FILE PHOTO: An Airbus A330 of Avianca airline takes off at the Simon Bolivar airport in Caracas, Venezuela October 23, 2016. REUTERS/Carlos Garcia Rawlins/File Photo
May 24, 2019
By Marcelo Rochabrun and Sanjana Shivdas
(Reuters) – United Airlines launched a management overhaul at Colombia’s Avianca Holdings on Friday, removing top shareholder German Efromovich from controlling the cash-strapped airline, according to regulatory filings.
United, which is proposing a three-way joint business agreement with Avianca and Panama’s Copa, said the move follows a default by Efromovich’s holding company BRW Aviation on a $456 million loan it made six months ago.
The Chicago-based airline, part of United Continental Holdings Inc, is seeking a deeper foothold in Latin America, which is considered ripe for air travel growth.
United’s loan was backed by Efromovich’s 51.5% stake in Avianca. However, the U.S. airline’s contract with its pilots restricts the company from majority ownership in another carrier. As a result, United is ceding voting rights to Kingsland Holdings, the Colombian carrier’s second-largest shareholder.
Kingsland is controlled by Roberto Kriete, who was embroiled in a long and bitter legal fight with Efromovich over the best strategy for heavily indebted Avianca.
Another Efromovich carrier, Avianca Brasil, filed for bankruptcy protection in December and its operations were suspended on Friday by Brazil’s civil aviation regulator ANAC.
United said it was willing to loan up to $150 million to Avianca Holdings.
(Reporting by Sanjana Shivdas in Bengaluru and Marcelo Rochabrun in Sao Paulo,; Writing by Tracy Rucinski; Editing by Marguerita Choy and Phil Berlowitz)
FILE PHOTO: The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, March 23, 2018. REUTERS/Kim Hong-Ji/File Photo
May 24, 2019
SEOUL (Reuters) – A South Korean court approved arrest warrants on Saturday for two executives at Samsung Electronics Co Ltd over their alleged roles in a suspected accounting fraud at the biotech arm of Samsung Group.
The Seoul Central District Court said in a statement it had granted warrants to arrest the executives due to concerns over possible destruction of evidence.
However, the court rejected the prosecution’s request for a warrant to arrest the chief executive of Samsung BioLogics Co Ltd.
Two Samsung Electronics officials were also arrested on suspicion of destroying evidence earlier this month.
South Korea’s financial watchdog in November accused the biotech arm of Samsung Group of breaking accounting rules ahead of its 2016 listing, sparking a criminal investigation.
Both Samsung Electronics and Samsung BioLogics were not immediately available for comment.
The widening probe comes at an awkward time for Samsung Group, South Korea’s top family-run conglomerate, as de facto head and heir Jay Y.Lee awaits a Supreme Court ruling on bribery charges and political pressure builds for greater transparency in its governance.
Samsung BioLogics had been touted as a new growth engine for Samsung Group amid a slowdown in the global smartphone market. Samsung Electronics is the second-biggest shareholder of BioLogics with a 31.5 percent stake.
Samsung Electronics had no comment on the case earlier, except that it was cooperating with prosecutors.
(Reporting by Heekyong Yang; Editing by Stephen Coates and Elane Hardcastle)
FILE PHOTO: The Boeing logo is pictured at the Latin American Business Aviation Conference & Exhibition fair (LABACE) at Congonhas Airport in Sao Paulo, Brazil, Aug. 14, 2018. REUTERS/Paulo Whitaker/File Photo
May 24, 2019
(Reuters) – Shares of Boeing Co rose as much as 3% to more than a two-week high on Friday after Reuters reported that the Federal Aviation Administration (FAA) expects to approve 737 MAX jets to return to service as soon as late June.
Shares of the world’s biggest planemaker have fallen nearly 15% since the fatal crash of an Ethiopian Airlines 737 MAX jet in March, erasing about $40 billion in market value.
The stock has also been among the worst performers on the S&P 500 index and the Dow Jones Industrial Average. The benchmark index is up about 3% during the same period, while the Dow has risen by a marginal 0.2%.
If the aircraft is cleared to fly by June, its operators, including Southwest Airlines Co, American Airlines Group Inc and United Continental Holdings Inc, would likely not have to extend costly cancellations that they have already put in place for the peak summer flying season.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D’Silva)
FILE PHOTO: A Goldman Sachs sign is displayed inside the company’s post on the floor of the New York Stock Exchange (NYSE) in New York, U.S., April 18, 2017. REUTERS/Brendan McDermid/File Photo
May 24, 2019
LONDON (Reuters) – Goldman Sachs raised its probability of a no-deal Brexit to 15% from 10% on Friday as Prime Minister Theresa May’s resignation potentially opened the way for a more hardline politician to lead the UK to exiting the European Union.
Goldman Sachs economist Adrian Paul said ratification of a Brexit deal would no longer be possible in the second quarter. “We pencil in an orderly EU withdrawal in late 2019 or early 2020, but our conviction is low,” he wrote.
The new Prime Minister will face the same constraints May grappled with in negotiating a deal, Paul added, saying they will eventually return to parliament with a close variant of the current withdrawal agreement.
“We revise up our probability of “no deal”… not because this Parliament (or indeed the next) is likely to coalesce in favor of its pursuit, but because the recent performance of the Brexit Party and the Eurosceptic credentials of the next Prime Minister may strengthen the case for including “no deal” on the ballot in a second referendum to unlock the impasse.”
(Reporting by Helen Reid; Editing by Marc Jones)
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 23, 2019. REUTERS/Brendan McDermid
May 24, 2019
By Shreyashi Sanyal
(Reuters) – U.S. stock index futures edged higher on Friday, attempting to bounce back from the previous session’s steep sell-off, on cautious optimism after President Donald Trump predicted a swift end to the ongoing tariff war with China.
Trump said on Thursday that complaints against Huawei Technologies Co Ltd might be resolved within the framework of a U.S.-China trade deal.
However, no high-level talks have been scheduled between the two countries since the last round of negotiations in Washington two weeks ago. Trump will meet his Chinese counterpart Xi Jinping at the G20 meeting next month in Japan.
Earlier this week, while Washington temporarily relaxed its ban on Huawei, there were reports that it was planning a similar ban on another Chinese firm, making investors worry that such moves would have lasting effects on the global technology supply chain.
In the previous session, the S&P 500 technology and industrials sectors closed 1.5% lower.
Technology giants Apple Inc and Microsoft Corp rose about 1% in premarket trading, while industrial bellwethers Boeing Co and 3M Co gained over 1%.
Reuters reported the Federal Aviation Administration expects to approve Boeing’s 737 MAX jet to return to service as soon as late June.
At 7:20 a.m. ET, Dow e-minis were up 171 points, or 0.67%. S&P 500 e-minis were up 18.25 points, or 0.65% and Nasdaq 100 e-minis were up 43.25 points, or 0.59%.
The daily exchanges between the United States and China have kept investors on edge, putting the S&P 500 index on track to post its biggest monthly decline since the December sell-off.
Following a sell-off on Thursday, the S&P 500 is now 4.7% off its all-time high hit on May 1.
Among other stocks, Foot Locker Inc dropped 6.7% after the footwear retailer missed quarterly profit and same-store sales estimates.
Autodesk Inc fell 7.4% after the software maker reported quarterly earnings below expectations.
Total System Services Inc jumped 6.4% after Bloomberg reported Global Payments Inc has held preliminary tie-up talks with the payment solutions provider. Global Payments’ shares rose 1.4%.
On the macro front, a U.S. Commerce Department report is likely to show April durable goods declined 2%, after a 2.6% rise in March. The data is due at 8:30 a.m. ET.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur)
Mark Schneider, CEO of Nestle gestures during an interview at the Swiss Economic Forum (SEF) conference in Interlaken, Switzerland May 24, 2019. REUTERS/Arnd Wiegmann
May 24, 2019
By John Revill
INTERLAKEN, Switzerland (Reuters) – Nestle remains committed to confectionery despite unloading its U.S. chocolate operations during a review of the food giant’s operations, Chief Executive Mark Schneider told an event in Switzerland on Friday.
“Our wide portfolio makes us strong…not everything is going to change,” Schneider said. “You have to find focus and areas where you concentrate your efforts,” he said, identifying water, baby food and animal food as Nestle’s growth drivers.
“Sweets are not among those. But we also want to exploit the opportunities of that market.”
Schneider said 2019 had got off to a good start, but efficiency remained important, saying unprofitable sales growth did not make sense. Nestle had to adjust because customer preferences had changed dramatically in recent years, he added, with ever-increasing price pressure from consumers.
“There is very strong price competition. That is reality,” Schneider said.
Nestle has come under pressure from activist investor Daniel Loeb’s Third Point, which last year demanded a faster turnaround.
“We have a wide range of shareholders…everyone has the same rights, all of their priorities have to be listened to,” Schneider said.
When asked if he was annoyed by appeals from some shareholders, he replied: “It’s not personal, just business. I can make the distinction.”
(Reporting by John Revill; Editing by Michael Shields)
FILE PHOTO: An aerial photo shows Boeing 737 MAX airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson
May 24, 2019
BEIJING (Reuters) – The China Air Transport Association (CATA) on Friday said it expects losses at Chinese airlines caused by the grounding of Boeing Co’s 737 MAX aircraft to be around 4 billion yuan ($579.32 million) by the end of June.
CATA in a statement on its website said it hopes Boeing will attach great importance to compensation requests made by Chinese airlines.
(Reporting by Stella Qiu and Beijing Monitoring Desk; Editing by Christopher Cushing)
A Huawei company logo is seen at the security exhibition in Shanghai, China May 24, 2019. REUTERS/Aly Song
May 24, 2019
BEIJING (Reuters) – China on Friday denounced U.S. Secretary of State Mike Pompeo for fabricating rumors after he said the chief executive of China’s Huawei Technologies Co Ltd was lying about his company’s ties to the Beijing government.
The United States placed Huawei on a trade blacklist last week, effectively banning U.S. firms from doing business with the world’s largest telecom network gear maker and escalating a trade battle between the world’s two biggest economies.
Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services.
Pompeo, speaking on Thursday, also dismissed Huawei CEO Ren Zhengfei’s assertions that his company would never share user secrets, and said he believed more American companies would cut ties with the tech giant.
“Recently, some U.S. politicians have continually fabricated rumors about Huawei but have never produced the clear evidence that countries have requested,” Chinese Foreign Ministry spokesman Lu Kang said, when asked about Pompeo’s remarks.
The United States has been rallying its allies to persuade them not to use Huawei for their 5G networks, citing security concerns.
Lu said the U.S. government was provoking suspicion in the U.S. public to confuse and instigate opposition.
U.S. President Donald Trump also said on Thursday that U.S. complaints against Huawei might be resolved within the framework of a U.S.-China trade deal, while at the same time calling the Chinese telecommunications giant “very dangerous”.
Lu said he didn’t know what Trump was talking about.
“Frankly, I’m actually not sure what the specific meaning of the U.S. leader, the U.S. side, saying this is,” he said, adding that if reporters were interested they should ask the United States to clarify.
Lu reiterated that the United States should stop using its national power to suppress and smear other countries’ companies, adding that China wanted to resolve differences between the two countries through friendly dialogue and consultation.
(Reporting by Michael Martina; Writing by Ben Blanchard; Editing by Jacqueline Wong and Nick Macfie)