TheChek News Flow

Italy’s Enel expects to add at least two million chargers, including home systems, in North America by the end of the decade

Italian energy giant Enel ENEL -3.92% SpA said it plans to add 10,000 electric-vehicle fast chargers in the U.S. by 2030, an effort to capitalize on the Biden administration’s efforts to switch more drivers to greener cars.

If Enel follows through on the plan, which it announced on Thursday, it would almost double the number of public fast chargers available to all drivers in the U.S. The availability of such chargers is considered one of the key requisites for the wider adoption of electric vehicles.

The Biden administration this week proposed new, tougher tailpipe emissions restrictions intended to accelerate the switch to EVs. New standards for light-duty vehicles would apply to the 2027 to 2032 model years.

Enel said Thursday that it expects to add at least two million chargers overall this decade in North America. Most of that new gear would come from selling at-home chargers that repower an EV battery over several hours, though its plans for building public fast chargers would make it one of the largest operators in that market.

hris Baker, head of charging subsidiary Enel X Way North America, said that government incentives and an uptick in EV adoption further convinced the company that it was time to enter the public charging market.

“We can come in and make a big commitment and take a long-term view on it,” Mr. Baker said. “It’s an infrastructure play.” He didn’t disclose the size of the investment.

At-home charging is the cheapest way to fuel but it takes time, while fast chargers can repower a car battery in about 30 minutes. Prices vary depending on EV efficiency and the electricity market, but a fast charge can cost around $13 for a midsize car to travel 100 miles.

The U.S. has around 11,500 fast-charging ports now that are open to any kind of vehicle, while EV market leader Tesla Inc. has a network for its own drivers with about 18,700, according to government data.

Enel’s fast-charging build-out is planned in the U.S., where the government has put billions on the table to try to create a national highway network of the equipment to ease “range anxiety,” the stress that drivers have about running out of juice on longer road trips.

The Biden administration has started giving states $7.5 billion to fund charging build-outs, money included in the $1 trillion infrastructure bill passed by Congress in 2021. Tax credits for installing EV chargers also were approved as part of last year’s Inflation Reduction Act. Enel would be in line to qualify for government funding.

Until now, Enel’s charging business has been focused on selling at-home and private commercial equipment in North America, though it has a large public charging network in Europe. Much of its work in Mexico is focused on fleet charging. Enel North America, another of its subsidiaries, is also a large developer of renewable energy and battery projects in the U.S. and is making a massive push into solar-panel manufacturing there.

The availability and reliability of fast chargers has been a hangup for wider EV adoption. Adding fast chargers is complex because of the large electric load and amount of costly infrastructure needed, but a rush of investment announcements have come in the wake of the new U.S. laws.

Canadian group indicates willingness to consider talks with FTSE 100 miner under different deal structure

Canadian miner Teck Resources rebuffed a revised hostile $23bn bid from Glencore, but left the door open for continued talks under a different deal structure than that proposed by the FTSE 100 miner.

Teck told Glencore that if it wished to continue deal talks in future, the Swiss miner should first spin off its thermal coal business — which is the world’s most profitable — then come back for discussions.

“As you have now publicly stated you are prepared to spin out your thermal coal business, we suggest you proceed with that,” wrote Teck chair Sheila Murray in a letter on Thursday.

Glencore should also separate its oil business, she continued, “then engage with Teck Metals after our own separation has been completed”.

Teck has now rebuffed two offers from the FTSE 100 miner in as many weeks but the plan its chair outlined represents the first time the Canadian group has indicated it would be willing to consider deal talks with Glencore — albeit under very different conditions than its current offer.

Teck is already planning to separate its metals business and its steelmaking coal business, a proposal that goes to shareholder vote on April 26.

Glencore has proposed merging with Teck, then dividing the joint assets into a “MetalsCo” and a “CoalCo”. Teck shareholders would receive 24 per cent of the shares in the new MetalsCo, as well as the option of shares or cash — worth up to $8.2bn — for the coal business.

Teck chief executive Jonathan Price told the Financial Times that Glencore’s sweetened offer proposed this week, was “unworkable” and a “non-starter”.

“Our recommendation is that Glencore should address some of the issues that it has with its portfolio, before approaching Teck for a potential acquisition,” he said.

The Swiss company has said its proposal would create maximum value for the two companies, by creating two global giants in metals and in coal.

In a tacit indication of support for Glencore, proxy voter ISS recommended Teck shareholders reject the Vancouver-based group’s plans to separate. ISS noted the separation was less compelling than “alternative structures which could be sought”, an apparent reference to Glencore’s offer.

Some of Glencore’s own shareholders have already been calling for the Swiss miner and commodity trader to spin out its thermal coal business.

“There is a clear way to do this deal,” said Giuseppe Bivona, chief investment officer at activist investor Bluebell Capital, which owns shares in both Teck and Glencore. “But the way the transaction should be done is completely different.”

Bluebell wrote to Glencore on Wednesday calling for it to separate its coal business and oil business, then merge with Teck’s metals unit — similar to what Teck advocated.

Glencore has said it is not planning to separate out its own coal business, but would do so if a significant number of shareholders demanded it.

“On coal we always said, if there was strong support from shareholders to divest, it is something we would do,” Glencore chief executive Gary Nagle told investors last week. Nagle is in Toronto on Thursday meeting certain Teck shareholders.

Investment in new large-scale fossil fuel projects is now a risky proposition

Inertia is a powerful force in energy systems — and a key challenge for efforts to transition economies to clean energy and tackle climate change. Why install a heat pump when your gas boiler works fine or buy an electric car when your petrol one does the job? Why build new power lines to connect solar plants to the grid when fossil fuel plants are already plugged in and running?

But the ongoing energy security crisis has demonstrated how shocks can shake systems out of inertia. Russia’s efforts to gain political and economic advantage by pushing energy prices higher have spurred a major response by governments — not just in the EU but in many countries around the world — to speed up the deployment of cleaner and more secure alternatives.

The effects of all this are becoming clearer by the day. Six months ago, the International Energy Agency showed that the repercussions of the war in Ukraine were reshaping the future of global energy, with a peak in fossil fuel demand clearly visible for the first time and set to happen before the end of the 2020s.

This will be a historic shift: fossil fuels have held their share of global energy supply steady at about 80 per cent for decades. But the energy world is changing fast — and clean technologies are building momentum. The IEA’s latest data indicates that the peak in fossil fuel demand is moving even closer.

For this, we can thank an array of clean energy developments, such as solar panels, wind turbines, electric vehicles and heat pumps, and the policies and investments that are supercharging their growth. It’s well known in energy and climate circles that these technologies are expanding quickly, but I think many people still don’t realise just how quickly. The implications need to be taken more into account, especially at a time when the energy crisis has prompted some countries and companies to push for new investment in large-scale fossil-fuel projects that may not actually start operations before the end of this decade.

Take solar panels. Over the past two years, their global deployment has been fast enough to align fully with the rate envisaged in the IEA’s ambitious pathway to net zero emissions by 2050. Low-carbon electricity is also getting a boost from the comeback by nuclear power in many parts of the world.

Sales of heat pumps, vital for the sustainable and secure heating of buildings, have been growing rapidly over the past two years, in Europe and elsewhere. Continued growth at this rate would almost double their share of heating in buildings worldwide by 2030. They are already outselling gas furnaces and boilers in the US and in a growing number of European countries — and demand remains robust in China, the world’s largest heat pump market.

Electric car sales are soaring, accounting for close to 15 per cent of the global car market in 2022, up from less than 5 per cent just two years earlier. Government subsidies have been vital in bringing down the upfront cost of buying an EV, while the day-to-day running costs are generally much cheaper than those of conventional cars. Plus, the recent move by Opec+ countries to significantly cut oil production risks pushing oil prices to economically painful levels yet again, making the case for buying an electric car more compelling than ever.

New IEA analysis in our Global EV Outlook 2023, to be published this month, shows that current trends in the rapidly growing global fleet of electric cars will avoid the need for the equivalent of 5mn barrels of oil a day by 2030. Strong government policies that encourage more people to purchase EVs can further increase this number.

The IEA pointed out in 2021 that global demand for petrol had already peaked, thanks to the growth of EVs and improvements in fuel economy. Today, our latest analysis shows that global demand for all road transport fuels — petrol, diesel and others combined — will peak by 2025 as a result of these ongoing trends.

The transition to clean energy is also accelerating in other sectors, including those where emissions are most challenging to reduce, such as steel. The project pipeline for producing steel with hydrogen rather than coal is expanding rapidly. If currently announced projects come to fruition, we could already have more than half of what we need in 2030 for the IEA’s net zero pathway.

These transformative developments are speeding up the emergence of a new clean energy economy. With this in mind, the push by some companies and governments to build new large-scale fossil fuel projects is not only a bet against the world reaching its climate goals — it is also a risky proposition for investors who want reasonable returns on their capital.

UBS/Credit Suisse: Swiss bank would be a valuable asset to lose

A spin-off might appeal to some politicians but domestic arm is both profitable and a feeder for UBS’s wealth management business

Partner at Big Four firm says Markus Braun invited him skiing as he sought to water down probe

Markus Braun tried to woo a senior KPMG partner with an invitation to his luxury ski hut and later threatened to sue the Big Four firm as he tried to water down its special audit into Wirecard, a Munich court has heard.

Sven-Olaf Leitz, an executive board member of KPMG Germany, told a panel of five judges on Thursday that the former chief executive of the payments group repeatedly lobbied to narrow the scope of the investigation into Wirecard’s outsourced operations in Asia.

Braun and two other former senior executives of the disgraced German company are facing charges of fraud, embezzlement, market and accounting manipulation that are punishable with up to 15 years in jail.

Wirecard collapsed in 2020 in one of Europe’s biggest accounting scandals after disclosing that half its revenue and €1.9bn in corporate cash did not exist. While Wirecard’s administrator and Munich criminal prosecutors have both concluded that the company’s outsourced operations did not exist, Braun argues that they were real.

The former chief executive, who has been in police custody since 2020, told the court he was genuinely concerned about fraud allegations raised by the Financial Times and pushed for a thorough investigation by KPMG to get to the bottom of the matter.

Leitz’s testimony, however, contradicted Braun’s version of events.

The KPMG partner said Braun had played down the allegations, repeatedly asking why it was necessary to check transaction data and payment flows between Wirecard’s outsourcing partners in Asia and merchants.

Leitz said Braun had argued that such detailed checks had not been required in the annual audits and were unnecessary, and that the former chief had implored him to “trust me”, stressing he “knew” that the outsourced business was real as he possessed “proprietary knowledge”.

He also said Braun had asked KPMG to further postpone the publication of the results, and to carve out a problematic bit where the firm faced an obstacle to its investigation.

“There were multiple attempts to influence us,” said Leitz, adding that in January 2020 Wirecard had sought the replacement of key KPMG team members who had vehemently pushed for access to data, a request KPMG ignored.

In one phone call, according to Leitz, Braun asked if he liked skiing and invited him to stay at his luxury chalet in the Austrian ski resort of Kitzbühel. “I told him that I only snowboarded and that this was out of the question anyway,” Leitz told the judge, adding that he had found Braun’s proposal “bizarre”.

When the Wirecard boss was briefed about KPMG’s findings, he said “you failed to prove that the money does not exist”, according to Leitz, who said he had responded to Braun that “you failed to prove to us that the money is there”.

He added that Jan Marsalek, then Wirecard’s second-in-command and now a fugitive, had intervened, asking: “Who else do you think may have the money? Potentially Kim Jong Il?”

In June 2020, two months after the report was published, KPMG was still trying to validate transactions from December 2019 that had been shared by Wirecard at the eleventh hour. When a KPMG request for direct access to the payment firm’s IT was turned down, KPMG decided to walk away from the mandate.

“We told Wirecard that we had lost the trust in any further co-operation,” Leitz said, adding that Braun had responded by trying to put pressure on the Big Four firm. “This was when he told us for the first time that they may take legal steps against us,” he said.

Weeks later, Wirecard collapsed into insolvency.

Leitz heavily implicated Braun with regard to a controversial Wirecard release in late April 2020 that said “no substantial findings have been made” and that failed to mention KPMG had run into an “obstacle to the investigation”.

After Braun had shared a draft of the release with Leitz, the KPMG executive said he had told Braun both by phone and in writing that he felt it was inaccurate and should be changed.

Clubs will be permitted to make fresh deals until ban kicks in at end of 2025-26 season

Premier League football clubs will phase out front-of-shirt gambling sponsorships by the end of the 2025-26 season after pressure from the UK government, which is undertaking a shake-up of gaming regulations.

The move comes after discussions with the Department for Digital, Culture, Media and Sport, the Premier League said on Thursday. However, clubs will be permitted to obtain fresh gambling sponsorship until the ban kicks in.

The league’s global audience is attractive to betting companies and other sponsors seeking to sell products internationally. In total, eight of its 20 clubs have front-of-shirt betting sponsorships, most of which are operators looking to appeal to “grey” markets in Asia, where the rules concerning gambling on foreign sites are undefined.

The clubs include West Ham, which is sponsored by Betway; Everton, which is sponsored by crypto-gambling site Stake.com; and Bournemouth and Newcastle, which are sponsored by Philippine offshore gambling operators Dafabet and Fun88, respectively.

The Premier League said front-of-shirt sponsorship deals were valued at £60mn a year. However, there will be no ban on operators signing shirtsleeve sponsorships with clubs, and gambling adverts will remain visible on pitchside hoardings despite calls from safer-gambling campaigners for the league to go further.

The league also said it was working with other sports on the development of a new code for “responsible” gambling sponsorship.

The government is set to publish its long-awaited review of the 2005 Gambling Act within weeks. The white paper is expected to usher in a statutory levy on some gambling companies to fund public health initiatives and introduce stake limits on bets.

The review is part of a wider reform of gambling laws that were created before the first smartphone was released and betting apps emerged, in effect putting a virtual bookmaker into punters’ pockets and increasing the volume of bets placed.

Lucy Frazer, culture secretary, welcomed the announcement by the Premier League, saying: “The vast majority of adults gamble safely, but we have to recognise that footballers are role models who have enormous influence on young people.”

Ministers struck a deal with the league to exclude proposals banning gambling sponsorship if clubs voluntarily removed front-of-shirt branding. Frazer added that the government wanted to work with the league “to do the right thing for young fans”.

“Although this outcome isn’t perfect, it’s a huge step,” said James Grimes, founder of The Big Step, a campaign aimed at ending gambling sponsorship in football.

Grimes said the announcement was “a significant acceptance of the harm caused by gambling sponsorship” but he added that “just moving logos to a different part of the kit while allowing pitchside advertising and league sponsorship to continue is totally incoherent”.

Matt Zarb-Cousin, director of Clean Up Gambling, said the change was only a “small concession”. “It’s a confession that the visibility of these sponsors are impacting on people experiencing gambling problems and on children, but they are doing the bare minimum,” he said.

Ed Craven, founder of Stake.com, told the Financial Times that despite the move being expected “for some time” it was “a shame nonetheless” that the company would have to remove its branding from the front of Everton’s shirt.

Proposal by Spanish infrastructure group has come under heavy criticism from Madrid

Ferrovial, the Spanish infrastructure group, has won shareholder backing for a contentious plan to shift its head office to the Netherlands, a setback for the Spanish government that has condemned the proposed move.

The Madrid-based group, which sees the Dutch move as a stepping stone to listing its shares in New York, on Thursday won the support of a majority of voters at a shareholder meeting for a plan that it says will better align its corporate structure with its large North American business.

The proposal sparked a Spanish political storm earlier this year and made Ferrovial, part owner of London’s Heathrow airport, the latest European company to stir controversy by seeking to access the larger pool of capital in the US.

Ferrovial’s chair Rafael del Pino, the billionaire son of its founder, told shareholders the move would “bring the company closer to American investors and equity markets” and “promote its international growth”. Under the plan, Ferrovial would retain its listing in Madrid.

Del Pino has been encouraged by shareholders including Chris Hohn’s hedge fund TCI, which owns about 6 per cent of the €20bn company and says a US listing would broaden its investor base and boost its share price.

While Thursday’s vote overcomes a major hurdle for Ferrovial, its move to the Netherlands is still not guaranteed.

The plan could still be thwarted if investors owning more than 2.5 per cent of the shares — and who oppose the move — take up an option to sell their stock back to the company. Shareholders have until May 13 to decide whether to exercise the option.

Ferrovial, whose share price remains below its pre-pandemic peak, is particularly keen to be included in the Russell indices, which are tracked by funds managing billions of dollars. The company also contends that a Dutch base and US listing will lower its cost of capital.

Still, some analysts who follow the company say listing the shares on Wall Street will have limited significance for the company’s prospects.

The Spanish government, which reacted furiously to the plan and accused Ferrovial of betraying a country that had lavished it with public works contracts, says it is not seeking to thwart the company, but continues to criticise its move.

“Spain has always been our country and that will not change,” del Pino said.

Earlier this week, Gonzalo García, Spain’s secretary of state for the economy, told Ferrovial in a letter that the authorities had concluded there was no need for the company to move in order to list in the US.

Ferrovial disagrees, arguing there is no precedent for a Spanish company to list its share directly on the US stock markets.

The company says moving its HQ to the Netherlands will be “neutral” for its taxes and is not motivated by the personal interests of Del Pino, who owns 20 per cent of its shares via a Dutch entity, or anyone else.

It intends to shift its head office by merging its parent company into its wholly owned subsidiary Ferrovial International, which has been based in the Netherlands since 2018. If it encounters no further obstacles, the company wants to lists its shares in the US in the fourth quarter.

The company currently has more than 5,400 employees in Spain, nearly 4,200 in the US, and only a small office in the Netherlands. But last year it earned 82 per cent of its revenue outside Spain.

In addition to its 25 per cent stake in Heathrow airport, Ferrovial operates airports in Glasgow, Aberdeen and Southampton and manages a terminal of New York’s John F Kennedy airport. But the most valuable part of its business is its toll road division, which includes projects in the US, Canada, UK, Ireland, Slovakia and Australia.

Tensions rise in dispute over strategy at US ETF manager

WisdomTree’s biggest shareholder is attempting to seize control of the board of the $90.7bn US asset manager with the aim of ousting both the chief executive and chair in an increasingly acrimonious dispute over strategy.

Jonathan Steinberg, WisdomTree’s founder and chief executive, is planning to launch a blockchain-enabled digital assets platform this year but his plans are opposed by Graham Tuckwell, the largest shareholder, who argued that the company should focus on its core fund management business and on improving its operational performance.

Tuckwell, the driving force behind the creation of the world’s first gold exchange traded fund, has nominated himself for election to the board along with Bruce Aust, a former vice-chair at Nasdaq, the exchange operator, and Tonia Pankopf, managing partner at Pareto Advisors, an investment management consultant.

Six board seats are due to be voted at the annual shareholder meeting in June including the positions held by Steinberg and Frank Salerno, WisdomTree’s chair since 2019.

Steinberg remains convinced that adopting blockchain-enabled technology is key to the future success of the company which he founded as an investment magazine publisher in 1988 before overseeing its development into an ETF provider in 2006.

He has insisted that the investment made in developing the new WisdomTree Prime platform has not detracted from the company’s core ETF business which attracted net investor inflows of $12.2bn last year. That strong momentum has continued in the first quarter with net inflows reaching $6.3bn, pushing assets under management to a record high.

Steinberg told the FT in 2018 that he expected WisdomTree’s assets to reach $100bn without specifying a timeframe, a goal that is now within view.

UBS this week upgraded WisdomTree to “buy” and raised its 12-month share price target from $6 to $8 to reflect the manager’s “consistently strong” net inflows. It closed at $6.25 on Wednesday, up 14.8 per cent so far this year.

“Investors appear to understate WisdomTree’s value as a standalone franchise,” said Brennan Hawken, an analyst at UBS in New York.

Speaking to the FT last year, Steinberg said he was acutely aware that his leadership was under attack.

“I was taught to win with honour, lose with honour and to never cheat,” he said, a riposte that underlines the acrimony between himself and Tuckwell.

The dispute has been rumbling since WisdomTree acquired the European arm of ETF Securities, a London-based ETF specialist founded by Tuckwell in 2005, in a $611mn cash and shares deal in November 2017.

Both men believed that the deal would help the enlarged WisdomTree, then ranked as the world’s ninth-largest ETF manager, to compete more effectively with bigger rivals such as BlackRock and Vanguard. They also hoped the combination would enhance WisdomTree’s appeal to a potential acquirer. However, no buyer for the group appeared and the share price has fallen by about 38 per cent since the completion of the deal in April 2018.

Tuckwell, an Australian entrepreneur, said WisdomTree needed to focus on its core ETF business and that overhauling the board was necessary to address the “dismal” share price performance.

Tuckwell has also been infuriated by WisdomTree’s reinstatement of a complex “stockholder rights plan” — involving the issue of preference shares that lack voting rights — designed to block him from gaining control without having to pay a premium.

WisdomTree’s board has “repeatedly refused to have any meaningful dialogue or make any offer or proposal that might assist in reaching any form of settlement”, said Tuckwell.

He has also objected to WisdomTree’s decision to approve the expansion of its severance plan to include eight executives who together could collect up to an estimated $25mn if their contracts are terminated. Steinberg could walk away with an estimated $9mn under the severance plan, according to an adviser to Tuckwell.

Salerno, WisdomTree’s chair, said Tuckwell was “asking for a blank cheque” to change the board to suit his own personal agenda.

“Contrary to Mr Tuckwell’s misleading claims, WisdomTree’s strategy is clearly leading to strong performance results,” he said.