Maitland/AMO Morning Monitor – Monday 29 June 2020

29th June 2020

In the news

  • Starbucks is the latest major company to join the Facebook advertising boycott as part of the Stop Hate for Profit campaign, already supported by Coca-Cola, Diageo and Unilever.
  • Green Alliance has published its Blueprint for a resilient economy, calling for a green recovery. They want the Government to allocate another £14bn to meet the cost of UK climate commitments as part of the Government’s economic recovery plans.
  • Concerns about a second wave of Coronavirus from an easing of restrictions continue to surface. Leicester is the first big city to face possible new local lockdown and public health officials meet today to discuss the implications there of a recent rise in cases.
  • Responding to pleas from the travel sector, the Government is widely expected this week to publish a list of up to 50 countries where the UK will share air bridges, offering exemption from quarantine rules, possibly from as early as 6 July.

Politics today

  • The Business and Planning Bill is due to go through all its stages in the House of Commons today. This sets out a range of mostly temporary measures to help businesses adjust to new ways of working as the country recovers from Covid 19 disruption.
  • Work and Pensions Questions, 2.30 pm House of Commons
  • The Prime Minister gives an interview to the new Times Radio this morning, which launches today

Stock market moves

  • Asian markets are lower today as the increase in US coronavirus cases has raised concerns about a global recovery. The Shanghai Composite is down 0.87% and the Hang Seng 1.40%.
  • In the US, the S&P 500, Nasdaq and Dow Jones all closed down ahead of the weekend with Dow Jones leading the way. Futures as of 8:30am BST point toward a positive open this afternoon.
  • In Europe, The FTSE 100 and Eurostoxx 600 are both trading slightly up in early hours.

Corporate announcements

* Maitland Client

Rio Tinto PLC Agreement on long-term power supply for Oyu Tolgoi
  • Rio Tinto, Turquoise Hill and the Government of Mongolia have reached an agreement on the preferred domestic power solution for Oyu Tolgoi.
  • The agreement, which is a revision of the Power Source Framework Agreement signed in 2018, states that the Parties will work towards finalising a Power Purchase Agreement by the end of March 2021.
  • In addition, the amended PSFA sets a proposed timetable for development, with construction of the coal-fired power plant set to begin no later than 1 July 2021, and commissioning within four years thereafter.
Lookers PLC Update on Grant Thornton investigation
  • As previously announced a draft report was received by the Company in early June. The Company has now completed its initial review of the Draft Report and is in discussions with Grant Thornton UK LLP and Deloitte LLP, the Group’s auditors, with a view to concluding outstanding matters at the earliest opportunity.
  • The Draft Report identified a cumulative total of approximately £19m of non-cash adjustments necessary to correct overstatements in profitability over several years. The Company has reviewed and agreed the Draft Adjustments and currently considers that approximately half of the Draft Adjustments impact the 2019 results with the remainder accumulated in prior years.
  • As previously reported, circa £4m of the Draft Adjustments relate to the initial phase of the investigation which focused on one of the Group’s operating divisions.
  • The remaining £15m of the Draft Adjustments relate to the incorrect or inconsistent application of policies, processes and accounting standards.
TBC Bank Group PLC TBC has launched banking operations in Uzbekistan
  • TBC Bank Group has announced that its subsidiary,   JSCB TBC Bank, has launched its banking operations in Uzbekistan, initially in a pilot mode for “friends and family”, and plans to extend its services to the broader population in August 2020.
  • In line with its asset-light and highly digitalized strategy, the company will be serving customers mainly through its online platform, Space, while its smart, next generation branches will be used primarily for client relationship purposes.
  • The first pilot branch has already opened.
  • Vakhtang Butskhrikidze, CEO, said: “The launch of banking operations in Uzbekistan is a very significant step in TBC PLC’s international expansion and is an integral part of our digitally-led growth strategy.”
Grainger PLC Grainger secures £350m senior secured bond
  • Grainger has issued a £350m sterling-denominated senior secured bond at a coupon of 3.0% for 10 years.
  • The bond is rated BBB- by S&P.
  • The transaction follows the Company’s successful equity raise in February 2020, and forms part of the Company’s overall financing strategy to extend its debt maturity profile and align to its long-term private rented sector  investment strategy.
  • Vanessa Simms, CFO, said: “Today’s transaction is an important milestone in extending our maturity profile and provides long-term interest rate certainty at an attractive coupon. This will enhance our funding capacity to expand our PRS pipeline further.”
Calisen PLC Resumption of smart meter installations
  • Whilst Calisen’s Lowri Beck subsidiary has continued to respond to emergency call-outs throughout the COVID-19 crisis, it also now expects to resume meter reading and other non-essential smart meter installations and field services in July.
  • The transition back to normalised levels of activity is expected to be gradual and to take several months.
  • It therefore remains too early to reinstate guidance for 2020 smart meter installations.
  • The Group believes the impact from COVID-19 will not be material to its longer-term plans for the metering portfolio to the end of the smart meter roll-out.
Carnival PLC Carnival Announces Loan Facility Pricing
  • Carnival Corporation announced the pricing of it’s first-priority senior secured term loan facility, consisting of a $1,860m tranche and a €800m tranche, with a maturity of five years.
  •  Both tranches of the term loan facility will be prepayable, in whole or in part.
  • The obligations under the term loan facility will be guaranteed by Carnival and the same subsidiaries that currently guarantee.
  • The term loan facility is expected to close on June 30, subject to customary closing conditions and the execution of definitive documentation.
  • Carnival Corporation intends to use the net proceeds from the term loan facility for general corporate purposes, which includes the repayment of near-term debt maturities.