Volkswagen plans on merging its components business and mulls asset sale

According to sources, German carmaker Volkswagen AG plans to combine the components business of its brands and divest certain assets as part of its strategy to navigate itself out of the emissions crisis.

The company’s senior management outlined its plans to the board, and may disclose it to investors by Thursday.

According to sources, the company plans to merge the components units of each brand into one new entity that would include about 70,000 employees at more than two dozen locations worldwide, allowing it to save costs and boost efficiency from a single management.

Currently, there were no plans outlined by VW to spin off or sell the new VW components unit.

VW is also likely to announce plans for a portfolio review, which could lead to the sale of non-core assets. While no decisions have been made on which assets are part of the sale, ones that could end on that list include motorcycle brand Ducati, the MAN Diesel & Turbo business and propulsion specialist MAN Renk.

An initial public offering of the trucking business could also be considered in future.

Source: Bloomberg

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Government considers merging Hanjin Shipping and Hyundai Merchant Marine

The government of South Korea stated that they would consider merging ailing Hyundai Merchant Marine (HMM) and Hanjin Shipping, should they successfully normalize their operations. Currently, the two debt-riddled shippers are undergoing restructuring programs.

Depending on the outcome of the program, state-run Korea Development Bank (KDB) would emerge as the controlling stakeholder of the firms, whilst the government would then lead the merger of the pair in the future.

Restructuring update:

According to sources, Hanjin Shipping continued to struggle to obtain a cut in charter rates during negotiations with the owners of its chartered fleet. The charter rate cut was one of the key conditions set by its creditors for the company to avert court receivership.

According to sources, Hanjin Shipping, has been in talks with about 22 owners of chartered ships since April 2016, but reported little progress during negotiations.

Hanjin’s struggle for a charter rate cut was in stark contrast to its smaller local rival, Hyundai Merchant Marine, which has reached an agreement with its ship owners to cut charter rates by 21%.

Source: KoreaTimes

 

 

India’s RBI eases guidelines for asset restructuring

India’s Reserve Bank of India (RBI) relaxed guidelines for lenders restructuring large stressed loans, a move that could allow banks to more effectively manage bad loans.

As per RBI’s statement on Monday, lenders would be allowed to differentiate between stressed loan accounts into the following two categories.

  • The sustainable debt portion that banks, or a lending syndicate, deem repayable and that the borrower would continue repaying on existing terms.
  • The second is the remainder that a borrower is deemed unable to repay, which can now be converted into equity or convertible debt, giving lenders a chance to eventually recover funds if and when the borrower is able to turn around its business.

However, it should be noted that the above categories would only apply on loans of over INR 5bn ($74m) from a single bank or a syndicate, and only if a borrower’s project is already in commercial operation.

The move comes amid RBI’s deadline of March 2017 to banks to clear up their balance sheets of non-performing loans, which has swelled to about $120bn.

Source: Reuters

 

Hercules Offshore lays off 60 employees at its Houston headquarters

Offshore drilling services firm Hercules Offshore, which filed its second bankruptcy in less than a year, laid off 60 employees at its Houston headquarters.

The company is expected to undertake further measures whilst undergoing restructuring.

As part of the bankruptcy process, Hercules anticipates a complete shutdown of its facilities.

This has resulted in the permanent terminations of 60 employees at the company’s Houston headquarters, according to data sent to the Texas Workforce Commission (TWC).

Source: RigZone

Adani India interested in SunEdison’s Indian assets

Adani Green Energy, a subsidiary of the Adani Group, was looking to acquire renewable energy projects owned by SunEdison India, subsidiary of the bankrupt parentco SunEdison.

Soon after a bankruptcy filing by the US-based developer, several Indian companies were reported to have expressed interest in acquiring SunEdison India’s projects.

SunEdison India already operates 700 MW of renewable energy capacity, mostly in the form of solar power projects, with an additional 1.7 GW under development. The company sold 425 MW of solar projects in India to its yieldco TerraForm Global for $231m in 2015.

The company also owns wind energy projects, some of which it acquired last year from Fersa Energías Renovables.

Around 1,000 MW of solar capacity is being developed or secured by SunEdison in competitive auctions, which includes the 500 MW project SunEdison won in the Andhra Pradesh auction.

The project was among the most economical projects in India, in terms of tariff.

Apart from Adani Green Energy, Tata Power Renewable Energy is also believed to have expressed interest in acquiring SunEdison’s assets.

Source: CleanTechnica

South Korean shipbuilders sign MOUs for Iranian $2.4bn shipbuilding projects

In a welcome move which temporarily diverts the financial pain suffered by South Korean shipbuilders, Hyundai Heavy Industries (HHI) and Daewoo Shipbuilding & Marine Engineering Co (DSME) have reached preliminary deals, collectively estimated at $2.4bn with an Iranian shipping company Islamic Republic of Iran Shipping Lines (IRISL) and an Iranian petroleum company Iranian Offshore Oil Co. (IOOC) to build ships, tankers and offshore equipment.

However, the efforts have fallen short of reaching official contracts as the companies have just signed memorandum of understandings (MOUs).

Hyundai Mipo Dockyard, a subsidiary of HHI, signed a MOU with IRISL for orders of 10 tankers and at least six handy-size bulk carriers.

Hyundai Heavy was also in talks with IRISL for building around six container carriers with a 14,500 TEU capacity. In this deal, however, HHI was known to be competing with China’s Dalian Shipbuilding Industry Co.

IRISL, which operates about 115 oceangoing vessels, with a total of capacity of 3.3m tons, has an aging fleet which requires urgent replacement. While IRISL was modernizing its vessels, the company was chartering ships from foreign shipping companies including Greek carriers.

DSME was in negotiations with IOOC to seal orders of at least five jack-up rigs. But the deal also reached just signing a MOU.

Separately, Daewoo’s creditors have urged the shipbuilder’s workers to refrain from going on a strike as the restructuring plan outlined by the company had proposed job cuts in order to stay viable, financially.

Source: Business Korea

 

Creditors urge Daewoo Shipbuilding’s workers not to go on strike

According to sources, creditors of South-Korea’s Daewoo Shipbuilding & Marine Engineering urged the company’s workers to refrain from going on strike, saying that it would deter the ongoing efforts to restructure the financially shaky firm.

Sources state that about 7,000 unionized workers at Daewoo Shipbuilding’s yards are scheduled to vote on whether or not they will launch a strike, claiming that the shipbuilder’s restructuring schemes submitted to its creditors negatively impacts the workers employment.

The results of the decision to strike is expected to come out by late Tuesday.

The company and union, in particular, are also at odds over the plan to slash the workforce by an additional 2,300 to 10,000 by 2019.

Last year, Daewoo Shipbuilding’s creditors provided KRW 4.2tn ($3.58bn) in financial aid to prevent its workers from going on a strike. Since August 2015, the creditors, led by state-run Korea Development Bank, have provided KRW 3.2tn in financial help to the shipbuilder.

Last week, the shipbuilder mapped out a KRW 5.3tn self-rescue plan, approved by its creditors, which includes asset sales and a spin-off of key business units.

Separately, the union of Hyundai Heavy Industries is set to hold a meeting of its representatives on Friday to decide on whether to go on strike.

Source: Korea Times