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ETG threatens international arbitration in dispute over $60mn seizure

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African commodities house ETG has warned Mozambique that it will seek international arbitration in a dispute over the seizure of up to $60mn in goods, in an escalation of a long-running fight over exports of a key Indian food staple.

Lawyers for Mauritius-headquartered ETG wrote to President Filipe Nyusi’s government last week warning that ETG “will have no choice but to commence international arbitration” if Mozambique does not offer talks to resolve the dispute, according to a letter seen by the Financial Times.

Its warning marks the latest development in an increasingly bitter fight between ETG, one of Africa’s biggest and oldest agricultural traders, and Mozambican food trading firm Royal Group.

The case has reignited concerns about the rule of law in Mozambique, a decade after the country’s $2bn ‘tuna bond’ debt crisis.

Royal Group seized goods including a large consignment of pigeon peas, widely used in meals across India and a key area of trade between India and Africa.

Mozambique exports a large share of pigeon peas to India and has privileged access to its market in terms of duties. Most Mozambican production comes from poor small-scale farmers who sell to traders.

ETG is alleging that by allowing the seizure, Mozambique has breached both a domestic law on investment that sets out property and export rights, and a bilateral investment treaty with Mauritius. Both have provisions for appointing arbitrators in the event of a dispute.

“We have tried to resolve the matter using every legal avenue available to us in Mozambique, but we have been met with obstructions from the authorities and the judiciary at every turn,” ETG said, adding that it was still open to an amicable solution.

The company said it had “incurred substantial losses, both directly and indirectly”. The situation was “unsustainable”, it added.

The dispute dates back to 2022, when a row erupted between ETG and Royal Group over an agricultural shipment to India.

Royal Group accused competitors, including ETG, of incorrectly informing Indian authorities that the trading house had falsely certified a food shipment to India as free of genetically modified products. ETG denies the claims, while Royal Group denies exporting GMO product.

Royal Group launched proceedings in Mozambique, contested by ETG, which led to Royal Group’s seizure of the assets.

In the letter to Mozambique’s attorney-general, ETG said its warehouses were being “continuously plundered, under the

Starwood’s woes betray the frailties of private capital vehicles

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Chinese EV company Xpeng shares surge 13% after forecasting growth in car deliveries

Chinese electric car company Xpeng saw its shares soar after reporting an improvement in profit margin and an upbeat outlook for second-quarter deliveries. Xpeng reported that vehicle margin rose 5.5% in the first three months of the year, from a negative 2.5% in the prior quarter. Vehicle margin is a measure of profitability. The company forecast deliveries of 29,000 to 32,000 cars in the second quarter, a year-on-year increase of at least 25%. The Xpeng X9 electric MPV on display at the Beijing auto show on April 25, 2024. CNBC | Evelyn Cheng

BEIJING — Chinese electric car company Xpeng saw its shares soar after reporting an improvement in profit margin and an upbeat outlook for second-quarter deliveries.

The company’s Hong Kong-listed shares rose more than 13% in morning trade Wednesday. U.S.-listed shares had climbed by nearly 6% in U.S. trade Tuesday after reporting first quarter results.

Xpeng reported that vehicle margin rose 5.5% in the first three months of the year, from a negative 2.5% in the prior quarter. Vehicle margin is a measure of profitability — the higher the margin, the greater the profit the company is making on its car sales.

The company forecast deliveries of 29,000 to 32,000 cars in the second quarter, a year-on-year increase of at least 25%.

Xpeng delivered 21,821 cars in the first quarter of the year, and 9, 393 cars in April.

Following the earnings release, Nomura analysts said in a note Wednesday they are reviewing their estimates for Xpeng.

“Overall, we see XPENG forging ahead with its business plans, and believe that it may enjoy some development ahead,” the report said.

“Meanwhile, considering the intensifying competition in the overall market, that renders smaller players more vulnerable, we remain slightly cautious and suggest investors to closely monitor the new model to be launched under the MONA brand next month,” the Nomura analysts said.

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Similar to other companies looking to stay competitive in China’s electric car market, Xpeng is expanding its product lineup with a lower-cost vehicle brand called Mona.

The first Mona car — an electric sedan below 200,000 yuan ($27,890) — is set for release in June and scheduled to begin mass deliveries in

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