COMPANY NEWS IN BRIEF

29 November 2021 | Business

Visa complains to US govt

Visa Inc has complained to the US government that India's "informal and formal" promotion of domestic payments rival RuPay hurts the US giant in a key market, memos seen by Reuters show.

In public Visa has downplayed concerns about the rise of RuPay, which has been supported by public lobbying from Prime Minister Narendra Modi that has included likening the use of local cards to national service.

But US government memos show Visa raised concerns about a "level playing field" in India during an Aug. 9 meeting between US Trade Representative (USTR) Katherine Tai and company executives, including CEO Alfred Kelly.

Mastercard Inc has raised similar concerns privately with the USTR. Reuters reported in 2018 that the company had lodged a protest with the USTR that Modi was using nationalism to promote the local network.

"Visa remains concerned about India's informal and formal policies that appear to favour the business of National Payments Corporation of India" (NPCI), the non-profit that runs RuPay, "over other domestic and foreign electronic payments companies," said a USTR memo prepared for Tai ahead of the meeting. -Nampa/Reuters

Tesla decides against state aid

Tesla said on Friday it has withdrawn its application for state aid for its planned battery factory near Berlin as CEO Elon Musk declared the electric vehicle maker opposed all subsidies.

The European Union in January approved a plan that included giving state aid to Tesla, BMW (BMWG.DE) and others to support production of electric vehicle batteries and help the bloc to reduce imports from industry leader China.

Tesla was expected to receive 1.14 billion euros (US$1.28 billion) in EU funding for its battery plant in Gruenheide, Brandenburg under the plan, with a final decision likely by the end of the year.

"Tesla has informed the Federal Ministry of Economics and the Brandenburg Ministry of Economics it is withdrawing its IPCEI application for state funding for the battery factory in Grünheide," a Tesla spokesperson said, referring to European subsidies allocated to so-called 'Important Projects of Common European Interest'.

Construction plans for the plant would not be affected by the decision, the spokesperson said.

"It has always been Tesla’s view that all subsidies should be eliminated," Musk posted on Twitter in response to a tweet by another user after Tesla said it had withdrawn its funding application. -Nampa/Reuters

LATAM files restructuring plan

Chile's LATAM Airlines Group SA said on Friday it has filed a reorganization plan, proposing an US$8.19 billion infusion of capital into the group, in a bid to exit its Chapter 11 bankruptcy.

The financing proposal will include a mix of new equity, convertible notes and debt, the group said in a statement, adding that it intends to launch an US$800 million equity rights offering to shareholders, upon confirmation of the plan.

"While our process is not yet over, we have reached a critical milestone in the path to a stronger financial future," said Roberto Alvo, chief executive of the largest airline in Latin America.

Recently, LATAM said it received several offers to fund the exit from Chapter 11 bankruptcy, each of which are worth more than $5 billion. The group filed for Chapter 11 bankruptcy protection in New York in May 2020 as world travel came to a halt amid the Covid-19 pandemic. read more

Upon emerging from Chapter 11, LATAM expects to have total debt of about US$7.26 billion and liquidity of about US$2.67 billion, the company said in the statement.

The Santiago-based company reported losses of some US$692 million in the third quarter, as the indebted company was still battling challenges from the pandemic. -Nampa/Reuters

Telecom Italia loses CEO

Telecom Italia (TIM) lost its fourth chief executive in six years on Friday after Luigi Gubitosi threw in the towel, following a clash with top investor Vivendi, a week after a US$12 billion takeover proposal by US fund KKR.

The former phone monopolist said in a statement the head of TIM Brazil, Pietro Labriola, had been named general manager so as to ensure the group continued to operate smoothly, confirming what sources had told Reuters earlier on Friday.

Chairman Salvatore Rossi, a former central bank official, took on Gubitosi's remaining powers, including the oversight of TIM's assets which matter for Italy's national security.

The CEO had offered to relinquish its responsibilities on Thursday, saying in a letter he did not want to stand in the way of the board giving prompt consideration to KKR's approach.

TIM's nominations committee will work with head-hunters Spencer Stuart to ensure a stable leadership for the group over the medium term, taking into account the evolution of TIM's structure and assets, it said. -Nampa/Reuters

Snam buys stake in Algerian gas

Italy's Snam has agreed to buy a stake in pipelines carrying Algerian gas into Italy in a move that could pave the way for hydrogen imports from Africa into Europe.

Europe's biggest gas infrastructure group said on Saturday it would pay energy company Eni 385 million euros (US$436 million) for a 49.9% stake in the pipelines to jointly control the assets with its fellow Italian company.

Snam, which makes most of its money from managing Italy's natural gas transport grid, has pledged to spend more on new, clean business lines such as green hydrogen.

Like other European gas grid operators, it is upgrading its national network to be hydrogen ready. "In the future, North Africa could also become a hub for producing solar energy and green hydrogen," Snam CEO Marco Alvera said in a joint statement with Eni. Snam, which runs most of Italy's gas storage facilities, also owns 20% of the TAP pipeline that carries Azeri gas into Italy.

The deal reflects the accelerating pace of planning taking place in the global oil and gas industry, keen to adapt as governments and activists ramp up the pressure to slash greenhouse gases. -Nampa/Reuters

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