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Seven days: 15 September 2017

Our take on the most important business stories of the past week
September 14, 2017

China cleans up

In arguably the biggest step towards the demise of petrol and diesel-powered cars, the Chinese government plans to set a deadline for the end to the sale of fossil-fuelled vehicles. Vice minister of industry and information technology Xin Guobin said the government is working with other regulators on a timetable to end production and sales, according to reports by state news agency Xinhua. If the plans come to fruition, it will be a major boost to the electric car industry. Since 2015, 336,000 of these vehicles have been sold in the country, representing 40 per cent of global sales.

 

BP spin-off

Midstream Partners floats

BP (BP.) confirmed plans to spin off some of its midstream assets, after filing with the US Securities and Exchange Commission (SEC). The oil and gas major will float BP Midstream Partners, which will be organised as a master limited partnership – designed to distribute excess cash flows to investors in a tax-efficient way. A BP subsidiary will become the general partner that controls almost all Midstream Partners’ operations. The spin-off gives BP another way to raise capital by divesting part of its portfolio, while retaining operational control and partial ownership of those assets. BP said in the filing that it expects to generate “stable, fee-based cash flows”, with “limited direct exposure to commodity price fluctuation”.

 

Compensation fund set up

£37m set aside

IC buy tip Spire Healthcare (SPI), along with other defendants, has agreed to settle all the current and known claims against it relating to former consultant Ian Paterson. The private healthcare group has set up a £37m fund to compensate around 750 victims of botched operations, contributing £27.2m itself. Mr Paterson was sentenced to 20 years in prison in August, after being found guilty of wounding with intent patients in Spire Healthcare hospitals in the West Midlands. Spire’s interim results were expected on 14 September at the time of going to press.

 

Popular Primark

But shares slide

A standout performance from retail arm Primark was not enough to prevent a minor slippage in the share price of Associated British Foods (ABF) following an update for the 12 months to September 2017. The fast fashion specialist has outperformed other high-street clothes retailers, with ABF reporting sales at constant currency running 13 per cent ahead of last year. But margins have come under some pressure from exchange rate movements. Other elements of ABF’s business are seeing mixed conditions, with grocery and agriculture profits coming in lower than last year.

 

Alphabet appeals

Disputes EU fine

Alphabet’s (GOOGL) search giant Google is appealing the record €2.4bn (£2.2bn) fine slapped on it by European anti-trust regulators in June. It was issued with the record fine for abusing its market dominance to favour its own shopping services, leaving consumers without a real choice. The search engine filed its appeal with the General Court in Luxembourg against the decision, but did not seek to block the regulator’s request to change its search engine to treat shopping comparison rivals equally with its own service.

 

In it for long-haul

Routes extended  

EasyJet (EZJ) is entering the long-haul market, sort of. The budget airline is partnering with Norwegian and WestJet to allow customers to use its website to book connecting flights with third-parties. Customers will be able to book flights to North and South America, as well as Singapore, from Gatwick, although they will need to transfer luggage between flights. The airline is in talks with other carriers and airports to expand the service, a spokesperson for easyJet said.

 

Bitcoin bashing

Dimon latest critic

JP Morgan boss Jamie Dimon has become the latest industry figure to round on Bitcoin. Mr Dimon labelled the cryptocurrency a “fraud” that could “blow up”, due to its lack of regulation. These remarks, coupled with mooted plans by the Chinese authorities to ban projects that looked to raise money through cryptocurrencies, preceded an 8 per cent fall in Bitcoin’s value. The decline to $3,953 represented a three-week low for the cryptocurrency but followed a surge in its value since the start of the year.