PRESS DIGEST - British business - June 30

The Times

TRAPPED ROCK BORROWERS FACE BIG JUMP IN PAYMENTS

A large number of Northern Rock (NRKx.L) customers face enormous hikes in their monthly mortgage payments at the end of their fixed-end deals. Around 200,000 home owners are on Rock's Together mortgage which allowed them to borrow up to 125 percent of their property's value. But as few lenders now offer deals above 95 percent, thousands of Together customers are trapped, being able to move only on to the bank's 7.49 percent standard rate. Melanie Bien, of broker Savills Private Finance, said: "Unfortunately, people with 100 and 125 percent loans who are coming to the end of the fixed-rate don't have much choice."

TAXPAYER BAILOUT LOOMS FOR 250 MILLION POUNDS GAMES VENUE

Carillion (CLLN.L) and Igloo IGLVF.PK, the developers of the 250 million pounds Olympic Games media centre, are facing difficulties securing bank finance because of the credit crunch, it has emerged. The news, coming just a few days after Lend Lease said it was having problems finding funds for the one billion pounds athlete's village, means that taxpayers could be asked to pay the burden. A spokesman for the Olympic Delivery Authority said a statement on the media centre was imminent, adding: "We still anticipate significant private investment."

BANKS MAY BE FORCED TO PUMP BILLIONS INTO SAVINGS COMPENSATION SCHEME

Alistair Darling is set to announce on Tuesday a new set of banking reforms, under which the institutions could be forced to pay billions of pounds upfront into a compensation scheme for those hit by bank failures. The banking industry, which would rather pay compensation as and when is needed, has called for a "sensible" limit on the amount of savings that the scheme will cover. It has also accused the government of provoking unfair competition, as the National Savings & Investments will not be included in the plan. A source said: "The industry is aggrieved that there's one rule for the government and one rule for banks and building societies. People are increasingly resentful about NS&I, which seems to enjoy unfair competitive advantages."

The Daily Telegraph

WIMPEY SEEKS 500 MILLION POUNDS CASH FROM INVESTORS

Taylor Wimpey (TW.L) is expected to issue a statement on Monday confirming it is in discussions with its major shareholders, including Standard Life (SL.L) and Barclays (BARC.L), about a 500 million pounds emergency fund-raising. The UK's second biggest housebuilder will use Wednesday's half-year trading update to give more details on the deal and also disclose that it has secured an agreement with its lenders over its banking covenants. Wimpey will be the first big company of the sector to make half-year trading statements, with analysts forecasting it could write down the value of its land holdings by up to 600 million pounds.

MATALAN DEFIES ECONOMIC SLOWDOWN

Retail giant Matalan has managed to escape the economic slowdown with an almost doubling of its pre-tax profits, up to 53.2 million pounds in the year to March 2008 against 28.1 million pounds the year before. Operating profit jumped from 53.3 million pounds to 90.2 million pounds, while sales over the same period remained flat at just over one billion pounds. Alistair McGeorge, the group's chief executive, said: "We have made considerable progress to improve the profitability and growth prospects for the business since we took it private." He said the retailer was considering overseas expansion and the possibility of offloading one or two of its brands online.

NEW TAG TO BRIGHTEN FUTURE ORANGE ADS

Orange's (FTE.PA) "the future's bright" successful slogan will be replaced on Monday by a new tagline, as the company launches a new 30 million advertising campaign in a bid to regain its former position as the UK's largest mobile company by customer numbers. The new "I am" tagline will be used globally as a prefix in all Orange advertising and marketing, such as "I am the one who always has the last text". Shaun Collins, of industry watcher CCS Insight, observed that brand change is not enough but saidOrange's management is "doing some pretty-root-and-branch changes".

The Independent

TPG AIMS TO WIN OVER UNHAPPY B&B INVESTORS

TPG is expected to meet Bradford & Bingley BB.L shareholders over the next few days in a bid to woo them regarding its proposed 179 million pound investment ahead of their vote at the bank's general meeting on July 7. A source near the talks revealed the U.S. buyout group "wants to repair relationships following recent events with Resolution and outline its future strategy with regards to Bradford & Bingley". Resolution, the fund set up by Colin Cowdery, abandoned its investment plan last Friday, accusing B&B's board of being "extremely obstructive" as they refused to open the books.

SELF-EMPLOYED CAN SET MORTGAGE COSTS AGAINST TAX, SAYS HMRC

A new guidance by HM Revenue & Customs is giving the opportunity to self-employed workers to write off their mortgage interest, council tax and even home insurance against their annual income tax bill for the first time. The news, coming amid a time of economic slowdown and soaring food and fuel costs, is expected to be welcomed by Britain's 3.6 million self-employed. Angela Beech, of the accountancy firm Blick Rothenburg, said the move was regarded in the past as a dangerous one as "it could put your house in jeopardy of being free of Capital Gains Tax". An HMRC spokesman said self-employed workers were always eligible to off set mortgage interest against tax, but admitted that this was the first time it had been formally stated in HRMC documents.

BUYOUT FIRM IN SUSTAINABILITY MOVE

Doughty Hanson has appointed Adam Black as its full-time adviser on environmental, social and government issues. The private equity firm is the first in the buyout sector to proceed in such a move. Guy Paisner, head of investor relations, said: "These issues concern financial and reputational risk and have important implications for the returns we generate for our investors." Black will join Doughty Hanson on Monday.

The Guardian

C&W LIKELY TO RAISE BID FOR THUS

Cable & Wireless (CW.L) is likely to raise its bid on Monday for Thus THUS.L by up to 180 pence a share, following intensive talks throughout the weekend. The new offer will value the telecoms provider at 330 million pounds. Thus's board had rejected an earlier 165 pence a share approach but it was brought back to talks after failing to attract an alternative bidder. It is believed a number of Thus investors have been keen for the resumption of the talks as they seek a cash return on their investment. A potential deal could lead to the departure of Bill Allan, Thus's chief executive, who has clashed with C&W in the past.

RAIL CAMPAIGNERS TARGET HEATHROW'S "ABSURD" DOMESTIC FLIGHTS

Transport minister Jim Fitzpatrick has revealed 2.5 million transfer passengers fly into Heathrow airport every year from British destinations, fuelling the debate over the construction of a third runway at the UK's largest airport. Opponents of the move argued the figures, which represented about four percent of all Heathrow's passengers last year, showed that many unnecessary flights could be swapped by high-speed rail routes. Norman Baker, transport spokesman for the Liberal Democrats, said: "It's absurd to have large numbers of people taking short-haul flights in this country when there is much more extensive use of high-speed rail in other European countries." Last week, Fitzpatrick repeated the government's support on the building of a third runway.

FOREIGN WEALTH POURS INTO LONDON'S HEDGE FUNDS

A new survey by the Hedge Fund Manager Week magazine has showed London's hedge fund industry is being targeted by foreign sovereign wealth investors who aim to increase the returns on their huge savings. The rapidly growing group of fund of hedge funds, which is acting across a range of individual projects, has seen a 10 percent growth in assets in the last six months to 700 billion pounds, with Fortis Prime Solutions topping the table with assets under administration of 107 billion pounds. According to the survey, total industry assets reached 2.2 trillion pounds.

Prepared for Reuters by Durrants