FT : Hello Kitty parent company Sanrio’s shares surge on Alibaba deal

Hello Kitty parent company Sanrio’s shares surge on Alibaba deal
Five-year licensing agreement comes as Japanese group works to introduce characters to new markets

Shares in Sanrio shot up as much as 15 per cent on Thursday morning after the Japanese company behind Hello Kitty struck a licensing deal with Chinese ecommerce group Alibaba in a bid to expand its footprint.

The five-year deal signed with Alibaba’s intellectual property licensing subsidiary, Alifish, will cover Sanrio’s cast of characters including Hello Kitty, My Melody and her rival devilish rabbit character Kuromi — a hugely popular character in China after a local influencer with more than 14mn followers posted a viral video on social media last year.

The Japanese company said it wanted to “maximise its growth opportunity” created by the rapid digitalisation of the Chinese market, its largest overseas market. Sales in China grew 39 per cent in the fiscal year that ended in March to ¥4.7bn ($34mn), while operating profits were up 19 per cent from a year earlier.

Sanrio had a licensing deal with Hong Kong-based KT Licensing, owned by an investment arm of the families of Victor Fung and William Fung, who are behind the sourcing and apparel manufacturing conglomerate Li & Fung Group.

“We expect not only a notable increase in our merchandise volume with the platformer giant, but also some potential clues from the tech company as we explore new businesses in metaverse and blockchain,” said a Sanrio spokesperson.

Sanrio, which handed control from the 94-year-old founder to his 33-year-old grandson Tomokuni Tsuji in 2020, is shifting its strategy after its operating profits have declined from a peak in 2013. In the fiscal year through March 2021, Sanrio was not profitable for the first time in 12 years. It returned to profit the following year.

The fall in performance followed smash hits from Disney including Frozen, which caused Sanrio brands to lose their lustre in lucrative US and European markets.

The coronavirus pandemic temporarily forced theme parks and stores to close, prompting Tsuji to boost the group’s digital strategy and attract new fans by creating mascots other than Hello Kitty.

Sanrio hosted a metaverse music festival in December to lure tech-savvy consumers. The company is now assessing data on how to promote such digital events, said the spokesperson.

The company is experiencing unanticipated success in China, where Kuromi has been searched on Baidu four times more than Frozen’s Elsa, according to Nikkei. The surge was prompted by a video posted in January 2021, which has drawn 2.7mn likes, in which an influencer danced in costumes imitating the rabbit mascot, among others.

>>> Stoxx 600 Pre-Market Indications

  • ArcelorMittal (ARRD TH) -2%
  • Persimmon (OHP TH) -2%
    • Michael Gove must put up or shut up over housebuilder cartel claims
  • SAP (SAP TH) -2.2%
    • SAP Cut to Neutral at Exane BNP Due to Risks on Demand Side
  • Lufthansa (LHA TH) -2.3%
  • Zalando (ZAL TH) -2.5%
  • Delivery Hero (DHER TH) -2.6%
  • Worldline (WO6 TH) -2.7%
  • Sanofi (SNW TH) -2.8%
  • Fortum (FOT TH) -4.8%
  • Uniper (UN01 TH) -10%
    • Uniper Discusses Potential Rescue Deal With German Government

>>> TradeGate Pre-Market Indications

DAX:
  • Vonovia (VNA TH) -0.8%
    • Adler Chairman Says Winding Up Company Is One Option: B-Z
  • SAP (SAP TH) -1.6%
    • SAP Cut to Neutral at Exane BNP Due to Risks on Demand Side
  • Zalando (ZAL TH) -1.7%
  • Mercedes (MBG TH) -1.7%
  • RWE (RWE TH) -1.8%
  • E.On (EOAN TH) -1.8%
MDAX:
  • Lufthansa (LHA TH) -2.1%
  • Delivery Hero (DHER TH) -2.2%
    • German Holdings Round-Up: TAG Immobilien, Delivery Hero
  • Grand City Properties (GYC TH) -2.7%
  • Uniper (UN01 TH) -10%
    • Russian Gas Squeeze Spurs Bailout Talks for Germany’s Uniper (1)
    • Uniper Prelim 1H Adjusted Ebit Below EU580M
SDAX:
  • Jenoptik (JEN TH) -0.9%
  • Salzgitter (SZG TH) -1.1%
  • Suedzucker (SZU TH) -1.1%
  • Hensoldt (HAG TH) -1.3%
  • AUTO1 (AG1 TH) -2.2%

WSJ : China’s Economy Returns to Growth Mode as Covid Lockdowns Lift

China’s Economy Returns to Growth Mode as Covid Lockdowns Lift
Services and construction activity rebounded in June, while weak export orders weighed on manufacturers, surveys showed

SINGAPORE—Economic activity in China expanded in June after three straight months of contraction, according to official surveys of businesses and factories that point to a modest recovery after Covid-19 restrictions were eased in the world’s second-largest economy.

Economists are downbeat about the prospects for a major revival, however, given the darkening global backdrop and the risk of further Covid outbreaks.

The U.S. and European economies slowed sharply in June as surging prices of energy and food weakened demand for other goods and services, surveys last week showed, underlining how gloomy the outlook has become as Russia’s war in Ukraine saps global growth and high inflation prompts central banks to jack up interest rates.

For China, that pullback in overseas spending means that it can’t rely on exports to propel a robust rebound from its lockdown-induced doldrums, as it did after the initial outbreak in early 2020.

Instead, Beijing is banking this time on an infrastructure splurge to power its economy, though many economists are doubtful that big investments will be enough to offset a sinking real-estate market and subdued consumer and business confidence.

Urban unemployment was 5.9% in May, higher than the government’s target of 5.5% or lower, while joblessness among those age 16 to 24 rose to a new high of 18.4%.

China’s official purchasing managers index for nonmanufacturing sectors posted a reading of 54.7 in June, a big jump from the previous month’s 47.8, the National Bureau of Statistics said Thursday. The surge was led by a rebound in construction and the services sector, where the lifting of Covid-19 restrictions unclogged transportation blockages and allowed people to return to stores and restaurants.

The reading was the highest since May last year, survey data shows, and follows three straight months of declines as lockdowns blanketed major cities such as Shenzhen and Shanghai. A reading above 50 indicates activity is expanding rather than shrinking.

Manufacturing activity returned to growth but the rebound was weaker than economists were anticipating. The purchasing managers index for the manufacturing sector notched up a reading of 50.2, higher than the previous month’s 49.6, but lower than the 50.5 reading expected by analysts polled by The Wall Street Journal.

Overall production rose, but new export orders were weak, the survey showed, highlighting fading global demand.

Weakening demand is the biggest problem that factories now face, said Zhao Qinghe, a senior statistician with China’s statistics bureau, who added that falling factory-gate prices are squeezing companies’ earnings.

Official data earlier this week showed profits at industrial companies dropped 6.5% from a year earlier in May, though that marked an improvement from the 8.5% year-over-year decline registered in April.

A subindex tracking service-sector activity surged to 54.3 from 47.1, while a subindex for construction activity reached 56.6 as infrastructure investment accelerated. China’s cabinet, known as the State Council, said this week that construction began on 120 new expressway and other highway projects between January and May, with overall investment in the road network during that period exceeding the equivalent of $1 trillion.

Separately on Thursday, a survey of 102 member companies by the American Chamber of Commerce in China found that 44% of respondents had reduced or delayed planned investment in China as a result of recent Covid-19 outbreaks, highlighting the strain on foreign businesses from Beijing’s zero-tolerance approach to the virus.

Forty-six percent reported lingering production difficulties even after lockdowns were eased, citing staff shortages, supply issues and other problems, according to the survey, which was conducted between June 22 and 24.

>>> Europe : Brokers Upgrades & Downgrades - 30th of June 2022

>>> Up
* Atea Raised to Hold at Handelsbanken
* Bank of Cyprus Raised to Outperform at KBW; PT 172.29 pence
* Orsted Raised to Buy at HSBC; PT 930 kroner
* Uniper Raised to Outperform at Oddo BHF; PT 25 euros
* Virgin Money UK Raised to Overweight at Barclays; PT 200 pence

>>> Down
* SAP Cut to Neutral at Exane; PT 100 euros
* Spie Cut to Hold at Stifel; PT 24 euros
* Supermarket Income Cut to Reduce at Peel Hunt; PT 115 pence
* YIT Cut to Hold at DNB Markets; PT 3.50 euros

>>> Initiation
* ABB Rated New Buy at Stifel; PT 35 Swiss francs
* Barry Callebaut Rated New Buy at Berenberg
* El.En. Rated New Buy at Berenberg; PT 16.10 euros
* Unity Software Rated New Sector Weight at KeyBanc

>>> Call
* Barry Callebaut a New Buy at Berenberg With Re-Rating Seen Ahead
* Citi Opens Positive Catalyst Watch on WPP, Publicis Into Results
* El.En. Set For Next Phase of Growth, New Buy at Berenberg
* Just Eat Share Drop Overdone, 2Q May Bring Respite, MS Says
* National Grid Downgraded at Jefferies as Upside Looks Limited

>>> What to look at today - 30th of June 2022

Stocks in Asia fluctuated Thursday as investors weighed signs of gradual improvement in China’s economy amid ongoing concerns about a US recession from monetary tightening.  Stocks fell in Japan and rose in China, while Hong Kong was steady. The dollar dropped and Asian currencies rebounded after China data showed a strong pickup in services spending as Covid outbreaks and restrictions were gradually eased. US futures pared declines after the S&P 500 and the Nasdaq 100 ended little changed in choppy trading amid end-of-quarter portfolio rebalancing. European futures were lower. Treasury yields edged higher. They had dropped earlier as traders upped their bets on a recession eventually halting the Federal Reserve’s aggressive tightening campaign. Oil bounced around $110 a barrel as demand worries persisted.  Fed Chair Jerome Powell and his counterparts in Europe and the UK warned inflation is going to be longer lasting as they gathered at the European Central Bank’s annual forum in Portugal.  A view that central banks misjudged inflation has roiled financial markets this year, with global stocks about to close out their worst quarter since the three months ended March 2020. President Xi Jinping declared Covid Zero the most “economic and effective” policy for China. The nation eased quarantine rules earlier this week, providing a brief boost to markets, but investors remain cautious of the stringent adherence to eradicating the virus. US After Hours PFE and BNTX announce new vaccine supply agreement with US govt; RH -5% falls on weak guidance; SGH -12.8% and DCT -12.3% lower on earnings

Nikkei -1.44% Hang Seng +0.03% CSI +1.62% Shanghai +1.31% Shenzen +1.76%

Eur$ 1.0455 CNH 6.6995 CNY 6.6958 JPY 136.43 GBP 1.2132 CHF 0.9541 RUB 52.9260 TRY 16.6438 WTI$ 109.85 +0.06% Gold 1,816.10 -0.09% BTC 20,010 -0.92% ETH 1,087 -1.84%

S&P -0.68% Nasdaq -0.77% EuroStoxx -1% FTSE -1 Dax -0.97% SMI -0.58%

Macro :
- Israel Prime Minister Naftali Bennett Won’t Run in Next Election
- Swiss Franc Soars to Seven-Year High, Reaches Euro Parity
- SEC Rejects Grayscale Bid to Turn Biggest Bitcoin Fund Into ETF
- China’s Economy Shows Signs of Improvement as Covid Eases
- London Struggles to Wean Itself From Russian Billions
- US Hypersonic Missile Fails in Test in Fresh Setback for Program

Keep an eye on :
- ADJ GY : Adler Chairman Says Winding Up Company Is One Option: B-Z
- AML LN : Aston Martin Seeking New Funds; Could Offer Board Seat: Autocar
- BNTX US : Pfizer, BioNTech to Get $3.2b From US for Extra Covid Vaccines
- CFEB BB : CFE Decides to Repurchase Up to 1.25M Own Shares
- CBK GY : BlackRock Takes Big Bet on Commerzbank as Stake Almost Doubles
- CON GY : Vitesco to Slash Two-Thirds of Jobs at German Plant by 2026
- EQNR NO : Equinor Transfers Operatorship for Gulf of Mexico Field to Shell
- EQNR NO : Equinor Delivering as Much Gas to Europe as Possible: CEO to HB
- EUCAR FP : Europcar Mobility Names Peter Gowers Group CEO
- GRF SM : Grifols in Talks With Funds (KKR & CVC) to Raise Up to EU2b: Confidencial
- IMPN SW : Implenia Expects to Exceed CHF80M Planned Total Equity Increase
- MC FP : LVMH buys California wine giant Joseph Phelps as high-end drinks market soars
- MFEB IM : MFE Is Interested in Bidding for UK’s Channel 4: CFO
- ORP FP : Orpea Publishes Summary of Audit on Elderly Residents
- OVH FP : OVH Boosts FY Revenue Forecast
- RNO FP : Nissan Makes Renault Pact Disclosure Amid Calls for Transparency
- STLA IM : Stellantis Warns of Car Market Collapse If EVs Don’t Get Cheaper
- TTE FP : Gabon Plans World’s Biggest Ever Issuance of Carbon Credits
- TRI FP : Trigano 3Q Revenue EU921.2M Vs. EU905.7M Y/y
- UN01 GY : Uniper Prelim 1H Adjusted Ebit Below EU580M
- DG FP : Portugal to Build New Lisbon Airport in Montijo, Jornal Reports
- VTSC GY : Vitesco to Slash Two-Thirds of Jobs at German Plant by 2026

FT : UK companies that sought to ride Spac wave crushed by sell-off

UK companies that sought to ride Spac wave crushed by sell-off
From electric vehicles to fintech start-ups, their stocks have lost an average of 61% of value

UK companies that went public via a Spac listing in the last two years have been crushed by the market sell-off, losing on average 61 per cent of their value as investors dump the once-hot start-ups.

Electric vehicle company Arrival has suffered most, losing 93 per cent of its value since completing its Spac deal in March last year, while online used car retailer Cazoo’s shares have plunged 91 per cent since the start-up listed last August, according to Dealogic data.

Most of the UK companies listed in the US, losing on average 72 per cent of their value and underperforming even battered American companies, which are down 63 per cent.

The plight of UK ventures that merged with a Spac comes amid a broader tech sell-off and as investors ditch their holdings of early-stage, cash intensive start-ups that epitomised the Spac boom but which have since failed to meet their often rosy projections.


Special purpose acquisition companies raise money and list on the stock exchange as a cash shell, later searching for a private company to merge with and take public. They offer a faster route to market than a traditional initial public offering and allow companies to present rosy forecasts.

Fourteen UK companies have merged with blank-cheque vehicles since 2020, with newspaper publisher JPI Media the only one to choose to list in London, according to Dealogic — and the only one of the group to rise in value.

In the US, Spacs surged in popularity to become Wall Street’s hottest investment product, with 231 US-listed Spacs merging with US companies since 2020, the Dealogic data finds.

The majority of UK companies who chose to list via a Spac picked the US as their listing destination, due in part to London’s tighter rules. Arrival, quantum tech company Arqit and data analysis business Wejo are among those who merged with New York-listed Spacs, adding to concerns that the London market was being deprived of tech companies.

The UK revamped its Spac rules in July 2021 in an effort to make the City more competitive, though it appears to have missed the boom. “The global Spac market was starting to turn quite considerably at that point,” said Paul Amiss, partner at law firm Winston & Strawn.


Investors have soured on Spacs following numerous scandals that left some investors nursing heavy losses. Earlier this year the US Securities and Exchange Commission also outlined a sweeping overhaul of the market, including clamping down on companies’ abilities to provide projections.

Electric van maker Arrival was valued at $13.6bn when it listed in New York in March 2021, a valuation that has plunged to under $1bn. In its Spac investor presentation, Arrival expected 2022 revenues to hit $60mn and production to reach 10,600 vehicles. Last month, the Hyundai-backed group said it expected to manufacture up to 600 vans “plus low volume” of buses this year.

The Spacs that (mainly) flopped
Arrival 
Like many of the new electric car companies, Arrival broke on to the public markets before actually manufacturing a vehicle. The bus and van developer plans to use “microfactories” to avoid the production pitfalls that have ensnared other start-ups including Tesla, Rivian and Lucid. Denis Sverdlov, who founded Arrival in 2015, previously served Russian president Vladimir Putin as his deputy communications minister but has distanced himself from the Kremlin’s recent actions.

Cazoo
Online used-car seller Cazoo was founded in 2018 by Alex Chesterman, who had previously started LoveFilm. It listed in New York at an $8bn valuation but has since shed most of its worth, with its market capitalisation now under $600mn. The lossmaking online car marketplace cut 750 jobs across the UK and Europe this month as it warned of the threat of a recession due to rising inflation and disruption to supply chains.

Paysafe 
Founded in London in 1996, fintech group Paysafe helps businesses handle their customers’ payments. The company was a constituent of London’s FTSE 250 index until it was taken private in 2017. In April 2021, it listed in New York after merging with a Spac backed by billionaire businessman Bill Foley — owner of the Vegas Golden Knights ice hockey team.

Babylon Health
Healthcare start-up Babylon was founded in 2013 by British-Iranian entrepreneur Ali Parsa. The tech company has received backing from Saudi Arabia’s sovereign wealth fund and data analytics group Palantir. Babylon’s “GP at hand” app allows customers to access their NHS doctors virtually.

GBT Travel Services UK
American Express’s business travel arranger was spun off by the payment group in 2014 and merged with a Spac backed by private equity firm Apollo Global Management in 2021. Videoconferencing company Zoom and buyout group Ares were among the investors in its Spac deal. The company helps businesses manage travel plans and expenses.

LumiraDx 
Founded in 2014 by three scientifically-minded businessmen, LumiraDx has its headquarters in London and creates diagnostic products for patient care. The company merged with a healthcare Spac led by Larry Neiterman, former chief operating officer for global Deloitte Consulting.

Vertical Aerospace 
Based in Bristol, Vertical Aerospace was founded in 2016 and develops electric aircraft. The company was set up by Stephen Fitzpatrick, who also leads energy retailer Ovo Energy.

Rockley Photonics 
Founded in 2013 by Andrew Rickman, Rockley Photonics makes biomarker sensors for communication products. Based in Oxford, the company focuses on the healthcare sector and wearable health-tracking devices. Its “clinic on the wrist” device analyses users’ blood and skin to measure temperature, alcohol and glucose levels, among other issues.

Genius Sports Group 
London-based Genius Sports Group is a data company that provides video, betting and other technology services to sports companies and associations including the Premier League and International Basketball Federation.

BenevolentAI 
Artificial intelligence drug discovery company BenevolentAI was founded in 2013. With headquarters in London and a research laboratory in Cambridge, the pharma company uses machine learning to find new treatments. The company’s atopic dermatitis treatment is its only programme currently in phase 2 trials.

Wejo 
Founded in 2013 in Manchester, Wejo is a connected vehicle analysis company. Backed by General Motors, Palantir and Microsoft, Wejo collects and processes data on traffic and driving.

Arqit 
Quantum encryption company Arqit was founded in 2017 by David Williams, a former investment banker. It merged with a Spac launched by London-based investment firm Centricus, which has close ties to SoftBank.

JPI Media Publishing 
JPIMedia Publishing was formed in 2018 after the acquisition of the assets of national, regional and local newspaper company Johnston Press by its lenders. The company runs about 200 titles across the UK, with flagships like The Scotsman and The Yorkshire Post. It listed on the London stock exchange in January 2021.

Super Group SGHC 
Headquartered in Guernsey, Super Group is the parent company of online gambling platform Betway and casino site Spin. It has ridden the wave of gambling legalisation and sports betting in the US, signing deals with San Francisco’s Golden State Warriors basketball team, among others.

FT : Megadeals buoy global M&A despite pullback from record 2021

Megadeals buoy global M&A despite pullback from record 2021
Deals such as Elon Musk’s proposed acquisition of Twitter carried volumes to $2tn in first half

A wave of megadeals carried global mergers and acquisitions volumes to $2tn in the first half of the year, even as inflation, interest rate rises and the Ukraine war have ravaged confidence and caused significant deals to fall through.

Twenty-five deals worth over $10bn have been announced in the first half of 2022, up 12 per cent compared with the same period last year — although overall deal volume fell by a fifth, according to figures from Refinitiv.

Concern has also arisen that some of the biggest deals that have buoyed the market might fall through or take longer to close than anticipated.

Elon Musk has repeatedly threatened to walk away from his $44bn takeover of Twitter and Broadcom is preparing for lengthy antitrust investigations into its proposed $69bn acquisition of cloud software company VMware. SoftBank’s $66bn sale of UK chip business Arm to Nvidia collapsed in February because of regulators’ concerns and Walgreens Boots Alliance this week halted the sale of Boots.

Dealmakers in the US are also preparing for a more hostile approach to M&A from officials installed by President Joe Biden in the Department of Justice and the Federal Trade Commission.

“The administration set out to cool things off in the M&A market and it is having some effect,” said Eric Swedenburg, co-head of M&A at Simpson Thacher & Bartlett. “The FTC has said it will fight a lot of deals even if that means they will lose more often.”

Global M&A last year hit its highest level since records began, thanks in part to booming markets and widespread stimulus measures during the pandemic.

US dealmaking is already down significantly from last year, with $950bn worth of deals agreed in the first half, a drop of 28 per cent from the same period in 2021. The blank-cheque boom that fuelled transaction volumes last year has largely died down and dealmakers have become more pessimistic on the economic outlook.

Corporate leaders “are going to be looking pretty closely at their balance sheets again to make sure they have rainy-day plans in place”, Swedenburg added. “For a lot of companies right now, that is more top-of-mind than inorganic growth.” 

Turmoil in the global economy has caused a rise in the value of deals being called off altogether, which stands at the highest level since before the pandemic at $286.2bn.

“We’re in a transition phase where sellers have high expectations of value, but buyers have repriced to lower multiples,” said David Higgins, a partner at Kirkland & Ellis. “That, together with issues around the quantum and pricing of debt available, has led to some processes being withdrawn or postponed.” 


The megadeals have helped shelter investment banks’ M&A businesses from the significant drops in fee income that they have suffered elsewhere. Fees from advising on deals have fallen 7 per cent this year, compared with declines of 72 per cent in banks’ equity businesses and 26 per cent in bonds.

As corporate M&A has faltered, private equity firms have stolen their largest-ever share of overall dealmaking, the figures show. Buyout groups’ deals accounted for 26 per cent of total M&A so far this year, the highest figure since records began in 1980.

The industry’s deals include a €54bn takeover bid by Blackstone and the billionaire family behind luxury fashion brand Benetton for Italian infrastructure group Atlantia in April, the largest ever take-private deal for a European listed company. In the US, activist fund Elliott Management led take-privates of media ratings firm Nielsen for $16bn and software firm Citrix for $16.5bn.

Buyout firms are turning more to private lenders for financing, but these groups are now warning that a slowing debt market will curtail activity.

“Demand for direct lending capital will meaningfully exceed the available supply,” said Marc Lipschultz, co-founder of Blue Owl Capital, who noted loans are sitting on lenders’ books longer, limiting their capacity to finance new deals. “The capital that’s normally refreshing the system just won’t be there,” he said.

Elizabeth Cooper, co-head of Simpson Thacher’s private equity M&A practice, said: “I think the summer is going to be quiet . . . If markets stabilise, I think we’ll see more take-private transactions.”

But other dealmakers said their clients were still showing interest in getting deals done.

“2022 was never going to be like 2021. It was a record way in every way,” said Stephen Arcano, global head of transactions at Skadden. “While there has been a slowdown this year, there has been a rebound in interest in transactions. It feels like the pipeline is pretty active, even with meaningful global, financial and regulatory headwinds.”

FT : Seized Gazprom division to keep paying bonuses after €10bn German bailout

Seized Gazprom division to keep paying bonuses after €10bn German bailout
New boss says rebranded company is ‘back in town, ready to resume our business’

The Gazprom unit that was seized by the German government in April and given a €10bn taxpayer bailout will continue to pay bonuses to its gas traders, its new managing director has said.

Egbert Laege told the Financial Times that Securing Energy for Europe, previously known as Gazprom Germania, was “back in town, ready to resume our business” after receiving the loan from German state development bank KfW.

Berlin seized control of Gazprom Germania and its subsidiaries in early April, several weeks after Russia invaded Ukraine, placing them under the trusteeship of the country’s federal energy regulator, the BNA.

Sefe owns a number of gas storage facilities in Germany including the country’s largest, Rehden, as well as the Wingas distribution company that supplies big industrial consumers, and UK trading division Gazprom Marketing & Trading, which is also set to be rebranded.

Russia struck back in May by cutting the volume of gas it supplies to the company, forcing it to buy in the spot market instead, often at higher prices, and plunging GG into a financial crisis.

The German government this month stepped in with its loan to save the company from insolvency and extended the BNA’s trusteeship beyond its previous cut-off point of September this year.

Laege said the loan had provided Sefe with much-needed liquidity and was helping it pay for the more expensive gas it was procuring.

He said his immediate goal as the head of Sefe was to secure the critical infrastructure under the company’s control to “ensure security of supply” for Germany, as well as to stabilise the company’s finances.

He added that the company had good long-term prospects based on the “unique capabilities” of its staff, particularly their experience of trading and portfolio management, and its control of infrastructure that could become the “backbone of a transformed energy system”. 

Gazprom has been accused of contributing to a squeeze on Europe’s gas supplies even before the invasion of Ukraine, after the company left the Gazprom Germania storage facilities in Germany and Austria practically empty ahead of last winter.

Laege said thanks to the KfW loan, GM&T “will now be able to start trading again”. He said many of its counterparties were “coming back to . . . us” and new ones were also appearing. “We take this as an encouraging sign that business is picking up,” he said. “We’re back on the GM&T side and back on the retail side, both in the UK and Germany,” he said.

London-based GM&T is a big trader of gas, liquefied natural gas and power, buying from sources including Norway and the North Sea and selling worldwide.

The average salary at GM&T was £127,000 a year in 2020, according to accounts filed in the UK, including administrative staff. Top traders at the company can at times receive millions of pounds in bonuses, according to one person close to the company.

Laege said there were no plans to change the existing pay structure. The company declined to comment on the size of trader bonuses.

GM&T’s subsidiary Gazprom Energy is the biggest supplier of gas to business in the UK, providing more than a fifth of that used by British companies, making it a crucial part of the country’s energy system.

Gazprom Energy, which has 30,000 corporate customers, came under pressure in recent months as companies such as Siemens and McDonald’s said they would try to withdraw from their contracts, and NHS trusts and local authorities were encouraged to find new suppliers.

The UK government had been on standby to put the company into “special administration”, a de facto nationalisation where it would have been kept as a going concern with taxpayer support.

Using German taxpayer money to pay bonuses to UK-based gas traders could prove controversial. Asked whether there might be adverse reaction from the German public, Laege said “German taxpayers have two interests — security of supply and making sure the money given to the company is [well-managed] and paid back some time.”

Asked why Sefe hadn’t tried to spin off its trading subsidiaries while maintaining control over the critical infrastructure assets, Laege said it was limited in its ability to restructure itself by the terms of its arrangement with the BNA. “Under the trusteeship that we have right now, there are strong limitations on breaking up the company,” he said.

Laege declined to comment on fears expressed by some in the industry that Sefe’s technology may be compromised because it was set up by Russian government security experts. “Fear is a bad adviser,” he said.

While he was “confident” that Germany could fill its gas storage to 90 per cent capacity as mandated by a new law, he said that should supplies from Russia continue to be curtailed, “it will be very very difficult to achieve that target”.

The Rehden storage facility is still only 17 per cent full.

>>> US After Hours Summary: PFE and BNTX announce new vaccine supply agreement w

After Hours Summary: PFE and BNTX announce new vaccine supply agreement with US govt; RH -5% falls on weak guidance; SGH -12.8% and DCT -12.3% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: POWW +10.6%, CDMO +5.5%, MLKN +5%

Companies trading higher in after hours in reaction to news: AVDL +8.5% (provides corporate update), LXRX +8% (announces positive top-line results from phase 2 study of LX9211), SYM +4.2% (stock offering), NXST +2.5% (NXST nearing a deal to acquire majority control of the CW Network from WBD and PARA, according to WSJ), BNTX +1.4% (PFE and BNTX announce new vaccine supply agreement with US govt), STNG +1.3% (president purchases 50,000 shares), PFE +0.5% (PFE and BNTX announce new vaccine supply agreement with US govt), PARA +0.5% (NXST nearing a deal to acquire majority control of the CW Network from WBD and PARA, according to WSJ), LRN +0.2% (names new CFO), XRX +0.2% (CEO and Vice Chairman John Visentin unexpectedly passes away), OSCR +0.1% (launches its Next Best Actions engine), UBS +0.1% (ordered to pay $25 mln to settle SEC fraud charges, according to Reuters), WBD +0.1% (NXST nearing a deal to acquire majority control of the CW Network from WBD and PARA, according to WSJ)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SGH -12.8% (also to acquire Stratus Technologies), DCT -12.3%, RH -5% (lowers FY22 revenue and op mgn guidance; maintains Q2 guidance), FIZZ -1%

Companies trading lower in after hours in reaction to news: HYPR -15.6% (CEO will step down for personal reasons), CYTK -13.9% (proposes $450 mln convertible notes offering), WSM -3.9% (in sympathy with weak RH guidance), W -1.4% (in sympathy with weak RH guidance), OIS -0.2% (settles dispute with HCperf Holdings), ETD -0.1% (in sympathy with weak RH guidance)