Start the conversation
Mobile TeleSystems Dials Up a 35% Profit; J.C. Flowers Saves Wilting Shinsei Bank; Royal Dutch Shell Exits Nigeria; China Metallurgical Moves on Afghanistan
- Mobile TeleSystems OJSC (MBT) announced yesterday (Tuesday) that third-quarter profits grew 35% to a larger-than-expected $655 million. Third-quarter revenue jumped 23.3% to $2.216 billion, up from $1.8 billion during the comparable quarter a year ago. Total profits for the Moscow-based mobile communications provider rose to $654.7 million this year from $486 million in the third quarter of 2006. The consensus analyst estimate was for profits of $576 million. This year's results were boosted by a foreign exchange gain of $81 million. Mobile TeleSystems gained 10.4 million new customers across all units on the year, and average monthly revenue per user in Russia increased to $10 in the third quarter of this year from $9.20 in the second – and from $8.60 during the third-quarter of 2006. "Growth of usage in Russia was the main driver of sales for the group," said in a statement. "We continue building networks in markets with low penetration, in Uzbekistan and Turkmenistan, and expect that in the coming years their contribution to the sales of the group will increase." He also added that further international expansion includes tapping Africa's growing market.
- A group of investors led by U.S. buyout firm J.C. Flowers & Co. LLC will bid about $1.8 billion for up to 32.6% of Shinsei Bank Ltd., putting more money into the Japanese bank it helped resurrect in one of the most lucrative private-equity deals ever. Shinsei has been hit by valuation losses due to declines in the share prices of two of its consumer-loan affiliates – Aplus Co. Ltd. and Shinki Co. Ltd. Shares of Aplus have lost more than half their value this year, while Shinki has lost more than 67%. Shinsei President Thierry Porte said the capital injection would allow the bank to increase the reach and effectiveness of its current operations, especially its consumer-finance business. "We believe there is merit – which perhaps some parts of the market don't agree with – in focusing on the consumer-finance business and building a new model," Porte said in an interview with Reuters. The group led by J .C. Flowers will bid for a 22.7% stake in the bank at $3.86 (425 yen) per share in the 30 business days from this Thursday through Jan. 10. The bidding price represents a 17% premium to Shinsei's closing price of $3.20 (364 yen) per share on Monday.
- Royal Dutch Shell PLC (RDS.B) is considering selling $900 million worth of its interests in Nigerian offshore blocks as it restructures and reduces its business in the troubled region. The company is considering selling 49.8% of interests owned through subsidiary Shell Nigeria Exploration and Production Co. Ltd. The remaining 50.2% is owned by Agip, a unit of Eni SpA (E). Last week, Shell unveiled restructuring plans to cut costs and jobs at its Nigerian ventures following months of unrest and pressure by the Nigerian government to renegotiate contracts. Both fields are in the area known as OML deep-water blocks. One field, OML-225, is producing 12,000 barrels of day, while the other, OML-134, is still in an exploration phase. , Eni's CEO, said he's surprised by the Shell move. "The situation in Nigeria isn't peaceful, but I don't think it's enough to push oil majors to leave," he said.
- A $2.87 billion bid by China Metallurgical Group Corp., the state-owned diversified metal producer, led a group that beat four rivals for the right to develop Afghanistan's largest copper mine. Under the terms of the deal, the Anyan Mine will produce 200,000 metric tons of copper annually. Beijing-based China Metallurgical expects to start constructing a mine in six to 12 months, barring interference from armed conflicts between NATO forces and the remaining Taliban insurgents. According to a recent report from U.S. Geological Survey, Afghanistan has 60 billion tons of copper and shares a 47-mile boarder with China, the largest consumer of copper in the world.