ELECTRICITE DE FRANCE

Final Decision Looms On U.K. Nuclear Plan

PARIS -- French state-owned power utility Electricite de France SA late Thursdayhas called a board meeting for July 28 to make a final decision on whether to go ahead with an GBP18 billion ($23.8 billion) nuclear power project in the U.K. despite the opposition from the company's labor unions.

The construction of two nuclear reactors in Hinkley Point, southwestern England, has the backing of the U.K. and France, which has a majority stake in EDF, but is waiting for the utility's board to sign off on the project.

The project would boost EDF's presence in the U.K., where it already operates 15 nuclear reactors.

The Hinkley Point project remains controversial, criticized in France by some senior EDF officials and labor unions who are worried about its impact on EDF's finances, and in the U.K. where some politicians and environment groups consider it too expensive and risky.

The six labor-union representatives sitting on EDF's 18-member board have repeatedly opposed the project.

Even though the U.K. government guaranteed EDF and its Chinese partner a price for the electricity generated by the reactors significantly above market prices, unions and several company officials have said the investment required would saddle EDF with too much debt.

EDF has delayed the final investment decision on the new nuclear power plant several times as it sought other partners to spread the costs and approval from the European Commission for U.K.-government financial support for the project.

The French government has backed the project and announced a cash injection of EUR3 billion ($3.3 billion) in EDF to help the company develop the project, which would lead to job creation in France and would buoy beleaguered state-owned nuclear firm Areva SA, which manufactures nuclear reactors.

--Inti Landauro

SAMSUNG ELECTRONICS

Smartphone Maker Sues Rival Huawei

SEOUL -- Samsung Electronics Co. has sued Huawei Technologies Co. of China for allegedly infringing on six patents, the latest salvo between Asia's two dominant smartphone makers over patents and innovation.

The lawsuit, filed in Beijing's Intellectual Property Court, seeks damages of 161 million Chinese yuan ($24.1 million), alleging that some of Huawei's smartphones, including its Mate8 smartphone and its Honor-branded lineup of handsets, infringed on Samsung's patents. It comes two months after Huawei, a telecommunications-equipment maker that has quickly gained ground competing with Samsung on smartphones, firstsued Samsung, alleging the South Korean electronics maker infringed on a number of patents covering mobile devices and cellular-communications technology.

The lawsuit also calls on the court to block Huawei and another company, Beijing Hengtongda Department Store Co., from producing or selling the devices, according to a court document.

The May lawsuit, which Huawei filed against Samsung in the U.S. and China, was the first major legal challenge from a Chinese rival against Samsung, the world's No. 1 maker of smartphones by sales volume.

In a statement Friday, Samsung said it had "faithfully negotiated with other patent holders for the fair licensing of technology." In this case, however, it added: "Despite our best efforts to resolve this matter amicably, it has regrettably become necessary to take legal action in order to defend our intellectual property."

A spokesman for Huawei said the company hasn't received a formal complaint. "We will review any documentation and defend ourselves as appropriate when we do. In the absence of a negotiated settlement, litigation is often an efficient way to resolve [intellectual property rights] disputes."

The lawsuit and countersuit come as Huawei increasingly emerges as the main rival to Samsung, particularly in the world of smartphones running Android, the dominant mobile operating system owned by Alphabet Inc.'s Google.

In the first three months of the year, Huawei sold more smartphones to end consumers than any other Android maker except for Samsung, accounting for 8.3% of the market, up from 5.4% a year earlier, according to research firm Gartner. Over that same period, Samsung's market share slipped to 23.2%, down from 24.1% a year earlier.

--Jonathan Cheng

VOLKSWAGEN

Sales in South Korea Halt Amid Scandal

SEOUL -- Volkswagen AG is suspending sales of its cars implicated in an emissions scandal in South Korea, in effect stopping all its marketing activities in the country, where its sales are slumping.

In a recent letter to local dealers, Audi Volkswagen Korea Co., the Korean unit of the German auto maker, said it would stop delivering 79 models of 34 vehicle types starting Monday.

The suspension, which Volkswagen Korea expects to last for at least three months, would deal a heavy blow to the European auto maker. Many of its models are among the country's top imported cars.

"This decision doesn't mean that Volkswagen is pulling out of Korea, which is a very important market to us. We'll reapply for certification of our cars if the government revokes it. The process may take several months," a Korean representative of Volkswagen said Friday.

The move comes as Seoul's environment ministry plans to revoke the certification of 79 vehicle models, including the Golf, Jetta, Tiguan and Audi A3 and A6, made by Volkswagen and its premium Audi brand after prosecutors found that it had fabricated documents on emissions and noise-level tests. The ministry said it would hold a public hearing on the German auto maker on Monday before it reaches a final decision later in the week.

A revocation order would lead to fines, a recall of about 79,000 vehicles and a sales ban on unsold cars, according to the ministry.

Sales of German cars in South Korea have soared since a 2011 free-trade deal cut duties on vehicles imported from Europe. The number of imported cars rose 24% to 243,900 last year and nearly a third of them were Volkswagens, Audis and Bentleys.

Volkswagen's global emissions-cheating scandal, however, has sparked a slide in local sales.

Volkswagen's Korean sales slumped 33% in the first half of this year from a year earlier. Audi, a luxury brand of Volkswagen, saw its first-half sales fall more than 10%.

"The scandal came as a rude awakening to the Korean people, who equated imported brands [with] good quality. Customers won't pay a premium anymore just because it's a Volkswagen or an Audi," said Kim Pil-soo, a professor of automotive engineering at Daelim University College.

As Korea widened its own probes into the scandal, prosecutors indicted an executive at Volkswagen's Korean unit earlier this month on charges of filing more than a hundred falsified emission documents and noise reports for cars sold in Korea.

Separately, Korea's trade watchdog is also considering filing criminal charges against Volkswagen executives in Korea and levying fines on the car maker over advertising claims that its cars met emissions regulations.

The Fair Trade Commission judges that Volkswagen exaggerated advertising in which it stated that hundreds of thousands of its cars sold in Korea met the European Union's strict Euro 5 emissions standards.

In November, the South Korean government ordered Volkswagen Korea to recall more than 125,000 diesel-powered cars sold in the country after it found the company installed emissions-cheating software in its vehicles. It also fined the company 14.1 billion won ($12.4 million).

Volkswagen was subject to legal action in South Korea and other countries after it said in September that it falsified U.S. emissions tests on some diesel-powered cars.

--In-Soo Nam

PETRĂ“LEO BRASILEIRO

Controlling Stake To Be Sold in Unit

RIO DE JANEIRO -- Brazilian state-run energy company PetrĂ³leo Brasileiro SA said Friday that it would sell a controlling stake in its fuel-distribution subsidiary, after it failed to get sufficient bids for a minority stake.

A minority interest in Petrobras's retail gasoline business, which operates under the brand name BR Distribuidora, has been on offer for the past year, with Petrobras initially refusing to consider giving up a majority stake.

But after three offers that came for the minority stake "did not meet the company's objectives," the board scrapped the offer and said it would begin a new sale process in which it would remain the largest shareholder of BR Distribuidora but retain only 49% voting rights.

Petrobras didn't identify the three bidders, through executives have previously said the three potential buyers were European and Asian.

BR Distribuidora is Brazil's largest gas-station chain, with some 7,500 outlets across the country. The sale is an important part of the Petrobras effort to raise capital, reduce its substantial debt load and regain investor confidence.

--Will Connors

 

(END) Dow Jones Newswires

July 25, 2016 02:48 ET (06:48 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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