LEHMAN WARNS ON US CLAIMS
Big banks seeking to make windfall profits by making “outrageously unreasonable” claims against Lehman Brothers’ US business will be forced to prove their case in public courts, the executive leading the unwinding of the failed bank has warned. Bryan Marsal, the chief executive of Lehman Brothers Holdings, who is responsible for maximising recoveries to all its creditors, said he was planning to make an example of big banks seeking to claim more than they should on billions of dollars of losses linked to trades in derivatives.
BIG MINERS SHUN CHINA DURING TALKS TO SET IRON ORE PRICE
Global miners have sidelined China, their biggest customer, in the annual iron ore price negotiations because of political gridlock over the resource in the industry and government and fears about retribution if the talks collapse. Vale of Brazil, Rio Tinto and BHP Billiton, the big operators that mine iron ore in Australia, are talking instead to Japanese customers to reach a benchmark deal.
RATE FEARS SPARK RUSH FOR BONDS
Businesses and governments have rushed to raise tens of billions of dollars from bond markets, embarking on a frenetic round of new year fundraising amid fears that interest rates are set to jump. A flurry of issuers, including Virgin Media, BMW and Manchester United, turned to the capital markets yesterday.
BP OVERTAKES SHELL IN MARKET CAP
BP overtook Royal?Dutch?Shell in market capitalisation for the first time in more than three years yesterday, reflecting the contrasting fortunes of the two rivals for the title of Europe’s biggest oil company. In the past year,?BP has benefited from rising production, cost cuts and success finding oil.
CHINESE HAND RIO TINTO CASE TO PROSECUTORS
Chinese investigators have concluded their investigation into four executives of Rio Tinto, the dual-listed mining group, and turned the case to prosecutors, increasing the likelihood that they will face jail. Stern Hu, an Australian citizen, and three Chinese colleagues were arrested in July on charges of stealing state secrets — a capital offence in China.
VIRGIN ATLANTIC STEPS UP OPPOSITION TO BA-AA ALLIANCE
Virgin Atlantic has stepped up its fight against the proposed alliance between British Airways and American Airlines, telling US authorities that the venture should be denied outright. The US Department of Justice said last month the alliance would cause “competitive harm” with fares rising by up to 15 per cent.
The Daily Telegraph
GM GEARING UP FOR FIRST PROFIT IN SIX YEARS
General Motors, the embattled carmaker, is hoping to motor into the black for the first time in six years in 2010. The company, which last made a full-year profit in 2004, is hoping to do so after last year’s restructuring which saw it enter Chapter 11 bankruptcy protection for six weeks to cut its debt pile. Bob Lutz, GM vice-chairman, said a full-year profit would depend on the speed of the US economy’s recovery.
US BANK CHIEFS FACE GRILLING
The heads of Wall Street’s biggest banks will this week be questioned on their role in the financial crisis as the US launches its investigation into the collapse. The chairmen of Goldman Sachs, JPMorgan Chase and Morgan Stanley will all testify before the Financial Crisis Inquiry Commission.
WALL STREET JOURNAL
ALCOA CUTS NOT ENOUGH TO STOP NEW LOSS IN FOURTH QUARTER
Alcoa kicked off the fourth quarter 2009 earnings season with a $277m (£172m) loss, reporting lower sales in the construction, aerospace, commercial-building and gas-turbine markets. While the fourth quarter loss is not as steep as its $1.2bn fourth quarter loss a year earlier, the aluminium maker’s results show it has not roared back into profitability yet.
AOL STARTS LAYOFFS, WILL CLOSE SOME OFFICES
AOL yesterday started laying off employees and said it would close some European offices, after failing to reach its goal of cutting about a third of its staff through a voluntary buyout programme. About 1,100 employees accepted the buyout programme, offered in December and aimed at cutting some 2,300 jobs.