Company news in brief
27 September 2021 | Business
A deadline passed on Thursday for China Evergrande, the world’s most indebted property company, to pay US$83.5 million in interest on a dollar bond. With US$305 billion in liabilities, Evergrande is struggling to meet debt obligations and global markets are watching for signs of default.
Evergrande has a 30-day grace period.
China Evergrande's electric car unit on Friday warned that without a strategic investment or the sale of assets it faces an uncertain future with its ability to pay staff and suppliers and mass-produce vehicles at risk.
Some Chinese banks, insurers and shadow banks stopped offering new credit to property developers.
China's central bank again injected cash into the banking system. – Nampa/Reuters
United Airlines fined for tarmac delays
United Airlines was fined US$1.9 million Friday by the US Transportation Department for violating federal rules on long tarmac delays and ordered to cease future similar violations.
The department said between December 2015 and February, United allowed 25 flights to remain on the tarmac for lengthy periods without allowing passengers to deplane.
United said Friday it remains "committed to fully meeting all DOT rules and will continue identifying and implementing improvements in how we manage difficult operating conditions."
The department said this is the largest fine of its kind ever imposed and impacted a total of 3 218 passengers. The Biden administration has pledged to take a tough line on airline consumer actions.
United noted "ultimately only 25 out of nearly 8 million flights operated by United" and its partners warranted "enforcement action" over more than five years. – Nampa/Reuters
United Breweries, Carlsberg fined
India's antitrust watchdog on Friday imposed a penalty of US$102 million on Heineken-controlled beer giant United Breweries and US$16 million on the local unit of Denmark's Carlsberg in a case related to cartelisation of beer prices in the country.
The order comes after a long-drawn investigation that in 2018 saw Competition Commission of India (CCI) raiding the offices of the brewers. The raids happened after rival Anheuser Busch InBev told the watchdog it had detected an industry cartel in India after it acquired operations of SABMiller Plc.
A detailed CCI investigation, reported by Reuters last year, found that the companies collectively strategised in seeking price increases in several states, forging a cartel.
In a final order published Friday, the CCI announced penalties of 7.5 billion rupees on United Breweries and 1.2 billion rupees on Carlsberg, after the amounts were lowered as the companies cooperated with the investigators. AB InBev was given a 100% exemption from penalties in the case as it alerted the CCI about the cartel, the order added. – Nampa/Reuters
Alibaba to divest in Chinese broadcaster
An investment arm of Chinese e-commerce giant Alibaba Group Holding Ltd, targeted in a regulatory crackdown, will divest its entire stake of 5.01% in broadcaster Mango Excellent Media Co Ltd, the media firm said.
The sale comes less than a year after the investment in December last year, as Chinese authorities mount an anti-trust crackdown on large tech companies.
One major target has been Alibaba, which faced a fine of US$2.75 billion over anti-competitive practices.
In Thursday's filing to the stock exchange, the media company said Alibaba's investment arm would seek a waiver from a one-year lockup to which it committed at the time of its investment
Since then, shares of Mango Excellent Media have fallen roughly 40%. The firm, based in China's western province of Hunan, produces Internet and television content besides running a shopping division. – Nampa/Reuters
Nike warns on holiday delays
Nike Inc on Thursday cut its fiscal 2022 sales expectations and said it expects delays during the holiday shopping season, blaming a supply chain crunch that has left it with soaring freight costs and products stuck in transit.
Months-long factory closures in Vietnam, where about half of all Nike footwear is manufactured, have piled more pressure on global supply chains already reeling from the impact of the pandemic.
The Beaverton, Oregon-based company's shares, which are down about 9% from their record high hit in August, fell 3.3% in extended trading after it said it now expects a mid-single-digit increase in full-year sales growth, versus the low-double-digit increase it had previously estimated.
Nike said it had lost 10 weeks of production in Vietnam so far and it would take several months to ramp back to full production.
Nike said revenue rose to US$12.25 billion from US$10.59 billion in the first quarter ended Aug. 31, while analysts on average had expected US$12.46 billion, according to IBES data from Refinitiv. – Nampa/Reuters