PRESS DIGEST - Financial Times - Aug 18

Financial Times

COMPANIES COMPLAIN OVER NEW VISA SYSTEM FOR OVERSEAS HIRING

Several large companies, including GlaxoSmithKline (GSK.L) and Morgan Stanley (MS.N), are facing difficulties when hiring staff from abroad because of the government's points-based immigration system. The approach, which was introduced to safeguard "British jobs for British workers", has sparked fears about London's status as a global business centre. Leading immigration lawyers say the scheme was rushed in by the government for political reasons. The CBI said it supports the scheme, but Neil Carberry, the body's head of employment policy, conceded there was growing frustration regarding rule changes and visa delays.

DEPARTMENT ALLOWS 300 MILLION POUNDS FOR EU FINES

Figures from the Department for Communities and Local Government show Britain has earmarked almost 300 million pounds to cover fines and potential fines from Brussels over irregularities in monitoring European regional aid. The figure represents a 74 million pound rise from earlier in the year when officials acknowledged the extent of the problem. The liabilities relate to administrative mistakes over grants, including the failure to follow procurement rules and a lack of paperwork to account for expenditure. Shadow communities secretary Caroline Spelman has called for a full ministerial statement on the matter.

FREEZE ON CITY HIRING SHOWS SIGNS OF THAWING

Figures released by Morgan McKinley, a City recruiter, reveal the Square Mile's freeze on recruitment is beginning to ease with firms starting to hire again. New job vacancies in the financial services sector rose by 20 percent in June from May's levels and although the number fell seven percent lower in July, it remained the second-highest this year. Improved investor confidence and the performance of financial markets are driving recruitment. Although most recruiters accepted the jobs market was moving again, any evidence was treated with extreme caution.

3I TO SELL EUROPEAN INVESTMENTS AT DISCOUNT

Private equity group 3i has entered exclusive talks to sell a portfolio of 36 European venture capital investments to a consortium headed by Coller Capital and HarbourVest Partners for around 100 million pounds. The development follows 3i's decision last year to stop early stage investing in start-up companies and focus instead on buy-outs, growth capital and infrastructure. The consortium's offer is believed to value the 36 venture capital investments at just over 100 million pounds, which is a substantial discount on their carrying value of around 250 million pounds in 3i's accounts.

HANSTEEN BUYS 18.5 PERCENT WARNER STAKE FROM PETCHEY

Property group Hansteen (HSTN.L) has acquired an 18.5 percent stake in Warner Estates. The Aim-listed group, which raised 200 million pounds through a placing and open offer earlier this year to seize opportunities in the depressed market, acquired the stake from Trefick, the investment vehicle of investor Jack Petchey. The purchase will give Hansteen a significant stake in a group that manages the Ashtenne Industrial Fund, which was established by Hansteen's joint chief executives Morgan Jones and Ian Watson. Hansteen has applied to issue 3.3 million new shares at ten pence each, which will used to acquire 10.4 million shares in Warner.

NEWRIVER SLASHES FLOTATION TARGET

NewRiver Retail has announced plans to raise 25 million pounds through a flotation after an attempt in June was abandoned due to a lack of investor interest. The amount represents just a tenth of the original target and has already been pledged by large institutional shareholders, but the company may return to the market for additional funding of up to 100 million pounds once it has established a record with its initial investments. A change of strategy at the company will see it seeking joint venture ties with larger investment groups and providing asset management experience rather than large amounts of its own capital.

RADAR GROUP IN TALKS WITH GARMIN

Raymarine RAY.L, the Portsmouth-based manufacturer of radar and navigation systems for leisure boats, is involved in takeover talks with the American satellite navigation firm Garmin (GRMN.O). The company has been locked in refinancing talks with its lenders since the beginning of the year, as the plummeting value of the pound increased the cost of its non-sterling loans. Losses due to foreign exchanges totalled 4.9 million pounds and accounted for half of the firm's financing costs last year. Raymarine said it was in preliminary talks with a number of parties, including Garmin, "which may or may not lead to a sale of the company".

HILL & SMITH EXPECTS U.S. LIFT

Hill & Smith (HILS.L), the constructional metal manufacturer, expects the rise in U.S. infrastructure spending to offset any comparable slowdown in its UK activity. Derek Muir, chief executive of the company which generates half of its revenue from crash barriers and motorway parapets, said: "The U.S. has good infrastructure but it's ageing and the spending will come through in the stimulus." The U.S. stimulus package contains 27.5 billion dollars for roads and highways and several other UK firms plan to grow their U.S. businesses via the increased investment.

QINETIQ CONSORTIUM WINS CONTRACT

The Ministry of Defence has awarded Metrix, a consortium led by research firm Qinetiq (QQ.L), a 31 million pound contract to begin designing new course training materials. The deal is part of the 12 billion pound Defence Training Review, which aims to modernise all non-military technical training for Army, Navy and Air Force personnel and locate it in a single academy in St Athan in south Wales. The first part of the 30-year private finance initiative was awarded to Metrix in January 2007, but the project has been hit by cost inflation and the credit crunch. The final investment decision on the programme is not expected until February 2010.

Prepared for Reuters by Durrants