Shares in City firms Credit Suisse and Nomura plunge as they warn of heavy losses after hedge fund fire sale

Credit Suisse and Nomura warn of hit to finances due to hedge fund defaulting on margin calls; shares in both lenders fell more than 15%

 
Archegos Capital is the hedge fund to have reportedly defaulted on margin calls

That sparked a massive fire sale of some individual stocks by the lenders

Shares in Deutsche Bank, UBS and Morgan Stanley also in the red

By CAMILLA CANOCCHI FOR THISISMONEY.CO.UK

PUBLISHED: 29 March 2021

Japanese bank Nomura and Switzerland's Credit Suisse, have warned they face heavy losses after US hedge fund Archegos Capital reportedly defaulted on margin calls, sparking a massive fire sale of some stocks.

A margin call is when a bank asks a client, in this case the hedge fund, to put up more money or collateral if stocks and assets they have bought on a margin - with borrowed money - have fallen sharply in value.

If the client cannot afford to do that, the bank will sell the shares and assets owned by the client in a bid to recoup what it is owed, which is what Credit Suisse and Nomura are in the process of doing.

Warning: Credit Suisse said the margin call would have 'highly significant and material' impact on its first quarter results

The news sent shares in Credit Suisse tumbling more than 15 per cent today, their biggest fall in a year, while Nomura shares closed down more than 16 per cent in Japan overnight.

The fallout has also hit other European banks, with Deutsche Bank shares falling 3.5 per cent and UBS shares tumbling 3.8 per cent in afternoon trading on Monday, as investors worried about who else might be on the hook for losses.

Shortly after the open in New York, shares in Morgan Stanley tumbled almost 4 per cent, while Goldman Sachs shares were down 0.6 per cent.

Both Credit Suisse and Nomura published trading updates today, saying they were evaluating the potential impact of an unnamed hedge fund's default on their finances.

Credit Suisse said that a 'significant US-based hedge fund defaulted on margin calls' made by the bank last week and that this would have 'highly significant and material' impact on its first quarter results.

'Following the failure of the fund to meet these margin commitments, Credit Suisse and a number of other banks are in the process of exiting these positions,' it said.

'While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first quarter results, notwithstanding the positive trends announced in our trading statement earlier this month.'

Meanwhile, Nomura said it faced a possible $2billion loss due to transactions with an unnamed US client.

Shares in US investment bank Morgan Stanley tumbled today amid reports it may also have been caught out

Although the two banks do not name the hedge fund, it has been widely reported that it was Archegos, the family fund run by former Tiger Asia manager Bill Hwang.

A sharp fall in the share prices of two US companies, ViacomCBS and Discovery, prompted Archegos' brokers, including Credit Suisse and Nomura, to make margin calls against their client, that triggered a massive sell-off.

Shares in ViacomCBS and Discovery tumbled by 6 per cent and 2.6 per cent respectively in early trading on Wall Street today.

Switzerland's financial regulator said several other banks and locations internationally were involved, according to Reuters.

According to reports, Deutsche Bank, Goldman and Morgan Stanley also forced Archegos to liquidate trades in a number of stocks on Friday.

The Financial Times reported that Morgan Stanley sold $4billion worth of shares early on Friday, followed by another $4billion in the afternoon.

Neil Wilson, an analyst at Markets.com, said: 'Archegos had built up a large stake in companies like Baidu and Farfetch, which had started to sell off in March.

'A new SEC rule aimed at Chinese stocks listed in the US, which requires firms to submit documents to establish that they are not owned or controlled by a governmental entity in a foreign jurisdiction, had exacerbated a decline in some big China tech names of late. This heaped more pressure on Archegos.'

He added: 'I don't think is systemically risky in itself - Archegos was massively levered and it appears to have been too concentrated in a number of risky stocks - but when we look at this and think about the GameStop saga and the decline in Tesla as two examples - what we're seeing are more and more pockets of very unusual trading activity in some stocks.'

Hedge fund failure slams Credit Suisse, Nomura and other banks

By Jill Disis and Matt Egan, CNN

Updated 1431 GMT (2231 HKT) March 29, 2021

Credit Suisse warned Monday of a 'highly significant' hit to earnings

from a hedge fund meltdown.

(CNN Business)Major global banks could be hit with billions of dollars in losses after US investment firm Archegos Capital was forced to dump shares last week when it got into financial trouble.

Nomura (NMR) and Credit Suisse (CS) said Monday that earnings might take "significant" hits after a client of their broking services defaulted on margin calls last week, roiling Wall Street. Shares in both banks plunged on Monday, wiping billions of dollars off their market capitalization.

A margin call by a broker requires a client to add funds to its account if the value drops below an agreed level. If it can't, the broker can dump the client's shares and liquidate its holdings to makeup the shortfall.

Neither bank identified the client that defaulted on the margin calls. But a person familiar with the matter told CNN Business that New York-based Archegos was the firm causing losses for Credit Suisse. A spokesperson for the Swiss bank declined to comment.

Bloomberg and other media outlets previously reported that Nomura's losses were triggered by Archegos, which was founded by Bill Hwang, a former Tiger Asia trader and protégé of hedge fund pioneer Julian Robertson. Archegos could not be reached for comment on Monday and its website could not be accessed.

Shares in other investment banks, such as Goldman Sachs (GS), Morgan Stanley (MS) and Deutsche Bank (DB) also fell Monday.

Goldman Sachs and Deutsche Bank declined to comment. Morgan Stanley could not be reached for comment.

A source familiar with the situation told CNN Business that Deutsche's exposure to Archegos was a fraction of that reported by other banks. The financial impact for Goldman Sachs, another lender to Archegos, was immaterial because the bank proactively managed its risk by seizing collateral and selling shares on Friday, another person familiar with the matter told CNN Business.

Wall Street regulators are paying attention.

"We have been monitoring the situation and communicating with market participants since last week," said a spokesperson for the Securities and Exchange Commission.

US media stocks hit

On its LinkedIn profile page, Archegos Capital Management says it is a family investment office specializing in public equities primarily in the United States, China, Japan and Korea, employing "a disciplined, research-driven approach to fundamental stock selection, while taking a multi-year approach to investing."

According to Bloomberg, which cited anonymous sources, ViacomCBS (VIACA) and Discovery (DISCA) were among the companies hit by the forced liquidation of Hwang's positions: Shares of each plunged more than 25% on Friday.

Credit Suisse said in a statement that a "significant US-based hedge fund" failed to meet its margin commitments. It said the default affected "certain other banks" as well, though did not name them.

"Following the failure of the fund to meet these margin commitments, Credit Suisse and a number of other banks are in the process of exiting these positions," Credit Suisse said.

"While at this time it is premature to quantify the exact size of the loss resulting from this exit, it could be highly significant and material to our first quarter results," the bank added.

Nomura said its losses could be as much as $2 billion, attributing the hit to "transactions with a US client." Asked for further detail, the company declined to comment to CNN Business.

"Nomura is currently evaluating the extent of the possible loss and the impact it could have on its consolidated financial results," the company said in a statement, adding that its estimate was calculated based on market prices that day.

"Given that this is a net rather than gross exposure, we believe it almost certainly means Nomura will recognize a bottom-line loss in its fiscal fourth quarter ending March 31," Michael Makdad, a senior equity analyst at Morningstar in Tokyo, said in a note on Monday.

Nomura's shares plunged more than 16% in Tokyo, the stock's worst day in at least 20 years. The move wiped more than $3 billion off its market value. Credit Suisse shares fell by 16% in early trading, wiping about $5 billion off its market cap.

— Rob North, Charles Riley, Michelle Toh and Laura He contributed to this article.

WOKE INVESTORS

Deliveroo dampens IPO expectations as investors raise workers' rights concerns

Takeaway delivery firm says it will price shares towards bottom of planned range

A Deliveroo protest on Sunday highlighted the fact that the company was effectively paying some riders as little as £2 an hour. 

Photograph: Toby Melville/Reuters


Gwyn Topham
@GwynTopham

Mon 29 Mar 2021 

Deliveroo has cut the upper valuation of its landmark flotation on Wednesday by £1bn, saying it will price its shares at the bottom of its guided range because of “volatile” market conditions.

The London stock market listing will now value the takeaway delivery firm at £7.6bn-£7.85bn, instead of a potential £8.8bn, after a week in which leading fund managers said they would shun Deliveroo amid concerns over workers’ rights.

Although the listing is still expected to be London’s biggest float for a decade, Legal & General and other investors highlighted the potential for state intervention in the gig economy to affect Deliveroo’s business model.


UK's biggest fund manager expected to shun Deliveroo float

A strike and protest by Deliveroo riders on Sunday underlined recent disclosures that the firm was effectively paying some as little as £2 per hour.

The firm is set to announce its final share pricing on Wednesday morning but has narrowed the range to between £3.90 and £4.10 a share, instead of up to £4.60.

A number of US tech stocks have also fallen below their issue prices after initial public offerings in recent weeks.

After the regulatory concerns highlighted by L&G and others including Aviva, the sustainable investment manager EdenTree indicated on Monday that it would boycott the IPO, saying Deliveroo’s model was “best characterised as a race to the bottom with employees in the main treated as disposable assets – which is the very antithesis of a sustainable business model”.

Despite these concerns, Deliveroo said on Monday that investor demand exceeded the number of shares on offer.

A spokesperson said: “Deliveroo has received very significant demand from institutions across the globe. The deal is covered multiple times throughout the range, led by three highly respected anchor investors.

“Given volatile global market conditions for IPOs, Deliveroo is choosing to price responsibly within the initial range and at an entry point that maximises long-term value for our new institutional and retail investors.”

Firms have also raised concerns over the Deliveroo share structure, which will result in the founder and chief executive, Will Shu, having 20 votes a share, compared with one a share for other investors, giving him a majority position at shareholder votes.

The company has benefited from the closure of restaurants for anything other than takeaways during the Covid-19 crisis and revenues have soared.

The listing is set to be London’s biggest IPO since Glencore in May 2011 and it will be the biggest tech IPO on the London Stock Exchange, dwarfing the Hut Group last year and the 2015 listing of Worldpay Group, which has since delisted.

While investors expressed concerns about Deliveroo, another big company in the gig economy, Hermes, reached an agreement with unions to increase rates.

The GMB union said about 20,000 couriers were getting the right to paid holiday and guaranteed minimum pay under the “self-employed plus” deal struck with the delivery firm in 2019.

Mick Rix, a GMB national officer, said: “Hermes is continuing to show other companies that looking after those who work for you is not just the right thing to do, it’s good for business.

“Couriers now have a real voice in their workplace.”

Martijn de Lange, chief executive of Hermes UK, said: “Independent research shows that over three-quarters of our SE+self-employed-plus couriers believe that their health and wellbeing has improved as a result of having paid holidays.

CRIMINAL CAPITALI$M BIG PHARMA

Paris court finds pharma giant guilty of fraud, manslaughter over weight loss pill

A French court on March 29, 2021 found pharma giant Servier guilty of aggravated fraud and involuntary manslaughter in the the Mediator case.

 Fred TANNEAU, - AFP/Archives

Issued on: 29/03/2021 

Text by: FRANCE 24

A French court on Monday found pharma giant Servier guilty of "aggravated fraud" and "involuntary manslaughter" over a diabetes and weight loss pill blamed for hundreds of deaths in one of the country's worst health scandals.

The drug Mediator was on the market for 33 years and used by about five million people before being pulled in 2009 over fears it could cause serious heart problems -- more than a decade after such concerns had first been raised.

Servier's former deputy boss was sentenced to a suspended jail sentence of four years, and the court fined the company 2.7 million euros ($3.2 million).

France's medicines agency was fined 303,000 euros for its role in the scandal.

A total of 12 people and 11 legal entities -- Servier, nine subsidiaries and France's medicine watchdog -- were tried in late 2019 and early 2020 over their alleged role in a scandal that contributed to widespread distrust of the pharmaceutical industry in France.

Initially intended for overweight people with diabetes, Mediator was widely prescribed to healthy individuals as an appetite suppressant.

Many of the victims who testified in court about the impact of the drug on their lives were women. Exhausted and out of breath, they recounted their stories sitting down.

The Mediator affair was the subject of the 2016 French film "150 Milligrams", about the work of lung specialist Irene Frachon, who was instrumental in bringing the alleged wrongdoing to light.

(FRANCE 24 with AFP)

Palestinians get 100,000 Chinese Covid vaccine doses

Monday's delivery was the largest single batch of coronavirus vaccines yet to reach the Palestinian territories 

ABBAS MOMANI AFP

Issued on: 29/03/2021 - 

Ramallah (Palestinian Territories) (AFP)

The Palestinian Authority received 100,000 doses of the Chinese Sinopharm jab on Monday, the largest single batch of coronavirus vaccines yet to reach the Palestinian territories.

The PA's vaccination campaign was launched this month after the delivery of thousands of vaccines through the UN's Covax program

The Palestinian vaccine rollout has lagged well behind that of Israel, which has faced criticism for excluding most Palestinians in the occupied West Bank and the Gaza Strip from its world-beating vaccination drive.me for poorer nations.

The latest jabs "represent a commitment to the promise China made to put vaccines at the service of the world," Chinese ambassador to the PA, Guo Wei, told reporters in Ramallah in the Israeli-occupied West Bank.

Palestinian health minister Mai al-Kaila said the delivery would "greatly contribute to accelerating the community vaccination campaign," as the number of infections in the West Bank continues to rise.

The PA announced it had started vaccinating the over-75s and some medical patients on March 21 after receiving 60,000 vaccine doses through the UN-backed Covax programme for poorer nations.

More than 20,000 of those doses have been transferred to Gaza, which Israel has blockaded since Hamas Islamists seized the coastal strip in 2007.

An additional 60,000 doses of the Russian Sputnik V vaccine have been delivered to Gaza from the United Arab Emirates, shipments brokered by a former top PA official currently exiled in Abu Dhabi, Mohammed Dahlan.

Covax has also pledged doses to vaccinate another million Palestinians.

Israel has fully innoculated more than half its roughly 9.3 million people.

Israel has also vaccinated 105,000 Palestinians with permits to work in Israel or in Jewish settlements in the West Bank.

Rights groups have called on Israel, as the occupying power, to offer vaccines to all Palestinians in the West Bank and Gaza.

Israel says the PA is responsible for health services across the Palestinian territories.

Since the start of the pandemic, the West Bank has recorded almost 175,000 coronavirus cases and 1,995 deaths, while 604 people have died in Gaza, out of 63,742 infections.

© 2021 AFP

Rich nation appetites driving tropical deforestation

Each person in G7 nations drives an average loss of four trees in the world per year, according to new research 

CHAIDEER MAHYUDDIN AFP/File

Issued on: 29/03/2021 -

Paris (AFP)

Rising demand in wealthy countries for dozens of commodities ranging from coffee to soybeans has stepped up the pace of deforestation in the tropics, researchers said Monday.

Even as North America and Europe expand forest cover within their own borders, efforts to slow forest loss in the global south through offset schemes and direct payments have been overwhelmed by these appetites, they reported in the journal Nature Ecology & Evolution.

The first country-by-country quantification of how rich-nation imports drive deforestation showed that each person in G7 nations accounts for, on average, the loss of four trees somewhere else in the world per year

In 2015, the last year for which figures were available across all the datasets examined, that totalled more than three billion trees, the researchers found.

In five of those G7 nations -- Japan, Germany, France, Britain and Italy -- 91 to 99 percent of their "deforestation footprint" was in foreign countries, half of that in the tropics.

That footprint has grown most rapidly in China and India, but per capita tree loss is still far below that of rich nations.

"Most forests are in poorer countries that are overwhelmed with economic incentives to cut them down," lead author Nguyen Tien Hoang, an expert in environmental modelling and mapping at the Research Institute for Humanity and Nature in Kyoto, told AFP.

"We show that richer countries are encouraging deforestation through demand for commodities."

Combining data on forest loss and global supply chains, Hoang and his colleague Keiichiro Kanemoto showed which nations were buying what commodities from where.

- Cocoa and coffee -

Cocoa consumption in Germany, for example, "poses a very high risk to forests" in Ivory Coast and Ghana, Hoang noted.

Deforestation in coastal Tanzania, meanwhile, is directly linked to Japanese demand for agricultural products.

In Vietnam, forest loss in the Central Highlands is mainly driven by coffee drinkers in the US, Germany and Italy, while in northern Vietnam the culprit is exports to China, South Korea and Japan.

Palm oil -- used in food products and biofuels -- is the main instigator of forest loss in Indonesia, while large swathes of forest in Brazil are destroyed to make way for beef, soybean and sugarcane production.

Among wealthy nations, France has the highest rate of per capita tropical deforestation, with 21 square metres (220 square feet) lost in 2015.

Germany and Norway were close behind, with Japan, Mexico and the US responsible, per capita, for about 16 square metres of cleared forest that year, whether through burning or timber harvesting.

"The richest and most biodiverse ecosystem among forests are in the tropics," said Hoang.

Forests cover more than 30 percent of Earth's land surface, and tropical forests are home to between 50 and 90 percent of all terrestrial species.

In 2019, a football pitch of primary, old-growth trees was destroyed in the tropics every six seconds -- about 38,000 square kilometres (14,500 square miles) in all, according to satellite data.

Preliminary data suggest the primary forest destruction in 2020 may have accelerated.

© 2021 AFP

UN chief calls for more pandemic debt relief for poorer nations

UN Secretary-General Antonio Guterres said the global community must "urgently provide" support to poorer nations Michael Sohn POOL/AFP/File
 

Issued on: 29/03/2021 -

United Nations (United States) (AFP)

UN Secretary-General Antonio Guterres called Monday for greater debt relief and new creative financing to help poorer nations deal with the pandemic and prevent their economic recoveries from falling behind.

A "new debt mechanism" to provide more options -- including debt swaps, buy-backs and cancellations -- is needed, he said, as many nations have been reluctant to add debt during the global health crisis, fearing a hit to their credit ratings.

He also called on G20 nations to extend the suspension of debtors' loan payments into 2022, and expand the Common Framework for Debt Treatments to include middle-income countries that request it.

"We are on the verge of a debt crisis," Guterres said at the start of a high-level meeting with dozens of heads of state, calling for "urgent action."

Richer nations, he said, have spent an unprecedented $16 trillion on emergency health and economic measures, "preventing a downward spiral, and setting the stage for recovery."

"But many developing countries cannot invest in recovery and resilience, because of financing constraints," he said, noting that the world's least developed countries have spent 580 times less per capita terms on their Covid-19 response than advanced economies.

Guterres cited stark differences in vaccine rollouts in rich and poor nations, and the poorest facing "painfully slow" economic recoveries that risk becoming a drag on the global economy.

Six nations have already defaulted on loans, and one-third of emerging market economies are at "high risk of fiscal crisis," he said.

"Developing countries need access to additional liquidity to respond to the pandemic, and to invest in recovery," Guterres said.

"The global community must urgently provide the necessary support to all developing countries in need."

© 2021 AFP

A third of global farmland at 'high' pesticide pollution risk

Nearly two-thirds of global agricultural land is at risk of pesticide pollution, a study says Money SHARMA AFP

ITS NOT JUST THE LAND THIS MAN IS NOT WEARING ANY PPE SO HE IS BEING POISIONED AS WILL BE HIS FAMILY

Issued on: 29/03/2021 -Paris (AFP)

A third of the planet's agricultural land is at "high risk" of pesticide pollution from the lingering residue of chemical ingredients that can leach into water supplies and threaten biodiversity, according to research published Monday.

The use of pesticides has soared globally as agricultural production has expanded, prompting growing fears over environmental damage and calls to cut hazardous chemical use.

Researchers in Australia modelled pollution risk across 168 countries with data on the usage of 92 active pesticide ingredients and found "widespread global pesticide pollution risk".

They highlighted several acutely vulnerable ecosystems in South Africa, China, India, Australia and Argentina, at the nexus of high pollution risk, high water scarcity and high biodiversity.

The study, published in Nature Geoscience, found that overall 64 percent of global agricultural land --approximately 24.5 million square kilometres (9.4 million sq miles) -- was at risk of pesticide pollution from more than one active ingredient, and 31 percent is at high risk.

"It is significant because the potential pollution is widespread and some regions at risk also bear high biodiversity and suffer from water scarcity," said lead author Fiona Tang, of the University of Sydney's School of Civil Engineering.

Tang said there were a number of factors that would contribute to a region becoming a potential contamination hotspot, including using excessive amounts of pesticides or those containing highly toxic substances.

Some environmental factors may also slow the breakdown of the pesticides into non-toxic substances, like cold temperatures or low soil carbon, while heavy rainfall might also cause high levels of run-off.

The study did not look directly at impacts on human health, but researchers said the leaching of pesticides into water used for drinking could pose a risk and called for a greater analysis into contamination of rivers, estuaries and lakes.

- Sustainability call -

Researchers looked at 59 herbicides, 21 insecticides and 19 fungicides.

They used estimates of pesticide application rates drawn from the United States Geological Survey data and country-based information from the United Nations Food and Agriculture Organization.

They fed this into a mathematical model and used it to estimate pesticide residues potentially remaining in the environment.

Regions were considered to be high risk if residues of at least one of the pesticide ingredients were estimated to be at least 1,000 times greater than concentrations that would produce no effect.

"The higher the risk score, the higher the probability for a non-target species to experience an effect," Tang told AFP, adding that this may not be as severe as death.

The report found that Asia has the largest land area, 4.9 million square kilometres, at high risk, with China accounting for 2.9 million square kilometres of that.

Researchers said estimates of elevated contamination in Russia, Ukraine and Spain meant nearly 62 percent of European agricultural land (2.3 million square kilometres) is at high risk of pesticide pollution.

The researchers also broke down risks in terms of type of environment -- soil, surface water, ground water and atmosphere.

Of these, Tang said surface water is the most vulnerable because run-off can pollute waterways.

The study called for a global strategy to transition towards "sustainable agriculture and sustainable living", involving low pesticide use, reduced food loss and food waste.

In 2019 the UN's Global Environment Outlook (GEO) called for reduced pesticide use and said food production is not only the main driver of biodiversity loss, but is also a major polluter of air, freshwater and seawater, particularly when farming is over-reliant on chemical pesticides and fertilizers.

© 2021 AFP

Bookchin M. Our Synthetic Environment.pdf (libcom.org)

(PDF) An Editorial Flop Revisited: Rethinking the Impact of M. Bookchin’s Our Synthetic Environment on its Golden Anniversary (researchgate.net)

]

UK

Ministers map out Liberty rescue plan: Emergency move to save 5,000 jobs after steel giant calls for £170m taxpayer bailout

Sanjeev Gupta wrote to Government officials in a desperate bid to secure a £170million bailout from taxpayers

Troubles at the UK's third largest steel producer follow the collapse of its main financier Greensill Capital

Concerns are now rising that Gupta's British operations could slide into administration unless new financing can be arranged

By EMMA DUNKLEY, FINANCIAL MAIL ON SUNDAY
PUBLISHED: 28 March 2021


The Government is preparing to trigger an emergency plan to save 5,000 British jobs in the event of a collapse of Sanjeev Gupta's steel business.

Gupta, founder of Liberty Steel and its vast parent company GFG Alliance, wrote to Government officials on Thursday in a desperate bid to secure a £170million bailout from taxpayers.

Troubles at the UK's third largest steel producer follow the collapse of its main financier Greensill Capital, which counted former Prime Minister David Cameron as a paid adviser.

Plea: Sanjeev Gupta wrote to Government officials in a desperate bid to secure a £170million bailout from taxpayers

Concerns are now rising that Gupta's British operations could slide into administration unless new financing can be arranged.

Gupta's call to Ministers for help comes just months after he forked out £42million – nearly a third of the bailout request – on a house in Belgravia.

Liberty owns a dozen steel plants in Britain, including sites at Newport and Rotherham. Private equity firms are understood to be assessing parts of GFG's global empire.

In its letter to the Department for Business GFG asked for the money to cover working capital and operating losses.

But Whitehall is thought to be concerned that bailout money might be used in other parts of Gupta's global empire instead of supporting UK jobs. There are also fears the firm could then require further financial support.

Boris Johnson has taken a personal interest in the situation, industry sources said. The Government is already thrashing out emergency plans in case the situation rapidly worsens, The Mail on Sunday understands.

It is thought the preferred route would be to wait for Liberty Steel to enter compulsory liquidation, at which point the Government would step in and keep the company running until a new buyer could be found.

This would be similar to the rescue of British Steel which collapsed in May 2019. Around 3,000 jobs were saved by an intervention which cost taxpayers nearly £600 million. The Official Receiver, a state agency, took control of the firm with the backing of the Government until it was sold to Chinese metals company Jingye last March.

Another option could see the Government support administrators to find a new buyer if Liberty Steel, which is thought to comprise seven different companies, collapses.

Dame Margaret Hodge, former chairwoman of the Public Accounts Committee, said: 'You need to save the jobs, not the man.'

She said there was a lack of transparency over 'where his money has come from, where it goes', adding: 'But what you don't want to do is sacrifice the jobs.'

The union Unite said it 'is urging the Government to do everything necessary' to save Liberty, adding: 'The loss of Liberty Steel and the specialist products it manufactures for the aerospace, automotive and oil and gas sectors would have damaging consequences beyond the steel sector.'

One industry source said it would be difficult for the Government to step in without GFG Alliance first becoming insolvent, because the company is 'a sprawling beast' with huge debts. Another source said: 'It's messy, it's very, very messy.'

And with private equity firms understood to be eyeing parts of GFG, one source in the sector said: 'It's an asset-backed bet, potentially Lone Star and Cerberus [are interested].'

Cerberus declined to comment. Lone Star did not respond.

Advisers to GFG Alliance are working on a private restructuring plan called 'Project Battery'.

Liberty Steel employs 3,000 people in Britain. Another 2,000 UK jobs span other divisions of GFG Alliance including aluminium firm Alvance and renewable energy business Simec.

Liberty Steel was forced to halt production at some sites earlier this month to preserve cash. It owes Greensill an estimated £3.6 billion, according to the Financial Times.

A GFG Alliance spokesman declined to comment on the letter, but said: 'GFG Alliance as a whole is operationally strong and benefiting from strong markets in steel, aluminium and iron ore.

'While Greensill's difficulties have created a challenging situation, we have adequate funding for our current needs. Discussions to secure alternative longterm funding continue to make good progress.

'In the UK speciality steel business, where weakness in the aerospace market has cut demand for some products by 60 per cent, we have been taking specific actions to stabilise the business and improve cash flow.'

These include 'reducing steel stocks ... and working with customers to achieve terms that will bring in cash as early as possible'.

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ISIS IS NO MORE D.J.TRUMP POTUS

Islamic State group claims control of northern Mozambique town of Palma

OIL GAS REFINERY

Issued on: 29/03/2021 - 

A woman, called Elsa by UK-based aid group Save the Children, walks with a child in a displacement camp in the northern Mozambique province of Cabo Delgado on January 26, 2021. © Rui Mutemba/Save the Children/REUTERS

Text by:FRANCE 24

The Islamic State group said Monday it had seized the coastal town of Palma in northern Mozambique, after days of fighting.

“The caliphate’s soldiers seize the strategic town of Palma” following a three-day attack against military and government targets that killed dozens, the group said in a statement on its Telegram channels.

The jihadist group’s claim came after thousands of survivors of coordinated jihadist attacks in the town fled on boats to the provincial capital, Pemba, according to sources in the city.

International aid agency sources said between 6,000 and 10,000 people are waiting to be evacuated to safety following the raid on Palma that began last Wednesday.

Extremist militants raided Palma, a town of around 75,000 people in the province of Cabo Delgado that is home to a multi-billion-dollar gas project being built by France’s Total and other energy companies.

The government said dozens were killed in the attack, including seven people caught in an ambush during an operation to evacuate them from a hotel where they had sought refuge.

A South African is among those killed, his family said.

The attack is the closest yet to the major gas project since an Islamist insurgency broke out across Mozambique’s north in October 2017.

The attack forced expatriate workers and locals to seek refuge temporarily at a heavily guarded gas plant located on the Afungi peninsula – 10km (six miles) from Palma, on the Indian Ocean coast south of the Tanzanian border.

Operations are under way to move them to Pemba, around 250 kilometres south of Palma.

Sea Star, a large passenger vessel, arrived in Pemba on Sunday with around 1,400 people, mostly workers including Total employees.

Another ship arrived in Pemba on Sunday afternoon and was released on Monday morning, according to an official from an international aid agency operating in the city.

“Authorities indicate that there will be a boat that will arrive during the day,” the source told AFP.

Thousands of other people were still stuck at Afungi, with some expected to have arrived in smaller boats overnight Sunday and early Monday.

Police and military have cordoned off the zone, hampering access to the area where the boats were landing.

UN agencies were due to hold emergency talks in Pemba to coordinate the evacuation and humanitarian aid for the new arrivals.

The defence ministry said late Sunday that the security forces have “reinforced their operational strategy to contain the criminal attacks of terrorists and restore normality in Palma, having carried out operational actions focused primarily on the rescue of hundreds of citizens in the last three days”.

Pemba is already packed with hundreds of thousands of other people displaced by the Islamist insurgency, which has uprooted nearly 700,000 from their homes across the vast province.

‘Shot while fleeing’

The armed attackers fired on civilians in their homes and on the streets “as they tried to flee for their lives”, according to Human Rights Watch.


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The violent, calculated raid broke a three-month hiatus in Islamist attacks widely attributed to counter-insurgency tactics and the rainy season from January through March.

Although the extremist fighters launched their campaign in 2017, experts say they had begun mobilising a decade earlier as disgruntled youths started to practise a different type of Islam, drinking alcohol and entering mosques dressed in shorts and shoes.

The violence has now taken root and claimed at least 2,600 lives, half of them civilians, according to the US-based data-collecting agency Armed Conflict Location and Event Data (ACLED).

“We are extremely concerned about the impact that this new outbreak of violence is having on already very vulnerable people who have been affected by years of conflict,” said medical charity Médecins Sans Frontières (Doctors Without Borders).

(FRANCE 24 with AFP)