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Adani’s market losses top $100 billion as shelved share sale spooks investors

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NEW DELHI/MUMBAI, Feb 2 (Reuters) – India’s Adani group shares sank on Thursday after it abandoned its flagship company’s $2.5 billion stock offering, swelling the conglomerate’s market losses to more than $100 billion and sparking worries about the potential systemic impact.

The withdrawal of Adani Enterprises’ (ADEL.NS) share sale caps a dramatic setback for Gautam Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but dwindled over the past one week after a U.S.-based short-seller published a critical research report.

The events are an embarrassing turn for Adani who has forged partnerships with foreign giants such as France’s TotalEnergies (TTEF.PA) and investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion of businesses that stretch from ports and mining to cement and power.

Adani late on Wednesday called off the share sale as a stocks rout sparked by short-seller Hindenburg’s criticisms intensified, despite the offer being fully subscribed on Tuesday.

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Adani Enterprises plunged nearly 20% on Thursday, trading at its lowest since March 2022. Other group companies were also under pressure – Adani Ports and Special Economic Zone (APSE.NS) was down 5%, while Adani Total Gas (ADAG.NS), Adani Green Energy (ADNA.NS) and Adani Transmission (ADAI.NS) lost 10% each.

Since Hindenburg’s report was released on Jan. 24, group companies have lost nearly half their combined market value. Adani Enterprises – described as an incubator of Adani’s businesses – alone has lost $24 billion in market capitalisation.

Adani, 60, is also no longer Asia’s richest person, having slid in the rankings of the world’s wealthiest to 16th, as per Forbes’ list, from third last week.

Reuters Graphics

“Unless Adani is able to regain the confidence of institutional investors, stocks will be in freefall,” said Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities.

Adani’s plummeting stocks have raised concerns about the likelihood of a wider impact on India’s financial system.

India’s central bank has asked local banks for details of their exposure to the Adani group of companies, government and banking sources told Reuters on Thursday. CLSA estimates that Indian banks were exposed to about 40% of the 2 trillion rupees ($24.53 billion) of Adani group’s debt in the fiscal year to March 2022. read more

Citigroup’s (C.N) wealth unit has stopped extending margin loans to its clients against securities of Adani group and decided to cut the loan-to-value ratio for credit against Adani securities to zero on Thursday, said a source.

“We see the market is losing confidence on how to gauge where the bottom can be and although there will be short-covering rebounds, we expect more fundamental downside risks given more private banks (are) likely to cut or reduce margin,” Monica Hsiao, Chief Investment Officer of Hong Kong-based credit fund Triada Capital, said.

In New Delhi, opposition lawmakers submitted notices in the Indian parliament, demanding discussion on the U.S. short-seller’s report. The Congress party demanded setting up a Joint Parliamentary Committee or a Supreme Court monitored investigation into the matter.

ADANI VS HINDENBURG

Hindenburg’s report last week alleged an improper use of offshore tax havens and stock manipulation by the Adani group. It also raised concerns about high debt and the valuations of seven listed Adani companies.

The Adani group has denied the accusations, saying the short-seller’s allegation of stock manipulation has “no basis” and stems from an ignorance of Indian law. The group has always made the necessary regulatory disclosures, it added.

Earlier this week, the Adani group said it had the complete support of investors, but investor confidence has tapered in recent days.

As shares plunged after the Hindenburg report publication, Adani managed to secure the share sale subscriptions on Tuesday even though the stock’s market price was below the issue’s offer price. But on Wednesday, stocks plunged again.

Maybank Securities and Abu Dhabi Investment Authority, as well as India’s Life Insurance Corporation (LIFI.NS), had bid for the anchor portion of the issue. Those investments will now be returned by Adani.

In a late night announcement on Wednesday, the billionaire said he was withdrawing the share sale as the company’s “stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct.”

Early on Thursday, Adani said in a video address the “interest of my investors is paramount and everything is secondary. Hence, to insulate the investors from potential losses we have withdrawn” the share sale.

Reporting by Chris Thomas, Nallur Sethuraman, Tanvi Madan, Ira Dugal, Aftab Ahmed, Sumeet Chatterjee, Anshuman Daga, Summer Zhen; Writing by Aditya Kalra; Editing by Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

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Adani loses Asia’s richest crown as stock rout deepens to $84 billion

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BENGALURU, Feb 1 (Reuters) – Shares in Indian tycoon Gautam Adani’s conglomerate plunged again on Wednesday as a rout in his companies deepened to $84 billion in the wake of a U.S. short-seller report, with the billionaire also losing his title as Asia’s richest person.

Wednesday’s stock losses saw Adani slip to 15th on Forbes rich list with an estimated net worth of $76.8 billion, below rival Mukesh Ambani, the chairman of Reliance Industries Ltd (RELI.NS) who ranks ninth with a net worth of $83.6 billion.

Before the critical report by U.S. short-seller Hindenburg, Adani had ranked third.

The losses mark a dramatic setback for Adani, the school-dropout-turned-billionaire whose business interests stretch from ports and airports to mining and cement. Now, the tycoon is fighting to stabilise his businesses and defend his reputation.

It comes just a day after the group managed to muster support from investors for a $2.5 billion share sale for flagship firm Adani Enterprises on Tuesday, in what some saw as a stamp of investor confidence.

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The report by Hindenburg Research last week alleged improper use by the Adani Group of offshore tax havens and stock manipulation. It also raised concerns about high debt and the valuations of seven listed Adani companies.

The group has denied the allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from an ignorance of Indian law. It has always made the necessary regulatory disclosures, it added.

Shares in Adani Enterprises (ADEL.NS), often described as the incubator of Adani businesses, plunged 30% on Wednesday. Adani Power (ADAN.NS) fell 5%, while Adani Total Gas (ADAG.NS) slumped 10%, down by its daily price limit.

Adani Transmission (ADAI.NS) was down 6% and Adani Ports and Special Economic Zone (APSE.NS) dropped 20%.

Adani Total Gas, a joint venture with France’s Total (TTEF.PA), has been the biggest casualty of the short seller report, losing about $27 billion.

“There was a slight bounce yesterday after the share sale went through, after seeming improbable at a point, but now the weak market sentiment has become visible again after the bombshell Hindenburg report,” said Ambareesh Baliga, a Mumbai-based independent market analyst.

“With the stocks down despite Adani’s rebuttal, it clearly shows some damage on investor sentiment. It will take a while to stabilise,” Baliga added.

Reuters Graphics

SCRUTINY

Underscoring the nervousness in some quarters, Bloomberg reported on Wednesday that Credit Suisse (CSGN.S) had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients.

Deven Choksey, managing director of KRChoksey Shares and Securities, said this was a big factor in Wednesday’s share slides.

Credit Suisse had no immediate comment.

Scrutiny of the conglomerate is stepping up, with an Australian regulator saying on Wednesday it would review Hindenburg’s allegations to see if further enquiries were warranted.

Data also showed that foreign investors sold a net $1.5 billion worth of Indian equities after the Hindenburg report – the biggest outflow over four consecutive days since Sept. 30.

Headaches for the Adani Group are expected to continue for some time.

India’s markets regulator, which has been looking into deals by the conglomerate, has said it will add Hindenburg’s report to its own preliminary investigation.

State-run Life Insurance Corporation (LIC) (LIFI.NS)said on Monday it would seek clarifications from Adani’s management on the short seller report. The insurance giant was, however, a key investor in the Adani Enterprises share sale.

Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group.

Reporting by Chris Thomas in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharath Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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Business

Adani’s $2.5 bln share offer backed by investors, despite short-seller attack

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MUMBAI, Jan 31 (Reuters) – Indian billionaire Gautam Adani’s $2.5 billion share sale inched closer to full subscription on Tuesday as investors pumped in funds after a tumultuous week for his group in which its stocks were pummeled by a scathing short-seller report.

The secondary share sale of flagship Adani Enterprises (ADEL.NS) was subscribed 93% on Tuesday, including the anchor investor portion, Indian stock exchange data showed. The share sale needed at least 90% subscription to go through.

By Monday, the book building process of the country’s largest share sale had received only 3% in bids, amid swirling concerns that the share sale could struggle due to a market rout in Adani’s stocks in recent days.

The share sale is critical for Adani, not just because it is India’s largest follow-on offering and will help cut debt, but also because its success will be seen as a stamp of confidence by investors at a time the tycoon faces one of his biggest business and reputational challenges of recent times.

The offer closes days after Adani’s public faceoff with Hindenburg Research, which on Jan. 24 flagged concerns about the use of tax havens and “substantial debt” at the group. It added that shares in seven Adani listed companies have an 85% downside due to what it called “sky-high valuations”.

That has since sparked $65 billion in cumulative losses for stocks of the Adani group, which called the report baseless.

The support for Adani’s share sale came even as the flagship’s shares were trading at 2,967 rupees, up nearly 2.5% but below the lower end of the share sale price band of 3,112 rupees.

“It looks down to the wire with just a few hours remaining on the last day, but the offering should go through. Institutions seem to be subscribing to capitalise on opportunity to buy in bulk quantities outside the open market,” said Dipan Mehta, founder director of Elixir Equities.

Adani Group’s total gross debt in the financial year ended March 31, 2022, rose 40% to 2.2 trillion rupees ($26.83 billion). Adani said on Sunday – while responding to Hindenburg’s allegations – that over the past decade the group has “consistently de-levered”. Hindenburg later said Adani’s “response largely confirmed our findings and ignored our key questions.”

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The group had in recent days repeatedly said investors were standing by its side and the share offering would go through, amid rising concerns that may not happen. Bankers at one point had considered tweaking the pricing of the issue, or extending the sale, Reuters had reported.

Adani even said the Hindenburg report was a “calculated attack” on the country and its institutions while its CFO compared the market rout of its stocks to a colonial-era massacre.

Demand from retail investors remained muted, garnering bids only worth around 10% of the shares on offer for that segment. On Tuesday, demand mostly came from foreign institutional investors, as well as corporates who bid in excess of 1 million rupees each, data showed.

Over the weekend and through Monday, Adani’s firm held extensive discussions with investment bankers and institutional investors to attract subscriptions, according to two sources with direct knowledge of the talks.

Abu Dhabi conglomerate International Holding Company (IHC.AD) said it will invest $400 million in the issue.

“The follow-on public offering has to go through to restore investor confidence,” said V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The Hindenburg report and its fallout have drawn global attention. Adani is now the world’s eighth richest person, down from third ranking on Forbes’ rich list last week.

Adani Transmission (ADAI.NS) rose 1.6% on Tuesday, after losing 38% since the Hindenburg report, while Adani Ports and Special Economic Zone (APSE.NS) climbed 3.2%.

Adani Total Gas (ADAG.NS) languished at its 10% lower price limit, while Adani Power (ADAN.NS) and Adani Wilmar (ADAW.NS) were down 5% each.

Reuters Graphics

Global index publisher FTSE Russell said on Tuesday it continues to monitor publicly available information on the group, in particular from the Indian regulatory authorities.

Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group. On Tuesday, U.S. dollar-denominated bonds issued by Adani Ports and Special Economic Zone continued their fall into a second week.

($1 = 82.0025 Indian rupees)

Reporting by M. Sriram and Chris Thomas; Editing by Aditya Kalra and Muralikumar Anantharaman

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Business

Unilever names former Heinz exec Schumacher as CEO

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  • To become CEO July 1
  • Activist shareholder says met Schumacher when at Heinz
  • First outsider CEO since Paul Polman appointed in 2008
  • Unilever shares outpace FTSE 100

LONDON, Jan 30 (Reuters) – Unilever on Monday appointed Hein Schumacher to replace Alan Jope as chief executive from July in a move that was welcomed by investors including board member and activist shareholder Nelson Peltz.

Schumacher, 51, rejoined Unilever in October last year as non-executive director and is currently the chief of Dutch dairy business FrieslandCampina.

He worked at Unilever more than 20 years ago before working for retailer Royal Ahold NV and packaged food maker H.J. Heinz in the United States, Europe and Asia.

One of the biggest consumer companies in the world with more than 400 brands ranging from detergent to ice cream, Unilever said in September said that Jope planned to retire at the end of 2023.

Billionaire activist investor Nelson Peltz, who heads investor Trian Partners, said he strongly supports Schumacher “as our new CEO and look(s) forward to working closely with him to drive significant sustainable stakeholder value.”

Peltz become a Unilever board member in July after it was revealed early last year that he had built a stake in the company.

“I first met Hein when I served as a director at the H.J. Heinz Company from 2006 to 2013 and was impressed by his leadership skills and business acumen,” Peltz said.

Peltz, through his Trian Fund, holds a nearly 1.5% stake in Unilever, making him the fourth largest shareholder, according to Refinitiv Eikon data.

Unilever shares were up 0.56% versus a FTSE 100 (.FTSE) index down 0.1% as of 1032 GMT.

The move was also cheered by other investors and analysts, who have felt in recent years that Unilever needed an outsider’s touch.

“Positive that he’s an external appointment,” Jack Martin, a fund manager at Unilever shareholder Oberon Investments, said. “Good CV from what I read, hopefully provides the impetus the company requires.”

‘ESG SAVVY, PRAGMATIC’

Unilever’s shares have underperformed European consumer staples and discretionary indices during CEO Jope’s tenure, which began in January 2019.

Reuters Graphics

His failed bids for GlaxoSmithKline’s (GSK.L) consumer healthcare business last year lost him some good faith among investors, including influential British billionaire Terry Smith, owner of Fundsmith.

Smith said at the time that Jope needed to focus less on sustainbility and more on building Unilever’s core business.

“Hein is ideal for Unilever — he’s got roots at the company but at the same time he’s external,” Allan Leighton, former CEO of British food retailer Asda and ex-chair of Britain’s Royal Mail, told Reuters.

Leighton, who worked with Schumacher on the board of C&A AG, described him as “ESG savvy but in a pragmatic and commercial way.”

Tineke Frikee, a fund manager at Unilever shareholder Waverton Investment Management, said: “It is good Schumacher has plenty of industry experience outside Unilever, particularly international.”

“I note though that his background is mainly in food, rather than beauty and personal care. This may lead the market to reduce the probability of a potential food spin-off.”

Unilever’s food business includes Ben & Jerry’s ice cream, Colman’s mustard, Hellman’s mayonnaise and Knorr stock cubes.

Some investors and analysts have speculated over the past year that Unilever might spin off what they feel is a weaker food business to focus on personal goods, beauty and home care.

“Why hire a food exec, if you are planning to sell the food business?” Bernstein analyst Bruno Monteyne said, adding that selling the food business “will always be on the cards, but I doubt that it is top priority in the short term.”

But Monteyne pointed out that some investors were hoping Unilever would name someone more well-established, globally.

“Investors we spoke to in recent weeks were hopeful for a more familiar name from a successful U.S.-based FMCG (fast-moving consumer goods) turnaround.”

Unilever had been considering internal and external candidates for the role.

Sources told Reuters in October that the candidates included finance chief Graeme Pitkethly, personal care division boss Fabian Garcia and Hanneke Faber, who heads the company’s nutrition group.

Reporting by Yadarisa Shabong and Richa Naidu; editing by Matt Scuffham and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

Richa Naidu

Thomson Reuters

London-based reporter covering retail and consumer goods, analysing trends including coverage of supply chains, advertising strategies, corporate governance, sustainability, politics and regulation. Previously wrote about U.S. based retailers, major financial institutions and covered the Tokyo 2020 Olympic Games.

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Business

Hindenburg shorts India’s Adani Group, flags debt and accounting concerns

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BENGALURU, Jan 25 (Reuters) – Hindenburg Research said on Wednesday it held short positions in India’s Adani Group, accusing the conglomerate of improper extensive use of entities set up in offshore tax havens and expressing concern about high debt levels.

The report, which comes days ahead of a $2.5 billion share offering by flagship firm Adani Enterprises (ADEL.NS), sent shares in Adani group firms sliding.

Hindenburg, a well known U.S. short-seller, said key listed companies in the group controlled by billionaire Gautam Adani had “substantial debt” which has put the entire group on a “precarious financial footing”.

It also said that seven Adani listed companies have an 85% downside on a fundamental basis due to what it called “sky-high valuations”.

An Adani spokesperson did not immediately respond to Reuters request for comment on the report, which Hindenburg said was based on research that involved speaking with dozens of individuals, including former Adani Group executives as well as a review of documents.

Hindenburg said it held its short positions through U.S.-traded bonds and non-Indian-traded derivative instruments.

Adani has repeatedly dismissed debt concerns. Adani Chief Financial Officer Jugeshinder Singh told media on Jan. 21 “Nobody has raised debt concerns to us. No single investor has.”

In the wake of the Hindenburg report, Adani Ports And Special Economic Zone (APSE.NS) slid 7.3% to its lowest level since early July, while Adani Enterprises dropped 3.7% to a near three-month low.

Reuters Graphics Reuters Graphics

Adani-owned cement firms ACC (ACC.NS) and Ambuja Cements (ABUJ.NS) fell 6.7% and 9.7% respectively.

Hindenburg’s report said that five of seven key listed Adani companies have reported current ratios – a measure of liquid assets minus near-term liabilities – below 1. This, the short-seller said, suggested “a heightened short-term liquidity risk.”

Adani Group’s total gross debt in the financial year ending March 31, 2022, rose 40% to 2.2 trillion rupees.

Refinitiv data shows that debt at all the Adani Group’s seven key listed Adani companies exceeds equity, with debt at Adani Green Energy Ltd (ADNA.NS) exceeding equity by more than 2,000%.

CreditSights, part of the Fitch Group, described the group last September as “overleveraged” and said it had concerns over its debt. While the report later corrected some calculation errors, CreditSights said it maintained its concerns over leverage.

Hindenburg is known for shorting electric truck maker Nikola Corp (NKLA.O) and Twitter though it later reversed its position in Twitter.

Shares in Adani Enterprises surged 125% in 2022, while other group companies, including power and gas units, rose more than 100%.

Reporting by Mrinmay Dey, Chris Thomas and Aditya Kalra; Additional reporting by Miyoung Kim; Editing by Dhanya Ann Thoppil and Edwina Gibbs

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World

Over 50 injured in Peru as protests cause ‘nationwide chaos’

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LIMA, Jan 20 (Reuters) – Dozens of Peruvians were injured after tensions flared again on Friday night as police clashed with protesters in anti-government demonstrations that are spreading across the country.

In the capital Lima, police officers used tear gas to repel demonstrators throwing glass bottles and stones, as fires burned in the streets, local TV footage showed.

In the country’s southern Puno region, some 1,500 protesters attacked a police station in the town of Ilave, Interior Minister Vicente Romero said in a statement to news media.

A police station in Zepita, Puno, was also on fire, Romero said.

Health authorities in Ilave reported eight patients hospitalized with injuries, including broken arms and legs, eye contusions and punctured abdomens.

By late afternoon, 58 people had been injured nationwide in demonstrations, according to a report from Peru’s ombudsman.

The unrest followed a day of turmoil in Thursday, when one of Lima’s most historic buildings burned to the ground, as President Dina Boluarte vowed to get tougher on “vandals.”

The destruction of the building, a near-century-old mansion in central Lima, was described by officials as the loss of a “monumental asset.” Authorities are investigating the causes.

Romero on Friday claimed the blaze was “duly planned and arranged.”

Thousands of protesters descended on Lima this week calling for change and angered by the protests’ mounting death toll, which officially stood at 45 on Friday.

[1/6] A riot police officer points with a weapon during the ‘Take over Lima’ march to demonstrate against Peru’s President Dina Boluarte, following the ousting and arrest of former President Pedro Castillo, in Lima, Peru January 20, 2023. REUTERS/Sebastian Castaneda

Protests have rocked Peru since President Pedro Castillo was ousted in December after he attempted to dissolve the legislature to prevent an impeachment vote.

The unrest has until this week been concentrated in Peru’s south.

In the Cusco region, Glencore’s (GLEN.L) major Antapaccay copper mine suspended operations on Friday after protesters attacked the premises – one of the largest in the country – for the third time this month.

Airports in Arequipa, Cusco and the southern city of Juliaca were also attacked by demonstrators, delivering a fresh blow to Peru’s tourism industry.

“It’s nationwide chaos, you can’t live like this. We are in a terrible uncertainty – the economy, vandalism,” said Lima resident Leonardo Rojas.

The government has extended a state of emergency to six regions, curtailing some civil rights.

But Boluarte has dismissed calls for her to resign and hold snap elections, instead calling for dialogue and promising to punish those involved in the unrest.

“All the rigor of the law will fall on those people who have acted with vandalism,” Boluarte said on Thursday.

Some locals pointed the finger at Boluarte, accusing her of not taking action to quell the protests, which began on Dec. 7 in response to the ouster and arrest of Castillo.

Human rights groups have accused the police and army of using deadly firearms. The police say protesters have used weapons and homemade explosives.

Reporting by Marco Aquino; Writing by Isabel Woodford; Editing by Bill Berkrot, Leslie Adler and William Mallard

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One year after volcanic blast, many of Tonga’s reefs lay silent

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Jan 15 (Reuters) – One year on from the massive eruption of an underwater volcano in the South Pacific, the island nation of Tonga is still dealing with the damage to its coastal waters.

When Hunga-Tonga-Hunga Ha’apai went off, it sent a shockwave around the world, produced a plume of water and ash that soared higher into the atmosphere than any other on record, and triggered tsunami waves that ricocheted across the region – slamming into the archipelago which lies southeast of Fiji.

Coral reefs were turned to rubble and many fish perished or migrated away.

The result has Tongans struggling, with more than 80% of Tongan families relying on subsistence reef fishing, according 2019 data from the World Bank. Following the eruption, the Tongan government said it would seek $240 million for recovery, including improving food security. In the immediate aftermath, the World Bank provided $8 million.

“In terms of recovery plan … we are awaiting for funds to cover expenditure associated with small-scale fisheries along coastal communities,” said Poasi Ngaluafe, head of the science division of Tonga’s Ministry of Fisheries.

SILENT REEFS

The vast majority of Tongan territory is ocean, with its exclusive economic zone extending across nearly 700,000 square kilometres (270,271 square miles) of water. While commercial fisheries contribute only 2.3% to the national economy, subsistence fishing is considered crucial in making up a staple of the Tongan diet.

The U.N.’s Food and Agricultural Organization estimated in a November report that the eruption cost the country’s fisheries and aquaculture sector some $7.4 million – a significant number for Tonga’s roughly $500 million economy. The losses were largely due to damaged fishing vessels, with nearly half of that damage in the small-scale fisheries sector, though some commercial vessels were also affected.

Because the Tongan government does not closely track subsistence fishing, it is difficult to estimate the eruption’s impact on fish harvests.

But scientists say that, apart from some fish stocks likely being depleted, there are other troubling signs that suggest it could take a long time for fisheries to recover.

Young corals are failing to mature in the coastal waters around the eruption site, and many areas once home to healthy and abundant reefs are now barren, according to the government’s August survey.

It is likely volcanic ash smothered many reefs, depriving fish of feeding areas and spawning beds. The survey found that no marine life had survived near the volcano.

Meanwhile, the tsunami that swelled in the waters around the archipelago knocked over large boulder corals, creating fields of coral rubble. And while some reefs survived, the crackling, snapping and popping noises of foraging shrimp and fish, a sign of a healthy environment, were gone.

“The reefs in Tonga were silent,” the survey report found.

FARMING REPRIEVE

Agriculture has proved a lifeline to Tongans facing empty waters and damaged boats. Despite concerns that the volcanic ash, which blanketed 99% of the country, would make soils too toxic to grow crops, “food production has resumed with little impacts,” said Siosiua Halavatu, a soil scientist speaking on behalf of the Tongan government.

Soil tests revealed that the fallen ash was not harmful for humans. And while yam and sweet potato plants perished during the eruption, and fruit trees were burned by falling ash, they began to recover once the ash was washed away.

“We have supported recovery works through land preparation, and planting backyard gardening and roots crops in the farms, as well as export crops like watermelon and squash,” Halavatu told Reuters.

But long-term monitoring will be critical, he said, and Tonga hopes to develop a national soil strategy and upgrade their soil testing laboratory to help farmers.

SKY WATER

Scientists are also now taking stock of the eruption’s impact on the atmosphere. While volcanic eruptions on land eject mostly ash and sulfur dioxide, underwater volcanos jettison far more water.

Tonga’s eruption was no different, with the blast’s white-grayish plume reaching 57 kilometers (35.4 miles) and injecting 146 million tonnes of water into the atmosphere.

Water vapor can linger in the atmosphere for up to a decade, trapping heat on Earth’s surface and leading to more overall warming. More atmospheric water vapor can also help deplete ozone, which shields the planet from harmful UV radiation.

“That one volcano increased the total amount of global water in the stratosphere by 10 percent,” said Paul Newman, chief scientist for earth sciences at NASA’s Goddard Space Flight Center. “We’re only now beginning to see the impact of that.”

Reporting by Gloria Dickie in London; Additional reporting by Kirsty Needham; Editing by Katy Daigle and Tomasz Janowski

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Business

U.S. FTC probes Pepsi, Coca-Cola over price discrimination – Politico

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Jan 9 (Reuters) – Beverage giants Coca-Cola Co (KO.N) and PepsiCo Inc (PEP.O) are under preliminary investigation by the U.S. Federal Trade Commission (FTC) over potential price discrimination in the soft drink market, Politico reported on Monday citing sources.

The pricing strategies of both companies are being scrutinized under the Robinson-Patman Act, the report said.

The U.S. antitrust law prevents large franchises and chains from engaging in price discrimination against small businesses.

The FTC reached out to large retailers, including Walmart Inc (WMT.N), for at least a month seeking data and other information on how they purchase and price soft drinks, two of the sources told Politico. Walmart is currently not a target in the investigation, according to the report.

FTC, Coca-Cola, Pepsi and Walmart did not immediately respond to Reuters’ request for comments.

Reporting by Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips

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Business

Exclusive: PepsiCo to roll out 100 Tesla Semis in 2023, exec says

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NEW YORK/SAN FRANCISCO, Dec 16 (Reuters) – PepsiCo plans to roll out 100 heavy-duty Tesla Semis in 2023, when it will start using the electric trucks to make deliveries to customers like Walmart and Kroger, the soda maker’s top fleet official told Reuters on Friday.

PepsiCo Inc (PEP.O), which ordered the big trucks in 2017, is purchasing them “outright” and is also upgrading its plants, including installing four 750-kilowatt Tesla Inc (TSLA.O) charging stalls at both its Modesto and Sacramento locations in California, PepsiCo Vice President Mike O’Connell said in an interview. A $15.4 million state grant and $40,000 federal subsidy per vehicle helps offset part of the costs.

“It’s a great starting point to electrify,” said O’Connell, who oversees the company’s fleet of vehicles.

“Like any early technology, the incentives help us build out the program,” he said, adding that there were “lots” of development and infrastructure costs.

PepsiCo is the first company to experiment with the battery-powered Tesla Semis as a way of cutting its environmental impact. read more

United Parcel Service Inc (UPS.N) and food delivery company Sysco Corp (SYY.N) have also reserved the trucks, while retailer Walmart Inc (WMT.N) is testing alternatives.

PepsiCo’s plans to use the Semis have been reported, but O’Connell provided new details on how the company is using them and its timeline for deploying them. Tesla Chief Executive Elon Musk initially said the trucks would be in production by 2019, but that was delayed due to battery constraints.

PepsiCo said it plans to deploy 15 trucks from Modesto and 21 from Sacramento. It is unclear where the others will be based but O’Connell said the firm is targeting rolling out the Semis in the central United States next, and then the East Coast.

The company’s Frito-Lay division sells lightweight food products, making it a good candidate for electric trucks, which have heavy batteries that could limit cargo capacity.

The Semis will haul Frito-Lay food products for around 425 miles (684 km), but for heavier loads of sodas, the trucks will initially do shorter trips of around 100 miles (160 km), O’Connell said. PepsiCo then will also use the Semis to haul beverages in the “400 to 500 mile range as well,” O’Connell said.

“Dragging a trailer full of chips around is not the most intense, tough ask,” said Oliver Dixon, senior analyst at consultancy Guidehouse.

“I still believe that Tesla has an awful lot to prove to the broader commercial vehicle marketplace,” Dixon said, citing Tesla’s unwillingness to offer information on payload and pricing.

PepsiCo has earmarked some of the trucks planned for the Sacramento location to make deliveries to Walmart and grocers such as Kroger Co (KR.N) and Albertsons Cos Inc (ACI.N). The trucks at the Modesto Frito-Lay plant have just gone to PepsiCo distribution centers, O’Connell said.

All of the Semis going to PepsiCo will have a 500-mile (805-km) range. O’Connell added that he is not aware of when Tesla will start deploying 300-mile (480-km) trucks. When Tesla starts building them, PepsiCo “will rotate those up” into its fleet, he said.

PepsiCo declined to share details on the price of the trucks, a figure that Tesla has kept quiet. Competing vehicles sell for $230,000 to $240,000, said Mark Barrott of consulting firm Plante Moran. He added that the 500-mile range Tesla Semi could be priced higher because its 1,000-kilowatt-hour (kWh) battery pack is about twice the size of many of its rivals.

“We keep the trucks for a million miles, seven years,” O’Connell said. “The operating costs over time will pay back.”

The Gatorade maker declined to share specifics on the weight of the trucks, another closely guarded secret by Tesla.

He said Tesla did not help pay for the trucks’ megachargers but provided design and engineering services for the facilities, which come with solar and battery storage systems.

O’Connell said that a 425-mile (684-km) trip carrying Frito-Lay products brings the Semi’s battery down to roughly 20%, and recharging it takes around 35 to 45 minutes.

Reporting by Jessica DiNapoli in New York and Hyun Joo Jin in San Francisco; additional reporting by Joe White and Siddharth Cavale; Editing by Jonathan Oatis and Rosalba O’Brien

Our Standards: The Thomson Reuters Trust Principles.

Jessica DiNapoli

Thomson Reuters

New York-based reporter covering U.S. consumer products spanning from paper towels to packaged food, the companies that make them and how they’re responding to the economy. Previously reported on corporate boards and distressed companies.

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Business

Elon Musk briefly loses title as world’s richest person to LVMH’s Arnault – Forbes

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Dec 7 (Reuters) – Twitter owner and Tesla (TSLA.O) boss Elon Musk briefly lost his title as the world’s richest person on Wednesday, according to Forbes, following a steep drop in the value of his stake in the electric-car maker and a $44 billion bet on the social media firm.

Bernard Arnault, the chief executive of luxury brand Louis Vuitton’s parent company LVMH (LVMH.PA), and his family briefly took the title as the world’s richest, but were back at No. 2 with a personal wealth of $185.3 billion, according to Forbes.

Musk, who has held the top spot on the Forbes list since September 2021, has a net worth of $185.7 billion. Musk took over the title from Amazon.com (AMZN.O) founder Jeff Bezos.

[1/2] Tesla CEO Elon Musk gestures as he visits the construction site of Tesla’s Gigafactory in Gruenheide near Berlin, Germany, August 13, 2021. Patrick Pleul/Pool via Reuters – RC2B4P9PCFBM/File Photo

Tesla shares, which have lost more than 47% in value since Musk made his offer to buy Twitter earlier this year, were down 2.7%.

Musk’s net worth dropped below $200 billion earlier on Nov. 8 as investors dumped Tesla’s shares on worries the top executive and largest shareholder of the world’s most valuable electric-vehicle maker is more preoccupied with Twitter.

Tesla has lost nearly half its market value and Musk’s net worth has dropped by about $70 billion since he bid for Twitter in April. Musk closed the deal for Twitter in October with $13 billion in loans and a $33.5 billion equity commitment.

Besides Tesla, Musk also heads rocket company SpaceX and Neuralink, a startup that is developing ultra-high bandwidth brain-machine interfaces to connect the human brain to computers.

Reporting by Akriti Sharma and Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

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