The Bank of England said on Monday it plans to extend its asset purchase facility to forms of working capital, therefore enabling companies to offload their high-quality short-term debt. The Bank is to begin a rapid consultation on purchasing commercial paper backed by assets such as trade receivables and equipment leases. Bank officials said the programme of new purchases of company debt would possibly begin by the end of June and they indicated the purchases would be financed by creating money under the 125 billion pound “quantitative easing” programme designed to pump money into the economy in response to the recession.
The latest survey by the Royal Institution for Chartered Surveyors predicts London’s housing market is set for a quicker recovery than the rest of the UK, with estate agents expecting house prices in the capital to rise for the first time in nearly two years. The survey shows a balance of 25 percent of estate agents expect prices to increase in London, while a balance of only five percent of estate agent report falling prices. Rics economist Simon Rubinsohn said: “In the last couple of months as things have begun to recover, London has been at the forefront. The worst fears of the City have not materialised and clearly overseas buyers have played a role.”
The board of EcoSecurities ECO.L has rejected two takeover approaches in consecutive working days. The Ireland-based carbon trading specialist said an indicated 75 pence a share cash offer from EDF Trading, a subsidiary of the French group EDF (EDF.PA), was “wholly inadequate” as it fell short of an indicative conditional proposal of 96 pence EDF made last month. On Friday, the company rejected an indicative offer of 60 pence a share from the Dutch company Guanabara which now owns 12 percent of EcoSecurites. EcoSecurities shares closed at 77.5 pence on Monday, up 18 pence.
In one of the biggest private funding rounds in Europe so far this year, online loans company Wonga.com has secured 22.25 million dollars of new finance in a deal led by Accel Partners and Greylock Partners. Wonga provides short-term loans of up to 750 pounds for consumers over the Internet and despite being launched only 11 months ago the company has already advanced 100,000 loans and is expecting revenues of 15 million pounds this year. The company is already profitable, thanks to a combination of high interest rates and a highly selective approach to who it lends to. Default rates for loans are below 10 percent, less than the average rates for credit cards.
Workspace (WKP.L) has posted a pre-tax loss of 360.4 million pounds for the full year, but the flexible business space provider said there is still a demand among its core tenants in the smaller business sector. The company reported a fall of 88 percent in net asset value per share to 27 pence for the year to March 31, following a 33 percent drop to 662 million pounds in the value of its property portfolio as well as a 87 million pound rights issue this year. Revenues rose 4.3 percent for the year to 70 million pounds despite a fall in occupancy to 83.4 per cent on a like-for-like basis from 89.6 percent last year. The company has renegotiated its debt facilities and a final dividend of 50 pence per share has been proposed.
Vivienne Cox, the chief executive of BP’s (BP.L) alternative energy division, is to retire at the end of the month as the company scales back its investment in the business. Cox, who previously ran the gas, power and renewables segment, is BP’s most senior female executive. Her replacement will be Katrina Landis, who has been working as chief operating officer in the alternatives division. Despite being criticised by environmentalists for failing to live up to its “beyond petroleum slogan”, BP says it has not weakened its commitment to alternative energy.
The Premier League has taken a tough line with struggling sports broadcaster Setanta over the issue of a 30 million pound payment which is due next week. Setanta is currently the main holder of UK football rights after winning a 392 million pound three-year contract to show 46 Premier League games a year. However, the broadcaster has found itself getting into deepening financial trouble, and there are fears that the Premier League’s stance could send it into administration.
CASH-RICH UBC PLANS TO BE CAUTIOUS ON ACQUISITION FRONT
UBC Media UBC.L chief executive Simon Cole has revealed the radio content company intends to be a cautious buyer of production companies to add to its stable. The company’s annual results revealed a record cash position following the 10.5 million pound sale of its traffic and travel arm to GTN of New York. While acknowledging that “this is not an easy time to be a buyer”, Cole said he would not be sitting on the money but concentrating on the best way to utilise it to boost UBC’s earnings.
BPP AGREES TO 303 MILLION POUND TAKEOVER BY APOLLO GLOBAL
Business college operator BPP BPP.L has agreed to a bid from Apollo Global, the U.S. education investor. The 620 pence-per-share offer values BPP’s equity at 303.5 million pounds. The deal is expected to be completed via a scheme of arrangement, which requires the approval of a poll of 75 percent of shareholders. The two companies informed the market they were in preliminary discussions at the end of April. BPP shares increased by 50 pence to 617 pence in late afternoon trading on Monday.
Scottish soft drinks group AG Barr (BAG.L) has delivered an upbeat trading statement for the four months to the end of May, citing the recent good weather as one of the contributing factors. Revenue increased by 22.5 percent compared with the same period last year, due mainly to the 59.8 million pound acquisition of juice brand Groupe Rubicon in August. Like-for-like sales, taking out the effect of the acquisition, were up by 7.9 percent. Pre-tax profits for the year to January were 23.4 million pounds on sales of 169.7 million pounds.
Prepared for Reuters by Durrants