Toyota, Panasonic consider joint development of EV batteries

Toyota Motor President Akio Toyoda left, and Panasonic President Kazuhiro Tsuga attend a joint news conference in Tokyo announcing a partnership to jointly developing batteries for electric vehicles. (Reuters)
Updated 13 December 2017
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Toyota, Panasonic consider joint development of EV batteries

TOKYO: Toyota Motor and Panasonic said on Wednesday they are considering jointly developing batteries for electric vehicles (EVs), a partnership that could help Panasonic extend its market lead in automotive lithium-ion batteries.
The announcement builds on an existing agreement under which Panasonic manufactures batteries for Toyota’s gasoline-electric and plug-in hybrid vehicles.
Toyota said last year it was planning to add fully electric vehicles to its product line-up in a shift away from its previous green-car strategy of focusing on plug-in hybrid and fuel-cell vehicles. It has said it plans to start marketing pure EVs in the early 2020s.
Panasonic is the main EV battery supplier for luxury US car maker Tesla. The electronics firm commands 29 percent of the market for batteries used in plug-in hybrids and EVs, showed Nomura Research data for the first half of 2017.
Nearest rival LG Chem holds 13 percent of the market, followed by China’s BYD on 10 percent and Contemporary Amperex Technology (CATL) at 9 percent.
“Working with automakers from the initial stages could allow battery makers to win orders that unlock economies of scale further down the road,” Credit Suisse analyst Mika Nishimura said in a research note to clients ahead of the Toyota-Panasonic announcement. “Partnerships could also allow battery makers to share R&D and capex costs with automakers to some extent.”
Panasonic sees batteries as central to its plan to nearly double automotive business revenue to ¥2.5 trillion ($826.14 billion) by the year through March 2022. To that end, it has been expanding battery production capacity globally.
It started mass production of battery cells at Tesla’s “Gigafactory” in the US state of Nevada earlier this year and plans to follow suit at a new plant in Dalian, China. It is also adding new production lines in Japan.


SABIC prepares to meet investors to offer bond

Updated 25 September 2018
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SABIC prepares to meet investors to offer bond

  • The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25
  • SABIC has also confirmed the appointment of BNP Paribas and Citigroup as global coordinators on the sale

LONDON: Saudi Basic Industries Corp. (SABIC) is preparing to offer its dollar-denominated unsecured bond to the global market with investor meetings due to start this week.
The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25, according to a filing on the Saudi stock exchange on Tuesday.
The Saudi company is likely to be keen to tap into the heightened international interest in the Kingdom’s financial markets following the lifting of some restrictions on foreign investors’ activities at the start of the year.
SABIC has also confirmed the appointment of BNP Paribas and Citigroup as global coordinators on the sale, alongside HSBC Bank, Mitsubishi UFG Securities EMEA and Standard Chartered Bank acting as joint lead managers, in its Tadawul note.
The proposed issuance has been well-received so far by analysts with ratings agency Moody’s Investor Service assigning an ‘A1’ rating to the proposed senior unsecured notes to be issued by the financial vehicle, referred to as SABIC Capital II, and guaranteed by SABIC itself.
“SABIC’s A1 rating reflects its strong business position in the chemical sector and its ability to weather industry volatility, particularly given its healthy operational cash flows and conservative liquidity profile,” said Rehan Akbar, a senior analyst at Moody’s, in a note on Monday.

 

The bond is anticipated to be used in part to refinance an existing SR11.3 billion ($3 billion) one-year bridge loan raised in January this year to fund the company’s 24.99 percent stake in the Swiss chemical company Clariant, according to the Moody’s note. All regulatory requirements were completed on this acquisition earlier this month.
Cash proceeds from the bond may also be used to repay a $1 billion bond due on Oct. 3, according to Moody’s.
On Tuesday SABIC confirmed that the bond will be used mainly to refinance “outstanding financial obligations” of the company and its subsidiaries.
Analysts at rating agency S&P Global were also upbeat about SABIC’s outlook, with research published on Monday stating that the company has “strong profitability” via its KSA operations and a “strong” liquidity position.
“The debt issuance is helpful for the credit profile in the sense that it extends the company’s debt maturity profile and strengthens its liquidity position,” said Tommy Trask, corporate and infrastructure credit analyst at S&P Global.
The agency currently assigns the petrochemical firm an ‘A Minus’ rating, with a “stable outlook,” which it said reflects its “view on the sovereign as well as its expectations that SABIC will maintain high profitability under current benign industry conditions.”
S&P Global’s report said margins in the global chemical industry will “largely stabilize in 2018 following several years of improvement, attributable to the increase in commodity chemical capacity.”
However, it also warned that a key risk to credit quality is
the trend for mergers and acquisitions within the sector and the “potential negative impact on credit metrics from funding them with debt.”

FACTOID

SABIC operates in more than 50 countries across the world.