News emerged this morning that mining giant Glencore Xstrata (GLEN.L) has finally approved plans to sell its project in Peru, the Las Bambas copper mine. The deal comes after months of negotiation and is worth $5.85Bln and the project will be sold to a consortium of investors including a subsidiary of Chinese state-owned China Minmetals Corp.
Proceeds of the deal are expected to be used to “de-gearing” the balance sheet and the company expects any surplus to then be returned to shareholders in a form to be decided and announced “within a reasonable timeframe”.
Infrastructure giant, Balfour Beatty plc (BBY.L) today released news detailing the results of a longstanding dispute in its professional services division. The arbitration process found in Parsons Brinckerhoff’s favour on a number of matters, but the overall award of US$8 million is significantly lower than management expectations.
Overall, the contribution to the 2014 income statement is expected to be nil, which is £12 million lower than anticipated. Balfour Beatty expect to receive net cash in excess of US$20 million, primarily from the escrow account.
Balfour commenting in a statement said: “Finalisation of this process allows us to settle all outstanding matters on the escrow account established at the time of the Parsons Brinckerhoff acquisition, subject to final agreement with the previous owners.”
There will be some changes at the top for Cairn Energy plc as Deputy Chief Executive Officer (CEO) Mike Watts and Managing Director and Chief Financial Officer (CFO) Jann Brown are stepping down as executive directors of the company.
Both will be leaving after the Annual General Meeting in May, though both have agreed to continue in senior roles for the company and to dedicate their time to resolving the Indian Tax position issue that has dogged the company in recent times – The Indian authorities are currently investigating Cairn Energy tax payments from 2007 and Cairn has been restricted by the Indian tax department from selling the remaining 10.3% stake in Cairn India, valued at $1bn at December 31st 2013.
Chief Executive Officer Simon Thomson, commenting said: “The changes announced today offer the best way of organising our business for the future – both in delivering our ongoing balanced growth strategy and in dealing with the situation in India.”
Broker Bernstein today downgraded Telecoms giant BT plc (BT-A.L) putting the companies shares under potential pressure. The broker sited potential overspending on TV rights and competition from rivals such as Virgin Media when downgrading the company to ‘market-perform’ and giving a fair value price of 385p.
With the upcoming auction of live sports rights and in particular premiership football the broker fears that BT may end up overspending in this area and it attempts to continue competing with wealthy opposition in the form of Sky Sports. The broker also highlighted Virgin Medias current cost cutting campaign and that BT may then come under increasing competition pressure as Virgin gains momentum.
Bernstein said: “None of these risks are necessarily imminent, but all are potentially significant, so we find it hard to find a compelling higher valuation.”
Unilever (ULVR.L) plc shares are up this morning after news emerged the company is considering a 4Bln share buyback. An article in the Financial Times today revealed that they are considering returning cash to investors and may announce a share buyback at the next quarterly results due later this month.
The company who owns well known brands such as Dove Soap, Radox shower gel, Flora spreads and Pot Noodle currently has a large free cash flow of around 4Bln Euros which was detailed at last result in January.
Retailer, Marks and Spencer (MKS) today unveiled plans to build the brand further worldwide with the opening of 250 new stores over the next 3 years. The company hopes to grow its international revenue and profits by as much as 40%.
Chief Executive Marc Bolland, speaking to city analysts this morning said “We need to build a brand internationally and be dot-com ready. That’s where our future is..”
The rollout of new stores is initially thought to be centred on Paris with the chain planning to open 20 food only outlets and then also looking to expansion into Western Europe, the Middle East and India. Since Bolland became Chief Executive, M&S’s store portfolio has increased from 337 stores in 41 territories to 455 in 53.