PRESS DIGEST - Financial Times - Dec 1

The Financial Times

PAYING BILLS WORRIES ONE IN FOUR BORROWERS

The annual "precious plastic" report conducted by YouGov for PwC has found that 27 percent of borrowers are concerned about their ability to pay bills in the future. Around 16 percent of those surveyed are already struggling to pay off debts amid mounting fears about the still growing 1,500 billion pounds personal debt pile. The study also found that personal insolvencies have increased by almost nine percent in the third quarter of this year from the previous quarter, with more than one hundred adults falling into bankruptcy, an individual voluntary arrangement or start a debt management plan every hour in the working day.

FSA TO STEP UP ITS SUPERVISORY ROLE

Hector Sants, chief executive of the Financial Services Authority, has revealed the regulator's plan to increase its supervisory role over the institutions it oversees, adopting a more intrusive approach to banking activity. In an interview with the Financial Times, Mr Sants conceded the City watchdog, which came under fire for its loose supervision of Northern Rock NRK.L, could have performed better: "We are acknowledging that we could have challenged those business models before they went into the downturn." The changes mean there will be more jobs on top of 218 new posts already announced, taking FSA's number of staff to more than 3,000 by 2010.

WARNING OF WORST DECLINE IN 20 YEARS

The EEF manufacturers' organisation has warned that the sector is to face the worst recession in 20 years, hit by the widespread withdrawal of credit from UK companies. The leading industry association, which warns on Monday that manufacturing will contract by five percent next year, followed by an additional decline of about one percent the year after, estimates 90,000 job losses in 2009 with an unspecified number of businesses going into liquidation. Analysts believe that the banks' delaying stance on the issue of lending is exacerbating the difficulties faced by the sector's groups.

BARCAP REBUILDS EQUITIES UNIT

Barclays (BARC.L) Capital has announced plans to return to the global equities market, which it had abandoned in 1997, by building on the platform it acquired as part of its takeover of the US operations of Lehman Brothers. Taking advantage of the economic crisis, the British bank is hiring research analysts and traders at knock-down rates, including former Lehman Brothers' employees. BarCap is aiming for a place in the top five equities players over the next three years but analysts believe it is entering the market at a difficult time and may face problems in building relationships with clients.

POTENTIAL BUYERS LINE UP POSSIBLE BIDS FOR WOOLWORTHS

Administrator Deloitte, which has been brought in to help the sale of Woolworths, said on Sunday that the failed chain could be sold within a week as potential buyers, including Theo Paphitis, owner of the Ryman brand, are preparing bids for the group. Other potential bidders include Endless, the Leeds-based turnround investor, Cerberus, Sun European Capital and Alchemy Partners. However, analysts played down Deloitte's optimism, arguing that Mr Paphitis, as well as the other interested parties, will withdraw his interest in the end. Like-for-like sales are posting a 20 percent rise on the day since Woolworths fell into administration.

JOHN LEWIS FEELS KNOCK-ON FROM RETAILER'S COLLAPSE

John Lewis [JLP.UL], the department store chain, has reported a 13 percent fall in sales in the week to Saturday compared to the same period last year, as the collapse of Woolworths and MFI plunged consumer confidence even further. Patrick Lewis, head of retail operations, said: "Confidence was relatively low already, and there's no doubt Woolies hit it again." Accompanying other struggling retailers, the company has been forced to offer large discounts in recent weeks. Mr Lewis underlined the importance of the following weeks for the retail sector: "We're concentrating on trading in the next month because we think that is what we can control. Beyond that, our crystal ball is as muddy as everyone else's."

LAST-DITCH MOVE TO BLOCK TAKEOVER

In a bid to challenge the planned Lloyds TSB (LLOY.L) takeover of Halifax Bank of Scotland HBOS.L, a group of Scottish entrepreneurs has called the Competition Appeal Tribunal to look at the government's decision to support the deal at the end of October without referring it to the Competition Commission. The Merger Action Group, which says it has the backing of customers, account holders and shareholders, claims the decision was unlawful. Shareholders in HBOS will meet to decide on the takeover on December 12 while the deal is scheduled to complete in mid-January.

LAND OF LEATHER POISED FOR STATEMENT ON UNSOLICITED BIDS

Directors in Land of Leather, the battling sofa retailer, were on Sunday night preparing a formal statement to issue to the market about the group's speculative buyers. It is believed that the company, which has given three profit warnings since Christmas, has not solicited the bids and has advised those interested to go through Investec, its corporate broker. Turnround specialist Hilco and private equity group Sun European have so far expressed interest for the group, but the talks are believed to be at a very early stage.

ACTIS RAISES 2.9 BILLION POUNDS FOR NEW MARKETS

Private equity group Actis is to unveil on Monday it has raised 2.9 billion dollars for its new emerging nations' fund to invest in businesses across Africa, China, India, Latin America and south-east Asia, in a move that highlights the attractiveness of the developing markets which proved more resilient to the credit crunch than the US and Europe. The new vehicle has already committed funding to eight deals, including investments in China, Egypt and South Africa.

Actis is employing 120 investment professionals in 13 offices around the world and has invested more than three billion dollars in the past ten years.

STANDARD BANK SEEKS TO RAISE FUNDS FOR PRIVATE EQUITY ACTIVITIES

Graham Thomas, the London-based chief of Standard Bank's private equity business, has unveiled the group's plans to raise third-party money to fund the growth of nascent emerging market private equity activities in the next two to three years. Mr Thomas believed the economic crisis could help the group, as it would lower competition for deals. Standard, which is Africa's biggest lender, has until now invested one hundred million dollars in small-scale buy-outs in Africa and Turkey. The group aims to do around 20 deals before raising a fund, while planning to open a new office in Brazil and doubling its workforce from 20 to 40.

Prepared for Reuters by Durrants