COMPANY NEWS IN BRIEF

11 September 2020 | Business

Penney reaches tentative deal

J.C. Penney Co Inc reached a tentative deal with landlords and lenders valued at US$1.75 billion to rescue the beleaguered department store chain from bankruptcy proceedings, averting a liquidation that would have threatened roughly 70 000 jobs.

Mall owners Simon Property Group Inc and Brookfield Property Partners LP have teamed up to acquire J.C. Penneyâs retail operations and are putting the finishing touches on an agreement.

The deal would carve J.C. Penney into three pieces. In addition to the retail operations the landlords are purchasing, lenders would take control of two other entities housing some J.C. Penney stores and the retailer's distribution centres.

The landlords are poised to put US$300 million toward the rescue and have agreed to a nonbinding letter of intent with J.C. Penney, he said. The operating company they are acquiring would assume US$500 million of debt.

J.C. Penney plans to move at "lightning speed" to seek approval of the deal from a bankruptcy judge in early October, Sussberg said. "We are in a position to move this into the endzone," he told US Bankruptcy Judge David Jones. – Nampa/Reuters

Vodafone CEO warns Italy

The head of Vodafone Group said Italy's plan to create a single fast broadband network in which Telecom Italia would hold a majority stake could be a step backwards since it effectively amounted to renationalisation and re-monopolisation.

In an article in Politico on Wednesday, Nick Read said Rome was looking to recreate the fixed-line monopoly that previous Italian governments and EU institutions had dismantled.

"This would leave would-be fixed broadband providers with only one seller of wholesale access to the combined network - yet again Telecom Italia (TIM)," he said.

Last month TIM and state lender CDP agreed to create a national ultrafast grid operator combining the former phone monopoly's network assets with those of smaller rival Open Fiber.

Such an operator could be majority-owned by TIM but its independence and third-party status would be guaranteed by a shared governance mechanism with CDP, which would emerge as a major shareholder in the venture, open to other players.– Nampa/Reuters

Tesco to trial drone deliveries

Tesco, Britain's biggest retailer, said on Wednesday it would next month trial grocery home deliveries with drones as it experiments with different ways to reach more customers.

Food retailers across the globe have rapidly expanded their pick-up and delivery services in the face of the Covid-19 pandemic and several are following US giant Amazon in trialing drones.

Separately on Wednesday, Walmart, the world's biggest retailer that owns Asda in Britain, said it would run a pilot project for delivery of grocery and household products through drones, along with end-to-end delivery firm Flytrex.

"They (Manna) have already proven the capability, the question is how do we take that capability and apply it to Tesco and that's the detail that's been worked on now before we get to the trial," Lewis said during a webcast Tesco hosted on "disruptive innovation".

The supermarket group's innovation director Claire Lorains said the trial would focus on the delivery of just a few grocery items, such as forgotten recipe items, with deliveries made within 30 minutes to an hour of an order being made. – Nampa/Reuters

Tesla shares bounce after plunge

Tesla Inc shares bounced after the electric car maker suffered the biggest one-day percentage drop in the company's history.

Shares jumped 6.88% a day after falling more than 21% as the company was passed over for inclusion in the benchmark S&P 500 index. The decline on Tuesday chopped off about US$80 billion in Tesla's market value, or more than the combined value of fellow automakers General Motors and Ford Motor.

The stock has been on a meteoric climb this year, rising about 400% through Sept. 4, including a gain of more than 74% in August as expectations grew the company would be included in the S&P 500 after its second-quarter earnings cleared a hurdle for inclusion in the index.

S&P late Friday announced it would include online craft seller Etsy Inc, semiconductor equipment maker Teradyne Inc and pharmaceutical technology company Catalent Inc to the S&P 500 instead.

Tuesday's decline pushed the stock down to a closing level of US$330.21, just above its 50-day moving average of US$329.63, a key technical support level. – Nampa/Reuters

Ex-VW CEO to face charges

Former Volkswagen chief executive Martin Winterkorn will face charges of conspiracy to commit organised commercial fraud with a high likelihood of conviction, a court probing the carmaker's diesel emissions scandal said on Wednesday.

A court in Braunschweig, Germany, near where Volkswagen is headquartered, expanded the list of charges beyond fraud to include organised commercial fraud, preliminary remarks published by the court at the start of the trial showed.

Winterkorn and other Volkswagen executives face charges for their role in allowing diesel cars with illegal emissions-masking software to hit the road.

Because Volkswagen vehicles had higher pollution levels than was declared, they should have been subject to higher road tax, and former Volkswagen executives should therefore also face charges of tax evasion and false advertising, the court added.

The scandal, which was uncovered by US authorities in September 2015, has cost Volkswagen more than 30 billion euros (US$35 billion) in refits, legal fees and settlements, and resulted in a drastic management and strategy overhaul. – Nampa/Reuters

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