Wirecard North America seeks buyer, distances itself from German company By Reuters


© Reuters. FILE PHOTO: A man walks past the Wirecard booth at the computer games fair Gamescom in Cologne, Germany

(Reuters) – Wirecard North America Inc, a unit of German payments company Wirecard AG (DE:), on Monday said it has put itself up for sale, days after the troubled parent firm filed for insolvency. The U.S.-based unit, which was bought by Wirecard in 2016, said an investment bank is coordinating the sale process. The unit was formerly known as Citi Prepaid Card Services.

It did not provide further details but said Wirecard North America is a separate legal and business entity of Wirecard and is “substantially autonomous” from the German company, adding that it remains “self-sustaining”.

Last week, Wirecard filed for insolvency owing creditors almost $4 billion after disclosing a 1.9 billion euro ($2.14 billion) hole in its accounts that its auditor EY said was the result of a sophisticated global fraud.

The company said on Saturday it would proceed with business activities after the insolvency filing and an administrator was appointed on Monday.

($1=0.8895 euros)

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GM seeks U.S. appeals court ruling to continue legal fight with Fiat Chrysler By Reuters


© Reuters. The GM logo is seen at the General Motors Assembly Plant in Ramos Arizpe

DETROIT (Reuters) – General Motors Co (N:) on Friday asked a U.S. appeals court to allow it to continue pursuing its civil racketeering suit against rival Fiat Chrysler Automobiles NV (N:) (MI:), rejecting a lower court judge’s belittling of the complaint.

The automaker’s filing with the Sixth Circuit Court of Appeals comes less than a week after U.S. District Court Judge Paul Borman called GM’s suit against Fiat Chrysler a “waste of time and resources” at a time when both automakers should be focused on surviving the coronavirus pandemic.

Borman ordered GM Chief Executive Mary Barra and Fiat Chrysler CEO Mike Manley to meet by July 1 to negotiate a resolution.

“As we have said from the date this lawsuit was filed, it is meritless,” FCA said on Friday.

“FCA will continue to defend itself vigorously and pursue all available remedies in response to GM’s groundless lawsuit. We stand ready to comply with Judge Borman’s order,” it added.

In its motion, GM asked the appeals court to throw out Borman’s order and reassign the case to a different district court judge. It called Borman’s order “unprecedented” and “a profound abuse” of judicial power.

GM sued Fiat Chrysler last year, accusing the Italian-American company’s executives of bribing United Auto Workers union officials to secure labor agreements that put GM at a disadvantage. Fiat Chrysler is under investigation by the U.S. Justice Department as part of a wide-ranging probe of UAW corruption.

GM’s accusations came as Fiat Chrysler and French automaker Peugeot SA (PA:) were in the early stages of preparing for a merger. Fiat Chrysler has said the suit was aimed at disrupting that deal. GM has said the suit has nothing to do with the merger.

In a statement, GM rejected Borman’s characterization of the suit as a “distraction” and defended its decision to press the case.

“We filed a lawsuit against FCA for the same reason the U.S. Department of Justice continues to investigate the company: former FCA executives admitted they conspired to use bribes to gain labor benefits, concessions and advantages. Based on the direct harm to GM these actions caused, we believe FCA must be held accountable.”

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Sweden, Denmark promise help as SAS seeks $1.3 billion in new funds By Reuters


© Reuters. FILE PHOTO: A SAS Airbus A320 airplane takes off from the airport in Palma de Mallorca

STOCKHOLM (Reuters) – SAS (ST:) needs about 12.5 billion Swedish crowns ($1.3 billion) in new funding to survive the coronavirus pandemic, the airline said on Monday as it presented a recapitalisation plan.

Airlines are among the worst hit businesses after widespread lockdowns and travel restrictions to contain the spread of the virus forced the grounding of most of their fleets.

“The aim of the plan is to ensure that SAS is fully funded and that shareholders equity will be at levels reported before the COVID-19 pandemic when anticipated business volumes return to pre-corona levels in 2022,” SAS said in a statement.

Sweden, which has a 14.8% stake in the carrier, said it would ask parliament for an injection of up to 5 billion crowns and to increase its stake by an unspecified amount.

Denmark, which has a 14.2% stake, said it would support the recapitalisation but declined to say how much money it would invest. It said the amount “must be matched by a fair share of ownership”.

SAS said in May it was in talks with shareholders to raise funds. Sweden and Denmark have already guaranteed a 3.3 billion Swedish crown credit facility for the carrier.

SAS said it was also seeking support from the government of Norway, which sold the last of its shares in SAS in 2018.

Shares in SAS were up 3.4% at 1029 GMT.

SAS reported losses before tax for the February-April quarter roughly three times the size of its loss a year earlier.

Sweden said its support was conditional on SAS setting tougher emissions goals as part of its new operating model.

“Let me be clear, Sweden will only go in with capital to SAS if clear, quantitative targets for reduced emissions are set in line with the Paris Agreement’s 1.5 degree goal,” Financial Markets Minister Per Bolund told reporters at a news conference.

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EU seeks feedback on new antitrust power to investigate companies By Reuters


© Reuters. FILE PHOTO: European Competition Commissioner Margrethe Vestager presents the EU executive’s economic response to the coronavirus epidemic in Brussels, Belgium

By Foo Yun Chee

BRUSSELS (Reuters) – EU regulators are seeking feedback about a possible new power to investigate businesses and demand changes even when no competition rules have been broken, in a move aimed at stopping companies from abusing their dominance.

The prospective power underlines a European Commission push for a speedier and a more effective antitrust capability and came after a decade-long battle with Google (O:) which rivals said has not resulted in any effective changes.

The new initiative would be similar to one introduced by Britain’s Competition and Markets Authority three years ago which subsequently led to a shake-up of the UK audit market following an investigation.

The Commission said the new power aims to address gaps in existing competition rules and to intervene against structural competition problems across markets in a timely way.

“After establishing a structural competition problem through a rigorous market investigation during which rights of defense are fully respected, the new tool should allow the Commission to impose behavioral and where appropriate, structural remedies,” the EU executive said.

“However, there would be no finding of an infringement, nor would any fines be imposed on the market participants,” it said.

The new effort could target industries ranging from tech to beverages to digital agriculture.

Areas of concern include the creation of powerful market players with an entrenched market or acting as gatekeepers, and markets where companies are unable to enter because of lack of access to data and other barriers, or where consumers are locked in to companies which offer a diverse range of services.

The consultation period runs to Sept. 8, with the Commission planning to roll out legislation in the final quarter of 2020.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Legend Biotech Seeks U.S. Capital For Pipeline Advance (Pending:LEGN)


Quick Take

Legend Biotech Corp. (LEGN) has filed to raise $100 million in an IPO of its ADSs representing ordinary shares, according to an F-1 registration statement.

Legend Biotech is spinning out from parent firm GenScript Biotech to pursue treatments in CAR T cell therapies for multiple myeloma.

LEGN has produced promising Phase 2 trial results for its lead candidate.

I’ll provide a final opinion when we learn more IPO details from management.

Company & Technology

Somerset, New Jersey-based Legend was founded within GenScript Biotech to advance a pipeline of drug treatment candidates for hematologic malignancies and solid tumor conditions.

Management is headed by Chief Executive Officer Ms. Yuan Xu, Ph.D., who has been with the firm since March 2018 and was previously Senior Vice President at Merck (MRK) and Vice President of Biologics at Gilead.

Below is a brief overview video of CAR T-cell therapies in multiple myeloma:

Source: VJHemOnc

The firm’s lead candidate, LCAR-B38M/JNJ-4528, is being developed in conjunction with Janssen Biotech (JNJ) and has produced promising responses in Phase 1 and Phase 1b/2 trials in the treatment of both multiple myeloma and relapsed and refractory multiple myeloma.

Below is the current status of the company’s drug development pipeline:

Source: Company F-1 Filing

Investors in the firm have invested at least $123 million and include GenScript Biotech and AquaPoint.

Market & Competition

According to a 2016 market research report by Grand View Research, the market for multiple myeloma reached $7.5 billion in 2015 and is expected to reach $37.5 billion by 2024.

This represents a forecast quintupling of the number of cases during the nine year period.

Key elements driving this expected growth are a growing elderly population worldwide with reduced immune system capacities as well as a higher incidence of MM in developed economies providing strong demand for new and more effective treatments.

Major competitive vendors that provide or are developing treatments include:

Financial Status

Legend’s recent financial results are atypical in that they feature significant collaboration revenue which helps to defray the costs of its pipeline program development.

Below are the company’s financial results for the past two calendar years (Audited IFRS):

Source: Company registration statement

As of December 31, 2019, the company had $83.4 million in cash and $410.6 million in total liabilities. (Unaudited, interim)

This level of liabilities is quite high for a biopharma firm at IPO.

IPO Details

Legend intends to raise $100 million in gross proceeds from an IPO of its ADSs representing ordinary shares, although the final amount may be different.

Management says it will use the net proceeds from the IPO as follows:

to fund the clinical development of LCAR-B38M/JNJ-4528;to fund the construction of our manufacturing facilities;to fund the commercial launch, if approved, of LCAR-B38M/JNJ-4528; andthe remaining amounts to fund the development of our pipeline programs, as well as for working capital and other general corporate purposes.

Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are Morgan Stanley, J.P. Morgan, and Jefferies.

Commentary

Legend is seeking U.S. public capital market funding to continue advancing its ambitious development pipeline.

The firm’s lead candidate, which is being developed in conjunction with Janssen Biotech as collaboration partner, has produced promising efficacy results in early Phase 2 trials for various arms.

The market opportunity for treatments for multiple myeloma is expected to explode in the coming years, drawing widespread development activity, so Legend has no shortage of competition within the larger space.

On the legal side, as a subsidiary of a Chinese firm, LEGN operates within a VIE structure or Variable Interest Entity. U.S. investors would only have an interest in an offshore firm with contractual rights to the firm’s operational results but would not own the underlying assets.

This is a legal gray area that brings the risk of management changing the terms of the contractual agreement or the Chinese government altering the legality of such arrangements. Prospective investors in the IPO would need to factor in this important structural uncertainty.

Chinese companies seeking to go public on U.S. markets will be under increased regulatory scrutiny.

I’ll provide a final opinion when we learn more about management’s assumptions on IPO pricing and valuation.

Expected IPO Pricing Date: To be announced.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.





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