Johnson & Johnson reaches $700 million talc settlement with US states

A Johnson & Johnson banner is displayed on the front of the NYSE in New York

Updated Tue, Jun 11, 2024
By Jonathan Stempel

NEW YORK (Reuters) - Johnson & Johnson has agreed to pay $700 million to settle an investigation by 42 U.S. states and Washington, D.C. into its marketing of baby powder and other talc-based products blamed for allegedly causing cancer.

The settlement resolves charges that Johnson & Johnson misled consumers into believing its talc products, which it sold for more than a century before stopping, were safe.

J&J did not admit wrongdoing in settling with the states, which were led by Florida, North Carolina and Texas, and has said its talc products are safe and do not cause cancer. The company announced a settlement in principle in January.

"This is a major advancement for consumer product safety," Florida Attorney General Ashley Moody said in a statement.

J&J still faces tens of thousands of talc lawsuits, and a class action accusing the New Brunswick, New Jersey-based company of fraudulently hiding their dangers from shareholders.

As of March 31, about 61,490 people were still suing J&J over talc. Most were women with ovarian cancer, while a smaller number had mesothelioma, a type of cancer linked to asbestos.

J&J stopped selling talc-based baby powder globally last year, switching to corn starch as the main ingredient. It has maintained that its products do not contain asbestos.

The company has twice tried to resolve the litigation by placing into bankruptcy a subsidiary it created to contain its talc liabilities, but courts rebuffed both attempts.

On May 1, J&J proposed a $6.48 billion settlement to resolve most of the litigation through a third bankruptcy filing. It has set aside an $11 billion reserve to cover all talc liabilities.

"The company continues to pursue several paths to achieve a comprehensive and final resolution of the talc litigation," Erik Haas, J&J worldwide vice president of litigation, said in a statement on Tuesday.

"We will continue to address the claims of those who do not want to participate in our contemplated consensual bankruptcy resolution through litigation or settlement," he added.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and Bill Berkrot)

The World Needs More Batteries — But Not This Many

David R Baker
Wed, Jun 12, 2024

(Bloomberg) -- The wave of battery factories under construction around the world will be able to produce far more cells than the global economy needs, BloombergNEF warns in a new report.

Demand for lithium-ion cells is growing fast, as automakers electrify their fleets and utilities install big batteries to stabilize the power grid. But manufacturers have announced so many new factories that capacity will outstrip demand for the rest of the decade, according to BNEF.

By the end of 2025, the global battery industry will be able to produce more than five times as many cells as the world will need that year, BNEF forecasts in its latest Electric Vehicle Outlook.

“This is good news for automakers and EV buyers but marks a challenging time ahead for new entrants to the battery industry,” the report said.

Oversupply is most acute in China, where manufacturing capacity will exceed annual battery demand by at least 400% for the rest of the decade. It’s also an issue in the US, where President Joe Biden has made building a domestic battery supply chain one of his top climate and industrial priorities. Among efforts to woo battery makers, the administration offered a conditional $9.2 billion loan to Ford Motor Co. last year to construct three battery factories.

Europe also faces a glut of battery capacity, yet governments are pushing for more. Swedish battery maker Nortvolt AB has a plant under construction in Germany, but the country’s Economy Minister Robert Habeck is already lobbying the company to build another.

Some planned factories around the world may be delayed or canceled due to the industry’s overcapacity, according to Yayoi Sekine, head of energy storage research at BNEF. Ford, for example, has ratcheted back its plans for ramping up electric vehicle production citing a price war for battery-powered cars and trucks.

“This will be a problem everywhere, including the US,” she said in an email.

At the same time, the chemistries used to make batteries are changing. The report found that lithium iron phosphate batteries are gaining popularity for powering electric cars, particularly among Chinese automakers. Their component materials are cheaper than the standard lithium-ion cells that use nickel, manganese and cobalt, and the shift could substantially lower future demand for those metals. BNEF cut its forecast for the amount of nickel used in batteries next year by 25%.

Bloomberg Businessweek

SWEDEN

SBB Faces Backlash With ISS Saying to Vote Against Chairman


Charles Daly and Christopher Jungstedt
Tue, Jun 11, 2024

(Bloomberg) -- Struggling Swedish landlord SBB is set for a showdown with shareholders at the end of the month after an influential proxy adviser said investors should vote against the company’s proposal to appoint a new chairman

Institutional Shareholder Services Inc. isn’t supporting Lennart Sten as chairman at the annual general meeting of Samhallsbyggnadsbolaget i Norden AB, as the company is formally known, because the candidate is “overboarded,” meaning he sits on an excessive number of boards, according to a report seen by Bloomberg News.

ISS also is recommending voting against the reelection of directors Ilija Batljan, Lennart Schuss and Sven-Olof Johansson at SBB’s annual general meeting, scheduled for June 28 in Stockholm. Their support “is not warranted due to a lack of gender diversity on the board,” the adviser said.

The stance by ISS could pose a serious setback to SBB as it seeks to draw a line under a tumultuous 18-month period that’s seen its share price plummet amid a spate of credit-rating downgrades. Last year, company founder Batljan was replaced as chief executive officer by Leiv Synnes, who has since embarked on a strategy to split the firm into three units in an effort to pay off some of its $5.6 billion pile of debt.

An SBB representative declined to comment on the ISS report.

It’s unclear how investors intend to vote on other agenda items, including discharging SBB’s directors from liability. Seven institutional investors in SBB that were contacted by Bloomberg News declined to disclose their voting plans. Under Swedish law, shareholders can refuse to grant the discharge of liability — and hence claim damages concerning a director’s management — provided they represent more than 10% of a company’s capital base.

The Swedish Shareholders’ Association, representing some 70,000 retail investors, has yet to decide on its position for how to vote during the annual meeting, said Sverre Linton, the group’s chief legal officer.

“Whether it was responsible or not to push through the dividend proposal at last year’s AGM is one of the important factors when we’re assessing how management has been handled during the past year,” Linton said, adding that there may also be reason to look at the responsibility of the accountant who signed off on the dividend proposal.

Linton, however, defended the Swedish system of different share classes entailing different weights in terms of voting power, which has repeatedly been a source of contention from foreign voting advisers such as ISS.

“This structure is functioning well, and has been historically,” he said.

 Bloomberg Businessweek

IMF Expects China to Reschedule Billions in Argentina’s Debt

Jorgelina do Rosario, Eric Martin and Manuela Tobias
Tue, Jun 11, 2024

(Bloomberg) -- The International Monetary Fund expects China to reschedule payments on part of the $18 billion swap line that it has extended to Argentina, a key step that frees up cash amid President Javier Milei’s deep budget cuts and helps sustain the fund’s massive fiscal support program for the country.

Argentina owes the People’s Bank of China about $2.9 billion this month and $1.9 billion July, according to central bank data released last month.

An agreement between Argentine authorities and IMF staff last month on the latest review of the country’s program included a firm commitment to refinance or roll over the debt, which was drawn down from an existing $18 billion swap line between Beijing and Buenos Aires, according to people familiar with the deal, who asked not to be identified as the information isn’t public.

The rollover commitment clears a major obstacle for Argentina’s $43 billion IMF program, as the government must show it has so-called financing assurances to manage its enormous debt pile.

The details of the rollover or any refinancing weren’t immediately available. One of the people suggested Argentina could repay some of the debt while rolling over the majority of it.

The IMF declined to comment. Argentina’s central bank did not immediately respond to a request for comment on Tuesday. China’s embassy in Washington also did not immediately respond.

The Washington-based lender’s executive board is scheduled to vote on the agreement Thursday, Economy Minister Luis Caputo said Tuesday. The IMF will publish the staff-level agreement after vote.

Caputo said in April that Argentina is starting talks for a new IMF financing program that could involve fresh funds, adding that Milei’s monetary and foreign exchange plans are part of the discussion.

Former President Alberto Fernandez’s government last year used some of the money from China to pay off part of its loan from the IMF, something that no fund member has done in its 80-year history. It also used the Chinese funds to finance imports as it ran low on dollars.

China’s swap is the largest source of foreign gross reserves in Argentina’s central bank, whose debts are currently larger than its assets. It’s also the biggest yuan swap line in the world.

On the campaign trail last year, Milei raised questions about the future of Argentina’s relations with China if elected, calling the Chinese “assassins” and “communists.” 

But in an April interview with Bloomberg News, the president adopted a much more pragmatic tone, avoiding incendiary remarks and assuring he wouldn’t touch the currency swaps.

©2024 Bloomberg L.P.

Gold is getting so expensive that even China's central bank stopped buying

Huileng Tan
Tue, Jun 11, 2024

Record gold prices are slowing appetite for the precious metal.

VCG/Getty Images

China's central bank has paused gold buying after prices reached record highs.


China's gold holdings were unchanged in May, halting an 18-month purchasing streak.


Gold prices are up 11% this year due to geopolitical tensions, but have softened from a record high.

China's central bank gold-buying streak has been a major driver of prices that hit record highs recently.


However, it looks like gold has gotten so expensive that even the People's Bank of China is taking a break.

On Friday, official data showed China's gold holdings were unchanged in May from the prior month — which means the central bank did not buy gold.

The PBOC's pause has left gold "vulnerable to more downside pressure," wrote Ewa Manthey, a commodities strategist at ING Bank, on Monday.

The benchmark spot gold price is around $2,300 per ounce — about 6% lower than its record high of nearly $2,450 per ounce on May 20.

Prices of gold, a traditional safe-haven asset, have been on a tear this year, gaining about 11% this year-to-date due to global geopolitical tensions. In China, people are also loading up on gold as a store of value amid economic uncertainties and a weak Chinese yuan.

But "gold's record-breaking rally might dent demand for now," wrote Manthey.

China's central bank gold buying had actually started to slow in April, when it bought just 60,000 troy ounces of the precious metal. That was down from 160,000 ounces in March and 390,000 ounces in February.

Before its pause in purchases last month, the PBOC had been snapping up gold for 18 straight months, making it the world's largest institutional buyer. According to industry association World Gold Council, China's central bank purchased 225 tons of gold in 2023. In second place was Poland's central bank, which bought 130 tons of the yellow metal.

David Tait, the council's CEO, told Reuters on Monday that China is "just waiting and watching. If prices correct to the $2,200 per ounce level, they will resume again."

Read the original article on Business Insider

 

Abu Dhabi’s First IPO of the Year Slumps in Rare Debut Decline

Farah Elbahrawy
Wed, Jun 12, 2024,


(Bloomberg) -- Alef Education Holding Plc shares dropped on their Abu Dhabi debut, a rarity in the Middle East where initial public offerings have typically yielded near-guaranteed returns in early trading.

The shares fell as much as 19% from the offer price of 1.35 dirhams apiece, before paring the decline. That contrasted with the strong demand for the stock when the IPO was unveiled — investors put in orders worth $20 billion and the deal, which priced at the top of the range and raised 1.89 billion dirhams ($515 million), was 39 times oversubscribed.

“Opening up below IPO price reflects negatively on the valuation it was sold at and the risk appetite of investors and liquidity of the market at that point,” said Mohammed Ali Yasin, founder and chief executive officer of Oracle Financial Consultancy and Investments. “Early investors, even if they are long term, will not enjoy these first few sessions.”

The shares were down 10% as of 12:55 p.m. local time.

Abu Dhabi’s first IPO of 2024 follows three busy years for offerings in the Emirate. The 14 companies that had IPOs price since the start of 2021 saw their shares rise by about 31% on average in the first session. That ranks Alef Education’s debut far below average and marks the worst performance since that year, according to data compiled by Bloomberg.

Tech Nova Investment – Sole Proprietorship LLC and Kryptonite Investments LLC sold 1.4 billion shares, or a 20% stake, in the education technology firm. First Abu Dhabi Bank PJSC and EFG Hermes were the joint lead managers and joint bookrunners on the IPO.

Though there’s been a lull in Abu Dhabi market, other countries in the region such as Saudi Arabia have seen more IPO activity this year. Four Saudi companies have drawn a combined $176 billion in orders for their IPOs, although the kingdom’s biggest of the year — that of Dr. Soliman Abdel Kader Fakeeh Hospital Co. — was overshadowed by Saudi Aramco’s $11.2 billion mega stock offering.

UAE Education

Founded in 2016 and indirectly majority owned by Abu Dhabi Capital Group, Alef Education serves the kindergarten to 12th grade sector. It operates in countries including the United Arab Emirates, Indonesia, Morocco and the US and plans to expand both organically and inorganically.

Parents in the UAE are among the world’s biggest spenders when it comes to educating their children. Dubai’s emergence as a post-Covid haven has drawn newcomers to the emirate, where private schools are mandatory for expatriate children.

Private school operator Taaleem Holdings, which listed in Dubai at the end of 2022, initially saw its shares fall below the offer price, but they are now trading 26% higher as profit rose on higher student enrollments.

Alef said it plans to pay investors a dividend of at least 135 million dirhams for this year and 2025.

--With assistance from Filipe Pacheco and Adveith Nair.

(Updates story throughout.)

CRIMINAL CAPITALI$M

Bathroom Off Limits at Archegos When Key Stocks Were On Move

JUST LIKE WORKING IN A MEAT PACKING PLANT



Chris Dolmetsch and Bob Van Voris
Wed, Jun 12, 2024, 

(Bloomberg) -- In the months before Archegos Capital Management imploded in March 2021, trading was almost nonstop. One of Bill Hwang’s traders made the mistake of stepping away to use the bathroom when a stock he was watching began to mov


“Bill yelled at us,” former Archegos head trader William Tomita recalled on the witness stand Tuesday at Hwang’s fraud trial. “He raised his voice, and he yelled at us that we can’t just go to the bathroom.”

In his second day of testimony as a star prosecution witness against Hwang, Tomita depicted his former boss as not just a market manipulator but a micromanager who oversaw every detail of trading at his family office and frequently berated his team.

Tomita was closer to Hwang than anybody who has taken the stand, including the other cooperating witness, former risk chief Scott Becker. His testimony, which is expected to continue for several days, is key to connecting the Archegos founder to the government’s charges of fraud, racketeering conspiracy and market manipulation.

Prosecutor Matthew Podolsky on Tuesday walked Tomita through several allegedly manipulative trades. Tomita also offered testimony of how Hwang ran his traders. At the time, most of them were working from home due to the pandemic. But they spent their days in an ongoing Zoom call with Hwang, who dictated their buying and selling from a corporate apartment on Central Park South.

It was via this Zoom that Hwang noticed that trader Peter DeSanto wasn’t at his desk when a stock he was shorting, Rocket Cos., started to move in the wrong direction. DeSanto was in the bathroom.

Inopportune breaks weren’t the only reason Hwang yelled at his team, Tomita said. He also frequently criticized them when they failed to get the prices of targeted stocks to his limit price.

“I remember with the stock Viacom, getting yelled at because I wasn’t aggressive enough,” Tomita said. “I wasn’t buying it in a manner that was moving the stock price as high as he wanted.”

Traders could often tell when Hwang was about to berate them, he said. “Sometimes he didn’t even need to vocalize because on the Zoom he would just glare, and that glance alone meant we were about to get yelled at or he was annoyed,” Tomita testified.

Bloomberg Businessweek

Oil Prospect Found by Tiny Firm Spurs Hope, Doubt in Korea

Heesu Lee
Wed, Jun 12, 2024

(Bloomberg) -- Vitor Abreu is a geologist, but he arrived in Seoul last week like a star, greeted at the airport by flashing cameras and a hoard of reporters.

The head of a 14-person consultancy — headquartered in his suburban Houston home — had discovered what could become one of the world’s biggest oil and gas deposits off the coast of South Korea, spurring hopes of an energy windfall even as skeptics raised questions. His firm found a prospective area, which still required full-fledged drilling to prove its size and viability.

Announced by President Yoon Suk Yeol in a televised speech, the potential find has gripped a nation struggling with costly fuel imports, underscoring the extent to which energy security has become a priority globally, even if it means tapping fossil fuels that might set back climate goals for decades.

South Korea aims to lift the share of renewables in its power mix to almost a third by 2038 from just 9% in 2022, and make nuclear its largest source of electricity generation, according to a government proposal. The use of fossil fuels — which currently dominate the energy mix — is meant to plunge over that timeline.

Still, the government has been enthusiastic about the potential hydrocarbons at stake. The president touted the field as holding as much as 14 billion barrels equivalent of resources, enough for four years of oil consumption, and 29 years of gas demand in the country. The announcement sent local oil and gas shares soaring and was trending on social media for days.

That’s despite the fact that the field, if successful, would take seven to 10 years to come online, and would still be producing oil and gas well after 2050, the year by which South Korea aims to be carbon neutral.

Abreu has sought to manage expectations. While the basin off the country’s southeastern coast held “great potential,” there was only a 20% chance it would yield fuel during exploration, he said, a rate that’s considered the industry norm, according to independent experts.

“It’s still risky,” the Brazilian scientist said at a press briefing on Friday. “There’s an 80% chance they do not work.”

Doubts Swirling

Any success from the Houston outfit would come after years of disappointment in Korea for much larger players.

After jointly exploring the same region with Korea National Oil Corp. for about 15 years, Woodside Energy Ltd. pulled out of the project last year, saying in its annual report the area was “no longer considered prospective.”

Abreu’s firm ACT-Geo bid for and won KNOC’s offer to jointly continue the assessment in 2023. President Yoon hailed ACT-Geo as a “world-class deepwater technology evaluation company,” though few in the local industry had heard of it. South Korean media also queried its track record.

The bespectacled geologist told reporters his consulting firm, which he describes as niche, had recently opened another office in London, which is also located at a personal residence. The Korean government, meanwhile, highlighted his doctorate from Houston’s Rice University and his experience leading exploration at Exxon Mobil Corp.

“The (president’s) press conference raised a lot of questions for the Korean people,” Abreu said. “So then I came here to actually give a more clear response to the Korean people on this very important project.”

Suraya Tulot, a senior upstream analyst at Welligence Energy Analytics, said it’s possible ACT-Geo could have unearthed new structures, complementing the work previously undertaken by Woodside and KNOC.

“You can come up with a lot of theories, but theories will not be proven until you drill the wells,” she said.

Opposition politicians in Korea have accused Yoon, who has approved drilling to start before the end of the year, of jumping the gun in announcing the discovery. With results of the exploration due in early 2025, and any production to start over the next decade, certainty is years away.

The main opposition party said in a statement that Koreans “cannot tolerate a shred of doubt” over the project’s viability as it will likely cost an “astronomical amount of taxpayers’ money.”

“It’ll take years for us to know whether the reserve is commercially viable,” said Kim Sungwhan, a lawmaker from the opposition Democratic Party.

--With assistance from Stephen Stapczynski.