SoftBank succeeds in tender offer for Uber shares www.reuters.com

(Reuters) - A consortium led by SoftBank Group Corp will buy a large number of shares of Uber Technologies Inc [UBER.UL] in a deal that values the ride-services firm at $48 billion, Uber said on Thursday, in a victory for new Chief Executive Dara Khosrowshahi.

The price is a roughly 30 percent discount to Uber’s most recent valuation of $68 billion. The deal will trigger a number of changes in the way the board oversees the company, which is dealing with federal criminal probes, a high-stakes lawsuit and an overhaul of its workplace culture.

SoftBank and the rest of the consortium, which includes Dragoneer Investment Group, will own approximately 17.5 percent of Uber, a person familiar with the matter said. That stake includes a share purchase, through a tender offer, from earlier investors and employees at the $48 billion valuation, as well as a $1.25 billion investment of fresh funding at the $68 billion level.

Uber said the deal will close early next year. On Thursday it said that existing investors had agreed to sell enough shares for SoftBank to go through with the transaction.

SoftBank itself will keep a 15 percent stake, while the rest of the consortium will own approximately 3 percent, according to a second person familiar with the matter.

Khosrowshahi, who took the top job in August after Travis Kalanick was forced to step down in June, helped negotiate the deal. Uber is losing more than $1 billion each quarter, and a new cash infusion is critical. The company is also planning an initial public offering in 2019.

Uber will use the investment “to support our technology investments, fuel our growth, and strengthen our corporate governance,” a spokesperson, who declined to be named, said.

When the deal is completed, the company will make governance changes, expanding Uber’s board from 11 to 17 members including four independent directors, limiting some early shareholders’ voting power and cutting the control wielded by Kalanick, who remains on the board and is still one of the largest stakeholders.

‘SMART THING’

“The stockholders did the smart thing. The price is less important than locking in the governance changes and securing the support of the world’s most powerful technology investor,” said Erik Gordon an entrepreneurship expert at the University of Michigan’s Ross School of Business.

Rajeev Misra, chief executive of SoftBank's Vision Fund, a $98 billion tech investment vehicle, will join the Uber board, The Wall Street Journal reported. (on.wsj.com/2ChJNyS) SoftBank will get two seats on the expanded board, a source told Reuters.

Misra said in a statement that SoftBank has “tremendous confidence in Uber’s leadership and employees.” Uber board members agreed in early November to governance changes to pave the way for the SoftBank deal.

Some initial investors in the consortium, including General Atlantic, dropped out over disagreement about the price offered to shareholders, Reuters previously reported.

SoftBank founder Masayoshi Son has taken a keen interest in ride-hailing companies around the world, and already has sizeable stakes in China’s Didi, Brazil-based 99, India’s Ola and Singapore Grab, all of which have competed with Uber. Didi last week raised $4 billion, including some investment from SoftBank.

The Uber investment comes after a year of troubles for the company, including a lawsuit by Alphabet Inc’s self-driving car unit Waymo that alleges trade-secrets theft and federal investigations that span possible bribery of foreign officials in Asian countries and the use of software to evade regulators.

Over the past year, a former employee’s charges of endemic sexual harassment led to an internal review, London said it is stripping Uber of its license and Uber revealed it had covered up a major hack.

Venture capital firms Benchmark, which owns 13 percent of Uber, had indicated that it would sell a portion of its shares, SoftBank said last month. Menlo Ventures, another large shareholder, would tender shares, Managing Director Shawn Carolan said at the time. Carolan on Thursday praised the deal without describing Menlo’s participation. Benchmark did not respond to a request for comment.

Japan sumo champion Harumafuji charged with assault www.bbc.com

Former sumo grand champion Harumafuji has been charged with assaulting a junior wrestler in a scandal that has rocked Japan's ceremonial sport.

The 33-year-old wrestler from Mongolia has already apologised and stepped down over the incident.
He is facing a summary indictment, which means he is expected to be fined rather than tried in court.
Japan's sumo world has been hit by scandals involving violence, mafia links and match fixing in recent years.
Harumafuji's assault on fellow Mongolian Takanoiwa happened while they were out drinking with other wrestlers in a bar in the western city of Tottori in October.
The grand champion is reported to have been angered that his countryman was checking his phone while being given advice. The latter was admitted to hospital with concussion and a fractured skull.
Harumafuji admitted punching him hitting him with a karaoke remote control but denied using a beer bottle in the attack.
"I'm truly sorry for hurting Takanoiwa mentally and physically," Harumafuji told police, according to Jiji Press.

UB extends restriction for local migration ban www.news.mn

Ulaanbaatar is one of the top-ten most polluted cities in the world. The scale of the migration is astounding. In the last decade, around 20% of the country’s population of three million has moved to Ulaanbaatar over the last decade, which has doubled the city’s population and further increased pollution. The influx has also brought other problems. There has been an increase in crime, severe gridlock, problems with urban planning, and pressure on the housing, health and social care systems.

Putin says Russia should ditch petrol in favor of natural gas fuel www.rt.com

Russia should follow the lead of Gazprom and have more cars running on natural gas instead of traditional gasoline, according to President Vladimir Putin. It is cheaper and more eco-friendly, he said.

“Gas fuel is, of course, more environmentally friendly. And we have great competitive advantages in this because we have enough of this fuel. More oil and petroleum products can be sold on the foreign market, as it is more profitable than gas sales,” Putin said on Thursday, speaking at a meeting dedicated to the development of Russia's regions.

Noble Group raises stake in Mongolian railways firm in exchange for debt repayment www.businesstimes.com.sg

NOBLE Group has bought an additional 10 per cent stake in Northern Mongolian Railways Limited (NMRL), a subsidiary of Australia-listed Aspire Mining Limited for US$1.4 million.

Foreign exchange reserves reach USD 2.9 billion www.montsame.mn

Ulaanbaatar /MONTSAME/ This year, the Central Bank’s foreign exchange reserves have surged to USD 2.9 billion. The reserves are crucial factor to sustain value of domestic currency and stability of financial and macro economic sector.

December 28, 2017 trading report www.mse.mn

On December 28, 2017, 732,831 shares of 34 firms listed as Tier I, II, and III were traded. 20 companies’ shares increased in price while those of 11 companies decreased and 3 companies unchanged. Mik Holding /MIK +14.96%/ and Khunnu Management /HBZ +14.96%/ were the top performers whereas Juulchin Gobi JSC /JGV/ was the worst performer, decreasing 15.00 percent.

Renewables generated triple the power of coal in 2017, UK figures show www.theguardian.com

British wind farms generated more electricity than coal plants on more than 75% of days this year, an analysis of energy figures has shown.

Mongolian livestock count reaches 66.2 million www.news.mn

The results of the livestock census that was carried out between from December 7th to 17th have been published. According to the results, the total number of livestock reached 66.2 million heads of livestock at the end of 2017, which is an increase of approximately 7.8% from 2016.

Mongolia debt dive caps Central Asia comeback www.atimes.com

Mongolia was lauded this month for more “durable than anticipated” 3% GDP growth in 2017 in the International Monetary Fund’s first review of its US$400 million rescue program, following an $800 million five-year external bond return in October, where the 5.5% yield was half the previous peak.

Since the May rescue by the IMF, commodity exports have picked up, particularly to China, with mine closures in that country and its ban on imports of North Korean coal, and boosted budget revenue in local-currency terms with the weaker exchange rate against the US dollar. “Investor confidence recovery” with the successful international issuance will boost the balance of payments and reserves, and fully cover 2018 maturities and refinance more expensive domestic debt, according to the evaluation.

However, both the IMF and frontier-market fund managers continue to be wary as political and banking-sector complications in Mongolia dilute the upbeat narrative. The new government elected in July lost a confidence vote, ousting the prime minister, who was then replaced by his deputy, while the IMF’s health check was delayed.

Bank credit growth is still at a runaway 20% annual pace, with large foreign-exchange exposure and a 7.5% bad-loan rate pending the results of an overall asset quality audit by the central bank. Despite headline economic strides, on structural reform the IMF report assigned a “mixed” score, as regional peers Azerbaijan and Kazakhstan not under the lender’s thumb likewise have rebounded from crisis but remain ambivalent near-term bond bets.

The jumps in prices for Mongolia’s coal, copper and gold from Chinese demand stoked 5% first-half growth in gross domestic product, but construction has been negative for four years, with excess real-estate inventory. The windfall produced a budget surplus through September, but scheduled social and civil-servant handouts will result in a deficit, as the 2018 blueprint adopted by parliament could send the overall gap close to 10% of GDP, according to President Khaltmaa Battulga, who vetoed it as against the IMF arrangement.

Growth is slated at 4.2% amid introduction of a progressive income tax, but the president lambasted “inefficient investment projects” pushed by the ruling Mongolian People’s Party, which holds 65 of the 75 seats. Battulga belongs to the opposition Democratic Party.

A fiscal-stability law envisages end-decade balance, but the IMF warns that the government wage bill compromises the target and threatens medium-term sustainability, with public debt already at 85% of output.

Inflation was over 8% in October, and monetary policy has reversed course toward easing with a 100-basis-point drop in the benchmark interest rate to 11%. The IMF urged the central bank to go slowly on cuts as the recent reserve buildup to $2.5 billion on a stable tugrik may not last. The Bank of Mongolia has regularly dipped into the stash for intervention, even though its currency powers are murky and shared with the Finance Ministry.

An updated organic law is to clarify the central bank’s independence and regulatory authority more broadly, but in the meantime its hands are full with the asset-quality exercise conducted with accounting firm PricewaterhouseCoopers. It will screen bank business plans and apply stress tests, with capital holes to be remedied by the end of next year when deposit insurance is due to start.

Among outstanding challenges, the financial sector agenda is “most important” and funding decisions should not tilt to favored shareholders or jeopardize the public-sector balance sheet, the IMF evaluation concluded.

Azerbaijan came in for separate caution under a December Article IV survey by the IMF, with stagflation ending as the hydrocarbon and service industries revive, but with banking-sector restructuring “still incomplete.”

Inflation will be near 15% in 2017 after exchange-rate depreciation, and increased fiscal spending should be reined in by clear rules before 2019, it recommended.

Privatization has drawn foreign-investor interest in real estate, and external debt remains minimal at under 20% of GDP.

Fitch Ratings expects positive growth in 2018 muddied by “continued bank asset quality pressure” despite the bad-loan cleanup at the International Bank of Azerbaijan. The rater was also skeptical about the Halyk-Kazkommertsbank consolidation as the biggest government-owned lender in Kazakhstan following the initial stage of operations merger in December.

Foreign-exchange positions may deteriorate as local-depositor tenge sentiment continues to swing as measured by dollarization levels, and international bonds were shaken by a New York court ruling freezing central-bank reserves in an investor dispute while the overall system is in knots.