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LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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United Steelworkers announced it has reached a tentative agreement on a new four-year contract with Royal Dutch Shell's Shell Oil as a pattern agreement for the rest of the industry. The agreement accomplishes the major goals as directed by the USW's oil conference in October of last year, it said, and has been approved by union's lead negotiators and National Oil Bargaining Policy Committee. The tentative agreement calls for yearly wages increases as well as maintaining the current health care plan cost-sharing ratio.
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US healthcare company Johnson & Johnson has sued UK rival GlaxoSmithKline, alleging Glaxo is attempting to unlawfully win market share with false advertising at the start of the spring allergy season in the US, Reuters reports. Two units of J&J, McNeil-PPC Inc and McNeil Consumer Healthcare, filed the suit in Manhattan, accusing Glaxo of making unsupported claims about its allergy nasal spray Flonase at the expense of McNeil's Benadryl and Zyrtec drugs. A spokeswoman for Glaxo told Reuters the company is reviewing the lawsuit.
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JD Wetherspoon reported strong sales growth in the first half of its financial year but a lower operating margin owing to higher rates of pay for pub staff and higher utility costs. The pub chain said revenue was up 9.0% at GBP744.4 million in the 26 weeks to 25 January from GBP683.2 million a year earlier. Like-for-like sales were up 4.5%. However, operating margin narrowed to 7.4% from 8.2%. Pretax profit rose 4.1% to GBP37.5 million in the half year from GBP36.0 million in the same period the year before. Wetherspoon left its interim dividend flat at 4.0 pence per share.
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Afren said it has reached an agreement in principle to address its short- and longer-term funding needs and recapitalise its capital structure, but also warned it will be making significant impairments in 2014 followed by significant budget cuts in 2015. The oil company said it has entered into an agreement with some holders of its 2016, 2019 and 2020 notes, and with the majority of its lenders under the company's existing USD300 million Ebok credit facility, to secure interim funding and recapitalise the business. The net funding of the agreement will total USD300 million if approved by shareholders, and Afren is hoping to secure the deal by the end of June.
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Vedanta Resources joined Cairn Energy in announcing Cairn India Ltd is facing a substantial tax order from the Indian Income Tax Department in relation to the fiscal year 2006 to 2007. On Tuesday, Cairn Energy, which holds a 10% stake in Cairn India, said it is disputing a draft assessment order from the Indian Income Tax Department calling for it to pay USD1.6 billion plus interest and any penalties for the fiscal year 2006 to 2007 in an effort to "protect its legal position and shareholder interests". Vedanta, which holds a far more significant 59.8% stake in Cairn India, said the subsidiary released a statement on Thursday which confirmed the order from the Income Tax Department for an alleged failure to deduct withholding tax on alleged capital gains arising during 2006 to 2007 "in the hands of Cairn UK Holdings Limited, our erstwhile parent company, a subsidiary of Cairn Energy PLC," it said. Vedanta did not state what it will do regarding the order, or how it will directly affect the company.
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Oil services company John Wood Group said it has been awarded a contract by Norwegian oil company Statoil to handle engineering modifications and upgrades to the Kollsnes process plant in Norway. Wood Group said the estimated value of the contract, including options and procurement, is NOK500 million, or GBP41.3 million. Wood Group's Mustang Norway unit started the work earlier this month, and the work is scheduled to finish in 2017.
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Diploma said it has struck a deal to buy the Kubo Group for up to CHF39.9 million in cash before acquisition costs. Kubo is a seals, O-Rings, gaskets and moulded rubber parts company with operations in Switzerland and Austria. Diploma is acquiring the business via Rutin AG, the non-trading holding company of Kubo based in Switzerland. Diploma said it will pay the consideration due on the deal in cash from its existing cash resources and revolving debt facility. It expects the deal to be immediately earnings accretive and will integrate the business into its Seals division.
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MARKETS
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London stocks are trading mixed with little in the way of economic data to drive sentiment, while JD Wetherspoon is amongst the worst-performing stocks in the FTSE 250 losers after reporting a fall in operating margins.
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FTSE 100: down 0.2% at 6,751.68
FTSE 250: up 0.2% at 17,091.33
AIM ALL-SHARE: up 0.2% at 717.95
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The dollar has resumed its rise against major currencies, with the pound hitting its lowest value against the greenback since June 2013. Sterling fell to a low of USD1.4808, its lowest since June 2010, while the euro hit a low of USD1.0564.
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GBP-USD: down at USD1.4836
EUR-USD: down at USD1.0582

GOLD: up at USD1156.08 per ounce
OIL (Brent): down at USD56.59 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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UK construction output declined unexpectedly in January, marking its first annual fall in nearly two years, damped by weaker housing, data from the Office for National Statistics revealed. Construction output dropped 3.1% year-on-year, in contrast to a 5.3% growth in December. Economists had forecast 2.1% gain. This was the first year-on-year decrease since May 2013 when it fell by 2.8%, the ONS said. The contribution of construction to fourth quarter GDP was also revised to show a decline of 2.2% versus the 2.1% fall reported earlier, although this doesn't change the overall GDP growth figure.
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Germany's wholesale prices declined at a slower pace in February, data from Destatis showed. Wholesale prices decreased 2.1% year-on-year in February, slower than the 2.6% decline seen in January. Nonetheless, the wholesale price index has been declining since July 2013. The annual decline was largely driven by a 15.7% fall in the wholesale prices of solid fuels and related products.
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European Commisison President Jean-Claude Juncker said he is "not satisfied" at efforts to resolve the dispute over Greece's bailout, but expressed hope in finding a solution, ahead of talks with Greek Prime Minister Alexis Tsipras. Greece and its creditors have made little progress in agreeing reforms that Athens must undertake in return for an extension of its rescue package until the end of June, after Tsipras came to power on a pledge to end bailout-related austerity. Earlier this week, technical talks resumed between Greece and the bailout institutions - the commission, the European Central Bank and the International Monetary Fund.
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European Central Bank's Benoit Coeure said in a speech that the quantitative easing programme has gotten off to a smooth start and that the bank did not face any problems in finding bonds. The banks have purchased EUR9.8 billion of debt in the first three days of the easing programme with an average maturity of nine years, he said. "QE is working, there is no doubt it will work," he said in his speech in Paris.
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The Indian parliament opened the country's insurance sector to greater foreign investment, in the first new business law by the government that came to power in May promising economic reform.
Foreign investors will be able to increase their participation in Indian insurance companies to 49%, up from the previous cap of 26%, under the bill passed by the upper house, Finance Ministry DS Malik said.
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The shooting of two police officers early Thursday stirred anew worries in the racially troubled town of Ferguson, Missouri, and drew condemnation from around the country. Tactical police launched a massive manhunt for the shooter and swarmed a house not far from where the shooting occurred, according to the St Louis Post Dispatch newspaper. In the assault, the two officers narrowly escaped serious injury and have been released from hospital. They had been standing guard during a midnight protest in front of the Ferguson police department. Just hours before, Ferguson's controversial police chief, Thomas Jackson, had resigned.
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