Edition:
United Kingdom

Ed Cropley

Breakingviews - Rolls-Royce self-harms by selling family silver

27 Aug 2020

LONDON (Reuters Breakingviews) - Rolls-Royce’s plans to flog chunks of the family silver look like self-harm. Although the 2 billion pounds ($2.6 billion) it hopes to raise will please the struggling British jet-engine maker’s lenders, Rolls will be left with a permanent limp, assuming it eventually recovers from the damage caused by Covid-19 lockdowns. 

Breakingviews - BT would be high-risk private equity double play

24 Aug 2020

LONDON (Reuters Breakingviews) - Does anybody really want to buy BT? Despite nearly four decades as a private company, Britain’s former state telecommunication monopoly has struggled to balance the demands of politicians and shareholders. With Prime Minister Boris Johnson targeting rapid broadband rollout as a solution to British inequality, the tension is particularly acute. But that may provide a new owner with a possible edge to add to BT’s juicy breakup potential.

Breakingviews - Cable Cowboy makes pricey Swiss return call

12 Aug 2020

LONDON (Reuters Breakingviews) - Cable Cowboy John Malone has pulled an aggressive pirouette on a tricky Alpine pass. Liberty Global, the telecoms group founded by the U.S. billionaire, is paying $7.4 billion for Sunrise Communications less than a year after failing to persuade it to buy its own Swiss unit. It’s a riskier and more expensive deal than the original plan, but one Malone can probably live with.  

Breakingviews - Aramco’s dividend defences are triple-locked

10 Aug 2020

LONDON (Reuters Breakingviews) - Saudi Aramco has deployed its triple-bottomed dividend defences sooner than expected. The Saudi state energy giant is handing $18.75 billion to investors this quarter even though earnings plunged to little more than a third of that amount. It’s a contrast with rivals BP and Royal Dutch Shell, which both trimmed their payouts. But even if crude demand plunges again, the $1.8 trillion firm has multiple ways of ensuring rewards for shareholders.

Breakingviews - BP gets serious about tough corporate reshaping

04 Aug 2020

LONDON (Reuters Breakingviews) - Bernard Looney is betting BP’s house on his green energy ambitions. Besides cutting the dividend to free up cash for renewable investment, the chief executive of what is still essentially a 61 billion pound oil and gas company plans to reduce hydrocarbon production by 40% over the next decade.  

Breakingviews - British public would end up paying for Huawei ban

08 Jul 2020

LONDON (Reuters Breakingviews) - British consumers could end up paying for the government’s Huawei Technologies red card. If Prime Minister Boris Johnson imposes a total ban on the Chinese company’s equipment from superfast 5G networks, mobile operators BT and Vodafone may have to spend over a billion pounds ripping out and replacing existing Huawei kit. The bill for the sudden change will land with taxpayers.

Breakingviews - Gold mining in Greenland is smarter than it sounds

03 Jul 2020

LONDON (Reuters Breakingviews) - AEX Gold is setting the early pace in a global warming-fuelled scramble for Greenland’s mineral wealth. The Canadian miner wants to restart bullion production on the giant ice-bound island with 45 million pounds unearthed from a planned UK listing. The idea is less sketchy than it looks.

Breakingviews - Lufthansa bailout rebel has jobs trump card

23 Jun 2020

LONDON (Reuters Breakingviews) - German billionaire Heinz Hermann Thiele’s threat to shoot down Deutsche Lufthansa’s 9 billion euro ($10 billion) bailout may not be as suicidal as it sounds. Tipping the ailing airline into bankruptcy would wipe out the 79-year-old brakes tycoon’s 715 million euro investment, but would also humiliate Chancellor Angela Merkel’s administration. There’s a way out that benefits them both.

Breakingviews - Tesla kills three birds with one Congolese stone

17 Jun 2020

LONDON (Reuters Breakingviews) - Elon Musk is giving his rivals the heavy metal blues. By securing 6,000 tonnes a year of cobalt directly from mining giant Glencore’s Democratic Republic of Congo operations, the Tesla boss is guaranteeing plentiful supplies of the battery ingredient while minimising headaches over its provenance. With China hoovering up more and more of the blue metal, he’s also putting the squeeze on electric vehicle competitors like General Motors and Volkswagen.

Breakingviews - Britain has more to lose from a Huawei U-turn

10 Jun 2020

LONDON (Reuters Breakingviews) - Boris Johnson is threatening to choose sides in the global telecom standards battle. Six months after granting Huawei Technologies a limited role in Britain’s next-generation mobile networks, the prime minister is facing renewed pressure to ban the Chinese giant entirely. That would carry big costs. It would also suggest that post-Brexit Britain is a weak negotiator.

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