Friday, 23 November 2007

De Beers sold historic Cullinan Mine

The world’s biggest diamond producer, De Beers (45% owned by Anglo American), said yesterday it had sold its historic Cullinan mine to the Petra Diamonds Cullinan Consortium (PDCC), consisting of Petra and Saudi investment firm Al Rajhi Holdings for R1 billion (£71 million) in cash. The PDCC consortium will each buy 37% stakes, with black-owned Thembinkosi Mining Investments getting 26%. De Beers Managing Director, Gareth Penny said “PDCC emerged as best bidder in a long selection process.”

Asked how the transaction would be funded, Penny said the money had been raised through a special purpose vehicle. The deal is expected to be concluded in April or June, depending on Competition Commission approval and the successful conversion of De Beers's mining right from old order to new order, and the transfer of that mining right to Petra and Thembinkosi.

The deal brought a major resource to the group. The sale was in the economy's interests as Cullinan mining would continue. The new players have studied Cullinan's cost structure and they have a plan in place to turn it around, it is understood. The 3106-carat Cullinan Diamond was found at the mine. This is the third mine De Beers has sold to Petra, regarding them as unprofitable; the others were the Koffiefontein and Kimberley underground mines. In the year to December, De Beers produced 1,15-million carats at Cullinan, with a market value of R505 million (£36 million). (source: Business Day)

TomorrowNow, the SAP unit at the centre of corporate spying scandal, is being eyed by US-based provider of software support, Rimini Street. Chief Executive of Rimini Street, Seth Raving, said “we are interested, but we are proceeding cautiously and need to analyse it first." AP, the German software group, revealed at the beginning of the week that it was exploring options for the troubled unit, including selling it.

Mr Ravin was among the founders of the Texas-based TomorrowNow and sold the company to SAP almost three years ago. He declined to say whether talks were going on with SAP. Oracle, SAP’s arch-rival, filed a lawsuit earlier this year accusing SAP or corporate espionage. In the wake of the scandal, TomorrowNow's chief executive and several senior member of management resigned on Monday.

SAP is under pressure to announce a swift solution for TomorrowNow in order to avoid further damage to its image. Mr Ravin said “Since SAP's announcement, Rimini Street had received a dozen enquiries from TomorrowNow customers, exploring a possible transition.” Customers were uncertain since SAP had not been clear about "what they are doing with TomorrowNow," he added. (source: msnbc)

Airbus is under life-threatening circumstances as the weakness of the dollar is threatening the survival of the European planemaker. Airbus chief executive Tom Enders has told employees in Germany, “the dollar’s rapid decline is life-threatening for Airbus. The dollar exchange rate has gone beyond the pain barrier.”

Mr Enders made the claim as he gave warning that European production plants would have to face major cost cuts to help them counter the impact of the currency. The calls from the head of Europe's biggest manufacturer will increase the pressure on European ministers and the European Central Bank to take action against the continually weakening dollar.

The weak dollar is favouring Airbus's arch rival Boeing, the company claimed. The dollar hit a new low against the euro yesterday. In the year to date, the euro has gained about 12.5% against the US currency.

This gives Boeing a massive advantage over Airbus, which is struggling to win back the lead position in aeroplane sales from the American group after it was destabilised and pushed into losses by delays to production of the new aircraft. (source: Timesonline)

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