In the biggest deal-ever in the fertiliser sector, Norwegian chemical company Yara International ASA has acquired Tata Chemicals’ Babrala urea plant and distribution business in Uttar Pradesh for $400 million.

The acquisition is on a debt and cash free basis, including normalised net working capital.

The plant has an annual production of 0.7 million tonne ammonia and 1.2 million tonne urea, and generated revenues and EBITDA of respectively $350 million and $35 million in the financial year ended March 31, 2016.

The plant was commissioned in 1994, and is the most-energy efficient plants in India, the company said in a statement.

”This acquisition represents another significant step in our growth strategy, creating an integrated position in the world’s second-largest fertiliser market. India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” said Svein Tore Holsether, President and Chief Executive Officer of Yara.

”This well-operated plant and its highly skilled employees will make an excellent addition to Yara’s global production system,” said Holsether.

The agreement is subject to regulatory approvals in India, a process which is expected to take 9-12 months after which closing of the transaction can take place, the company said.

Yara has operated in India since the 1990s, focusing in recent years on premium product sales in the West and South of the country, delivering strong volume growth and margins well above Yara’s average for the region.

”Our growth in India can be further accelerated with this acquisition, creating a larger market footprint for Yara and enabling increased premium product sales in particular. We will place great emphasis on successful integration of the operations, and will put in place an integration team consisting of highly experienced TCL and Yara employees, the latter from both our existing India operations and our regional management,” said Terje Knutsen, SVP and Head of Yara Crop Nutrition.

Norwegian Air International (NAI), the Dublin-based carrier whose efforts to launch flights between Cork and America have been stymied by US officials, posted a $59.7m (€53.4m) loss last year.

Total revenue at the airline, which is a subsidiary of Norwegian Air Shuttle, hit $719m (€644m), according to accounts for the Irish carrier.

That included ticket and ancillary revenue of $577.7m and so-called wet lease revenue of $141.2m.

The airline operates services throughout Europe, and also to Asia. The wet lease revenue is turnover NAI generates from leasing its aircraft and crew to group companies.

The airline received an air operator’s certificate from the Irish Aviation Authority in 2014.

But a delay by the United States Department of Transportation in granting NAI a permit to allow it fly to America has sparked a major political row between the US and the European Union.

NAI applied for a permit over two years ago. Earlier this year, the US Department of Transportation signalled it intended to grant the permit. But since then, the process has stalled. It’s likely it will be left to the next the US administration to deal with the matter.

Last month, the EU’s Transport Commissioner, Violeta Bulc, warned US Secretary of Transportation Anthony Foxx that the failure to issue a permit to NAI could damage plans for the proposed EU-US Transatlantic Trade and Investment Partnership.

“At a time when closer bilateral ties are being put into question by many sectors of our societies, we should carefully consider the implications that this long and protracted dispute could have,” she told Mr Foxx.

NAI has established operations in Dublin to benefit from the Open Skies agreement that exists between the United States and the European Union. It enables any airline based in the EU to fly from any location in the EU to any location in the US, and vice versa.

If it secures a US permit, NAI has said it will launch a low-cost service between Cork and Boston initially, and eventually, another to New York.

US aviation unions claim NAI has based itself in Ireland to circumvent more stringent labour rules in Norway, something that NAI has consistently denied. The Irish Airline Pilots’Association has also opposed NAI’s plans to use Ireland as a base to fly to the US from Europe.

The delay by US authorities in issuing NAI a permit has prompted the EU to seek arbitration on the matter.

NAI notes in its accounts that the granting of a permit is thought to be imminent. But the assertion is certainly optimistic.
NAI said that it made a loss last year due to off-off new base set-up costs, as well as aircraft and financing costs, and that it expects to be profitable in future years.

The airline’s fuel costs totalled $153.3m last year, while its operational staff costs were $99.2m.
NAI has 50 of its own employees, who work in administrative roles, and hires operational personnel from group companies.

Catering costs totalled $22.5m, while its airport costs were $106.2m.
Irish Independent

Avinor, the organisation responsible for managing 46 Norwegian airports, including the country’s busiest air gateway in Oslo, has prioritised efforts to improve air connections between Norway and Asia, pointing to potential benefits for both passengers and freight.

As part of this strategy, Avinor appointed Ulv Elbirk in a consultancy role as director Asia route development in a move effective as of August 1.

Based in Hong Kong, he is tasked with attracting the launch of direct air routes from big city destinations in Asia to Oslo in particular.

“Norway is probably one of the last under-served markets in Europe. With vast inbound potential routes, Oslo can become a goldmine for especially Asian carriers,” Elbirk remarked.

The belief is that the Norwegian business community would benefit from quicker access to the major cities of Northeast Asia in particular, and that there exists significant demand for improving transport links and cut the time of travel between Norway and Asia.

This is certainly the case for the huge amounts of seafood exports that are flown out of Norway to Asian destinations.

“Today, much salmon is trucked to other European airports, but for an Asian carrier it can be a vital boost to the route profitability when the whole cargo space on a passenger aircraft is guaranteed full on every flight no matter the season,” a statement from Avinor observed.

Norwegian chemical company Yara International ASA has entered into an agreement to acquire the Tata Chemicals Ltd’s Babrala urea plant and distribution business in Uttar Pradesh for $ 400 million (about Rs 2670 crore) on a debt and cash free basis, including normalised net working capital.

“This acquisition represents another significant step in our growth strategy, creating an integrated position in the world’s second-largest fertiliser market. India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” said Svein Tore Holsether, president and chief executive officer of Yara.

The plant has an annual production of 0.7 million tonnes ammonia and 1.2 million tonnes urea, and generated revenues and EBITDA of respectively $ 350 million and $ 35 million in the financial year ended March 31, 2016. The plant was commissioned in 1994, and is the most energy efficient plant in India, with energy efficiency on a par with Yara’s best plants.
“We are impressed with the world-class operations we have seen in Babrala. The workforce is committed to high HESQ standards, and has a solid safety track record. This well operated plant and its highly skilled employees will make an excellent addition to Yara’s global production system,” said Holsether.

Yara has operated in India since the 1990s, focusing in recent years on premium product sales in the West and South of the country, delivering strong volume growth and margins well above Yara’s average for the region.

“Our growth in India can be further accelerated with this acquisition, creating a larger market footprint for Yara and enabling increased premium product sales in particular. We will place great emphasis on successful integration of the operations, and will put in place an integration team consisting of highly experienced Tata Chemicals and Yara employees, the latter from both our existing India operations and our regional management,” said Terje Knutsen, SVP and Head of Yara Crop Nutrition.

The agreement will be subject to regulatory approvals and sanctioning by the relevant courts in India, a process which is expected to take 9-12 months after which closing of the transaction can take place.

(business-standard)

Skanska (STO:SKAB) has bought the development property Sinsenveien 51-53 of Axer Eiendom AS. The net investment for residential purpose amounts to NOK 360M, about SEK 360M, and will be recorded by Skanska Norway in the third quarter 2016.

The property is located in the attractive residential area Løren/Sinsen in central Oslo, Norway, and covers 14,000 square meters. Skanska’s long-term goal is to develop 300-350 apartments in the project, which is planned to be implemented in four phases from 2019 and onwards.

The investment is the single largest Skanska has made in a development property in Norway since 2000.

Skanska Norway focuses on construction and civil engineering operations. The unit has approximately 4,000 employees. In 2015, Skanska Norway reported revenue of about SEK 12 billion. In Norway, Skanska is also active in development of residential, commercial properties and public private partnerships (PPP) projects.

The information provided herein is such as Skanska AB is obligated to disclose pursuant to the EU market securities act (EU) no. 596/2014.

Skanska is one of the world’s leading construction and project development companies, focused on selected home markets in the Nordic region, other European countries and North America. Supported by global trends in urbanization and demographics, and by being at the forefront in sustainability, Skanska offers competitive solutions for both simple and the most complex assignments, helping to build a sustainable future for customers and communities. The Group currently has 43,100 employees in selected home markets in Europe and North America. Skanska’s sales in 2015 totaled SEK 155 billion.

The European bank that would suffer the smallest capital loss in a recession is DNB ASA, Norway’s biggest lender.

According to the financial regulator in Oslo, DNB did so well in the European Banking Authority’s stress test because lenders in Norway have less leeway to reduce the share of assets against which they’re required to hold capital. To ensure banks don’t get too creative, their use of risk weighting is limited by a floor that Norway’s regulator says adheres more closely to the principles that underpin the 1988 Basel I standards.

“We have chosen this way because we think it is the way it should be done according the Basel Accord, and the way it probably will be done in the future,” Emil Steffensen, deputy director general at the Financial Supervisory Authority, told Bloomberg.

The EBA tested banks representing 70% of Europe’s financial industry to see how they would fare after three years of recession and plunging property markets. While Sweden’s biggest banks ranked highest, based on common equity Tier 1 ratios, DNB’s capital buffer hardly changed at all in the stressed scenario, slipping a mere basis point.
The bank which suffered the biggest depletion was Banca Monte dei Paschi di Siena SpA, losing 14.51 percentage points in capital.

Deutsche Bank’s capital situation would deteriorate 3.32 percentage points, while Royal Bank of Scotland Group Plc’s would sink 7.45 percentage points, the EBA tests show.

DNB’s capital measured against total assets – the so- called leverage ratio – also fell by only one basis point, to 6.30%.
“What we have done on risk weights, what we have done on floors, what we have done on dividends, points in the right direction,” Steffensen said. “There has been a capital building in Norwegian banks while keeping risk-weighted assets on a prudent level.”

The EBA on Wednesday recommended a minimum leverage ratio of 3% and said the world’s largest lenders should perhaps face a higher requirement. That’s consistent with a January proposal by the Basel Committee on Banking Supervision, which sets global rules.

The measure would limit institutions’ ability to take on “excessive leverage while maintaining comfortable risk-based capital measures,” the EBA said.

Basel in 2004 adopted a new policy – Basel II – allowing banks to calculate their risks internally. It also imposed a floor to prevent capital ratios from dropping too low.

But implementation varied from country to country, with some interpreting the floor as a minimum capital level while others, including Norway, have viewed it as a floor that limits the freedom of banks to use internal models to reduce their risk- weighted assets. Now, Basel is revisiting that floor, which was originally to be temporary. Countries such as Sweden and Denmark, where banks have tended to use low risk weights because default rates have historically been low, are fighting the move. They’re lobbying Basel and plan to take the battle to the European Union if they fail. Norway isn’t joining them.

“Our opinion is that the floor should be on risk-weighted assets,” Steffensen said. Where Basel sets the floor will also be important, he said.

DNB’s ability to withstand losses is already being tested as its clients get buffeted by a bear market in oil while negative interest rates across much of the Nordic region erode the bank’s income.

According to Steffensen, “Norwegian banks need to strengthen their capital also in 2016, so the FSA is expecting banks will retain a large part of their profits also this year.”

(gulf-times)