Collision of car with train, YOUR HIGHNESS...

Barclays sells iShares to CVC for $4.2bn

Banking Editor: April 9 2009 15:07. Bob Diamond, Barclays’ president, is set to pocket a $6.9m cash windfall after the banking group on Thursday agreed to sell its iShares subsidiary to CVC Capital, the private equity group, for $4.2bn (£2.8bn). The long-awaited sale of the fast-growing fund management business will boost Barclays’ capital reserves as the bank seeks to strengthen its balance sheet to help it weather further losses that arise from the global economic downturn. Mr Diamond, who oversees Barclays Global Investors, the bank’s fund management division, is one of the beneficiaries of a compensation scheme that has given BGI employees shares and options over up to 10.3 per cent of the division’s equity. Following the sale, BGI is expected to distribute the cash to shareholders in the form of a dividend. The news is likely to be controversial because Barclays executives – including Mr Diamond – waived their rights to any bonuses in 2008 after the bank was last autumn forced to raise £7bn in capital from investors in the Middle East. Barclays stressed that Mr Diamond was not involved in the negotiations over the iShares sale. All of Barclays’ directors have been put up for re-election at the bank’s annual general meeting later this month, and some shareholders are expected to use the opportunity to express their frustration with the board. The sale of iShares, the world’s leading provider of exchange-traded funds, underscores Barclays’ determination to shore up its balance sheet and avoid turning to the UK government for capital. The Financial Services Authority last month concluded that Barclays had enough capital to weather a severe economic downturn, but investors have made it clear they would like the bank to strengthen its buffers. Barclays will book a $2.2bn (£1.5bn) profit on the deal and said the sale would boost its Tier One ratio – a key measure of balance sheet strength – by 54 basis points. Including the benefits of the sale, the bank’s Tier One ratio at the end of 2008 would have been 10.3 per cent, while its Equity Tier One ratio – which excludes preference capital – would have been 7.2 per cent. However, CVC Capital is putting up just $1.05bn of the purchase price by providing the equity for the deal. Barclays itself is providing $3.1bn of debt financing for the deal and has agreed to keep the majority of the debt on its books for five years. If CVC doubles the value of its investment in the next two years, Barclays will also receive a cash windfall worth 20 per cent of the increased value on the equity of the buyout. Investors welcomed the deal, sending shares in Barclays 9.5 per cent higher to 172.8p in afternoon London trading. The sale also reveals the attractions of the iShares business, which has grown rapidly in recent years. The deal values iShares at around 10 times the division’s pre-tax profits, which were £288m in 2008. Barclays also revealed that iShares generated almost half the pre-tax profit of BGI. Excluding iShares, the division last year made a pre-tax profit of £307m on total income of £1.19bn. The deal includes a provision that would allow any other bidder to make a higher offer for iShares in the next 45 days, though any bidder would have to pay a $175m break fee to CVC. John Varley, chief executive of Barclays, said in a statement : “This transaction realises significant value for Barclays. iShares has experienced rapid growth over the past several years and has reached a point where it can develop further on a standalone basis. Barclays shareholders will benefit from a reinforcement of our capital base and an ongoing commercial relationship with iShares.” 

Turkmen gas exports to Russia halted after blast 09.04.09 13:29 Turkmenistan has suspended gas supplies to Russia after a pipeline explosion caused by an accident, a source in Kazakhstan's energy sector said on Thursday, Reutersreported. Turkmenistan is the biggest gas producer in Central Asia and Russia's gas export monopoly Gazprom (GAZP.MM) buys up to 50 billion cubic metres of its gas a year to meet its export obligations and demand at home. "Supplies have been suspended," the source told Reuters. "Repair work is under way." A Gazprom spokeswoman said she was not aware of the blast. Turkmen gas goes through a pipeline via Uzbekistan and Kazakhstan, both of which also supply smaller amounts, before reaching Russia. Gazprom normally cannot meet both its export obligations and demand at home without the Turkmen gas but at the moment it will probably be able to cope without it for some time because of a slump in demand in Russia and Europe. PKK blow up Baku-Ceyhan pipeline 08/10/2008 - 16:27. Kurdish PKK guerillas claimed responsibility for an Aug. 5 blast near Refahiye, in eastern Turkey's Erzincan province, that shut down the Baku-Tbilisi-Ceyhan oil pipeline. No collision of car with train of Baku oil refinery 09.04.09 17:04 Azerbaijan, Baku, April 9Baku oil refinery Azneftyag, which is part of SOCAR (State Oil Company of Azerbaijan), completely refutes information on collision of car with the train, which go from the plant, a source at the plant said on April 9. "Small technical defect was discovered in the connection of cisterns to the train, but no collision took place," the same source said. As a result of defect, cistern even did not disconnect from the train, the movement was not stopped. "This is small production defect - small problem with the receiver. Such incidents occur in the process of production," the same source said. There are two oil refinery plants (ORP) in Azerbaijan, including the Heydar Aliyev ORP and Azneftyag ORP. The first ORP produces light oil and the second - dark products. Both ORPs' production capacity is 20 million tons of oil each year. Both ORPs belong to SOCAR which produces roughly 6 million tons of oil each year from offshore and onshore fields by own means.