Sunday, December 13, 2015

USP Group to buy marine and industrial equipment trading firm

USP Group to buy marine and industrial equipment trading firm

OIL blending firm USP Group Limited has signed a conditional sale and purchase agreement to buy Supratechnic Pte Ltd in a bid to diversify the former's business.
The consideration for the acquisition will be S$12.34 million in cash and 64 million new shares in USP Group.
The new shares are valued between S$2,496,000 to S$3,891,200 based on the last traded share price and the latest reported net asset value per USP Group share, respectively. The group's counter closed at 3.9 Singapore cents on Friday.
The cash component of the consideration will be funded by internal resources, bank financing and, depending on market sentiment, a private placement, according to USP Group.
Currently, USP Group's existing business comprises the blending and distribution of diesel and engine oil, as well as property development.
Its acquisition target, Supratechnic, will see USP Group diversifying into the trading of marine equipment as well as industrial machinery and equipment. Supratechnic has operations in Singapore, Malaysia and Indonesia.
Based on Supratechnic's audited consolidated accounts for the financial year ended Dec 31, 2014, its net tangible asset stands at about S$17,943,000 and its net profit after tax is about S$2,584,000.
USP Group's board will hold an extraordinary general meeting to seek shareholders' approval for both the acquisition and the diversification of the group's business scope that the deal entails.

Spain wants to reclaim lead in renewable energy

Spain wants to reclaim lead in renewable energy

[MADRID] A former global champion of renewable energy, Spain wants to make up the ground it lost during the economic crisis when it reversed its policy slashing subsidies and decimating the sector.
With roughly 300 days of sunshine per year and regions that receive strong winds, Spain was a world leader in 2007-08 in solar and wind power production, helped by generous state subsidies.
But the sharp economic downturn that followed the collapse of a decade-long property bubble in 2008 put the brakes on the development of renewable energy as the government scaled back support.
Jorge Puebla, a 41-year-old firefighter, suffered the fallout from his energy investment.
"They ruined my life," the father of two told AFP.
He and his wife had invested a million euros ($1.1 million dollars) in 2007 in a solar energy farm in the northeastern region of Castile and Leon.
They borrowed 800,000 euros from a bank with Puebla's parents acting as the loan guarantors.
Solar investors like Puebla were lured by a law passed under the Socialist government in power in 2007. It guaranteed producers a so-called solar tariff of as much as 44 cents per kilowatt-hour for their electricity for 25 years.
At that rate, the couple thought they could easily make their monthly loan repayments of 8,400 euros.
But the government did not keep its promise. Faced with a ballooning budget deficit, in 2011 it cut the subsidies that were intended to stimulate the growth of the renewable energy sector.
The conservative Popular Party that swept to power at the end of 2011 made further cuts to the state aid.
"Everything that existed disappeared from one day to the other," said Puebla.
He now relies on help from his sister and three brothers to pay his loan.
Solar power farms have seen their revenues drop 15-50 per cent due to the change in government policy, said Jose Donoso, the head of Spain's solar lobby group UNEF.
The solar power sector has shed 35,000 jobs since 2008 and now employs just 5,000 people, he added.
The government U-turn has been especially hard on the roughly 62,000 private investors like Puebla and it essentially stopped the solar power sector from expanding.
Spain added just 22 megawatts of photovoltaics capacity last year, compared with 2,270 megawatts in Britain.
Wind power has also stalled. The sector has lost half of its jobs in eight years and no new wind power capacity was added in 2015.
"The change in regulations since 2008 was negative for the entire industry," said Carlos Garcia, a renewable energy specialist at the IE Business School in Madrid.
He points the finger at "pressure" from traditional energy producers that rely on coal, gas, oil and nuclear power to "stop the development of renewables".
It is not just small and medium-sized businesses that are suffering.
Spain's flagship renewable energy giant Abengoa which employs more than 27,000 people worldwide is teetering on the edge of bankruptcy. While the loss of subsidies is not the main cause of its troubles, experts say it has not helped.
"2015 marks the lowest point in the development of renewables in the past 20 years in Spain," said Spanish Wind Energy Association policy director Heikki Willstedt.
"Spain must make up for lost time and fulfil its goals for 2020," she added.
Willstedt recalled that Spain is committed to meeting 20 per cent of its energy needs through renewables by 2020, compared to the current 15 per cent.
The government which emerges following the general election on December 20 must change Spain's renewable energy policies, added Garcia.
Spain's ruling conservative Popular Party has presented proposals to restart the wind power sector but has not yet outlined its plans for solar energy.
Prime Minister Mariano Rajoy vowed at the World Climate Change Conference 2015 (COP21) in Paris on November 30 to table a "law on climate change" if he is re-elected, after having complained for a long time that renewable energy is too expensive.
Spain has maintained companies "with significant know how" in the area such as Gamesa which survived the economic downturn by expanding abroad, mainly in Latin America, said Garcia.
The country is still the fifth largest producer in the world of wind power and the third biggest exporter.
AFP

Australia ends Abbott's war on wind farms as funding ban lifted

Australia ends Abbott's war on wind farms as funding ban lifted

[MELBOURNE] Australian Prime Minister Malcolm Turnbull lifted a ban on government investment in wind power introduced by predecessor Tony Abbott, in another policy shift that coincides with a global climate-change deal to curb fossil-fuel pollution.
Environment Minister Greg Hunt issued the state-backed Clean Energy Finance Corp with orders cancelling Mr Abbott's directive which prohibited the A$10 billion (S$10.2 billion) ($7.2 billion)renewable energy fund from investing in new wind power projects, according to a Dec 3 investment mandate obtained by Bloomberg.
The fund can now invest in any clean energy project, including wind, that involves "emerging and innovative" technology, according to the document. The government has directed it to focus on offshore wind projects, given that funding of established onshore technologies may be met from commercial sources.
"The new CEFC investment mandate reflects the Turnbull government's strong support for renewables and innovation," Caitlin Keage, a spokeswoman for the prime minister, said in an e-mailed statement. "The mandate puts the CEFC's focus on new and emerging renewable technologies, rather than supporting well established technologies that are financially viable without government support."
It's another policy reversal by Mr Turnbull, who deposed Mr Abbott as Prime Minister after a leadership ballot of the ruling Liberal-National coalition in September. He last month scrapped a system of bestowing knighthoods on prominent Australians which was reintroduced by Mr Abbott, and in October signalled his intention to reform the nation's tax system, including a debate on increasing the goods and services tax.
Wind farming in Australia suffered a setback when Mr Abbott, who had labelled wind farms as ugly and noisy, said in July that the Clean Energy Finance Corp should be "investing in new and emerging technologies and certainly not existing wind farms". The government had outlined plans the previous month to appoint a commissioner to oversee wind farms and back research into whether they damage people's health.
The mandate also honours commitments made to crossbench senators during negotiations to secure changes to the Renewable Energy Target, Mr Turnbull's spokeswoman said. In June, the Parliament certified a new target of producing 33,000 gigawatt hours of electricity from large-scale renewable energy projects by 2020, after months of lawmaker disagreement.
Negotiations at the United Nations climate summit in Paris came to a head on Saturday as envoys from 195 nations endorsed a package of measures to limit fossil-fuel pollution, establish a mechanism to step up the reductions for decades, set an ambitious goal to curb temperature increases and set up ways to measure and verify emissions.
Wind accounted for almost a quarter of the Australian fund's investment portfolio as of last year and about one-third of its project proposals relate to wind technology, according to its website.
The corporation has acted as a debt provider with other lenders for wind projects including the AGL Energy Ltd-operated Macarthur wind farm in Victoria state, it said.
Plans to change the fund's investment mandate were reported earlier by The Sydney Morning Herald.
BLOOMBERG

China probe concerns Fosun boss' "personal affairs"

China probe concerns Fosun boss' "personal affairs"

[BEIJING] Guo Guangchang, one of China's best-known entrepreneurs, is helping police with an investigation that focuses mostly on his personal affairs, the president of Guo's investment conglomerate Fosun International said on Sunday.
Fosun had confirmed on Friday that Guo, a self-styled student of investor Warren Buffett, was assisting authorities with a probe, a day after local media said the group had lost contact with its billionaire founder.
"It is mostly about his personal affairs," company president Wang Qunbin told a conference call when asked whether the investigation was into the company, or Guo personally.
Neither Wang nor chief executive Liang Xinjun, who told the same conference call that Guo was in Shanghai, gave any further details about the nature of the investigation.
Liang said Fosun was in communication with its lenders, investors and credit ratings agencies and said the company was "not in crisis", and its financial situation was "very healthy".
The CEO said Guo was able to take part in major decisions involving the company, but also said Fosun had the management structures and business strength to withstand Guo's absence, saying it did not rely on "any one executive." Guo's sudden absence and the lack of detailed information that the company has given about his status underline the opaqueness of China's legal system.
A string of senior executives at Chinese companies have temporarily gone missing this year amid a crackdown by Beijing on its financial sector.
Fosun International's shares and convertible bonds, as well as shares in companies controlled by Guo, were suspended in Hong Kong and the mainland on Friday. Fosun International shares and convertible bonds were due to resume trade on Monday.
Liang said the company would consider buying back stock if the share price fluctuated. He said progress on the company's current deals was "proceeding normally." The question of Guo's whereabouts has already come to the attention of banking supervisors in Europe, where Fosun is in a battle to buy Anglo-German bank BHF Kleinwort Benson, people familiar with the regulatory process said on Friday.
Fosun had been given a green light by the European Central Bank for its takeover, but with reservations, two of the people said.
Guo, 48, has built an empire of industrial companies, alongside a host of insurance, banking and asset management firms. He is a delegate to the Chinese People's Political Consultative Conference and has amassed a personal net worth of $5.7 billion, according to Forbes.
Earlier this year, Fosun clinched a billion-dollar takeover of the Club Med resort chain. In total, Fosun has spent more than $30 billion on foreign acquisitions and at the end of June 2015, it had total assets worth $55 billion.
REUTERS

As garbage mountains rise, Jakarta faces huge waste crisis

As garbage mountains rise, Jakarta faces huge waste crisis

[BEKASI, Indonesia] Sifting through a mountain of garbage with her bare hands, a thick cloth wrapped around her face to keep out the stench, Patimah recalled her early days scavenging at a dump on the outskirts of the Indonesian capital the size of 120 football fields.
"I vomited back then," she told AFP while wading through knee-deep waste, swatting away flies as she hunted for plastic bottles amid food scraps and soiled clothing.
But now Patimah, who like many Indonesians goes by one name, said the smell no longer bothers her: "I am used to it."
The same cannot be said for people living nearby, who are increasingly angry at the odours wafting from the tip, placing it at the centre of a row that highlights the challenge for Jakarta and other developing cities in dealing with their waste.
Virtually all rubbish from Jakarta - a sprawling city of about 10 million with a booming middle class - is dumped an hour's drive away at Bantar Gebang, in the city of Bekasi, where towering mountains of trash have risen skyward as the capital grows bigger and wealthier.
The absence of a citywide recycling scheme, and limited public awareness of "going green", means the tip - already one of the world's largest - is growing by an estimated 6,500 tonnes per day.
The job of sorting through the mountains of untreated waste falls to a 6,000-strong army of trash pickers, including many young children, who dodge heavy machinery and exposure to disease to eke out a living from the city's filth.
As he wandered around searching for toys and paper as trucks tipped reeking waste nearby, 11-year-old Agung said his father was a trash picker while his mother sorted plastic at one of the many shanty towns that have grown up around the dumpsite.
"I come here after school," he told AFP, as a friend hauled a bamboo basket carrying cans and plastic bottles on his back.
At the dump's only school - it also has a dedicated mosque, salon and many shops selling food and cool drinks - principal Nasrudin fretted over his students, most of whom suffer skin infections, bronchial problems and intestinal worms from working on the tip.
"I am very, very worried about the safety of the children working around such heavy machinery," he said, speaking from the school's newly-built second floor, where the giant trash heaps are visible from classrooms. "They are still small children, and they are not psychologically or physically ready for such work."
In the 20 years Mr Nasrudin has worked at the school, enrolment has soared as the first garbage mountain was joined by a second, then a third and fourth.
As the tip expanded, so did the shanty towns around it, with whole families relocating to scour for anything to sell, on, including plastic, glass and aluminium.
Crouched among maggot-ridden earth outside his squalid shack, his hands black with filth, Paino said he tilled a rice field until drought forced him and his young family to find work elsewhere.
"Essentially, we had to make a living," he said. "Who knows, maybe we'll make more than we did working in the rice fields," he told AFP, adding that he earned about 75,000 rupiah (S$7.60) ($5) every day.
But elsewhere, Bantar Gebang represents a nuisance, with nearby communities - there are nearly 850,000 people living within 10 kilometres of the tip - furious at the odour and overfilled garbage trucks passing by 24 hours a day, spilling waste in their neighbourhoods.
In November, the road to Bantar Gebang was blocked for days by angry residents, triggering a crisis as trucks backed up for miles and trash collection points quickly reached capacity.
The standoff dominated local headlines until Jakarta's governor finally ordered police to escort the trucks to the dumpsite. But the issue is far from resolved and highlights a perennial problem facing many developing cities.
The world's 50 biggest dumps identified last year by the non-profit Waste Atlas Partnership - behemoths that include Mbeubeuss in Senegal, Deonar in India and Estrutural in Brazil - are largely concentrated in the developing world, where rapid urbanisation and rising incomes are putting even more strain on these sites.
The head of Jakarta's public sanitation agency, Isnawa Adji, knows the city cannot rely on Bantar Gebang forever, and says the authorities plan to build several world-class waste treatment facilities at significant cost to boost recycling and incinerate trash.
But in a city where canals and parks are littered with rubbish, and even the smallest purchase is often double wrapped in plastic, Mr Adji knows he's facing an uphill battle.
"The public aren't educated about this," he said, referring to the "reduce, reuse, recycle" signs outside his office.
"The most effective change begins in the home."
AFP

IMF must stay, Grexit risk not over: EU bailout chief

IMF must stay, Grexit risk not over: EU bailout chief

[ATHENS] Greece cannot remove the IMF from its economic bailout, the head of the EU's rescue fund said Sunday, adding that the possibility of a Greek eurozone exit remains if reforms are neglected.
"There has to be a financial contribution because the IMF, according to the ESM Treaty and to the agreement in the July summit, should be part of the programme also financially," Klaus Regling, head of the European Stability Mechanism, told To Vima weekly.
Greek Prime Minister Alexis Tsipras last week argued that the global lender's participation was "not necessary" in the country's third bailout, highlighting the International Monetary Fund's "unconstructive" position in demanding tough reforms and guarantees.
But Regling warned Sunday: "If the IMF decides not to participate it could be a big problem." "My assumption is that the IMF will participate," he said, adding that the contribution "is likely to be small." Tsipras' leftist government was forced in July to back down from its anti-austerity electoral pledges and accept a three-year, 86 billion euro (S$133 billion) rescue from its eurozone partners.
At the time, the threat of Greece being forced to leave the eurozone had been broached in Brussels, and Regling on Sunday said the risk was theoretically still present.
"Greece has agreed to implement reforms which are necessary so that its partners can provide the financing needed and Greece can return to a sustainable economic situation," the European Stability Mechanism chief said.
"But ultimately the possibility is always there, if commitments as a member of monetary union are not respected," he said in reference to the so-called Grexit.
Tsipras' administration has since July pushed through parliament a number of unpopular bailout reforms, losing part of its majority in the chamber to defections in the process.
Next week lawmakers will be called to approve the privatisation of electricity distributor Admie and the sale of non-performing business loans to distress funds.
But Athens must next overhaul its social security system and possibly cut pensions, a measure that is likely to put further pressure on the government's tenuous hold on parliament.
AFP

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