Author: Henry R. Lares

Henry Lares is still early into his career as tech reporter but has already had his work published in many major publications including Tech Crunch and the Huffington Post.  In regards to academics, Henry earned an engineering degree from Apex Technical School. Henry has a passion for emerging technology and covers upcoming products and breakthroughs in science and tech.

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Markets

Alberta contributes $2 billion to diversify energy

Alberta will invest an additional $1 billion in its energy diversification program, the provincial government announced Monday as it looks for new opportunities for its oil and gas industry. The amount is in addition to the $1 billion announced at the end of February.

Part of the money will be spent on increasing the production of ethane, one of the main chemical compounds found in natural gas and used in plastic production. The province also wants more oil to be refined in Alberta.

The announcement follows the tabling of Bill 1 on energy diversification on Friday.

State aid will be divided into three tranches:

  • $500 million in royalty credits to help petrochemical companies diversify their operations.
  • $500 million in loan guarantees and subsidies to help companies that want to produce higher value-added substances, such as ethane, gain access to more raw materials.
  • $1 billion in loan guarantees and subsidies to help businesses modernize their equipment.

The government hopes that these loans and grants will result in $10 billion in private investment. The province believes that these various projects will lead to the creation of 8,000 jobs during the construction of the new infrastructure.

Alberta Energy Minister Margaret McCuaig-Boyd says she wants to reduce the dependence of Alberta’s oil and gas industry on pipelines. “We are trying to encourage companies to extract products like ethane here in Alberta rather than exporting gas and crude oil directly,” she says.

Bob Masterson, president of the Chemistry Industry Association of Canada, is saddened to see a large share of petrochemical investments going to the United States rather than Canada. “For five years, we should have seen 25 to 30 international projects announced in Canada, we had only 3,” he laments.

A report from the International Energy Agency released last week predicts that more and more of the world’s oil and gas will be refined to produce plastics , lubricants or cosmetics rather than fuels.

Categories
Economy

Molson Brewery workers avoid strike

Workers at the Molson plant in Montreal, affiliated with the Teamsters Union, accepted 55% of their employer’s bids on Sunday at a union meeting, ruling out the risk of a strike that hovered over the union. business.

No less than 438 of the approximately 550 employees participated in the vote.

Molson employees granted a strike warrant to their union in a proportion of 87% on February 25, after refusing the first two employer offers.

The main issues in dispute were the pension plan, group insurance, outsourcing and wages.

Under the terms of the new collective agreement, part of the subcontracting has been eliminated and wages will be increased by 5% for the duration of the four-year contract. In addition, a bonus of $ 1,000 at the signature has been added.

According to the union, which says wage compromises have had to be made, these increases are in line with the market and other brewers’ collective agreements in North America.

With respect to the pension plan, employees participate in a defined contribution plan in which the employer contributes 16.5%, which would be the highest rate of Molson plants.

Concerns still present

Although the ratification of the agreement is good news, the union pointed out that 45% of the workers who voted opposed it.

“I think that translates a perfectly legitimate uncertainty about the new plant that will be launched in three to five years. Molson must commit itself as quickly as possible to announce its colors, to know how this factory will be set up and what will be the assembly lines that will be put in place, “commented the Director of Communications and Business. Teamsters Canada, Stéphane Lacroix.

Recall that Molson intends to move its plant from Notre-Dame Street in Montreal to settle on the South Shore, near the Saint-Hubert airport.

In a statement, the union also said it feared that Molson would end the production of brown bottles, which “helps maintain hundreds of quality jobs,” to produce only cans.

According to the union, the “shifting cane” the company has taken in recent years has contributed to the loss of dozens of jobs.

He points out that 55% of Quebec’s beer production is sold in cans.

Categories
Markets

Stock market listings bloom before the arrival of the “unicorns”

Dropbox, Spotify, Uber, Lyft … As IPOs pick up dramatically in the United States, some tech giants dubbed “unicorns” are preparing to hit markets.

In January, 18 Initial Public Offering (IPO) were registered in the country for $7.9 billion of capital raised, a record-breaking start to the year since Dealogic compiled these statistics in 1995.

The year 2017 had already shown the way of the recovery after a slump of three years, 189 companies having entered the United States for $49.4 billion raised capital.

“Wall Street is in very good health, the political context is stable now, the results of companies in the world are good and there is currently no major geopolitical threat that could delay the introduction process”, said Alex Ibrahim, head of the international capital markets division of New York Stock Exchange (NYSE).

Despite the recorded drops on the courses of Snap and Blue Apron since their very remarkable introduction last year (respectively -20% and -70%), the beginnings of the great majority of the newcomers were solid.

The firm Renaissance Capital, specializing in IPOs, noted a gain of 26% on average between the arrival on the market of companies introduced last year and end of 2017.

This favorable environment encourages certain “unicorns”, unlisted companies valued beyond $ 1 billion, of which a hundred are counted in the United States alone, to prepare the ground for their next arrival.

Dropbox, Spotify …

This is the case of the specialist online file storage Dropbox. The company, valued around $10 billion after its last round in 2014, filed in January a confidential application for IPO in the United States, according to the US press.

This request could lead to an IPO by the summer.

Allowed since 2012 by a US law and expanded last summer to large companies by the US Securities Regulator (SEC), this procedure aims to promote IPOs without having to reveal publicly confidential information, at least not before an advanced stage .

“Time to determine if institutional investors have an appetite for the company and if this appetite offers the level of valuation it considers necessary” for its development, said Douglas Ellenoff, a lawyer in business law.

According to Ibrahim, this procedure is used today by 75% of companies that are launching a listing process.

The Swedish music streaming giant Spotify would also be on the list to list the New York Stock Exchange via a direct listing procedure, subject to a green light from the SEC expected soon.

Direct listing, an atypical procedure the NYSE uses to attract new businesses, saves costs associated with a traditional IPO, such as some commissions paid to banks to help companies attract investors. It also prevents companies from raising new capital.

According to the Wall Street Journal , about $ 30 million will be paid by Spotify to the investment banks that follow the operation, which is three times less than when Snap was introduced.

Abundant capital

“Investment banks are usually paid a lot of money to allow a proper listing process. My fear is that the pricing mechanism is not as transparent and mature as it would be in a traditional IPO, “says Ellenoff. In his opinion, this would open the way to a risk of high price volatility in the first exchanges following the introduction.

Like Spotify, widely supported by private investors with deep pockets for several years, other unicorns could follow this model, say many observers. Uber, Lyft or Airbnb are regularly mentioned, the latter, however, said Thursday that it did not provide IPO this year.

“I do not think there will be a tidal wave. But they could follow this path if Spotify’s beginnings are a success, “says Ellenoff.

Kathleen Smith, co-founder of Renaissance Capital, is, however, more skeptical: “There is a reason that direct listing has not been used in the past. The many commissions and meetings that Spotify will need to fund to reach investors could ultimately cost it more in the long run. ”

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