Una's Feed
Jan 6, 2015
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AirAsia’s minority structure clouds crash impact

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

AirAsia is sharing the pain of its minority investments. The Malaysian budget carrier owns just 49 percent of the Indonesian unit that was struck by tragedy when one of its planes crashed into the Java Sea on Dec. 28. AirAsia shares have since lost more than 15 percent of their value. It’s a reminder that the group’s particular business model can’t entirely contain the financial pain.

Dec 31, 2014
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China rail merger reveals topsy-turvy reform logic

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

China is re-creating a domestic rail monopoly to improve its competitiveness abroad. Combining the country’s two largest train makers looks at odds with President Xi Jinping’s promise that market forces will play a more decisive role in The People’s Republic. But the new giant should be able to ratchet up pressure on foreign rivals.

Dec 23, 2014

Breakingviews: Kim Jong Un could succeed where Dan Loeb failed

By Una Galani

HONG KONG (Reuters Breakingviews) – Though the pay may be
better, it would be far-fetched to suggest that Kim Jong Un is
transforming from reclusive leader to activist shareholder. Yet
the cyberattack North Korea allegedly threw at Sony Pictures
could have the same effect. The hacking of the Hollywood studio
and its subsequent response put the question of whether the
Japanese group should spin off its entertainment unit back on
the front burner.

After many profit warnings and deep apologetic bows,
Sony Chief Executive Kazuo Hirai was beginning to win
investor support for his restructuring efforts. Having seen off
hedge fund manager Dan Loeb’s calls for a spinoff of Sony’s
entertainment properties, Hirai oversaw the sale of Sony’s PC
division and the downsizing of its ambitions in smartphones.
Even with the hacking scandal, Sony shares are up 35 percent
this year – nicely outperforming the benchmark Topix.

Dec 19, 2014
via Breakingviews

Goodbye tech conglomerates, hello “ecosystems”

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Short on strategy? Maybe you need an “ecosystem”. Technology giants are using that word to justify building sprawling internet-based conglomerates out of a mish-mash of assets, often with few obvious synergies. Asian companies like China’s Alibaba and Japan’s Softbank are among the most avid fans of this unhelpful term.

Dec 17, 2014
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SpiceJet rescue is no fix for India aviation woes

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

SpiceJet’s woes are all too familiar. India is cajoling banks to lend to the country’s second largest single-brand carrier when the debt-ridden airline needs more equity. The government’s hope is to save jobs and prevent a repeat of the embarrassing high-profile failure of Kingfisher Airlines which was grounded in 2012. Even if the rescue works, exorbitant fuel taxes and the lack of a bankruptcy law will keep the industry stuck in an air pocket.

Dec 15, 2014

Breakingviews: BAIC Motor IPO offers slow road to China luxury

By Una Galani

HONG KONG (Reuters Breakingviews) – BAIC Motor’s initial
public offering is priced for cautious drivers. The Chinese
automaker plans to sell shares in Hong Kong at HK$8.90 ($1.15),
giving a relatively unracy market capitalisation of $8.6
billion. That reflects worries about the position that BAIC
occupies within China’s decelerating car market and a healthy
degree of reservation over its premium ambitions.

The Beijing-based company has a three-speed business model.
Its own-brand low-cost cars are not profitable. Earnings rely on
two joint ventures with foreign partners. A partnership with
South Korea’s Hyundai Motor producing mass-market
cars is the main cash engine, contributing around 5.4 billion
yuan ($873 million) to the bottom line in 2013. A joint venture
with Germany’s Daimler to sell the premium
Mercedes-Benz brand contributed less than 800 million yuan.

Dec 10, 2014

Breakingviews: BG’s $5bln sale bodes well for Aussie M&A pipeline

By Una Galani

HONG KONG (Reuters Breakingviews) – Australia’s
infrastructure M&A frenzy shows no sign of easing. A sale by
Britain’s BG Group of a pipeline to APA Group
for $5 billion confirms a pattern of fiercely competitive
bidding and high valuations for low-risk assets down under. Amid
red-hot investor demand, 2015 promises to be another bumper year
for Australian M&A.

It’s a chunky deal for APA, accounting for 56 percent of the
company’s current enterprise value. The country’s largest owner
of gas transmission pipelines will pay a multiple of 13 times
2016 EBITDA for the 543-kilometer conduit that links BG’s gas
fields in southern Queensland with Australia’s eastern coast.
APA itself trades on 12.8 times, according to Eikon. The
transaction will be financed by a $1.52 billion rights issue and
a two-year bridge loan.

Nov 26, 2014
via Breakingviews

Samsung IPO offers ringside seat for restructuring

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Samsung is offering the ultimate ringside seat for its big restructuring. As the South Korean conglomerate reshuffles assets ahead of a transfer of power within the controlling Lee family, the initial public offering of its de facto holding company is drawing interest. Cheil Industries is an odd mishmash of assets. Yet for investors, the $1.4 billion IPO is a way to get up close and personal with the group’s heir apparent.

Oct 31, 2014
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Hong Kong protests lay minefield for business

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 

Hong Kong’s protesters have laid a minefield for big business. The city’s democracy debate is a deeply divisive issue. For companies, keeping quiet is less risky than expressing an opinion guaranteed to irk customers and staff or strain relations with Beijing. It’s even harder for individual employees who must tread a blurry line between free speech and corporate interests.

Oct 21, 2014
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Hong Kong tycoons can be part of protest solution

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Hong Kong’s tycoons could be part of ending the standoff with pro-democracy activists. The city’s business leaders have an outsize influence over local politics. Relaxing their grip on special corporate votes could ease divisions over electoral reform as well as tensions over rampant inequality.

    • About Una

      "Una Galani is Asia Corporate Finance Columnist of Reuters Breakingviews, based in Hong Kong. She spent three years in Dubai covering the region’s economies in the immediate aftermath of the Arab Spring. Previously, Una wrote on capital markets, mergers and acquisitions, and telecoms across Europe from London. She was commended in the category of Young Financial Journalist at the Harold Wincott Awards for 2009 after joining Breakingviews in 2006. Una read English Literature at Oxford. Follow Una on Twitter @ugalani"
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