PRESS DIGEST - British business - Dec 7
The Mail on Sunday
RIO TINTO SET TO AXE THOUSANDS
Rio Tinto(RIO.L), the mining conglomerate, is set to axe thousands of jobs and postpone billions of pounds of big projects in an attempt to crackdown on spending. Tom Albanese, chief executive, is taking swift action to preserve cash after BHP Billiton's(BLT.L) decision to cancel a 43 billion pound takeover bid for Rio following a year-long battle. Rio is poised to mothball its massive Simandou iron project in west Africa along with other schemes across the globe.
BOVIS IN LAND WRITEDOWN SHOCK
Bovis Homes Group(BVS.L), the builder, could writedown the value of its land bank next month, and is likely to slash jobs in the next few weeks with more to go next year. David Ritchie, chief executive, revealed that the company would make an announcement of job cuts in January, which could also include the writedown of its land bank. Mr Ritchie said the writedown would be less than 100 million pounds, and that employees would be axed this year to drive down costs, but declined to comment on the numbers.
CHEMRING TARGETS GROWTH
Defence firm Chemring Group(CHG.L) has armed itself with a 100 million pound war chest to make acquisitions in Europe next year. David Price, chief executive, revealed the company was looking to expand after a massive boom in business this year as it supplied forces in Iraq and Afghanistan. He added that Chemring, which produces ammunition and decoy countermeasures for military aircraft, was also set to win the U.S. contract to supply flares for Lockheed Martin's new F22 Raptor fighter jet.
The Sunday Times
46 MILLION POUND BONUS AT KNIGHT FRANK
Staff at Knight Frank, the upmarket estate agent and commercial property consultancy, have defied the credit crunch to bag 46 million pounds in bonuses this year. The payouts came following a strong financial year to last April, which saw group turnover soar 17 per cent to 333.9 million pounds, and underlying profits before tax increase to 67 million pounds from 64.9 million pounds. Since then, the commercial and residential markets have taken a nosedive, but chairman Nick Thomlinson remains "cautiously optimistic" about the current year.
EX-CITY TRADER TAKES THE REINS AT AMANDA WAKELEY
Amanda Wakeley has been bought by Jason Granite, a former City trader now forging a career rescuing troubled British retailers. The women's fashion brand designs luxurious clothes worn by famous females such as actress Dame Helen Mirren. Mr Granite has recently sold his stake in Agilo, the distressed-assets fund he co-founded after leaving Deutsche bank(DBKGn.DE) where he was a debt trader. It is his first deal since selling out of Agilo.
BT AD DEAL FOR GELDOF
Ten Alps, Sir Bob Geldof's media company, will sign a deal with BT(BT.L) this week to begin offering online video adverts to 250,000 of the telecoms group's small-business customers. Ten Alps hopes to create a video version of the Yellow Pages(YELL.L) by making low-budget commercials for members of BT Tradespace, a networking website.
The Sunday Telegraph
HEDGE FUNDS PUT 700 MILLION POUND GATE GOURMET IN DEPARTURE.
Gate Gourmet, the airline catering firm, has been put up for sale by its hedge fund owners with an expected 700 million pound price tag. The company has appointed Credit Suisse(CSGN.VX) to handle the sale on behalf of its one hundred or so shareholders, with the first deadline for offers three weeks ago. The group, once at the centre of Heathrow's most bitter industrial disputes, supplies inflight meals to customers such as British Airways(BAY.L).
TORY BUSINESS ADVISER TO CALL IN ADMINISTRATORS
Library House has announced it will appoint Leonard Curtis, the corporate recovery firm, as its administrator following a dramatic slowdown in demand for its services. Trutap, which badges itself as the closest thing to a social networking operation on mobile phones, is also considering shedding up to 80 percent of its employees. Doug Richard, a panellist on the BBC television series Dragons' Den and a major investor in Trutap, said this weekend that the group was continuing to perform well but that it had to live within its means.
PRIVATE EQUITY OWNER OF AA AND SAGA LAUNCHES FIVE BILLION POUND.
Charterhouse Capital, the private equity firm, is seeking to raise up to 5.2 billion pounds for a new buyout fund. Its move comes even as many investors in the asset class scale back their commitments amid a funding crisis. The new fund is called Charterhouse Capital Partners IX, and investors understood to have already signed up include Los Angeles City Employees' Retirement System. Charterhouse has also committed itself to providing at least 259.1 million pounds of the fund.
The Independent on Sunday
BAIN CLOSE TO CLINCHING ONE BILLION DOLLAR 'VARIETY' DEAL
Media giant Reed Elsevier(REL.L) is close to selling the publisher of New Scientist and Variety to Bain Capital, the U.S. buyout group, for 680 million pounds, after its main rival pulled out. TPG, the private equity group, withdrew from the auction after its investment company decided the acquisition was too risky for the current economic climate. This left Bain as the last remaining bidder; however, it will not have a clear run at Reed Business Information (RBI), which also publishes Flight International and Estates Gazette.
'THERE'S NOT ENOUGH MONEY TO GO ROUND' SAYS XL'S ADMINISTRATOR
Thousands of creditors to failed XL Leisure will not be invited to a creditors meeting at Wembley Arena next week because administrators have deemed there is no money left in the underlying companies. Zolfo Cooper, the administrator, published proposals last Friday which reveal that creditors to just five of XL's 13 underlying companies will be invited to attend the 16 December meeting. A spokesman for the administrator said: "The reason we have done this is because there are simply no funds left to distribute to unsecured creditors in these companies."
