Important news from Fredricka

~ Tuesday, October 18 ~
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RPT-UPDATE 3-Air France-KLM ousts CEO, targets recovery


* Juniac to run French unit, seen as CEO successor* Air France-KLM shares rise on restructuring hopesBy Cyril Altmeyer and Tim HepherPARIS, Oct 17 (Reuters) - Air France-KLM SA ousted its chief executive on Monday and recalled the chief architects of the Franco-Dutch merger with a brief to eradicate losses while preparing for an anointed successor.Europe’s largest airline by revenues, which has fallen behind peers due to a cocktail of costs, debts and competition, said after board talks that recovery and the improvement of performance would be its “top priority.”The group said it postponed plans to reorganise into a full fledged holding company, with integrated divisions, from the beginning of 2012 until 2013 and restored its tried-and-tested old guard to run things in the interim.Jean-Cyril Spinetta will remain chairman and resume his previous role as chief executive, replacing Pierre-Henri Gourgeon who resigned from the post he had held since January 2009.Leo Van Wijk, who together with Air France’s Spinetta masterminded the 2004 merger of French and Dutch carriers from the KLM side, will be deputy chief executive, the group said.The holding company move is seen as a necessary precursor to possible future acquisitions.Air France-KLM shares closed up 1.4 percent after rising 6 percent on newspaper leaks about the proposed board decision, which analysts said would speed up restructuring.Air France-KLM also put in place the man widely seen as most likely to become chief executive — former defence executive Alexandre de Juniac, who has been appointed as the head of Air France, the most troubled and strike-prone part of the group.Juniac was a top aide to former French finance minister Christine Lagarde until her recent appointment as head of the International Monetary Fund and previously held senior posts at Thales SA , the state-controlled French arms group.The 48-year-old industrialist will submit directly to the board measures to boost the performance of the Air France unit and follow them up “over time,” the group said in a statement.Air France-KLM set the pace for airline consolidation when the two flag carriers joined forces in 2004, merging key behind the scenes functions while keeping separate networks.But it has suffered more severely than much of the industry recently because of high labour costs, a large debt and from competition that has especially affected Air France.The group’s shares have fallen almost 53 percent in the past six months, compared with a 26 percent decline for International Airlines Group (IAG) and a 35 percent drop at Lufthansa .Although many savings were made, analysts had expressed concerns about the profitability of Air France-KLM under Gourgeon, a former military engineer with fighter aircraft qualifications who failed to keep the airline in the black.Air France-KLM posted an operating loss of 145 million euros ($201 million) in April-June, compared with a profit of 230 million at Lufthansa and a 134 million-euro profit after exceptional items at IAG, parent of British Airways and Iberia.ELECTION PRESSUREAs the board deliberated Gourgeon’s fate, it received a warning from one of France’s largest unions. The CFDT stopped short of an immediate strike threat, but put the new management on notice it could quickly face turbulence over recent calls for substantial new savings.Analysts say restructuring could be difficult in the run-up to next year’s French election, likely to be dominated by jobs.”It looks as though the Spinetta-Juniac duo will be able to put in place the necessary restructuring measures that Gourgeon should have carried out years ago,” a Paris-based analyst said, asking not to be named.”On the other hand, doing this just a few months before (April-May) presidential elections will be difficult for such a symbolic company as Air France,” the analyst added.Juniac was said to be restless at the finance ministry and he was linked to several unsuccessful bids to land top jobs.An ex-Thales colleague described his time in government as “two years of purgatory while waiting for a place in heaven.”“He has a lot of expertise with international groups. He is charismatic and knows how to listen to people internally, lead and explain his strategy,” the former colleague said.Juniac will need those qualities to handle the internal politics of Air France, whose cabin crews already plan strikes next weekend, the start of a 10-day break for French school children.He will also have to grapple with the airline’s safety record after the 2009 Rio-Paris crash, which investigators attributed in part to a suspected pilot error. A final report on the crash, which killed 228 people, is expected next year.

Tags: RPTUPDATE 3Air FranceKLM ousts CEO targets recovery
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~ Monday, October 17 ~
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Tech wrap: Apple’s iOS 5 debuts


Apple rolled out its iOS 5 mobile operating system, one week after pancreatic cancer claimed the life of its former CEO and visionary Steve Jobs. The update adds voice recognition software called “Siri”, instant messaging and support for Apple’s iCloud service, although the inclusion of Siri is limited to the iPhone 4S. MacWorld’s Dan Moren says the free update is “ambitious” and that “there’s hardly a part of Apple’s mobile operating system that isn’t altered in some way”. Engadget’s Dante Cesa says that “other than turn-by-turn navigation, more multitasking APIs and some delectable widgets, there isn’t much, headline-wise, left on Apple’s hit list for iOS 6“. Despite Jobs’s death, investors still like what they see at Apple and want the company to start giving up some cash, according to a Reuters Poll. Apple has a cash hoard of $75 billion and record demand for the iPhone 4S has pushed its stock price near an all-time high. Six of the 11 money managers polled by Reuters called for a dividend payout as a reward for their loyalty. A three-day disruption of BlackBerry services spread to North America, frustrating millions of users of RIM smartphones and putting more pressure on the company for sweeping changes. RIM advised clients of an outage in the Americas and said it was working to restore services as customers in Europe, the Middle East, Africa and India continued to experience patchy email delivery and no access to browsing and messaging. RIM said the root cause of the failure was the malfunction of a core router switch and the subsequent failure of a back-up system to kick in. It then experienced a severe backlog of unrouted messages that is taking time to deliver. South Korea’s Samsung said it will soon release upgraded versions of three Galaxy smartphones in Europe to get around temporary sales bans on earlier versions of products that violated an Apple patent. Samsung ambushed the launch of Apple’s iPhone 4S in Sydney, Australia, offering $2 smartphones to the first 10 customers per day in a temporary store, a stone’s throw from the official Sydney Apple store. Accustomed to long lineups leading up to and even after the release of its products, at one point Apple took second place to those waiting for their chance to snap-up a Galaxy S2 phone. Facebook executive and eBay board member Katie Mitic unveiled a partnership between the two companies designed to create a new crop of e-commerce applications with social networking features. Mitic said that Facebook’s Open Graph — the map of connections that Facebook users create with friends and online content — will be integrated “seamlessly” into applications developed with certain eBay services and technologies. EBay is trying to encourage outside developers to create applications for its e-commerce platforms and is making a particularly strong push in mobile commerce. Sony said that a third party had tried to sign in to 93,000 active accounts on its PlayStation and other networks this month. The company said it had frozen the accounts and informed affected customers by e-mail, adding that it believed only a few of the accounts were actually accessed.

Tags: Tech wrap Apple’s iOS 5 debuts
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~ Friday, October 14 ~
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UPDATE 1-AXA, Generali submit first-round bids for HSBC unit - sources


* Japanese bidders only interested in Asian partsBy Denny ThomasHONG KONG, Oct 14 (Reuters) - European insurers AXA SA , Assicurazioni Generali SpA , Japan’s Tokio Marine and MS&AD Insurance Group are among suitors to submit first round bids for HSBC’s non-life insurance business, sources with knowledge of the matter told Reuters, in a deal worth about $1 billion.Allianz SE and Zurich Financial Services AG were also interested in the process, sources previously told Reuters, but it could not be independently ascertained whether they had submitted preliminary bids, which were due on Wednesday.HSBC , under new Chief Executive Stuart Gulliver, is exiting non-core businesses and targeting about $3.5 billion in cost savings. The sale of the non-life insurance business is part of that plan. The company has already sold its non-life business in Britain.HSBC’s planned sale is the first major banncassurance deal attempted in Asia and the valuation of this transaction will set a benchmark for other similar deals.A big question in such deals is determining how much value to pay upfront and how should be built into the banncasurance agreement, which allows the buyer and seller to share future commissions earned from the sale of insurance products.In some cases, buyers agree to pay a lower upfront value and agree to a rich distribution agreement, which offers incentives for the vendor to perform.HSBC, Europe’s biggest bank, may consider selling the businesses by splitting it by region, sources familiar with the matter said.HSBC has non-life insurance operations in Hong Kong, Singapore in some Latin American countries and France. Non-life insurance premiums totalled $1.3 billion in 2010, according to HSBC’s balance sheet.AXA, Generali, Zurich, Tokio Marine, MS&AD, Allianz all declined to comment. HSBC also declined comment.The sources declined to be identified as the sale process was not public.Potential suitors are attracted to HSBC’s captive customer base and the distribution network available through its bank branches.But there were questions about the ability of potential buyers to bid aggressively because of sharp falls in asset prices globally and the capital issues faced by European financial institutions, sources said.The geographical spread of the assets also makes the auction potentially tricky as some potential suitors only want certain parts of the business and not the whole.For instance, the two Japanese insurers were interested in the Asian operations of HSBC’s non-life insurance business, especially its Hong Kong business, and not the entire package, the sources said.HSBC made and distributed general insurance products in Panama, Honduras, El Salvador, Argentina, France and Mexico. But it earns a portion of its premiums from Hong Kong and Singapore, with the two centres alone producing about $300 million, one source previously said.HSBC’s planned sale follows other recent deals to exit non-core businesses, including the disposal of its credit card unit in the United States, the closure of underperforming U.S. branches, and the sale of 195 branches to First Nigara Financial Group Inc .

Tags: UPDATE 1AXA Generali submit firstround bids for HSBC unit sources
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~ Wednesday, October 12 ~
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UPDATE 2-Australia’s carbon tax plan passes biggest hurdle


* Initial carbon price set at A$23 a tonne (Adds business, environment group reaction)By James GrubelCANBERRA, Oct 12 (Reuters) - Australia’s plan for a sweeping national carbon price passed its biggest political hurdle on Wednesday when the lower house of parliament voted in favour of the scheme — a major victory for beleaguered Prime Minister Julia Gillard.Gillard, who is staring at electoral defeat according to opinion polls, has staked her minority government’s future on the sweeping economic reform that will impose a carbon tax on around 500 of the country’s biggest polluters from July 2012, before moving to a carbon trade scheme in 2015.”Today is a significant day for Australians and the Australians of the future who want to see a better environment,” Gillard said before the bills passed by 74 votes to 72 in the House of Representatives.Australia, the world’s biggest coal exporting nation, accounts for only around 1.5 percent of global emissions, but is the developed world’s highest per capita polluter due to a reliance on coal for 80 percent of its electricity generation.The carbon legislation, and a bill for A$300 million ($298.7 million) in assistance for the steel industry, must still pass the upper house Senate in a vote due in mid-November, but the government and Green senators have the numbers to ensure the bills will become law.The carbon plan, if passed by the Senate, would see Australia join the European Union and New Zealand with national emissions trading schemes, while the United States and Japan have smaller regional schemes.The government and the Greens hope the carbon tax will reignite momentum for a global emissions reduction agreement at climate talks in Durban, South Africa, in December.GOVERNMENT CELEBRATES CARBON VOTEGovernment lawmakers applauded when the lower house vote was taken, while Gillard and her ministers hugged each other and waved to supporters in the public galleries.Two previous attempts to pass laws for a carbon price failed in 2009, and were partly responsible for the ruling Labor Party’s decision to dump then Prime Minister Kevin Rudd in favour of Gillard in June 2010.The carbon price is the central plank in the government’s plan to cut carbon emissions, blamed for global warming, by 5 percent of 2000 levels by 2020.The conservative opposition, currently ahead of Gillard’s Labor in opinion polls and on track to win an election in two years, said it would dismantle the tax if victorious and replace it with an alternative that did not explicitly price carbon.”We can repeal the tax, we will repeal the tax, we must repeal the tax. This is a pledge in blood. This tax will go,” opposition leader Tony Abbott said.Environment groups welcomed the vote, but business and mining groups vigorously oppose the carbon scheme, arguing it will close coal mines, cost thousands of jobs, hike power bills and damage Australia’s international competitiveness.”This has been an ugly and very long debate … and urge the Senate to pass the legislation as soon as possible,” said Climate Institute chief executive John Connor.INITIAL A$23 A TONNE CARBON PRICEThe bills set an initial carbon price of A$23 a tonne, and guarantees billions of dollars of compensation for big business and households, which will face higher electricity prices.Export-exposed industries such as aluminium smelters and steel makers will receive up to 94.5 percent of carbon permits for free, while liquefied natural gas projects will receive effective assistance for 50 percent of emissions.The scheme sets up a A$10 billion clean energy finance fund to leverage private investment in renewable energy. Legislation for the fund will be introduced in early 2012. The scheme also sets aside A$1.3 billion to help coal mines reduce emissions.The plan also includes an extra A$300 million to help the steel industry, which is struggling with a high Australian dollar and higher costs for raw materials.The scheme will also allow the government to buy-back up to 2,000 megawatts of electricity from Australia’s dirtiest coal-fired power stations by 2020, encouraging new investment in renewable energy and gas-fired power plants.Agriculture is exempt from the carbon price, although farmers will be able to cash in on the market for carbon offsets. ($1 = 1.004 Australian Dollars)

Tags: UPDATE 2Australias carbon tax plan passes biggest hurdle
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