Argo launches non-commercial driverless vehicles in Miami, Austin

By Tina Bellon

AUSTIN (Reuters) – Self-driving startup Argo AI on Tuesday said it had launched driverless vehicles in Miami, Florida and Austin, Texas, but added the vehicles initially were used for in-house testing, with commercial applications following at an unspecified time.

Argo, which is backed by Ford Motor Co and Volkswagen AG, has tested its robotaxis on public roads in both cities for several years, but until today included safety drivers behind the wheel.

“Argo is first to go driverless in two major American cities, safely operating amongst heavy traffic, pedestrians and bicyclists in the busiest of neighborhoods,” Argo AI Chief Executive Bryan Salesky said in a statement.

The company allows ride-hail, delivery and logistics companies to integrate its driverless vehicles into their operations.

An Argo AI spokeswoman said ride-hail service Lyft Inc and grocery giant Walmart Inc were running pilot programs integrating the technology.

“Our driverless operations are initially focused on conducting employee rides using our internally-developed ride hailing test app,” the spokeswoman said. “We’ll integrate driverless into commercial operations at the appropriate time.”

(Reporting by Tina Bellon in Austin, Texas)

Russians line up for final Big Mac ahead of McDonald’s exit

(Reuters) – Russians lined up in a Moscow train station on Tuesday for what may be their last Big Mac from one of the few McDonald’s restaurants still open in the country.

The world’s largest burger chain is rolling down the shutters in Russia after more than 30 years, becoming one of the biggest global brands to leave following Moscow’s actions in Ukraine.

McDonald’s exit ends a chapter in the U.S. company’s history that began when it started serving its burgers in Russia as a symbol of American capitalism.

The company had already decided to temporarily close its restaurants in the country in March. They included the iconic Pushkin Square location in central Moscow, which broke global records when opening on Jan. 31, 1990, as more than 30,000 people queued around the block for Big Macs costing 3 roubles.

“McDonald’s operates in few places now,” said 32-year-old Irina, who was queuing at the branch in Moscow’s Leningradsky Station, from where trains head north to St Petersburg. “I miss McDonald’s, so when I go to St Petersburg, I drop by and treat myself to a Big Mac.”


McDonald’s plans to sell 84% of its nearly 850 restaurants in Russia to a local buyer. The future of the remaining restaurants, operated by franchisees, is unclear.

The new owners will not be allowed to use Mcdonald’s name, logo, branding and menu. That left some Russians worried that the quality will suffer.

“I read yesterday that McDonald’s was closing soon and opening under a new name, so I rushed here today to buy my favourite cheeseburger, milkshake and chips,” said Alla, 21. “What if the quality gets worse after the rebranding?”

The franchised restaurants remain open and have seen a pick up in business since McDonald’s closed its outlets.

“In accessible locations in the centre of Moscow and St Petersburg we are seeing elevated demand,” franchisee Rosinter Restaurants said on Tuesday.

McDonald’s will retain its trademark in Russia, which analysts said left the door open for a return. In the meantime, restaurants will start reopening under new ownership and branding in June, a source close to the company said.


In southern Russia and Siberia, some franchised outlets are still trading.

One man from southern Russia drove for two and a half hours to find an open restaurant, he said in an online review posted on Yandex on April 21.

“I came to this McDonald’s especially from Samara, only 250km,” the user wrote. “I remembered the atmosphere and happily dived into it.

“The food and burgers are just as tasty and flavourful,” he said. “Thank you for being relatively close by.”

The burger chain came to symbolise a thawing of Cold War tensions and was a way for millions of Soviet citizens to sample Western food and culture, even though the cost of a burger was several times bigger than the daily budgets of many city dwellers.

In the past few years, McDonald’s has became one of the most affordable, and quick, lunch options in Russia. Based on The Economist magazine’s Big Mac index, which shows purchasing power parity, the rouble was the most undervalued currency in early February 2022.

“Standing in a queue for a while is nothing to be afraid of, if one remembers how long we stood in the 90s, said Ivan Tumanov, 45, who was also waiting in line at Leningradsky Station. “Let’s remind ourselves today of a taste of the West.”

(Reporting by Reuters; Editing by Matt Scuffham and Jane Merriman)

U.S. FDA clears Pfizer’s COVID booster shot for young children

(Reuters) -The U.S. Food and Drug Administration has authorized the use of a booster shot of Pfizer and BioNTech’s COVID-19 vaccine for children aged 5 to 11, the regulator said on Tuesday.

The authorization makes everyone in the United States aged five and above eligible for booster doses of the vaccine, although the U.S. Centers for Disease Control and Prevention (CDC) still needs to sign off on the shots.

“While it has largely been the case that COVID-19 tends to be less severe in children than adults, the Omicron wave has seen more kids getting sick with the disease and being hospitalized,” FDA Commissioner Robert Califf said in a statement.

Califf said the authorization would help provide continued protection against COVID-19 in that age group. Data has shown that vaccine effectiveness starts to wane over time.

The U.S. government has been urging Americans to get boosters, and for the unvaccinated who are at much higher risk of severe COVID-19 and death to be inoculated.

But it is unclear how much many parents of children aged 5 to 11 will opt for a third dose. Just 28.8% of children in that age group are fully vaccinated, according to CDC data.

Children below the age of five are not yet eligible for a COVID-19 vaccine in the United States.

Roughly 66% of the U.S. population, or 220.6 million people, have received the full vaccination schedule so far, according to federal data. Of those, 102.3 million people have received one booster dose, and 11.7 million have received a second booster.

The CDC has scheduled a meeting of outside advisers to discuss vaccine boosters on Thursday. The agency’s director has the final say on the administration of vaccines.

(Reporting by Manas Mishra in Bengaluru and Michael Erman in New Jersey; Editing by Sriraj Kalluvila and Arun Koyyur)

Russia says it’s not planning to block YouTube or cut itself off from internet

(Reuters) -Russia is not planning to block Alphabet Inc’s YouTube, the minister for digital development said on Tuesday, acknowledging that such a move would likely see Russian users suffer and should therefore be avoided.

Russia has blocked other foreign social media platforms, but despite months of fines and threats against YouTube for failing to delete content Moscow deems illegal and for restricting access to some Russian media, it has stopped short of delivering a killer blow to the video-hosting service.

With around 90 million monthly users in Russia, YouTube is extremely popular and plays an important role in the digital economy. Though Russia has domestic versions of other social media, a viable YouTube alternative on that scale is yet to emerge.

“We are not planning to close YouTube,” Maksut Shadaev, who is also minister of communications and mass media, told an educational forum. “Above all, when we restrict something, we should clearly understand that our users won’t suffer.”

Competition is the engine of progress and blocking is an extreme measure, he told a vast auditorium of mostly young Russians, some scattered around the room on bean bags.

Alphabet’s Google did not immediately respond to a request for comment.

Simmering tensions between Moscow and Big Tech erupted into a full-on information battle after Russia sent tens of thousands of troops into Ukraine on Feb. 24.

Russia restricted access to Twitter and Meta Platform’s Facebook and Instagram in early March. It vowed in April to punish Google for shutting out Russian state-funded media globally on YouTube, accusing it of spreading fakes about what Russia calls its special military operation in Ukraine.

Meta was found guilty of “extremist activity” in March, a ruling the company objected to, but Kremlin spokesperson Dmitry Peskov on Tuesday said he would not rule out the return of Instagram, provided Meta complies with Russian laws on content and local offices.


Shadaev also poured cold water on suggestions that Russia may seek to isolate itself further from global internet infrastructure, something it disconnected itself from during tests last summer.

“We do not want to close ourselves off from anyone,” Shadaev said. “On the contrary, we think that Russia should remain a part of the global network.”

(Reporting by Reuters)

Wall St rises on gains in banks, strong retail sales data

By Amruta Khandekar and Devik Jain

(Reuters) – U.S. stocks climbed on Tuesday, as Citigroup led a surge in bank shares after Berkshire Hathaway disclosed a big stake and solid retail sales in April eased concerns about slowing economic growth.

Nine of the 11 major S&P sectors advanced in morning trade, with financials up 2.3% and technology 1.8%.

Microsoft Corp, Apple Inc, Tesla Inc and Nvidia Corp gained between 1.4% and 4%, providing the biggest boost to the S&P 500 and the Nasdaq.

Banks jumped 3.5%, with Citigroup climbing 7% after Warren Buffett’s Berkshire Hathaway disclosed a nearly $3 billion investment in the U.S. lender.

U.S. retail sales increased strongly in April as consumers bought motor vehicles amid an improvement in supply and frequented restaurants, providing a powerful boost to the economy at the start of the second quarter.

“Retail sales is one of the core data points that the Fed will look at as it thinks about how aggressive (it needs) to be to rein in inflation,” said Greg Bassuk, chief executive at AXS Investments in New York.

“It should allay some of those (recession) concerns on the basis that it is a positive signal on the trajectory and potential health of the U.S. economy further into 2022.”

Fed Chair Jerome Powell is scheduled to speak later in the day and his comments would be parsed for clues on the path of future interest rate hikes. Traders now see a nearly 80% probability of a 50-basis point rate hike in June.

At 10:09 a.m. ET, the Dow Jones Industrial Average was up 292.68 points, or 0.91%, at 32,516.10, the S&P 500 was up 49.19 points, or 1.23%, at 4,057.20, and the Nasdaq Composite was up 186.51 points, or 1.60%, at 11,849.30.

However, rising costs weighed on Dow component Walmart Inc, which fell 8.6% after the retail giant cut its annual profit forecast, signaling a bigger hit to margins.

Shares of rival retailers Costco, Target, Dollar Tree slipped between 0.6% and 2.2%.

Home Depot Inc added 1.9% after raising its full-year sales forecast on firm demand for home improvement tools and building materials.

United Airlines Holdings Inc rose 6.1% after the carrier lifted its current-quarter revenue forecast, boosting shares of Delta Air, American Airlines and Spirit Airlines.

A positive first-quarter earnings season has been overshadowed by worries about the Ukraine war, soaring inflation, COVID-19 lockdown in China and aggressive policy tightening by central banks.

The S&P 500 is down nearly 2% and the Nasdaq 3.9% so far in May, largely hit by declines in growth stocks.

U.S.-listed Chinese stocks jumped on hopes that China will ease its crackdown on technology sector and COVID-19 pandemic.

Advancing issues outnumbered decliners by a 4.05-to-1 ratio on the NYSE and a 3.95-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 29 new lows, while the Nasdaq recorded 18 new highs and 100 new lows.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Arun Koyyur)

Walmart profit falls, cuts outlook as fuel, labor costs bite

By Uday Sampath Kumar and Siddharth Cavale

(Reuters) -Walmart Inc reported a sharp drop in quarterly earnings and cut its full-year profit outlook on Tuesday as rising costs of fuel and labor hurt its bottom line while shoppers squeezed by decades-high inflation moved to buy lower-margin basics.

Shares of the retailer fell 8% in morning trading, its biggest one day percentage drop since March 2020, and dragged down shares of rivals, including Target Corp, which reports results on Wednesday.

Walmart, with its massive store footprint and leading position in domestic grocery sales, serves as a barometer for U.S. consumer sentiment and its earnings are closely watched by investors for hints about the health of the U.S. economy.

On Tuesday, the company reported a 3% rise in U.S. same-store sales, which came at the expense of margins as it strived to keep prices low while absorbing higher costs.

Gross margins fell 38 basis points in the three months ended April 30, three quarters of which reflected higher supply chain costs, the company said.

Operating expenses also rose by 45 basis points as a percentage of net sales due to elevated inventories and wage costs, the latter of which was exacerbated by a rapid return of employees from COVID leave leading to higher staffing.

Chief Executive Doug McMillon said the retailer’s quarterly profits “reflect the unusual environment”, at a time when U.S. inflation is at a nearly four-decade high.

While some consumers are being squeezed and are increasing spending on private-label brands and half gallons of milk, there are others that are spending on gaming consoles and other higher margin items, Walmart’s CFO, Brett Biggs said, indicating that inflation was impacting certain demographics differently.

U.S. retail sales grew 0.9% in April, aided by automotive sales and consumer visits to restaurants, despite fears of a recession, the Commerce Department said on Tuesday. April’s sales reflected both strong demand and higher prices, was in line with economists’ expectations.

Walmart executives on a post earnings call, however, warned that food prices continued to rise at double digit rates, indicating that consumers will be forced to shift more money away from discretionary spending to essentials like meat and dairy over the coming months.

Overall, Walmart’s net profit fell by a quarter to $2.05 billion in the quarter.

The Bentonville, Arkansas-based retailer is not alone in feeling the pressure of ballooning costs.

Rival Inc last month said it could post an operating loss of as much as $1 billion in the current quarter as it sinks more money into higher wages and to run its warehouses. Shares of the company, which also flagged overstaffing issues hurting productivity, have lost nearly a quarter of their value since then.


“Overall, Walmart is in a solid place,” Neil Saunders, managing director of GlobalData said.

“However, it is now entering a much leaner period where the absolute necessity of maintaining a low-price proposition will likely mean that profitability and margins come under increasing pressure.”

Walmart said it now expects fiscal 2023 earnings per share (EPS) to fall about 1%, rather than rise by mid-single digits seen earlier.

It also tempered its second-quarter expectations, with EPS now expected to be flat to up slightly, compared to a low to mid-single digit increase previously.

First-quarter earnings of $1.30 per share missed analysts’ average estimate by 18 cents. This marked Walmart’s first quarterly profit miss in five quarters.

Total revenue for the quarter rose 2.4% to $141.57 billion, which McMillon attributed to higher inflation that was causing average bills to rise up.

(Additional reporting by Arriana McLymore in New York; Editing by Sriraj Kalluvila and Tomasz Janowski)

Ad group M&C Saatchi rejects latest buyout offer from top investor

By Sachin Ravikumar and Shanima A

(Reuters) -M&C Saatchi on Tuesday rejected a fourth takeover offer from its biggest investor Vin Murria, saying the “derisory” proposal worth 253.6 million pounds ($316.4 million) undervalued the British advertising group’s business.

Software entrepreneur Murria’s acquisition vehicle AdvancedAdvT announced the fresh offer earlier, giving M&C investors a choice between receiving 2.530 new AdvancedAdvT shares for each share held or a mix of cash and shares.

Based on AdvanceAdvT’s last closing share price, both options value M&C Saatchi at 207.5 pence per share, representing a 27% premium to M&C’s Monday closing price. At their peak in 2018, M&C shares were worth 430 pence apiece.

AdvancedAdvT, which is also backed by private equity group Marwyn, wants to combine its digital capabilities with the brand recognition of M&C – known for its historical advertising links to Britain’s ruling Conservative Party – and invest heavily in M&C to help it compete better.

“I urge shareholders to reject this bid as it significantly undervalues the business and prospects of M&C Saatchi,” M&C Chairman Gareth Davis said in a statement.

M&C shares pared earlier gains of over 10% to trade 3.2% higher at 168.2 pence by 1323 GMT, while AdvancedAdvT shares were up 0.6%.

Founded in 1995 by ad mogul brothers Maurice and Charles Saatchi, M&C has been recovering from a 2019 accounting scandal but last month reported a record annual profit helped by client wins and deepened relationships with the likes of Alphabet’s Google, Uber and TikTok.

The company said its independent directors have also unanimously rejected AdvancedAdvT’s offer.

AdvanceAdvT’s previous all-stock approach from February was worth 2.347 AdvancedAdvT shares for each M&C share. The Ad group disclosed on Tuesday it had also rejected two other lower proposals made in January.

“ADV has access to an existing pipeline of selective (mergers & acquisitions) opportunities comprising businesses that enhance M&C Saatchi’s data and analytics capability, as well as complementing the existing offering,” it said.

Murria and AdvanceAdvT own 22.3% of M&C. Shareholders owning a further 20.2% have indicated their support for AdvanceAdvT’s offer, it said, adding that it would add two industry veterans to the board of the combined company if a deal is completed.

($1 = 0.8078 pounds)

(Reporting by Sachin Ravikumar and Shanima A in Bengaluru; editing by Uttaresh.V, Aditya Soni, Barbara Lewis and Emelia Sithole-Matarise)

S.Africa retailer Pick n Pay to cut $187 million in costs in 3 years

By Nqobile Dludla

JOHANNESBURG (Reuters) – South African grocery and clothing retailer Pick n Pay aims to cut costs by 3 billion rand ($187 million) in the next three years and grow its market share by 3% under a new strategy, CEO Pieter Boone said on Tuesday.

One of the country’s largest retail chains is seeking to improve shareholder returns, which have been dropping in the last 12 months in a highly competitive grocery market dominated by biggest rival Shoprite.

The cost savings will be achieved through efficiencies in supply chain and working capital, a slimmer support office, leveraging technology to save costs and simplifying store operations, Group Chief Financial Officer Lerena Olivier said after Pick n Pay reported a rise in annual earnings earlier.

The group is also looking to get more customers to shop at its discount Boxer grocery chains and mid-upmarket Pick n Pay stores in a highly competitive grocery market.

To do that, it will roll out 200 Boxer stores and refine its product ranges at its Pick n Pay chain to better serve the affluent customer and low- to middle-income customer through two different Pick n Pay brands instead of one, Boone told investors.

“We have tried to be everything to everyone and as a consequence we end up losing relevance and differentiation,” Boone said, referring to challenges of serving all customer groups from one brand.


The retailer is also aiming to tap more online customers through continued investment in its e-commerce business, which will result in eight-fold sales growth by its financial year 2026, he said.

Other initiatives will see Pick n Pay deliver group turnover growth at a compound annual rate of 10%, resulting in market share growth of at least 3% by 2026. It has also pledged to increase its profit before tax margin to above 3% by 2026 from 2% at present and double Boxer sales, he added.

South Africa’s formal food and grocery market is seen growing by 227 billion rand ($14 billion) to 855 billion rand by 2026, with the bulk of the growth coming from the less affluent income market, Boone said.

“Today we have 16% overall market share in the formal market. The opportunity is everywhere but especially in the less affluent part of the market,” he said.

Its growth initiatives will be supported by a 3.5 billion rand capital investment for financial year 2023. Capex will remain around this level in the medium-term, Olivier said.

The group earlier reported headline earnings per share, the main profit measure in South Africa, of 262.59 cents for the year ended Feb. 27, compared with 229.31 cents in the previous comparable period.

Pick n Pay, with a national store footprint of more than 1,900, also announced a commercial agreement with Naspers-owned e-commerce giant Takealot that will enable its customers to buy its groceries and liquor on Takeaalot’s food delivery Mr D app. This will launch in August.

($1 = 16.0011 rand)

(Reporting by Nqobile Dludla; Editing by Subhranshu Sahu and Emelia Sithole-Matarise)

Twitter’s account of deal shows Musk signing without asking for more info

By Greg Roumeliotis

(Reuters) -Twitter Inc published its account on Tuesday of its deal negotiations with Elon Musk, showing he opted out of asking the questions about the social media company’s business he has now cited in declaring the $44 billion acquisition is “on hold.”

The account, published in Twitter’s proxy statement that outlines what shareholders need to know to vote on the deal, paints a picture of Musk in a rush to clinch a deal and makes no mention of threats he has tweeted about not going ahead with the deal if he does not get to the bottom of how many spam accounts the platform has.

Musk negotiated the Twitter deal over the weekend of April 23 and April 24 without carrying out any due diligence, the proxy statement shows.

Since signing the deal on April 25, Musk has questioned the accuracy of Twitter’s public filing about spam accounts representing less than 5% of its user base, claiming they must be at least 20%. This is despite Twitter stating that its filings provide just estimates.

Musk tweeted on Tuesday that Twitter chief executive Parag Agrawal has refused to show proof for his company’s estimate and that the deal cannot move forward until he does. Twitter’s proxy statement shows that in the run-up to the deal Musk made no effort to get information about the issue.

“Mr. Musk did not ask to enter into a confidentiality agreement or seek from Twitter any non-public info regarding Twitter,” Twitter said in its proxy statement.

Legal experts have said Musk would likely lose in court if he tried to walk away from a deal. But they say that any litigation would likely be protracted and cast uncertainty over Twitter’s business. Most companies that have prevailed in court over their acquirers have ended up negotiating financial settlements.

Musk is contractually obligated to pay a $1 billion break-up fee if he does not complete the deal, but Twitter can sue for “specific performance” to force Musk to complete a deal and get a settlement from him as a result.

Twitter said on Tuesday it remained committed to the deal at the agreed price and expected it to be completed in 2022.

(Reporting by Greg Roumeliotis in New YorkEditing by Nick Zieminski)

Mercedes-Benz to use energy-dense silicon battery for G-Class

BERLIN (Reuters) – Mercedes-Benz will incorporate a new, highly energy-dense battery in its upcoming electric G-Class from 2025, it said on Tuesday, a solution to the problem of how to power large electric cars without weighing them down with heavy batteries.

The battery, made by start-up Sila Nanotechnologies, uses silicon-based anodes and is 20-40% more energy dense than comparable cells currently available, Mercedes-Benz said.

Silicon – which Tesla said in 2020 it would build up the use of in its batteries – provides an alternative to the more commonly used graphite, 70% of which comes from China.

Mercedes-Benz is the first publicly announced automotive customer of California-based battery start-up Sila Nanotechnologies, which said in early May it was investing a figure in the low hundreds of millions of dollars in a new plant in Washington state due to open in 2024.

The premium carmaker has a minority equity stake in the unlisted Sila, which is also working with BMW.

Sila, founded by an ex-Tesla engineer, raised an additional $590 million last year, boosting its valuation to an estimated $3.3 billion.

(Reporting by Victoria Waldersee, Editing by Miranda Murray)

Factbox-What is the EU’s stance on Russia’s roubles gas payment demand?

By Kate Abnett

(Reuters) -The European Commission said on Tuesday opening accounts in roubles at a Russian bank to pay for gas would breach the bloc’s sanctions against Moscow, after releasing updated guidance on how companies can legally keep buying Russian fuel.

Russia halted gas supplies to Bulgaria and Poland in April after they refused to meet its demand that European buyers start paying for Russian gas in roubles – raising fears that other states could be next.

Countries and companies have for weeks been demanding clarity on how they can proceed, with some firms facing payment deadlines this month.

The European Commission has said countries should not pay in roubles, and that complying with Russia’s request could breach European Union sanctions against Moscow over its invasion of Ukraine.

However, Brussels has also outlined options that may allow EU buyers to continue paying for Russian gas without breaching sanctions.

The following explores the issue.


In March, Moscow issued a decree proposing that energy buyers open accounts at Gazprombank to make payments in euros or dollars that would then be converted to roubles and paid to gas supplier Gazprom.

The decree said Gazprombank would open special “K” type accounts for gas payments from foreign buyers. An EU company would transfer foreign currency into one such account, and then a Russian bank would convert the payment to roubles and transfer the roubles to another “K” account belonging to Gazprom.

The decree said the buyer’s obligation would be considered fulfilled only when the roubles arrived in Gazprom’s account.


The European Commission sent updated advice to the EU’s 27 member countries on the issue on Friday.

The guidance said EU companies can pay for Russian gas without breaching sanctions, but only if they do so in the currency agreed in their existing contracts. Nearly all – 97% – of the supply contracts EU companies have with Russian gas giant Gazprom are in euros or dollars.

Companies must also make a “clear statement” that when they pay euros or dollars, they consider their obligations under existing contracts to be fulfilled – as opposed to after Russia has converted the payment into roubles, the guidance said.

The Commission’s latest guidance said EU companies are allowed to open accounts with Gazprombank to make payments in this way. That confirmed earlier advice it had shared with EU countries in April.

However, a Commission spokesman said on Tuesday opening accounts in roubles at a Russian bank to pay for gas would breach the bloc’s sanctions.

“It goes beyond the indications which we give to the member states of what was allowed under the regime,” the spokesman told a regular press briefing, when asked about opening rouble accounts.

That has raised further questions about how European companies can pay, because Russia’s decree calls for buyers to open two accounts to enable the currency conversion – one for each currency.


The Commission has consistently said that fully complying with Russia’s decree – under which the EU buyer’s contractual obligation would not be considered complete until the euros are converted into roubles, in a transaction potentially involving the central bank – would breach EU sanctions.

By declaring its obligations finished once it deposits euros or dollars, a European company could therefore avoid being involved in any dealings with the Russian central bank.

It isn’t clear if Russia would accept the workaround suggested by the Commission. President Vladimir Putin’s decree had said a transaction would only be deemed complete after the foreign currency was converted to roubles.

(Reporting by Kate Abnett; editing by Philip Blenkinsop, David Evans and Barbara Lewis)

Lessor AerCap books $2.7 billion charge on stranded Russian jets

(Reuters) -The world’s top aircraft lessor AerCap said on Tuesday it booked a pretax charge of $2.7 billion in the first quarter as it recognised a loss on its more than 100 jets that remain stranded in Russia.

AerCap is the latest leasing company to take an immediate hit on its Russian exposure, something the firms had previously been expected to defer until they had more clarity over the amount that could be reclaimed from insurers.

But with lessors and insurers gearing up for an historic battle over record potential claims worth an estimated $10 billion, industry executives said some lessors had been advised by lawyers to take writedowns as soon as possible to buttress claims that could drag through the courts for years.

Dublin-based AerCap had the largest exposure of any lessor, accounting for 5% of its fleet by value. It submitted a $3.5 billion insurance claim in March and said on Tuesday it had not recognized any receivables relating to the claims.

“We have filed insurance claims related to these assets and will vigorously pursue all available remedies to recover our losses,” AerCap Chief Executive Officer Aengus Kelly said in a statement, describing the Russian hit as an undoubted setback, but a manageable one.

Over 400 leased planes worth almost $10 billion remained in Russia after a March 28 deadline to cancel the contracts in line with Western sanctions over the war in Ukraine.

AerCap’s charge comprised of an impairment loss and complete write off of flight equipment that remains in Russia. It removed 22 aircraft and three engines that were based outside of Russia when the sanctions were announced, but has 113 aircraft and 11 engines still stuck in the country.

The charge was partially offset by $210 million in payments from letters of credit related to the Russian-based assets. AerCap said it had initiated legal proceedings against one financial institution which rejected its payment demands.

AerCap said that excluding the charge, its first quarter net income was $540 million and Kelly said he expected to see demand for travel continue to grow as a broad-based recovery progresses.

(Reporting by Nathan Gomes in Bengaluru, Padraic Halpin in Dublin and Tim Hepher in ParisEditing by Maju Samuel and Mark Potter)

Citi shares climb as Berkshire reveals new $3 billion stake

(Reuters) -Citigroup Inc’s shares rose nearly 6.1% in early trading after a new $3 billion bet by billionaire investor Warren Buffett’s Berkshire Hathaway Inc boosted confidence in the battered Wall Street lender’s stock.

Berkshire bought nearly $3 billion in Citigroup in the quarter ended March 31, taking advantage of a 5% pullback in the shares during the period following a slide in U.S. banks on fears of slowing economic growth.

Citi is undergoing an overhaul led by Chief Executive Officer Jane Fraser as it lags the financial performance of its peers. The bank is also working to fix its risk and compliance systems after orders from U.S. banking regulators.

Its shares have slumped 38% over the past 12 months, the most among major Wall Street banks. Bank of America Corp, which counts Berkshire as its top holder, has dropped 18% in the last year.

“Citi is one of the cheapest stocks in the market,” said Thomas Hayes, chairman at Great Hill Capital in New York.

“With Buffett ‘blessing’ it, it should finally get the interest it deserves and attract some buying interest in coming weeks and months.”

The latest investment takes Berkshire’s interest in Citi to 2.8%, making it the fourth largest shareholder, according to Refinitiv data.

Investing in so-called value stocks – assets trading below their intrinsic value – has a broad following and Warren Buffett is a prominent proponent of this investment style.

Berkshire also exited its 33-year-old investment in Wells Fargo & Co and deployed its cash to build stakes in Ally Financial Inc, chemicals and specialty materials company Celanese Corp and drug distributor McKesson Corp among others, lifting their shares.

(Reporting by Medha Singh and Bansari Mayur Kamdar in Bengaluru; Editing by Shinjini Ganguli)

Archegos’ Bill Hwang asks for Morgan Stanley probe after costly short squeeze – Bloomberg News

(Reuters) – Archegos Capital Management founder Bill Hwang has asked for a probe into Morgan Stanley to review if someone at the bank tipped off outsiders of the firm’s plan to buy Futu Holdings Ltd stock in bulk, according to a Bloomberg News report on Tuesday.

Archegos had alerted U.S. authorities of a short squeeze on Futu, which took almost $4 billion out of Hwang’s portfolio, after regulators launched a probe into block-trading at Morgan Stanley earlier this year, Bloomberg reported, citing one person familiar with the matter.

Spokespeople for Hwang and Morgan Stanley did not immediately respond to Reuters’ requests for comment.

The U.S. Securities and Exchange Commission said in February they were probing the investment banking giant on whether financial executives may have broken rules by tipping off hedge funds ahead of large sales of shares, known as “block trades”.

Archegos collapsed in March last year after its highly leveraged stock bets went sour. The family office run by Hwang defaulted on margin calls, triggering losses of up to $10 billion that sent shockwaves through Wall Street and led to calls for more stringent regulation of family offices.

(Reporting by Sohini Podder and Niket Nishant in Bengaluru; Editing by Maju Samuel)

U.S. House members ask Meta to address pro-Russian disinformation on Facebook in Slovakia

WASHINGTON (Reuters) – Members of the U.S. House intelligence committee sent a letter to Meta CEO Mark Zuckerberg this week asking Facebook to address what it called pro-Russian disinformation on the company’s platforms in Slovakia, the committee said in a statement on Tuesday.

(Reporting by Chris Gallagher)

Germany’s Allianz and its U.S. funds troubles

FRANKFURT (Reuters) – Germany’s Allianz has agreed to pay about $6 billion and its U.S. asset management unit will plead guilty to fraud after a group of its multibillion investment funds collapsed amid market turmoil triggered by the coronavirus pandemic in 2020.

Here is timeline of key events in the saga, based on court documents, corporate disclosures, archived websites, public statements, and minutes of investor meetings:


Allianz’s U.S. asset management arm establishes the so-called Structured Alpha funds under manager Greg Tournant.


Arkansas’ pension fund for retired teachers – which would later be the first to sue Allianz over its investments in the funds – owns $19.4 million in Allianz stock, its fourth-largest holding in a foreign company.


The Arkansas’ pension fund makes an initial investment in Allianz’s Structured Alpha funds.


Arkansas decides to build up its investment in the Allianz funds. The funds also attracted pension funds that served labourers in Alaska and subway workers in New York.


Marketing material describes the funds as “a tested & proven solution” and “consistently above target”. They are marketed as “a confident strategy with an insurance spirit”.


Arkansas’ Structured Alpha holdings reach a market value of $1.6 billion at the end of 2019, a significant portion of the $18.3 billion fund.


January – Global stock markets plunge amid fears of the spreading coronavirus.

Feb. 3 – Mohamed El-Erian, Chief Economic Advisor at Allianz, warns CNBC viewers not “to buy the dip” because the coronavirus crisis was without precedent.

March 13 – The investment consultant Aon warns Structured Alpha investors in a “flash report” that it put the Structured Alpha funds on review.

March 25 – Allianz announces the liquidation of two hard-hit funds. Investors are also told chief fund manager Tournant had been ill for weeks, according to lawsuits.

March 27 – Allianz says it remains committed to the fund franchise and “the remaining funds are now well positioned”, but Aon issues another report recommending a “sell”.

March 31 – One of the funds held by Arkansas loses 78% in the first quarter, compared to a 22% drop of its benchmark.

April 6 – The Arkansas fund’s board votes to exit the Allianz funds and park the proceeds with BlackRock.

June 30 – The Arkansas fund’s board votes to sue Allianz.

July 20 – Arkansas’ suit is filed with the U.S. Southern District of New York claiming $774 million in losses.

July 21 Allianz publishes a paper saying that “losses were not the result of any failure in the portfolio’s investment strategy or risk management processes”. It has since been removed from the web.

Aug. 4 – Allianz discloses that the SEC is investigating.

September – Numerous other investors had by this point filed suits similar to Arkansas’, and more followed.


May – The U.S. Department of Justice approaches Allianz for information on the funds.

Aug. 1 Allianz publicly discloses the DOJ investigation and says it could take a financial hit.

Aug. 2 – Allianz shares drop 7.8%.

Aug. 7 Oliver Baete, Allianz chief executive officer describes a “horrible week” and concedes “not everything was perfect in the fund management.”

Sept. 10 – Reuters reports that the DOJ was looking at possible misconduct by fund managers and misrepresentation of risk to investors.


Feb. 17 – Allianz says it will set aside 3.7 billion euros ($3.90 billion) to deal with investigations and lawsuits. Reports 2021 profit was the lowest since 2013.

Feb. 18 – Allianz announces bonus cuts for its CEO and board, and a settlement with a “vast majority” of investors.

Feb. 28 – A number of big investors file to end their lawsuits.

March 3 – Arkansas drops its lawsuit after settling for $642 million, according to a court document and board meeting minutes.

March 4 – Allianz’s annual report discloses that Allianz Chief Executive Oliver Baete earned 9% more in 2021 despite a cut in his bonus for the funds saga.

May 11 – Allianz sets aside another 1.9 billion euros to settle litigation and any fines from U.S. regulators. nL5N2X327P]

MAY 17 – The DOJ announces Allianz has agreed to pay about $6 billion and its U.S. asset management unit will plead guilty to fraud.

($1 = 0.9496 euros)

(Reporting by Tom Sims; Editing by Tomasz Janowski)

M&C Saatchi rejects sweetened buyout offer from top investor

(Reuters) – British advertising group M&C Saatchi on Tuesday rejected a fresh 253.6 million pounds ($316.44 million) takeover offer from the acquisition vehicle of its top shareholder Vin Murria.

“I urge shareholders to reject this bid as it significantly undervalues the business and prospects of M&C Saatchi,” Chairman Gareth Davis said.

($1 = 0.8014 pounds)

(Reporting by Shanima A in Bengaluru; Editing by Shounak Dasgupta)

Some of United Airlines’ Boeing 777s get OK to fly after 2021 engine failure

By Rajesh Kumar Singh and David Shepardson

CHICAGO/WASHINGTON (Reuters) -United Airlines said on Tuesday the Federal Aviation Administration (FAA) has cleared its Boeing 777 planes equipped with Pratt & Whitney (PW) 4000 engines to return to service, while the wide-body jets are expected to begin flying next week.

Andrew Nocella, United’s chief commercial officer, said the FAA issued the final paperwork for the planes late on Monday.

Separately, the FAA confirmed it has approved the service bulletins that will allow the Boeing 777-200 with Pratt & Whitney PW4000 engines to return to service.

The jets were grounded after a United flight to Honolulu that suffered engine failure showered debris over nearby cities and made an emergency landing in Denver in February 2021. No one was injured and the plane safely returned to the airport.

“We expect to start flying the aircraft in ad hoc probably within the next week,” Nocella told a Bank of America conference.

United is the only U.S. operator of 777s with the PW4000 engine and has 52 of those planes. The airline plans to begin flying the planes on May 26.

The jets account for 10% of the Chicago-based carrier’s capacity. The delay in their return to service had hurt the airline’s plans to ramp up capacity, and it announced some flight cuts earlier this month.

United had previously told lawmakers that an indefinite delay in the 777’s return could impact up to 1 million passengers this summer, sources told Reuters.

In March, the FAA finalized new safety directives after three reported in-flight fan blade failures that required enhanced inspections and modifications.

Since the planes are the company’s most cost-efficient aircraft, it needs the full fleet to be back up and flying to ease cost pressures.

United plans to deploy the aircraft first on domestic routes before flying them internationally in June.

(Reporting by Rajesh Kumar Singh and David Shepardson in Washington; Editing by Louise Heavens and Bernadette Baum)

Sberbank CFO among latest senior resignations at sanctioned Russian lender

(Reuters) – Three board members of Russia’s Sberbank have left their posts, the bank said on Tuesday, the latest in a flurry of senior departures from the state-owned lender since Moscow sent tens of thousands of troops into Ukraine on Feb. 24.

Chief Financial Officer Alexandra Buriko and fellow Deputy Board Chairman Sergei Maltsev decided to terminate their employment with the bank, Sberbank said in a statement.

“Within the framework of transforming Sberbank’s governance model and updating its strategy, changes have been made to the composition of the board,” Sberbank said.

It also said board member Natalia Alimova had resigned.

The resignations come a day after Sberbank said one of its senior vice presidents had left, following in the footsteps of high-profile board members soon after Russia began what it calls a special military operation in Ukraine.

(Reporting by Reuters, Editing by Louise Heavens)

Factbox-Companies sell their businesses in Russia

(Reuters) -Some Western companies have agreed to sell their Russian assets or hand them over to local managers as they scramble to comply with sanctions over the Ukraine conflict and deal with threats from the Kremlin that foreign-owned assets may be seized.

The moves, part of a broader corporate exodus from the country, are likely to stir concerns that Russian firms and institutions are snapping up prized assets for a bargain.

Below is a list of firms by sector that have secured deals to sell their businesses in Russia:



The British car distributor said it had agreed to sell its Russian business to local management. The sale will result in an exceptional non-cash loss before tax of about 240 million pounds ($299 million).

RENAULT The French carmaker said on May 16 it will sell its majority stake in Russia’s biggest carmaker, Avtovaz, to the Russian Central Research and Development Automobile and Engine Institute (Nami), with a six-year option to buy back the stake.

Renault also said that 100% of the shares in Renault Russia will go to the city of Moscow.

Russia had said on April 27 that Renault would transfer its 67.69% stake in Avtovaz to the institute for the symbolic sum of one rouble.



The Czech investment group has agreed to sell its Russian banking assets to a group of investors, PPF said on May 17.

PPF’s consumer lender, the Home Credit and Finance Bank, and its subsidiaries will be acquired by investors led by Ivan Tyryshkin, PPF said, without giving the price or other details of the transaction.

SOCIETE GENERALE The French bank expects to close the sale of its Rosbank unit to Russia’s Interros Capital “in the coming weeks,” it said on May 5.

It announced the sale on April 11, adding it would write off 3.1 billion euros ($3.6 billion), comprising a 2 billion-euro hit on Rosbank’s book value and the rest linked to the reversal of rouble conversion reserves.



The French electrical equipment maker will sell its operations in Russia and Belarus to local management, the company said on April 27, as it signed a letter of intent with the designated buyers.

It will write off up to 300 million euros ($314 million) of net book value and make a non-cash reversal of currency translation estimated at 120 million euros.



The British energy and petrochemical giant will sell its Russian retail and lubricants business to Russia’s Lukoil, the companies said on May 12. The deal includes 411 retail stations and the Torzhok lubricants blending plant. Shell would not comment on the value of the deal.



The Dutch brewer said on April 22 it would sell its non-controlling stake in its Russian joint venture AB InBev Efes. The divestiture will result in a $1.1 billion impairment charge in the first quarter. The joint venture has 11 breweries in Russia and three in Ukraine.


The Finnish food processing company said on May 16 it sold its fast food business in Russia, Sibylla Rus, to Russian meat producer Cherkizovo for about 8 million euros ($8.4 million).


The Finnish bakery and food service company said on April 29 it had agreed to sell its Russian unit to Moscow’s Kolomenskij Bakery and Confectionery Holding. Fazer did not disclose the value of the transaction.


The American fast food giant said on May 16 it had initiated a process to sell its business in Russia after 30 years of operating its restaurants in the country. McDonald’s expects to record a mostly non-cash charge of about $1.2 billion to $1.4 billion.


The privately owned Finnish food and drink company said on May 5 it had sold its operations in Russia to private Indian investor Vikas Soi, after being mentioned by Russian authorities as an example of a foreign company that could be nationalised.

It said the divesture includes the Paulig Rus LLC unit and Paulig’s operations, as well as its coffee roastery in Tver, but not the Paulig brand, which will be phased out in Russia over the coming months.


The Finnish food processing company said on April 29 it had agreed to sell its consumer business in Russia to Copacker Agro Ltd for about 1.5 million euros ($1.6 million). As a result of the sale, Raisio said it would recognise an estimated impairment loss of 2.9 million euros in its Q1 earnings before interest and taxes.


The Finnish dairy producer has sold its Russian business to GK Velkom, the company said on April 26, following an earlier threat by Russian authorities to nationalise its business there. Valio said the transaction would take effect immediately but gave no financial value for it.



The London-listed Russian mining company announced on May 9 it proposed to sell its main Kun-Manie project for $105 million and agreed to assign to buyer benefit of all loans owed by Kun-Manie to Amur in consideration for $30 million.


Kinross Gold Corp is selling its Russian assets to the Highland Gold Mining group of companies for a total of $680 million in cash, the Canadian gold miner said on April 5, nearly a month after suspending its operations in the country.



Turkish shoe retailer FLO Magazacilik is in talks to buy more than 100 stores owned by fitness brand Reebok in Russia, which is part of the Authentic Brands Group, FLO Chairman Mehmet Ziylan said on May 16. Ziylan added a deal had not been finalised.


The Dutch employment services company is in the process of selling activities in Russia to local management, it said on April 29, adding its net investment in the country at end-March was 14 million euros ($14.7 million).


The Danish paint maker said on April 8 it had initiated the sale of its Russian and Belarusian companies, taking a 115 million Danish crowns ($16.2 million) write-down.


The British tobacco group said on May 17 that the terms of its agreement to exit Russia did not include a clause allowing it to buy back its business there in future.

Imperial Brands had announced the transfer of its Russian business to “investors based in Russia” on April 20, following talks with an unidentified third party in March.


The Danish shipping company has found possible buyers for its 30.75% stake in Global Ports Investments, which operates ports in Russia, it said on May 4.


The Finnish forestry firm has completed its exit from Russia with the sale of three corrugated packaging plants to local management, it said on May 16.

At the end of April, Stora said it had agreed to sell its two sawmills and their forest operations in Russia to local management, causing it to record a 130 million euro ($136 million) loss.


The Finnish builder has signed an agreement with Etalon Group PLC for the sale of its operations in Russia for about 50 million euros ($52 million). As a result of the sale, YIT said it would book an impairment of about 150 million euros in its first quarter income statement.

($1 = 0.8022 pounds)

($1 = 0.9546 euros)

($1 = 7.1002 Danish crowns)

(Compiled by Elena Vardon, Augustin Turpin, Enrico Sciacovelli, Ina Kreuz; Editing by Mark Potter, Jan Harvey, Andrew Heavens and Susan Fenton)