Anheuser-Busch InBev adds Citi, BAML to banks working on $5 billion Asian IPO: sources

Anheuser-Busch InBev adds Citi, BAML to banks working on $5 billion Asian IPO: sources

HONG KONG (Reuters) – The world’s biggest brewer, Anheuser-Busch InBev, has added Citigroup and Bank of America Merrill Lynch to the team of banks working on the sale of its Asia-Pacific business, three people with direct knowledge of the matter told Reuters.

FILE PHOTO: The logo of Anheuser-Busch InBev is pictured outside the brewer’s headquarters in Leuven, Belgium February 28, 2019. REUTERS/Francois Lenoir

The two join Morgan Stanley and JPMorgan, both of which are the sponsors, or leads, for the planned Hong Kong initial public offering (IPO) which could raise up to $5 billion for the heavily indebted brewer, the people said, declining to be identified as they were not authorized to speak to the media.

With main markets China and Australia, the region last year made up 18 percent of group volume and 14 percent of underlying operating profit, which in turn rose 13 percent to $3.1 billion. It was not clear how much of the business was up for sale.

AB InBev and BAML did not immediately respond to a request for comment. Citi declined to comment.

The Leuven, Belgium-based maker of Budweiser, Corona and Stella Artois brands aims to spin-off its Asia-Pacific business to reduce leverage, the people said.

AB InBev’s net debt stood at $102.5 billion at the end of December, a figure inflated by its late 2016 purchase of nearest rival SABMiller for around $100 billion. AB InBev wants to bring its net debt/EBITDA ratio to around two times from a multiple of 4.6 at the end of last year. With that goal, it has halved its proposed dividend and said payouts will only grow slowly.

While AB InBev’s shares have risen 19 percent since reporting forecast-beating earnings in February, the brewer is battling to reverse a longer share price decline. Over the past two years, its shares have fallen 24 percent, in contrast to rivals Heineken and Carlsberg, which have gained 15 and 28 percent respectively.

The IPO would not be the first time AB InBev has sold Asia-Pacific assets to reduce debt. After InBev bought Anheuser-Busch in 2008, AB InBev sold South Korean unit Oriental Brewery to private equity firm KKR – only to buy it back in 2014.

The IPO is slated for the second half of the year and the brewer expects to file with the Hong Kong stock exchange in the first half, the people said. One of the people said the filing would happen either later this month or early May.

At $5 billion, the IPO could be the largest in Hong Kong this year, where the flood of companies looking to go public has slowed to a trickle.

Companies have raised $2.9 billion through Hong Kong listings so far this year, lagging the $6.4 billion raised on New York’s Nasdaq, showed Refinitiv data as of Friday.

Hong Kong topped all other exchanges globally last year with stock market listings raising $36.3 billion. This year, however, is widely expected to be slower due to thinning numbers of Chinese companies looking to go public, particularly in tech.

Reporting by Julie Zhu and Julia Fioretti; Additional reporting by Kane Wu in HONG KONG and Philip Blenkinsop in BRUSSELS; Editing by Jennifer Hughes and Christopher Cushing

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Anti-stall system active before Ethiopian 737 MAX crash: sources

Anti-stall system active before Ethiopian 737 MAX crash: sources

WASHINGTON/PARIS (Reuters) – An anti-stall system at the center of a probe into the crash of a Boeing 737 MAX jetliner in Indonesia five months ago was also at play when an identical aircraft crashed in Ethiopia earlier this month, three people briefed on the matter said.

FILE PHOTO: Ethiopian Federal policemen stand at the scene of the Ethiopian Airlines Flight ET 302 plane crash, near the town of Bishoftu, southeast of Addis Ababa, Ethiopia March 11, 2019. REUTERS/Tiksa Negeri/File Photo

Data pulled from the Ethiopian Airlines flight recorder suggests the so-called MCAS system, which pushes the nose of the jet downwards, had been activated before the jet ploughed into a field outside Addis Ababa on March 10, the people said, speaking on condition of anonymity ahead of an interim official report.

Boeing and the Federal Aviation Administration declined to comment on the data, first reported by the Wall Street Journal.

It is the second related piece of evidence to emerge from the black boxes of Ethiopian flight 302 after an initial sample of data recovered by investigators in Paris 11 days ago suggested similar “angle of attack” readings to the first crash.

These initial airflow readings from the Ethiopian jet, first reported by Reuters, refer to stall-related information needed to trigger the automated nose-down MCAS system.

The system is designed to be activated only when the angle of attack – measuring the way the wing cuts through the air – has become too high to avoid the plane stalling or losing lift.

However, it was not immediately clear whether the system on the Ethiopian jet was responding to faulty sensor data, as in the case of the earlier crash, or genuine stall indications.

Ethiopian, French and U.S. officials have said there are similarities between the two accidents, which led to the worldwide grounding of the recently introduced 737 MAX.

An Ethiopian-led investigation is trying to establish whether the system overpowered the pilots, a leading scenario in the Lion Air crash, and what action was taken by the crew.

Boeing has suggested using two existing cut-out switches could have prevented the Lion Air disaster, but it has also announced proposals to beef up the system and improve training.

Two of the people briefed on the matter said they presumed that the Ethiopian Airlines pilots did not hit the cut-out switches based on the airplane’s speed and fatal descent, but could not confirm that the data established that.

Reporting by David Shepardson, Tim Hepher, Editing by Sarah White

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Australia’s Lendlease hires banks to run engineering unit sale: sources

BlueMountain names slate for PG&E board

SYDNEY (Reuters) – Australian construction firm LendLease Group has appointed Morgan Stanley and local adviser Gresham to run the sale of its underperforming engineering and services business (E&S), two people aware of the matter told Reuters on Thursday.

The investment banks have sent term sheets to a host or prospective buyers, added one of the sources who spoke on condition of anonymity because they were not authorized to speak to the media.

Representatives for Lendlease and Morgan Stanley declined to comment. Gresham did not return requests for comment.

The Australian developer wants to divest the E&S unit, which Bank of America Merrill Lynch analysts have said could fetch about A$500 million ($355.15 million) in cash proceeds, and focus on its other three units – construction, development and property investments.

In a presentation on Thursday, Lendlease said it expected to take a restructuring hit from the sale of between A$450 million to A$550 million.

LendLease last month reported a 96.3 percent drop in first-half profit, dragged down by the underperformance of the E&S businesses, which was hit by delays and low productivity in a tunneling project in Sydney.

Reporting by Paulina Duran; Editing by Kim Coghill and Rashmi Aich

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SpiceJet seeks planes from other sources after India grounds 737 MAX fleet

SpiceJet seeks planes from other sources after India grounds 737 MAX fleet

A man looks out through a window with an advertisement of SpiceJet Airline, on a commercial building in the western Indian city of Ahmedabad February 14, 2014. REUTERS/Amit Dave

(Reuters) – India’s SpiceJet Ltd said on Friday it was in talks will lessors globally to induct aircraft, in an effort to fill a gap after the grounding of its MAX fleet.

The airline was forced to ground its 12 Boeing Co 737 MAX 8 planes by India’s aviation watchdog due to safety concerns after an Ethiopian Airlines plane crash that killed 157 people earlier this month.

The low-cost carrier could also benefit from cash-strapped Jet Airways being forced to ground planes, and is in talks with lessors to lease some of those aircraft, a person with direct knowledge of the matter had told Reuters earlier this week.

Reporting by Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu

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Foxconn Ventures sells $398.4 million in Alibaba stock: sources

Foxconn Ventures sells $398.4 million in Alibaba stock: sources

The logo of Alibaba Group is seen inside DingTalk office, an offshoot of Alibaba Group Holding Ltd, in Hangzhou, Zhejiang province, China July 20, 2018. Picture taken July 20, 2018. REUTERS/Aly Song

(Reuters) – Foxconn Ventures Holdco has sold $398.4 million worth of Alibaba Group Holding Ltd’s shares, in a block trade in the open market managed by Goldman Sachs Group Inc, people familiar with the matter said on Wednesday.

Foxconn sold 2.2 million Alibaba shares on Wednesday at $181.10 per share, the sources said, asking not to be identified ahead of any official announcement.

Foxconn and Goldman Sachs did not immediately respond to requests for comment.

Reporting by Joshua Franklin in New York; Editing by Chizu Nomiyama

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