Wed, April 24, 2024 at 9:35 AM EDT
Business
Potential buyers for Chelsea told to approach UK government
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Anyone interested in buying Chelsea Football Club can make a proposal to the government, Britain said on Friday, after ministers sanctioned owner Roman Abramovich and halted his planned sale of the Premier League side.
The British government, which has been under pressure to ramp up sanctions on Russian oligarchs after Moscow’s invasion of Ukraine last month, imposed a travel ban and froze Abramovich’s assets on Thursday.
The announcement brought to a halt his recently announced plans to sell the London club, which he had expected to fetch more than three billion pounds ($3.9 billion).
The club is now effectively controlled by the government and permitted to operate under strict conditions which prevent transfer deals and new ticket sales and even forced the club merchandise store to close.
“As the licence conditions are written today, the sale would not be allowed,” Britain’s technology minister Chris Philp told Sky News.
“However, if a buyer emerged it would be open to that buyer or to that football club to approach the government and ask for the conditions to be varied in a way that allows that sale to take place.”
British property developer Nick Candy remains interested in making a bid, a spokesperson said in a statement, and was examining the details of Thursday’s sanctions announcement.
Chelsea said on Thursday it would seek changes to the licence under which it must now operate to allow the club to continue as normal as possible. The government has said that while Abramovich cannot benefit financially from the club, some changes might be possible.
“We’re in constant contact with the club…It’s now up to the club to apply for any amended licence,” Prime Minister Boris Johnson’s spokesman said.
“Chelsea have said that they will do that, and we’ll obviously work with the club and… the league to consider any operationally necessary changes.”
The Times newspaper cited unnamed sources at the club as saying the club was facing severe financial difficulty because of the restrictions the government had imposed.
“The licence allows the club to continue with day-to-day activities but the banks don’t have the risk appetite for it,” a source told the paper. “They’ve frozen some of the corporate credit cards. It’s put a lot more pressure on the club.”
SUSPENDED TIES
While Chelsea’s main shirt sponsor, mobile network Three, has suspended ties, another sponsor, Trivago, said would stick with the club.
“The uncertainty over the current ownership situation of Chelsea FC has been challenging. Moving forward, it is important to us to continue supporting the club,” the internet hotel search firm said in a statement.
“We are looking forward to a transition of ownership as soon as possible and want to support the club in this process.”
Three said on Thursday it had asked the club to remove its logo and was suspending its relationship, while shirt sleeve sponsor Hyundai Motor said it was considering its next move.
Thomas Tuchel, the Chelsea team manager, said players could “wear a message for peace” on the team shirts instead.
“It can never be the wrong message,” he said. “Maybe the worry is to find enough shirts to play in with the sanctions. But as long as we have enough shirts and the bus is full of fuel, we will arrive and be competitive.”
He said he trusted the British government to find a solution to the impact of the sanctions by the end of the season.
Separately, London-listed Russian steelmaker Evraz, in which Abramovich is the largest shareholder with a 28.6% stake according to Refinitiv Eikon, said on Friday that 10 of its 11 board members had quit.
($1 = 0.7643 pounds)
(Reporting by William James, Alistair Smout, Andrew MacAskill, Muvija M, and Michael Holden; additional reporting by Silvia Recchimuzzi and Simon Evans; editing by Mark Potter, Jason Neely, Angus MacSwan and Louise Heavens)
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Business
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
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Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
Business
Tesla profits cut in half as demand falls
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Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
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Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
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