FINANCE
Hedge fund wants Charney
Lion Capital LLP is threatening to call in a US$10 million loan to American Apparel Inc unless the retailer reinstates ousted chief executive officer Dov Charney, according to a person familiar with the situation. Barring an investigation that finds illegal or immoral activities by Charney, the hedge fund believes his return would be best for American Apparel because it would stabilize the chain in the short-term, said the person, who asked not to be named because the matter is not public. Lion was due to make its case yesterday in a meeting with Standard General LP, another hedge fund that is now the chain’s largest investor and is in talks with the retailer about how to turn it around, the person said. London-based Lion is to file a notice to accelerate payment of its loan before US markets open today if it is not satisfied by Standard General’s plans, the person said.
STOCK MARKET
3i to sell share in Eltel
Private-equity firm 3i Group Plc is planning a sale or initial public offering of its Finnish telecommunication business Eltel Networks that may value it at about 1 billion euros (US$1.4 billion), said two people with knowledge of the matter. Morgan Stanley and BNP Paribas SA are advising on the sale and no final decision has been made, the people said. The valuation of the business includes debt, they said. Funds managed by 3i hold 59.5 percent of Eltel, while BNP Paribas holds 29.5 percent and management holds 11 percent. The Finland-based company builds and maintains electricity, telecommunications, railway, aviation, public safety and enterprise networks and is the leading provider of infranet services in northern Europe, according to 3i.
AIRLINES
Airbus confident on sales
Airbus Group has not decided whether it will launch its proposed A330neo jet at this month’s Farnborough Airshow but is confident about the outlook for plane orders at the gala event, its strategy chief Marwan Lahoud said on Saturday. Airbus has drawn up plans to revamp its biggest-selling wide-body passenger jet to preserve a second front in its competition with the delayed Boeing 787-Dreamliner in addition to the new A350-800. Lahoud said “the jury is still out” on whether the A330-neo, a more efficient version of the 20-year-old A330 jet, would be launched at the July 14 to July 20 airshow. People familiar with the matter say technical work on the project, based on a Rolls-Royce engine and new wingtips, is complete and that barring surprises, the US$2 billion revamp is to go ahead soon, subject to board approval.
TRADE
Japan, US in TPP talks
Current trade talks in Ottawa between Japan, the US and 10 other Pacific rim countries are key to advancing the planned Trans-Pacific Partnership (TPP) to its final stage by the end of the year, Japan’s chief negotiator, Koji Tsuruoka, said on Saturday. US President Barack Obama said on June 20 his aim was to have a free-trade draft he could take to meetings with other leaders in November, and Koji Tsuruoka also referred to a goal of late this year. Frustrated by the lack of progress in global talks at the WTO, the 12 Pacific countries involved are trying to come up with a regional pact, one which nonetheless could still get bogged down over issues like Japanese farm tariffs. Koji Tsuruoka said the US and Japan made “huge progress” on auto and agricultural trade issues when Obama visited Tokyo in April. He said it was “a little too high a goal” to hope the Ottawa talks would solve all the TPP issues remaining.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to