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Business

Nike, IKEA close Russian stores as sanctions, trade restrictions bite

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March 3 (Reuters) – Sneaker maker Nike and home furnishings firm IKEA shut down stores in Russia on Thursday, as trade restrictions and supply shutdowns added to political pressure for companies to stop business in Russia because of its invasion of Ukraine.

French bank Societe Generale (SOGN.PA) said it was working to cut its risks in Russia, fearing a tit-for-tat response by Moscow to Western sanctions, as more companies from vodka maker Diageo (DGE.L) to IKEA suspended business in the country.

Globally known companies including Apple, Ford and Shell have condemned Russia’s attack, but some of the announcements on Thursday were more practical, focused on supplies and sanctions as shipping routes closes and governments banned exports to Russia.

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Boeing Chief Executive David Calhoun, in a note to staff, acknowledged the violence in Ukraine but avoided politics.

“Moving forward, Boeing will continue to follow the lead of the U.S. government and strictly adhere to the export controls and restrictions that have been announced governing work in Russia,” he said in the note seen by Reuters, which described suspension of work in Russia and Ukraine.

Brazilian plane-maker Embraer (EMBR3.SA) joined Airbus and Boeing in halting parts supplies to Russian airlines.

Home furnishings retailer IKEA (IKEA.UL) said it would close outlets in Russia and Russian ally Belarus, affecting 15,000 workers, and described its shutdowns in non-political terms.

“The war has both a huge human impact and is resulting in serious disruptions to supply chain and trading conditions, which is why the company groups have decided to temporarily pause IKEA operations in Russia,” IKEA said in a statement. read more

Nike Inc said it was “deeply troubled by the devastating crisis in Ukraine” and described its closing of stores in this way: “Given the rapidly evolving situation, and the increasing challenges of operating our business, Nike will be pausing operations in Russia.”

Some companies and investors added up the costs of their actions.

Norway’s $1.3 trillion wealth fund said its Russian assets, worth around $3 billion before the invasion, have now become effectively worthless. read more “They are pretty much written off,” CEO Nicolai Tangen told Reuters.

TJX Cos Inc (TJX.N) said on Thursday it would sell its 25% stake in Russian low-cost apparel retailer Familia, which cost it $225 million in 2019. Because of a decline in the rouble and TJX said it may take an impairment charge due to the sale.

SANCTIONS RISKS

A man wearing a protective face mask amid the outbreak of the coronavirus disease (COVID-19) walks past a Nike brand store in central Kyiv, Ukraine December 10, 2020. REUTERS/Valentyn Ogirenko

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Underscoring the challenges global companies are facing as they comply with sanctions against Russia, Societe Generale said on Thursday it could see an “extreme scenario” where Russia strips the bank of its local operations. The lender has a $20 billion exposure to Russia. read more

Citigroup Inc (C.N) said on Wednesday it could face billions of dollars in losses on its exposure to Russia and was looking to exit Russian assets. Bank shares have taken a drubbing in recent days amid fears of possible writedowns and weaker economies. read more

Western sanctions, including shutting out some Russian banks from the SWIFT global financial network, new export controls, and closure of air space, have led dozens of global companies to pause operations in the country, hammered the rouble and forced the central bank to jack up interest rates. read more

Spanish fashion retailer Mango said on Thursday that it was temporarily closing its shops and its online sale website in Russia, and Spirits company Diageo (DGE.L), the maker of Smirnoff vodka and Guinness, said it had paused exports to Ukraine and Russia. read more

Accenture said it was discontinuing its Russian business, which had nearly 2,300 employees. read more

Britain said on Thursday it will ban Russian companies from the London insurance market, the world’s largest commercial and specialty insurance centre. read more

Hundreds of Russian soldiers and Ukrainian civilians have been killed and more than one million people have fled Ukraine in the week since President Vladimir Putin ordered the attack. read more

Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.

SCRAMBLED SUPPLIES

With a shortage of components, more carmakers are halting production at their factories in Russia, including Russia’s biggest carmaker, Avtovaz (AVAZI_p.MM) – controlled by France’s Renault (RENA.PA) – which said it would close two plants on Saturday and from March 9 to 10 due to shortage of electronic components. read more

Nissan Motor Co <7201.T > said on Thursday it has suspended vehicle exports to Russia, while Japanese peer Toyota (7203.T) said it would halt production at its Russian factory from Friday and indefinitely stop vehicle exports to the country.

The world’s biggest shipping lines, MSC and Maersk (MAERSKb.CO) have suspended container shipping to and from Russia, with Maersk saying food and medical supplies to Russia risk being damaged or spoiled due to delays at ports and customs. read more

Japan Airlines (9201.T) and ANA Holdings (9202.T), which normally use Russian airspace for their Europe flights, said they would cancel all flights to and from Europe on Thursday, joining other carriers that have canceled or rerouted flights between Europe and north Asia. read more

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Reporting by Tassilo Hummel in Paris, Jamie Freed in Sydney, Gwladys Fouche in Oslo, Illona Wissenbach in Frankfurt, Anna Ringstrom in Stockholm, Richa Naidu in London
Additional reporting by Tim Hepher in Paris, Satoshi Sugiyama in Tokyo, Mehr Bedi, Chavi Mehta, Praveen Paramasivam, Uday Sampath in Bengaluru, Megan Davies in New York, and in Madrid by Emma Pinedo
Writing by Peter Henderson, Sayantani Ghosh and John Revill
Editing by Lincoln Feast, Simon Cameron-Moore, Tomasz Janowski, Frances Kerry and Nick Zieminski

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Business

Boeing, Exxon, Apple join Western firms spurning Russia over Ukraine

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  • Ford suspends operations in Russia
  • Apple stops iPhone sales in Russian market
  • ESG investors press Western firms to act

March 2 (Reuters) – Boeing (BA.N) suspended maintenance and technical support for Russian airlines and U.S. energy firm Exxon Mobil (XOM.N) said it would exit Russia, joining a growing list of Western companies spurning Moscow over its invasion of Ukraine.

U.S. tech giant Apple (AAPL.O) said it had stopped sales of iPhones and other products in Russia, while Ford Motor (F.N) joined other automakers by suspending operations in the country.

Western nations have steadily ratcheted up sanctions on Russia since it invaded Ukraine last week, including shutting out some Russian banks from the SWIFT global financial network.

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The measures have hammered the rouble and forced the central bank to jack up interest rates, while Moscow has responded to the growing exodus of Western investors by temporarily restricting Russian asset sales by foreigners.

Russian firms, meanwhile, have felt increasingly squeezed. Sberbank (SBER.MM), Russia’s largest lender, said on Wednesday it was leaving the European market because its subsidiaries faced large cash outflows. It also said the safety of its employees and property was threatened. read more

Signalling there would be no let up from the West, U.S. President Joe Biden said in his State of the Union address on Tuesday that his Russian counterpart Vladimir Putin “has no idea what’s coming” as he joined European states and Canada in closing U.S. airspace to Russian planes. read more

With international shippers such as Maersk (MAERSKb.CO), Hapag Lloyd (HLAG.DE) and MSC suspending bookings to and from Russia, the country has become increasingly shut out of world commerce. Sanctions are also squeezing Russia’s aviation sector.

Boeing’s said on Tuesday it was suspending operations as other aviation companies face growing European and U.S. restrictions on dealings with Russia clients, affecting leasing planes, exporting new aircraft and providing parts.

CHORUS OF CONDEMNATION

Exxon said it would not invest in new developments in Russia and was taking steps to exit the Sakhalin-1 oil and gas venture, after similar moves to dump assets by Britain’s BP , Russia’s biggest foreign investor, and Shell Plc (SHEL.L).

However, French firm TotalEnergies (TTEF.PA) stopped short of saying it would exit Russia, only saying it would not put in new cash. read more

Logo at an Apple store in Washington, U.S., January 27, 2022. REUTERS/Joshua Roberts

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Apple, which halted sales in Russia, said it was making changes to its Maps app to protect civilians in Ukraine.

It also joined a growing chorus of Western companies openly condemning Russian actions.

“We are deeply concerned about the Russian invasion of Ukraine and stand with all of the people who are suffering as a result of the violence,” Apple said.

“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” Exxon said, while Ford said in its condemnation: “The situation has compelled us to reassess our operations in Russia.”

Motor cycle maker Harley-Davidson Inc suspended shipments of its bikes to Russia.

The increasing focus of investors in environmental, social and governance (ESG) issues has added pressure on companies to act swiftly in ending ties with Russia and Russian entities.

“The only course of action for many is simply divestment,” said TJ Kistner, vice president at Segal Marco Advisors, a large U.S. pension consultant.

Big Western technology companies said they were continuing efforts to stop Russia from taking advantage of their products.

Apple said it had blocked app downloads of some state-backed news services outside of Russia.

Google, owned by Alphabet Inc (GOOGL.O), said it had blocked mobile apps connected to Russian state-funded publisher RT from its news-related features, including the Google News search.

Google also barred RT and other Russian channels from receiving money for ads on websites, apps and YouTube videos, mirroring a move made by Facebook (FB.O).

Microsoft (MSFT.O) said it would remove RT’s mobile apps from its Windows App store and ban ads on Russian state-sponsored media.

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Reporting by Paresh Dave in Oakland, Ross Kerber in New York, Dawn Chmielewski in Los Angeles; Writing by Peter Henderson and Sayantani Ghosh; Editing by Lincoln Feast and Edmund Blair

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Business

Amazon is exploring offer for Peloton, source says; report says Nike also weighing bid

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A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Market site in New York City, New York, U.S., September 26, 2019. REUTERS/Shannon Stapleton

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Feb 4 (Reuters) – Peloton Interactive Inc (PTON.O) has drawn interest from potential buyers including e-commerce giant Amazon.com Inc , according to a person familiar with the matter, as the exercise bike maker struggles to maintain pandemic-fueled growth.

Shares of Peloton surged 30% in extended trading on the news, which comes days after activist investor Blackwells Capital urged the company’s board to put it up for sale.

Amazon is exploring an offer for Peloton and is speaking with advisers about whether and how to proceed, a source said. Peloton has not yet decided whether it will explore a sale, according to the source.

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Meanwhile, the Financial Times reported late on Friday that sportswear company NikeInc is also evaluating a bid for Peloton, citing people briefed on the matter, who said the considerations are preliminary and Nike has not held talks with Peloton.

Peloton and Nike did not immediately respond to a Reuters request for comment, while Amazon declined to comment.

Peloton’s sales boomed during COVID-19 lockdowns, with many snapping up home fitness equipment. But its fortunes began to fade as vaccinations increased, gyms reopened and rivals offered competitive products.

In November, it hinted that demand for its exercise bikes and treadmills was slowing faster than expected, and its market capitalization since then has shrunk to about $8 billion from a peak of nearly $52 billion in early 2021.

If the stock’s gains hold on Monday, Peloton could reach the $10 billion market-capitalization threshold.

Last week, Blackwells Capital called on the board of Peloton to remove CEO John Foley immediately, accusing him of deals that set high fixed costs and for holding on to excessive inventory, while misleading investors about the need to raise capital. read more

Blackwells criticized Foley for hiring his wife as a key executive and committing to a 300,000-square-foot, 20-year lease for office space in New York, among other things.

The investment firm, run by Jason Aintabi, has also urged the board to put the company up for sale to a buyer like Walt Disney Co (DIS.N), Apple Inc (AAPL.O), Sony Group (6758.T) or Nike Inc , Reuters reported on Sunday. read more

Peloton has tried to cushion the blow to its growth by cutting the price of its popular bike and ramping up its ad spending, but growth remains stagnant.

Last month, Peloton said the company was reviewing the size of its workforce and “resetting” production levels, following a report that it was temporarily halting production of connected fitness bikes and treadmills after a significant drop in demand. read more

While many investors have become frustrated with Peloton due to a steep drop in its share price, analysts also note that the company may be a difficult acquisition target because of its two classes of stock, effectively allowing insiders to control it.

The news was first reported by the Wall Street Journal. (https://on.wsj.com/3AVMIf7)

The growth in the fitness band market has prompted tech giants such as Apple Inc (AAPL.O) and Samsung (005930.KS) to introduce features for health tracking, including electrocardiogram and blood pressure sensor. Alphabet Inc-owned Google (GOOGL.O) closed its acquisition of fitness tracking company Fitbit Inc in January.

Tech giants including Amazon and Alphabet have also seen a rise in their valuation after blockbuster results this week. A day after Facebook owner Meta Platforms (FB.O) suffered the deepest loss of stock market value in history for a U.S. company, Amazon logged the greatest ever one-day increase in value. read more

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Reporting by Rithika Krishna, Tiyashi Datta, Nivedita Balu and Shivam Patel in Bengaluru and Greg Roumeliotis in New York; Editing by Devika Syamnath, Peter Henderson, Anil D’Silva and Kim Coghill

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Business

Made-from-CO2 concrete, lululemons and diamonds spark investor excitement

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Oct 4 (Reuters) – What do diamonds, sunglasses, high-end lululemon sportswear and concrete have to do with climate change?

They can all be made using carbon dioxide (CO2), locking up the planet warming gas. And tech startups behind these transformations are grabbing investor attention.

Some use bacteria. Some use proteins. Some use chemical processes to speed natural reactions. Most pull apart the carbon and the oxygen in CO2 to create another chemical that is used to make consumers goods.

Companies in the area raised over $800 million so far this year, more than tripling from 2020, according to a Reuters review of data from PitchBook, Circular Carbon Network, Cleantech Group and Climate Tech VC.

Reuters Graphics

“I don’t want to call it a green tax, but our consumers who really do care … have demonstrated that they’re willing to pay a bit of a premium,” said Ryan Shearman, chief executiveof Aether Diamonds, which grows diamonds in the lab using captured CO2.
On the opposite end of the glamour spectrum, the concrete industry, green also is good for marketing, said Robert Niven, CEO of CarbonCure Technologies, which makes technology that injects CO2 into fresh concrete, and strengthens it by locking in the carbon.

“About 90% of our uptake has been from independent concrete producers large and small that are just looking for that competitive edge.”

The world needs to capture and store 10 billion tonnes of CO2 annually by midcentury to slow climate change, according to United Nations estimates, a scale the companies can only dream of, when current carbon capture pilots often are at scales of hundreds and thousands of tonnes.

Humans produce greenhouse gases that are the equivalent of around 50 billion tonnes of CO2 each year, and governments will gather in Scotland in late October and November for a U.N. climate conference on cutting emissions.

All fossil-based products that could use recycled CO2 instead account for some 6.8 billion tonnes of emissions, according to a Columbia University report in May, although lead author Amar Bhardwaj said trying to swap out all of that “would be a misuse of CO2 recycling,” since there are cheaper ways to reduce carbon emissions.

Nicholas Flanders, co-founder of Twelve, which uses chemical processes to reuse CO2, says recycling is better than storing captured CO2 underground. “We’re developing a technology that can go toe to toe with fossil fuels” without additional financial incentives to remove carbon.

That is because many consumers are attracted by “green” labels.

lululemon athletica inc (LULU.O) says it has created a polyester yarn from carbon emissions with LanzaTech that will be used for future products. LanzaTech, which has raised the most funds of companies in the space, according to Reuters’ review, creates ethanol using bacteria. Ethanol is turned into ethylene which is used to make everything from plastic bottles to polyester.

CEO Jennifer Holmgren said LanzaTech’s ethanol is more expensive than corn based ethanol, but customers looking to source greener products are buying.

The biggest investment in the space this year, more than $350 million, was into Houston-based Solugen, which feeds CO2 and other ingredients to enzymes that make chemicals for stronger cement, water pipe coating and other products.

Its products are already cheaper than those made from fossil fuels, said CEO Gaurab Chakrabarti. Still, it is not sourcing CO2 captured from factory emissions or from the air, which Chakrabarti described as “an option.”

Capturing CO2 is a less enticing prospect for many investors, who think the government should fund such expensive, high risk projects.

However, Nicholas Moore Eisenberger, managing partner at Pure Energy Partners, has invested in direct air capture firm Global Thermostat and sees opportunity in necessity and believes once the projects scale up, they will be cheaper.

“The science tells us that we have under a decade to start to bend the curve on climate, and that is now within the investment time frame of most venture and private equity investors,” said Eisenberger.

Reporting By Jane Lanhee Lee and Nia Williams; editing by Peter Henderson and Marguerita Choy

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Business

Fossil fuel demand shakes off pandemic in blow to climate fight

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LONDON, Oct 4 (Reuters) – Demand for coal and natural gas has exceeded pre-COVID-19 highs with oil not far behind, dealing a setback to hopes the pandemic would spur a faster transition to clean energy from fossil fuels.

Global natural gas shortages, record gas and coal prices, a power crunch in China and a three-year high on oil prices all tell one story – demand for energy has roared back and the world still needs fossil fuels to meet most of those energy needs.

“The demand fall during the pandemic was entirely linked to governments’ decision to restrict movements and had nothing to do with the energy transition,” Cuneyt Kazokoglu, head of oil demand analysis at FGE told Reuters.

“The energy transition and decarbonisation are decade-long strategies and do not happen overnight.”

Over three-quarters of global energy demand is still met by fossil fuels with less than a fifth by non-nuclear renewables, according to energy watchdog the International Energy Agency.

Energy transition policies have come under fire for the run up in energy prices. In some places, they are having an impact, such as in Europe where high carbon prices aimed at reducing emissions have made utilities reluctant to switch on coal-fired plants to alleviate the shortage.

In China, policies to reduce emissions have contributed to the government’s decision to ration energy to heavy industry.

But much of the rise in energy prices is simply because producers took enormous amounts of capacity offline last year when the pandemic led to an unprecedented fall in demand.

Several factors mean temporary shortages may not last.

They could abate with a decision by OPEC to open taps to unleash supply it reined in during the first onslaught of COVID, likely new liquid natural gas (LNG) output coming online after a price slump in the last decade and a Chinese government climb-down on price setting which has undercut coal power production.

RENEWABLES A “SOLUTION, NOT A CAUSE”

Producers of gas, coal, and to a lesser extent oil have been caught flat-footed by the economic recovery, much of it sparked by government stimulus spending in energy-intensive industries.

National policies have also played a role in the power supply problems. In China, state mandated power prices mean utilities simply cannot afford to burn coal and sell the power, because the cost of coal is too high to make a profit.

Chinese utilities are producing below capacity to avoid losing money, not because they cannot produce more.

Meanwhile, most gas projects take several years to design and build, so the shortage now reflects investment decisions taken pre-pandemic – and before the energy transition gathered political momentum.

The chief of the Paris-based IEA said energy transition policies were not to blame for the crisis.

“Well-managed clean energy transitions are a solution to the issues that we are seeing in gas and electricity markets today – not the cause of them,” Fatih Birol said in a statement.

2020 LOSSES ERASED

Still, the IEA’s data show global demand for coal, the single largest source of CO2 emissions, surpassed pre-pandemic levels late last year.

Global coal supplies are tight because China, responsible for around half of global output, has tightened safety regulations at mines after a spate of accidents, sapping supply.

That has left China importing more coal from Indonesia, in turn leaving less for other importers such as India.

Global coal demand is set for with a 4.5% increase this year, pushing beyond 2019 levels.

IEA coal consumption

Global natural gas demand fell 1.9% last year, a smaller drop than other energy sources as utilities cranked up power production to meet heating needs during winter.

But the IEA projects gas demand will rise 3.2% in 2021 to over 4 trillion cubic metres, erasing 2020 losses, and pushing demand above 2019 levels.

Rystad LNG demand
Natural gas McKinsey

Cold weather patterns in the northern hemisphere, Oslo-based consultancy Rystad Energy said, “caused a rise in demand for coal, liquefied natural gas (LNG), electricity and even a bit of oil (that) is here to stay”.

LNG accounts for just over 10% of the global supply but is more readily traded globally so can be deployed more easily to cover short-term supply crunches.

“Eye-popping price spikes and their spread between summer and winter will widen, especially for gas, both natural and liquefied,” Rystad added, as prices are higher amid cold winter weather than in summer.

SUPPLY GAPS, SHORT-TERM RALLIES

Last to catch up, oil demand is set to rebound toward pre-pandemic levels above 100 million barrels per day sometime next year, according to four of the major tracking groups.

High prices on oil markets are because OPEC and allied producers still have millions of barrels per day of oil production offline after they made record cuts to supply during the pandemic to match plummeting demand for transport fuel.

Producer club OPEC offers the most robust prediction for a demand rebound, putting the recovery date at the second quarter of 2022.

Oil use rises above 100 million barrels per day in 2022
FGE Oil Demand

In the more distant future, with most forecasters predicting a peak in fossil fuel demand within the next two decades and the IEA recommending against new projects to ensure net zero emissions, broader supply gaps could fuel more price shocks.

McKinsey fossil fuel peak

“Prices for fossil fuels will remain volatile”, said Nikos Tsafos, senior fellow at the Center for Strategic and International Studies (CSIS).

“The risk of a supply-demand imbalance is greater in a market that is shrinking where the case for further investment is weak, which could produce short-term rallies.”

Writing by Noah Browning; editing by David Evans and Ed Osmond

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World

Self-belief and strategy: Japan’s Taro Kono upends race for next premier

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Taro Kono, Japan’s vaccination programme chief and ruling Liberal Democratic Party (LDP) lawmaker, attends a news conference as he announces his candidacy for the party’s presidential election in Tokyo, Japan, September 10, 2021. REUTERS/Issei Kato

TOKYO, Sept 14 (Reuters) – When Taro Kono, Japan’s leading contender to be prime minister, was a senior in high school, he asked his father to send him overseas for university, but was flatly refused.

Instead, the elder Kono, a leading politician in the ruling party, took his son to a U.S. embassy reception in a bid to prove his English was not good enough.

But the move backfired.

“I went around the room telling people enthusiastically, in my broken English, how I wanted to study abroad but my father was against it, so I had a problem,” Kono wrote in a recent book.

Everyone said no, he should wait. But that response, and perhaps his son’s audacity, somehow convinced the father, and Kono wound up spending four years at Georgetown University in Washington, D.C.

Now 58, Japan’s popular vaccines minister is fluent in English and hopes to parlay that early combination of self-belief, strategy and stubbornness into becoming leader of the conservative ruling Liberal Democratic Party (LDP) and prime minister.

In addition to a resume studded with high-profile portfolios such as foreign affairs and defence, he runs a Twitter feed in two languages and, in a world of staid politicians, speaks bluntly, by contrast with Prime Minister Yoshihide Suga.

“Kono’s a tight communicator, he’s talking,” said Corey Wallace, a foreign policy specialist at Kanagawa University.

“He’s always out there, giving press conferences on the vaccine rollout and so on,” Wallace added. “Suga looked like he only communicated when he absolutely had to.”

Kono regularly tops opinion polls as voters’ choice for the next prime minister, which will help him with both rank-and-file members in the LDP contest, and young lawmakers worried about keeping their jobs as a general election looms this year.

Image, at which Kono excels, could trump policy, said Airo Hino, a professor of political science at Waseda University.

“Lawmakers are definitely going to pick who they think is better for re-election,” Hino added.

“They’re thinking of election posters, and their faces on them with the LDP president. This is especially true in urban areas, and with the young.”

SOCIAL MEDIA REACH

Kono’s outreach has flourished on social media, where he has garnered 2.4 million followers on Twitter.

The whimsical posts of early this year, featuring memes, his lunch, or a mask with a dinosaur skull, have shifted to promoting the vaccine and highlighting online policy meetings.

That Kono had forged a genuine connection with those who do not usually care about politicians became clear when debate erupted online after he blocked some of those who disagreed with him on Twitter.

But that incident also throws light on one of his biggest weaknesses, say analysts.

“He wants you to like him, and he wants to like you, and he wants to engage, but he has a little bit of an angry streak and it can be a liability,” Wallace said.

In 2019, when foreign minister, Kono berated the South Korean ambassador during a meeting in front of cameras, telling him he was “extremely rude”.

These memories stir consternation in South Korea, already nervous about the conservative stance Kono took on key policies when a cabinet minister.

That is a contrast with his father, Yohei Kono, the chief cabinet secretary who authored a landmark apology in 1993 to “comfort women,” a euphemism for those forced to work in Japan’s wartime brothels.

South Korean media have played up his hardline stance, and some commentators fear already-strained ties might not improve.

But at home there is hope that Kono, whose maverick nature brings to mind the wildly popular Junichiro Koizumi, prime minister from 2001 to 2006, may be able to get things done.

Analysts say most of the blame for Japan’s handling of the pandemic has landed on Suga, sinking his cabinet, while Kono has built an image of working hard on the vaccine rollout.

Japan’s emergency measures achieved little until recently to curb virus infections that swamped its hospitals, but after a slow start vaccination rates have risen to a little more than half, pulling close to the United States and other G7 nations.

“He … overcame all the hurdles and bureaucratic excuses notably made by the ministry of health,” said Kenji Shibuya, former director of the Institute for Population Health at King’s College London, who directed municipal vaccinations in Fukushima prefecture, north of Tokyo, the capital.

“I think he is the only candidate who can challenge the status quo.”

But first Kono must win, which means he will have to overcome the deep-seated fears of party elders that he could be difficult to keep in check.

“That’s not to say Kono is completely against what the party wants to do,” Wallace added. “But he will be his own prime minister, one way or another.”

Additional reporting by Ju-min Park and Rocky Swift; Editing by Clarence Fernandez

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Business

Lordstown Motors says hedge fund may buy up to $400 mln of its stock

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A Lordstown Motors pre-production all electric pickup truck, the Endurance, is seen after being merged with a chassis at the Lordstown Assembly Plant in Lordstown, Ohio, U.S., June 21, 2021. REUTERS/Rebecca Cook

July 26 (Reuters) – Lordstown Motors Corp (RIDE.O) said on Monday hedge fund YA II PN Ltd has committed to purchase up to $400 million of the company’s shares, over a three year period, coming at a crucial time when the electric-truck maker faces heightened regulatory scrutiny related to its SPAC merger and vehicle pre-orders.

Under the deal, YA can receive nearly 35 million Lordstown shares upon execution of the agreement, subject to the approval of Lordstown shareholders, as well as a small discount on the shares whenever purchased, according to a regulatory filing.

Lordstown’s shares rose 3.9% to $7.77 and are on track to snap a three-day streak of losses.

Some industry observers called it a good deal for Lordstown.

“Existing shareholders are not taking $400 million worth of dilution. It’s like a standby commitment on the part of YA to buy stock when Lordstown says it needs more money,” said Erik Gordon, professor at the University of Michigan’s Ross School of Business.

“I was surprised. It’s more like the knight in shining armor than the vulture at the carcass.”

The agreement comes a month after Lordstown warned it may not be able to continue as a “going concern.” The company had since attempted to allay fears by saying it was in talks with multiple parties to raise funds.

The investor, YA II PN Ltd, is a fund managed by Mountainside, New Jersey-based investment manager Yorkville Advisors Global LP.

Yorkville has investments in more than 700 companies in over 20 countries, according to its website. Its current active sectors include healthcare, metals and mining, energy, technology, and cannabis. Some of its investments include cannabis deals network Leafbuyer.com, copper ores company Copperstone Resources and biotechnology company CytoTools.

Yorkville Advisors Global did not immediately respond to a Reuters’ request for comment.

(This story corrects typo in headline to say “up to”)

Reporting by Eva Mathews and Ankit Ajmera in Bengaluru and Ben Klayman in Detroit; Editing by Shailesh Kuber and Krishna Chandra Eluri

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Business

French champagne industry group fumes over new Russian champagne law

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PARIS/MOSCOW, July 5 (Reuters) – France’s champagne industry group on Monday blasted a new Russian law forcing foreign champagne producers to add a “sparkling wine” reference to their bottles and called for champagne exports to Russia to be halted.

The law, signed by Russian President Vladimir Putin on Friday, requires all foreign producers of sparkling wine to describe their product as such on the label on the back of the bottle — though not on the front — while makers of Russian “shampanskoye” may continue to use that term alone.

The French champagne industry group called on its members to halt all shipments to Russia for the time being and said the name “champagne”, which refers to the region in France the drink comes from, had legal protection in 120 countries.

“The Champagne Committee deplores the fact that this legislation does not ensure that Russian consumers have clear and transparent information about the origins and characteristics of wine,” group co-presidents Maxime Toubart and Jean-Marie Barillere said in a statement.

French Trade Minister Franck Riester said he was tracking the new Russian law closely, in contact with the wine industry and France’s European partners.

“We will unfailingly support our producers and French excellence,” he said on Twitter.

Moet Hennessy, the LVMH-owned French maker of Veuve Clicquot and Dom Perignon champagnes, said on Sunday it would begin adding the designation “sparkling wine” to the back of bottles destined for Russia to comply with the law.

LVMH (LVMH.PA) shares were down around 0.2% on Monday afternoon, underperforming the Paris bourse, which was up 0.34%.

Shares in Russian sparkling wine maker Abrau-Durso (ABRD.MM) were up more than 3% after rising as much 7.77% in early trade.

Abrau-Durso president Pavel Titov told Radio France Internationale on Saturday his firm does not have sparkling wines that would be called “champagne” in its portfolio and said he hoped the issue would be resolved in favor of global norms and standards.

“It is very important to protect the Russian wines on our market. But the legislation must be reasonable and not contradict common sense … I have no doubts that the real champagne is made in the Champagne region of France,” he said.

Reporting by Sudip Kar-Gupta and Leigh Thomas in Paris and Alexander Marrow in Moscow;
Writing by Geert De Clercq
Editing by Alison Williams, Andrea Ricci and Catherine Evans

Our Standards: The Thomson Reuters Trust Principles.

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France probes fashion retailers for concealing ‘crimes against humanity’ in Xinjiang

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Customers enter a Zara shop in Nantes as non-essential business re-open after closing down for months, amid the coronavirus disease (COVID-19) outbreak in France, May 19, 2021. REUTERS/Stephane Mahe/File Photo

PARIS, July 1 (Reuters) – French prosecutors have opened an investigation into four fashion retailers suspected of concealing “crimes against humanity” in China’s Xinjiang region, a judicial source said on Thursday.

The procedure is linked to accusations against China over its treatment of minority Muslim Uyghurs in the region, including the use of forced labour, the source said.

China denies all accusations of abuse in the region.

The source told Reuters Uniqlo France, a unit of Japan’s Fast Retailing (9983.T), Zara owner Inditex (ITX.MC), France’s SMCP (SMCP.PA) and Skechers (SKX.N) were the subject of the investigation, confirming a report by French media website Mediapart.

“An investigation has been opened by the crimes against humanity unit within the antiterrorism prosecutor’s office following the filing of a complaint,” the source said.

France has a Central Office to Fight Crimes against Humanity, Genocide and War Crimes, founded in 2013.

Inditex said it rejected the claims in the legal complaint, adding that it conducted rigorous traceability controls and would fully cooperate with the French investigation.

“At Inditex, we have zero tolerance for all forms of forced labour and have established policies and procedures to ensure this practice does not take place in our supply chain,” the company said in a statement.

SMCP said it would cooperate with the French authorities to prove the allegations false.

“SMCP works with suppliers located all over the world and maintains that it does not have direct suppliers in the region mentioned in the press,” SMCP said, adding that it regularly audited its suppliers.

Fast Retailing said in a statement from Tokyo that it had not been contacted by French authorities and that none of its production partners are located in Xinjiang.

“If and when notified, we will cooperate fully with the investigation to reaffirm there is no forced labour in our supply chains,” it said.

The company lost an appeal with United States Customs in May after a shipment of Uniqlo men’s shirts were impounded because of suspected violations of a ban on Xinjiang cotton. read more

Skechers said it does not comment on pending litigation. It referred Reuters to a March 2021 statement in which it said it maintained a strict supplier code of conduct.

Two nongovernmental organisations (NGOs) filed a complaint in France in early April against multinationals for concealment of forced labour and crimes against humanity.

United Nations experts and rights groups estimate over a million people, mainly Uyghurs and other Muslim minorities, have been detained in recent years in a vast system of camps in China’s western Xinjiang region.

Many former inmates have said they were subject to ideological training and abuse. Rights groups say the camps have been used as a source of low-paid and coercive labour.

China initially denied the camps existed, but has since said they are vocational centres designed to combat extremism. In late 2019, China said all people in the camps had “graduated.”

Several Western brands including H&M (HMb.ST), Burberry (BRBY.L) and Nike (NKE.N) have been hit by consumer boycotts in China after raising concerns about reports of forced labour in Xinjiang. read more

In March, the United States, the European Union, Britain and Canada imposed sanctions on Chinese officials, citing human rights abuses in Xinjiang. Beijing retaliated immediately with its own punitive measures. read more

Human Rights Watch this year documented what it said could constitute crimes against humanity being committed in Xinjiang.

Reporting by Benoit Van Overstraeten in Paris
Additional reporting by Richard Lough in Paris, Jesus Aguado in Madrid and Rocky Swift in Tokyo.
Editing by Kirsten Donovan and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

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