands and boutiques with bespoke, cutting-edge technology and giving leading designers access to consumers around the globe.”

Coupang, which invested alongside the San Francisco-based firm Greenoaks Capital, is a Fortune 200 company listed on the New York Stock Exchange. It has operations and support services in markets including South Korea, Taiwan, Singapore, China and India.

In its home market of South Korea, Coupang has become part of everyday life, offering home delivery for everything from groceries and take-away orders to consumer goods.

It compares, albeit on a smaller scale, to Alibaba in China and, according to industry sources, has been looking to move upmarket into fashion and luxury goods services.

A statement from Farfetch said that Coupang’s “operational excellence and innovative logistics combined with Farfetch’s leading role in the luxury ecosystem will drive exceptional experiences for customers, boutiques and brands” worldwide.

“Farfetch is a landmark of the luxury landscape and has been a transformative force in demonstrating that online luxury is the future of luxury retail,” said Bom Kim, founder and chief executive officer of Coupang.

He added: “Farfetch will rededicate itself to providing the most elevated experience for the world’s most exclusive brands, while pursuing steady and thoughtful growth as a private company. We also see tremendous opportunities to redefine the customer experience for luxury clients everywhere.”

José Neves, founder, CEO and chairman of Farfetch, said, “Coupang’s proven track record and deep experience in revolutionizing commerce will enable us to deliver exceptional service for our brand and boutique partners, as well as for our millions of customers around the world.”

As part of the deal, Farfetch will be pulled off the New York Stock Exchange and taken private, while shareholders, including Neves, will see their investments wiped out.

Neves will remain with the company, which will be fully controlled by Coupang.

A source close to Farfetch said that, going forward, it will be business as usual for suppliers, customers and partners.

Richemont’s pending deal to sell a majority stake in Yoox Net-a-porter to Farfetch and Alabbar has been terminated as a result of the takeover.

Under pre-pack administration in the U.K., a rescuer for a troubled business is found and a sale is negotiated before the administrators step in. In a normal administration, a company is declared insolvent, and it’s up to the administrators to seek buyers for the business.

The fate of Farfetch’s many assets — in particular Browns, New Guards Group, Stadium Goods, Farfetch’s $200 million stake in Neiman Marcus — remains unclear. It is understood there are ongoing conversations with potential buyers regarding Browns and New Guards Group.

Over the past weeks, as Farfetch struggled to secure a white knight, two of its biggest commercial partners, Compagnie Financière Richemont and Alibaba, both kept their distance and made clear they were not interested in rescuing the company.

Richemont said it would not invest in the ailing Farfetch, while Alibaba had been willing to put money in, but did not want to buy Farfetch outright.

Richemont said last month it was “reviewing its options in respect of its arrangements with Farfetch,” and stressed that its maisons and YNAP had not yet adopted Farfetch Platform Solutions, part of a wider deal forged with the fashion platform in 2022.

Farfetch has a separate partnership with Richemont and Alibaba, for distribution in China. Last week, the Chinese e-comm giant’s president Mike Evans resigned from Farfetch’s board.

Many believe tech expertise remains Farfetch’s superpower, and will continue to be the core of the business going forward.

Neves has always been proud of the platform he founded, which offered technology allowing large and small specialty stores to sell to the world. In addition, Neves and his team also worked with brands and retailers helping them unpick data, gauge consumer demand, and build stores that could meld physical and digital retail.

Farfetch’s original model of marketing retailers’ fashion and processing orders, but not holding stock, was considered clever and cutting edge, and Neves originally attracted investment from across the fashion community, from Chanel to Condé Nast to Artémis, the investment arm of France’s Pinault family, which invested multimillions in Farfetch’s Class A shares at the time of the IPO.

The CEO seemed particularly adept at securing partnerships and cutting deals.

A year ago, Farfetch seem poised to take a major step forward with its agreement to take the wheel at YNAP as part of a wider plan that would have also seen Farfetch apply its Platform Solutions tech to some of the Richemont brand sites.

But the business continued to vex Wall Street.

Last December, Neves returned to New York for the company’s first capital markets day since going public in 2018.

“Farfetch is at the tipping point,” the CEO said. “We’re at the point where we’re going to start to leverage the investments of the past 14 years to continue on the path of growth, profitable growth and cash flow generation. And today is all about providing clarity to you on the building blocks of that roadmap.”

Many didn’t like what they saw. Shares of Farfetch fell by more than 35 percent that day, and while at least some analysts remained bullish on the thesis behind the company, the road ahead seemed longer than generally expected.

The money-losing operation bounced back some after that, but never really regained its traction on Wall Street.

Experts attributed a big part of that to a series of what many saw were as non-core acquisitions that complicated the business.

Over the years, Farfetch’s buying spree included London retailer Browns, New Guards Group and Stadium Goods. Farfetch became a retailer that held stock and managed inventory.

The luxury fashion platform also made a splashy its move into beauty, acquiring Violet Grey and tapping founder Cassandra Grey as an adviser. The deal was followed by a broader rollout of beauty in April 2022, when more than 100 prestige brands launched on the marketplace.

In August, Farfetch abruptly said it was exiting the beauty category.

At the time, Neves told WWD: “This company was built from zero, from nothing, and actually launched in 2008, amid a global financial crisis.

“We got our first venture capital money in 2010, so the first three years were just my money, which was no money. And so we really have that DNA of resiliency and frugality and we’ve grown this business from those humble, very humble origins to be a global platform present in all large luxury goods markets in the world.…The North Star of this company remains absolutely intact, which is to be the global platform for luxury,” he said.

But investors have not kept the faith. Farfetch’s market capitalization dipped below $250 million this past week as the company was said to be speaking with administrators — a long way from the $25 billion it nearly hit in 2021.

Ultimately, the company’s cash burn seems to have just too much for equity investors and the firm’s debt came to the fore.

Earlier this week, Moody’s Investors Service lowered its credit rating of Farfetch deep into junk territory, moving the company to “Caa2” from “B3,” and put Farfetch on review for a further downgrade. Standard & Poor’s had already cut its rating on the luxury platform earlier in the month.

WWD : Richemont Confirms Long-awaited Deal to Sell YNAP to Farfetch and Alabbar

Richemont Confirms Long-awaited Deal to Sell YNAP to Farfetch and Alabbar Is Off the Table
Compagnie Financière Richemont said it will consider “alternative options” to create a neutral luxury platform, and will continue to re-platform the brands in its portfolio without help from Farfetch.

LONDON — Compagnie Financière Richemont is considering its options after calling off a long-awaited deal to sell Yoox Net-a-porter to Farfetch and Alabbar; adopt Farfetch Platform Solutions tech, and open e-concessions for its luxury maisons on the Farfetch marketplace.

The agreement to sell a majority stake in YNAP to Farfetch would have realized Richemont chairman Johann Rupert’s vision of creating a shared e-commerce platform for luxury goods companies worldwide, and would have allowed Richemont to focus on brand-building rather than on tech.

The deal also would have allowed Richemont’s maisons to update their e-commerce operations using proprietary technology from Farfetch, and to sell via e-concessions on the retailer’s marketplace.

The deal had been set to complete by the end of December, and had already been approved by the U.K. and European Union regulatory bodies.

But it was not to be. Farfetch entered pre-pack administration this week and was purchased by the South Korean service provider Coupang, which gave it a cash injection of $500 million.

RELATED: Coupang to Rescue Farfetch, Injecting $500 Million Into Troubled Firm

On Monday, shortly after the Coupang announcement, Richemont said it will consider “alternative options” to pursue its realization of a neutral platform for luxury brands, and added it was “confident that its maisons will benefit from cutting-edge platform technology” going forward.

Although it did not mention Farfetch, it’s clear that Richemont plans to move ahead without any help from the troubled e-commerce platform.

YNAP, it said, continues to operate on its own technology. Richemont said it will be holding on to YNAP and plans to “reevaluate options for it to best harness its strengths and potential under new stewardship.”

Richemont had been eager to get moving on the Farfetch deal. It had already written down the cost of the disposal on its balance sheet, and Rupert was keen to tap into the know-how of founder and chairman José Neves and the Farfetch team for maisons ranging from Cartier to Chloé.

On Monday, shortly after Coupang and Farfetch announced their partnership, Richemont and Symphony Global, one of the investment vehicles of Mohamed Alabbar, terminated their agreements with Farfetch and said the deal “cannot complete.”

Richemont also said it was “reasonable to expect” that the $300 million in convertible senior notes issued by Farfetch Ltd. to Richemont in November 2020 “will not be repaid.”

The carrying value of the notes in Richemont’s accounts amounted to 218 million euros as of Nov. 30.

Richemont reiterated an earlier statement saying it had no financial obligations toward Farfetch, and does not envisage “lending or investing” into it.

It said the Richemont maisons continue to operate on their own platforms “and have neither adopted Farfetch Platform Solutions, nor launched e-concessions on the Farfetch marketplace.”

The deal was announced in August 2022 with much fanfare, and both companies saw their share prices climb following the announcement.

Upon completion, Richemont was set to hold a 49.3 percent stake in YNAP with Farfetch and Alabbar owning the rest. Over the next five years, Farfetch was expected to acquire the entirety of YNAP, subject to certain conditions.

At the time, Richemont and Farfetch said they planned to work together to accelerate the quality and global penetration of the Richemont brands online.

Rupert said many times the new alliance would realize his “long-standing goal of making YNAP a neutral, industry-wide platform, with no controlling shareholder.”

He believed the planned sale of YNAP to Farfetch would have allowed Richemont “to deliver on its global digital strategy” and, at the same time, “to focus on what it does best.”

The deal with Farfetch, he declared, was going to be “transformative for all of luxury, and not for a select few. It will transform big and small companies throughout Europe” by allowing them to set up shop online with help from tech-savvy Farfetch.

Neves, who expected the deal to double the gross merchandise value of Farfetch, argued that Farfetch’s tech was going to be “a game-changer for Richemont’s brands, and allow them to operate in a hybrid marketplace that is open to the entire industry.”

WSJ : A Secluded Runway, a Turkish Spymaster and No Guns: the New World of Hosta

A Secluded Runway, a Turkish Spymaster and No Guns: the New World of Hostage Exchanges
Washington turns to Middle East power brokers to bring prisoners home; a former U.S. Marine for a Russian drug smuggler

ANKARA ESENBOGA AIRPORT, Turkey—Two jets—one American, the other Russian—were approaching the same runway, each carrying a single prisoner, both monitored by a Turkish intelligence officer in the control tower.

In the cockpits of each jet, pilots were navigating through thick clouds toward a cordoned-off area of Turkey’s capital city airport, when the officer’s voice issued directives over a secure line.

Neither jet, he warned, would have permission to land until their crews ticked off a checklist that included taking and texting him photos of every passenger on board. There were to be no news cameras, no last-minute delays or changes to the flight manifests—and no guns.

Two months into Russia’s invasion of Ukraine, Turkey was thrusting itself into the secret world of hostage brokering, orchestrating a carefully choreographed exchange between two hostile powers.

Within minutes, the Turkish officer’s phone lighted up with photos of Russian and American passengers whose faces matched those named on a list prearranged over days of preparation. Air-traffic control signaled clearance to land and the two jets taxied to the agreed distance of 300 meters, their engines still roaring as their doors, precisely facing one another, opened.

From the first plane, wearing a brown T-shirt and khaki pants and carrying a single yellow folder, stepped Konstantin Yaroshenko, a Russian pilot convicted on cocaine-smuggling charges in the U.S.

From the other—shoulders hunched and gaunt after three six-day hunger strikes at Russia’s remote IK-12 penal colony—former U.S. Marine Trevor Reed shuffled onto the tarmac. Bundled by balaclava-masked agents of Russia’s Federal Security Service, or FSB, onto the back of the jet, he had been seated behind a curtain wondering for the duration of the flight where he was headed.

The April 27, 2022, handover, described in exclusive detail by Turkish and American officials and another person present, was the first of several hostage exchanges that Turkey has hosted—among them a prisoner-of-war swap between Ukraine and Russia in September of last year which was the most important and sensitive since Moscow’s invasion. Turkey has more recently helped Qatar mediate between Israel and Hamas to try to extract the estimated 200 Israeli and foreign hostages, including around a dozen Americans, abducted during the militants’ incursion from Gaza.

Not since the height of the Cold War have so many Americans been held as bargaining chips by hostile states. Those held in Russia include Wall Street Journal reporter Evan Gershkovich and former U.S. Marine Paul Whelan, who are both kept on espionage charges that they and the U.S. government strongly deny. “We have contacts with our American partners in this regard,” Russian President Vladimir Putin said last week. “I hope that we will find a solution.”

The burgeoning practice of hostage-takings by rival nations has become so widespread that the Biden administration has declared it a national emergency. And yet the governments America is now tapping to help navigate this pirate world of kidnappings and ransom-payments are all too familiar with the game. In 2018, the U.S. sanctioned Turkey’s interior and justice ministers for the “unjust detention” of Andrew Brunson, an evangelical pastor from North Carolina, delisting them after his release.

Last year, when Russian and U.S. intelligence officials discussed which country could host a prisoner trade given many countries’ travel restrictions on Russian officials, both sides agreed they could trust Turkey.

“It is all about trust,” said one senior Turkish official. “It is intelligence diplomacy.”

If it was once Zurich, Vienna and the so-called Bridge of Spies connecting East and West Berlin that provided the trading floor for spy swaps and hostage deals, that mantle has shifted decidedly east.

Russia added Switzerland and Austria, two historically neutral states, to its “Unfriendly Countries List” after they joined European sanctions. Swiss diplomats, who once held a front-row seat mediating the superpower conflicts of the 20th century, now grumble in WhatsApp groups over being relegated to the bleachers.

Instead, Turkey—a NATO member which still supplies military-linked goods to Russia and sells Ukraine combat drones developed by President Recep Tayyip Erdogan’s son-in-law—is at the center of a group of Middle East power brokers that are amassing diplomatic clout by hosting prisoner swaps, peace talks and backchannel negotiations.

Qatar, a U.S. ally which also hosts the political office of Hamas, helped mediate September’s swap of five jailed Americans for several Iranian prisoners and access to $6 billion in frozen oil revenue. The United Arab Emirates, one of America’s closest military partners in the Middle East—and now a hub for Russian oil trading—hosted last year’s exchange of American basketball gold medalist Brittney Griner and convicted Russian arms dealer Viktor Bout.

Saudi Arabia—which has worked with Turkey to help free U.S. and U.K. citizens taken as prisoners of war while fighting Russian forces in eastern Ukraine—has also jailed American citizens for long sentences for criticizing the regime of Crown Prince Mohammed Bin Salman. Washington nonetheless has thanked Saudi Arabia for its role facilitating prisoner exchanges with Russia.

The diplomatic shift also throws into stark relief the limits of a central foreign-policy plank of the Biden administration, which broadly views the U.S. in a contest between democracies against authoritarian governments. In reality, America’s dependence on Turkey, Saudi Arabia, or the U.A.E. to help resolve hostage crises and other disputes have put those countries’ human-rights records or their booming trade with Russia on the back burner. Before the war, Biden pointedly excluded Turkey from its 2021 Summit for Democracy, and had warned that its relationship with the U.S. would depend on its freedoms it extended at home.

The next year—after Turkey started mediating between the U.S., Ukraine, and Moscow—Biden praised Erdogan at a summit of leaders from all NATO members.

“I mean, you’re doing a great job,” he said.

A Biden administration official said that after negotiating exchanges directly with hostile nations, it does sometimes seek logistical assistance from others: “We always are grateful when a country helps us, and it sometimes takes a country that is talking to the bad actors.”

A hidden hand of Turkey’s hostage diplomacy is Hakan Fidan, the veteran spy chief with a salt-and-pepper beard whom Erdogan calls his “secret keeper.”

Little known outside the Middle East, Fidan rose to prominence as head of Turkey’s National Intelligence Organization, or MIT, where he shaped Turkey’s regional strategy of backing Syrian rebels fighting the regime of Bashar al-Assad. He then helped Erdogan quash a 2016 coup attempt. In June, Erdogan promoted him to foreign minister and replaced him with Ibrahim Kalin, his chief adviser.

A former army officer who studied politics and administrative science at the University of Maryland, Fidan became Turkey’s youngest-ever intelligence chief in 2010 at 42. Low-key and softly spoken, he has rarely given interviews. In June, Erdogan made him his foreign minister. Former CIA officers who worked with Fidan said he built a network that traversed geopolitical fault lines, fostering close contacts in Washington and Moscow.

Two months after Russia’s invasion of Ukraine in 2022, the U.S. and Russia both sent requests to Fidan’s office. Would he help facilitate a prisoner swap in Istanbul?

As an offer came into shape to release Reed for Yaroshenko, the Russian pilot, Moscow offered to host the exchange—a proposal the U.S. swiftly rejected for fear the Russians could engineer last-minute changes or renege on a deal, leaving them empty-handed on hostile territory. U.S. and Russian intelligence officials settled on Istanbul to take the job.

Fidan responded that Turkey would help—but said a secluded part of the airport in the capital, Ankara, would be better.

Turkey had never arranged such a prisoner swap between great powers, and the country lacked an established protocol. Fidan delivered the request to Erdogan.

The president, in power for nearly two decades, said yes.

U.S. and Russia’s spy chiefs in Ankara shuttled to the MIT’s remote, 5,000-acre hilltop headquarters, known as “the fortress,” to haggle over parameters for the exchange. Within days, MIT had sent them both a message outlining the details: precise times and locations the flights would land, how many people will be on board and the rules of engagement.

An important stipulation: To preserve secrecy, neither side would film or photograph the exchange.

In the small and cramped cubicle hive of the U.S. State Department’s special envoy for hostage affairs’s office, staff set in motion logistics to receive what they called “a wrongful”—an American they determined had been arbitrarily detained as an act of hostage taking.

Reed, 32, from Granbury, Texas, had once been once posted to Camp David, where his duties included protecting then-Vice President Biden. During a trip to see his Russian girlfriend, he was jailed and eventually sentenced to nine years for allegedly assaulting Moscow police after a drunken night out with friends. Reed denied the assault and repeatedly said Russian law enforcement provided no credible evidence it had taken place. The State Department declared him “wrongfully detained.” U.S. officials said his case was overseen by a secretive FSB unit targeting American Marines known as the Department of Counter Intelligence, or DKRO.

By April 2022, Reed was in his third year of imprisonment, held at IK-12, a facility hundreds of miles east of Moscow that had repeatedly thrown him into solitary confinement for acts of insubordination. It was his latest prison in a stint of a half dozen that included Moscow’s infamous Lefortovo, also once home to Whelan and now the Journal’s Gershkovich. Reed had written to his parents Joey and Paula to say his body had been damaged by bouts of Covid-19 and symptoms of tuberculosis and asked for them to send toilet paper, water and meat.

Reed’s parents launched a campaign, standing in the rain outside the White House with placards, eventually landing a presidential meeting after a CNN journalist asked Biden about their plight. Biden invited them inside, and after an emotional discussion, authorized a deal to trade Reed for Yaroshenko, the Russian pilot imprisoned in the U.S.

Days later, prison guards thrust a piece of paper in Reed’s arms—a direct request to Vladimir Putin for a pardon—which he refused to sign. America’s ambassador to Russia had to call to tell the defiant prisoner “if you sign that paper you won’t regret it.” He obliged.

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Given the black shirt and slacks he had worn in court and allowed to shower for the first time in weeks, Reed was taken to a holding cell, where he carved his service branch into the thick, nearly soundproof walls: “U.S. Marine Corps.” Hours later, masked men in fatigues from Alpha Group, the FSB’s special forces, ushered him onto a plane, as a Russian state news crew filmed the departure.

On board, Reed was told to sit with security officers at the back, while the senior FSB operatives leading the operation were in front, concealed by a curtain. Reed listened as his guards chatted reverentially in Russian about the officer running the operation, Col. Sergei Latkov, whom they had seen on other jobs. As the plane arched toward the Black Sea, Latkov walked through the curtain to address Reed.

“Hello,” he said in English. “How are you?”

Unbeknown to Reed, Latkov was a longtime intelligence officer who once served as the head of the 10th section of the FSB’s DKRO unit—the subdivision that tracks foreign journalists—according to a 2006 memo alerting Putin to a CBS news crew’s activities in the country, later published by Agentura, a Russian-focused investigative outlet. The DKRO led the arrest of Gershkovich, and helped detain Reed and Whelan, according to U.S. and other Western diplomats, intelligence officers and former Russian operatives. Latkov is now with the Presidential administration, Putin’s executive office, according to flight records.

“Good. How are you?” Reed shot back in Russian, which he had greatly improved in prison. Latkov smiled and returned to his seat.

Hundreds of miles away at Ankara airport, a Turkish MIT officer stepped into the control tower. “This is an operation,” he said to the traffic controllers as he explained that two planes would shortly land on a cordoned-off runway on the southern side of the airport usually used by VIPs. The swap was to take place in secrecy, with no news cameras.

For some previous prisoner exchanges, U.S. officials had booked commercial flights to save money, but Reed’s medical problems meant they needed to charter a State Department OpMed, or Operational Medicine, plane.

The jet began to descend toward Ankara shortly after the MIT officer called to run through the checklist. It arrived minutes after the Russian jet. The American delegation had prepared in minute detail for the flight protocols, but as the plane touched down and taxied toward the Russian jet, it was unclear which delegation should move first to begin the exchange.

As the two jets sat on the runway, Reed saw another man emerge through the curtain.

“I’m Roger Carstens, I’m here to identify you.”

“It’s me!” Reed replied, eagerly. Ambassador Carstens, the U.S. special presidential envoy for hostage affairs, turned and walked out of the jet without another word. For a moment, Reed worried he had somehow jeopardized his release. Within minutes he was being ushered onto the tarmac by Latkov and another officer.

In Cold War exchanges, American and Soviet delegations would halt a short distance away from each other, leaving prisoners to walk the final steps to freedom. But Carstens and Latkov greeted one another, shaking hands on the tarmac as they welcomed Reed and Yaroshenko.

Shortly after, footage of the handover appeared on Kremlin-controlled media, the faces of the Russians officials blurred, and the scene presented as a victory for Putin in his score-settling grudge with the West. Erdogan’s government was surprised; the Americans complained.

Sometime later, Turkish officials quizzed their Russian counterparts about the breach of rules—why had they filmed the exchange?

In reply, the Russians offered a curt denial: “We didn’t.”


Five months later, a Turkish intelligence officer ascended again into the air-traffic control tower, to guide another jet from Russia into the section of Ankara airport, the stage for the most complex hostage swap since the Ukraine conflict began.

A plane was bringing Ankara some of Russia’s most prized prisoners of war: five Ukrainian commanders taken during Russia’s siege of a steel plant in the eastern city of Mariupol. Among them was Col. Denys Prokopenko, commander of the Azov Regiment, a National Guard unit long tarred by Russia for its origins in a nationalist militia. In Poland, a plane was waiting to take off for Ankara with Viktor Medvedchuk, a pro-Russian Ukrainian politician and close personal friend of Putin’s, who had been captured by Ukraine’s security service after escaping house arrest at the start of the war.

Ten mostly British and American foreign fighters taken prisoner from Ukrainian battlefields by Russia were settling into the gold-trimmed leather seats of a third jet, bound for the Saudi capital, Riyadh, the crew passing out fresh salmon to the emaciated prisoners, who smoked celebratory cigarettes midflight. On the plane, Shaun Pinner, a British prisoner, noticed a celebrity look-alike, talking to an aide.

“I said to him, you really look like Roman Abramovich…and he said, ‘I am Roman Abramovich.’”

The Russian tycoon and longtime owner of London soccer team Chelsea, had been working as a mediator, attending peace talks in Turkey, which let him safely dock his superyacht there, away from European sanctions. He had traveled to Ankara and Riyadh, meeting Turkish and Saudi leaders ahead of the swap and was in Rostov-on-Don to personally ensure no last-minute derailments. The oligarch posed for pictures on the plane while Pinner joked that he wished he’d bought his team, West Ham United. “Chelsea was closer to my house,” Abramovich replied.

Once that jet touched down in the Saudi capital of Riyadh, another 200 prisoners of war would be driven in convoy to the border with Ukraine, to cross into home territory. Ukraine would send some 50 Russian soldiers across its borders.

Collectively, they were some of Russia and Ukraine’s most valuable prisoners. Nobody wanted to move first.

“We don’t trust the Russians,” said Ukraine’s presidential chief of staff, Andriy Yermak, who coordinated the exchange in Kyiv.

The plane carrying the Mariupol commanders landed in Ankara, where Ukraine’s head of military intelligence, Lt. Gen. Kyrylo Budanov, was waiting to receive them. After a fierce debate, the Russians relented to let him board the plane to confirm their identities.

He sent photos to Yermak in Kyiv. The five men looked exhausted and emaciated after four months in Russian captivity, but it was them. Medvedchuk’s plane left the Ankara runway for Moscow, and hundreds of miles away, the Ukrainians shuffled across the border, one of them sinking to his knees to kiss the Ukrainian soil.

This time, it would be Russia complaining that Turkey had broken the rules. The Russians said they had agreed to release the Ukrainians to Turkey on the grounds that they stayed there, far from the fight, until the war’s conclusion.

Instead, a few months later, the Ankara airport had another visitor: Ukrainian President Volodymyr Zelensky, who flew in on a Czech jet, loaded it up with the Ukrainian commanders, then returned home.

Publicly, Russia objected that it hadn’t been informed in advance. Privately, Russia assured Turkey it wanted to continue working together.

By then, freed pilot, Yaroshenko, had been personally appointed by Putin to Russia’s civic chamber, a government body that facilitates contacts between society and the state.

Reed, now free, was on a very different life journey: Months later, deployed as a volunteer to fight the invasion of Ukraine, he was near the strategic town of Bakhmut, when shrapnel tore through his legs. He was evacuated to Germany by a nongovernmental organization and is now back in the U.S.

Turkish officials say they are standing by should Washington need their services in cutting a deal for any future American hostages.