PRESS DIGEST - British business - April 7
The Times
BA SHOWDOWN LOOMS AS WALSH SEEKS TO CUT CABIN CREW PAY.
British Airways'(BAY.L) 13,500 cabin crew could see marked reductions in pay and holiday allowance as BA seeks to cut its 567.9 million pound in-flight budget by 82 million pounds.
Proposals put forward by BA include a reduction in annual leave, a pay freeze over two years and a reduction in bonuses for working long-haul routes. The proposals would also mean that new staff would no longer be entitled to the benefits enjoyed by present cabin crew.
A meeting of more than 1,500 cabin crew Monday unanimously rejected permanent changes to their terms and conditions.
VIRGIN DIDN'T WANT THESE PASSENGERS, BUT NOW A RIVAL IS.
Rail company Wrexham & Shropshire, which offers Britain's cheapest train tickets, could find its existence threatened due to competition from Virgin.
Having withdrawn its London to Shrewsbury service five years ago, citing insufficient demand, Virgin now plans to run trains from London to Shrewsbury and Wrexham, having noted the success of Wrexham & Shropshire-operated trains travelling on these routes.
If the regulator decides to protect W&S from its larger rival, it is likely that more small companies will start to challenge the monopolies enjoyed by the likes of Virgin.
ITV PONDERS CASH CALL AFTER SOUNDING OUT SHAREHOLDERS
ITV's (ITV.L) leading shareholders are said to be "neutral to positive" on the idea of a rights issue following a meeting with the broadcaster.
ITV has debts of 730 million pounds, and poor short-term trading means that cash may be needed to boost liquidity. It is thought that a rights issue could raise around 500 million pounds.
ITV would be unable to draw on a 450 million pound loan should debts exceed 3.75 times underlying earnings, leaving it with headroom of only a 200 million pound facility at 8.85 per cent interest.
TEMPUS
Cranswick (CWK.L) No more than a hold
Afren AFRE.L<Pass
Adnams (ADNM.PZ) Avoid
The Daily Telegraph
PRINCIPLE FIGHTS FOUNDER MYERSON
Principle Capital Investment Trust has called for its shareholders to reject its former chief executive Brian Myerson's attempts to regain control of the group.
Principle founder Myerson and the rest of the board were deposed last month by a group of investors and a new board was installed to wind the business down, with cash due to be returned to investors.
Myerson has accepted Principle should be wound down, but has accused QVT Financial of seeking a fire sale. Principle, however, has claimed assets will be sold over two years.
BOWES BRINGS HOME BACON IN 17 MILLION POUND DEAL
Bowes of Norfolk has agreed to sell its pork processing business to Cranswick for 17.2 million pounds. Bowes was founded in 1957 and has grown into a pig farming company with an annual turnover of more than 75 million pounds.
The deal is subject to approval from competition regulators and will see Cranswick acquire Bowes' entire share capital, but the arable farming division will remain in the hands of the Bowes family, while the pig-rearing unit will be sold to a team made up of Bowes management.
ICAP AIMS TO CUT BANK RISKS WITH NEW FX VENTURE
ICAP (IAP.L) has teamed up with CLS Group to launch a new service designed to reduce the risks banks face when trading foreign currencies. The service has won backing from Citigroup, JP Morgan,
Royal Bank of Scotland(RBS.L) and Deutsche Bank(DBKGn.DE). Global regulators have identified the foreign exchange market as an area of concern, having criticised the settlement system for being overburdened and too outdated to deal with the growing market.
The ICAP-CLS joint venture will aggregate smaller trades into groups to reduce risks, with settlement costs expected to be significantly reduced.
