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Russia’s En+ says Deripaska agrees in principle to reduce stake below 50 percent

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Russian sanctions-hit businessman Oleg Deripaska has agreed in principle to reduce his stake in Russia’s En+ Group, which manages his aluminum and hydropower assets, to less than 50 percent, the company said in a statement on Friday.

Washington imposed sweeping sanctions on some of Russia’s biggest companies and businessmen on April 6, striking at allies of President Vladimir Putin to punish Moscow for its alleged meddling in the 2016 U.S. presidential election and other so-called malign activities.

En+, along with Deripaska, who currently has a 65 percent stake in the company, and aluminum giant Rusal, in which En+ owns a 48 percent stake, were all hit with sanctions.

“Following a series of discussions with the Company’s independent chairman, Lord Barker of Battle, Mr. Oleg Deripaska has agreed in principle to the chairman’s request that Mr Deripaska reduce his shareholding in the company to below 50 percent,” En+ said in the statement.

Earlier this week, the United States said it could remove Rusal from the list if Deripaska ceded control.

Deripaska also agreed with the chairman’s proposal that he will resign from the board and consent to the appointment of some new directors so that the board will have a majority of new independent directors, it added.

En+ also said that it asked the United States for an extension of the deadline for operations with En+’s debt, equity, or other holdings from the current May 7 to Oct. 31 or another appropriate date.

Without the extension, En+’s ability to maintain its listing in London will be materially impacted, it added.

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10,000 stores set to close in 2021, Covid keeps pummeling retailers

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A man passes by a Banana Republic store, which is going out of business, in New York, January 10, 2021.

Scott Mlyn | CNBC

One retail research and advisory group is forecasting there could be as many as 10,000 store closures announced by retailers in the United States this year, which would set a new record, as the Covid pandemic continues to take a toll on the industry and companies rethink how many locations they’re able to keep open.

10,000 closures would represent a 14% uptick from 2020 levels, Coresight Research said in a report released Thursday. Coresight is also forecasting retailers will announce 4,000 store openings in 2021, driven by growth from grocery discounters and dollar store chains.

Last year, in the thick of the pandemic, Coresight predicted in the June that there were going to be as many as 25,000 closures announced by retailers in 2020. But it ended up tracking just 8,741, along with 3,304 openings. That was a deceleration from the 9,832 closures it tracked in 2019 — the highest number Coresight has seen as long as it has been following retail closings and openings.

The reason for the large gap between the final tally and its initial prediction, Coresight said, was because some companies have been “holding out for an upturn in store-based sales.” Many retailers have also been able to buy more time by reducing their rents and striking deals with their landlords to be able to stay open a little longer, it said.

“In 2021, the rollout of [Covid] vaccination programs should result in a partial recovery in store-based sales,” Coresight CEO and Founder Deborah Weinswig said. “However, these programs may take many months to reach a wide base of consumers.”

Some companies won’t be able to wait much longer, Weinswig said, especially those that didn’t have the holiday season they were hoping for. Consumers are going to continue to spend more of their money online, which is another reason for the heightened store closure forecast this year, she said.

As of Jan. 22, Coresight said retailers in the U.S. have already announced 1,678 closures, which include ones by Bed Bath & Beyond, Macy’s and J.C. Penney.

Weinswig also pointed to a pattern that took shape in the retail industry after the Great Recession, which could repeat itself this year.

“Although retail was significantly impacted in 2008 and 2009, the repercussions in terms of retail bankruptcies peaked in 2010,” she said. “We could see history repeat itself in 2021, resulting in greater numbers of store closures this year than we saw in 2020.”

Coresight said apparel retailers, including Ascena Retail Group and The Children’s Place, accounted for 36% of all store closures in 2020, tallying more than 3,000. The apparel category will likely make up a substantial portion of closures this year, too, it said.

A study released earlier this week by First Insight found 40% of consumers plan to shop for apparel in brick-and-mortar stores either the same amount or less after being vaccinated, implying there won’t be an immediate rush back to the mall.

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Hong Kong leader Carrie Lam on relations with U.S., potential second term

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Hong Kong leader Carrie Lam told CNBC on Thursday that she’s “optimistic” the new U.S. administration under President Joe Biden will give her government “a fair hearing” with regard to the city’s controversial national security law.

The law was imposed in Hong Kong last year by the Chinese central government in Beijing — bypassing the city’s lawmakers. The Trump administration criticized the move, which became one of the issues at the center of worsening U.S.-China ties.

Lam, however, denied that Hong Kong is a sticking point between the two economic powers. Instead, she said the U.S. sometimes used the city as a “pawn” in its dealings with China.

“As far as we’re concerned, yes, we’re going through a very tough period where Hong Kong is often put on the global radar screen,” Lam told CNBC’s Emily Tan. She acknowledged there are a “couple of laws made by the U.S. Congress and the president’s executive order, which do affect Hong Kong’s business and individuals — of course, including myself.”

“But I remain optimistic that with the new U.S. administration, I hope that they will give us a fair hearing as far as the national security law is concerned,” she added.

Following the implementation of the law, the Trump administration sanctioned 11 individuals — including Lam — for “undermining Hong Kong’s autonomy” and rolled back the city’s special status under American law that treated it differently from other Chinese cities.  

Hong Kong is a former British colony that was returned to Chinese rule in 1997. The city is governed under the “one country, two systems” principle and is given greater autonomy than other Chinese cities.

Lam said her government has gone to the World Trade Organization to dispute the U.S. removal of Hong Kong’s special status — but their request for a dispute settlement has been blocked by Washington.

“We always love to have what we used to have,” she said. “What we used to have, actually, should be with us but unfortunately on this front, the signal is not very positive.”

A second term?

The Hong Kong economy has been battling multiple crises over the past years, including the U.S.-China trade war that intensified in 2018, months of pro-democracy protests in 2019 and the ongoing coronavirus pandemic.

Latest available economic data showed that Hong Kong’s economy has contracted for five consecutive quarters on a year-on-year basis as of the third quarter of 2020.

The city is expected to release fourth-quarter GDP data on Friday, and official forecast is for the economy to shrink by 6.1% for the whole of last year — among the worst performance in Asia.

Lam told CNBC she hopes to see “some encouraging growth” in 2021, unless the pandemic worsens despite restrictions and vaccination.

She added that a vaccination program would be rolled out in Hong Kong next month.

The number of Covid vaccine doses the government has committed to buy is about three times Hong Kong’s population of 7.5 million, she said.

Hong Kong has been recording an increase in Covid-19 infections in recent weeks.

The city recorded more than 10,300 in cumulative cases and 176 deaths as of Thursday, according to government data. The numbers are lower than many countries and territories globally, but its economy can ill-afford further threats that dampen activity.

Lam, who took over as the city’s leader in 2017, has had a difficult tenure plugged by both political and economic challenges.  

Asked if she would seek reelection when her term ends next year, she declined to answer but said: “I just try to comfort myself that very often, women are being left to do the most difficult job. And I happen to be one of them.”

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BMW cuts prices for its China-made electric SUV by $10,000

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