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The Morning Ledger: SEC Charges Impede Volkswagen CFO's Efforts to Boost Investor Trust
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Volkswagen CFO Frank Witter in 2018. PHOTO: OMER MESSINGER/EPA-EFE/REX/SHUTT/EPA/SHUTTERSTOCK
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Good morning. The U.S. Securities and Exchange Commission’s charges against Volkswagen AG dealt a blow to the efforts of its finance chief in his yearslong quest to engage with investors to rebuild trust in the company, reports CFO Journal.
A "tough week." Chief Financial Officer Frank Witter, in an email on Friday, said he is in regular contact with investors and that the company’s recent debt sales show Volkswagen has progressed in regaining "the trust of capital markets." He added that the company’s recent bond sales have been oversubscribed.
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Another lawsuit. The SEC on Thursday charged the German auto maker, two of its units and former Chief Executive Martin Winterkorn with defrauding U.S. bond investors in connection with its diesel emissions cheating. Volkswagen re-entered the U.S. bond market in November after a 3½ year absence. The recent bond sales aren’t the subject of the SEC’s lawsuit.
Dealt a blow. The suit is a setback to Mr. Witter’s efforts to reintroduce Volkswagen to the capital markets, analysts and accountants said. “I think it creates additional headwinds that he has to deal with,” said Peter Bible, chief risk officer at accounting firm EisnerAmper LLP and a former chief accounting officer at General Motors Co.
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The National Association of Home Builders releases its U.S. housing sentiment index for March. Economists surveyed by The Wall Street Journal forecast the index clocked in at 63, compared with a reading of 62 a month earlier.
Lyft Inc. plans to raise up to $2.09 billion in its initial public offering, according to an amended prospectus filed Monday morning. The ride-hailing service will kick off the roadshow for the offering Monday, according to people familiar with the matter.
Del Taco Restaurants Inc., Overstock.com Inc. and Tilray Inc. are among the companies slated to report earnings today.
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Federal Reserve officials are discussing U.S. monetary policy on Tuesday and Wednesday. They are likely to be signaling little if any appetite to raise interest rates this year.
Brazil's central bank is expected to hold its policy rate at 6.5% on Wednesday.
On Friday, the National Association of Realtors releases February data on U.S. existing-home sales. Economists surveyed by The Wall Street Journal forecast home sales rose 3.2% in February to a 5.10 million annual rate.
Also on Friday, the U.S. Treasury Department publishes February federal budget gap figures. Economists surveyed by The Wall Street Journal forecast a federal budget deficit of $229 billion for February.
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An employee holds a Worldpay payment machine in a retail outlet in London. PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS
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Fidelity National Information Services Inc. said Monday it has agreed to acquire Worldpay Inc. for about $35 billion in cash and stock, creating a global payments giant.
Deutsche Bank AG and rival Commerzbank AG on Sunday confirmed they are formally discussing a merger, marking a new phase after years of speculation about the troubled fates of Germany’s two biggest banks.
The strong U.S. economy has created millions of jobs and pushed up wages for many Americans. It also helped many big-company CEOs secure another raise and total compensation worth $1 million a month.
Naspers Ltd., Africa’s biggest company best known for its bet on Chinese internet giant Tencent Holdings Ltd., is building a foothold in Silicon Valley. But unlike many other tech investors, Naspers isn’t solely focused on finding its next big hit here.
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PG&E Corp. has made offers to 10 new independent board candidates and is expected to unveil the slate as soon as this week, alongside a new chief executive.
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U.K. Contractor Interserve Goes Into Administration, Sells Assets
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U.K. outsourcing company Interserve PLC said Friday it went into administration—a process similar to chapter 11 protection in the U.S.—after it failed to win shareholder approval for a debt-for-equity swap.
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The Reading, England-based company, a large contractor for the U.K. government, appointed Ernst & Young LLP as administrators and immediately afterward sold its assets to a newly incorporated company owned by its lenders, among them banks and hedge funds. The company is in the process of being renamed as Interserve Group Ltd.
Interserve said previous shareholders “are not expected to receive any value for their shareholding.” The sale of assets means Interserve could continue “to operate as normal for customers and suppliers,” the company said.
About £485 million ($644 million) in existing debt will be swapped for ordinary shares in the new company, Interserve said in a statement. The buyer of the assets, Interserve’s lenders, will provide £110 million in additional liquidity, the company said.
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Federal prosecutors and U.S. Department of Transportation officials are scrutinizing the development of Boeing Co.’s 737 MAX jetliners, according to people familiar with the matter, unusual inquiries that come amid probes of regulators’ safety approvals of the new plane.
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Workers on the assembly line at General Motors Co.’s plant in Flint, Mich., in February. PHOTO: BILL PUGLIANO/GETTY IMAGES
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U.S. manufacturing output declined for the second consecutive month in February, a fresh sign that a long-predicted slowdown is hitting the U.S. economy.
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OPEC and a group of 10 oil-producing nations led by Russia are deepening their crude production cuts, but remain split on whether the curbs should remain in place through the end of the year, officials said Sunday.
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Used cans are piling up at scrapyards because U.S. aluminum companies are turning fewer of them into new metal, another indication of the economic challenges facing recycling.
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Greece and Spain are sharply raising the minimum wage, despite the legacy of high unemployment left by Europe’s long debt crisis.
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Leoni AG, a Nuremberg, Germany-based harnessing and cable manufacturer, said its chief financial officer, Karl Gadesmann, resigned with immediate effect.
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Chief Executive Aldo Kamper will serve as interim finance chief while the company searches for a permanent replacement. Leoni on Monday scrapped its guidance for 2019 amid poor performance in its core business units.
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Lumber Liquidators Holdings Inc., a Toano, Va.-based hardwood flooring retailer, has appointed Chief Accounting Officer Timothy J. Mulvaney as interim finance chief, effective April 5. The company's current chief financial officer, Martin D. Agard, will resign on the same date to pursue a new opportunity outside the company. He has served as CFO since September 2016.
Mr. Mulvaney will receive an increase in annual base salary to $350,000, a proposed equity award of $200,000 and a retention bonus of $100,000 if named as the company's permanent Chief Financial Officer, Lumber Liquidators said in a filing.
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