Tag Archives: INVBNK

Business

Crypto lending unit of Genesis files for U.S. bankruptcy

Leave a comment

Jan 20 (Reuters) – The lending unit of crypto firm Genesis filed for U.S. bankruptcy protection on Thursday, owing creditors at least $3.4 billion, after being toppled by a market rout along with the likes of exchange FTX and lender BlockFi.

Genesis Global Capital, one of the largest crypto lenders, froze customer redemptions on Nov. 16 after the collapse of major exchange FTX sent shockwaves through the crypto asset industry, fuelling concern that other companies could implode.

Genesis is owned by venture capital firm Digital Currency Group (DCG).

Its bankruptcy filing is the latest in a string of crypto failures triggered by a market collapse that wiped about $1.3 trillion off the value of crypto tokens last year. While bitcoin has rallied so far in 2023, the impact of the market collapse has continued to hit companies in the highly interconnected sector.

The bankruptcy “doesn’t come as a shock to the markets,” said Ivan Kachkovski, currency and crypto strategist at UBS. “It remains to be seen if the chain effect would go on.”

“However, given that the funds have already been frozen for over two months and no other large crypto company reported an associated weakness, it’s likely that the contagion would be limited.”

Genesis’ lending unit said it had both assets and liabilities in the range of $1 billion to $10 billion, and estimated it had more than 100,000 creditors in its filing with the U.S. Bankruptcy Court for the Southern District of New York.

Genesis Global Holdco, the parent group of Genesis Global Capital, also filed for bankruptcy protection, along with another lending unit Genesis Asia Pacific.

Genesis Global Holdco said in a statement that it would contemplate a potential sale, or a stock-related transaction, to pay creditors, and that it had $150 million in cash to support the restructuring.

It added that Genesis’ derivatives and spot trading, broker dealer and custody businesses were not part of the bankruptcy process, and would continue their client trading operations.

CREDITORS’ CLAIMS

Genesis owes its 50 biggest creditors $3.4 billion, according to Reuters’ calculations from the bankruptcy filing. Its largest creditor is crypto exchange Gemini, which it owes $765.9 million. Gemini was founded by the identical twin cryptocurrency pioneers Cameron and Tyler Winklevoss.

Genesis was already locked in a dispute with Gemini over a crypto lending product called Earn that the two firms jointly offered to Gemini customers.

The Winklevoss twins have said Genesis owed more than $900 million to some 340,000 Earn investors. On Jan. 10, Cameron Winklevoss called for the removal of Barry Silbert as the chief executive of Digital Currency Group.

Representations of cryptocurrencies are seen in front of displayed decreasing stock graph in this illustration taken November 10, 2022. REUTERS/Dado Ruvic/Illustration

About an hour after the bankruptcy filing, Cameron Winklevoss tweeted that Silbert and Digital Currency Group continued to deny creditors a fair deal.

“Unless Barry (Silbert) and DCG come to their senses and make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently,” Winklevoss said in his tweet thread.

DCG did not immediately respond to a Reuters request for comment on the tweets.

Amsterdam-based crypto exchange Bitvavo, said in December it was trying to recover 280 million euros ($302.93 million) which it had lent to Genesis.

Bitvavo said in a blog post on Friday that talks on the repayment “have not yet led to an overall agreement that works for all parties concerned” and that it would continue to negotiate.

The bankruptcy filing “brings the process of negotiations to calmer waters,” Bitvavo said.

LENDING BUSINESS

Genesis brokered digital assets for financial institutions such as hedge funds and asset managers and had almost $3 billion in total active loans at the end of the third quarter, down from $11.1 billion a year earlier, according to its website.

Last year, Genesis extended $130.6 billion in crypto loans and traded $116.5 billion in assets, according to its website.

Its two biggest borrowers were Three Arrows Capital, a Singapore-based crypto hedge fund, and Alameda Research, a trading company closely affiliated with FTX, a source told Reuters. Both are in bankruptcy proceedings.

Three Arrows debt to Genesis was assumed by its parent company Digital Currency Group (DCG), which then filed a claim against Three Arrows. DCG’s portfolio companies also include crypto asset manager Grayscale and news service CoinDesk.

Crypto lenders, which acted as the de facto banks, boomed during the pandemic. But unlike traditional banks, they are not required to hold capital cushions. Earlier this year, a shortfall of collateral forced some lenders – and their customers – to shoulder large losses.

($1 = 0.9243 euros)

Reporting by Tom Hals in Wilmington, Delaware, Akanksha Khushi, and Elizabeth Howcroft in London; Editing by Lananh Nguyen, Clarence Fernandez, Kim Coghill, Ira Iosebashvili and Sharon Singleton

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Brazil court grants bankruptcy protection for retailer Americanas

Leave a comment

SAO PAULO, Jan 19 (Reuters) – A Rio de Janeiro court on Thursday accepted Brazilian retailer Americanas SA’s (AMER3.SA) bankruptcy protection request, days after the company disclosed nearly $4 billion in accounting inconsistencies that have sparked a legal feud with creditors and investors.

Americanas, a 93-year-old company with stores all over Brazil and a major e-commerce unit, said in a securities filing that it would restructure debts of about 43 billion reais ($8.2 billion).

Shares in the company plunged about 42.5% to 1.00 real following news of the filing, extending its year-to-date drop to around 90%.

The firm, backed by the billionaire trio that founded 3G Capital, said the move had come “despite the efforts and measures that the management has been taking in the past few days alongside its financial and legal advisers to protect the company from the effects” of the accounting scandal.

Investors had expected the decision, with some deeming it unavoidable, especially after lender BTG Pactual (BPAC3.SA) obtained on Wednesday a court decision overturning part of the firm’s protection from creditors.

Americanas is also facing seven different investigations launched by securities regulator CVM, as well as an arbitration process requesting compensation of 500 million reais to the firm and the trio that founded 3G Capital.

In a document filed with the court, law firms Basilio Advogados and Salomao Kaiuca Abrahao attributed the urgency in filing for bankruptcy to the creditors’ decision to seize the companies’ assets.

The retailer also mentioned a debt downgrade by ratings agencies, which prevented any new loans from being extended. S&P, Moody’s and Fitch all downgraded Americanas’ credit ratings following the accounting scandal.

Earlier, Americanas had said that its current cash position stood at only 800 million reais, down from a previously reported 7.8 billion.

Lucas Pogetti, a partner at M&A advisers RGS Partners, said a large part of Americanas’ previously disclosed cash position was linked to the prepayment of receivables or deposited with creditors.

“Naturally, when the banks became aware of the company’s real situation they began to adopt a more aggressive posture to protect themselves, consequently restricting access to resources,” Pogetti said.

In the filing, Americanas asks to exclude its fintech, Ame, from the bankruptcy protection, as it is regulated by the central bank, and for authorization to increase its capital.

Americanas’ stores are ubiquitous at Brazilian shopping malls. It e-commerce unit, which traded as a separate company before a recent restructuring, is one of the country’s top online retailers.

Chief executive Sergio Rial resigned last week, less than two weeks after taking the job, citing the discovery of “accounting inconsistencies” totaling 20 billion reais.

Rial, the former head of Banco Santander’s Brazilian arm (SANB3.SA), attributed the inconsistencies to differences in accounting for the financial cost of bank loans and debt with suppliers.

Chief financial officer Andre Covre, who had just joined Americanas as well, also left the firm, which has Brazilian billionaires Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles as reference shareholders.

Americanas said the reference shareholders intended to maintain the company’s liquidity at levels that allowed for a “good operation” of its stores, digital channel and other entities.

($1 = 5.2226 reais)

Reporting by Gabriel Araujo, Tatiana Bautzer and Peter Frontini in Sao Paulo and Carolina Pulice in Mexico City; Editing by Rosalba O’Brien and Bradley Perrett

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Crypto lender Genesis preparing to file for bankruptcy, Bloomberg News reports

Leave a comment

Jan 18 (Reuters) – Cryptocurrency lender Genesis Global Capital is planning to file for bankruptcy as soon as this week, Bloomberg News reported on Wednesday, citing people with knowledge of the situation.

A bankruptcy filing has been expected for weeks, after the company froze customer redemptions on Nov. 16 following the downfall of major cryptocurrency exchange FTX.

The collapse of FTX in November has claimed several victims including crypto lender BlockFi and Core Scientific Inc , one of the biggest publicly traded crypto mining companies in the United States, both of which filed for bankruptcy protection in the following months.

Genesis, its parent Digital Currency Group and creditors have exchanged several proposals, but have so far failed to come to an agreement, the Bloomberg report said, adding that Kirkland & Ellis and Proskauer Rose have been advising groups of creditors.

Genesis did not immediately respond to a Reuters request for comment.

Genesis is also locked in a dispute with Gemini, founded by the identical twin crypto pioneers Cameron and Tyler Winklevoss.

Gemini offered a crypto lending product called Earn in partnership with Genesis, and now says Genesis owes it $900 million in connection with that product.

The U.S. Securities and Exchange Commission last week said it had charged Genesis and Gemini with illegally selling securities to hundreds of thousands of investors through their crypto lending program.

Reporting by Niket Nishant and Mehnaz Yasmin in Bengaluru; Editing by Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Goldman misses profit estimates as dealmaking slumps, consumer business hit

Leave a comment

Jan 17 (Reuters) – Goldman Sachs Group Inc (GS.N) on Tuesday reported a bigger-than-expected 69% drop in fourth-quarter profit as it struggled with a slump in dealmaking, a drop in asset and wealth management revenue and booked losses at its consumer business.

Wall Street banks are making deep cuts to their workforce and streamlining their operations as dealmaking activity, their major source of revenue, stalls on worries over a weakening global economy and rising interest rates.

Goldman is also curbing its consumer banking ambitions as Chief Executive Officer David Solomon refocuses the bank’s resources on strengthening its core businesses such as investment banking and trading.

Solomon confirmed that the bank was cutting 6% of its headcount, or around 3,200 jobs, and was making changes to the consumer business to navigate an uncertain outlook for 2023.

“We tried to do too much too quickly,” he said about the consumer business such as its direct-to-consumer unit Marcus. “We didn’t execute perfectly on some so we’ve taken a hard look at those, and you make adjustments.”

Goldman reported a net loss of $660 million at its platform solutions unit, which houses transaction banking, credit card and financial technology businesses, as provisions for credit losses grew while the business was expanding.

Full-year net loss for the platform solutions business was $1.67 billion, the bank said, even though net revenue of $1.50 billion for 2022 was 135% above 2021.

Goldman on Tuesday confirmed that it is planning to stop making unsecured consumer loans after it moved Marcus into its asset and wealth management arm. The checking account launch for Marcus has also been postponed.

Goldman’s investment banking fees fell 48% in the latest quarter, while revenue from its asset and wealth management unit dropped 27% due to lower revenue from equity and debt investments.

Solomon said the investment banking outlook could be better in the “back half” of 2023, as people are softening their views on the economic outlook for this year.

Shares were down nearly 7% at $347.66 in midday trade.

[1/2] The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly

Reuters Graphics Reuters Graphics

GROWING COSTS

Wall Street’s biggest banks have stockpiled more rainy-day funds to prepare for a possible recession, while showing caution about forecasting income growth in an uncertain economy and as higher rates increase competition for deposits.

Total operating expenses at Goldman rose 11% to $8.1 billion in the quarter. A source told Reuters last week that the bank would lay off 3,000 employees in an attempt to rein in costs.

Goldman Chief Financial Officer Denis Coleman said severance charges will be adjusted in 2023.

The bank reported a profit of $1.19 billion, or $3.32 per share, for the three months ended Dec. 31, missing the Street estimate of $5.48, according to Refinitiv IBES data.

“Widely expected to be awful, Goldman Sachs’ Q4 results were even more miserable than anticipated,” said Octavio Marenzi, CEO of consultancy Opimas.

“The real problem lies in the fact that operating expenses shot up 11% while revenues tumbled. This strongly suggests more cost cutting and layoffs are going to come,” he added.

Goldman’s trading business was a bright spot as it benefited from heightened market volatility, spurred by the Federal Reserve’s quantitative tightening.

Fixed income, currency and commodities trading revenue was up 44% while revenue from equities trading fell 5%.

Overall net revenue was down 16% at $10.6 billion.

Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru and Saeed Azhar in New York; Additional reporting by Bansari Mayur Kamdar; Editing by Anil D’Silva and Mark Porter

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

World

Brazil markets tumble on Lula’s first full day in office

Leave a comment

BRASILIA, Jan 2 (Reuters) – Brazilian markets delivered a withering verdict on leftist President Luiz Inacio Lula da Silva’s first full day in office on Monday, after he pledged to prioritize social issues and ordered a budget-busting extension to a fuel tax exemption.

Lula’s decision to extend the fuel tax exemption, which will deprive the Treasury of 52.9 billion reais ($9.9 billion) a year in fiscal income, was a stinging rebuke of his finance minister Fernando Haddad, a Workers Party (PT) loyalist who had said it would not be extended.

Haddad, who is seeking to dispel market fears that he might not maintain fiscal discipline, took office on Monday, pledging to control spending. “We are not here for adventures,” he said.

Markets seemed unconvinced.

The real currency lost 1.5% in value against the dollar in afternoon trading, while the benchmark Sao Paulo stock market index (.BVSP) ended 3.06% down. Shares of state-run oil company Petrobras (PETR4.SA) retreated nearly 6.45%.

In speeches delivered at his inauguration in Brasilia on Sunday, Lula promised that tackling hunger and poverty would be “the hallmark” of his third presidency after two previous stints running the country from 2003 to 2010.

Financial analysts said the start of Lula’s third presidency was in line with his campaign promises, and looked similar to earlier Workers Party policies that led to a deep recession.

Lula narrowly defeated far-right incumbent Jair Bolsonaro in October, swinging South America’s largest nation back on a left-wing track.

On Monday, Lula instructed ministers to revoke steps to privatize state companies taken by the previous administration, including studies to sell Petrobras, the Post Office and state broadcasting company EBC.

On Sunday, he signed a decree extending an exemption for fuels from federal taxes, a measure passed by his predecessor aimed at lowering their cost in the run-up to the election, but which will deprive the Treasury of 52.9 billion reais ($9.9 billion) a year in fiscal income.

The federal tax exemption for fuels will last one year for diesel and biodiesel and two months for gasoline and ethanol, a decree published in the official gazette showed on Monday.

Gabriel Araujo Gracia, analyst at Guide Investimentos, said Lula’s plans to increase social spending, expand the role of state banks and abolish a constitutionally mandated spending ceiling harked back to the worst days of Workers Party rule.

“The policies remind us of Dilma Rousseff’s government rather than Lula’s,” Gracia said, referring to Lula’s handpicked successor, who was impeached while in office. “Her policies led to Brazil’s worst recession since 1929.”

Lula, who lifted millions of Brazilians from poverty during his first two terms, criticized Bolsonaro for allowing hunger to return to Brazil, and wept during his speech to supporters on Sunday as he described how poverty had increased again.

Allies said Lula’s newfound social conscience was the result of his 580 days in prison, Reuters reported on Sunday.

Lula kicks off his third presidential term after persuading Congress to pass a one-year, 170 billion-reais increased social spending package, in line with his campaign promises.

“The package ended up being bigger than expected, with potential repercussions for public debt sustainability,” Banco BTG Pactual said in a research note.

Lula spent his first day in office meeting with more than a dozen heads of state who attended his inauguration.

The meetings started with the king of Spain, and continued with South American presidents, among them the leftist leaders of Argentina, Chile and Bolivia, as well as representatives from Cuba and Venezuela, and Vice President Wang Qishan of China.

On Twitter, Lula said he had received a letter from Chinese leader Xi Jinping expressing a desire to increase cooperation between the two countries.

“China is our biggest trading partner, and we can further expand relations between our countries,” Lula added.

The new president is also set to attend the wake of Brazilian soccer star Pele, who died on Thursday at 82 after battling colon cancer.

Lula will pay his respects and pay tribute to Pele and his family on Tuesday morning, the president’s office said in a statement.

($1 = 5.3633 reais)

Reporting by Anthony Boadle, Marcela Ayres and Gabriel Araujo; Editing by Matthew Lewis and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Credit Suisse seeks billions from investors in make-or-break overhaul

Leave a comment

ZURICH, Oct 27 (Reuters) – Credit Suisse plans to raise 4 billion Swiss francs ($4 billion) from investors, cut thousands of jobs and shift its focus from investment banking towards its rich clients, as the bank attempts to put years of scandals behind it.

The Swiss lender outlined on Thursday what its chairman Axel Lehmann dubbed a “blueprint for success”, after it racked up an unexpected 4 billion Swiss franc loss in the third quarter of the year.

The announcement followed torrid weeks for the bank and fell flat with investors. Its stock, which has plumbed record lows in recent weeks, dropped about 14 percent in early trading, valuing the embattled bank around 11 billion francs.

Credit Suisse said clients pulled funds in recent weeks at a pace that saw the lender breach some regulatory requirements for liquidity, underscoring the impact on its business of wild market swings and a social media storm.

The group added that it was stable throughout.

Analysts gave the announcement a lukewarm welcome. Vontobel’s Andreas Venditti said the bank was embarking on a “lengthy process to restore credibility”.

“Resolute execution and no further missteps will be key and it will take time until results will begin to show,” he said.

The turnaround plan has many elements, from cutting jobs to refocusing on banking for the wealthy.

It will cut 2,700 jobs or 5% of its workforce by the end of this year, and ultimately reduce its workforce by roughly 9,000 to about 43,000 by the end of 2025.

The Swiss bank said it also aims to separate out its investment bank to create CS First Boston, focused on advisory work such as mergers and acquisitions and arranging deals on capital markets.

The bank envisions selling a stake but keeping roughly 50% in the new business, said one person familiar with the issue. It is also exploring the possibility of an initial public offering, another source familiar with the matter said.

Saudi National Bank, majority-owned by the government of Saudi Arabia, said it will invest up to 1.5 billion francs in Credit Suisse to take a stake of up to 9.9% and may invest in the investment bank.

The move bolsters Saudi influence in one of Switzerland’s best-known banks. Olayan Group, one of the biggest Saudi family-owned conglomerates, with a multibillion dollar investment portfolio, also owns a 5% stake in the bank.

The Qatar Investment Authority – which owns about 5% of the Swiss bank – declined to comment on whether it plans to buy any shares.

Credit Suisse said it will create a capital release unit to wind down non-strategic, higher-risk businesses, while announcing plans to sell a large part of its securitised products business to an investor group led by Apollo.

The bank will also wind down some trading businesses in emerging markets and equities.

Its heavy loss in the third quarter was due in large part to write-offs linked to its investment banking overhaul, including adjustments for lost tax credits.

JPMorgan analysts said that “question marks remain” over the restructuring of investment banking, adding that the share sale would also weigh on the stock.

The latest revamp, aiming to overcome the bank’s worst crisis in its history, is the third attempt in recent years by successive CEOs to turn the group around.

Reuters Graphics Reuters Graphics

Once a symbol for Swiss reliability, the bank’s reputation has been tarnished by a series of scandals, including an unprecedented prosecution at home involving laundering money for a criminal gang.

The bank had been rushing to raise money and free up capital by selling assets, keen to limit how much cash it would have to raise from investors to fund its overhaul, handle its legacy litigation costs and retain a cushion for rough markets ahead.

Credit Suisse needs to revamp after a series of costly and morale-sapping blunders that triggered a wholesale change of management.

In refocusing away from risky investment banking to banking for the globe’s rich, Credit Suisse is following in the footsteps of its bigger Swiss rival, UBS.

The UBS turnaround succeeded in large part because of a flood of freshly printed money from the world’s central banks to reignite the economy during the financial crisis.

Credit Suisse, on the other hand, is attempting to refocus its business in a world facing war, an energy crisis, rocketing inflation and an economic slide.

Last year, the bank took a $5.5 billion loss from the unravelling of U.S. investment firm Archegos and had to freeze $10 billion worth of supply chain finance funds linked to insolvent British financier Greensill, highlighting risk-management failings.

Its deepening problems even put it on the radar of day traders earlier this month, when a frenzy of wild speculation about its health sent its stock price into a tailspin to a record low.

($1 = 0.9858 Swiss francs)

Additional reporting by Michael Shields in Zurich and Yousef Saba in Dubai; Writing by John O’Donnell; Editing by Edmund Klamann

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Crypto lender Voyager Digital files for bankruptcy

Leave a comment

July 6 (Reuters) – U.S. crypto lender Voyager Digital (VOYG.TO) said on Wednesday it had filed for bankruptcy, becoming another casualty of a dramatic fall in prices that has shaken the cryptocurrency sector.

Crypto lenders such as Voyager boomed in the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. However the recent slump in crypto markets – sparked by the downfall of two major tokens in May – has hurt lenders.

New Jersey-based Celsius in June froze withdrawals and has hired advisers on a possible bankruptcy filing. Voyager froze withdrawals this month, as did another lender, Singapore’s Vauld. read more

Register now for FREE unlimited access to Reuters.com

Register

Last week, Voyager said it had issued a notice of default to Singapore-based crypto hedge fund Three Arrows Capital (3AC) for failing to make payments on a crypto loan totalling over $650 million. read more

3AC later that week filed for chapter 15 bankruptcy, which allows foreign debtors to shield U.S. assets, becoming one of the highest-profile investors hit by plummeting crypto prices. 3AC is now being liquidated, Reuters reported last week. read more

“The prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital on a loan from the company’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now,” Voyager Chief Executive Officer Stephen Ehrlich said in a statement.

CHAPTER 11

REUTERS/Dado Ruvic/Illustration

Read More

In its Chapter 11 bankruptcy filing on Tuesday, Voyager – based in New Jersey but listed in Toronto – estimated that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in assets, and liabilities worth the same value.

Voyager had last month signed an agreement with trading firm Alameda Ventures, founded by Sam Bankman-Fried, CEO of major exchange FTX, for a revolving line of credit. A filing with the U.S. Bankruptcy Court Southern District of New York showed that Alameda was Voyager’s largest single creditor, with unsecured loans of $75 million.

Alameda did not immediately respond to a request for comment.

Chapter 11 bankruptcy procedures put a hold on all civil litigation matters and allow companies to prepare turnaround plans while remaining operational.

In a message to customers on Twitter, Ehrlich said the process would protect assets and “maximise value for all stakeholders, especially customers”.

Voyager said on Wednesday it had more than $110 million of cash and owned crypto assets on hand. It intends to pay employees in the usual manner and continue their primary benefits and certain customer programs without disruption.

Voyager has hired Moelis & Company and The Consello Group as financial advisers, Kirkland & Ellis LLP as legal adviser and Berkeley Research Group LLC as restructuring adviser.

Register now for FREE unlimited access to Reuters.com

Register

Reporting by Shivam Patel in Bengaluru and Sinead Cruise and Tom Wilson in London; Additional reporting by Ann Maria Shibu; Editing by Rashmi Aich, Bradley Perrett, Alexandra Hudson

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Citigroup to enforce ‘no-jab, no-job’ policy starting Jan. 14 – source

Leave a comment

The Citigroup Inc (Citi) in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/File Photo

Register now for FREE unlimited access to Reuters.com

Register

Jan 7 (Reuters) – Citigroup Inc (C.N) will begin enforcing a previously announced “no-jab, no job” policy as of Jan. 14, according to a source familiar with the matter, making it the first major Wall Street institution to implement a strict COVID-19 vaccine mandate.

The move comes as the financial industry, which has long been keen to get back to business as usual, grapples with how to safely bring workers back to the office amid the spread of the highly infectious Omicron coronavirus variant.

Other major Wall Street banks, including Goldman Sachs & Co, (GS.N), Morgan Stanley (MS.N) and JPMorgan Chase & Co (JPM.N), are telling unvaccinated staff to work from home, but have not yet gone as far as terminating their employment.

Register now for FREE unlimited access to Reuters.com

Register

While Citigroup is the first Wall Street bank to enforce a vaccine mandate, a handful of other major U.S. companies have introduced “no-jab, no-job” policies, including Google and United Airlines, with varying degrees of stringency.

Citigroup said in October it would require U.S. employees to be vaccinated as a condition of their employment but did not say when it would begin enforcing the new policy.

The bank said at the time it was complying with the policy of Democratic President Joe Biden’s administration requiring all workers supporting government contracts to be fully vaccinated, as the government remains a “large and important” client of Citi.

Citigroup will assess exemptions on religious or medical grounds, or any other accommodation by state or local law, on a case-to-case basis, the bank said at the time.

The source said the bank would begin enforcing that policy as of Jan. 14, but did not provide further details.

The U.S. Supreme Court on Friday was hearing arguments over requests by Republican state officials and business groups to block a Biden vaccine mandate for employers with more than 100 workers.

Bloomberg first reported Citigroup’s Jan. 14 deadline on Friday. Citigroup will place workers who do not comply by then on unpaid leave, with their last day of employment at the end of the month, the news outlet reported.

More than 90% of Citigroup staff have so far complied with the mandate and that figure is rising rapidly, Bloomberg reported, citing a Citigroup spokeswoman.

Many financial companies have pushed back their return-to-office plans and are encouraging staff to get vaccinated and boosted, but have so far avoided vaccine mandates for legal reasons.

“This is going to be a challenging and complex policy to implement. The problem here is there are a variety of different laws that weigh in on this,” said Chase Hattaway, a partner at law firm RumbergerKirk, noting both federal and anti-discrimination laws as well as a patchwork of state rules.

“Citi will have to tailor its policy to state legislation, and in many cases, cities and municipalities will have different regulations as well, that may require even further carve-outs,” Hattaway said.

BIDEN MANDATES

The Biden administration has used regulations to require businesses with at least 100 employees to require vaccination or weekly testing of employees.

An increasing number of U.S. companies have been using vaccine requirements to protect staff and operations from disruptions.

United Airlines Chief Executive Officer Scott Kirby said last month the carrier fired 200 of its 67,000 employees for failure to comply with its mandate.

Many hospitals have fired staff for failing to comply with mandates, which have been imposed on the healthcare industry in more than 20 states.

While some companies such as Tyson Foods Inc (TSN.N) have gotten more than 96% of its employees to take a vaccine, those in construction and retail have resisted vaccine mandates over fears of staff resistance amid a very tight labor market.

Register now for FREE unlimited access to Reuters.com

Register

Reporting by Niket Nishant in Bengaluru and David Henry in New York; Additional reporting by Tom Hals; Writing by Michelle Price; Editing by Amy Caren Daniel, Nick Zieminski and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Zuckerberg has metaverse rivals who mean business

Leave a comment

Facebook founder Mark Zuckerberg speaks in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam

Register now for FREE unlimited access to Reuters.com

Register

LONDON, Dec 23 (Reuters Breakingviews) – Many successful consumer technologies began life with a narrow focus. Think 1980s executives wielding bulky cellphones or scientists sharing research on Tim Berners-Lee’s newfangled World Wide Web. If the metaverse goes the same way, Microsoft (MSFT.O) – rather than chief proponent Meta Platforms (FB.O) – will be in pole position.

The metaverse refers to a more immersive version of the current internet: pulling on a virtual-reality headset, meeting friends at an entirely digital theatre, and watching a movie together, for example. Among its cheerleaders are “Fortnite” maker Epic Games and Mark Zuckerberg’s Meta – formerly Facebook – which is looking to capitalise on its VR unit.

But regular punters’ appetite for the metaverse is uncertain. To many people, existing video games like those available on the Roblox platform are already part of it. But the next step, VR headsets, remain pricey, not to mention heavy: Meta’s Quest 2 costs $300 and weighs half a kilogram. Meanwhile, subtler augmented-reality glasses are still nascent. read more

Register now for FREE unlimited access to Reuters.com

Register

Then there’s the unproven appeal of virtual experiences. Eventbrite (EB.N), which helps people organise concerts, cooking classes and such, saw sales collapse by two-thirds in 2020, despite the number of events on its platform falling by just 2%. It’s not clear that giving 2D online gigs an extra virtual dimension would have made much difference.

By contrast, corporations look a more fruitful target. The latest wave of Covid-19 has shuttered borders again, and finance chiefs are looking to keep a grip on expenses. Meta’s Horizon Workrooms software already allows for VR meetings. Yet although Microsoft boss Satya Nadella isn’t thumping the tub like Zuckerberg, that kind of customer is the software giant’s domain.

Slack Technologies’ experience shows how quickly Microsoft can catch up. By bundling its Teams product with existing subscriptions, users rapidly came from a standing start in 2016 to overtake former workplace-chat leader Slack within about three years. Slack agreed to sell itself to Salesforce.com (CRM.N) for $28 billion in December 2020. Metaverse-wise, Nadella’s firm has partnered with Accenture (ACN.N) to build “the Nth floor”, a virtual office the consultancy’s employees can beam into.

“If this is the future you want to see, I hope you’ll join us,” said Zuckerberg. At least at first, his enthusiasm may help arch-rivals more than it helps his own business.

(This is a Breakingviews prediction for 2022. To see more of our predictions, click here.)

Follow @olivertaslic on Twitter

CONTEXT NEWS

– Facebook founder Mark Zuckerberg on Oct. 28 said the social network’s parent company would be rebranded as Meta Platforms. Zuckerberg said that the new name reflected its work investing in the metaverse, which he described as “the successor to the mobile internet”.

– Chief Financial Officer David Wehner said on Oct. 25 that investment in Facebook Reality Labs, which includes the company’s augmented and virtual reality hardware, software and content, would reduce operating profit in 2021 by $10 billion.

– Microsoft on Nov. 2 announced Mesh for Microsoft Teams, which aims to combine “mixed-reality capabilities” with the software firm’s flagship workplace-chat product, as well as introducing personalised avatars.

Register now for FREE unlimited access to Reuters.com

Register

Editing by Richard Beales and Sharon Lam

Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.



Read original article here

Business

Evergrande backer Chinese Estates’ stock soars on take-private offer

Leave a comment

The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song

HONG KONG, Oct 7 (Reuters) – Shares of Chinese Estates Holdings (0127.HK), a former major shareholder of embattled developer China Evergrande (3333.HK), jumped as much as 32% on Thursday after it announced an offer to be taken private for HK$1.91 billion ($245 million).

The Hong Kong developer said on Wednesday the family of Chinese Estates’ biggest shareholder, Joseph Lau, had proposed to take it private by offering minority shareholders a 38% premium to its last traded price.

The offer represents the latest move by Lau and China Estates to emerge from the shadow of Evergrande, which is floundering due to a huge debt load and threatening the Hong Kong company’s future.

Formerly Evergrande’s second-biggest shareholder, Chinese Estates has already slashed its holding over the past few months to 4.39% from 6.48%. It has flagged a goal to exit the holding completely and estimates a loss of HK$10.41 billion for the current year from the stake disposal. read more

Eugene Law, business development director of China Galaxy International Financial, said as a listed company Chinese Estates would need to keep updating on its position in Evergrande and “it does not want that trouble”.

Once China’s top-selling property group, Evergrande is facing one of the country’s largest-ever defaults as it struggles with more than $300 billion of debt. Its fate is also unsettling global markets wary about the fallout of one of China’s biggest borrowers toppling.

Chinese Estates’ shares rose to HK$3.81 by noon. They resumed trading on Thursday after being suspended on Sept. 29.

Shares of the Hong Kong developer were down 42% this year before the trading suspension, dragged down by unrealized losses in its investment in Evergrande whose stock took a hit due to liquidity crisis and default risks.

Shares of Chinese Estates/Evergrande

In a statement late on Wednesday, Chinese Estates said its stock price may be further affected by Evergrande, as it is “cautious and concerned” about recent developments at the Chinese developer.

A delisting would reduce the costs and management resources to maintain the listing status, Chinese Estates added, and it could provide more flexibility to implement long-term business strategies.

Other than Evergrande, Chinese Estates said it also has significant investments in another Chinese developer, Kaisa Group (1638.HK), whose shares have also suffered falls over the past few months on wider liquidity concerns about China’s real estate sector.

Chinese Estates’ former chairman Lau has been a major backer of Evergrande chairman Hui Ka Yan and is a member of the so-called “poker club” of Hong Kong tycoons that includes Hui. read more

Lau, whose family owns about 75% of Chinese Estates’ equity capital, resigned as its chairman and chief executive in 2014 after he was found guilty of bribery and money laundering charges in the gambling hub of Macau.

($1 = 7.7857 Hong Kong dollars)

Reporting By Clare Jim and Donny Kwok; Editing by Anne Marie Roantree and Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

Read original article here