Volkswagen pumps 2 billion euros into China electric vehicle bet

BEIJING/HONG KONG (Reuters) – Volkswagen AG (VOWG_p.DE) plans to boost its electric push in China, the world’s biggest auto market, by pumping 2.1 billion euros in two Chinese electric vehicle players.

The deals come as global rivals such as General Motors (GM.N), Toyota (7203.T) and Tesla Inc (TSLA.O) seek to expand electric sales in the Chinese car market.

Volkswagen said it will invest 1 billion euros to take a 50% stake in the state-owned parent of Anhui Jianghuai Automobile Group (JAC Motors) (600418.SS), also taking full management control of the its existing electric vehicle joint venture with JAC by raising its stake to 75% from 50%.

Volkswagen’s China chief Stephan Woellenstein told reporters on Friday the venture planned to revamp one existing JAC plant and launch its first electric model based on its MEB platform, an architecture enabling efficient production of various EV models, in 2023.

The joint venture will launch five more electric models by 2025, when the German giant aims to sell 1.5 million new energy vehicles (NEV) – including battery electric cars as well as plug-in hybrid and hydrogen fuel-cell vehicles – a year in China.

In a separate transaction, Volkswagen will pay 1.1 billion euros to acquire 26.5% of Guoxuan High-tech Co Ltd (002074.SZ), a maker of electric vehicle batteries, becoming its biggest shareholder. Volkswagen said Guoxuan, based in Hefei like JAC, will supply batteries to its EV models in China.

Woellenstein said Anhui province, where Hefei is located, will be Volkswagen’s EV manufacturing hub in China. The Wolfsburg-based automaker has not changed its EV strategy in China after the global gasoline market tumbled, he said.

He added China’s overall auto sales in the second half of this year will be level with same period last year. Volkswagen China’s full-year sales will be lower than last year due to the sales loss in the first months.

Reuters exclusively reported on Wednesday that VW was in final talks to invest in the two companies.

China has set a target of 25% of 2025 annual vehicle sales to be made up of NEVs. More than 25 million vehicles were sold in China last year.

Friday’s moves also make Volkswagen the latest foreign automaker to increase ownership of operations in China since the government started to relax rules in 2018, with German peer BMW AG (BMWG.DE) quick to take control of its main local venture.

Related Coverage

  • Volkswagen says it will have full control of JAC-VW Chinese venture

Tesla last year became the first foreign automaker to wholly own a car plant in China.

Volkswagen also has ventures with state-owned China FAW Group Corp Ltd [SASACJ.UL] and SAIC Motor Corp Ltd (600104.SS).

Shares in both JAC and Guoxuan climbed their maximum daily limit of 10% on Friday morning. Volkswagen’s shares fell 3%.

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Sellers beware: Price collapse triggers bartering over oil and gas deals

LONDON (Reuters) – The collapse in oil prices to 21-year lows has led potential buyers of oil and gas fields to try and renegotiate deals already agreed at higher prices, with the first examples emerging of sellers having their hand forced.

At a time when most oil companies are slashing budgets, dividends and headcounts to preserve cash, sellers are facing a difficult choice between sweetening the deal or risking losing it altogether.

Premier Oil’s (PMO.L) CEO said he is seeking a cheaper price for North Sea assets it agreed to buy from BP (BP.L) for $625 million and Energean (ENOG.L) is doing the same with a $700 million purchase from Edison (EDNn.MI).

“The oil industry is revisiting its ‘before coronavirus’ (BC) bids, and we envisage announcements from other firms as they re-price or repackage previously announced deals,” said Royal Bank of Canada oil and gas equity analyst Al Stanton.

Total (TOTF.PA) this month decided to walk away from its purchase of Occidental Petroleum’s (OXY.N) assets in Ghana, which hit a glitch over part of the French firm’s wider deal with U.S. Occidental.

“Given the extraordinary market environment and the lack of visibility that the group faces… Total has decided not to pursue the completion of the purchase of the Ghana assets,” Total said in a statement.

Among deals currently on the table, private equity group Blackstone (BX.N) with its North Sea vehicle Siccar Point, was already disagreeing with another private equity firm, Chrysaor, over price even before the slump in March, sources said.

However, privately held Hilcorp Energy and private-equity firm HitecVision have successfully renegotiated deals with energy majors BP (BP.L) and Total (TOTF.PA), respectively, during the current oil price meltdown.

“Sellers, especially the majors, have certainly been very constructive,” said one industry banker.

Hilcorp’s new agreement retains the original sale price but provides for vendor financing, smaller payments in 2020 and for cash-flow sharing in the near term, BP said. The terms may lead to BP receiving less cash at the end of the day.

Total on Wednesday said it agreed to restructure a deal, initially set at $635 million, to sell North Sea oilfields to HitecVision’s NEO unit to reflect “current market conditions while retaining the majority of the value of the transaction.” This included lending money to the buyer.

“It is my view that all deals… in general will be a mixture of initial payments that are suitable for the current market and earn out or commodity price payments that allow sellers to get good deals as the volatility subsides,” HitecVision Senior Partner John Knight said.

“Vendor finance with junior (debt) facilities, working capital and marketing and hedging arrangements and in some cases tax transfers and allocations and decommissioning security arrangements will all be tools all sellers and buyers will use in markets like this.”

Earn-out or upside sharing means the seller will only be paid once the oil price exceeds a certain limit.

HitecVision said it is on the prowl for more acquisitions in the British North Sea. In Norway, Aker BP (AKERBP.OL) and Lundin LUNE.ST may be on the lookout for cheap assets, while OKEA (OKEA.OL) and DNO (DNO.OL), which took control of UK’s Faroe Petroleum last year, are also looking to grow.

For some producers, like North Africa and gas-focused SDX (SDX.L), current oil prices do represent a “catalyst for opportunities”, but Chief Executive Mark Reid said vendor financing, such as becoming the sellers’ debtor, is a double-edged sword.

“It’s clearly something that helps to sell the asset and put it into the hands of a smaller company… It is an interesting dynamic that the majors are able to use their balance sheet to facilitate (mergers and acquisitions),” he said.

“We continue to talk to our contacts at BP, and other majors. (But) most importantly, (we plan) so that the company doesn’t find itself drowned in debt.”

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Wuhan plans to virus test 11 million residents

The Chinese city of Wuhan is drawing up plans to test its entire population of 11 million people for Covid-19, state media report.

The plan appears to be in its early stages, with all districts in Wuhan told to submit details as to how testing could be done within 10 days.

It comes after Wuhan, where the virus first emerged, recorded six new cases over the weekend.

Prior to this, it had seen no new cases at all since 3 April.

Wuhan, which was in strict lockdown for 11 weeks, began re-opening on 8 April.

For a while it seemed like life was getting back to normal as schools re-opened, businesses slowly emerged and public transport resumed operations. But the emergence of a cluster of cases – all from the same residential compound – has now threatened the move back to normalcy.

‘The ten-day-battle’

According to report by The Paper, quoting a widely circulated internal document, every district in the city has been told to draw up a 10-day testing plan by noon on Tuesday.

Each district is responsible for coming up with its own plan based on the size of their population and whether or not there is currently an active outbreak in the district.

The document, which refers to the test plan as the “10-day battle”, also says that older people and densely populated communities should be prioritised when it comes to testing.

However several senior health officials quoted by the Global Times newspaper indicated that testing the entire city would be unfeasible and costly.

Peng Zhiyong, director of the intensive care unit of the Zhongnan Hospital of Wuhan University, instead that testing was instead likely to be targeted at medical workers, vulnerable people and those who’d had close contacts with a case.

Another Wuhan University director suggested that a large percentage of Wuhan’s population – around 3-5 million – had already been tested, and Wuhan was “capable” of testing the remaining 6-8 million in a 10-days period.

To put the goal into context, the US now conducts around 300,000 tests each day, according to the White House. So far, it’s tested almost 9 million people in total.

On Chinese social media site Weibo, people have been raising questions about whether such a large number of tests can be carried out in just a matter of days.

“It is impossible to test so many people,” said one commenter, who also questioned how much it would cost.

Another said that such tests should have been carried out before Wuhan re-opened its doors to the rest of China.

Taking no chances

Stephen McDonnell, BBC News, Beijing

Wuhan was where this global emergency started and there was relief when the first cluster site seemed to come out the other side. There would also be despair if the first lockdown city was to be engulfed again by the coronavirus.

Not letting this happen has become a priority for the Chinese government.

When a new domestic infection appeared in the city three days ago you could feel the concern over 1,000km away in Beijing.

Then five others were infected by the 89-year old man previously declared “asymptomatic”, and the manager of their housing complex was removed.

However, sacking local officials in this way might also encourage a tendency to hide future cases.

China’s most powerful seven people, in the Politburo Standing Committee, met last week to discuss improving the country’s early warning system for outbreaks like this.

They could start by easing the “no mistakes at all costs” approach to governing, in which those who reveal the bad news can end up being punished.

China reported just one new cases on Monday, bringing the total number of cases to 82,919, with the death toll at 4,633.

Hundreds of asymptomatic cases are being monitored by Wuhan health authorities

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To celebrate mothers trapped in quarantine, Sao Paulo gets creative

SAO PAULO (Reuters) – On Friday, musician Rodrigo Cunha and his piano zipped down an elevated highway in a gritty section of downtown Sao Paulo, playing tunes written by Brazil’s most famous composers, from Tom Jobim to Vinicius de Moraes.

Dressed in a dark blue suit, wearing a plastic face shield and riding atop a modified flatbed truck, Cunha is a conspicuous presence on the Minhocao, a highway weaving through graffiti-covered buildings that has become a symbol the city’s urban grit.

But with South America’s largest metropolis under quarantine, the surreal has become increasingly normal in recent weeks. This is one of the few ways, Cunha says, he can serenade the region’s mothers, many of whom are forced to pass this Mother’s Day without their children or grandchildren.

“I’m really moved to be able to share my art so that people feel alright,” said Cunha, a musician at the city’s Baccarelli Elizete Costa Orchestra, who is volunteering his time. “And I feel good being able to collaborate and be part of this story that we’re living through.”

Cunha is part of a crew of dozens of Paulistanos, as the city’s residents are known, who have volunteered their time and, in some cases, resources to pay homage to the city’s mothers.

While the coronavirus crisis is growing in Brazil, leading to a palpable sense of frustration and fear, the crisis has also been an opportunity for Brazil’s famously convivial to show their solidarity in unexpected ways.

The truck upon which Cunha rides was provided by a local Mercedes-Benz dealer for free. His suit was provided by a city tailor.

Olga Amato, the owner of a large events business in Sao Paulo and the organizer of the initiative, said she was inspired by a similar homage to medical professionals in the Italian town of Varallo, in which musicians played the famed Brazilian tango “Odeon,” by Ernesto Nazareth. Amato said she managed to gather all the volunteers she needed for the project within a 24-hour time frame.

“I think that if this virus came to teach us something, it was to teach us that we need to lessen our differences,” she said, after a tune from the piano that left hundreds of Paulistanos glued to their windows.

“That empathy and solidarity will stay with us forever.”

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Latest on the worldwide spread of the new coronavirus

(Reuters) – More than 3.44 million people have been reported to be infected by the novel coronavirus globally and 243,015 have died, according to a Reuters tally, as of 0200 GMT on Sunday.

DEATHS AND INFECTIONS

**For an interactive graphic tracking the global spread, open tmsnrt.rs/3aIRuz7 in an external browser.

**For a U.S.-focused tracker with state-by-state and county map, open tmsnrt.rs/2w7hX9T in an external browser.

EUROPE

**Parts of the world are starting to emerge from the pandemic and to cautiously resume some sort of normal life, but the new coronavirus will pose significant risks until vaccines are developed, the WHO’s top emergencies expert said.

**Spaniards revelled in a second day of freedom, heading outside in time-slots for age groups on the first weekend adults were allowed out since one of the world’s strictest coronavirus lockdowns was imposed in mid-March.

**The British government had a contingency plan for Prime Minister Boris Johnson’s death as he battled COVID-19 in intensive care last month, he said in an interview with The Sun newspaper.

**Russia recorded its highest daily rise in confirmed coronavirus cases with 10,633 new cases, bringing the total to 134,687, with more than half of cases and deaths in Moscow.

**Roche Holding <AG ROG.S> received emergency use approval from the U.S. Food and Drug Administration (FDA) for an antibody test to help determine if people have ever been infected with the coronavirus, the Swiss drugmaker said.

**Austria’s loosened lockdown means tennis players can return to the court as long as they stick to coronavirus-related rules – singles only, no touching each other’s tennis balls, and definitely no shaking hands at the net.

AMERICAS

**In the United States, sunny days and warm weather are proving to be as challenging to manage as restaurants, hair salons and other businesses as about half of states partially reopen their economies.

**Canada’s daily coronavirus death toll edged up by under 5% in another sign the outbreak has peaked and Prime Minister Justin Trudeau promised additional funding for mental healthcare services.

**Families in a poor satellite city of Mexico’s capital with one of the country’s highest coronavirus tallies have staged protests to demand news of sick relatives and the return of the bodies of the dead after videos surfaced showing cadavers at a hospital.

**An inmate uprising at a Brazilian prison stoked by fears of a coronavirus outbreak saw seven prison guards briefly taken hostage in Manaus, a state capital deep in the Amazon rainforest where public services have been overwhelmed by the pandemic.

ASIA-PACIFIC

**South Korea will further relax social distancing rules from May 6, allowing a phased re-opening of businesses, as the nation has largely managed to bring the coronavirus outbreak under control, the government said.

**Japan could ease some coronavirus curbs by allowing places such as parks and museums to reopen, provided proper preventive measures were in place, Economy Minister Yasutoshi Nishimura said.

**Singapore will progressively ramp up its manufacturing activities, its minister of trade and industry said, with the city-state looking to restart its economy as curbs start to ease over the next few weeks.

**India’s air force flew aircraft low over more than a dozen cities, part of a nationwide campaign by the armed forces to thank healthcare workers and other essential services personnel fighting the outbreak.

**China has published a short animation titled “Once Upon a Virus” mocking the U.S. response to the new coronavirus, using Lego-like figures to represent the two countries.

MIDDLE EAST AND AFRICA

**Muslims, many praying shoulder-to-shoulder and without face masks, crowded mosques in Burkina Faso’s capital Ouagadougou after the government lifted an order closing them.

**Jordan said it had lifted all restrictions on economic activity in the latest easing of lockdown rules.

**Israel reopened some schools but the bid to edge back to normality was boycotted by several municipalities and many parents who cited poor government preparation.

**Malls in the United Arab Emirates’ capital Abu Dhabi began reopening to a restricted number of customers as the UAE eases lockdown measures.

**Iran plans to reopen mosques and schools in areas that have been consistently free of the coronavirus.

ECONOMIC FALLOUT

**White House economic adviser Larry Kudlow said he would not rule out any element in the next potential coronavirus relief bill, including more money for state and local governments and the small business program.

**Billionaire investor Warren Buffett said the United States’ capacity to withstand crises provides a silver lining as it combats the coronavirus, even as he acknowledged that the global pandemic could significantly damage the economy and his investments.

**Berkshire Hathaway Inc sold its entire stakes in the four largest U.S. airlines in April, Chairman Warren Buffett said at the company’s annual meeting.

**Saudi Arabia’s stock market fell sharply on Sunday, snapping three sessions of gains as the prospect of more stringent measures to cope with the coronavirus and Moody’s downgrading of the kingdom’s outlook soured investor sentiment.

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Jetmaker Embraer focuses on future after Boeing divorce 'pain'

PARIS/SAO PAULO (Reuters) – The head of Embraer’s (EMBR3.SA) commercial aircraft unit defended the benefits of a $4.2 billion tie-up abandoned by Boeing Co (BA.N) last week, but said the Brazilian aerospace group was focusing on its future as a re-united company.

Commercial Aviation Chief Executive John Slattery said Embraer had incurred pain and costs in separating jetliners from defence and business-jet activities in preparation for the merger, including a loss of deliveries in January.

He declined to comment on an arbitration process Embraer launched after Boeing abruptly cancelled the deal on Saturday.

Speaking in a webinar hosted by Aviation Week, Slattery said he was convinced the commercial aerospace partnership with Boeing would have provided “extraordinary benefits” to airline customers who had expressed disappointment at its collapse.

Boeing has said Embraer failed to meet conditions for closing the deal.

Slattery said Embraer was burning cash but had capacity to raise more if needed. “I am not concerned about liquidity.”

It was the first public appearance by the company’s commercial boss since the deal collapsed in acrimony.

The breakdown, first reported by Reuters, has captured the attention of an industry already facing its worst crisis over the drop in travel caused by the coronavirus pandemic, with 2,000 people tuning into the previously arranged webinar.

Slattery quipped that the audience was dominated by lawyers from each side as the two companies head for what is widely expected to be a bitter divorce case.

Embraer carved out its commercial unit and shut activities for 40 days in preparation for folding it into a new venture to be 80% owned by Boeing.

It also invested $30 million on a new headquarters for the remaining core of the Brazilian aerospace champion.

Slattery said the carve-out had resulted in some duplication between core Embraer and its commercial spin-off, but that the world’s third largest plane-maker would rebound as “one Embraer”.

ARBITRATION ROW

The arbitration is expected to involve fierce debate over Brazilian claims that a tie-up cost Embraer spin-off costs and lost sales for its E2 against the Airbus A220, a Canadian-designed jet acquired from Embraer’s historic rival, Bombardier.

Analysts say Boeing is expected to argue that Embraer needed to carry out reorganisation to prepare for potential alliances and that it failed to invest enough in the commercial arm.

Neither company agreed to comment on the case.

Slattery played up future demand for the E2, a regional jet sitting below the Boeing 737 MAX, as airlines turn post-crisis to smaller, less financially risky models.

Southeast Asia, one of the top markets for giants Boeing and Airbus, could see a move to such jets, he said.

Top aircraft buyers had backed the Boeing tie-up, saying Embraer lacked deep enough pockets to compete alone with Airbus, which can discount other jets to win A220 sales.

Brazil’s government, which used to own Embraer and is its top military client, has suggested China could be a potential new partner for Embraer, even though several senior Brazilian government figures have attacked Beijing over the pandemic.

Slattery said Embraer had not initiated talks with anyone, but that he could not “legislate for the inbound calls that could come”. The board will study next moves “in a very thoughtful way,” he added.

Tentative plans for a new regional turboprop to compete with Europe’s ATR (AIR.PA)(LDOF.MI), half-owned by Airbus, are no longer a priority because of the current crisis, Slattery said.

While the airliner’s business case looked strong, he said, “it is hard to consider a new programme in this environment”.

The prop plane joins other planemaker projects on the back-burner as the health crisis dents balance sheets.

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Unilever, L'Oreal among firms looking to buy makeup brand Charlotte Tilbury: Bloomberg

(Reuters) – Unilever Plc (ULVR.L), L’Oreal SA (OREP.PA) and Estee Lauder Companies Inc (EL.N) are among firms vying to buy British makeup brand Charlotte Tilbury Beauty Ltd, Bloomberg reported here on Tuesday.

The London-based brand, founded by makeup artist Charlotte Tilbury, is working with advisers at Goldman Sachs Group and Jefferies Financial Group, and could fetch more than 1 billion pounds ($1.24 billion), Bloomberg said, citing sources.

Puig, the firm behind Penhaligon’s and Paco Rabanne perfumes brands, Japanese cosmetics-maker Shiseido Co Ltd (4911.T) and several private equity firms have also shown interest in Charlotte Tilbury, according to the report.

Charlotte Tilbury could choose a winning bidder as early as May, Bloomberg said, cautioning that no final decisions have yet been made and the talks may not materialize into a deal.

L’Oreal and Unilever declined a Reuters request for comment, while Charlotte Tilbury, Puig, Estee Lauder and Shiseido were not immediately available to respond.

The world’s biggest beauty product companies, including Unilever and L’oreal, have been snapping up niche and premium brands over the past few years to attract millennials largely influenced by social media trends.

Unilever paid a reported $500 million for San-Francisco skincare brand Tatcha and also added French brand Garancia to its lineup last year.

L’oreal too has been on an acquisition spree, buying brands such as IT Cosmetics and skincare firms CeraVe and La-Roche Posay over the past few years.

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Hear our prayers: coronavirus cuts off France's Mont Saint-Michel

MONT SAINT-MICHEL, France (Reuters) – The sound of prayer flowed around the centuries-old abbey atop the Mont Saint-Michel, a tidal islet amidst vast sandbanks off France’s northwest coast, drifting down towards its deserted alleyways and past empty restaurants.

In normal times, the mount draws more than 2 million visitors a year. Now it lies empty except for 30 local residents whose restaurants, souvenir shops and cafes depend on the influx of tourists.

For Yan Galton, the commune’s outgoing mayor, the coronavirus lockdown has returned the Mont Saint-Michel to a charming bygone era — but with painful consequences.

“It takes me back years, reminds me of how it was when I was a kid,” Galton said. “Armed with my wooden sword, I used to pretend I was an Ivanhoe and would have the run of the fortress.

“Mont Saint-Michel is resting now. But from an economic point of view, it is a little sad.”

The abbey was founded in 966, built on a sanctuary dedicated to the Archangel Michel, but it was in the 13th century that work began on the Gothic centre-piece of its architecture, with towering walls and soaring pinnacles.

Tourists began swarming to the abbey and the village that arose in the shadows of its walls in the 1980s after it was designated a World Heritage Site.

Now with France under virtual lockdown, however, the Mont Saint-Michel is closed to the public and tourism is almost the only source of income.

At the foot of the mount, a shovel barred the doorway of the 132-year-old La Mere Poulard restaurant, through which the likes of Pablo Picasso, Glenn Close and Coco Chanel have passed to dine on its woodfire-cooked puff omelettes.

Eric Bellon, who heads the La Mere Poulard business, said the group’s 250 employees were temporarily unemployed on a government furlough scheme.

“Their jobs ground to a halt over the course of a weekend,” Bellon said, referring to the Saturday and Sunday before a March 17 virtual lockdown was imposed.

Souvenir shop owner Marc Yrieux also worries for his 20 staff and his business. He counts April as the month his summer season begins.

There will be no easing of the restrictions on public life until at least May 11 and even then it is unclear when France will re-open its borders, permit festivals and allow the tourism sector to reboot.

“It’s not like I’m going to make up for lost revenues in November,” Yrieux said.

For centuries the Mont Saint-Michel has been a sacred destination for pilgrims. While the pandemic has not altered a routine of work and prayer for the abbey’s five monks and six nuns, a profound sense of misfortune pervades, said Brother Philippe.

“In all the crises we have known, never have people been prevented people from praying among us,” he said.

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Kremlin warns of huge influx of Moscow patients as coronavirus toll climbs

MOSCOW (Reuters) – The Kremlin said on Saturday a “huge influx” of coronavirus patients was beginning to put a strain on hospitals in Moscow as Russia’s death toll rose to more than 100.

Moscow and many other regions have been in lockdown for nearly two weeks to stem the contagion, but hospitals in the capital are still being pushed to their limit, officials said.

On Saturday, a Reuters witness saw a tailback of dozens of ambulances queuing outside a hospital handling coronavirus cases in the region immediately outside Moscow, waiting to drop off patients.

One ambulance driver said he had been waiting 15 hours outside the hospital to drop off a patient suspected of having the virus.

“The situation in both Moscow and St. Petersburg, but mostly in Moscow, is quite tense because the number of sick people is growing,” Kremlin Spokesman Dmitry Peskov said in an interview on state television, Russian news agencies reported.

“There is a huge influx of patients. We are seeing hospitals in Moscow working extremely intensely, in heroic, emergency mode.”

Russia’s coronavirus crisis response centre said hospitals were taking all possible measures to ensure rapid admissions and that cases of ambulances needing to wait hours to drop off patients was not a systemic issue.

AN UNFORTUNATE ‘NECESSITY’

Russia has reported 13,584 cases of the virus, and the authorities said on Saturday that 12 new coronavirus-related deaths in the last day had pushed the death toll to 106.

Peskov added that it would become clearer only in the next few weeks whether the country was nearing the worst point in its outbreak.

Sergei Sobyanin, the mayor of Moscow, said on Friday that the city was far from reaching the peak of the outbreak, saying it was merely in its “foothills”.

On Saturday he said Moscow would introduce digital permits next week to control movement around the city to help enforce the lockdown.

He said residents will have to request the permits, which will contain a code that identifies the holder, in order to travel using motorcycles, scooters, cars, taxi services or the city’s vast public transport network.

Sobyanin added that residents should be ready to present identification documents and their digital permit to law enforcement officers patrolling the city.

“Unfortunately this is a necessity,” Sobyanin wrote on his website. “It is needed to protect the lives and health of many Muscovites, to overcome this calamity and to return to normal life.”

A stronger police presence was visible on the streets of Moscow. Traffic police had set up check points on major thoroughfares on the outskirts of the city but were not systematically carrying out checks.

In the early stages epidemic, Russia recorded fewer cases of the new coronavirus than many Western European countries, but its tally began to rise sharply this month.

Until late March officials were saying the situation was under control and that there was no epidemic in the country.

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Kremlin says Moscow hospitals flooded as coronavirus death toll passes 100

MOSCOW (Reuters) – The Kremlin said on Saturday a “huge influx” of coronavirus patients was beginning to put a strain on hospitals in Moscow as Russia’s death toll rose to more than 100.

Moscow and many other regions have been in lockdown for nearly two weeks to stem the contagion, but hospitals in the capital are still being pushed to their limit, officials said.

On Saturday a Reuters witness saw a tailback of dozens of ambulances queuing outside a hospital handling coronavirus cases in the region immediately outside Moscow, waiting to drop off patients.

One ambulance driver said he had been waiting 15 hours outside the hospital to drop off a patient suspected of having the virus.

“The situation in both Moscow and St. Petersburg, but mostly in Moscow, is quite tense because the number of sick people is growing,” Kremlin Spokesman Dmitry Peskov said in an interview on state television, Russian news agencies reported.

“There is a huge influx of patients. We are seeing hospitals in Moscow working extremely intensely, in heroic, emergency mode.”

Russia has reported 13,584 cases of the virus, and the authorities said on Saturday that 12 new coronavirus-related deaths in the last day had pushed the casualty toll to 106.

Peskov added that it would become clearer only in the next few weeks whether the country was nearing the worst point in its outbreak.

Sergei Sobyanin, the mayor of Moscow, said on Friday that the city was far from reaching the peak of the outbreak, saying it was merely in its “foothills”.

The authorities in Moscow are set to begin introducing a system of permits to control movement around the city starting next week to help enforce the lockdown.

A stronger police presence was visible on the streets of Moscow on Saturday. Traffic police had set up check points on major thoroughfares on the outskirts of the city but were not systematically carrying out checks.

In the early stages epidemic, Russia recorded fewer cases of the new coronavirus than many Western European countries, but its tally began to rise sharply this month.

Until late March officials were saying the situation was under control and that there was no epidemic in the country.

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