Santos, GDF Suez LNG Venture; Continental AG Up

Mayank Mehta
18 Aug, 2009
New York City

European stocks edged higher in a late rally. Continental AG surged 17% to

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European stocks edged higher in a late rally. Continental AG surged 17% to €26.10 after Schaeffler Group finalized its agreement to refinance debt. France based GDF Suez and Australia based Santos agreed to form a joint venture to explore and sell natural gas field in the Northwestern Australia coast.[/R]

The private survey of investors and analysts suggested a sharp rebound in the confidence index in August. The index surged to 56.1 from 39.5 in July, the highest since April 2006.

The leading indicator of economic developments at least two quarters in advance suggests that the economic expansion that started in second quarter may continue.

In London FTSE 100 Index closed higher 40.77 or 0.88% to 4,685.78, in Paris CAC 40 Index increased 31.00 or 0.91% to close at 3,450.69 and in Frankfurt DAX index higher 49.13 or 0.94% to close at 5,250.74. In Zurich trading SMI decreased 70.05 or 1.19% to close at 5,953.75.

Gainers & Losers

Air France-KLM the Europe’s airline gained 0.4% to €9.89.

ArcelorMittal NA the world’s steelmaker advanced 2.1% to €24.34 after Nomura Holdings issued “buy” rating in research coverage and offered positive outlook for the industry.

Casino Guichard Perrachon SA the supermarket owner in Paris rallied 2.8% to €50.81 after Exane BNP Paribas lifted the rating on the company to “outperform” from “neutral.”

Continental AG surged 17% to €26.10 after Schaeffler Group finalized its agreement to refinance debt with banks including UBS, RBS, Unicredit SpA, Landesbank and Commerzbank.

The revised debt agreement for €12 billion will allow the ball bearing company to delay the payment schedule but at a higher cost. The company amassed huge debt to acquire 90% stake in Continental AG at €75 a share to form the largest auto parts maker in Germany. Schaeffler directly controls 49.9% in Continental and 403% is held with banks that financed the acquisition.

The loan issued in two tranches will be issued to operating company with a maturity of 4.5 years and for the holding company will mature in six years.

Etablissements Maurel et Prom SA added 0.3% to €12.69 after the French oil explorer and Cove Energy plc extend agreement. The extension will be granted on call option to purchase a 51% participating interest in Artumas'' Tanzanian gas assets, a 34% participating interest in Artumas'' onshore Mozambique assets and all of Artumas'' 8.5% participating interest in offshore Mozambique.

The revised agreement increases the participating interest and lowers the royalty payment.

GDF Suez SA advanced 1.3% to €27.08 after the natural gas company and Santos Ltd formed a joint venture to develop gas fields in the Northwest Region of Australia.

Santos will sell 60% stake in three gas fields to GDF for $200 million and together will develop a floating LNG project for 2 mtpa capacity. The fields collectively are estimated to hold 220 mboe and GDF will make further $170 million in milestone payment.

GPC Biotech AG rose €1.30 after the German biotechnology company said first six months revenues decreased 97% to €0.1 million compared to €3.0 million in the period ending in June a year ago.

NextRadioTV SA the owner of French radio stations fell 0.4% to €11.60.

Sixt AG added 0.4% to €17.13 after the car rental company said first-half revenues fell 8.4% to €782.8 million from €854.6 million a year ago. Net loss in the first-half was €22.4 billion or €0.88 per diluted share compared to net profit of €44.9 million or €1.78 per share a year ago.

Technip SA rose 1.9% to €41.71 after the oil services company was selected by PT. Chevron Pacific Indonesia for a lump sum services contract for the Minas field located in Sumatra, Indonesia.

ThyssenKrupp AG surged 1.4% to €23.50 after the German steelmaker has only one bidder left for Xervon unit.

Total SA the Europe’s Oil Company advanced 0.7% to €37.60.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 1.82% followed by losses in Beiersdorf AG of 1.04%, in Fresenius Medical Care AG of 0.76%, in BMW AG of 0.30%, in SAP AG of 0.20%.

Deutsche Boerse AG led gainers in the DAX index with a rise of 4.36% followed by increase in Salzgitter AG of 4.04%, in Thyssenkrupp AG of 2.67%, in Deutsche Bank AG of 2.27%, in BASF SE of 1.53%.

CAC-40 Index Movers

STMicroelectronics N.V. led the decliners in the CAC-40 index of 0.99% followed by losses in Unibail-Rodamco SA of 0.88%, in Essilor International SA of 0.51%, in Sanofi-Aventis of 0.38%, in EADS NV of 0.26%.

Dexia SA gainers in the CAC-40 index with a rise of 3.49%, followed by increase in Alcatel-Lucent of 3.40%, in ArcelorMittal of 3.11%, in Renault of 2.73%, in GDF Suez SA of 1.98%.