No silver lining?

BY Richard Summerfield

There has been a lot of talk around the potential of cloud computing. The cloud is often heralded as the future of many organisations as it will fundamentally alter business strategies. Yet, maintaining security in the cloud is a challenging and contentious issue.

Indeed, many security professionals consider their existing tools to be inadequate for securing critical cloud data, even as their organisations invest heavily and with increasing speed in cloud applications, according to a new report from ESG.

The report, ‘Retooling CyberSecurity Programs for the Cloud-First Era’, based on surveys with responses ranging from approximately 392-600 senior IT decision makers and cyber security professionals, suggests that there is a security gap in cloud computing which is both wide and dangerous.

Though cloud-first strategies are becoming more common, 81 percent of respondents said their on-premises data security practices are more advanced than those intended to secure cloud-based data. Furthermore, 50 percent of respondents say that their organisation has lost cloud-resident data.

Ninety percent of respondents are concerned about not having visibility into misconfigured cloud services, server workloads, network security or privileged accounts. Eighty-three percent of respondents also stated they had concerns about the misuse of privileged accounts by insiders. Thirty-five percent say that the use of multiple cyber security controls has increased complexity and 66 percent say IT is more complex than it was two years ago.

Forty-three percent of respondents cited maintaining consistency across the disparate infrastructures of hybrid, multi-cloud environments where cloud-native apps are deployed as the biggest challenge in securing cloud-native apps, and 43 percent of respondents said that DevSecOps automation is the highest cloud security priority to address many of these concerns.

“The cloud is no longer merely a backup target – it’s now the center of computing gravity for many businesses,” said Doug Cahill, ESG’s Cybersecurity Group Director and Senior Analyst. “Cloud-first strategies are becoming more common, and yet security capabilities are lagging behind cloud adoption. The gap between the degree to which cloud services and cloud-native technologies have and will continue to be consumed and organizational readiness to secure that usage requires a retooling of cybersecurity programs to keep pace with the speed of the cloud era.”

Report: Retooling CyberSecurity Programs for the Cloud-First Era

Dubai Aerospace to manage $1.4bn aircraft portfolio

BY Fraser Tennant

In an investment mandate valued at approximately $1.4bn, globally recognised aerospace corporation Dubai Aerospace Enterprise (DAE) Ltd is to source and manage an aircraft portfolio on behalf of one of the world’s largest hedge funds.

DAE’ best-in-class Aircraft Investor Services (AIS) platform has been tasked with managing the portfolio of assets on behalf of the investment fund, the name of which has not been disclosed.

Moreover, the multi-year investment mandate will involve DAE assisting the investor with the capital structure for the acquired aircraft, primarily targeting used narrow-body and wide-body aircraft sourced through DAE’s global relationships in secondary market trading and sale-leaseback channels.

Headquartered in Dubai, DAE is one of the largest aircraft leasing companies in the world. Its leasing and engineering divisions serve over 125 airline customers around the world from its seven locations in Dubai, Dublin, Amman, Singapore and the US.

The addition of the investment mandate will bring DAE’s managed portfolio to over $2.7bn in assets under management (AUM). Coupled with other ongoing projects, DAE fully expects its managed portfolio to grow to its target of $5bn.

“DAE is thrilled to have the opportunity to grow its managed aircraft business by sourcing and managing aircraft for a world-class financial institution,” said Firoz Tarapore, chief executive of DAE.  “We are off to a flying start and have already sourced 25 percent of the portfolio.

“We own more than 300 aircraft and will manage more than 100 aircraft. We maintain an active dialog with 250 airline customers,” he continued. “This scale and relevance combined with our 150-person full-service platform and our industry leading AIS offering is a very compelling value proposition for investors in the managed aircraft space.”

State-controlled DAE made a first-half 2019 profit of $197.1m compared with $195.2m last year.

News: Dubai Aerospace wins $1.4 bln deal to manage aircraft

Purdue Pharma files for Chapter 11 to settle opioid lawsuits

BY Fraser Tennant

Accused of fuelling the opioid crisis which claimed the lives of almost 70,000 people in the US last year, drug maker Purdue Pharma has filed for Chapter 11 bankruptcy protection in a bid to settle the opioid litigation the company faces.

To finalise and implement the settlement agreement, the court-supervised Chapter 11 process will facilitate a resolution of all claims against Purdue and its subsidiaries, while preserving the value of the company’s assets.

Furthermore, the settlement is estimated to provide more than $10bn to address the opioid crisis, including contributing millions of doses of life-saving opioid overdose reversal medications – treatment that has the potential to reverse overdoses from powerful synthetic opioids, such as fentanyl.

The key elements of the settlement, which is subject to court approval, include: (i) the owners of Purdue contributing all of its assets to a trust or other entity established for the benefit of claimants; (ii) the new entity being governed by a new board selected by claimants and approved by the bankruptcy court; (iii) the new entity potentially contributing tens of millions of doses of opioid overdose reversal and addiction treatment medications at no or low cost; and (iv) the new entity agreeing to be bound permanently by injunctive relief, including marketing restrictions on the sale and promotion of opioids.

“This unique framework for a comprehensive resolution will dedicate all of the assets and resources of Purdue for the benefit of the American public,” said Steve Miller, chairman of Purdue’s board of directors. “This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis.”

Across the US, more than 130 people die every day after overdosing on opioids. The misuse of and addiction to opioids – which includes prescription pain relievers, heroin and synthetic opioids, such as fentanyl – is a crisis that affects public health, as well as social and economic welfare.

Mr Miller concluded: “We will continue to work with state attorneys general and other plaintiff representatives to finalise and implement this agreement as quickly as possible.”

News: Purdue Pharma files for bankruptcy in the US

Dream deal for Blackstone

BY Richard Summerfield

Funds managed by Blackstone Group have agreed to acquire Dream Global Real Estate Investment Trust for $4.7bn.

The deal will see Dream stockholders receive C$16.79 in cash for each share they hold, a premium of 18.5 percent to Friday’s closing stock price. The deal is expected to close by December.

The deal needs at least 66.67 percent approval from Dream Global’s shareholders. Its board of trustees unanimously approved the deal and recommended the shareholders vote in favour of it.

“This transaction is the culmination of the tremendous growth that Dream Global has achieved since its 2011 IPO,” said Detlef Bierbaum, chairman of Dream Global’s board of trustees. “At a time when the Western European real estate market is becoming increasingly competitive, this transaction provides premium value to unitholders. Upon completion of the Transaction, Dream Global will have increased its equity market capitalisation by nearly eight times and will have delivered total annualised returns of 15 percent to our unitholders, since inception, which exceed both the Canadian and European REIT benchmarks by approximately 60 percent and are competitive against the best managed real estate private equity funds and pension funds globally, over the same time period.”

“Today’s announcement can be attributed to Dream Global’s high-quality portfolio of properties located in key markets in Western Europe and the strength of our property management platform, as evidenced by our strong relationships with tenants, partners and lenders,” said Jane Gavan, president and chief executive of Dream Global. “By combining a disciplined approach to capital allocation with active asset management, we have established Dream as one of the most respected brands for investing in Western European office properties.”

“We are delighted to be acquiring Dream Global, a high-quality and diversified portfolio of office and logistics assets in Western Europe, which has been created by Dream over the last eight years,” said James Seppala, head of Blackstone Real Estate Europe. “This transaction is an exciting opportunity for Blackstone to expand its existing office and logistics portfolios in some of the largest and most important markets in the region.”

Canadian REIT Dream Global, which was formerly known as Dundee International REIT, started out by acquiring properties leased to Deutsche Post, Germany’s post office. Today the firm owns over 200 office and industrial properties in key markets in Western Europe with a particular focus on Germany and the Netherlands.

News: Dream Global REIT to be bought by Blackstone funds in $4.7 billion deal

PG&E files Chapter 11 exit plan

BY Richard Summerfield

Californian energy provider PG&E Corp has filed a reorganisation plan which proposes to cap the wildfire liabilities that forced it into bankruptcy at about $18bn — less than half of what victims and insurers have said they are owed.

The plan, which was filed in US Bankruptcy Court in San Francisco, includes payments capped at $8.4bn for wildfire victims, payments capped at $8.5bn for reimbursing insurers that had paid victims and a $1bn settlement with local governments. The company was forced to file for Chapter 11 bankruptcy in January to deal with an estimated $30bn in liabilities related to devastating wildfires that its equipment ignited in 2017 and 2018. In its filing, the company listed $51.69bn in debts and $71.39bn in assets.

However, the exit plan may prove controversial as lawyers for fire victims said the company’s liabilities may top $40bn. Furthermore, insurance companies claim PG&E owes them approximately $18bn.

“This is outrageous,” said Gerald Singleton, a lawyer representing around 5500 wildfire victims. “PG&E is short changing the wildfire victims and is attempting to evade its responsibility.”

“Under the Plan we filed today, we will meet our commitment to fairly compensate wildfire victims and we will emerge from Chapter 11 financially sound and able to continue meeting California's clean energy goals,” said Bill Johnson, PG&E’s chief executive and president. “Throughout this process, we remain focused on the guiding principles of safely and reliably delivering energy to our customers, further reducing the risk of wildfires, and continuing to support the state’s clean energy goals. I am confident that we can, and will, provide better service to our customers and communities, and our Plan of Reorganization is another step in this process.”

Prior to the filing of its restructuring plan, the company has fended off a number of potential takeover and equipment offers. Last week, the city of San Francisco is believed to have offered $2.5bn for the company’s electrical equipment. The city’s offer is 35 times PG&E’s estimated 2019 earnings for the assets and described it as “a very attractive premium valuation” considering the company’s bankruptcy and other recent utility takeovers.  However, this offer was rebuffed.

Going forward, PG&E said it would employ a combination of debt and stock to raise the cash to help finance its exit from bankruptcy.

News: PG&E proposes reorganization plan with $17.9 billion for wildfire claims