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Bloomberg – General Motors Corp. said its European Opel unit risks running out of cash next quarter, threatening three factories with closure and imperiling as many as 300,000 jobs across the region.
Opel, based in Ruesselsheim, near Frankfurt, is struggling with 30 percent overcapacity as sales slide, GM’s European chief, Carl-Peter Forster, said today in a press briefing at the Geneva International Motor Show. He didn’t specify which sites might close. The U.S. company has major plants in Germany, Spain, Poland, Belgium and the U.K.
GM expects European governments to reach decisions in “days or weeks” on aid the carmaker is seeking to help save operations in the region, Chief Operating Officer Fritz Henderson said. Any interest in the Saab brand depends on a bailout from the Swedish government, according to the executive, who said GM is determined to eliminate failing units in order to channel resources toward more successful models.
“GM will be global, we think,” Henderson said in an interview earlier. “But we have to be realistic, and the environment today requires us to take a lot of tough measures. We need to focus our brand portfolio. We need to get down to fewer brands that can focus very clearly on the market.”
Hummer, Saturn and Saab may all be surplus to requirements and will play “a diminished role,” Henderson said, while Pontiac will be reduced to a niche brand in the U.S. GM, already relying on $13.4 billion in government loans to survive, said Feb. 17 it needs as much as $16.6 billion in additional funds to avoid bankruptcy, including $2 billion by the end of this month.
“We’re quite confident that we can execute a product program and build a brand to be successful going forward,” Henderson said. “After all, it’s about revenue.”
New York (HedgeCo.Net) – Philip Richards, head of hedge fund RAB Capital, is stepping down and will be replaced with Finance Director Stephen Couttie, according to a statement made by the company yesterday.
Richards ran the $1.4 billion Special Situations Fund, which received poor press and even worse returns when it lost millions thanks to the nationalization of Northern Rock in February.
Richards will still be employed by RAB, serving as an executive director while still managing the Global Mining and Resources funds, which holds assets of around $210 million. He made headlines recently with his controversial personal stake in Bahamas-based oil exploration company BPC, in which his Special Situations Fund along with Falkland Gold & Minerals facilitated a takeover bid that earned him a hefty paycheck.
RAB currently manages around $5.9 billion in assets, a sharp drop from the over $7 billion it managed in 2007.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) – Shareholders in Falkland Gold & Minerals have approved plans to buy Bahamas-based oil exploration company BPC after a unanimous vote yesterday.
Philip Richards, head of the RAB Special Situations Fund that owns a 76 percent stake in Falkland, will pocket around £1m thanks to the reverse takeover and his vast personal stake in BPC of 300,000 shares.
While there has been some question regarding a possible conflict of interest with a hedge fund manager having that kind of stake in a company, Richards has been completely transparent in his holdings long before the meeting in which shareholders overwhelmingly approved the takeover.
"This was a deal recommended by two strong independent and separate boards, both of which concluded that it was in the best interest of all their respective shareholders," said a spokesperson for RAB.
Shareholders will get six shares of Falkland for every one share of BPC.
RAB made headlines when the fund experienced sharp declines amidst the nationalization of Northern Rock, in which they amassed a significant stake. Meanwhile, Falkland has posted losses of over 90 percent over the past four years, prompting investors in the Special Situations Fund to lose an estimated £11m.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
New York (HedgeCo.Net) – RAB Special Situations hedge fund is contemplating a share buyback, after getting burned by the nationalization of Northern Rock and the plummeting of share values that followed. The fund said it may repurchase the shares and either hold or cancel them.
"Our strategy has now lost money for three straight quarters ever since the credit crunch spread from the debt markets and began to hurt equity valuations," said RAB head Philip Richards.
While he did write off the Northern Rock loss as “very regrettable,” Richards went on to explain how he believes in a twenty year super-cycle for commodities. This would be driven by urbanization and industrialization in China, India and the Gulf region; areas that he says are experiencing supply shortages stemming from decades of under-investments in the mining and energy industries.
The $1.5 billion fund lost about 37% of its NAV this year. While it was the biggest holder of Northern Rock, other sour investments would have still forced the decline in Net Asset Value. The fund posted a loss of 28.9 million pounds, or 53.8 million dollars in the first six months of this year.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
