Company news in brief

Rolls-Royce scraps targets, dividend

Rolls-Royce is scrapping its targets and final dividend to shore up its finances as the British aero-engine maker's customers around the world ground planes due to the coronavirus pandemic.

Rolls, one of Britain's most historic industrial names, which before the coronavirus crisis struck was trying to emerge from a multi-year turnaround plan, has suspended its dividend for the first time since 1987.

The company's engines power Airbus and Boeing's widebody jets but more than 60% of that fleet is now grounded, according to aviation data provider Cirium.

Rolls-Royce is paid by airlines based on how many hours they fly. Over the last six weeks, the headwind from coronavirus was about 300 million pounds, Rolls-Royce said, on flying hours which were 50% lower in March and expected to deteriorate further in April.

Rolls-Royce said yesterday it had secured an additional 1.5 billion pound revolving credit facility, bringing its overall liquidity to 6.7 billion pounds, to give it headroom during a potential prolonged downturn. – Nampa/Reuters

Carmaker PSA secures further loans

French carmaker and Peugeot-owner PSA announced yesterday a further 3 billion euro ($3.3 billion) worth of loans to strengthen its financial position in the wake of the hit to the global automotive industry from the coronavirus crisis.

The latest syndicated loans come on top of an existing 3 billion euro worth of undrawn credit lines, making available a total amount of 6 billion euro.

The new syndicated loan has an initial maturity of 12 months with two optional 3-month extensions, added the company.

"This operation reinforces our ability to face up this exceptional situation and prepare the future. It also proves the confidence of our partner banks in the financial strength and recognised resilience of Groupe PSA," said PSA chief financial officer Philippe de Rovira.

PSA shares were up 7.3% amid a broader global equity market rally, while Renault shares also rose 10.5%. – Nampa/Reuters

Tesla show ventilator prototype

Engineers at Tesla Inc showed a prototype for a ventilator on Sunday evening in a video published on the company's YouTube channel, as hospitals around the country overwhelmed by coronavirus patients face device shortages.

The design for the ventilators relies heavily on Tesla car parts, one of the engineers said, enabling the company to redeploy existing stock and produce the devices quickly.

The video comes two weeks after chief executive Elon Musk said Tesla planned to reopen its New York factory to produce ventilators.

The timeline for production was not specified in the video.

"There's still a lot of work to do," said one of the engineers, "but we're giving it our best effort." – Nampa/Reuters

Emaar suspends construction projects

Emaar Properties, the largest listed developer in the United Arab Emirates, has suspended work on major projects in Dubai, sources familiar with the matter said, as the coronavirus pandemic exacerbates a real estate slowdown in the business hub.

Emaar has suspended projects at Dubai Creek Harbour, a new development touted as offering homes to 200 000 people, four the sources said.

That included suspending work on the Dubai Creek Harbour Tower, billed as being higher than Dubai's Burj Khalifa, which is now the world's tallest building, they said.

Emaar had said last month said it had suspended work on a luxury residential tower in a prime Dubai district and had temporarily closed several hotels due to the impact of the virus on tourism.

In a letter seen by Reuters and confirmed by a source, Emaar said chairman Mohamed Alabbar had forfeited his salary and other staff would have had their salaries cut by as much as 50%. – Nampa/Reuters

Norwegian Air's March traffic tumbles

Norwegian Air's passenger volume fell by 60% year-on-year in March as it grounded planes amid efforts to halt the spread of the new coronavirus, and will book a hedging loss of US$102 million as the cost of fuel has plunged.

A pioneer in low-fare transatlantic air travel, Norwegian's rapid expansion has left it heavily in debt. It has repeatedly raised cash from shareholders in order to stay in business and its Oslo-listed shares have plunged 78% so far this year.

Norwegian has said it will cancel 85% of its flights and furlough 90% of staff while seeking financial aid from Norway's government.

The company last month also said it would start talks with creditors on postponing payments in order to qualify for a government rescue package requiring, among other things, that debt repayments must be put on hold for the time being.

The group said it estimated losses on fuel hedging positions of 1.07 billion Norwegian crowns (US$102 million). Europe's largest budget carrier Ryanair, one of the few others to so far disclose its fuel hedging losses, last week said it would book a charge of 300 million euro (US$324 million). – Nampa/Reuters