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Trafigura and Blackstone discuss equity investment of up to $3bn

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Trafigura and Blackstone discuss equity investment of up to bn

Trafigura has held discussions with Blackstone about an fairness funding of as much as $3bn, because the privately owned commodity dealer seeks to broaden its sources of funding.

The talks between Trafigura and the world’s largest different asset supervisor come as commodity costs have soared following Russia’s invasion of Ukraine, rising pressures on the business.

Blackstone declined to touch upon the discussions, which individuals acquainted with the matter stated had ended and not using a deal.

In an announcement, Trafigura pointed to the appointment in March 2021 of Khodor Mattar, a former Temasek govt, to a newly created place of head of capital improvement as a part of a longer-term technique to diversify its sources of finance.

“We’ve got been constructing relationships with different suppliers of capital,” the corporate stated. “We recurrently interact with different capital suppliers on debt and fairness alternatives throughout the enterprise.” 

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Huge commodity merchants sometimes depend on credit score strains from banks to finance the cargoes of uncooked supplies they purchase and promote. In Trafigura’s case it additionally faucets public debt markets and has a securitisation programme.

The funding necessities of the business have risen considerably for the reason that invasion of Ukraine, including to liquidity pressures.

Partially, that displays greater commodity costs, which have elevated the price of shopping for a cargo of liquefied pure fuel or filling a supertanker with crude oil, which at present costs stands at nearly $200mn.

However rising costs have additionally elevated the amount of money merchants have to pledge in opposition to the futures contracts they use to hedge long-term contracts and inventories.

Most merchants can not transfer bodily commodities from the place they’re produced to the place they’re consumed until they’re able to hedge their worth threat.

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Commodity merchants and power majors with giant buying and selling arms have discovered themselves on the hook for enormous margin calls — calls for for further money from counterparties to cowl lossmaking hedging positions.

This was particularly acute earlier this month when benchmark fuel contracts in Europe greater than doubled in a few days, and final week when nickel doubled to greater than $100,000 a tonne in a single buying and selling session.

Final Tuesday, Trafigura secured a $1.2bn credit score line from a gaggle of banks together with Mizuho Financial institution, Société Générale, Sumitomo Mitsui Banking Company and UniCredit.

The power was arrange in simply 48 hours and is predicted to extend to $2bn as soon as syndication to a wider group of lenders has been accomplished.

On the time, Trafigura stated the brand new facility was wanted because it manages the unprecedented enhance in commodity costs because of the conflict in Ukraine.

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Though funding necessities have elevated, bankers reckon the sector is making wholesome income from the availability disruptions and dislocations attributable to the battle. Nonetheless, to grasp these income they might want to have sufficient liquidity in place to ship the products to the end-consumer.

Final yr, Trafigura generated internet revenue of $3.1bn, nearly double the earlier yr’s $1.6bn, on income that rose 57 per cent to $231bn on the again of upper commodity costs and elevated buying and selling volumes.

That allowed the corporate at hand greater than $1bn to its prime executives and workers. On the finish of September, the corporate, which is personal and owned by 1,000 of its staff, had complete debt of $45bn 

The discussions between Trafigura and Blackstone had been first reported by Bloomberg.

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California fires could be costliest disaster in US history, says governor

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California fires could be costliest disaster in US history, says governor

The California wildfires could be the costliest disaster in US history, the state’s governor said, as forecasts of heavy winds raised fears that the catastrophic blazes would spread further.

In remarks to NBC’s Meet the Press on Sunday, Gavin Newsom said the fires — which have burnt through more than 40,000 acres, according to CalFire, the state’s forestry and fire protection department — would be the worst the country has seen “in terms of just the costs associated with it, [and] in terms of the scale and scope”.

He added that there were likely to be “a lot more” fatalities confirmed. The death toll on Saturday evening stood at 16, according to Los Angeles authorities.

The prospect of a pick-up on Sunday in the Santa Ana winds that have fanned the flames has left tens of thousands of residents under evacuation orders. The fires were threatening homes in upscale Mandeville Canyon and the Brentwood neighbourhood, although officials said they had made progress in stemming the advance there.

The National Weather Service has forecast gusts of between 50mph and 70mph, while drought conditions remain.

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“We know that elevated critical fire conditions will continue through Wednesday”, Los Angeles County fire chief Anthony Maroney said on Sunday.

LA is experiencing its second-driest start to its rainy season in more than a century, according to the non-profit Cal Matters news service. Halfway into the season, LA has only recorded about 0.2 inches of rain since October -— well below the 4.5 inches that is common by January.

Newsom, a Democrat, responded to a barrage of attacks from Donald Trump. The incoming Republican president has accused the governor of depleting water reserves to protect an endangered species of fish, and of refusing to sign a “water restoration declaration” that would have “allowed millions of gallons of water . . . to flow daily into many parts of California”. Newsom’s office has said no such declaration exists.

Trump, who has a long-standing feud with Newsom and refers to him as “Newscum”, also called on the Californian to resign, accusing him of “gross incompetence”.

“The reservoirs are completely full, the state reservoirs here in Southern California,” Newsom said.

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The charred remains of a jewellery store and other shops at a corner of Sunset Boulevard © Michael Nigro/Bloomberg
An air tanker drops fire retardant at the Palisades Fire © Ringo Chiu/Reuters

“That mis- and disinformation I don’t think advantages or aids any of us,” he added. “Responding to Donald Trump’s insults, we would spend another month. I’m very familiar with them. Every elected official that he disagrees with is very familiar with them.”

Newsom also said he had invited the president-elect to visit the affected areas, but had yet to receive a response from the Trump transition team.

Firefighters have tamed three fires since Tuesday, including the Sunset blaze that threatened the Hollywood hills. The Hurst fire in the San Fernando Valley, north of Los Angeles, was 80 per cent contained on Sunday afternoon.

But firefighters are still struggling to tame the two biggest blazes. Newsom said on social media platform X that the Palisades and Eaton fires were 11 per cent and 27 per cent contained. Thousands of firefighters have been deployed to battle the Palisades fire with heavy trucks and air support, the mayor’s office said Sunday. The city has also opened shelters to affected families.

The Federal Emergency Management Agency (Fema) has staff in LA to help Angelenos apply for disaster relief, while the Federal Small Business Administration is offering home and business disaster loans.

Newsom issued an executive order that he said would prevent those who lost their homes from being “caught up in bureaucratic red tape” so they could quickly rebuild.

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The head of Fema on Sunday raised the prospect of US troops being sent to Los Angeles to help control the blaze.

“There are active-duty military personnel that are on a prepare-to-deploy order, that are ready to go in and continue to support the firefighting effort,” Deanne Criswell told ABC’s This Week programme. Speaking on CNN, she warned that strong winds expected in the coming days could spread the fire further.

Map showing the perimeters of the fires in LA and evacuation orders and warnings currently in place

No official estimate of the cost of the damage has yet been released, but analysts at AccuWeather last week calculated the economic loss to be between $135bn and $150bn — short of the $250bn cost associated with last year’s Hurricane Helene. At least 12,300 structures had been destroyed, according to CalFire.

President Joe Biden on Thursday pledged that the US government would pay for “100 per cent of all the costs” created by the disaster, and would ask Congress for more financial aid.

Trump, who on the campaign trail last year threatened to withhold disaster funding from California, has thus far remained silent on whether he would provide similar assistance. On Sunday, he renewed his attacks on the state’s officials.

“The incompetent pols have no idea how to put [the fires] out,” he wrote. “There is death all over the place. This is one of the worst catastrophes in the history of our country. They just can’t put out the fires. What’s wrong with them?”

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On the way out: Transportation Sec. Buttigieg looks back on achievements, challenges : Consider This from NPR

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On the way out: Transportation Sec. Buttigieg looks back on achievements, challenges : Consider This from NPR

U.S. Secretary of Transportation Pete Buttigieg speaks to questions during a news conference at Ronald Reagan Washington National Airport November 21, 2024 in Arlington, Virginia.

Alex Wong/Getty Images


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Alex Wong/Getty Images


U.S. Secretary of Transportation Pete Buttigieg speaks to questions during a news conference at Ronald Reagan Washington National Airport November 21, 2024 in Arlington, Virginia.

Alex Wong/Getty Images

From handling crises in the rail and airline industries to overseeing the distribution of billions of dollars in infrastructure funding, Transportation Secretary Pete Buttigieg has taken on a lot over the last four years.

Now, his tenure is coming to an end.

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Host Scott Detrow speaks with Buttigieg about what the Biden administration accomplished, what it didn’t get done, and what he’s taking away from an election where voters resoundingly called for something different.

For sponsor-free episodes of Consider This, sign up for Consider This+ via Apple Podcasts or at plus.npr.org

Email us at considerthis@npr.org

This episode was produced by Brianna Scott, Avery Keatley and Tyler Bartlam. It was edited by Adam Raney.

Our executive producer is Sami Yenigun.

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Trump Calls Officials Handling Los Angeles Wildfires ‘Incompetent’

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Trump Calls Officials Handling Los Angeles Wildfires ‘Incompetent’

President-elect Donald J. Trump offered fresh criticism early Sunday of the officials in charge of fighting the Los Angeles wildfires, calling them “incompetent” and asking why the blazes were not yet extinguished.

“The fires are still raging in L.A.,” Mr. Trump wrote on his Truth Social site. “The incompetent pols have no idea how to put them out.”

Mr. Trump’s comments indicated that the fires, and officials’ response to them, will likely occupy a prominent place on his domestic political agenda when he takes office on Jan. 20. He has renewed a longstanding feud with California’s governor, Gavin Newsom, who in turn has accused Mr. Trump of politicizing the fires.

California politicians have faced criticism over the fires since they broke out on Tuesday, including questions over how local and state authorities had prepared for them and how they have grown so quickly into huge blazes.

Mayor Karen Bass of Los Angeles had to contend with questions about whether there was adequate warning about the likelihood of devastating fires, and why there was a shortage of water and firefighters during the initial response. At a news conference on Thursday, she avoided a question about her absence from the city when the fires began — she was in Ghana on a previously scheduled official visit — and said that any evaluation of mistakes or failures by “any body, department, individual” would come later.

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Mr. Newsom, a Democrat, has also fended off criticism from Mr. Trump, who blamed him for the failure to contain fires and claimed he had blocked an infusion of water to Southern California over concerns about how it would affect a threatened fish species.

Mr. Newsom’s press office responded by saying in a statement that the “water restoration declaration” that Mr. Trump had accused him of not signing did not exist. “The governor is focused on protecting people, not playing politics, and making sure firefighters have all the resources they need,” the statement said.

Mr. Newsom and Kathryn Barger, the chair of the Los Angeles County Board of Supervisors, have invited Mr. Trump to tour fire damage in the city. He has not responded publicly to those invitations.

At least 16 people had died as a result of the fires as of Sunday morning, and at least 12,000 structures had been destroyed, officials said. Mr. Trump alluded to that devastation in his post on Sunday.

“Thousands of magnificent houses are gone, and many more will soon be lost,” he wrote. “There is death all over the place. This is one of the worst catastrophes in the history of our Country. They just can’t put out the fires. What’s wrong with them?”

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His post did not mention any officials by name.

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