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16:37GMT 26Jan2009-Iberia down as BA merger doubts increase
Shares in Iberia IBLA.MC shed 3.6 percent, tracking heavy losses in its merger partner British Airways BAY.L after the UK airline issues a profit warning and its chief executive Willie Walsh calls the proposed tie up into question.
BA’s announcement that it expects to make a 150 million pounds operating loss for 2008 send the UK flag carrier’s shares tumbling over 8 percent, further eroding a market capitalisation which is already smaller than its merger partner’s.
“As BA’s share price falls, so does the possiblility of the merger going ahead. The UK airline’s shareholders are unlikely to accept merger terms which reflect the market value of the two companies,” a Madrid-based dealer said.
The Financial Times cited Walsh on Saturday as saying that the current market valuation of BA, currently lower than Iberia, is unacceptable for determining the share exchange terms between the two carriers.
Even before today’s losses added to the collapsing share price of BA, the market value of both airlines gave Iberia shareholders 50.4 percent of the merged company, compared to the initial proposed ratio of 65 percent ownership by BA.
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For more information on BA’s profit warning, click on [nLQ406678]
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15:44GMT 26Jan2009-Goldenport up after rescheduling deliveries
Shares in Goldenport GPRT.L gain 3.8 percent as the shipping company reaches an agreement with COSCO (Zhoushan) Shipyard Co. to reschedule the delivery dates of the four new-build 57,000 DWT bulk carriers on order with the yard.
Goldenport, which owns and operates a fleet of container and dry bulk vessels, says the above rescheduling was agreed at no additional cost to the company, and that taking delivery at a later time, when market conditions may have improved, should benefit cash flows during the current challenging market conditions.
“We believe Goldenport will survive the current market turmoil,” says Panmure Gordon, which has a “buy” recommendation on the stock.
“Container revenues are supported by longer term charters and despite short term weakness in dry bulk, medium to long term growth prospects remain sound, driven particularly by economic growth in the Far East,” says the broker.
“We expect that substantial scrapping in the current years will improve the supply/demand imbalance and help restore rates,” it says.
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