2009 week 24
TNT in the media - week 24
UN to spend 36m dollars in food aid for Zambia's vulnerable
6 June 2009
The World Food Programme (WFP) intends to buy 38,345 metric tonnes of food amounting to US$ 36 million for vulnerable people in Zambia this year.
And the WFP and stakeholders will this Sunday participate at the 'End Hunger, Walk the World' awareness campaign to sensitise the public on the impact of hunger.
The aim is to raise awareness and funds for possible eradication of child hunger by 2015.WFP country director, Pablo Recalde, announced this at a media briefing ahead of the walk.
Mr Recalde said aid could not stop the hunger in sub-Saharan Africa, and Zambia in particular.
WFP targets 611,332 households to benefit from the 38,345 tonnes of food compared to 29,846 tonnes last year.
He said the current global economic downturn has caused the food crisis to be more critical, especially, in sub-Saharan region, with the economic cost of hunger estimated at US$1 trillion.
"The cost of child under-nutrition to national and economic development is estimated at US$20-30 billion per annum. When multiplied over the lifetime of today's under-nourished children, this amounts to US$500 billion to US$1 trillion in lost productivity and income," he said.
Mr Recalde said that last year more than 250,000 participants in 70 countries joined the awareness walk and raised over US $1 million to feed hungry children in schools.
"It is our responsibility to fight against hunger for the future of our children...and Government has agreed to walk with us," he said.
The event will be led by WFP and corporate partners such as TNT, a world leading express logistical firm and the Food Programme Management Unit (FPMU) in Lusaka.
TNT managing director, Tigger Foden, said the organization had invested about 41 million Euros globally.
TNT is an Australian-based courier company providing logistical services to 220 countries and has been operating in Zambia for six months.
Earlier, FPMU acting programme manager, Dorothy Sikazwe, said Zambia was trying to achieve the Millennium Development Goals (MDGs) of eradicating hunger and achieving universal primary education.
Mrs Sikazwe said the unit was happy to be part of the event, adding that in 2007, with the leadership of WFP, stakeholders raised enough money to build a school in Chongwe.
"For Zambia, we are doing a lot to achieve the MDGs especially that children are the future because if they grow up without education, they will not have a productive future," she said.
Source: BBC Monitoring Africa, www.bbc.co.uk
TNT Investors Grow Restless, Want Co To Weigh Strategy
8 June 2009
Investors appear to be growing restless with the performance of Dutch postal and logistics giant TNT NV (TNT.AE), saying management didn't disclose interest in the company from potential buyers and has failed to properly evaluate strategic options.
Their frustration was sparked by TNT's decision to pay shareholders a final dividend in stock rather than cash and cut the full-year payment below previous guidance. At the same time, it kept spending on acquisitions in Latin America, which these shareholders say were overpriced.
TNT, which generated more than EUR11 billion in revenue in 2008, currently is in discussions with the British government over a possible minority stake in U.K. postal operator Royal Mail, a move criticized by some investors who fear TNT might overpay and will have limited opportunities to restructure the business.
TNT refuted the shareholder gripes, but declined to make Chief Executive Peter Bakker available for an interview.
"There are shareholders, who own around 20% to 30% of the company, that are upset," according to a person familiar with the shareholders' thinking.
Several of those shareholders voiced their discontent in a series of interviews with Dow Jones Newswires. None wanted to be identified and none is seeking to call an extraordinary general meeting to air their concerns with other investors or management.
"They are divided by those who want the company to actively review its strategic options, including a split-up or merger, and those that want the company to be more open for interest from a potential buyer," said one shareholder.
While Bakker previously has promised to disclose such interest, some shareholders believe the company last year held discussions with potential buyers, several TNT shareholders told Dow Jones.
TNT spokesman Ernst Moeksis said TNT never answers questions about market speculation and added TNT acted in accordance with Dutch law.
Media reports last year said TNT was holding talks with U.S. rivals United Parcel Service Inc. (UPS) and FedEx Corp. (FDX), causing its shares to soar, but all three companies at the time declined to comment to the reports. UPS and Fedex said they don't comment on rumors or speculation.
Since those reports, TNT's share price has dropped from a high of EUR26.59 and at 1300 GMT traded at EUR14.66.
Some analysts have said an acquisition of TNT would make sense for its U.S. rivals as it would provide them with scale in Europe's express market and bring significant cost savings. While the U.S. express market is dominated by UPS and Fedex, the European market is fragmented. TNT holds an 18% market share in Europe, while UPS has 9% and Fedex 2%. Other large players in the sector include Deutsche Post AG (DPW.XE), which services the market through its DHL unit, and France's La Poste.
TNT appears not to be considering a sale. At its annual general meeting in April, Chairman Piet Klaver said: "Our intention is to let TNT be a sustainable company with continuity, which is the boss in its own home."
That stance riles some shareholders. "We want management to open up to potential buyers, as we have no doubt there is interest," said one shareholder. "There is significant value in this company, but it is unable to realize that on its own."
Shareholders worry that TNT's value to the U.S. logistics giants is diminishing, and so is the likelihood of a deal. Because UPS and Fedex have such a dominant position in the U.S. market, they are able to generate vast amounts of cash to invest in strengthening their networks in Europe. "The value of express decreases as other larger competitors strengthen their European networks, causing antitrust hurdles to grow and synergies to fall," one shareholder said.
TNT's strategy for its express business, which accounts for about 60% of group revenue, focuses on strengthening it's position in Europe in national and intra-European flows, while building a dominant position in selected emerging markets.
It evaluates its strategy every year and gives an update at its annual investor day in December, Moeksis said.
He said TNT made acquisitions in Latin America after extensive due diligence. "The price represents a fair market value," Moeksis said, adding the acquisitions are relatively small and fit TNT's strategy to strengthen its networks in emerging markets.
While the liberalization of the Dutch postal market has moved ahead, other European countries still have boundaries, which combined with long legal procedures keep rivals from fully competing.
"When the European mail market is liberalized over time, TNT is in a strong position to profit from it," one investor said.
TNT's mail unit, which generates stable cash flows and is seen as less cyclical, is facing a slowdown as ongoing digitalization and market liberalization cause volumes to drop as competition increases.
TNT is in talks with the British government over a possible minority stake in U.K. postal operator Royal Mail, and has promised shareholders a vote on a potential deal. Several shareholders that oppose such a deal say that management gave in to shareholder pressure to allow shareholders to vote on any transaction. TNT said it made the decision on its own.
Investors will find out whether TNT will return to paying a cash dividend when it publishes half-year results July 27. "We don't comment on our dividend policy ahead of time," Moeksis said.
Source: Dow Jones, www.dowjones.com