28 September 2020 | Business

Kioxia to scrap IPO plan

Kioxia Holdings Corp, the world's second-largest memory chipmaker, will scrap plans for an initial public offering (IPO) as tensions between China and the United States have been rising, the Nikkei Business magazine reported on Sunday.

The reported decision comes after Kioxia earlier this month set a tentative price range for an IPO in Tokyo that put the market value lower than 2 trillion yen (US$18.94 billion), the price that a Bain Capital-led group paid for the company two years ago.

Kioxia, formerly known as Toshiba Memory, had planned to list on the Tokyo Stock Exchange on Oct. 6. Toshiba said in a statement the company was not in a position to comment on Kioxia's IPO. Bain Capital could not be immediately reached for comment.

The memory chip market is bracing for an impact from tighter US restrictions on Huawei Technologies Co Ltd that came into force this month. Kioxia warned the tighter rules could cause memory chip oversupply and drive down market prices. -Nampa/Reuters

Commerzbank poaches Knof as new CEO

Manfred Knof, head of Deutsche Bank’s retail business in Germany, will assume the top spot at Germany’s No. 2 lender on Jan. 1.

He succeeds Martin Zielke, who resigned this summer in the wake of a revolt led by the private equity investor Cerberus, one of the lender’s largest shareholders who was pressing for big changes at the bank.

The appointment allows Commerzbank to move forward with a new strategic plan that was put on hold until a new leader was found. The bank is looking at branch closures and shedding international staff to save costs.

Hans-Joerg Vetter, chairman of Commerzbank’s supervisory board since last month, has told employees that the lender is not a “restructuring case, but Commerzbank must become more efficient”.

“It needs to increase its revenues, reduce costs, and to question the status quo,” Vetter told employees, according to a transcript seen by Reuters. - Nampa/Reuters

Mitsubishi Motors to cut jobs

Mitsubishi Motors Corp 7211.T will seek voluntary retirement from 500 to 600 employees, mostly in management, in Japan from mid-November to cut costs, two sources familiar with the matter told Reuters on Saturday.

The auto company is expected to post a net loss of 360 billion yen in the financial year to March 2021, hurt by a plunge in sales due in part to the coronavirus pandemic.

The company plans to solicit voluntary retirement from management employees aged 45 years and over in Japan at its headquarters and other sites, such as its Okazaki plant in Aichi prefecture and Mizushima plant in Okayama prefecture, the sources said.

The coronavirus crisis has worsened conditions at the company, which is already battling falling sales in its largest markets of China and Southeast Asia, which account for a quarter of its sales.

As part of its restructuring plan, Mitsubishi, a junior member of the Nissan-Renault automaking group, has said it would stop making the Pajero SUV crossover model next year and close the plant in Japan that makes the vehicle. - Nampa/Reuters

American Airlines secures US$5.5 billion

American Airlines AAL.O said on Friday it has secured a US$5.5 billion government loan and could tap up to $2 billion more in October depending on how the US Treasury allocates extra funds under a $25 billion loan package for airlines.

Airlines have until Sept. 30 to decide whether to take the US Treasury loans, which were authorized under the CARES Act coronavirus relief bill passed by Congress in March.

American Airlines was originally allocated US$4.75 billion, but carriers including Delta Air Lines DAL.N and Southwest Airlines LUV.N have already said they do not intend to take their share of the package, opening the door for the funds to be used by other airlines.

Fort Worth, Texas-based American said it has already drawn down US$550 million of the Treasury loan, which is backed by its loyalty program. The loans also require airlines to issue warrants and carry restrictions on executive compensation and buybacks.

Among other carriers, United Airline UAL.O said this week it will tap the Treasury loans, but it was not clear whether the airline would only seek its US$4.5 billion share or more. - Nampa/Reuters

Judge to hold hearing on planned TikTok

A judge will hold a hearing on whether to allow a Commerce Department ban on new TikTok downloads from Apple Inc and Alphabet Inc Google app stores from taking effect.

The Justice Department faced a 2:30 p.m. EDT (1830 GMT) Friday deadline to either delay the ban or oppose TikTok’s preliminary injunction. It filed its objection under seal, citing submissions made by TikTok’s Chinese owner, ByteDance, that include confidential business information.

ByteDance has said it made a preliminary deal for Walmart Inc and Oracle Corp to take stakes in the short video sharing app, but the exact terms of the agreement remain unclear.

Another US judge, in Pennsylvania, is also considering issuing a preliminary injunction after three TikTok content creators filed suit last week arguing they would “lose access to tens of thousands of potential viewers and creators every month, an effect amplified by the looming threat to close TikTok altogether.”

On Sept. 20, a judge in California issued a preliminary injunction that blocked a similar order from taking effect on Tencent Holdings’ WeChat app. The Justice Department has asked the judge to allow the ban to take effect pending appeal. – Nampa/Reuters

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