Business news in brief
In the Region
PUC approves a PPL electricity-rate increase
The Pennsylvania Public Utility Commission approved a $55 million electricity-rate increase for PPL Corp., of Allentown. The amount, approved 3-1 by the commission, will raise a monthly $98 residential electric bill $4, effective Jan. 1, the commission said. PPL called the increase a "modest" 1.7 percent increase in revenue. The utility had requested an $83.6 million revenue increase, but it was challenged by groups including the state's Office of Consumer Advocate and Pennsylvania's Office of Small Business Advocate. The increase affects 1.2 million residential customers in Berks, Bucks, Carbon, Chester, Clinton, Columbia, Cumberland, Dauphin, Juniata, Lackawanna, Lancaster, Lebanon, Lehigh and Luzerne Counties.
- Reid Kanaley
SERS names Leonard M. Knepp executive director
The Pennsylvania State Employees' Retirement System named 25-year SERS veteran Leonard M. Knepp executive director. Knepp had been acting director. John C. Winchester was named chief investment officer. He had been deputy CIO. Also, SERS said it would invest up to $50 million in an SEI Investments Co. collateralized loan obligation strategy, $100 million in Templeton Strategic Emerging Markets Fund III, $25 million in Prudential Latin America Residential Fund, $25 million in ABRY Advanced Securities Fund, $30 million in LLR Equity Partners III, and $25 million in Siguler Guff BRIC Opportunities II.
- Joseph N. DiStefano
Insurer estimates Calif. fire losses at $7.5 million
Philadelphia Consolidated Holding Corp., a Bala Cynwyd commercial insurer, said after the market closed that estimated pretax losses from the October wildfires in California were $7.5 million. The company's shares closed at $43.47, up $1.86, or 4.47 percent, in Nasdaq trading.
- Harold Brubaker
C&D seeks to build research facility in Wis.
C&D Technologies Inc., Blue Bell, said it hoped to build a $15 million to $20 million research facility in the Milwaukee area that would create up to 150 jobs there. The plant will design and manufacture a new generation of lithium-ion batteries primarily for military use. But the company said its commitment depended on federal funding for much of the cost. The company won an $800,000 federal appropriation last month.
UnitedHealth ex-chief to surrender $468 million
Former UnitedHealth Group Inc. chairman and chief executive officer William McGuire has agreed to surrender more than $400 million to settle a lawsuit related to a stock-options-backdating scandal, the Minnesota-based company and the Securities and Exchange Commission said. McGuire, who stepped down a year ago as the highest-profile corporate chief caught in the probe, will give up $320 million in stock options and forgo more than $99 million in other retirement and executive savings benefits, the company said. The SEC valued the settlement at $468 million. The agency said McGuire did not admit or deny guilt.
When Fla. pool reopens, $1.1 billion more drained
Local governments drained more than $1.1 billion from Florida's state-run investment pool when it reopened yesterday, a week after it was frozen amid a run that withdrew almost $10 billion on worries about its investments in securities backed by troubled mortgages. The latest withdrawals amounted to about 8 percent of the $14 billion pool.
Tribune to put $500 million cash toward its buyout
Tribune Co. said it planned to use $500 million in available cash to reduce the amount it needed to borrow to close the $8.2 billion buyout of the company by year's end. Tribune stock hit a six-month high on the news. The company owns the Los Angeles Times, Chicago Tribune and other newspapers, 23 television stations, and the Chicago Cubs. Tribune also said it filed an appeal Monday of the FCC's denial of its request to waive rules against owning newspaper and broadcast properties in the same market.
Shares of Citizens Bank parent up after loan news
Shares of the Royal Bank of Scotland Group P.L.C., parent of Citizens Bank, jumped after the bank reported a smaller write-down related to the U.S. subprime-lending crisis than had been anticipated. It said it would beat analyst expectations for full-year profit. RBS, Britain's second-largest bank, said it was booking a 1.25 billion pound ($2.5 billion) write-down for its credit-market exposure, including that of newly acquired ABN Amro Holding N.V.
Global monitor urges no more lending-rate cuts
The world economy can weather the fallout from the U.S. housing crisis, the Organization for Economic Cooperation and Development forecast in its economic outlook, urging the European Central Bank and U.S. Federal Reserve not to cut borrowing costs. The United States has already lowered its benchmark rate twice, while the Bank of England made a quarter-point cut yesterday. The ECB held steady.
Bidders line up to buy unprofitable carrier Alitalia
Air France-KLM S.A., the world's biggest airline, and Italy's Air One will compete to buy Alitalia S.p.A., Italy's unprofitable national carrier. A group led by Italian lawyer Antonio Baldassarre also submitted an offer, even after being excluded from talks, Alitalia said.
- Bloomberg News
Sudden resignation of Coca-Cola's CEO
In a surprise move, the chief executive officer of Coca-Cola Co. will step down after four years as head of the world's largest beverage-maker and be succeeded by his second-in-command, the company said. Neville Isdell, 64, will step down July 1 and be succeeded by the company's president and chief operating officer, Muhtar Kent, 55.
CEO to leave Dow Jones after Murdoch purchase
Richard Zannino will depart as chief executive officer of Dow Jones & Co. Inc. after the financial-news publishing company is sold to Rupert Murdoch's News Corp. Zannino became CEO of Dow Jones, which publishes the Wall Street Journal, in early 2006. A successor was not named. Murdoch's deal to acquire Dow Jones for $5.6 billion is expected to close after Dow Jones shareholders vote on it Thursday.
Krispy Kreme rising with narrower quarterly loss
Krispy Kreme Doughnuts Inc. posted a narrower quarterly loss on reduced costs as it shut unprofitable stores. The shares surged the most in more than seven years. The third-quarter net loss shrunk to $798,000, or 1 cent a share, from a loss of $7.2 million, or 12 cents a share, the company said. Sales fell 12 percent to $103.4 million.
- Bloomberg News
Dell exiting direct-sales model for Best Buy deal
Dell Inc. is venturing further from its direct-to-consumer sales model and will start selling computers at more than 900 Best Buy stores in January. Dell built its business around selling personal computers directly to customers, but it has been cutting deals with retailers as growth of PC sales slowed. Late last year, the Round Rock, Texas, company lost its spot as the world's No. 1 computer-maker to Hewlett-Packard Co.