Fighter planes to be paid for out of oil revenues (Aftenposten)

Defence Minister Kristin Krohn Devold wants to buy even more fighter planes than her predecessor – probably 60 aircraft worth a total of NOK 30-35 billion. Efforts to find a replacement for today’s F-16 fighter planes will get underway in just a few months. Ms Krohn Devold will recommend that the Government pay the bill directly from Norway’s oil revenues. "Norway has the money. Funding the aircraft purchases by taking the money directly out of the Government Petroleum Fund poses no major problem, since doing so avoids inflationary measures at home," she said.

Business demands slice of the cake (Aftenposten)

Norwegian industry rejects the notion that Norway should buy new fighter aircraft without part of the purchase price being ploughed back into the domestic economy in the form of subcontracting agreements with Norwegian companies. "If it is true that the planned purchase of new fighter planes is to be carried out without at least some of the subcontracting work being placed with Norwegian companies, it would represent a break with a Norwegian policy which we have had for decades," said Knut E. Sunde of the Federation of Norwegian Engineering Industries. The Federation represents that section of Norwegian industry which for years has been involved in negotiations with potential aircraft manufacturers on lucrative subcontracting agreements.

Progress Party more attractive with Siv Jensen (Dagsavisen)

When Siv Jensen takes over from Carl I. Hagen as chairman of the Progress Party, the party will improve its chances of taking part in a centre-right coalition, according to centrally placed sources within both the Progress Party and the Conservative Party. The Progress Party had originally planned that Mr Hagen would step down as leader of the party’s parliamentary group this autumn to become President of the Storting. However, that scheme was dashed by the Conservatives and the Christian Democrats. Dagsavisen has learned from centrally placed sources within the Progress Party that Mr Hagen will now continue as parliamentary leader until the next election, despite the fact that Siv Jensen will take over as party chairman before then.

Top score for Hagen (Nationen)

Both the Labour Party and the Conservatives will soon be feeling Carl I. Hagen breathing down their necks, according to the poll carried out by Sentio-Norsk Statistikk. Following a substantial three per cent leap forward, the Progress Party is now approaching its former glory, with 18.1 per cent of voters saying they support the party. The Conservatives, Christian Democrats and Liberals have all lost ground. The Conservatives have the support of 21.9 per cent of the electorate, a fall of 0.9 per cent since September. Nevertheless, they remain Norway’s largest party. Labour score 21.4 per cent, a drop of 0.7 per cent.

Yukos to cut stake in Kværner to 6 per cent (Aftenposten)

Yukos Oil is planning to cut its stake in Kværner from 22 per cent to 5.8 per cent within a short space of time. The mystery investment syndicate which the Russians have cobbled together will hold a minimum of 16.2 per cent of Kværner’s shares. Together with Yukos they will therefore still control 22 per cent of the company. It is Yukos’s friends in the investment syndicate who have underwritten the NOK 1.35 billion share issue, not Yukos itself.

DnB refused to meet Røkke (Dagens Næringsliv)

Kjell Inge Røkke demanded that Kværner’s banks write off NOK 4 billion of Kværner’s debts. This was too much for Den norske Bank (DnB), Kværner’s main banking services provider for many years. DnB refused to meet the multi-millionaire from Molde. Mr Røkke was willing to put NOK 600 million on the table in the shape of a convertible bond loan to gain control of Kværner. The conversion price was NOK 1. The loan was intended to rescue Kværner from its short-term liquidity crisis.

Worth Noting

1. Even though the Norwegian Central Bank has not reduced interest rates at this time, the banks must shave their interest margins, says the Norwegian Houseowners’ Association. "Today the banks are pocketing an interest rate margin which is unreasonably large. It is immoral," said the Association’s chief executive, Peter Batta. (Dagsavisen)
2. Einar Forsbak, chief executive of the Norwegian Savings Banks’ Association, is critical of the Norwegian Central Bank’s decision to keep interest rates unchanged. He believes the Central Bank is too optimistic in its forecasts for the Norwegian economy. (Dagens Næringsliv)
3. The NOK 1 billion earmarked for the elderly has given results. Over the past four years the number of places in nursing homes has risen, a larger number of qualified staff have been employed to care for the elderly and a larger number of those in residential care now have a single room. (Aftenposten)
4. The National Insurance Fund will put up NOK 400 million of Kværner’s NOK 3 billion share issue. This means that the state fund will increase its stake in Kværner to 15 per cent, which is the maximum shareholding the Fund can own in an individual company. (Dagens Næringsliv)
5. Kværner’s board of directors has appointed Kristian Siem to take over as chief executive from Kjell E. Almskog, who stepped down yesterday. Mr Siem has been a member of Kværner’s board since May 2001. (Aftenposten)
6. The Norwegian firm of architects, Snøhetta, has beaten off strong international competition to win the contract to design the new Turner gallery in Margate, UK. William Turner is held to be Britain’s foremost painter of seascapes, and Snøhetta’s winning design for the new gallery has attracted much attention in the British media. (Aftenposten)

Today’s comment from Dagens Næringsliv

Has multi-millionaire investor Kjell Inge Røkke really been outmanoeuvred by the Russian super-capitalist Mikhail B. Khodorkovski? Has Mr Røkke been defeated by his own greed and thirst for power? Is the battle for control of Kværner over? The answer to none of these three questions is an unqualified yes. There is still a long way to go before Kværner’s employees, shareholders, loan providers and other creditors can once again consider it a ‘normal’ company. In one month a new extraordinary general meeting will decide whether to go ahead with the share issue, which is part of the financial rescue package – a rescue package negotiated by the various parties against Mr Røkke’s wishes. Approval of the package is by no means guaranteed. Mr Røkke’s ability to pull the plug on it could depend on the number of shareholders who turn up for the extraordinary general meeting. The question is also whether Mr Røkke is prepared to bear the burden of voting against. If he does, it could send Kværner to the wall, effectively shattering the image he has tried to build of himself as a responsible, long-term industrialist. It is easy to understand that Mr Røkke is bitter about losing some NOK 2 billion in the battle for Kværner. But he knows the rules of the stock market game better than most. It is not an inalienable human right to succeed in one’s attempts to seize control of other companies – whether the takeover is carried out in a friendly or hostile manner.