Ambrilia Biopharma seeks creditor protection July 31, 2009
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Cancer drug developer Ambrilia Biopharma Inc. said Friday that current economic conditions have forced it to file for bankruptcy protection under the Companies’ Creditors Arrangement Act.
Ambrilia Biopharma 3-month TSX chartThe Montreal-based company said current cash on hand would not allow it to meet its business obligations.
Ambrilia’s application is being filed with the Quebec Superior Court.
The company said it will present a plan of arrangement to its creditors, but has not yet prepared a restructuring plan.
The move comes two days after Ambrilia laid off its chief executive officer and chief financial officer as part of a cost-cutting effort.
EnCana posts $1M reward for pipeline bomber July 31, 2009
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EnCana Corp. has doubled its reward to $1 million for tips leading to an arrest and prosecution in the bombings that have targeted its natural gas facilities in northeastern B.C.
Alan Boras, a spokesman for the Calgary-based oil and gas company, said all EnCana employees and contractors would now be eligible for the reward.
“Previously we had a restriction that employees and contractors were not eligible for the reward. As we thought about it, we looked at it, we determined that we wanted to remove any barriers that may be standing in the way of people coming forward.”
EnCana offered a $500,000 reward in January after four bombing attacks along its pipeline southwest of Dawson Creek, B.C., starting last October. The last two bombings in the oil-rich region occurred earlier this month.
RCMP have made no arrests but suspect the bomber is living in the area around Tomslake, 30 kilometres southeast of Dawson Creek.
On July 16, a two-page letter was sent to a newspaper in the town, warning that if EnCana didn’t shut down its operations, the bombings would get worse.
RCMP Sgt. Tim Shields said Thursday police are appealing for help because the safety of EnCana employees and the public is at risk.
“We’re hoping that with this increased reward of $1 million it will be enough to motivate someone to come forward with either the identity of the suspect or the location of explosives,” he said.
Police won’t comment on anyone who might be a person of interest, he said.
“We won’t be making public the identities or the occupations of anyone who might be a person of interest in this investigation. We have to be very careful that we don’t make public exactly what it is that we know. We don’t want the suspects to know what our next step might be.”
The $1-million reward matches what the RCMP offered during the hunt for those responsible for blowing up an Air India flight that killed 329 people. The RCMP offered the Air India reward in May 1995, a decade after Flight 182 crashed into the Atlantic Ocean off the coast of Ireland, but the reward money was never collected. Only one of three Vancouver-area men charged in connection with placing a suitcase bomb aboard the plane was convicted in the case.
with files from Canadian Press (more…)
U.S. GDP to grow 2% by 2014: IMF July 31, 2009
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The U.S. economy will need another five years to get its annual growth rate back to two per cent, according to a study released by the International Monetary Fund Friday.
The IMF said U.S. will face constraints in paying for productivity-enhancing capital equipment for the next couple of years.
As a result, the once-fire-breathing U.S. economy will post potential GDP economic growth more characteristic of less dynamic countries for the next few years.
It will take until 2014 for America’s potential GDP growth rate to touch the two per cent plateau, the IMF said.
“The protracted recession and tighter financial conditions will hurt investment and, thus capital accumulation, and the resulting high and more-persistent-than-usual unemployment rates will affect equilibrium rates of unemployment ? both lowering potential growth,” the IMF said.
Potential GDP growth in the U.S. will slip to 0.9 per cent in 2010 and will rise slowly to touch two per cent in 2014, the think tank predicts.
U.S. GDP growth (%)
2009 1.4
2010 0.9
2011 1.2
2012 1.6
2013 1.9
2014 2.0
Source: International Monetary Fund
The IMF does report growth rates for each of the next six years. But, the Washington-based organization’s model does not predict economic conditions for individual years in the way a bank or investment house might.
Instead, the IMF study estimates U.S. GDP growth as if external financial conditions remain relatively stable.
Thus, for the 2009 to 2014 period, the United States will expand on average by 1.5 per cent.
That rate would be far slower than previous periods, such as 2004 to 2008 when the American economy expanded by 2.4 per cent.
The IMF figured one big problem is that U.S. business will be constrained by the ongoing global credit crunch and won’t invest in new equipment to the degree firms did in prior years.
The report estimated that, between 2010 and 2014, the American economy would accumulate new capital stock at an average clip of 2.08 per cent.
That rate would be much slower than the rate of 3.6 per cent at which U.S. firms added new equipment between 2004 and 2008, the IMF said.
Economists often link the rate at which an economy accumulates capital equipment to its productivity and, ultimately, its GDP growth.
Air Canada will get pension break, Flaherty says July 25, 2009
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Air Canada is struggling with a $2.85-billion pension shortfall. (Canadian Press)
The federal government is close to letting Air Canada delay certain pension fund contributions, Finance Minister Jim Flaherty said Thursday.
The approval, which Air Canada has said requires a cabinet order, is “virtually ready,” Flaherty said. Air Canada is federally regulated, so it needs the government’s approval to change its pension plan.
The moratorium on payments to the pension fund, which faces a $2.85-billion shortfall, is one leg in the airline’s three-point plan to rebuild its business.
It has already renegotiated pension arrangements with its five unions and non-unionized employees. The deals give the airline a moratorium on past service contributions totalling $645 million until early 2011, and then call for fixed payments till 2013.
The third leg requires the airline to raise at least $600 million in new financing.
But even meeting those three conditions will not be enough, CEO Calin Rovinescu said recently.
“To return Air Canada to profitability will require a fundamental restructuring of our business,” he said. “This will include the execution of a disciplined and significant cost-reduction program, requiring participation by certain suppliers and stakeholders, as well as new revenue-generation initiatives.”
As part of its deal with the unions, Air Canada has negotiated an extension to its contracts, freezing wages and pensions for 21 months.
With files from The Canadian Press (more…)
Bruce Power drops plan to build Ont. reactors July 25, 2009
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Bruce Power has dropped plans to build new reactors in Ontario’s Bruce County, the company said Thursday.
The company said it has opted to focus on refurbishing its Bruce A and B reactor units at its site about 250 kilometres northwest of Toronto on Lake Huron.
The company also said it will withdraw its application to build reactors in Nanticoke, on Lake Erie, citing declining provincial energy demand.
“These are business decisions unique to Ontario and reflect the current realities of the market,” said Duncan Hawthorne, Bruce Power’s president and chief executive officer.
“Our focus has always been to find the best way to provide Ontario with a long-term supply of 6,300 megawatts. For more than five years, we’ve examined our options and refurbishing our existing units has emerged as the most economical.”
The Bruce A and B units have four CANDU reactors each. Six of them are operating, while two are down for refit.
Bruce Power said Thursday it will work with investors and the Ontario Power Authority to investigate refurbishing the six operating units after the restart of the two units that are down.
Bruce Power also said the decision to shelve new Ontario reactors won’t stop its plans to construct reactors in Alberta and Saskatchewan.
In late June, the Ontario government dropped its plans to build two new nuclear reactors at the Darlington power station, blaming the decision on rising costs.
MDA wins polar satellite contract July 25, 2009
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The Canadian Space Agency has asked space robotics firm MacDonald, Dettwiler and Associates Ltd. to come up with a plan to put two satellites in space over the North to improve communications and weather observation in the region.
MDA announced Thursday it was awarded a $4.3-million contract to develop the concept for the Polar Communications and Weather (PCW) mission. The mission is to launch two satellites in an elliptical orbit around Northern regions to assist in Canadians operations in the north, including those dealing with protecting Canadian sovereignty.
“The PCW mission addresses the Canadian government needs in the Arctic and strengthens Canada’s sovereignty in the North,” MDA vice-president Steve Oldham said in a statement.
The concept phase is just the first step in a process that could eventually see the satellites in orbit. If the concept is approved, the CSA would then have the option of awarding a contract for the design of the satellites, followed by another contract to build and service them.
The contract marks the first new project the CSA and MDA have embarked upon since MDA, frustrated at a lack of work in Canada, attempted to sell its space robotics and satellite business to U.S. defence contractor Alliant Techsystems Inc. in 2008.
Sale blocked
The proposed $1.3-billion sale sparked national outrage over the loss of taxpayer-funded technology, especially the satellite Radarsat-2, which is designed to protect Canada’s sovereignty and also provides Arctic imagery.
Jim Prentice, the industry minister at the time, blocked the sale in April 2008 after determining the deal was not “of net benefit to Canada.”
In November, the CSA awarded MDA a design contract for a series of satellites dubbed Radarsat Constellation, but that project had reached the concept phase before the controversy over the proposed sale. The agency and the company have also renewed work relating to the International Space Station.
Oldham said last November MDA wanted to continue to work in the area of space exploration ? where the company gained a reputation building robotics such as the space shuttle’s Canadarm and the space station’s Canadarm 2 ? but that the company needed contracts from the government to stay in the business.
The space agency has been slow to award new contracts, in part because new president Steve MacLean is in the process of putting together a national space policy, which should provide the agency and government with direction when considering future projects.
High Arctic project on hold
The news about the PCW contract also comes the same week the CBC learned that the federal government has paused a four-year pilot project to test High Arctic surveillance technology at the entrance to the Northwest Passage.
As part of the Northern Watch program, scientists from Defence Research and Development Canada began installing underwater listening devices and land-based sensors on Devon Island in summer 2008.
A National Defence spokesperson said the Northern Watch program is taking a hiatus this summer as researchers want to evaluate data the devices have collected already.
Canada gets some Arctic surveillance data from MDA’s RadarSat 2 satellite, said Michael Byers, who holds the Canada Research Chair in Global Politics and International Law at the University of British Columbia.
But Byers said ground-based technologies are needed to back up information from the satellites, adding that Northern Watch gave Canada a chance to develop its own ground-based technology for the Arctic.
EnCana benefits from hedges July 24, 2009
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Three-month TSX trading in EnCana
EnCana Corp.’s commodity hedges contributed $900 million US to its cash flow in the second quarter, the company said Thursday.
That helped the company hold the drop in cash flow to 25 per cent in the quarter, compared with a 38 per cent fall in operating profit and an 80 per cent crash in final profit.
Natural gas prices fell 68 per cent year-over-year, to $3.50 per million British thermal units from $10.93 in the second quarter of 2008. But EnCana’s realized price, after hedging, fell just 18 per cent to $6.99.
“In the past year, natural gas prices dropped close to 70 per cent, yet we have continued to meet or exceed our 2009 financial and operating objectives” because of the hedges, Randy Eresman, president and CEO, said in a news release.
After-tax realized and unrealized hedging gains will total about $3 billion by the time the natural gas year ends on Oct. 31, EnCana said.
Second-quarter natural gas and oil production was unchanged from the same quarter a year ago, at 4.6 billion cubic feet equivalent per day.
The company said its cost cutting had already saved more than $900 million.
“Some of those savings, achieved primarily through capital reductions, have been redeployed to other parts of our portfolio, largely to shale gas plays,” Eresman said.
Profit for the three months ended June 30 was $239 million (32 cents a diluted share), down from $1.22 billion ($1.63) a year earlier.
EnCana pipelines in northeastern British Columbia have been the targets of six unsolved bombings in less than a year. A letter to the Dawson Creek Daily News in mid-July warned EnCana to shut down its operations in the area or face more bombs.
The company isn’t leaving the area, spokesman Alan Boras has said.
Loblaw buying T&T Asian food chain July 24, 2009
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Grocery retailer Loblaw Companies Ltd. said Friday it is buying T&T Supermarket Inc., Canada’s largest Asian food retailer, for about $225 million.
Loblaw 3-month TSX chart
Loblaw said the deal is for $191 million in cash, with the rest in preferred shares issued by T&T. The value of the preferred shares will be tied to the future performance of the business.
Launched in 1993, T&T operates 17 stores in British Columbia, Alberta and Ontario, and four distribution centres ?three in Vancouver and one in Toronto.
“T&T’s talented management team and colleagues have developed what we believe are the best Asian stores in Canada, which will be used to help Loblaw extend its ethnic offering to better serve Canada’s largest growing customer segment,” Galen G. Weston, executive chairman of Loblaw, said in a release.
Sales at T&T hit roughly $514 million in the 12 months leading up to June 30.
“Some of our customers have a nickname for us ? the Asian Loblaw. Today we are proud it has become a reality,” said Cindy Lee, CEO of T&T.
The deal is expected to be completed by the end of this year.
Loblaw’s store chains already include Zehrs, Fortinos, Real Canadian Superstore, valu-mart, Atlantic Superstore, Maxi, Maxi & Cie, no frills, Provigo and Extra Foods. The company has about 1,000 corporate-owned or franchised stores across the country.
Shortly after announcing the T&T deal, Loblaw told investors its second-quarter earnings jumped by 38 per cent.
The Toronto-based company said it made $193 million, or 70 cents a share, up from $140 million, or 51 cents a share, a year earlier.
Sales in the quarter rose by 2.8 per cent to $7.2 billion on growth in its food and drugstore operations. Same-store sales ? which track sales at stores open at least a 12 months ? gained 2.5 per cent, topping the one-year rise of 0.7 per cent seen in the same quarter of 2008.
Markets move up sharply July 24, 2009
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The TSX composite over a month
North American markets gained more than two per cent Thursday on a variety of bullish indicators.
In Toronto, it was a report from the Bank of Canada saying that economic growth in the current quarter indicated the recession was over.
In the United States, a bigger-than-expected increase in sales of existing houses suggested that the real estate market was recovering.
The S&P/TSX composite index jumped 2.3 per cent or 243.33 points to 10,675.68.
The index rose from the opening, then held fairly steady around 10,650 before moving up toward the end of the session to close at the day’s high.
The TSX mining, energy and financial sub-index led the climb.
The future price of a barrel of oil rose $1.76 to $67.16 US in New York Mercantile Exchange trading.
The Canadian dollar was also strong, moving up 1.01 cents to 92.04 cents US.
The Dow Jones industrial average rose 2.1 per cent or 188.03 points to 9,069.29. It’s the first close over 9,000 since Jan. 6.
The Nasdaq index was up 2.45 per cent or 47.22 points to 1,973.60.
Bank of America beats expectations July 20, 2009
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Bank of America Corp. on Friday became the fourth U.S. lender to prove that the recession is easing, at least for the financial giants that were backed by billions of U.S. taxpayers’ dollars.
The bank, which received $45 billion in bailout funds, said profit for the three months ended June 30 was $2.42 billion (33 cents a diluted share), compared with $3.22 billion (72 cents) in the second quarter a year earlier.
The results beat expectations, as analysts surveyed by Thomson Reuters expected an average profit of 28 cents a share.
Three-month Bank of America tradingThe bank was in good company with its better-than-expected results, joining Goldman Sachs, Citibank and JPMorgan Chase.
Bank of America grew partly through two takeovers made as competitors got into trouble in the financial meltdown. It bought Merrill Lynch for $50 billion in stock in September 2008, and mortgage provider Countrywide Financial for $4.2 billion in stock earlier that year.
The takeovers helped boost the bank’s second-quarter revenue to $32.77 billion from $20.41 in the 2008 second quarter.
Consumer weakness concern
Bank of America stock slipped 28 cents to $12.89 in New York trading.
Despite the strong profit, big consumer banks “are the ones who have the most to lose in a prolonged consumer-oriented recession,” said Tony Plath, finance professor at the University of North Carolina at Charlotte.
The bank is the largest U.S. consumer bank, with about 55 million consumer and small business customers.
Bank CEO Ken Lewis warned that the weak economy, rising unemployment and deteriorating credit quality would affect the company into 2010.
With files from The Associated Press (more…)
