PRESS DIGEST - Financial Times - Nov 23

FINANCIAL TIMES

CBI SAYS SHOCK OF CRISIS SET TO TRIGGER NEW ERA

The Confederation of British Industry says companies will rethink their commercial models and supply chains in the wake of the recession, seeking new forms of finance and achieving greater workforce flexibility. A report published on Monday to mark the CBI's annual conference in London says businesses do not envisage credit terms returning to pre-crunch levels, and will seek to protect investment and innovation by seeking alternatives to debt-driven growth.

FEARS FOR FREE BANKING FROM COURT CASE

The new Supreme Court will rule on Wednesday on whether overdraft charges can be assessed for fairness under the Unfair Terms in Consumer Contract regulations. If the Supreme Court rules in favour of consumers, another court hearing will rule on whether the charges are unfair. Banks could be forced to pay out hundreds of millions of pounds if overdraft charges are ruled unfair, and could seek to recoup losses through charges on current accounts and ATM withdrawals.

FLOOD CLAIMS RISE TOWARDS 100 MILLION POUND MARK

According to the Association of British Insurers, insurers have received between 500 and 1,000 claims relating to recent flooding in Cumbria and southern Scotland totalling up to 100 million pounds. At least 1,500 homes were affected by the floods, six bridges are reported to have collapsed and 5,000 households were left without power. The ABI said it was unsure how many more claims could be expected. Insurers have said they might have to reconsider current arrangements, whereby all homes in the UK are offered flood insurance.

BA CHIEF WARNS CABIN CREW OVER STRIKE

In an interview with the Financial Times, British Airways BAY.L chief executive Willie Walsh said he will not compromise in cost-cutting measures at the airline aimed at saving 130 million pounds a year. Walsh said the measures, which include voluntary redundancies and cutting the number of flight attendants on long-haul flights from 15 to 14, are vital to the company's future as it faces declaring its second consecutive year of losses for the first time. The union Unite began balloting 12,000 staff on strike action over the cuts last Monday and could legally go on strike from December 21 if they win the vote.

CADBURY IS SWEET ON TAKEOVER BY HERSHY

Cadbury CBRY.L is expecting a friendly takeover-bid from Hershey. The charitable trust that controls the U.S. confectionary maker is pushing the company's management to place a 10.3 billion pound bid for Cadbury that would exceed a recent 9.8 billion pound hostile bid from Kraft (KFT.N). According to a person close to the British chocolate manufacturer, a Hershey bid would be better received by Cadbury as "these are people who know each other". However, the source said the bid would still succeed only if it was high enough.

LLOYDS INVESTORS WARM TO CoCos

Advisers for Lloyds Banking Group (LLOY.L) are expected to announce on Monday that investors have subscribed for more than the 9 billion pounds of contingent convertible notes, or CoCos, offered as part of a 22.5 billion pound capital raising plan by the bank. The new securities, which convert into shares if the bank's core tier one capital ratio falls below five percent, were offered for exchange to holders of a series of existing subordinated and hybrid bonds. Lloyds will hold an extraordinary meeting of shareholders on Thursday to approve both the CoCo transaction and a proposed 13.5 billion pound rights issue by the group.

HERITAGE OIL SCOOPS TULLOW WITH ENI MOVE

Heritage Oil (HOIL.L) has agreed to sell the company's oil fields in Uganda to Italian Energy Group Eni (ENI.MI), in a deal said to be worth 1.3 billion dollars. Heritage's willingness to sell 100 percent of its stakes in the two blocks on the shores of Lake Albert is thought to have swayed Eni into the deal as opposed to bidding for Ugandan oil fields that have been put up for sale by Heritage's rival Tullow (TLW.L), which was only prepared to sell a partial stake in its fields. Heritage chief executive Tony Buckingham could personally make as much as 80 million pounds on the deal.

LANDLORDS POISED TO HELP BLACKS LEISURE ESCAPE ADMINISTRATION

Blacks Leisure BSLA.L is poised to sign a deal that will allow the outdoor goods retailer to back out of leases on 101 stores. Blacks' landlords, which include Land Securities (LAND.L) and British Land (BLND.L), will vote on Monday on whether to accept plans for Blacks to enter into a Company Voluntary Agreement, which could save 290 shops and 4,000 jobs. JJB Sports, Discover Leisure and Focus DIY have all avoided administration by entering into CVAs in recent months.

ROCKSPRING BUYS DISTRESSED RBS ASSETS

Property fund manager Rockspring will purchase a portfolio of UK industrial properties from Royal Bank of Scotland (RBS.L) in one of the first deals to see a sale of distressed assets by a UK lender. The portfolio of 13 logistics and manufacturing units will change hands for 27 million pounds, reflecting a 13.5 percent initial yield. RBS will provide a new debt facility amounting to around 60 percent of the purchase price, while Rockspring's Transeuropean IV fund will provide the remainder of the equity.

SKYSCANNER WEATHERS RECESSION

Edinburgh-based online travel research firm Skyscanner has seen a surge in business despite the recession and is expecting revenue of nine million pounds in the year to next May, up from 3.5 million pounds for the previous year. Chief executive Gareth Williams said the company was benefiting from the interest of consumers looking to travel more economically. Williams said the company had no immediate fund-raising plans for the future, but that a listing was possible "in a few years' time".

Prepared for Reuters by Durrants