Reuters - EDF Hopes to extend the lifespan of its nuclear plants to 50y from 40y

EDF sees French energy plan shaping nuclear depreciation schedule - Reuters News

* Longer reactor depreciation would boost EDF bottom line
Wants to lengthen depreciation before lifespan decision
Regulator: no guarantee for 10-year life span extension
Life extensions would push back nuclear provisions

PARIS, May 19 (Reuters) - The French government's energy investment plan due in July will be a key indicator for whether and for how long EDF EDF.PA will extend the depreciation period of its nuclear plants, an executive said on Thursday.

EDF hopes to get nuclear energy regulator ASN's authorisation to extend the lifespan of its nuclear plants to 50 years from 40, and already wants to extend the depreciation period on these assets, which would boost bottom-line profit.

Early this year ASN said it expects to give generic guidelines on French nuclear plant life extensions by 2018, but said extensions could not be taken for granted and that they would be decided reactor by reactor. (Full Story)

The government's long-awaited multi-year energy investment plan (PPE) - implementing the August 2015 energy transition law - will not specify reactor lifespan, but should set targets for the share of nuclear in France's power mix.

President Francois Hollande has vowed to reduce that share from 75 percent to 50 by 2025, but has taken no concrete steps towards that goal.

"The PPE, and notably its nuclear chapter, expected early July, will figure largely in our decision about the accounting lifespan of our nuclear reactors," EDF nuclear chief Dominique Miniere told reporters.

In 2003, EDF extended the depreciation schedule for its reactors in its accounts to 40 years from 30 - six years before the ASN authorised the move.

CEO Jean-Bernard Levy said in April EDF plans to extend the depreciation period by the closing of first-half results.

Miniere said the PPE should signal how many of EDF's 58 reactors can keep operating, which will determine over what period reactors and related maintenance costs can be depreciated.

He said life extension would also impact EDF's 23 billion euros worth of decommissioning and nuclear waste provisions.

"Delaying reactor decommissioning also means delaying provisions," he said.

Miniere said 80 percent of EDF's 58 reactors were built between 1980 and 1990. From 2020, many need to close or get approval operate another decade.

Miniere said every reactor has annual maintenance costs of about 50 million euros, or about 3 billion euros per year for EDF's fleet.

Extending EDF's reactors by 10 years and incorporating safety lessons learned from the Fukushima disaster will boost that to 4-4.2 billion euros per year in the 2014-2025 period, a total of just over 50 billion, after which costs will ease to 4.2-3 billion euros per year, he said.

FT : Och-Ziff bribery probe: what is at stake?

Och-Ziff bribery probe: what is at stake?

Och-Ziff, one of the world’s largest hedge funds with about $42bn in assets under management, is being investigated over whether it paid bribes in Zimbabwe, Congo and Libya. It has set aside $200m to pay fines to US authorities. Its founder, Daniel Och, said the firm expected the penalties from the Department of Justice and Securities and Exchange Commission to exceed that amount. If a case is brought, it would be the first hedge fund to face a penalty for alleged violations of the 1977 US Foreign Corrupt Practices Act. DoJ officials have recently stepped up their efforts to eradicate overseas bribery and are aiming to prosecute individuals.

What could a settlement look like?

Och-Ziff is being probed by both the DoJ and the SEC. The SEC usually levies fines in FCPA cases, while the DoJ usually chooses between offering a deferred prosecution agreement or demanding a guilty plea. Under a DPA, the hedge fund would avoid prosecution for a set period of time, as long as it pays a penalty, does not reoffend for the length of the agreement, and meets other conditions, such as having a corporate monitor. The firm could also be forced to plead guilty.

Can Och-Ziff afford the fine?

Och-Ziff had to borrow money to provision for a DoJ settlement that it expects to be at least $200m. Its shares have fallen sharply over the past year due to uncertainty over the size of the payment and the potential for reputational damage from a settlement.

Analysts covering Och-Ziff stock reacted positively after the hedge fund said it had set aside $200m for a settlement. Some have argued that the fact that Och-Ziff management has entered into settlement talks with the DoJ suggests that the company feels it could afford any potential penalty.

“We see the reserve as a good sign and one that signals the potential for resolution,” analysts at JPMorgan wrote earlier this month. “We note that if the settlement could lead to a terrible outcome for Och-Ziff, we expect the company would rather go to court. Thus, we’d view a settlement as a welcome outcome.”

However, Och-Ziff opted to borrow $120m of the money it set aside, which will lead to higher borrowing costs and could eat into earnings for shareholders.

How will investors in Och-Ziff’s funds react?

Investors have already pulled several billion dollars out of the funds since the investigation was disclosed in 2014. There has never been a case against a hedge fund over alleged FCPA violations. But in the past investors have stuck with fund managers such as David Einhorn and Philippe Jabre after they faced civil penalties in the UK for violating financial market rules.

However, in several US insider trading investigations that involved criminal charges, hedge funds have been forced to shut down. The Galleon Group, which once managed about $7bn, closed in 2009 when it became embroiled in scandal. Its founder, Raj Rajaratnam, and five others were arrested and charged with insider trading. When SAC Capital pleaded guilty in 2014 to making millions of dollars from illegal stock tips, it paid a record $1.8bn and agreed to not manage outside money for a period.

Does Och-Ziff face other legal issues?

The hedge fund is still facing a proposed US class action lawsuit in federal court in Manhattan. Investors who bought shares over a two-and-a-half-year period allege that Och-Ziff misled investors about the SEC and DoJ probes and failed to disclose allegations that it had violated the FCPA. In February, the judge overseeing the case threw out the claims against Michael Cohen, a former Och-Ziff employee who managed its African investments, and part of the claim against the firm and Mr Och.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: DRWI -21.6%, SSI -18.4%, CMCM -11.2%, AAP -10.5%, MNRO -6.3%, FLO -6.1%, LB -5.3%, OXLC -5.2%, TK -4.8%, TNK -3.3%, TTWO -2.6%, MBT -1.3%, NGG -1%

Select metals/mining stocks trading lower: IAG -3.9%, HMY -2.4%, GG -2.3%, SLV -2.2%, KGC -2.2%, NEM -2.1%, VALE -1.9%, AU -1.9%, GDX -1.8%, FCX -1.7%, BBL -1.6%, BHP -1.4%, RIO -1.3%, AA -0.9%

Select oil/gas related names showing early weakness: SDRL -4.3%, STO -2%, MRO -1.8%, RDS.A -1.7%, TOT -1.7%, WTI -1.4%

Other news: HK -71.5% ( reaches agreement to restructure balance sheet with select note holders for the potential elimination of ~$1.8 bln of debt & ~$222 mln of preferred equity while reducing interest burden by more than $200 mln), GBSN -7.7% (holders of its senior secured convertible notes voluntarily removed restrictions on the Company's use of an aggregate of $1 mln previously funded to the Company and authorized the release of those funds from the restricted accounts of the Company), RGEN -7.3% ( files for mixed securities shelf offering; commences underwritten public offering of $100 mln aggregate principal amount of Convertible Senior Notes due 2021), HLT -4.6% (travel stocks under pressure after reports of missing Egypt plane), BLDR -4.4% (prices 13.26 mln share secondary public offering of common stock by selling shareholder), GLPI -3.4% (prices ~10.5 mln common stock offering by selling shareholders), IHG -2% (travel stocks under pressure after reports of missing Egypt plane), PFGC -1.2% (prices offering by selling shareholders of 12 mln shares of common stock at $24.25 per share)

Analyst comments: BKU -0.9% (downgraded to Sell from Buy at Goldman)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: TNXP +17.6%, AEO +15.5%, PERY +9.4%, ROX +8.4%, WMT +8%, URBN +7.8%, ZIOP +6.4%, CRM +6.1%, CSCO +4.8%, SQM +2.3%, SQM +2.3%, DKS +2.1%, HQCL +2%, FTI +1.4%, EXP +0.5%

M&A news: CHD +8.8% (report that Reckitt (RBGLY) might bid for CHD), MON +7.6% (confirms receipt of non-binding proposal from Bayer (BAYRY)), FTI +1.2% (FMC Tech and Technip (TKPPY) to merge in all-stock transaction; combined company would have an equity value of $13 bln)

Select EU financial related names showing strength: RBS +2.9%, CS +2.3%, HSBC +2%


Other news: RPRX +23.3% (reports 'positive' clinical data for Oral Proellex ), BIND +15.7% (reaches agreement in relation to its recent Chapter 11 filing for the use of cash collateral through July 8), GEVO +15% (enters into an agreement with Clariant), TNXP +14.5% (announces topline results of the Phase 2 dose-finding clinical study of TNX-102 SL in military-related PTSD), CPXX +10.7% (granted breakthrough therapy designation to Vyxeos), ZIOP +6.4% (to present interim results from its ongoing Phase 1, multi-center dose-escalation study of the gene therapy candidate Ad-RTS-hIL-12 + orally-administered veledimex in patients with recurrent or progressive glioblastoma at ASCO), ARRY +5.4% (to present present additional data on its late-stage candidates binimetinib and encorafenib in NRAS-mutant melanoma and BRAF-mutant colorectal cancer at ASCO), GALE +3.4% (to present primary analysis from the Company's GALE-301 Phase 1/2a clinical trial at ASCO), ARIA +2.7% (to present clinical data on brigatinib at ASCO), DB +1.9% (rovides 2020 financial objectives; Fitschen will step down as Co-Chairman of the Management Board of Deutsche Bank), POT +1.8% (in symp with MON), COST +1.1% (in sympathy with WMT)

>>> US Early premarket gappers

Early premarket gappers
Gapping up: TNXP +37.9%, RPRX +33%, AEO +14.6%, CHD +9.2%, WMT +8.5%, MON +8.3%, URBN +8.2%, ZIOP +7.1%, CRM +6.2%, GALE +6.1%, CSCO +5.7%, FTI +4.4%, CS +3.7%, POT +3.6%, ARRY +3.4%, RBS +2.7%, ARIA +2.5%, SQM +2.3%, HSBC +2.1%, HQCL +2%, DB +1.7%, TK +1.4%, EGO +1.3%

Gapping down: HK -70%, DRWI -21.6%, SSI -15%, AAP -9.6%, IAG -8.6%, FLO -7.1%, VALE -5.6%, LB -5.5%, SDRL -4%, WTI -3.8%, MRO -3.7%, TOT -2.3%, PFGC -2.2%, RDS.A -2%, BBL -1.8%, STO -1.5%, AU -1.4%, BHP -1.4%, FCX -1.3%, SLV -1.2%, RIO -1.2%, AA -1.1%, NGG -1%, GDX -0.9%, TTWO -0.8%

SkyNews - Cinven Eyes Bid For Ailing Garfunkel's Owner



Cinven Eyes Bid For Ailing Garfunkel's Owner

Private equity firms including Pizza Express's former owner are mulling bids for struggling Restaurant Group, Sky News learns.

The former owner of Pizza Express is weighing a takeover bid for the struggling listed company which operates the Garfunkel's restaurant chain.

Sky News has learnt that Cinven, the private equity firm, is in the early stages of evaluating an approach to the board of Restaurant Group, which has seen its shares plunge by more than half during the last 12 months.

Cinven, which sold Pizza Express to a Chinese investor two years ago, is not the only private equity firm circling Restaurant Group, which also owns Frankie & Benny's.

City sources said that TA Associates and other parties had been running the numbers on a possible bid, although it was unclear whether a formal approach would materialise.

Restaurant Group has endured a torrid few months, announcing the departure of its long-serving finance director and a third profit warning in quick succession less than a fortnight ago.

The company, which also owns the Mexican-themed chain Chiquito and Joe's Kitchen, which is focused on a fresh food offer, has warned investors that this year's profits to be no higher than £80m.

Shares in Restaurant Group were trading at around 327p on Thursday, giving the company a market capitalisation of just over £630m.

It was unclear what level of takeover premium would be required to persuade the company's big investors to sell, but one source suggested an offer would have to be pitched above 500p to be credible.

Another insider said it was far from certain that Cinven's interest would result in a firm offer being made for Restaurant Group.

Cinven is also a former owner of the Byron, Ask and Zizzi restaurant chains through Gondola Holdings, their one-time parent company, before the latter two were sold to another private equity investor, Bridgepoint.

Confidence in the pace of the consumer spending recovery during the last five years has buoyed confidence in the UK's casual dining sector, with a flurry of deals involving chains such as Cote and TGI Friday taking place.

A person close to Restaurant Group said Cinven's operational expertise in the restaurant industry meant there could be considerable scope to improve its performance.

"The company's reputation has been badly damaged in recent months, made worse by the poor advice of its financial public relations advisers," the source said.

Alongside last month's profit warning, Danny Breithaupt, Restaurant Group's chief executive, announced a strategic review, the results of which would be announced in August.

"We are focused in the short term on the operational levers that will improve our trading performance," he said.

"In the medium term, we are reviewing the core strategic assumptions that differentiate our operating model to ensure that we optimise returns for shareholders.

Spokespeople for Cinven and Restaurant Group declined to comment on Thursday.