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Electric vehicles: the revolution is finally here

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- Europe’s Power Crisis Is Moving North as Water Shortage Worsens

- JPMorgan Sees Natural Gas Crisis Pushing Oil to $84 By Year-End

- U.K. Government Clears Army to Start Delivering Fuel From Monday

- September Selloff Brings October Questions, Payrolls in Focus

Keep an eye on :

- ADJ GY : Adler Group Starts Review After Yielding Assets Draw Approaches

- AIR FP : Airbus CEO Sticks to Higher A320 Output Goal Despite Supply Woes

- AIR FP : U.S. Aerospace Firms Commit to Net Zero Emissions by 2050: Rtrs

- ALMB DC : Alm. Brand Sells Unit for DKK1.1B to Reduce Rights Issue (1)

- ARYN SW : Aryzta FY Revenue Beats Estimates

- BAYN GY : *FDA: BAYER RECALLS SOME LOTRIMIN & TINACTIN SPRAY PRODUCTS

- CA FP : Carrefour Announces Voluntary Job Cuts in Italy After Plan

- CA FP : Mulliez Family Won’t Sell Auchan: La Voix du Nord (Oct. 2)

- COPN SW : *EXCHANGE RATIO PER CASSIOPEA SHARE IS CHF37.13/SHARE

- CSGN SW : Credit Suisse Offices Searched in Relation to Greensill: NZZamS

- DELT IT : Israeli Clothing Maker Delta Galil Is Said to Plan U.S. Listing

- DBK GY : Deutsche Bank Drops Risky Clients After Epstein Case, FT Reports

- DHER GY : Delivery Hero Buys Danish Food Delivery Service Hungry, No Terms

- EDF FP : EDF Says Urgent for U.K. to Decide on Sizewell Nuclear Plant: FT

- ECV GY : Encavis Converts Hybrid Convertible Bonds Issued in ‘17 and ‘19

- FAMI US : Farmmi Falls 24%: Chinese U.S. Listings

- FLNG NO : *FLEX LNG FILES $500M MIXED-SECURITIES SHELF

- FYB GY : FDA May Extend Shelf Life of Millions of Moderna Shots: NBC News

- IAG LN : *GLOBALIA SEEKS NEW PLAN TO RESCUE AIR EUROPA: EL CONFIDENCIAL

- Informatica IPO : Permira-Backed Technology Company Informatica Files for IPO

- MXCT LN : MaxCyte Shares Slump Further From Record Amid Biotech Slump

- MS IM : Mediaset Proposes Introduction of Dual Class Share Structure

- MRK GY : Merck’s Covid Pill Dominates Early Stocks Moves

- MLP GY : MLP Expects to Significantly Exceed EBIT Forecast for 2021

- MRW LN : CD&R Beats Fortress in $9.5 Billion Auction Fight for Morrison - 287p/share

- NOVN SW ; Novartis’s Sandoz Unit to Pay $185m to Settle U.S. Pricing Probe

- ONTEX BB : Ontex Gets Payment of EU81m From Brazil Arbitration Settlement

- PLTR US : *PALANTIR FALLS 2.4% POSTMARKET AFTER MIXED SHELF FILED

- PSH NA : Pershing Square Holdings Sept. Net Performance +4.2%

- PFC LN : Petrofac Says It’s Reviewing Refinancing Options

- Rivian IPO : Rivian Automotive Files for IPO, Seeks Nasdaq Listing

- STLA IM : FCA Reports U.S. 3Q Total Sales 410,917 Vehicles vs 507,351 Y/y

- TSCO LN : Tesco to Unveil Share Buyback Plan This Week, Sunday Times Says

- TSLA US : *JUDGE SHELVES NIKOLA’S $2B PATENT LAWSUIT AGAINST TESLA: VERGE

- TSLA US : Tesla 3Q Deliveries Beats Estimates

- VOW3 GY : Volkswagen of America: 3Q Sales -8.2% Y/y

- VOW3 GY : Chip Crisis to Cut Auto Output by Up to 11M Cars This Year: Welt

- VOW3 GY : VW Workers Urge Faster EV Rollout at World’s Biggest Car Factory

* Catena Raised to Buy at Kempen & Co; PT 550 kronor

* Endesa Raised to Sector Perform at RBC; PT 19 euros

* Eutelsat Raised to Neutral at Exane; PT 13 euros

* Iberdrola Raised to Sector Perform at RBC; PT 9.50 euros

* Repsol Raised to Overweight at Morgan Stanley; PT 14 euros

* Scatec Raised to Buy at SpareBank; PT 160 kroner

* Tritax EuroBox Raised to Buy at Kempen & Co; PT 125.30 pence

>>> Down

* BE Semiconductor Cut to Neutral at Kempen & Co; PT 67 euros

* Tritax Big Box Cut to Neutral at Kempen & Co; PT 230 pence

>>> Initiation

* Alcon Rated New Market Perform at Oppenheimer

* Bawag Rated New Outperform at KBW; PT 72.40 euros

* Diploma Reinstated Buy at Stifel; PT 3,300 pence

* Liontrust Rated New Hold at Peel Hunt; PT 2,291 pence

* NIO Inc. ADRs Rated New Buy at Industrial Securities; PT $49.50

* Premier Miton Group PLC Rated New Buy at Peel Hunt; PT 223 pence

* Prosus Resumed Overweight at Morgan Stanley; PT 128 euros

* Volution Rated New Hold at Jefferies; PT 550 pence

>>> Call

* Banks to Deliver Strong 3Q Driven by Credit, Deutsche Bank Says

* Carlsberg Sell-Off Concerns Overdone, Risks Are to Upside: Citi

* Holmen Forest Assets Attractive, More Value Elsewhere: Jefferies

* Repsol Favored Over OMV at Morgan Stanley on Refining Margins

* Supply Chain Issues Not Priced in 3Q Earnings Expectations: MS

Ex-Elliott sovereign debt supremo gears up for final battle in India

After leading US hedge fund’s 15-year fight against Argentina, Jay Newman is now taking on New Delhi

The man who extracted $2.4bn from Argentina is now coming after India.

Jay Newman led US hedge fund Elliott Management’s 15-year battle to force the Argentine government to pay out on its defaulted debt. The campaign, which came good in 2016 when the country agreed to settle the claims of “holdout” creditors, is seen as one of the greatest hedge fund trades.

Now, the 69-year-old, who during a more than four-decade career on Wall Street built a reputation for high-risk bets on defaulted sovereign debt from Latin America to Asia, says that one case has helped entice him out of retirement.

Newman has been hired by a group of shareholders of Devas Multimedia, a satellite and telecoms company embroiled in a fight with the Indian government. Founded by a former Goldman Sachs banker, Devas was awarded about $1.3bn in arbitration rulings after a contract, which it had with an Indian state-owned company called Antrix to develop broadband, was cancelled a decade ago. Interest on the amount owed is accumulating at about $350,000 per day.

India has refused to pay, alleging the original competition for the contract was mired in fraud, and has launched legal proceedings to shut down Devas, which counts US investment groups Columbia Capital and Telcom Ventures as well as Deutsche Telekom among its shareholders.

India is trying to “bully its way through” the dispute, Newman told the Financial Times. “It rivals the behaviour of Russia and Argentina combined,” he said.

India is locking horns with Devas just as its approach towards a series of decisions by international arbitration panels has drawn scrutiny.

Scottish oil producer Cairn Energy has for months been trying to force the country to pay $1.2bn awarded by a tribunal in a stand-off over tax, echoing earlier disputes with telecoms group Vodafone and French drugmaker Sanofi.

There was a breakthrough in August when New Delhi moved to scrap the retrospective tax that had ensnared Cairn Energy and Vodafone, paving the way for a $1bn refund to Cairn. India’s revenue secretary Tarun Bajaj said at the time that “we want to give a message to investors that the country believes in the stability and certainty of taxation”.

Newman said the government’s decision to ditch the tax law did not affect Devas and that the group’s shareholders would “continue to enforce our legal rights”.

With little sign of India paying up in its dispute, Newman says Devas is sizing up Indian government assets and it could try to seize them abroad. The threat carries echoes of Elliott’s sensational seizure of an Argentine naval vessel in Ghana in 2012, during a campaign that set new and controversial precedents for pursuing financial claims against sovereign states.

“People will be surprised by how many assets India has,” said Newman. Assets liable to seizure “could be literally anything”.

Planes owned by Air India could be next, subject to a court’s decision. In June, Devas shareholders filed a lawsuit in the southern district of New York trying to establish that the state-owned airline is “the alter ego” of India and therefore also liable, following a similar move by Cairn. A judge in Seattle in August ordered Antrix to reveal details of its assets to Devas shareholders.

The sprawling dispute between Devas and New Delhi, which dates back to 2005, has included lawsuits in India, the US, Switzerland, the Netherlands, the UK and France and rulings by three arbitration panels.

Devas agreed in 2005 to lease satellite spectrum from Antrix to develop a broadband network and to pay more than $300m, according to a Chennai court filing this year.

But in early 2011, after an investigation by India’s official auditor into the alleged underpricing of internet licences by the space ministry, state-owned Antrix cancelled the contract with Devas, citing force majeure.

According to the Chennai filing, Devas alleges the contract was cancelled “illegally” and claims “irreparable loss”. It has already paid about $130m for the satellite spectrum, said a person familiar with the matter.

Since then, Devas has won a series of tribunal decisions. In 2015, the International Chamber of Commerce found Antrix had “unlawfully” annulled the contract and ordered it to pay $562m in damages plus $100m in pre-award interest. With additional interest running at 18 per cent a year, the award is worth about $1.2bn. Two further tribunals have also found in Devas’s favour, taking the total awarded to about $1.3bn.

However, in November the Indian Supreme Court halted the collection of the $1.2bn ICC award after the attorney-general said India had discovered “a serious fraud”.

Antrix filed a winding up petition against Devas earlier this year, claiming the award of the contract was “mired in fraud and corruption”, and in May India’s National Company Law Tribunal appointed a liquidator for Devas.

“It is surprising for Antrix as to how a stayed award is being attempted to be enforced by Devas across the globe,” Antrix told the Financial Times. It said the original agreement that Devas entered into with then-officials of Antrix was “fraudulent” and that “Devas lacked the technical competence to fulfil their obligation under the agreement”.

It added: “Antrix is vehemently opposing this motion across the globe wherever such attempts are being made. Antrix is hopeful of succeeding.”

Matthew McGill, partner at Gibson, Dunn & Crutcher, which represents Devas shareholders, said: “To this day, India has failed to substantiate any allegations of fraud against Devas.”

India’s ministries of corporate affairs and external affairs did not respond to requests for comment.

When at Elliott, Newman spotted an opportunity in Argentina’s beaten-down bonds following the country’s 2001 default on about $100bn of debt. While most creditors accepted punitive restructurings offering about 30 cents on the dollar, Newman spearheaded Elliott’s decision, along with a small group of “holdout” creditors, to fight through the courts.

“What truly captures my interest are those rare cases that epitomise the chronic deficiencies in governance that hold back certain countries from their full potential,” said Newman, who has been writing a thriller, Undermoney, during a retirement split between Florida and upstate New York. “In Argentina, it was utter disdain for honouring borrowing contracts. In India, it is complete disrespect for private enterprise, especially those from abroad.”

Elliott argued that Argentina should not continue to pay bondholders who accepted the restructurings without paying the holdouts in full as well. US judge Thomas Griesa accepted the argument and put an injunction on anyone helping Argentina avoid his order to pay the holdouts.

President Cristina Fernández de Kirchner refused to buckle, branding the holdouts “vultures” and “financial terrorists”, but in 2016 the new president Mauricio Macri agreed to pay $4.7bn, including $2.4bn to Elliott.

Newman doubts the battle with India will consume the 15 years it took to resolve the Argentina dispute, but stressed “you need a strong will” to see it through.

“Sometimes it takes time for a sovereign to recognise that not all creditors will fold their tents and disappear,” he said.

Politics still stymies the consolidation of European banking fiefdoms

The likelihood of an outcome declines as preconditions multiply. That applies forcefully to European banking mergers. UniCredit is a handy lens through which to examine the problem. The conclusions help explain why international investors justifiably prefer US banks.

UniCredit is Italy’s second-largest lender and also has a sizeable German business. For years, politicians have been putting pressure on it to absorb Monte dei Paschi di Siena. A 2017 bailout left this historic, troubled bank under state control. A transaction, which could be announced in the wake of Italian by-elections this week, is closer now than ever before.

One big implicit precondition has already been met. UniCredit has a newish chief executive in the shape of ex-UBS investment banker Andrea Orcel. He is willing to do a deal without, it appears, seeing this as a springboard to the foreign expansion some board members resisted when Jean Pierre Mustier had the job.

Orcel has been canny in publicising UniCredit’s own preconditions for a takeover. The most important of these is a refusal to take on MPS’s substantial bad debts. Deal terms, when published, should hopefully reveal an injection of equity in the form of a creditworthy customer base. That would be a reasonable fee to UniCredit shareholders for relieving the government of Italy’s problem bank.

In return, UniCredit would be shouldering integration risks. These include the danger that some loans classified as “performing” prove to be nothing of the sort.

So far, so good. The point where even the most patient foreign investors may start zoning out is when political preconditions enter the equation. The main reason, it appears, that the takeover has not already been announced is that current Italian by-elections encompass Siena, a stunningly beautiful city of some 55,000 inhabitants.

This superficially minor contest underlines how politics and banking interweave in parts of Europe. The constituency of Siena, where MPS is an important employer, is up for grabs because former incumbent Pier Carlo Padoan is now the chair of UniCredit. The takeover of MPS, where jobs may be cut, might leave his fiduciary duties and local loyalties interestingly counterpoised.

It has been predicted that Enrico Letta, a former prime minister loyal to Mario Draghi’s ruling coalition, will win Padoan’s old seat, beating candidates from parties hostile to the deal. Barring upsets elsewhere, publicists in Rome, Siena and UniCredit’s hometown of Milan can then send out the joint communique on a merger they have all been sweating over.

The problem for investors in European banks is that such a deal is all too rare. The European Commission has the job of banging heads together in the cause of greater integration. It shows little sign of doing so. Instead, domestic banks largely remain fiefs of national governments and regulators.

The snag with most mooted combinations is that national governments would be happy for their banks to buy lenders in rival EU states, but not vice-versa. The accepted wisdom is that domestic consolidation must therefore occur first. But progress on this is slow.

A few years ago, Wall Street bankers were as pessimistic about regional banking consolidation as their European peers. “There are plenty of deals to be done,” they would say, “But each bank is headquartered in a big city that does not want to lose it and is run by a CEO who does not want to lose their job either.”

They were wrong. Financial drivers behind consolidation outweighed the local political resistance, admittedly much weaker than in Europe. Over the past four years, US banking mergers have totalled just under $40bn in value annually. This consolidation is occurring because political and regulatory barriers are far lower. US banks also trade at a premium thanks to a slicker exit from the financial crisis, faster growth and fatter margins.

You might complain that the comparison weighs apples against pears. But the same objection applies to bullish descriptions of the EU as the world’s third-largest economy after the US and China. These would only be valid if the EU was as integrated economically and financially. As long as progress toward that goal can be speeded or impeded by a poll centred on an Italian city smaller than Bismarck, North Dakota, most international investors will prefer simpler propositions.

Europe’s energy crisis has become the main political issue in Spain and divided EU governments

Spain’s economics supremo has pushed back against electricity companies’ challenge to Madrid’s €3bn levy on their “windfall profits”, as European governments step up efforts to rein in soaring energy prices.

In an interview with the Financial Times, Nadia Calviño, the number two in the Spanish government, dismissed energy companies’ arguments that the levy announced last month jeopardised vital green investments, taxed non-existent profits or broke EU law.

Europe’s energy crisis has become the main political issue in Spain and is rapidly getting the attention of other EU leaders. The topic is set to dominate Monday’s gathering of eurozone finance ministers.

“It is essential that this increase in wholesale prices is not fully passed on to the customers and to the companies and therefore we must use all possible legal instruments to reduce the elements of the energy bill,” said Calviño, whose formal position is deputy prime minister for the economy.

She added that the Spanish levy, most of which has already become law, was “absolutely and fully compliant with EU legislation”.

Officials told the FT that the European Commission was assessing whether government measures responding to the price rises were in line with EU electricity market and state-aid rules.

One EU competition expert said Spain’s windfall profits raid would be assessed to see if it unfairly targeted some companies and sectors over others, thus falling foul of the bloc’s state-aid rules. Brussels will publish its recommendations this month.

Calviño, a former senior EU competition policy official, argued that the crisis showed that the bloc had to develop a common response to the rise in energy prices.

The crisis has divided EU governments, with some in northern Europe arguing that rising prices should not be used as an excuse to derail the bloc’s path to net zero emissions by 2050.

But France, which has described the EU’s energy pricing system as “ludicrous”, announced last week that it would block further rises to consumers’ gas and electricity prices. Italy unveiled its own €3bn package to mitigate the price rises on September 23.

Outside the EU, numerous gas providers in the UK have gone out of business because of price caps.

In a further sign of concern about the issue, José Manuel Albares, Spain’s foreign minister, travelled last week to Algeria, traditionally the country's biggest gas provider, to obtain assurances that it would keep Spain supplied at market prices, despite the closure of a pipeline that runs via Morocco.

Spain is particularly vulnerable to the energy price rise because tariffs paid by more than a third of households are linked to the spot electricity market, which has soared because of the rising cost of gas, and to a lesser extent, carbon trading rates.

Calviño argued that the levy would reduce prices for consumers by ploughing the funds into Spain’s energy grid.

She added that it would be related to companies’ profits and would not deter investment. “When companies made their investment decisions they were not expecting these wholesale prices. They were not expecting these CO2 prices and gas prices,” she said.

But Spain’s electricity companies have responded furiously to Madrid’s levy. In a letter to the European Commission on September 24, they said that the measure created “massive distortions, uncertainty and damages”. 

Calling for Brussels to investigate, they added that the levy would “jeopardise” EU objectives to cut carbon emissions, violated legislation governing the bloc’s single electricity market, and was “likely to infringe the [EU] treaty requirements relating to investor protection”.

The government has said the levy is on windfall profits of groups that have benefited from the rise in electricity prices and do not have corresponding gas and carbon costs of their own.

The companies, however, argue that the windfall profits do not in fact exist, since they have sold much of their production for this year and next on the forward market rather than at higher spot prices.

Elliott’s former $2.4bn Argentina man comes after India

Lure of $1.3bn battle brings sovereign bond supremo out of retirement

Unlike Bill Ackman, Paul Singer and Dan Loeb, the name Jay Newman has little household recognition outside of the esoteric world of sovereign debt restructuring.

Until recently, the 69-year-old was enjoying his retirement, split between Florida and upstate New York, after a more than four-decade career on Wall Street. And boy had he earned it. It was Newman who led Elliott Management’s battle to force the Argentine government to pay out on its defaulted debt. The 15-year struggle encompassed the brief capture by Elliott of an Argentine naval vessel crewed by more than 200 sailors in a Ghanaian port in 2012, and the activist fund’s attempted seizure of satellite launch slots that Argentina had agreed with Elon Musk’s SpaceX.

When the wager came good for Elliott in 2016 after Argentina agreed to settle the claims of “holdout” creditors, it yielded $2.4bn for the activist. And it earned a place in history as one of the greatest hedge fund trades ever.

Meanwhile, with Newman’s courtroom days behind him — or so he thought — he had been writing a thriller, Undermoney, with a synopsis reminiscent of an Ian Fleming yarn. The book is “an electrifying thriller about a group of American patriots who secretly take over the world’s largest dark money operation with the help of a beautiful female CIA agent”, its publisher claims.

But one siren call proved just too strong for Newman to resist. Our hedge fund correspondent Laurence Fletcher has the inside story on how he has been hired by the shareholders of Devas Multimedia, a satellite and telecoms company embroiled in a fight with the Indian government. Devas is trying to collect $1.3bn it has been awarded by international tribunals after the cancellation of a contract it had with an Indian state-owned company. But the government refuses to pay.

“Time is on the side of creditors,” Newman tells Laurence. “Going to court isn’t fun. But, if that’s what it takes, we do it.”