COMPANY NEWS IN BRIEF

27 July 2020 | Business

Centrica to sell its subsidiary

Centrica Plc on said it was selling its North American subsidiary Direct Energy for US$3.63 billion to US integrated power firm NRG Energy, clearing the way for the new head of the British Gas owner to focus on its home markets.

The transaction was announced along with Centrica's half-year earnings, where the group reported a profit slump due to the Covid-19 impact and low commodity prices.

Both sets of shareholders welcomed the deal. Centrica's shares ended 16.7% higher, having surged almost 40% early on Friday, and NRG closed up 2.9%.

Centrica plans to use the cash from the sale to reduce net debt and contribute to its pension schemes, with its operations subsequently centred on the UK and Ireland.

"We had a number of expressions of interest in Direct Energy but it came down to the right price and the right buyer," Centrica Group chief executive Chris O'Shea told reporters on a conference call. O'Shea took over permanently as CEO in April.

The transaction comes at a time of flux for power providers on both sides of the Atlantic, as companies shape their businesses to best cope with changed energy demands amid the coronavirus pandemic, such as greater working from home. – Nampa/Reuters

Boeing to delay 777X

Boeing Co is preparing to delay its all-new 777X jet by several months or up to a year, three people familiar with the matter said, as the Covid-19 crisis exacerbates a drop in demand for the industry's

largest jetliners.

An announcement of the delay could come as early as next week when Boeing announces earnings, one of the people said.

A Boeing spokesman declined to comment on changes to the 777X timeline. He said it was continuing 777X flight tests and "working closely with our customers around the world as they continue to adapt to the evolving Covid-19 situation.

Boeing has been working to get the 777X, a larger version of the 777 mini-jumbo, into the hands of airline customers in 2021. That is already a year later than originally scheduled after snags with its General Electric GE9X engines. – Nampa/Reuters

Indivior to pay US$600 million

-Indivior Plc has agreed to pay US$600 million and have a subsidiary plead guilty to a felony charge to resolve US allegations that it engaged in an illegal scheme to boost prescriptions of its opioid addiction treatment Suboxone.

The US justice department announced the agreement after the subsidiary, Indivior Solutions Inc, pleaded guilty in Abingdon, Virginia, to making false statements related to healthcare matters.

The agreement came after the parent company was indicted in April 2019 in one of the few corporate prosecutions related to the US opioid addiction epidemic.

The indictment alleged Indivior deceived doctors and healthcare benefit programs into believing the film version of Suboxone, which has an opioid component, was safer and less susceptible to abuse than similar drugs.

The indictment said Indivior also used an internet and telephone program touted as a resource for opioid addicts to connect them to doctors it knew were prescribing Suboxone and other opioids at high rates and in suspect circumstances. – Nampa/Reuters

McDonald's instruct clients

McDonald's Corp said it would require customers to wear face masks in its US restaurants starting next month, as new coronavirus cases surge across the country.

The world's largest fast-food chain also said it would extend its pause on the re-opening of dining rooms in the United States for another 30 days.

At the start of July, McDonald's had planned to pause the reopening of it dine-in service by 21 days, according to a letter seen by Reuters.

Using face masks is the top recommendation from health experts and government officials looking to control the spread of the Covid-19 pandemic, which has infected more than 4 million people in the United States.

Other companies, including Walmart Inc, Target Corp and Starbucks Corp, have also made masks compulsory, even as Americans stay divided over their imposition, with some seeing it as a violation of their constitutional rights.

McDonald's said it would train its employees to address customers who decline to wear a face covering in a "friendly, expedited way". – Nampa/Reuters

Intel shares slumped

Shares of Intel slumped and its rivals surged after the US chipmaker signalled it may give up manufacturing its own components after falling far behind schedule developing its newest technology.

Intel plunged 15% after CEO Bob Swan told investors on a conference call late on Thursday that Intel's new 7 nanometer chip technology was six months behind schedule and that Intel may pay other manufacturers to produce its chip designs.

Designing and manufacturing its own personal computer and server chips has given Intel a lead over rivals for decades, and a move away from that model would strengthen smaller rival Advanced Micro Devices, which surged 15%.

"This, our 45th Intel earnings call, was the worst we have seen in our career covering the company," Bernstein analyst Stacy Rasgon wrote in a client note, cutting his Intel rating to "underperform".

"Frankly, none of the numbers matter. In fact, investors could have stopped reading the press release after the fourth line on the first page, which indicated Intel delaying their 7nm trajectory with yields running a year behind internal targets," Rasgon wrote. – Nampa/Reuters

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