02/07/2025

BIZ & FINANCE WEDNESDAY | JULY 2, 2025

16

US judge orders Argentina to give up stake in YPF

Renault to report €9.5b loss on Nissan stake in first half PARIS: French carmaker Renault said yesterday it will report an extraordinary loss of about €9.5 billion (RM46.95 billion) on its stake in Nissan Motor in the first half after changing the way it accounts for the investment. The change comes as the two companies loosen their ties and adjust a two-decade long partnership, with Renault gradually lowering its stake in the Japanese firm which is battling slumping sales and scrambling to boost cash. Renault owns 35.7% of Nissan, with 17.05% held directly and the rest through a trust. It said in the future, any change in the value of the holding would be directly recognised in equity and assessed based on Nissan’s share price, with no impact on its net income nor on dividends it pays out. It added that there would be no change to operational projects and collaboration between the two com panies. Renault, which reports its first-half results on July 31, is also seeking a new CEO, with current leader Luca de Meo due to depart on July 15 and later take the helm at luxury firm Kering. – Reuters EQUITY: MORGAN STANLEY BENGALURU: Elon Musk’s xAI has completed a US$5 billion (RM20.96 billion) debt raise alongside a separate US$5 billion strategic equity investment, Morgan Stanley said on Monday, as the startup looks to expand its AI infrastructure through data centres amid intensifying competition in the industry. The US$5 billion raised in debt consists of financing of secured notes and term loans, Morgan Stanley in a statement posted on social media platform X. The deal was oversubscribed and included prominent global debt investors, it added. XAI did not immediately respond to a Reuters request for comment outside regular business hours. The proceeds will support xAI’s continued develop ment of AI solutions, a data center and its flagship Grok platform, the bank said. – Reuters INDIAN AUTO PARTS MAKER HERO MOTORS FILES FOR IPO BENGALURU: Indian auto parts maker Hero Motors has filed for an initial public offering (IPO) of up to 12 billion rupees (RM587.8 million), draft papers showed yesterday. The company will issue fresh shares worth up to 8 billion rupees while its existing shareholders will sell shares worth up to 4 billion rupees, the draft prospectus showed. Hero Motors, which counts BMW and Ducati as its clients, is led by Pankaj Munjal, who belongs to the Munjal family that runs India’s largest two-wheeler maker by volumes, Hero MotoCorp. Proceeds from the IPO will be used to trim debt and fund purchase of equipment to expand its facility in India’s Uttar Pradesh state, Hero Motors said. Its full fiscal year 2024 net profit fell 67% on-year, as increased expenses overshadowed a near-1% rise in revenue. – Reuters XAI RAISES US$10B IN FRESH DEBT AND

BR I E F S

o Case arose from 2012 seizure of 51% interest held by Spain’s Repsol, without tendering for shares held by two minority investors NEW YORK: A US judge on Monday ordered Argentina to give up its 51% stake in oil and gas company YPF to partially satisfy a US$16.1 billion (RM67.5 billion) court judgment, handing a defeat to the cash-strapped country. US District Judge Loretta Preska in Manhattan said Argentina must transfer its YPF shares within 14 days to BNY Mellon, and instruct it to transfer the shares within one business day to the plaintiffs. On X, Argentina’s President Javier Milei vowed to appeal to “defend national interests”. The case arose from Argentina’s 2012 seizure of the 51% YPF stake held by Spain’s Repsol, without tendering for shares held by minority investors Petersen Energia Inversora and Eton Park Capital Management. Argentina has been appealing Preska’s September 2023 decision to award US$14.39 billion to Petersen and US$1.71 billion to Eton Park. The plaintiffs are represented by litigation funder Burford Capital, which has said it expected to receive 35% and 73% of Petersen’s and Eton Park’s respective damages. Shares of Burford soared in New York after the decision, closing up 22%, while YPF shares closed down 5.6%. In a statement, Argentina said the decision was “wrong on the law” and would interfere with US foreign policy. It will ask Preska to put her decision on hold during the appeal. The US Department of Justice had sided with Argentina in opposing a turnover of the YPF shares.

Petrol prices are seen on a billboard at a YPF gas station in Buenos Aires in December 2023. Argentina’s President Javier Milei vowed to appeal against a US judge’s ruling to ‘defend national interests. – REUTERSPIC

despite being located outside the United States. She also rejected Argentina’s suggestion that comity, or the respect that countries afford each other by limiting how far their laws reach, weighed against her getting involved. “Comity is not a one-way street,” Preska wrote. “The United States has a strong interest in enforcing its judgments,” she added. “Foreign governments cannot simply override the exceptions to the FSIA by invoking its own law to shield its assets from execution in the United States.” Argentina previously sought to limit overall damages to about US$4.9 billion. – Reuters satellite unit Starlink. His rift with Trump also caused volatility for Tesla, with shares of the electric car company losing about US$150 billion of its market value on June 5, the largest single-day decline in the company’s history, though it has since recovered. After weeks of relative silence following his earlier feud with Trump over the legislation, Musk rejoined the debate on Saturday as the Senate took up the package, calling it “utterly insane and destructive” in a post on X. On Monday, he said lawmakers who had campaigned on cutting spending but backed the bill “should hang their heads in shame!” “And they will lose their primary next year if it is the last thing I do on this Earth,“ Musk added. – Reuters campaigners and now a broader group of companies and investors say the rules are key to helping them manage climate risks and drive capital to the green transition. By promoting transparency and responsible business conduct, the rules are conducive to growth, better risk management and to reorienting investment to green technologies and growth across the bloc, said the statement, which was also signed by Ikea’s parent company Ingka Group. – Reuters

Burford and its lawyers did not immediately respond to requests for comment. Preska ruled on the same day that Argentina asked London’s High Court to block enforcement of the judgment. Argentina had argued that the YPF shares were immune from turnover under the federal Foreign Sovereign Immunities Act (FSIA). Burford countered that a commercial activity exception to immunity, together with Argentina’s “many years” of evasion, justified a turnover. In her 33-page decision, Preska said Argentina’s control over YPF triggered the exception, and the shares could be transferred

Trump suggests DOGE look at subsidies for Musk’s firms WASHINGTON: US President Donald Trump suggested yesterday that the government efficiency department should take a look at the subsidies that Tesla CEO Elon Musk’s companies have received in order to save money. FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!,“ Trump said in a post on Truth Social, referring to the federal Department of Government Efficiency (DOGE).

In response to Trump’s post, Musk, on his own social media platform X, said “I am literally saying CUT IT ALL. Now.” Trump previously threatened to cut Musk’s government subsidies and contracts when their relationship dissolved into an all-out brawl on social media in early June over the bill, which non-partisan analysts have said would add about US$3 trillion (RM12.5 trillion) to the US debt. Musk’s businesses include rocket company and government contractor SpaceX, which has about US$22 billion in federal contracts, and its creation and subsequent returns for investors”. EU policymakers are negotiating proposals that would loosen the bloc’s corporate sustainability reporting rules for a large majority of businesses, and soften a policy requiring firms to check their supply chains for abuse, amid criticism from some governments and industries that red tape hinders productivity. Germany, France and some businesses have demanded the reporting requirements be dramatically reduced, but environmental

Trump’s comments come after Musk, the world’s richest man, renewed his criticism on Monday of Trump’s sweeping tax-cut and spending bill, vowing to unseat lawmakers who backed it after campaigning on limiting government spending. “Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a

Businesses urge EU not to weaken sustainability rules BRUSSELS: More than 100 companies and investors yesterday warned against rolling back European sustainability rules that they said support economic growth, as the European Union (EU) negotiates cuts to the rules to reduce costs for local industries.

A group of 29 businesses and 80 investors and financial institutions including EDF, Nokia and Allianz said in a statement that rather than hindering growth, the rules were “conducive to competi tiveness and growth, as well as long-term value