Editor: Pat Williams. E-mail pwilliams@creditman.co.uk
John Arnold. E-mail jarnold@creditman.co.uk
Site: Business Credit Management UK
URL: http://www.creditman.co.uk
Issue: Vol 4 Issue 22
Dated: 4 June 2000
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
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UKBUDDING ROMEO MAKES SURE THAT YOUNG WORKERS DON'T MISS OUT ON NEW NMW YOUTH RATE
Around 150,000 young workers will benefit from the increased National Minimum Wage (NMW) youth hourly rate of £3.20 which came into force on the 1 June, Department of Trade and Industry Minister Alan Johnson has announced.
And to help raise awareness of the new youth rate among young workers and employers, the DTI has also launched a £1 million radio and press advertising campaign.
Bearing the slogan 'Whatever you miss make sure it's not the minimum wage', the adverts feature a range of humorous scenarios where something has been missed. They include a budding Romeo trying to chat up a girl in a pub unaware that his flies are undone, and another has a man, sitting on a toilet reading a newspaper, failing to notice that the toilet roll is empty!
The new hourly youth rate, payable to workers aged 18 - 21, was previously £3.00.
DTI Minister Alan Johnson said:
"By using these slightly risque but humorous adverts we are hoping to grab the attention of young workers who from 1 June will benefit from the new £3.20 youth rate.
"The new rate is good news for the low paid and guarantees decent minimum standards of pay for young workers in all sectors of the economy.
"It is also good news for business. Since we brought in the National Minimum Wage last year, more and more employers have discovered that decent pay means happy staff and that means happy customers.
"Also, responsible bosses no longer need to fear being undercut by unscrupulous competitors who pay poverty wages."
The advertising campaign also encourages 18-21 year olds to telephone the National Minimum Wage Helpline on 0845 6000 678 for further information or to complain about underpayment.
Employers have also been targeted through the Inland Revenue's newsletter - which goes to 1.2 million tax registered employers - about the new youth rate. In addition, the DTI has also written to over 500 organisations including Chambers of Commerce, trade associations, trade unions, CBI and small business associations.
In February the Low Pay Commission report on the National Minimum Wage confirmed that the it had been introduced successfully, giving around 1.5 million people a pay boost without having any adverse impact on the economy or employment.
In addition to the increase, the NMW £3.60 main hourly rate for workers aged 22 and over rises to £3.70 on 1 October and is expected to benefit 1.3 million workers.
The DTI advertising campaign is also running in youth magazines. Internet banners on popular youth websites (e.g. www.studentuk.co.uk and www.nme.co.uk) and beer mats are also being used to publicise the new youth rate.
For information, people can also visit the DTI National Minimum Wage website at http://www.dti.gov.uk/er/nmw
CULTURE OF GOING SICK IS ON THE MEND - CBI/PPP HEALTHCARE
The culture of going sick is on the mend among British workers as absence levels fall across the UK, said the Confederation of British Industry (CBI) at a conference lastThursday.
At a Managing Absence, Sickness and Stress Conference the CBI and PPP healthcare launched the results of a survey showing manual workers take 3.1 days less off sick than they did ten years ago, a figure that has been consistently falling for a decade. Manual workers in 1999 took 9.2 days sick leave, a fall from 9.4 days in the previous year and 12.1 days in 1989.
Absence among non-manual workers has fallen to the lowest levels for five years. Non-manual workers take 6.5 days sick leave down from 7.6 days in the previous year.
These results show that the UK still has one of the lowest absence levels in the European Union with absence levels falling to 7.8 days a year per employee, from 8.5 days in the previous year.
John Cridland, CBI's director of human resources policy, said:
"Over the last decade absence from work has been slashed as part of a business drive for better cost management. There are no grounds for complacency, absence still costs business £10 billion a year but we are heading in the right direction."
Dudley Lusted, PPP healthcare's director of corporate healthcare development, agreed:
"The trend is welcome but it's time to move on and get a better grip on longer term absence and stress related problems. Tackling their underlying causes and supporting people with early access to medical and psychological care are key to achieving the 5.3 days' absence levels currently attained by the best performing companies."
ECGD on the 30 May announced completion in Rome of a co-operation agreement with the Italian Export Credit Agency SACE. This agreement will allow UK and Italian capital good exporters "One Stop Shop" access to export credit packages when they work together in projects in third countries.
Exporters from the UK and Italy will gain faster access to export finance as a result of the agreement. It will also strengthen their bids when working together to win contracts in third countries. The arrangement is likely to benefit exporters already bidding for over £1.6 billion of contracts in the Middle East and Far East.
A reciprocal Reinsurance Agreement was signed by John Weiss, Group Director of Underwriting ECGD, and Giorgio Tellini, SACE's Chief Executive Officer.
ECGD and SACE have also agreed to host an event, sponsored by BNP Paribas, promoting this agreement and its benefits to multi-national exporters in Milan on 1 June.
Mr Weiss said:
"We are very pleased with this new agreement. UK and Italian exporters often work together on major overseas projects. This arrangement should help them put together more competitive financing for their bids in future."
Mr Tellini said:
"We look forward to working with ECGD under this new Agreement. It should serve to provide streamlined financing for buyers choosing to source from both our countries."
This agreement now brings the number of co-operation and "One Stop Shop" arrangements which ECGD has in place with other countries to 19.
The main features of this agreement are:
ECGD is also set to conclude a reciprocal interest rate/ stabilisation agreement with SIMEST (Societa Italiana per le Impresse all'Estero) the official Italian interest support institution, which will be signed in the next few weeks.
Istituto per i Servizi Assicurativi del Commercio Estero (SACE), the Rome-based Italian Export Credit Insurance agency, is an autonomous section of the Istituto Nazionale delle Assicurazioni (the National Insurance Institute). It is empowered to insure and reinsure political risks, natural disasters, economic and commercial risks as well as exchange risk rates.
ECGD AGREEMENTS CLEAR WAY FOR RUPEE FINANCED EXPORTS TO INDIA
Richard Caborn, the Minister for Trade, on the 31 May announced that ECGD had signed agreements with two of India's leading financial institutions to enable UK capital goods exports and services destined for India to be financed in rupees.
Documents signed in Bombay and Delhi with Industrial Credit and Investment Corporation of India (ICICI) and Infrastructure Development Finance Co. (IDFC) follow an agreement reached by ECGD with the Government of India earlier in the year to allow the UK to provide rupee denominated export credits.
Mr Caborn said:
"We have already made a commitment to help UK exporters trade with India by offering the option of finance in local currency. These two agreements now allow us to put this commitment into practice.
"India is a very important trading partner for the UK, and I am pleased that this move is going to be of mutual benefit. This move gives our exporters an added competitive weapon in their armoury and will also be attractive for Indian borrowers looking to minimise exchange risks, particularly those involved in infrastructure and power-generating projects which produce revenue in local currency."
SCOTTISH EXPORTER TO BOOST ELECTRICITY PRODUCTION IN DOMINICAN REPUBLIC WITH ECGD BACKING
Richard Caborn, the Minister for Trade, announced last week that ECGD backing had helped Scottish exporter Motherwell Bridge Engineering Ltd clinch a US$25 million contract as part a project to construct a power station in the Dominican Republic.
This is the first time ECGD has underwritten a contract in the Dominican Republic and the first time it has backed a deal in the Caribbean on a 'Project Finance' basis (meaning that the finance supported by ECGD is to be repaid from the revenues generated by the project, rather than from the funds of a borrower).
Motherwell Bridge Engineering Ltd have been commissioned to construct a range of facilities, including offshore mooring and fuel unloading, onshore bunkering, and pipelines connecting these to the 300 megawatt oil-fired generating plant being built near the city of San Pedro de Macoris.
Mr Caborn said: "This contract is good news all round. Motherwell Bridge have calculated that the order will provide full-time work for people in the Motherwell area over the next 18 months - as well as employment for a large number of smaller sub-contractors.
"The project, of course, also has tremendous benefits for the people of the Dominican Republic who can now look forward to a more efficient and cheaper electricity supply and a reduction in the number of electricity blackouts."
ECGD's support for the San Pedro project as a whole takes the form of backing for a £13.8 million loan provided by Kreditanstalt fur Wiederaufbau (KfW) of Germany and a £8.9 million reinsurance arrangement with Hermes, the German export credit agency.
The reinsurance arrangement is under the terms and conditions of the ECGD/Hermes Co-operation agreement of July 1998.
The sponsors for this project are Cogentrix (a US utility company) and the Commonwealth Development Corporation (CDC).
KPMG's Mick McLoughlin, the provisional liquidator of boo.com, is pleased to announce a successful conclusion to the sale of the business. The boo.com brand, domain name and trademarks have been sold to New York-based online fashion portal Fashionmall.com.
Mr McLoughlin on the 2 June said: "This sale followed a period of exhaustive negotiation which has been far from straightforward. Boo.com's liquidation has generated a vast amount of interest, and as we are in ground breaking territory our skills base has undoubtedly been enhanced. I would once again like to thank boo.com's staff who have been assisting us and I am delighted to be able to announce today's news."
SCOTTISH BANKRUPTCY LAW - AN OVERDUE REVIEW
Contributed by Stephen Cowan, Yuill & Kyle, Debt Recovery Lawyers, Scotland. www.debtscotland.com
E-mail Stephen Cowan scowan@yuill-kyle.co.uk
One of the current features of the Scottish enforcement review gaining popularity from all sides is the possible introduction of a debt arrangement scheme for individuals who, through no real fault of there own, have a multiple debt problem and wish to repay their debts in an orderly controlled fashion, binding upon creditors.
Why should such a scheme be necessary? Basically the essentials of Scottish bankruptcy law have remained unaltered since 1856 and whilst there has been substantial modernizing legislation since then these statutes have largely ignored gargantuan changes in consumerism, not least the credit explosion.
Current bankruptcy law is a fairly drastic and expensive way of writing off debt for those caught up with a multiple debt problem. Perhaps less formal measures would be more appropriate in the new millennium. Currently there are those debtors for whom "full blown" bankruptcy will be appropriate and whose assets (and also whose financial dealings) should be under the control, scrutiny and investigation of a trustee operating within the current bankruptcy legislation. At the other end of the scale there are those debtors whilst, having assets, it would nevertheless be in-appropriate for all their debts to be written off. For them the full rigor of the current bankruptcy measures, with the appropriate total loss of assets, does seem to be unnecessarily harsh. It may well be the introduction of a debt arrangement scheme could be more appropriate in these circumstances.
However what will be unwelcome would be the introduction of a scheme without adequate primary debt enforcement measures being in place. In other words with poindings and warrant sales abolished there really does have to be an effective replacement before debt arrangement schemes are introduced.
What is concerning is that those favouring abolition of enforcement are aware that bankruptcy, where legally possible, will be used to a greater degree to force payment in situations where debtors are able to pay their debts but simply do not. The reform of Scottish bankruptcy legislation should not be seen as removing what might be the only blunt instrument left available to creditors legitimately perusing their interests.
Bankruptcy law reform should be part of a holistic enforcement review-sensibly considered and executed.
*** Forthcoming Creditors Meetings ***
Contributed byhttp://www.insolvency.co.uk
For more detailed information and ALL the British Isles insolvency's (liquidation's, receiverships, administrations, dividends, creditors) please visit http://www.insolvency.co.uk
From 05/06/2000 to 13/06/2000 Number of Creditor meetings : 201 Section Company Time Venue 138 Scotland - Interim Liquidator calling Creditors Meeting 07/06/2000 Mair & Sinclair Ltd 02.00 pm Edinburgh Scottish Adhesives Co Ltd - The 10.00 am Glasgow Tigerco Ltd 03.00 pm Edinburgh 08/06/2000 Made Joinery Ltd 12.00 pm Glasgow 13/06/2000 Douglas Haulage Ltd 11.00 am Glasgow Precision Cutting Systems Ltd 12.00 pm Glasgow 23 Administrator Calling a meeting of Creditors 06/06/2000 Waterside Interiors Ltd 11.30 am London 12/06/2000 Brightside YAY Ltd 11.30 am Manchester Brightside YAY Maintenance Ltd 11.30 am Manchester 13/06/2000 Uno Plc 11.00 am Bolton 48 Receiver calling unsecured Creditors Meeting 06/06/2000 North End Oil Ltd 11.00 am Guildford Pedley Retail Practices Ltd 10.30 am Sheffield 09/06/2000 U Niche Retail (UK) Ltd 10.30 am Hatfield 12/06/2000 Loyal Designs (UK) Ltd 11.00 am London 13/06/2000 Inwoods Equities Ltd 10.30 am Birmingham 98 Creditors Voluntary Liquidations 05/06/2000 21st Century (UK) Ltd 10.30 am London AGN Linkways Ltd 11.30 am Hornchurch Ambassador Data Products Ltd 11.00 am Basingstoke Birmingham & Midland Canal Carry Co Lt 01.00 pm Birmingham Boney Hay Joinery & Construction Co Lt 10.30 am Cannock CBS Building & Maintenance Ltd 11.30 am Altrincham Comet Services Ltd 11.00 am London Elite Appointments (UK) Ltd 12.00 pm Gerrards Cross Encore UK Ltd 11.00 am Manchester Ian P Banks (Haulage Contractors) Ltd 02.30 pm Stockport M & J Post Ltd 10.15 am Edgware Noahs Ltd 11.30 am Winchester Point Blank Events Ltd 10.15 am Leeds Precision Developments Ltd 12.00 pm Woodlesford Pristine Products Ltd 02.30 pm London Steart Hse (Burnham-on-Sea) Manag Co L 11.00 am Salisbury T W Electronics Ltd 02.30 pm Cambridge TGI Digital Ltd 10.30 am Watford Y P Trading Ltd 11.00 am Chelmsford 06/06/2000 69 Diving Ltd 11.30 am London A P Degville & Co Ltd 10.30 am Birmingham Achilles Entertainments Ltd 10.30 am Bristol Activecross Ltd 11.30 am Preston Agrispares (UK) Ltd 11.00 am Corsham Alperton Supplies Ltd 11.30 am Birmingham B + E Technology Ltd 10.45 am Bromley Beattie Engine Developments Ltd 11.00 am Crewe Bracklin Farms Ltd 11.15 am Salisbury Caledonia Golf & Leisure Ltd 10.00 am East Linton City Archives Supplies Ltd 11.30 am Southend-on-Sea Coleway Service Stations Ltd 10.30 am Newport Cross Park Community Care Ltd 11.00 am Brixham Cybernetic Instruments Ltd 10.30 am Woodford Green Display Imaging Services Ltd 02.30 pm Paddington Factory Direct (UK) Ltd 11.00 am Brighton Lynch Contracts Ltd 10.45 am London Memonew Ltd 10.30 am Newport Mosaic Direct Ltd 10.15 am Salisbury Old English Taverns Ltd 11.00 am Swindon P C Warehouse (MK) Ltd 11.30 am Leighton Pembridge Group Ltd - The 03.30 pm Lutterworth Public Creatives Ltd 02.00 pm London R & D Draughting Ltd 11.00 am Leeds Rose & Tyler Transport Ltd 11.00 am Nottingham Rosedale Developments Ltd 11.30 am Southampton Scon Ltd 11.00 am Harpenden Wakefield Group Ltd - The 10.30 am Wakefield World Sports Agency Ltd - The 10.30 am Droitwich Spa 07/06/2000 1st Class Roofing Ltd 11.30 am Plymouth Addington Equestrian Centre Ltd 12.00 pm Hurley Apollo Three Ltd 11.45 am Croydon Braithwaites (Hertfordshire) Ltd 03.00 pm London Care Assured Agency Ltd 11.00 am Coventry Display & Graphic Production Ltd 12.00 pm London Euro-Tec Glazing Specialists Ltd 03.00 pm Welling Farmtrack Ltd 03.00 pm Bristol Fieldbuspub Ltd 10.30 am Southampton Gladmatch Ltd 11.00 am London Greenwoods of Leeds Ltd 11.00 am Leeds Hopkins-Willcox Ltd 02.30 pm Manchester ITS Drylinning Ltd 11.30 am Preston Inta Ltd 10.30 am Sheffield Kent Carpenters Ltd 12.00 pm Dover Larkin & Demain Ltd 10.30 am London M & R Electrical Contractors Ltd 11.30 am Preston Maintable Ltd 10.30 am Droitwich Spa Manor Joinery Ltd 10.30 am Hurley Mildcraft Ltd 11.00 am London R & S Meat & Poultry Ltd 12.00 pm Birmingham Realistic Fashions Ltd 11.00 am London Ripon Business Services Ltd 11.00 am Huddersfield Site Recruitment Services Ltd 11.00 am Potters Bar Sporting Media Ltd 11.00 am London Stoutfellows Beer Co Ltd 12.00 pm Cardiff Tankcare Services Ltd 11.00 am London Universal Windows & Doors Ltd 12.00 pm London Wondercliff Ltd 11.00 am Birmingham 08/06/2000 Appeals to Industry Ltd 12.30 pm London B W L Maintenance Ltd 10.00 am London Cardmaster Marketing Co Ltd - The 11.00 am London Chip Right Ltd 12.00 pm Birmingham Cloverbrook Developments Ltd 12.00 pm London Consulate Wines Plc 12.00 pm Chandlers Ford Deeside Technology Ltd 10.30 am Liverpool Direct Recruitment Solutions Ltd 10.15 am Epsom Doningmore Ltd 11.00 am Sevenoaks Elite Exteriors Roofing Services Ltd 03.00 pm Leicester Empire Entertainment Ltd 11.30 am Gerrards Cross HDF (North West) Ltd 11.30 am Liverpool Jemsa Technical Services Ltd 03.00 pm Cardiff Jewelbree Ltd 11.30 am Blackburn Linwest Trading Ltd 11.30 am Glazebrook Marginsutt Ltd 11.15 am Sutton Metal Art Ltd 11.30 am Leicester Oliver Nathian Precision Engine Co Ltd 10.30 am Droitwich Spa P W Food Services Ltd 12.00 pm London Premier Collectables Ltd 11.30 am Liverpool Sharrowvale Ltd 12.00 pm London Sloane Publicity Ltd 12.45 pm London Stevetone Service & Supply Co Ltd 11.30 am Dudley Swan Manufacturing of Congleton Ltd 11.00 am Sandbach Tempacom Ltd 12.00 pm Leeds Trade Frames Direct (Merseyside) Ltd 12.00 pm Hale Xenofile Ltd 12.00 pm London 09/06/2000 Adam & Eve (Sherwood Forest) Ltd 10.30 am Lincoln Atlas Stainless Ltd 11.30 am Southampton Brian Hewitt Plc 03.00 pm Liverpool C T S Cladding Ltd 11.00 am Uttoxeter Clark & Co (Public Relations) Ltd 10.45 am Leeds Cloudbox Ltd 11.00 am Sunderland Cloudtemp Ltd 12.00 pm Sunderland Complete Export Services Ltd 10.30 am Manchester Countryside Industries Plc 12.00 pm Royston Court Publishing Ltd 11.30 am Pontefract Curved Space (UK) Ltd 11.00 am London DVS Solutuions Ltd 12.00 pm London Direct Motion Ltd 03.00 pm Leicester Dollar Marketing (Scotland) Ltd 11.00 am Glasgow Embassy Enterprises (UK) Ltd 02.30 pm Exmouth Falcon Trade Computer Centre Ltd 11.00 am Hull Harmony Holidays Ltd 11.30 am Exmouth Hart Installation Ltd 12.00 pm Birmingham K P S Projects Ltd 10.00 am St Albans M & H Realisations No 1 Ltd 03.00 pm Birmingham Marcam Ltd 11.00 am Northampton Marlborough Promotions Ltd 03.30 pm Exmouth Marlowe Engineering Ltd 11.00 am Birmingham Paignton Mould Tool Co Ltd 12.00 pm Matford Paul Thorp (Partition & Drylining) Ltd 11.30 am Lutterworth Portsmouth Roofing Co Ltd 02.30 pm Botley Posh Packaging Ltd 12.00 pm London R S J Displays Ltd 02.30 pm Tong RPG Bedrock Ltd 11.00 am Birmingham Response Lighting Ltd 10.00 am St Albans Rolines Ltd 11.00 am Birmingham Travel Time (UK) Ltd 11.30 am Exmouth Unique Personal & Training Ltd 10.30 am London 12/06/2000 1st National Maintenance Ltd 10.15 am Southend-on-Sea Alligator Sales Ltd 10.30 am London Alpadale Ltd 12.00 pm Manchester BTC Steels Ltd 11.00 am Birmingham Bellcraft Ltd 12.00 pm Manchester Cellutrim Ltd 12.00 pm London Contract Property Services Ltd 12.00 pm Sheffield Copyscan Ltd 12.00 pm Manchester Divitech Ltd 12.00 pm Manchester FMS International Ltd 11.00 am London Fullcross Ltd 12.00 pm Manchester Futuremex Ltd 12.00 pm Manchester Goldfarm Ltd 12.00 pm Manchester Happy Radio Ltd 11.30 am London Interseal Ltd 12.00 pm Manchester Limik Ltd 12.30 pm Warwick Linkside Ltd 12.00 pm Manchester Maxipace Ltd 12.00 pm Manchester Merlin Contractors (UK) Ltd 02.30 pm Henley-on-Thame Powerspec Ltd 12.00 pm Manchester Premier Products (Europe) Ltd 11.00 am Gosforth Reditech Ltd 12.00 pm Manchester Samson Furniture (Agencies) Ltd 11.00 am Barnsley Sparetime Consultants Ltd 02.30 pm London Starsky & Hutch Ltd 11.00 am London Surebay Ltd 12.00 pm Manchester Telepresence Ltd 12.00 pm Sheffield Timeplus Ltd 12.00 pm Manchester Viewtex Ltd 12.00 pm Manchester Wakefast Ltd 12.00 pm Manchester 13/06/2000 A B CDs Ltd 11.00 am London Alco Mechanical Services Ltd 02.00 pm Halesowen Andersons of Hitchin (Bespoke Kitch) L 11.45 am London Big J Construction Ltd 11.00 am Newcastle-u-Lym Clevedon Motorways Ltd 11.00 am Wells Colin Felton Associates Ltd 11.00 am Sevenoaks Cover Publishing Ltd 11.00 am London Diwppw Publishing Ltd 11.30 am Bingham G W C Contractors Ltd 12.00 pm London Old Park Project Management Ltd 04.00 pm Cliftonville Pel Electrostatic Screens Ltd 03.00 pm Peterborough Pretty Originals Ltd 11.30 am Guildford Racefind Ltd 12.00 pm Sevenoaks Spectator Sports Ltd 11.00 am Watford Swaneast Ltd 11.00 am London Trackfare Plant Hire Ltd 12.00 pm London Tradewest 2000 Ltd 10.30 am Droitwich Spa Upstairs Downstairs Kit/Bed Co Ltd 12.00 pm Manchester Western & Warwickshire Engine Ltd 02.45 pm Wells
TW LW TW LW
USA 1.50 1.51 Canada 2.24 2.30
Austria 22.11 23.13 Portugal 322.25 347.19
France 10.54 11.02 Belgium 64.84 69.85
Finland 9.55 9.95 Italy 3112.40 3353.15
Germany 3.14 3.28 Sweden 13.45 14.06
Holland 3.54 3.70 Switzerland 2.52 2.68
Spain 267.45 279.74 Ireland 1.26 1.36
Australia 2.63 2.62 Denmark 11.99 12.90
Hong Kong 11.70 11.83 Euro 1.60 1.73
Africa Com 10.49 10.82 Saudi Arabia 5.63 5.78
India 66.90 66.64 Malaysia 5.70 5.86
Singapore 2.60 2.62 Norway 13.37 14.05
Japan 163.13 165.27
TW This week LW Last week.
Express Dairies announced pre-tax profits of 7.1 million pounds, after exceptional charge, on turnover of 928.5 million, for the year ending 31st March 2000.
Pilkington, the glassmaker, announced pre-tax profits of 52 million pounds, after exceptional charge, on turnover of 2,463 million, for the year ending 31st March 2000.
Railtrack announced pre-tax profits of 360 million pounds, after exceptional charge, on turnover of 2,547 million, for the year ending 31st March 2000. Earnings per share stand at 73.3p.
SGB the scaffolding supplier has recommended shareholders to reject a hostile bid from Harsco of the USA. John Mowlem sold its 51 per cent shareholding in SGB to Harsco last month, provoking SGB's chairman Kenneth Minton into announcing that "Mowlem is seeking to sell the company on the cheap".
France Telecom is to acquire Orange, the UK's third-largest mobile-phone operator, from Vodafone AirTouch for 25.1 billion pounds ($37.6 billion). The deal will create Europe's second-largest mobile-phone company, worth perhaps 100 billion. France Telecom is expected to float 15-20% of the operation, and to use the cash and shares to make further mobile acquisitions in Europe and perhaps America.
Vodafone Artouch, UK's largest company, threatened to relocate its headquarters overseas in a dispute with the government over proposed changes to tax rules for multinationals. The government intends to make it illegal to mix profits from overseas operations through offshore subsidiaries in order to minimise British taxes.
Dixons, the UK's electronics retailer, announced that it would auction its 80% stake in Freeserve, the leading British Internet service provider. Dixons is said to be looking for a valuation in excess of 6 billion pounds ($9 billion). Germany's T-Online, 90% owned by Deutsche Telekom, which had been rumoured to be planning a bid for Freeserve, is still a likely front-runner. Freeserve's shares jumped on the news.
Invensys, the UK engineering firm, agreed to buy Baan for 762m ($ 707m). Baan is a struggling Dutch business-software group that had been plagued by consistent losses for seven consecutive quarters and faced bankruptcy. Shareholders were displeased: Invensys shares lost 14% of their value in two days.
J Sainsbury, the UK's second-biggest supermarket chain, announced a 23% drop in annual pre-tax profits to 580m pounds ($870m). The company's shares fell by 11% on the news; they are 37% down since the start of 1999.
Hyundai, the biggest of South Korea's giant conglomerates, or chaebol, hastily announced a plan to tackle the company's debts of 52 billion won ($46 billion) and restore investors' confidence by selling assets worth 3.7 trillion won. Hyundai also said that its founder, Chung Ju Yung, and his two sons would retire from the company.
Source - The Economist
MERGER CLEARANCE
The Secretary of State for Trade and Industry has decided, on the information at present before him, and in accordance with the recommendation of the Director General of Fair Trading, not to refer the following merger to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973:Proposed acquisition by Limit plc of Wellington Underwriting plc
Proposed acquisition by Powergen Plc of LG & E Energy Corp
Proposed acquisition by Allied Leisure Plc of Waterfall Holdings Plc
Acquisition by Statkorn Holding ASA of EWOS Limited
Proposed merger between Capital Radio plc and Border Television plc
Acquisition by National Express Group plc's subsidiary Airlinks The Airport Coach Company Ltd of London United's Airbus
KIM HOWELLS REFERS SYLVAN INTERNATIONAL/LOCKER GROUP JOINT VENTURE TO THE COMPETITION COMMISSION
Kim Howells, Competition and Consumer Affairs Minister, has decided, in accordance with the advice of the Director General of Fair Trading (DGFT), to refer the joint venture between Askern Group Ltd (a subsidiary of Sylvan International Limited) and Locker Group plc's Pentre Packaging drum and reel business to the Competition Commission under the provisions of the Fair Trading Act 1973.
Dr Howells considers that the joint venture raises competition concerns in respect of the market for the supply of drums and reels for the cable and wire industry in the UK. The decision to make a reference does not in any way prejudge the question of whether or not the joint venture would be against the public interest. It is for the Competition Commission to report on this after investigation. The Commission are to make their report by 14 September 2000.
Dr Howells has also asked the DGFT to seek interim undertakings from the parties to ensure that they will not do anything which might impede any action which may be warranted in the light of the Commission's report.
The Fair Trading Act 1973 empowers the Secretary of State to refer to the Competition Commission for investigation and report actual or proposed mergers which create or intensify a market share of 25 per cent of the supply in the UK, or a substantial part of the UK, of particular goods and services or involve the take-over of assets exceeding £70 million.
The demand for Business to Business (b2b) Electronic Commerce will drive a transformation in the way payment products and services are provided in the future. However, if electronically enabled payments and financing are not provided then the massive forecast growth b2b e-Commerce markets will simply not be achieved.
Peter Fawcett, KPMG Principal Consultant, will deliver this view at the e-Commerce-finance.com conference in London next week (5 June 2000).
The b2b e-Commerce market is forecast to grow from $400bn in 2000 to over $2.5 trillion by 2004 (Forrester). Forecasters see this as one of the fastest growing markets that has huge implications for international trade. However, most b2b markets still only generate moderate levels of transaction revenues, with these transactions largely limited to low value items such as office supplies or for Maintenance, Repair and Operational applications (MROs).
The typical on-line payment methods are via credit or purchase cards, with 2-3% interest charged on each transaction, which are not suited to the higher value transaction flows demanded by the wider b2b marketplace. Also past experience of using Electronic Data Interchange (EDI) networks has only had modest success generating only around 100,000 commercial customers worldwide.
"The current b2b market is fine for buying biros and paperclips, but not for larger commercial payments," comments Peter Fawcett. "Without ongoing development I feel that the payments industry is handicapping itself and will fail to achieve the ambitious growth that has been forecast. I believe these forecasts can and should be achieved, but I struggle to see how they will at current rates. Large scale b2b will happen, but it is a significant challenge. My message is if financial organisations don't continue to evolve their payment systems, then competitors will and they will find themselves left some way behind.
"That said, many of the constraints of the older EDI marketplace are now being removed. The Internet now provides universal access to customers on a global basis with massive reductions in cost and quantum improvements in bandwidth and performance, now and in the future. Improvements in security are also happening. However there is much work to be done here before the levels of trust for the higher valued transactions in the b2b market are achieved. The biggest obstacles to the take up of b2b eCommerce is in the shortage of electronically enabled payment, financing and credit facilities offered."
The banking and financial industry have provided complex products to industry for over a hundred years covering the sophisticated needs of corporate customers. The facilities that corporates expect as part of the business to business trade requirement include the provision of complex payment options, working capital, risk management, tax, regulation and logistics. However, the new b2b e-Commerce networks lack these facilities and this provides both a threat and an opportunity to the b2b e-Commerce revolution.
Banks and other payment and finance providers will need to rise to the challenge of the global eCommerce opportunity, by providing the sophisticated products and services their customers demand. They will also have to restructure and reposition themselves to meet the demands of the new marketplace.
16 June 2000 The ICM Fellows Luncheon Royal Air Force Club Piccadilly, London W1.Tickets are #39.50 plus vat each. To reserve tickets contact the ICM Training Department on 01780-722907 fax 01780 721271 e-mail training@icm.org.uk 19 June 2000 The Wessex Branch meeting of the ICM Presentation by Mike Heath Director General of the Chamber of Commerce The Royal Southampton Yacht Club 1 Channel Way, Southampton 7.00pm for 7.30 pm Buffet 20 June 2000 The ICM AGM at 3.30pm The Water Mill, Station Road, South Luffenham, Oakham, Leics, LE15 8NB 5 July 2000 E-Commerce for the Credit Manager New ICM Conference Kenilworth, Warwickshire Contact the ICM Training Department on 01780-722907 e-mail training@icm.org.uk Tuesday 3 October 2000 ICM Credit Scotland 2000 (Conference and Exhibition) Hampden Park Football Stadium, Glasgow Anyone interested in attending (or exhibiting) should contact David Ancliffe on (0131 200 8686). Friday 20 October 2000 Millennium Annual Dinner of the ICM Drapers Hall, City of London.
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