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Canadian billionaire Lance Stroll leads group buying stake in Aston Martin – The Globe and Mail

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A consortium that includes Canadian billionaires Lawrence Stroll and André Desmarais is buying a major stake in struggling British carmaker Aston Martin Lagonda Ltd. whose best customer is James Bond.

The group is investing £182-million, or $316-million, as part of a £500-million financing for the carmaker which has been beset by plummeting sales. The consortium will initially acquire a 16.7 per stake but it plans to increase that to 20 per cent.

Mr. Stroll is leading the consortium and he will become the 106-year old company’s executive chairman. Under the deal, he is also injecting £55.5-million in short-term funding to immediately stabilise the company’s finances. The money will be refunded as soon as the rest of the financing is in place.

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Mr. Stroll built his fortune in the fashion world and has become a avid Forumla One fan. He currently owns the Racing Point F1 team but plans to re-brand it Aston Martin F1 under a 10-year sponsorship deal that begins next year. Aston Martin will continue to sponsor the Red Bull Racing team this season. Mr. Stroll’s 21-year old son, Lance, drives for Racing Point and he finished 15th in the drivers’ standing last year.

“Aston Martin Lagonda makes some of the world’s most iconic luxury cars, designed and built by very talented people,” Mr. Stroll said in a statement. “Our investment announced today underpins the Company’s financial security and ensures it will be operating from a position of financial strength.”

Other members of the consortium include Mr. Desmarais, the former chief executive of Power Corp.; John McCaw, former part owner of McCaw Cellular; and Mr. Stroll’s long-time business partner Silas Chou, a Hong Kong-based investor.

Aston Martin’s chief executive Andy Palmer told Reuters that Mr. Stroll brings several advantages to the company. “He brings with him his experiences and access to his Formula One team,” Mr. Palmer said. “We’ve talked a lot in the past few years about wanting to be clearly rooted in luxury and obviously Mr Stroll knows an awful lot about luxury.”

Aston Martin has struggled since going public on the London Stock Exchange in 2018 at £19 a share. The stock price has sunk to £4 lately although it jumped to £4.73 pence on Friday after the announcement.

The company, whose cars have appeared in 12 James Bond films, issued a profit warning earlier this month after announcing that its deliveries to dealers had fallen by 7 per cent to 5,809 last year. Full results will be released at the end of February but the company said its operating profit for 2019 was expected to fall to between £130 million and £140 million from £247 million in 2018. It added that 2019 had been “a disappointing year with trading weaker than anticipated, particularly for Vantage and in Europe and the UK across all car lines.”

The profit warning raised fresh concerns about the viability of the carmaker which has gone bankrupt seven times in its history. It has blamed the slump on rising marketing costs, foreign currency exchange and a drop in the average selling price as buyers moved toward its Vantage two-seater sports car, its cheapest brand which sells for £120,900. The company plans a major restructuring which will include management changes and job cuts aimed at saving £10-million annually. The weak performance also meant Aston Martin faced a cash crunch and had exceeded the conditions on a $100-million line of financing.

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The company has been betting much of its future on the launch of its first SUV this summer called DBX, which has received good reviews. It said Friday that orders for the DBX have been climbing and now stand at 1,800, which was “materially better than for any previous model.” It’s also launching a Vantage Roadster this spring.

“Having been no stranger to bankruptcy during its 106-year history, the company’s board will have been fully aware of the stakes following a disastrous 2019 which made a mockery of the company’s £4-billion valuation at IPO,” Russ Mould, Investment Director, at AJ Bell said in a report Friday. “Focus is now likely to fall on CEO Andy Palmer and whether he is the right man to have behind the wheel as Aston Martin looks to find another gear.”

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Keystone pipeline temporarily closed following Kansas oil spill – Al Jazeera English

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The energy company in charge of the pipeline has not said what caused the spill or how much oil was released.

The Keystone pipeline has halted operations following an oil spill into a creek in the United States state of Kansas. The pipeline carries more than 600,000 barrels of oil from Canada to the Texas Gulf Coast each day.

Canada-based TC Energy said in a press release that it shut down the pipeline on Wednesday night in response to a drop in pipeline pressure. The company has yet to offer information on the scale and cause of the spill.

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“The system remains shut down as our crews actively respond and work to contain and recover the oil,” the release said.

The spill resulted in oil leaking into a creek in northeastern Kansas and the company has said they were using machinery to prevent the oil from moving further downstream. Pipelines have long spurred concerns about the destructive potential of oil spills.

Another pipeline previously proposed by TC, the Keystone XL pipeline, would have been 1,930 kilometres (1,200 miles) long and cut across US states such as Montana, South Dakota and Nebraska.

That proposal spurred strong opposition from advocates who said it would increase the chance of spills, undermine the rights of Indigenous communities and worsen climate change.

Former President Donald Trump approved a permit for the contentious project in 2017 but a court halted construction in 2018 before the permit was cancelled by President Joe Biden’s administration last year.

TC finally abandoned the effort in June 2021 but has since filed a claim seeking remuneration for losses it says it faced because of the cancellation.

The spill on Wednesday occurred several years after the Keystone pipeline leaked about 1.4m litres (383,000 gallons) of oil in eastern North Dakota in 2019.

As word of the shutdown spread on Wednesday, oil prices ticked upwards by about five percent.

“It’s something to keep an eye on, but not necessarily an immediate impact for now,” said Patrick De Haan, head of petroleum analysis at GasBuddy, which tracks gasoline prices, according to the Associated Press. “It could eventually impact oil supplies to refiners, which could be severe if it lasts more than a few days.”

In their statement, Keystone said their primary focus was the “health and safety of onsite staff and personnel, the surrounding community, and mitigating risk to the environment through the deployment of booms downstream as we work to contain and prevent further migration of the release”.

Previous Keystone spills have resulted in stoppages that lasted up to two weeks. However, analysts have noted that the current stoppage could possibly last longer because it involves a body of water.

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Bank of Canada policy will ‘hit home’ in 2023: David Rosenberg

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The Bank of Canada may be signalling a possible end to its months-long aggressive interest-rate hike cycle, but economist David Rosenberg said next year will see the lagging impact of 2022’s monetary policy “hit home” for Canadians.

“Next year is the payback,” Rosenberg, chief economist and strategist at Rosenberg Research and Associates Inc., said in an interview with BNN Bloomberg.

“2022 was the year of the sharp run-up in rates, 2023 will be the year where the policy lags from those rising rates hit home.”

He made the comments Thursday, a day after the Bank of Canada raised its overnight lending rate by 50 basis points to 4.25 per cent, as the central bank continued with its approach to bringing down inflation.

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Rosenberg predicted a “severe recession” for Canada next year based on the rate hike cycle, calling for a “triple whammy” with economic impacts compounded by high levels of household debt, a housing bubble and ripples in the global economy.

Possible spillover effects from the interest rate cycle could be felt, Rosenberg said, as banks may constrain the availability of credit and spending drops across various sectors.

Based on the latest rate increase, Rosenberg said he predicts at potentially one more rate hike from the bank before a pause. Once inflation starts to come down, Rosenberg said he thinks the central bank may start to cut rates, possibly in the second half of 2023.

“The next stage is going to be waiting for the inflation to come down, which I think it will, and the recession is going to catch a lot of people by surprise,” he said.

A similar pattern may play out in the U.S., but Rosenberg said Canadians are more exposed to higher interest rates through variable-rate mortgages and because more consumer credit is tied to short-term interest rates.

“As bad as it’s going to be in the U.S., and believe me, it’s not going to be a pretty picture there, I think the Canadian situation in the next year is going to be clouded at best,” he said.

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CRTC rejects Telus’ request to charge credit card processing fee for some services

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The Canadian Radio-television and Telecommunications Commission ruled Thursday that Telus is not able to charge a credit card processing fee for regulated home telephone services.

This ruling applies to Alberta and B.C. services that are regulated by the CRTC, which are generally home telephone services in certain smaller communities.

Since Oct. 6, most Canadian businesses, except in Quebec, can charge their customers a fee for credit card transactions, following a class-action lawsuit filed by retailers against Visa, MasterCard and card-issuing banks.

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Quebec is not included in this decision due to the province’s Consumer Protection Act, which prohibits the application of such surcharges.

On Aug. 8, Telus filed an application with the CRTC to introduce a credit card processing fee of 1.5 per cent, plus taxes, for payments made with a credit card.

On. Oct. 17, Telus began to charge the fee to clients paying by credit card in areas where services are not regulated by the CRTC, which includes its wireless and internet customers outside of Quebec.

Telus does not need to ask for the CRTC’s approval to add the surcharge to its unregulated services but the organization said it is “very concerned” about this practice as it goes against affordability and consumer interest.

“We heard Canadians loud and clear: close to 4,000 of you told us that you should not be subjected to an additional fee based on the method you choose to pay your bill,” Ian Scott, chairperson and CEO of the CRTC, said in a statement. “We expect the telecommunications industry to treat Canadians with respect and do better.”

The CRTC said, with this ruling, it is sending a “clear message” to Telus and other telecommunications service providers that are thinking of imposing a fee like this one on their customers.

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