California regulators rebuke PG&E with $2.1 billion fine for wildfires

SAN FRANCISCO — California power regulators slapped Pacific Gas and Electric with a $2.1 billion fine for igniting a series of deadly wildfires that landed the beleaguered utility in bankruptcy.

The record penalty imposed Thursday in an administrative law judge’s decision boosts the punishment that had been agreed upon in a $1.7 billion settlement announced in December. Several consumer groups had protested the settlement as too lenient in light of the destruction that PG&E left behind, and the California Public Utilities Commission agreed, upon further review.

PG&E PCG, -2.33%  didn’t have an immediate comment about the increased penalty.

The harsher punishment includes a $200 million payment to California that will be earmarked for people who lost family members, homes and businesses in catastrophic wildfires caused by PG&E’s outdated electrical grid and negligence during 2017 and 2018. The fires killed nearly 130 people and destroyed nearly 28,000 homes and other buildings.

That $200 million will supplement a $13.5 billion fund that the San Francisco company is setting up as part of its effort to emerge from bankruptcy protection by a June 30 deadline.

More than 81,000 claims have been filed in the bankruptcy case.

The decision will also prevent PG&E from attempting to recover $1.82 billion from its customers, forcing its shareholders to bear the cost instead. The settlement previously had prevented PG&E from recovering $1.63 billion.

As part of the previous settlement, PG&E had projected it would realize $469 million in tax savings. The ruling issued Thursday would require the San Francisco company to funnel any tax savings to hold down the prices charged to the 16 million people who rely on the nation’s largest utility for electricity.

Thursday’s rebuke is the latest blow to PG&E, which has been trying to climb out of a huge financial hole left by its liabilities in the fires. The company filed for bankruptcy 13 months ago to seek shelter from more than $50 billion in claimed losses.

PG&E has settled those claims by reaching settlements totaling $25.5 billion with the wildfire victims, insurers and some government agencies.

But the company still faces some potentially imposing hurdles to clear, with California Gov. Gavin Newsom threatening a government-led takeover bid of PG&E unless changes are made to its current plan for getting out of bankruptcy. PG&E needs state approval of the plan in order to qualify for coverage from a wildfire insurance fund created by California last summer.

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Beyond Meat earnings: Shares rise, then fall, on mixed results

There was plenty of bite in Beyond Meat Inc.’s quarterly sales.

Beyond Meat’s BYND, -5.66%  shares were initially up 6% in after-hours trading Thursday after the maker of plant-based products reported fourth-quarter earnings that blew past Wall Street revenue estimates but concerns about operational efficiencies later dragged the stock down 8%.

The El Segundo, Calif.-based company said it lost $452,000, or 1 cent a share, in the quarter, compared with a loss of $7.5 million, or 18 cents a share, in the year-ago quarter. Revenue soared 212% to $98.5 million from $31.5 million a year ago.

Analysts surveyed by FactSet had expected net income of 1 cent a share on sales of $81.2 million.

“Temporary disruptions related to capacity expansion projects at two co-manufacturing partners’ plants partially offset the year-over-year improvements in gross margin in the fourth quarter of 2019 and contributed to the sequential decline in gross margin relative to the third quarter of 2019,” Beyond Meat said in a statement announcing its results.

The earnings report came a day after Beyond Meat said it was teaming with Starbucks Corp. SBUX, -2.95% to sell breakfast sandwiches with Beyond Meat sausage patties. The sandwiches go on sale March 3 in about 1,500 stores in Canada. In late January, Restaurant Brands International Inc. QSR, -2.53% subsidiary Tim Hortons stopped selling Beyond Meat products at its shops in Ontario and British Columbia, according to a Bloomberg News report. The chain started selling the plant-based products across Canada in June but scaled back the offerings to Ontario and B.C. in September, according to Bloomberg.

Shares of Beyond Meat, which went public May 2, 2019, are up 40.4% this year, while the broader S&P 500 index SPX, -4.42% has declined 7.8% year to date.

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Telcos seek help on ‘priority basis’

Seek adjustment of GST credit in AGR dues, doing away with bank guarantees

Reeling under pressure to clear their adjusted gross revenue-related dues, telecom companies have sent an SOS to the government seeking measures on a ‘priority basis’ to facilitate reduction of financial stress in the industry.

In a letter to various government departments, including the Prime Minister’s Office, industry body COAI highlighted that banks were currently unwilling to take any risk with regard to the telecom sector and there was a need to give a clear message to banks that the government was there to support the sector.

“The banks are constantly asking telcos to reduce their exposures by refusing to issue new bank guarantees or even to renew the bank guarantees,” COAI Director General Rajan Mathews said, adding that the requirement for financial bank guarantees (FBGs) to secure payment of licence fee should be done away with.

“However, if DoT is still of the opinion that FBGs are still required, then it should at least be reduced to one quarter’s license fee.”

The letter written to Telecom Secretary Anshu Prakash has also been marked to the Telecom Minister, Finance Minister, Principal Secretary, PMO, Cabinet Secretary, DPIIT Secretary, DEA Secretary and Niti Aayog CEO.

On AGR dues, Mr. Mathews requested that as individual firms were stretching to make as much payment possible in a stressed financial situation, the government could adjust the GST credit due to the telcos from the government. Following this, the payment of the balance amount may be allowed in a staggered manner. “It is requested that a moratorium of 3 years be provided, as we expect that it will take at least that much time to recover the health of the sector, followed by a payment tenure of 15 years at a simple interest of 6%,” the industry body said.

As an alternative, Mr. Mathews said the government may consider granting loan equal to the AGR amount at 6% rate of interest so that the AGR liability may be discharged immediately.

COAI also reiterated its demand for reduction in licence fee, spectrum usage charges as well as rationalisation of universal service levy.

The industry body has also pitched for implementation of floor price for telecom tariffs April 1, 2020 onwards. “Floor pricing is imperative to ensure the sector is sustainable, and in a position to bear the deferred spectrum and AGR dues, while continuing to invest in world class networks and services,” it said.

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COVID-19 case tally: 82,549 cases, 2,810 deaths

The U.S. reported its first case of a COVID-19 infection in an individual who had not been to China or exposed to another person with the novel coronavirus, the Centers for Disease Control and Prevention said Wednesday night. This would mark the first instance of what experts call "community spread" in the U.S. All previous U.S. cases can be directly connected to travel to mainland China, time as a passenger on the Diamond Princess cruise ship, or in two instances spread of the virus between spouses. The case was announced by the CDC after President Donald Trump held a news conference aiming to ease American worries about the outbreak, in part by putting Vice President Michael Pence in charge of the U.S.’s COVID-19 response. "At this time, the patient’s exposure is unknown," the CDC said. "It’s possible this could be an instance of community spread of COVID-19…It’s also possible, however, that the patient may have been exposed to a returned traveler who was infected." There are now 60 cases of COVID-19 in the U.S., including among 45 people who were repatriated from the Diamond Princess and from Wuhan, China, the city that first detected the virus in December. Six people are counted as recovered in the U.S. Worldwide, there are now 82,549 cases of COVID-19, at least 2,810 deaths, and about 33,252 people, primarily in China’s Hubei Province, have recovered, according to the latest figures from the Johns Hopkins Whiting School of Engineering’s Centers for Systems Science and Engineering. (The World Health Organization’s dashboard tracking COVID-19 remains down.) A number of countries including Iran, Italy, and South Korea have also reported community spread as the number of cases in their countries have soared in recent days. Iran now has 245 cases, 26 deaths, and 49 people have recovered; Italy has 528 cases, 14 deaths and 40 people have recovered; and South Korea has 1,766 cases, 13 deaths, and 22 people have recovered.

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18,000 New York City students treated to free performance of ‘To Kill a Mockingbird’

NEW YORK (AP) — The cast of “To Kill a Mockingbird” traded its somber Broadway home Wednesday for the cavernous Madison Square Garden, performing the play for 18,000 school kids in an electric one-time-only performance that one actor called “primal.”

It marks the first time a Broadway play has been performed at the venue nicknamed “The World’s Most Famous Arena,” which is home to the NBA’s New York Knicks and the NHL’s Rangers. At the last line of the play, “All rise,” the students did exactly that, giving the performance a standing ovation and a hearty thank you.

“I loved the book in middle school when I read it and seeing it live and seeing the characters come to life, it’s so much more real,” said Alissa DiCristo, 17. “It makes you feel so much more.”

The play’s usual Broadway home is the 1,435-seat Shubert Theatre, where it’s routinely sold out. But thousands of middle and high school students from all five boroughs got to see it for free, courtesy of the Scott Rudin-led production and James L. Dolan, executive chairman and CEO of the Madison Square Garden Co.MSG, -4.69% . The tickets were distributed by the city’s education department. Free popcorn and bottles of water were offered on the way out.

The audience this time surrounded the stage and, in the moments before the play, started using the flashlight feature on their phones to make patterns and signals, turning the Garden into a tapestry of lights, like a forest ignited with fireflies.

As the play progressed, the students clapped, booed, cheered and gasped, even erupting in the same excitement as a buzzer-beating 3-point shot when the stately Atticus Finch wrestled with the evil Bob Ewell. At other times, the area fell completely silent as it felt like 18,000 young people held their breaths, particularly during courtroom scenes.

“We did say how we feel and each and everyone was respectful, too, when they needed to,” said 17-year-old Eric Meza, who had his first experience with a Broadway show. “It was just an amazing experience.”

“To Kill a Mockingbird” by Harper Lee won a Pulitzer Prize in 1961 and has been widely praised as a sensitive portrait of racial tension in 1930s Alabama. At its core is Finch, a lawyer called upon to defend a black man falsely accused of raping a white woman.

Oscar-winning screenwriter Aaron Sorkin adapted Lee’s play and it crackles with current issues: institutional racism, a flawed criminal justice system, police misconduct, sexual assault and standing against evil. Ripples of anger coursed through the crowd when racial epithets were used.

“I feel like it targeted a lot of prominent issues in today’s society and it really did speak to me,” said Ambria Creary, 17. “Definitely there were parts where you had to react because it hurt so bad to even imagine it happening today.”

The entire current Broadway cast performed the show, led by Ed Harris as Finch. They practiced for the Garden show in a warehouse in Long Island City, preparing to work on their new space, a stage measuring 90 feet in length by 40 feet in width.

Despite the size, the actors kept the experience intimate, rolling pieces of equipment onstage and helping put away props. Some, when not onstage, sat in chairs or a bench waiting their cues. At one point, Nick Robinson, who played Jem, gave Lisa Gay Hamilton, who played Calpurnia, a gentle hug after a powerful scene.

“It was magical. It felt like what theater used to like be thousands of years ago,” said actor Taylor Trensch, who played Dill Harris. “It’s something I’ll remember forever.”

Mayor Bill de Blasio and city first lady Chirlane McCray introduced the show, urging the students to think about the themes of the play and urging them to embrace the arts. “You are part of history today,” McCray said. Director Spike Lee, a die-hard Knicks fan, said: “Don’t let anyone tell you you can’t be artists. Follow your dreams.”

While Sorkin’s script wasn’t altered, the staging had to adapt to the hulking space. Eight cameras captured the action and beamed it onto four massive screens so everyone could see small details.

The stage arrived in about 100 pieces and took four hours in install, including the jury box, which remains empty throughout, a signal that the audience also is complicit in the trial. On Wednesday, director Bartlett Sher paced along one side of the stage during the performance, helping actors with their sound equipment and cheering them on.

Trensch thought back to his own youth and didn’t initially know if the three-hour play would capture the attention of the children. He needn’t have worried.

“It was almost primal,” he said. “There was like an electrical charge in the air that you don’t get at the Shubert Theatre.”

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Not in sound financial state; can meet liabilities only with govt. support, says Vodafone Idea

It said adjustment of GST credit due from the government could help in meeting its AGR payment.

Troubled Vodafone Idea has written to the telecom department expressing its inability to pay full AGR dues unless the government takes urgent measures, including allowing staggered payment, reduction in levies and implementation of floor prices in the crisis-ridden sector.

The letter to the communications ministry comes at a time when the company is confronted with AGR dues of over ₹53,000 crore and has paid a mere 7% of its liabilities so far.

Warning that it is “not in a sound financial state”, Vodafone Idea said the company would be in a position to meet its liabilities only if the government initiates steps including allowing set offs for GST credit accumulated so far, and permitting staggered mechanism for payment of balance amount of interest, penalty, and interest on penalty.

It said adjustment of GST credit due from the government could help in meeting its AGR payment.

Citing its losses over last few years, the company said the financial stress in the telecom sector is widely acknowledged. The company underlined its current subscriber base of 300 million, and employee base of 10,000 direct staffers while making a strong plea for “urgent support from government“.

Vodafone Idea Ltd (VIL) said it can settle the balance of its self-assessed principle if the Centre allows set-offs of ₹8,000 crore worth of GST credit lying with the government.

In fact, the amount when fully set off will even pay in part the self assessed interest, it said in the letter to the telecom department seen by PTI.

The company has sought a moratorium of three years on payment of interest and penalty, and subsequent payment timeline of 15 years at an interest of six per cent.

The letter, similar to the one written by industry body COAI, has also batted for grant of loan, equal to AGR amount at six per cent interest rate “so that the AGR liability may be discharged immediately”.

When contacted, a VIL spokesperson refused to comment on the issue.

VIL, in its letter, further pitched for reduction in licence fee to three per cent from the current eight per cent, and also sought reduction in spectrum usage charges (SUC) to zero or a uniform rate of one per cent for all spectrum.

Blaming the below-cost pricing of telecom services, compelled by competitive pressures as being the root cause of financial stress, the company sought immediate implementation of floor price in tariffs.

VIL said a floor price needs to be immediately made effective, say from April 1, 2020 to ensure that the sector is fully sustainable and in a position to pay deferred spectrum and AGR dues and still invest to create world-class network and services.

The company said the introduction of floor price will enable revenue of the telecom sector to nearly double from the current level of ₹1.75 lakh crore.

“Revenue of VIL is likely to touch the revenue levels which existed five years ago i.e 2015-16 and ensure that enough cash is generated to pay for deferred auction spectrum dues and deferred AGR payments of interest, penalty and interest on penalty,” it said.

VIL Chairman Kumar Mangalam Birla has in the past made it clear that the company will fold if it is forced to make payment of over ₹53,000 crore dues. Birla has held multiple rounds of discussions with the finance minister and the telecom minister over the last few days to explore options to keep the company afloat.

In all, as many as 15 entities owe the government ₹1.47 lakh crore — ₹92,642 crore in unpaid licence fee and another ₹55,054 crore in outstanding spectrum usage charges.

These dues arose after Supreme Court, in October last year, upheld the government’s position on including revenue from non-core businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

The Supreme Court earlier this month rejected a plea by mobile carriers such as Bharti Airtel and VIL for extension in the payment schedule and asked them to deposit an estimated ₹1.47 lakh crore in past dues for spectrum and licences.

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Aston Martin cut share-offer price after loss

Aston Martin Lagonda Global Holdings PLC said Thursday that it will offer shares at 207 pence each under the previously announced rights issue, as it reported a widened net loss for 2019.

The troubled luxury car maker—famed for its links to cinema spy James Bond–said last month that it was seeking to raise up to 500 million pounds ($647.4 million), part of which will be supported by billionaire Lawrence Stroll.

A consortium led by Mr. Stroll–father of Formula 1 racer Lance Stroll–is investing GBP182 million in the company, taking a 16.7% stake.

Aston Martin is raising an extra GBP318 million from shareholders via the rights issue. Accepting shareholders can buy up to 153.2 million shares at the discounted price on the basis of 14 new shares for every 25 owned.

The issue price is a 49% discount to its closing price of 402.70 pence on Jan. 30, the day before it announced the fundraising plan.

The company added that as previously agreed Penny Hughes will step down as chair of the board and be replaced by Mr. Stroll. In addition, Mark Wilson will step down as chief financial offer by April 30.

For 2019, Aston Martin booked a net loss of GBP113.2 million compared with a loss of GBP62.7 million in 2018.

Adjusted earnings before interest, taxes, depreciation and amortization–the company’s preferred metric which strips out exceptional and other one-off items–were GBP134.2 million compared with GBP247.3 million.

The company said that its supply chain is being actively managed in China and other markets and so far there hasn’t been any impact on production. It added that supply is secured until at least the end of March.

Write to Ian Walker at [email protected]; @IanWalk40289749

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COAI rings alarm bells, asks govt. to ease terms for AGR dues’ payment

COAI also sought an immediate cut in licence fee levy to 3% from 8% and reduction in spectrum usage charges

The Cellular Operators’ Association of India (COAI) has sent out a distress signal to the government seeking easier terms for payment of statutory dues by telcos, including extension of loans at lower rates to cover AGR liabilities, as also fast implementation of floor prices, to rescue the troubled sector.

Also read | DoT’s test checks on variations in telecom companies AGR dues standard audit procedure: COAI

With the telecom industry plunging into a deep, unprecedented crisis, the association has raised an alarm over banks’ unwillingness to take any risk with regard to the sector, and asserted the “need to give a clear message to banks that government is there to support the sector”.

“Banks are currently unwilling to take any risk with respect to the telecom sector and are constantly asking telecom service providers to reduce their exposures by refusing to issue new bank guarantees or even to renew bank guarantees,” COAI Director General, Rajan Mathews said in a letter to Telecom Secretary Anshu Prakash.

COAI has also said that the requirement of financial bank guarantees for securing licence fee payments should be done away with.

Explained | Vodafone and Airtel’s historic losses


In case Telecom Department is of the view that financial bank guarantees are needed, the same should be reduced to one quarter of licence fee, as per the industry body.

COAI also sought an immediate cut in licence fee levy to 3% from 8% and reduction in spectrum usage charges.

Citing India’s low average revenue per user compared to markets like China, Brazil and Russia, it further said data prices in India are a fraction of those in markets are U.S., China, Germany, France and others.

“Therefore, floor pricing is imperative to ensure the sector is sustainable and in a position to bear the deferred spectrum and adjusted gross revenue (AGR) dues, while continuing to invest in world class networks,” COAI said.

COAI’s letter, dated February 26, came even as Vodafone Idea has reportedly made it clear to the government that it won’t be able to pay court mandated AGR dues in entirety, unless a bailout is extended immediately.

In all, 15 telecom entities owe the government ₹1.47 lakh crore in unpaid statutory dues — ₹92,642 crore in unpaid licence fee and another ₹55,054 crore in outstanding spectrum usage charges.

Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea account for about 60%.

These dues arose after the Supreme Court, in October last year, upheld the government’s position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

The Supreme Court, earlier this month, rejected a plea by mobile carriers such as Bharti Airtel and Vodafone Idea for extension in the payment schedule and asked companies to deposit their past dues for spectrum and licences.

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Delta reduces flights to South Korea while Hawaiian suspends flights on outbreak fears

Delta Air Lines is reducing flights to South Korea while Hawaiian Airlines will suspend them entirely, as airlines deal with growing concern about the spread of the new virus beyond China.

Delta DAL, -2.55%  said Wednesday that it will suspend flights between Seoul and Minneapolis after Saturday and running through April 30. Delta also said it will reduce flights from Seoul to Atlanta, Detroit and Seattle to five times a week. The airline said last fall that it was operating about 28 flights per week on those routes.

The Atlanta-based airline, the world’s largest by revenue, will also delay the start of new flights between Seoul’s Incheon Airport and Manila. Instead of beginning March 29, the launch has been pushed back to May 1.

Hawaiian Airlines said it will suspend flights between Honolulu and Seoul starting next Monday and running through April 30. The carrier currently flies the route five times a week.

Hawaiian CEO Peter Ingram called the suspension prudent because of the rise in COVID-19 cases in South Korea and the effect the outbreak is having on demand for leisure travel by Koreans.

Delta, United Airlines and American Airlines have already suspended all flights to and from mainland China and Hong Kong. United said this week that demand for service to China had disappeared, and that March bookings for flights elsewhere in the Asia-Pacific region had plummeted 75% since the outbreak.

Fear about the virus is hitting cruise lines and other travel companies hard too. Booking Holdings Inc. BKNG, -2.80%  , the parent of travel search and booking sites including Kayak and Priceline, said the virus had “a significant and negative impact across our business” in the first quarter.

“It is not possible to predict where, and to what degree, outbreaks of the coronavirus will disrupt travel patterns,” the company said.

The number of new cases of the COVID-19 virus reported Tuesday was greater outside China than inside China for the first time, according to the World Health Organization. South Korea has reported more than 1,200 cases and 11 deaths.

Several airlines in Asia and the Middle East have suspended flights to other Asian countries besides China. The list includes Korean Air 003490, +0.65% , Japan Airlines 9201, -3.03%  and Philippine Airlines. Singapore Airlines C6L, -0.60% , hurt by weak demand, has suspended flights to several destinations in the U.S. and Europe.

Shares in the U.S. airlines that fly to Asia have been hammered — they have been among the biggest losers during this week’s stock market downturn.

The stocks — along with those of cruise companies — continued to fall Wednesday, even as the broader market stabilized after a two-day rout.

On Wednesday, shares of Delta Air Lines Inc. fell 2.6%. United Airlines Holdings Inc. UAL, -5.72%  plunged 5.7%, Hawaiian Airlines parent Hawaiian Holdings HA, -3.82%  lost 3.8%, and American Airlines Group Inc. AAL, -3.50%  dropped 3.5% — hitting its lowest level since late 2013, when the airline’s predecessor parent company was under bankruptcy protection.

The four biggest losers in the Standard & Poor’s 500 index SPX, -0.38%  on Wednesday were Royal Caribbean Cruises Ltd. RCL, -8.05% , Norwegian Cruise Line Holdings Ltd. NCLH, -7.89% , Carnival Corp. CCL, -7.53% , and online travel agency Expedia Group Inc. EXPE, -7.09% . Royal Caribbean dropped more than 8%; the others fell more than 7%.

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L Brands takes nearly $700 million writedown

L Brands Inc. took a nearly $700 million charge to write down the value of its Victoria’s Secret chain, an accounting hit that pushed the retailer into a loss for the holiday quarter.

The company agreed last week to sell a 55% stake in the lingerie business, which includes the Pink chain, to private-equity firm Sycamore Partners for $525 million. The deal valued the business at $1.1 billion and will create a separate private company.

Victoria’s Secret, which long dominated the U.S. lingerie market, recently has struggled with slumping sales and has been losing customers to upstarts with more inclusive sizing and marketing. Revenue in the U.S. and Canada dropped about 8% to $6.8 billion last year and the business’s operating income plunged 78%.

L Brands, which also owns the Bath & Body Works chain, reported a loss of $192.3 million for the quarter ended Feb. 1, compared with a profit of $540 million in the year-ago period. Total quarterly revenue slipped 3% to $4.71 billion, as gains at Bath & Body Works largely offset declines at Victoria’s Secret.

The latest quarter’s results included a $689.6 million goodwill charge and a $35.4 million charge related to the impairment of Victoria’s Secret stores. L Brands took nearly $250 million worth of charges related to Victoria’s Secret in the third quarter.

The company said Wednesday it expects to post another loss in the current quarter, including a hit from the closure of stores in China due to coronavirus. L Brands said it currently expects production delays of two to four weeks for some items, primarily lingerie and spring apparel. "While we have a diversified finished goods sourcing base by country, China is a critical source of raw materials," the company said.

Write to Khadeeja Safdar at [email protected]

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