Issue 34

Khazanah makes $72m capital injection into struggling carrier Malaysia Airlines

Malaysian sovereign wealth fund Khazanah Nasional Bhd said on Monday it had pumped another 300 million ringgit ($72 million) into Malaysia Airlines to keep the national carrier afloat as it considers offers for the company. 

Malaysia Airlines has been struggling to transform its operations and return to profitability since two disasters struck in 2014, when flight MH370 mysteriously disappeared and flight MH17 was shot down over eastern Ukraine. 

Khazanah, which took the airline private in 2014, said it made the capital injection as part of an earlier approved funding. The infusion was first reported by Malaysian newspaper the Edge Financial Daily. “All strategic options (including partnership with other airlines) are being evaluated,” a Khazanah spokesman said. 

“Several parties have publicly expressed their interests in (the airline). Khazanah will evaluate all serious offers, specifically, on their capabilities financially and from the execution point of view.” Malaysia’s Prime Minister Mahathir Mohamad said in March the government was considering whether to shut, sell or refinance Malaysia Airlines.


From – Deal Street Asia


GOJEK’s Vietnam affiliate GoViet says bike service grew 400% since its launch

GoViet, the Vietnam-based affiliate of Indonesian ride-hailing major GOJEK, said it has scored 100 million rides through bike services, representing a 400 per cent growth since its launch a year ago. 

However, the firm has not disclosed any plans to expand to car hailing services yet. Kicking off with GoBike in Ho Chi Minh City in August 2018 and Hanoi in September 2018, the service has registered more than 125,000 driver partners. 

Its GoFood business, which came later in Ho Chi Minh City in November 2018 and Hanoi in March 2019, has worked with around 70,000 merchants and witnessed the number of orders growing 25-35 per cent every month, the company said in a statement. 

GoSend, operated on the bike service platform, has also completed millions of orders since its launch last year. The firm is yet to start offering car ride-hailing service in Vietnam. GoViet and VinaCapital Ventures-backed Fastgo are the latest companies in the sector to secure an approval to implement car ride-hailing services in May this year. 

Vietnam had issued what it called a pilot scheme on allowing taxi and technology firms to offer ride-sharing, which has granted licences to Grab, Be Group and other apps developed by local transportation businesses. “GoViet aims to become a ‘super-app’ for Vietnam, following the highly successful model that GOJEK has implemented in Indonesia, a market with economic conditions and demographics that are similar to Vietnam,” the Vietnam-based entity said. 

It has recently appointed Le Diep Kieu Trang, previously country director of Facebook, to spearhead its business, after the company’s former core leadership team including CEO and chief growth officer stepped down. 

GoViet is also scouting for new talent to join the team to cover operations from legal, marketing, government relations, business development to anti-fraud, and especially its GoPay service in the country. Its major rival in the country is Singapore-headquartered Grab, which entered Vietnam in 2014, and since then launched additional services other than e-hailing, food and delivery, such as payment, subscription packages and hotel booking. 

It has recently branched into air delivery. Vietnam’s home-grown BE Group has also offered delivery services to both individuals, SMEs and e-commerce companies, claiming it has completed 20 million bike and car rides since its launch in December 2018. In the food delivery segment, Now by Foody is also another noteworthy player which secured investment from Sea Group in a $64-million acquisition deal. 

Grab and GOJEK have raised billions from renowned global investors including SoftBank, Visa, Experian, Tencent, Temasek and Mitsubishi. Both are Southeast Asia’s first decacorns – tech companies with valuation surpassing $10 billion.

From – Deal Street Asia

HK’s CK Asset Holdings to acquire British pub operator Greene King

British pubs operator Greene King has agreed to a 4.6 billion pounds ($5.6 billion) bid from a Hong Kong-listed company founded by the territory’s richest man Li Ka-Shing, which said it was seeking to increase its UK presence even as Brexit looms. 

The offer from CK Asset, whose founder ranks among Asia’s best-known entrepreneurs, values shares in the brewer of Old Speckled Hen and Abbot Ale at 850 pence each or 2.7 billion pounds in total, a premium of about 51% to their Friday close. 

Including debt the deal value amounts to 4.6 billion pounds, though some analysts said the cash value should be higher. 

“We would see 950p per share as a more attractive exit price to secure shareholder consent,” said Shore Capital analysts, noting that underlying trading had improved lately. 

CKA already owns a near 3% stake in Greene King, also owner of the Chef & Brewer and Hungry Horse chains and whose shares jumped 51% to match the bid price. 

The proposed takeover comes after Greene King, with 2,700 pubs, restaurants and hotels across the UK, has like others struggled with a rise in the minimum wage and a move away from pub drinking among younger Britons. 

Britain’s looming exit from the European Union risks denting the economy but in the meantime the weakness of sterling has made it cheaper for foreign buyers to snap up UK assets. 

More than 11,000 pubs shut in the UK in the last decade, a fall of almost a quarter, a 2018 analysis by Office for National Statistics had revealed. 

However, Greene King, which replaced its long-time boss last year, in June posted a higher than expected 1.6 percent rise in annual adjusted profit before tax to 246.9 million pounds. 

British culture Some saw the move as likely to lead to more pubs closing as CKA, where Li Ka-shing retired in May as chairman and passed the role to his eldest son but retains a near 30% stake, looks to cash in on their property value. 

“While it’s a bottle of champagne for shareholders, there may be fewer reasons to celebrate for patrons. I think we can comfortably expect more pub closures,” analyst Neil Wilson said. CKA said its strategy was to look for businesses with stable and resilient characteristics and strong cash flow. 

“The company believes that the United Kingdom pub and brewing sector shares these characteristics and that pubs will continue to be an important part of British culture and the eating and drinking-out market,” it said in a statement. 

The deal would mark the latest in a series of investments by Li Ka-shing’s business empire in the UK, withholdings in retailer Superdrug, utilities Northumbrian Water and Wales and West Gas, and the Port of Felixstow. It also comes as the sector sees a wave of consolidation. 

Slug and Lettuce chain owner Stonegate last month agreed to buy larger rival Ei Group for 1.27 billion pounds, while Japanese brewer Asahi Group said it would snap up the British beer business of Fuller, Smith & Turner. 

Greene King‘s directors intend to unanimously recommend shareholders vote in favour of the deal, which will be funded from CKA’s existing cash resources.

From – Deal Street Asia

Sony to buy Spider-Man video-game developer Insomniac

Sony Corp. agreed to buy Insomniac Games Inc., the studio behind last year’s hit Marvel’s Spider-Man, as part of a push to stay competitive by acquiring independent game studios. 

The studio, based in Burbank, California, and Durham, North Carolina, was founded 25 years ago by current Chief Executive Officer Ted Price. It has a long history of making games for Sony, including Ratchet & Clank, a sci-fi shooting game, and the Spider-Man title, which has sold over 13.2 million copies. 

Financial terms weren’t disclosed. Sony’s PlayStation remains the top-selling gaming console worldwide. But like the rest of the industry, it’s grappling with the global success of Fortnite — a shooting title from Epic Games Inc. — and a broader shift toward free-to-play titles. 

Tech giants Apple Inc., Facebook Inc. and Google also have stated their intention of getting deeper into the business. And traditional game developers, such as Electronic Arts Inc., are introducing subscription services, making even their top titles available to customers who pay them monthly subscription fees. 

Sony now operates 14 video-game studios around the world. Sony has long made games from its studios exclusive to PlayStation, just as Microsoft Corp. and Nintendo Co. do with their platforms. 

Broader distribution In an interview, Shawn Layden, chairman of Sony’s game studios worldwide, said exclusive titles will still be a part of the company’s strategy, but that some games — particularly multiplayer titles designed to be played on personal computers — may see broader distribution. 

“We must support the PlayStation platform — that is nonnegotiable,” Layden said. “That said, you will see in the future some titles coming out of my collection of studios which may need to lean into a wider installed base.” 

Sony is expected to announce a fifth generation of its popular PlayStation console in the near future. The current version launched in 2013.

From – Deal Street Asia

Juul raises $325m in equity, debt financing for global expansion

U.S. e-cigarette maker Juul Labs Inc has raised $325 million in an equity and debt offering to speed up its global reach at a time of intense regulatory scrutiny in its home market. 

The company did not break out the ratio of equity and debt offered, but a source familiar with the matter told Reuters that Juul sold convertible debt in a bridge financing to bolster its balance sheet. Juul, 35% owned by Marlboro maker Altria Group Inc, has over the past year focused its efforts on growing outside the United States, as American regulators increase oversight of e-cigarette products that are wildly popular among teenagers. 

The company launched its products in South Korea, Philippines and Indonesia at around the same time the city of San Francisco, where Juul is headquartered, approved an ordinance to ban the sale and distribution of e-cigarettes until manufacturers get approval from the U.S. Food and Drug Administration. 

In July, a U.S. federal court ordered e-cigarette companies to submit applications to the FDA within 10 months to remain in the market, instead of in 2022. The latest funding round comes a year after Juul, which launched its products in 2015, raised about $1.25 billion to fund its explosive growth. Last December, it received about $12.5 billion from Altria for a stake in the company.

From – Deal Street Asia
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