CORPORATE NEWS
The Strategic Investment Fund announced by President Nicolas SARKOZY in November was officially created. Caisse des Dépots (CDC) holds majority ownership, 51%, and State ownership accounts for 49%
The MADOFF pyramid fraud spread to European banks: SOCIETE GENERALE announced « negligible exposure, below € 10 million » to Madoff Investment Securities LLC. BNP Paribas exposure was estimated at € 350mn , NATEXIS at € 450mn, RBS at GBP 400mn, BANCO de SANTANDER at € 1.2bn, FORTIS at €1.3bn and HSBC at USD 1mn
EDF acquired two major energy companies in less than a month: the Group took 50% ownership of US Constellation Energy for a total € 3bn and full ownership of British Energy for € 15.7bn
The ANTI TRUST Agency imposed a record € 565 MN fine to 11 steel industry manufacturers for illegal cartel activities: the Conseil de la Concurrence brought action against the French Federation of Metal Distributors, a national union, along with major steel manufacturers for operating a cartel between 1999 and mid 2004 including price fixing, and clients sharing in clear violation of anti trust laws. The Counseil concluded upon a five year investigation that the three main groups, PUM/Arcelor (Arcelor Mittal Group), KDI (subsidiary of Germany Group Kloeckner) and Descours & Cabaud (dealer headquartered in Lyon, France) took part in an agreement covering between 70% to 90% of the steel market. Groupe Arcelor Mittal was fined € 301 780 000 mn, Arcelor Profil €12 950 000 mn and AMD Sud Ouest €830 000, KDI €169 300 000mn and Descours & Cabaud SA € 82 550 000 mn and FFDM € 124 500. The investigation further proved that the cartel was set up at the highest levels and that companies were fully aware of their illegal activities due to notes and instructions found during the investigation such as « never say the word agreement », never give any information on our meetings », « avoid talking about it to colleagues. »
AIR FRANCE - KLM posted November passenger traffic down 0.8% despite the four-day pilots strike while Cargo activity fell -13.2% impacted by the slow down in trade. The European network saw traffic decrease by 5.8% with a 4.2% reduction in capacity. On the Americas and Asia network traffic declined -0.4% On the Africa and Middle East network traffic rose +3.3% The Caribbean and Indian Ocean network grew + 0.6% in traffic
Workers at FORD and PEUGEOT plants started their respective periods of days not worked, 10 weeks and 6 weeks effective this December until next January,as the lack of consumer demand and, globally, triggered substantial production reductions. As per union rules, workers will be paid 70% of their salaries (Ford) and 100% (Peugeot)
RENAULT announced temporary measures to boost sales on the French car market. The Group will extend the €1000 bonus measure for the purchase of a new vehicle with less than 160g CO2 per km to replace an automobile between eight to 10 years old. In addition, €1000 bonus will be granted for the purchase of recent second hand cars to replace vehicles that are over eight years old
ARCELOR MITTAL announced that 1400 administrative and sales representative jobs will be axed next year through buy-out packages;
AREVA was awarded € 200mn contract by EDF to supply nine replacement steam generators for all three loops of three of its 900 MW plants operated in France. Steam generators are used to transfer heat from the reactor coolant system to the secondary side, while keeping the two in perfect isolation. Steam generators, like nuclear vessel heads, are replaced to prolong the reactor’s service life. The contract includes the design, manufacturing and delivery of the nine components and all associated services. Work will be performed by AREVA’s Chalon/Saint-Marcel plant. Delivery of the first set of three steam generators is scheduled for December 2012 and manufacturing will start in 2010. The other two series will be delivered in 2014 and 2015 respectively
TOTAL was awarded three exploration licences in the 25th Oil and Gas Licensing Round of the UK’s Department of Energy and Climate Change. In the West of Shetlands area, Total and its partners in the Laggan and Tormore gas condensate discoveries, have been awarded part of the adjacent Block 205/4. Further north, Total will have a 56% interest in the exploration licence formed by Blocks 214/17, 214/21b and 214/22. In addition, in the Central Graben area of the North Sea, Total will have a 75% equity in Block 29/3b where it has a firm well commitment to drill the high temperature-high pressure Corfe Prospect. The Group also announced core shareholder in U.S. solar energy startup and signed up with Konarka, specialized in organic photovoltaic technology after Total Gas & Power USA (SAS) recently underwrote a share issue becoming first shareholder with a significant interest in the company. The stake will be slightly less than 20%. Co-founded in 2001 by Howard Berke and Alan Heeger, Nobel Laureate in Chemistry for his work on conductive polymers, Konarka is a U.S. startup actively developing third-generation organic solar energy technology
THALES will provide Oslo's public transport operators with complete ticketing and interoperability solutions for an e-ticketing system based on contactless smart media and ticketing machines. Oslo KTP, the public transport operator for the city of Oslo, will replace the current paper ticket with the contactless transport card, Flexus, in a wide scale, to be made available to Oslo’s inhabitants by early 2009. As part of the contract, Thales has equipped Oslo KTP with a fully integrated e-ticketing system covering over 525 buses, 72 trams, 7 boats and 94 metro stations
ALSTOM was awarded with the Swedish rolling stock company AB Transitio for trains to be used by public transport authorities Norrtåg AB in Northern Sweden and Västtrafik AB in the region of Västra Götaland (southwest of Sweden). This order is part of the 10-year rail development plan for the northern part of Sweden. The trains for Västtrafik will operate between Kungsbacka-Gothenburg-Alingsås. The new trains for Norrtåg will serve the new lines between Sundsvall-Umea and Umea-Lulea as well as the existing Sundsvall-Östersund-Storlien and Lulea-Kiruna lines. The new trains are Coradia Nordic EMUs (Electric Multiple Unit) with 4 articulated cars and they can reach up to 180 km/h. The train sets will be designed and assembled at Alstom’s Salzgitter site in Germany while the ONIX traction system will be constructed at the site in Tarbes, France. They will be delivered by autumn 2010. Coradia Nordic are particularly well-suited to extreme winter conditions thanks to the placing of technical equipment on the roof (traction, converters, air-conditioning system etc) and, are able to accommodate 228 passengers. The Coradia Nordic are also a part of Alstom’s environmental protection strategy: they are 95% recyclable and their distributed power optimizes the braking and acceleration of each carriage, which decreases energy consumption
RHODIA revised its objectives for the full year 2008 and has announced a profit warning: the Group recurring EBITDA is expected to be about 10% below the level achieved in 2007. Rhodia has been affected by the deteriorating economic context and is being impacted by an accelerated decline in demand in several of its end-markets. Customers’ inventory de-stocking practices have extended to numerous sectors, affecting in particular the Polyamide, Silcea and Novecare enterprises. Acetow, Energy Services and Eco Services enterprises remain resilient. Furthermore, lower demand is preventing the Group from capturing the positive impacts from the declining raw material and energy cost trends that were anticipated
GDF SUEZ, independent power producer in Brazil, has just completed construction of the Sao Salvador hydro-electric plant in northern Brazil, along the Tocantins River between the States of Tocantins and Goais, a concession the Group received in 2001. Sao Salvador is GDF SUEZ 15th power plant in Brazil and required a € 307mn investment. Production for the Sao Salvador Dam (148 MW) has been sold by auction, for a total amount of € 2bn over 30 year period starting in 2011. The Group has also started building the Jirau hydro-electric power plant, the country’s largest infrastructure project, and, in May 2008, a consortium led by GDF SUEZ was rewarded a 35-year concession to build, own and operate this 3 300 MW dam
CARREFOUR announced the opening of the Group’s 124th and 125th hypermarkets in the cities of Putian and Changsha, in south east China. Putian hypermarket total surface stands at 6 742 sq/m and Changsha counts 7 454 sq/m
VALEO, a major car equipment manufacturer, plans to cut down 1500 jobs nationwide from next January
LA REDOUTE, a household name for sales on catalogs, announced that over 600 jobs are to be axed by the end of this year. Workers at 3 SUISSES learned from press reports about the company's major restructuring plan involving nearly 400 positions. CHANEL announced the suppression of all temporary and short term positions or 200 staff to be made redundant by the end of the month
Over 10 tons of counterfeit Ferrero chocolate were seized by customs in Rungis for an estimated value of € 223 500. Upon controls, custom officers found a total 32 832 boxes of fake chocolate or 10 769 kg. Once analysed, the chocolates were found to be of very poor quality but with no threat to human health
Unemployment rose +3.2% in November to a total 2 068 500 jobless . Per age category, the under 25 years old were impacted the most +14.3% in one year as well as the over 50, +7.3%
President Nicolas SARKOZY announced €26bn Recovery Plan to safeguard industrial activities. Mr. Patrick DEVEDJIAN was appointed Minister of the Plan : the two year program which accounts for 1% of GDP includes measures to boost the automobile industry (new car buyers will receive €1000 bonus to replace automobiles over ten years old) the building works sector (100 000 new housing estates apartments will be purchased by the State) and the civil engineering works sector, (new roads, new highways, and new TGV lines will be built). Businesses will be reimbursed VAT and other company taxes within a shorter timeframe, and will be exempt from taxes on salaries for new employees. Regarding measures destined to improve consumption, the total amount loaned per household for a first acquisition of a newly built apartment, at zero rate, will be increased twofold. Food stamp recipients and individuals on precarious living conditions will benefit from €200 bonus before next April. The plan which will take the public debt to 3.9% from the current 3.1% was deemed unsatisfactory by unions and opposition leaders
Public Debt reached a record € 1248.8bn in Q3/2008 according to figures released by Insee
Several homeless were found dead due to sub-zero temperatures in and around Paris. Many shelters reached full capacity and in addition, a majority of homeless refuse to be taken to shelters where they feel safety and hygiene conditions remain dubious
LONDON BRENT Crude oil prices per barrel hit a record low USD 37.49, the lowest since December 2004. The first week of the month, crude oil had topped a previous low at USD 39.74
Following the conflict that erupted between Israel and the Gaza strip, due to rocket attacks by Hamas into Israel, Javier SOLANA, EU High Representative for the Common Foreign and Security Policy (CFSP) called for an immediate cessation of military actions on both sides. President Nicolas SARKOZY expressed his deepest concerns and preoccupation over the conflict escalation and violence in the south of Israel and in the Gaza strip. The President called for the rocket attacks into Israel to stop immediately and for bombardments of the Gaza strip by Israel to end likewise. According to United Nations reports, over 300 people have been killed in the Gaza strip and more than 1500 injured
Car gas consumption dipped a record -12.3% in November year on year according to figures released by the French federation of Oil Industries (UFIP) as a direct consequence of the global recession and despite lower oil prices. New PASSENGER CAR REGISTRATIONS dipped -5% in November year on year according to CCFA figures and sales of Light Industrial Vehicles plunged -17.2% on the same period. Between January and November, 1 896 622 new passenger cars were sold or +1.6% while sales of LiV, 428 869 units, grew +2%
Mr. Yazid SABEG was appointed Equal Opportunity Commissioner by President Nicolas SARKOZY
Contracts worth over € 6bn between France and Brazil were agreed upon during President Nicolas SARKOZY’s two-day visit in Brazil: the contracts, which include knowledge transfer, comprise the purchase of several helicopters from the Eurocopter company, and submarines from DCN. France and Brazil also agreed to pursue joint efforts via future agreements on space, and bio-diversity
Government announced that household gas prices will remain stable throughout the winter period. Consumers expressed discontent as gas prices, pegged against crude oil prices, have stagnated despite -51% London Brent price cut in the last six months. In four years, household gas prices have gone up 50%
BANQUE de FRANCE has revised down France’s GDP to -0.7% in Q4/08; according to the National Office of Statistics latest economics studies , (INSEE) France is in recession, as GDP is projected to fall to -0.8% in Q4/08 and to -0.4% in Q1/09. Unemploment is expected to rise above 8% next year. The Minister of the Economy, Mrs. Christine LAGARDE, contradicted INSEE's projections and maintained that GDP will be up between +0.2% and +0.5% next year. GDP declined -0.2% in each the Euro area and the EU27 in Q3/08 compared with the previous quarter, according to first estimates released by Eurostat. In the second quarter of 2008, growth rates were -0.2% in the Euro area and flat in the EU27. Member states with two consecutive quarters of negative growth were Germany (Q2 -0.4% and Q3 -0.2%) Estonia (Q2-0.8% and Q3 -1%) Italy (Q2-0.4% and Q3 -0.5%) and Sweden (each quarters -0.1%)
EUROPEAN BOURSES plunged upon news of the US Senate rejection of the Automobile Industry rescue package : CAC 40 -4.9%, Dax -4%, Footsie -3.2% In less than a year, the CAC 40 financials along with the automobile industry accounted for valuations with the strongest losses: BNPParibas -65%, Peugeot -78% In one year the index fell -42%
Residential permits dived -17% in November year on year according to Dares figures
INTERNET ACCESS in FRANCE per household increased +51% between 2006-2008 to 60% of total population, similarly in the EU 27, while broadband jumped 90% on the same period to 57% of households (48% in the EU 27) according to a Eurostat survey. On the same period, interacting with public authorities on the web for private purposes among French Internet users accounted for the highest rate of activites or 43% compared with internet banking 40% reading newspapers or magazines online 22% ordering goods or services 28% and job hunting-sendig applications 17% Member states with the highest proportion of individuals performing these activities, above 50% on average, were the Netherlands, Denmark, Finland (Internet banking 72%), Sweden and Luxembourg. Norway recorded the highest rate 73% for reading newspapers or magazines online
The European Commission has adopted a temporary framework for Member States to tackle the effects of the credit squeeze on real economies: temporary measures to allow Member States to address the exceptional difficulties of companies to obtain finance include, subsidised loans. Member States will be able to grant such loans without notification of individual cases, in particular, for the production of green products (meeting environmental protection standards early or going beyond such standards), loan guarantees at a reduced premium, risk capital for SMEs up to € 2.5 million per SME per year (instead of the current €1.5 million) in cases where at least 30% (instead of the current 50%) of the investment cost comes from private investors, and, direct aids of up to €500,000 per company for the next two years, to relieve them from current difficulties. All measures are limited until the end of 2010 and subject to conditions. Based on Member States' reports, the Commission will evaluate whether the measures should be maintained beyond 2010, depending on whether the crisis continues
The EU 27 unanimously agreed on 20% pollution reduction by the year 2020. Some new east European member states such as Poland opted out so as to safeguard their coal led industries
Members of the European Parliament (MEPs) approved the Small Business Act : the resolution was adopted with 614 votes in favor, 11 against and 9 abstentions.The SBA must be formally approved by the European Council in order to be effective and implemented by each member states
EUROPEAN CENTRAL BANKS reduced rates by 75 basis points to 2.50%
CHINA expressed strong discontent with President Nicolas SARKOZY’s meeting with the Dailaî Lama, and warned France of potential retaliatory economic measures. Web sites in China called for the boycott of French products. Commentators underlined that CHINA made no statement to the attention of the EUROPEAN PARLIAMENT during the Dailaî Lama's official guest visit
