Business

NEW YORK — Fiat Chrysler (FCA) and Peugeot Citroen (PSA) announced on Monday they had modified the terms of their mega-merger in light of business disruptions caused by COVID-19.

FCA agreed to lower the exceptional dividend to be distributed to its shareholders to 2.9 billion euros ($3.4 billion), compared to 5.5 billion euros ($6.5 billion) previously, while PSA will distribute its 46 per cent stake in French automotive equipment maker Faurecia to all shareholder of the new company, rather than to its shareholders alone as agreed to previously.

The decision was made to "take into account the impact on liquidity the COVID-19 health crisis has had on the automotive industry", the companies said in a joint press release, while "preserving the original balance of the merger" which should be completed by the end of the first quarter of 2021.

They were approved "unanimously" by the boards of directors of both companies "with the strong support of their reference shareholders”, FCA and PSA said.

The tie-up, which was announced at the end of October, will create Stellantis, set to be the world's fourth-largest automaker in terms of volume, and number three in terms of sales.

The combined company unites brands such as Peugeot, Citroen, Fiat, Chrysler, Jeep, Alfa Romeo and Maserati into a global giant, each of which will continue under its own marque.

But doubts have been raised in recent months about the equilibrium of the merger, which was advertised from the outset as a marriage of equals.

The two companies announced in May they'd waive a dividend payment of 1.1 billion euros ($1.3 billion), planned as part of the merger, due to the coronavirus downturn.

The exceptional dividend that FCA was to distribute to its shareholders along with the distribution of Faurecia's shares were also issues of concern, since the French equipment makers's market capitalization has declined since the merger's announcement.

WASHINGTON — Ahead of a deadline set by US President Donald Trump over video sharing app TikTok, Washington officials will evaluate a bid that could see US tech giant Oracle become a partner to a Chinese company that has been called a national security risk.

US Treasury Secretary Steven Mnuchin confirmed on Monday the government had received a bid from Oracle for TikTok’s American operations after the video-sharing app’s parent ByteDance rejected a proposal from Microsoft.

The transaction is being structured as a partnership and probably won’t be an outright sale, The Wall Street Journal reported, citing unnamed sources.

“I will confirm that we did get a proposal over the weekend that includes Oracle as the trusted technology partner,” Mnuchin said on CNBC, adding that the bid would be handled by a government panel that reviews foreign transactions for national security concerns. 

“We need to make sure that the code is, one, secure, Americans’ data are secure, phones are secure, and we’ll be having discussions with Oracle over the next few days with our technical teams,” Mnuchin said.

Oracle confirmed its submission, saying the company “is part of the proposal by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider”.

TikTok’s brand of short, quirky videos made on users’ cellphones has grown popular in the United States and beyond, but Trump’s claims that TikTok could be used by China to track the location of federal employees, build dossiers for the purpose of blackmail and conduct corporate espionage has sparked a diplomatic storm between Washington and Beijing.

Trump effectively ordered the sale of the Chinese company’s US operations by September 20, or else the app would shut down.

Microsoft bid nixed 

TikTok has rejected the charges and sued over the crackdown, contending that the US order was a misuse of its International Emergency Economic Powers Act because the platform is not “an unusual and extraordinary threat”.

In late August, China’s commerce ministry published new rules potentially making it more difficult for ByteDance to sell TikTok to an American entity by adding “civilian use” to a list of technologies that are restricted for export.

ByteDance had vowed to “strictly abide” by the new export rules.

Downloaded 175 million times in the United States, TikTok is used by as many as a billion people worldwide. It has repeatedly denied sharing data with Beijing.

Microsoft had indicated at the beginning of August that it was interested in acquiring TikTok’s US operations, but announced Sunday that bid had been rejected.

“We believe Microsoft would only buy TikTok with its core algorithm, which the Chinese government and ByteDance was not willing to budge,” Wedbush analyst Daniel Ives said in a note.

“Given the need now to get a green light from Beijing after its export rules were changed a few weeks ago, TikTok’s days in the US likely are numbered with a shutdown now the next step.”

S&P warned on Monday that the transaction for TikTok could result in a downgrade of Oracle’s credit rating, depending on whether the company needs to take on significant debt for the transaction.

“A deal in which Oracle is a technology partner rather than a full owner could lower the price,” S&P said. “And if Oracle has co-bidders, that could further reduce the financial impact.”

Shares of Oracle were temporarily halted shortly after the open due to the pending new on the company. Near 1500 GMT, shares were up 6.5 per cent at $60.70.

AMMAN — Net profit after tax attributable to shareholders for the first half of 2020 for the companies listed at the Amman Stock Exchange (ASE) which have provided financial reports fell to JD43.3 million, compared to JD596.9 million for the first half of 2019, a decrease of 92.7 per cent, according to ASE CEO Mazen Wathaifi. 

In a statement posted on the bourse website, he said the service sector profit after tax attributable to shareholders fell by 322.6 per cent, adding that energy, utilities, transport, hotels and tourism services were the hardest hit in the field. 

The financial sector, as a whole, saw a drop by 62.6 per cent, with banking seeing the biggest drop, according to the Bourse CEO.

The industrial Sector saw a 56.5 per cent decrease, with mining and quarries receiving the hardest blow, he added. 

NEW YORK — World stock markets were mixed on Friday as European traders mulled Britain's increasingly acrimonious war dance with the EU, while in the United States technology shares continued to pull back.

Sterling remained under pressure as Britain sparred with Brussels, rejecting an ultimatum to withdraw controversial Brexit legislation but agreeing to extend talks soon.

On the plus side for British industry, a stuttering currency — which hauled itself off multi-month midweek lows — has been helping to boost share prices of index multinational's earnings in dollars.

Those increases helped London's FTSE index gain ground on Friday.

After Thursday's sterling selloff, the pound was stable on Friday amid news the British economy expanded 6.6 per cent — albeit still well off pre-coronavirus levels.

"Ultimately UK investors will probably thank the UK government for pushing down sterling and allowing the FTSE the room to recover 6000 [points]," said Chris Beauchamp, chief market analyst at IG.

"Given time, however, we can expect the index to return to its dismal ways, as the global investing community picks the more solid performers on Wall Street over an increasingly fraught UK outlook."

Meanwhile, US stocks concluded a volatile week on a mixed note, with the Dow rising and the Nasdaq suffering its fifth decline in six sessions.

Tech shares have been under pressure since hitting a record on September 2, with investors questioning skyrocketing stock values.

Markets are also assessing the timing of vaccine candidates for Covid-19 and how much a vaccine could erode the advantage tech companies have attained from higher demand for e-commerce and digital services if the economy normalises quickly.

Art Hogan, chief market strategist at National Securities, said September has historically been volatile month for equities. 

This year, there is also unease about the upcoming presidential election, rising tensions between Washington and Beijing and worries over coronavirus outbreaks, including at colleges, Hogan said.

"Volatility is going to be norm for the balance of this month and probably October also," he said.

PARIS — Pan-European stock market operator Euronext and Germany’s Deutsche Boerse on Friday announced rival offers to try to buy Milan’s Borsa Italiana, setting the stage for a bidding war.

Switzerland’s SIX is also reportedly considering joining the race for the Milan stock exchange.

Euronext was the first to show its hand, saying it was teaming up with Italian lender CDP to submit a joint bid for Milan’s Borsa Italiana.

Euronext — which operates the exchanges of Amsterdam, Brussels, Dublin, Lisbon, Oslo and Paris — said in a statement that it was “currently in discussions with Cassa Depositi e Prestiti to submit an offer to London Stock Exchange Group plc. for the acquisition of the business and key operational assets of Borsa Italiana”.

“A further announcement will be made as and when appropriate,” the Paris-based company said.

According to Bloomberg, the joint bid values Borsa Italiana at 3.5-4 billion euros ($4.2-4.7 billion).

CDP would get around 8 per cent of Euronext, under the terms of the deal, Bloomberg said.

German stock exchange operator Deutsche Boerse released a statement on Friday after markets closed stating that “Deutsche Boerse has submitted a bid for Borsa Italiana Group”.

The statement did not provide any financial details.

“As a global player, we are offering a high value for the future growth and development of an autonomous Borsa Italiana Group, thereby strengthening its crucial role for the Italian economy and the European capital markets,” the DAX 30 owner added.

The London Stock Exchange Group (LSEG) said in July that it was prepared to sell its Borsa Italiana subsidiary in order to win approval by the EU Commission of its planned purchase of US financial data provider Refinitiv.

Shopping spree 

Euronext chief Stephane Boujnah had said at the start of the year that his company could be interested if LSEG were willing to sell. 

Euronext has been on a shopping spree recently, buying the Danish central securities depository, VP Securities, last month to expand its Nordic footprint. 

It also acquired the Scandinavian electricity exchange Nord Pool in January and the Oslo Stock Exchange in June 2019. 

By contrast, it decided not to buy the Madrid stock exchange, which was eventually snapped up Swiss operator SIX.

In Italy, state-owned CDF confirmed it was “proceeding jointly with Euronext to submit a non-binding bid for Borsa Italiana”. 

Italian news agency Radiocor, quoting sources familiar with the matter, said the deadline for bids had been set back until September 14. 

Rome has said all offers will be examined closely by the government and the regulatory authorities. 

Economy and finance minister Roberto Gualtieri said he hoped Borsa Italiana would “find its strategic place within the single market and the eurozone, with industrial and financial partners able to support and strengthen in the project for a single capital market at a European level”. 

BERLIN — Finance ministers from the EU's top economies on Friday pushed for strict curbs on cryptocurrencies, including the Libra project launched by Facebook.

A joint statement by the finance ministers of Germany, France, Spain, Italy and The Netherlands insisted such projects should be carefully controlled and regulated.

"No global asset-backed crypto-asset arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed," they said.

Facebook's announcement last year of plans to design the Libra cryptocurrency and payments system raised big red flags for global regulators who expressed criticism of privately-run currency.

Facebook has touted its initiative as a way to lower costs for consumers around the world, eliminating the high fees of cross-border transfers.

The European Central Bank "is the only one to be allowed to issue a currency", French Finance Minister Bruno Le Maire said in Berlin, at a meeting of EU finance ministers.

"This point is something that cannot be jeopardised or weakened by any kind of project, including the so-called Libra project," he said.

If created, all such currencies should be tied to the euro or another EU currency, the ministers said, and should be registered and deposited in an EU-approved bank.

"We are waiting for the commission to issue very strong and very clear rules to avoid the misuse of cryptocurrencies for terrorist activities or for money laundering," Le Maire said.

The commission, the EU's executive arm, is set to deliver its proposals later this month.

KUWAIT CITY — After more than 45 years washing cars in Kuwait to make ends meet, Egyptian Marzouq Mohammed will soon be kicked out of the country as economic woes and coronavirus stoke anti-foreigner sentiment.

The 65-year-old is among tens of thousands who will be forced to leave the oil-rich country, hard hit by collapsing crude prices. 

Last month, the cash-strapped government said that from January it will no longer renew work permits for expatriates over the age of 60 without university degrees. 

"Now they tell us this? Now they say 'he's 65, he must leave'. Leave where and to do what? We spent a lifetime here," Mohammed said. 

Like its Gulf neighbours, Kuwait depends heavily on cheap foreign labour, mainly Middle Eastern and Asian workers.

Many arrive as young adults to work in blue-collar jobs, occupations most Kuwaitis shun in favour of high-paying government positions.

But collapsing oil revenues, a vital source of state funds, are forcing a rethink.

Prime Minister Sabah Al-Khaled Al-Sabah has said the number of non-Kuwaitis should be capped at 30 per cent of the 4.8 million population, down from 70 per cent currently, to "resolve the demographic imbalance".

The country must rely more on Kuwaitis "to work in all professions" as it seeks to diversify its economy, he said. 

But for Iranian Hasan Ali, also among the more than 68,000 people whose visas will not be renewed, leaving a country where he has spent more than half his 67 years will be heartbreaking.

"I got married here, I had my children here, I lived my life here," Ali, a greengrocer at the Al-Mubarakiya souq in Kuwait City, said. 

"It's difficult that I have to leave 'just like that' after all these years."

 Business sense? 

The coronavirus pandemic, which disproportionately hit migrant workers living in crowded lodgings, spotlighted the presence of a community increasingly seen as a burden -- particularly as the downturn snuffed out their jobs.

One famous Kuwaiti actress made headlines at the height of the panic in April by saying foreigners should be expelled to free up hospital beds for locals.

"We should send them out... put them in the desert. I'm not against humanity, but we have reached a stage where we're fed up," Hayat Al-Fahad told a local television channel.

Her comments sparked outrage on social media. 

TV presenter Nadia Al-Maraghi faced legal action for "inappropriate rhetoric" after visiting a holding centre for foreign workers being ejected for visa violations, where she and a friend joked that they had to wear masks because of the stink.

While the latest move to slash the migrant population has been welcomed by some, experts say the decision will hurt the private sector and stifle consumption. 

The restaurants union has warned it could hit businesses already struggling after months of lockdown.

M.R. Raghu, head of research at Kuwait Financial Centre (Markaz), said the strategy was to create jobs for Kuwaitis while retaining more skilled foreign workers.

"By reducing the expats who do not add much value to the economy, jobs can be freed up to provide employment opportunities for nationals," he said.

However, despite a drive to encourage locals to enter the private job market, only about 72,000 locals work in the private sector -- just over five percent of the country's 1.4 million citizens. 

"The government would also need to take steps to make the private sector much more attractive for nationals, who currently prefer to work in the public sector," Raghu said.

 'Leave everything behind' 

Populations across the Gulf are dipping as the coronavirus and the ensuing oil crunch ravage economies.

Kuwait's crunch has been particularly acute. Last month, Finance minister Barak Al-Sheetan warned that there would not be enough cash to pay state salaries beyond October unless the government can secure fresh funds.

The country has one of the world's largest sovereign wealth funds, known as the Future Generations Fund, with assets estimated at $550 billion -- set aside for a post-oil era. 

Withdrawals require approval from parliament. 

But the legislature accuses the government of mismanaging public finances, and has rejected a bill to borrow 20 billion dinars ($65 billion) over the next 30 years.

It is a rude reckoning for a country once seen as the most dynamic in the Gulf, but where generous subsidies and public sector salaries now make up three-quarters of oil-fuelled state budgets.

But Syrian Khalil Abdullah, a 63-year-old mechanic, said he still hoped for a reprieve to let him stay in Kuwait into his old age.

"Those who have shops and companies, is it possible for them to just leave everything behind and go?" he asked.