Casino Shares Surge After French Grocer Sells Stake in Big C

“The valuation should be a positive surprise to the market,” Fabienne Caron, an analyst at Kepler Cheuvreux, said in a note. The price and speed of the divestment “could lead to a short squeeze” on the stock.

The shares were up 3.3 percent at 44.06 euros as of 11:54 am Big C stock jumped 9.7 percent to 249 baht in Bangkok, the highest close in about a year.

Big C

TCC agreed to buy the stake in Big C for 252.88 baht a share, 11 percent higher than the Thai grocer’s Feb. 5 closing price. Big C runs more than 700 stores,ranging from hypermarkets to convenience shops.

Casino said the transaction will reduce debt by 3.3 billion euros, including Big C’s borrowings.The grocer is “very confident that it can execute the debt-reduction plan completely or even exceed the goal,” Chief Financial Officer Antoine Giscard-D’Estaing said in a phone interview. The retailer is also selling a business in Vietnam, which analysts at Kepler value at 740 million euros.

Will Chesapeake Energy Be Able To Avoid A Bankruptcy Filing?

Chesapeake Energy[ticker symb=CHK] said Monday that it doesn’t have plans right now to file for bankruptcy protection. Analysts doubt that bankruptcy is an immediate threat, though a default is possible in 2017.
The No. 2 producer of natural gas and No. 12 producer of oil and natural gas liquids in the US has already been forced to halt its preferred stock dividend amid the collapse in energy prices. And in December, a bond swap meant to reduce debt flopped.
Reports that Chesapeake had hired the Kirkland amp; Ellis law firm to look at restructuring sparked fears of a bankruptcy filing. Chesapeake said Monday that the firm has been its counsel since 2010 and is advising the company as it seeks to further strengthen its balance sheet following its recent debt exchange.
Chesapeake closed down 33% at 2.04 in the stock market today.
Mark Hanson, an equity analyst at Morningstar, said oil prices would have to hit zero and natural gas prices would have to go negative for Chesapeake to go bankrupt this year.
If they were really that close to bankruptcy, they would be out front and center about it, he told IBD.
But there is a risk of a covenant breach next year as Chesapeakes $2 billion in debt matures, he added. Still, a lot of things could happen between now and then, like oil and gas prices recovering.
In December, Chesapeake’s plan to ease liquidity woes appeared to be in jeopardy. Debt-swap participation rates for 2017 and 2018 bond holders were so low that Chesapeake secured only $252 million tendered overall on $1.7 billion in face value, according to Reuters.
Also that month, research firm CreditSights said that it sees Chesapeake filing for bankruptcy in 2018, unless prices rebound sharply. When asked Monday about a possible bankruptcy filing, Chesapeake re-sent its earlier statement.
Chesapeakes denial that it will file for bankruptcy comes after dozens of smaller companies filed for protection last year. More are expected to file this year as prices stay lower for longer. On Monday, Brent crude futures fell 3.5% to $32.88 a barrel, and US crude dropped 3.9% to $29.69.
On Thursday, oil and gas producer Linn Energy[ticker symb=LINE] and affiliate LinnCo[ticker symb=LNCO] said that they would explore strategic alternatives but said they have enough resources to continue operations.
The companies didnt give any details about the types of alternatives they are looking at. Linn shares sank 58% Friday and 34.7% Monday. LinnCo lost 65% Friday and 42% Monday.

Glencore Copper Output Falls as Franco to Buy Gold Supply

Glencore Plc’s copper production fell last year after it suspended output from mines in Africa following a plunge in prices. The trader and miner also agreed a $500 million deal with Franco-Nevada Corp. to sell precious-metals output from a mine in Peru.

Glencore mined 374,700 metric tons of copper in the final quarter of 2015, 6 percent less than year earlier, the company said in a statement Thursday. Output for the whole year fell 3 percent to 1.5 million tons, reflecting the suspension of operations at Katanga in the Democratic Republic of Congo and a curtailment at Mopani in Zambia. The company said it plans to cut copper output about 7.5 percent this year and reduce zinc supply by a quarter.

The rout in commodities from copper to coal has left mining companies battling for survival. Billionaire Chief Executive Officer Ivan Glasenberghas scrapped Glencore’s dividend payments and sold new shares to rein in debt accumulated during a commodities boom. The company said in December that it planned to reduce debt to as low as $18 billion by the end of this year. It’s cutting output and has started asset sales.

Nation moving too slowly to reduce debt

I’m not sure if columnist Ron Eachus is so focused on cheering for his side that he doesn’t see the big picture or if he is just being disingenuous. In his Feb. 2 column, he talks about reducing the deficit, when it is our total debt that is the greatest threat to our economic stability.

We used to have a currency backed by gold. Now our gold reserve won’t pay a dime on a dollar of our debt. All the gold mined in the world since the Pharaohs won’t pay a quarter on a dollar. Our debt has taken 220 years to reach $9 trillion and we double it in seven years.

Eachus brags about the current administration reducing the deficit and all he is doing is bragging about digging a deeper debt hole more slowly.

Lowell Smith


Debt Levels Double for Older Americans

Older Americans have more than doubled their amount of debt over a dozen years, and many of them make ends meet by forgoing home or car repairs and cutting medications in half, according to a new report by the National Council on Aging.

“We need to recognize that debt is a problem among this population, and help prepare older adults to better manage their future medical, housing and other daily expenses as they age,” Maggie Flowers, the council’s associate director for economic security, said in a statement.

The council looked at government figures on the debt levels of households headed by adults age 60 and older as of 2013. Among the findings:

  • The median total debt has more than doubled from $18,285 in 2001 to $40,900 in 2013.
  • One in 25 households had a negative net worth, meaning their liabilities surpassed their assets. In 2001, 1 in 50 had a negative net worth.
  • More households carry credit card debt and more of it. Nearly one-third of households owed money on a credit card — up from just over a quarter of them a dozen years ago. And the median credit card debt over that time doubled to $2,450.

Mortgage loans make up the largest slice of debt among older consumers, as homeowners over the past decade have taken advantage of historically low interest rates to refinance and tap the equity in their houses, says Lori Trawinski, director of banking and finance at the AARP Public Policy Institute.

Borrowers typically don’t take out loans that they don’t expect to repay, although unexpected setbacks such as an illness or the loss of a job or spouse can make that debt unmanageable, Trawinski adds. And the older you are, the harder it is to overcome these setbacks, she says.

The council surveyed some professionals who work at senior centers, Area Agencies on Aging and other agencies to find out what trade-offs older consumers are making to manage their debt. Many report that seniors forgo needed home or car repairs, cut pills, avoid social engagements, skip medical appointments and meals, and miss rent and mortgage payments to try to make ends meet.

The council offers two online services to assist seniors. The EconomicsCheckUp can help older adults reduce debt, find work and cut spending, while BenefitsCheckUp posts information on federal, state and local benefits available to lower-income households.

AARP also offers online calculators to help with budgeting and managing debt. And AARP’s Work amp; Jobs site can help with a job search.

Photo: TimArbaev/istock