PRESS DIGEST - Financial Times - April 16

BANKS GIVE BROWN MORTGAGE WARNING

Heads of Britain's leading banks told Gordon Brown on Tuesday that unless the government intervenes to break the logjam in the financial markets, dozens of smaller building societies could be forced to stop offering new mortgages.

At a summit at Downing Street, bank executives said that without intervention only a handful of larger banks would control the market.

"The big banks said: 'You've got to think about this,'" said one person present at the meeting. "We're going to take 100 percent of the market."

The warning came as the Bank of England was finalising proposals to ease the markets by taking over mortgage loans that are stuck on banks' balance sheets, raising hopes of an intervention.

HOUSE PRICES FALL BY 1.6 PERCENT

Official data released on Tuesday showed a 1.6 percent fall in house prices in February. According to the figures from the Department for Communities and Local Government, the average cost of a home by the end of the month was 217,737 pounds ($428,400), its lowest level since last June.

Flats fell by 2.9 percent, detached properties by 1.5 percent and terraced homes by 1.1 percent. Although the DCLG figures are seen as more reliable than those of lenders such as Halifax and Nationwide, they lag several months behind them and as such may underestimate the extent of the slowdown.

'PROBLEM DEBT' HITS 25 BILLION POUNDS

According to a new study by TDX Group, a provider of debt management data, about 25 billion pounds of consumer debt in Britain is "problem debt" that people are struggling to repay.

The report estimates that the debt is split between about one million people, each owing about 25,000 pounds in addition to any mortgage loans, with 60 percent of the debt relating to credit cards and 40 percent to other debt such as personal loans.

About 45 percent of people entering into an Individual Voluntary Agreement to repay debt do not complete them, with 15 percent failing in the first year, according to TDX.

BAUGUR TO SELL LOSSMAKING FASHION CHAIN

The Icelandic investment group Baugur is looking to dispose of its loss-making fashion chain MK One, one of the worst-performing businesses in its portfolio.

MK One lost 17.4 million pounds last year on sales of 118 million pounds across its 172 stores, amid fierce competition from bigger rivals such as Peacocks and Primark.

Baugur now owns a retail portfolio of bigger companies including Karen Millen and House of Fraser and the move to sell MK One is part of a broader restructuring of the group to concentrate on larger, potentially international, retail brands.

CHINESE BUILD UP STAKE OF ONE PERCENT IN BP

A yet-to-be-identified Chinese sovereign fund has built a stake of about one percent in BP (BP.L). The oil and gas group said on Tuesday: "We are aware that over the past few months a Chinese entity has built up a stake of just under one percent."

The identity of the Chinese company concerned was not yet known. BP welcomed the investment, saying: "Our shares are traded publicly and we welcome all shareholders."

Speaking in Beijing, the chancellor Alistair Darling welcomed the move, saying Britain wanted investment "be it from the private sector or sovereign wealth funds, provided it is done on a commercial basis".

LAND SECURITIES TO SELL BULLRING STAKE

Land Securities (LAND.L) is to sell one of its largest holdings, in the Bullring shopping centre in Birmingham, in a move that will test the fragile property investment market.

Britain's biggest property company is putting its one-third stake in the 1.2 million square foot landmark development up for sale.

Property agents estimate that the development is worth about one billion pounds in total so expect bids of more than 300 million pounds.

Land Securities confirmed the sale process, saying: "As part of our regular review of the assets in our portfolio, we are considering a sale of our 33 percent stake in Bullring Shopping Centre".

CLIPPER OPTIMISTIC DESPITE SETBACKS

Clipper Windpower (CWPR.L) said turnover rose to $23.9 million in 2007 from $7.3 million the previous year, although pre-tax losses increased nearly 10-fold from $20 million to $192 million in the year to Dec. 31. However, the headline loss included $107 million related to manufacturing difficulties -- problems which the company said it was "getting through".

James Dehlsen, chairman and chief executive, said difficulties with the drive train for the company's turbines were "about 75 percent solved" and that new financing had added $200 million to the balance sheet.

Charles Williams, chief financial officer, said the company should turn a profit in 2009.

PRIVATE EQUITY BIDDERS VIE FOR INFINEUM

What would be one of the biggest buy-outs in Britain this year came a step closer this week, as private equity bidders queued up to submit 1.5 billion pound bids for Infineum, an oil additives venture between Exxon Mobil (XOM.N) and Royal Dutch Shell (RDSa.L)(RDSb.L).

Cinven [CINV.UL], the Carlyle Group [CYL.UL], TPG Capital [TPG.UL] and Kohlberg Kravis Roberts [KKR.UL] were among the firms that either submitted bids or are expected to do so shortly.

The interest of private equity groups in oil and gas underlines the attractiveness of a sector benefiting from a booming oil price at a time when cyclical sectors such as property and retail look less appealing.

EXPANSION PROMPTS BUOYANT SALES AT SSL

SSL International (SSL.L) said it expected sales to be up by more than 10 percent to about 532 million pounds in the year to the end of March, underpinned by strong growth from its Durex condom business and its Scholl footcare and footwear ranges.

Garry Watts, chief executive, said that product developments of items including vibrating penis rings were behind the improved performance, and said it could be argued that in a recession "people could stay at home more, with nothing to do but have sex".

The shares rose 9.25 pence on Tuesday, closing at 450.5 pence.

CHRYSALIS DECIDES 155 PENCE PRICE IS NOT RIGHT

A long auction process involving Chrysalis (CHS.L) came to an end on Tuesday when Chris Wright, chief executive, rejected the only formal offer on the table.

The offer from EMI of 155 pence a share, valuing the company that owns a back catalogue featuring David Bowie and a host of other artists at about 133 million pounds, was far short of what Chrysalis was hoping for.

Analysts suggested Wright and his investors were optimistic of an offer in the region of 200 pence to 210 pence a share for a music publishing business that currently holds the number one spot in the UK singles chart. Prepared for Reuters by Durrants ($1=.5082 Pound)