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Thursday newspaper round-up: Peacocks, Essar, Falklands
Tue, 22 May, 2012
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Thursday newspaper round-up: Peacocks, Essar, Falklands
Thu, 19 Jan 2012, 07:12:00
Traders were unconvinced by a radical proposal by the
International Monetary Fund
(IMF) to deploy $1tn (£648bn) to stem the European debt crisis and its impact on the global economy. Ms Lagarde said its members recognised the "importance of ensuring adequate fund firepower to help defuse current global economic weaknesses and regional challenges." But neither traders nor economists - nor some key politicians - were prepared to bet on the delivery of the IMF's plan and worried instead about the advancing debt crisis. The yield on 10 year-gilts, which have become a bell-weather of stresses in the Eurozone, fell to a record low of 1.917% before recovering to 1.963% as bondholders sought shelter in UK debt. Stock markets across Europe slid amid more predictions of recession, bail-outs and downgrades, The Telegraph writes. High street retailer
Peacocks
collapsed into administration last night amid bitter recriminations after lenders rejected a £50m-plus rescue bid. The loss of 9,600 jobs will make Peacocks the UK's biggest administration since Woolworths - following a grim series of company failures in recent weeks. Talks concerning a last-ditch rescue deal, led by incumbent chief executive Richard Kirk and backed by an unnamed financier, broke down in the early hours of Wednesday morning, leading to the formal appointment of KPMG as administrators that afternoon. The team behind the rescue bid is thought to have originally tabled a £65m offer for the 611 stores and 49 concessions. This valued Peacocks' £240m of net debt at 28p in the pound. But according to sources, amid a dispute about the sale of Peacocks subsidiary Bonmarché, the price was cut and the deal collapsed, The Telegraph reports. David Cameron has approved contingency plans for a rapid increase in Britain's military presence on the
Falklands
as he warned Argentina that the islands' sovereignty was not up for grabs. The Prime Minister accused Buenos Aires of colonialism yesterday after talks with military chiefs about Argentina's increasingly aggressive rhetoric. The Government is braced for further sabre-rattling prior to the 30th anniversary of the 1982 conflict, a build-up that includes the Duke of Cambridge spending six weeks on the islands in his role as a search and rescue co-pilot. It is understood that Prince William lobbied to be allowed to take up his deployment next month and in March, according to The Times.
Royal Bank of Scotland
was fined £2.17m yesterday after managers in its insurance division encouraged junior employees to alter closed complaint files. The Financial Services Authority imposed the penalty on the Churchill and Direct Line insurance operations for failing to conduct their businesses with "due skill, care and diligence". In an attempt to head off a regulatory crackdown, managers had told 200 staff in conference calls to review complaints files due to be inspected by the FSA. If they took action to change any that were not in a fit state to pass the inspection, that would be seen as an extremely positive result. Those staff not operating to the required standard would be disciplined, they were told. Out of 50 complaint files requested, the FSA found that 27 were altered improperly, with one employee forging colleagues' signatures, The Times says. Every dog has its day. Bargain hunters took the view that
Essar Energy
is heavily oversold and with vague rumours that Royal Dutch Shell and ExxonMobil could be sniffing around - or billionaire 76% shareholders the Ruia brothers could decide to take the India-focused refiner and power generator back private - chased the shares up to 143.1p before they closed 9.2p higher to 136.2p. JP Morgan Cazenove and Deutsche Bank helped float Essar at 420p in 2010 and after briefly flirting with the £6 level, it's been downhill for the shares ever since. After being the worst performing Footsie stock of 2011 with a fall of 70%, it has already had a dreadful start to 2012, The Daily Mail reports. Drilling activity in UK waters has fallen to its lowest level since 2003 due to a lack of oil rigs and the knock-on effects of the 2008-9 recession, according to a report published today. The number of exploration wells sunk on the UK continental shelf (UKCS) fell by 34% year-on-year in 2011, worse than the 12% fall for north-west Europe as a whole (...) according to analysts at accountancy firm Deloitte, which compiled the report. They warned the effects of Chancellor George Osborne's surprise North Sea tax hike in last year's Budget won't be felt until the end of this year. Health and safety concerns following the Gulf of Mexico explosion may also have played a role in lowering last year's total, the firm said. Investment in UK waters continued though, "with a larger number of significant development projects granted approval", Deloitte said. That finding backed up a report issued last week by research firm Wood MacKenzie, which found investment reached £7.5bn in 2011, a new record, The Scotsman says. The UK faces a request for £19bn as the IMF boosts its
bailout fund
to $1tn. The government has said it will demand improvements in European Union efforts to sort out its currency before it can agree to an imminent request from the International Monetary Fund for extra UK funds that is likely to be as high as £19bn. The Commons has already given the Treasury leeway to draw down an extra £10bn to give the IMF, but anything further would require a fresh vote in the Commons - and be likely to prompt a backbench Tory rebellion. Ed Balls, the shadow chancellor, has said Labour will vote against extra cash if there is no serious sign that the European Union, specifically through further interventions by the European Central Bank, is taking action to strengthen the euro. Balls would also like to see a shift in broader European economic policy so there is less emphasis on austerity and more on securing growth, The Guardian says. AB
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