Cable Hits Back At Royal Mail Sale Critics

By Mark Kleinman, City Editor

Vince Cable, the Business Secretary, has rebutted claims that he cost taxpayers hundreds of millions of pounds by undervaluing shares in Royal Mail, arguing that the price of the privatisation should be assessed only after the Government has sold its entire stake in the company.

Sky News has obtained a letter sent by Mr Cable on Friday to the Business, Innovation and Skills (BIS) Select Committee, in which he dismisses concerns that the sale of the postal operator was spectacularly mispriced.

Mr Cable and the Government's investment banking advisers have been accused of undervaluing the company after seeing its share price rise by 38% on its first day of trading.

"Value for money has been central to our strategy as we have taken forward the sale of shares through an initial public offering," he wrote.

"Delivering value for money is about more than just the level of proceeds received on day one.

"Our long-term strategy to safeguard the universal service and deliver value for money for the taxpayer involves not only getting good value for the initial stake sold but also getting good value for the residual stake held by Government (30% of the Company assuming exercising in full the Over-allotment Option), and leaving Royal Mail in a strong, sustainable position capable of accessing the capital markets in the future."

Mr Cable said that the initial price range for the flotation, which attributed a value of between £2.6bn and £3.3bn to Royal Mail, was recommended by Goldman Sachs and UBS, the lead banking advisers, and endorsed by Lazard, which provided independent advice to ministers.

"In August 2013, as the date of the IPO approached, this list of potential investors was narrowed down to a focused group of approximately 20 investors, selected on the basis of feedback gathered during the investor engagement process and, in particular, their understanding of the risks inherent in the Company's industrial relations," he wrote.

The timing of the disclosure that unions would ballot Royal Mail workers for strike action, which was voted through this week, meant that some potential investors in the company indicated that they would opt not to buy shares, the Business Secretary added.

Royal Mail's share price has been mildly buffeted by the vote in favour of industrial action next month, but the stock continues to trade well in excess of the 330p-a-share offer price.

Mr Cable told MPs that the top end of the price range was set because it was "compatible with securing a stable, long term shareholder base as a foundation for achieving value in future sell-downs of the Government's retained stake whilst also taking into account the material risks associated at the time with the ongoing IR situation and the market risks arising from possible US default and the fact that the recent IPO of BPost (a recently-listed Belgian peer) was trading below issue price".

In his letter to committee members, Mr Cable argued that the flotation price placed Royal Mail in a similar dividend yield bracket to comparable companies, but said the "considerable media interest that was predicting a substantial first day premium" was a factor in the initial surge in its share price.

The Business Secretary also sought to counter claims by his Labour opposite number, Chuka Umunna, that Royal Mail's property portfolio could be worth more than £1bn.

"Taking into account the overall position of the surplus portfolio and the relative immaturity of these sites in terms of actual development, a combined value of £330m (as suggested in one of the equity research analyst reports) appears at the top end of any likely range," he wrote.

12.06 | 0 komentar | Read More

Energy Bills: Small Firms Challenge 'Big Six'

No10 In 'Wear A Jumper' Row

Updated: 1:36am UK, Saturday 19 October 2013

Downing Street has been forced to backtrack after suggesting people struggling to pay their heating bills should put on a jumper.

Officials had to issue a clarification after initially saying wrapping up warm to avoid paying more was something people could "consider".

Labour, which has accused the Government of failing to act to address soaring energy prices, leapt on the comment as proof the Tories are "out of touch".

Leader Ed Miliband declared: "Their crime policy used to be 'hug a hoodie'. Now their energy policy appears to be 'wear a hoodie'."

The comment also quickly gained traction on social networking site Twitter, with various comical suggestions under the tag #cameronsheatingtips doing the rounds.

One user wrote: "Have your maid stitch a fine coat of swan feathers after your manservant plucks a swan for Sunday brunch."

Another advised: "Simply add a large measure of Courvoisier VSOP to your Vanilla Latte."

The row will have been exactly what Downing Street was seeking to avoid when it was quizzed about the Prime Minister's views on energy price hikes.

It came after Energy Secretary Ed Davey said on Thursday night that he wears jumpers at home to keep his bills down.

On Friday morning, Mr Cameron's official spokesman was duly asked whether people should "wrap up warm" and wear jumpers in the same way.

He said: "That's not a question that I have asked him. Clearly, he is not going to prescribe necessarily the actions individuals should take about that but if people are giving that advice, that is something that people may wish to consider."

The spokesman added: "His advice to people is to shop around for fuel prices."

Mr Miliband moved to capitalise on what was interpreted as a gaffe, even though No10 had tried to make clear Mr Cameron would not tell people what to wear.

He wrote on the Labour website: "These responses to the energy price rises show how little Mr Cameron and his Government stand up for the interests of hard-working people.

"He has no grip on the cost of living crisis and he seems to think the solution to this crisis is nothing to do with him.

"Energy bills are already up by an average £300 since he took office. The price hikes we are seeing point to a market that isn't working for consumers. Yet his solution to this market failure was to tell people to shop around and dress warmly.

"Of course people will rightly seek the best deal they can find but that will not fix a broken market, and will not bring the kind of relief that consumers and businesses need."

He added: "Never let the Government tell you that there's nothing they can do, or that it's your responsibility to sort out the problems in our energy market. They could act - they just choose not to."

Downing Street later had to issue a clarification, as insiders admitted the spokesman had used "loose language".

It said: "To be clear, it is entirely false to suggest the Prime Minister would advise people they should wear jumpers to stay warm.

"Any suggestion to the contrary is mischief-making. The Prime Minister would point people to a range of things being done to help people with their fuel bills, such as legislating to put everyone on the best tariff for them.

"He believes Labour's "price freeze" policy is a con - and certainly would not advise people on what they should wear."

Energy policy has been thrust to the heart of the political cost of living row after companies started announcing major hikes in prices ahead of the winter.

On Thursday, British Gas became the second of the "Big Six" to announce price increases after SSE led the charge with an 8.2% rise earlier this month.

Mr Cameron described the hike as "disappointing" and he and Mr Davey encouraged customers to switch to a cheaper deal with another firm.

Labour has said it will impose a 20-month freeze on prices if it wins power in 2015 but this has been dismissed by critics, including the Tories, as unworkable.

12.06 | 0 komentar | Read More

Osborne Signs Nuclear Power Deal With China

By Mark Stone, China Correspondent, Taishan, Southern China

Britain's next generation of nuclear power is almost certain to be funded in part by the Chinese following an agreement between governments and operators in the UK and China.

The announcement was made by the Chancellor George Osborne on a visit to China's Taishan Nuclear Power plant in Guangdong, southern China.

Mr Osborne said: "Today is another demonstration of the next big step in the relationship between Britain and China - the world's oldest civil nuclear power and the world's fastest-growing civil nuclear power."

The agreement will almost certainly mean that a new reactor, already planned for Hinkley Point in Somerset, will be a mirror image of the Taishan plant in China.

The terms of the contracts with China and detailed figures for the proposed Hinkley Point project, including the so-called strike price between the companies and governments, are expected to be announced in the UK next week.

Taishan nuclear power plant in China

However, the broad agreement outlined by Mr Osborne will allow a consortium of French and Chinese firms to build the plant using a proportion of Chinese cash.

China's state-owned China General Nuclear Power Company (CGN), French energy company EDF and the nuclear firm Areva already work together at the Taishan plant, which is due for completion later this year.

Mr Osborne was given a tour of the Taishan plant, where he climbed up one of the unfinished nuclear reactors with CGN general manager Zhang Shanming and the CEO of EDF, Vincent de Rivaz.

"It is an important potential part of the Government's plan for developing the next generation of nuclear power in Britain," he said.

"It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers."

Mr Osborne said the deal would mean more jobs and investment

China has the largest new nuclear power construction market in the world. It currently has 17 operating nuclear reactors, with a further 28 under construction.

UK treasury officials, travelling with the Chancellor, have been keen to stress the safety record of the Chinese civil nuclear industry and also the strict regulations under which the Chinese must operate.

"Any investment from any country has to comply with rigorous regulatory standards for safety and security," an official said.

Reports that China has asked for a future licence to operate nuclear power plants in the UK in return for their investment have not been confirmed by British officials.

Today's agreement followed a Memorandum of Understanding (MoU) signed in Beijing on Tuesday between Mr Osborne and his Chinese counterpart Ma Kai on civil nuclear co-operation.

The potential importance of a nuclear future was underlined by a report warning that Britain faced a higher risk of power shortages over the next five years as old generating plants began to close.

The Royal Academy of Engineering predicted that capacity would be stretched "close to its limits" from next winter by unexpected events like prolonged cold weather and unplanned plant outages.

12.06 | 0 komentar | Read More

Energy Bills: British Gas Ups Prices By 9.2%

British Gas has become the second major supplier of household energy to announce a rise in its prices - by an average 9.2%.

The company said its electricity and gas prices will rise by 10.4% and 8.4% respectively from November 23 - affecting 7.8 million households.

Regional variations mean some Scottish customers will see prices rise on average by as much as 11.2% while those in London will suffer a 10.6% increase and households in Yorkshire will have a 10.5% lift.

The move comes despite a pledge by British Gas earlier this year to use an annual earnings windfall from the cold weather last winter to keep a lid on tariffs.

Angry customers took to Twitter to complain ahead of an already planned Q&A session with customer services director Bert Pijls.

Twitter users flocked to complain ahead of a British Gas Q&A session

One user asked: "Hey @BritishGas how many vulnerable people do you think you will push into fuel poverty whilst continuing to make billions in profit?"

The average increase is higher in percentage terms than that confirmed by rival SSE last week which is raising its bills by 8.2% from November 15, although research from price comparison website uSwitch suggested it brought their average dual fuel tariffs together in terms of cost.

The Prime Minister David Cameron described the latest increase as "disappointing" and urged households to try to save money by switching suppliers.

E.ON, Scottish Power, EDF Energy and npower are the other so-called 'big six' providers yet to make announcements on their winter pricing.

Electricity prices are rising faster than those for gas

British Gas said it was a hard decision for the company, which is owned by Centrica.

Its statement said: "We recognise that energy bills are a real worry for hard-pressed households, particularly at a time when the cost of living is rising faster than incomes.

"Today's announcement, which will add about £2 a week to the average dual fuel bill, reflects the increasing cost of: buying energy in global markets, delivering gas and electricity to the home, and the Government's social and environmental programmes, which are paid for through customers' bills."

It pledged that more than 500,000 of its elderly and most in-need customers would be protected by an automatic discount to offset the price increase throughout the winter - worth £60 per dual fuel household.

This was, British Gas said, in addition to the £135 that will be paid to many of these customers who qualify for the Government's Warm Home Discount scheme.

Ed Miliband used Labour's conference to announce his 'bill freeze' plan

Ian Peters, managing director of British Gas Residential Energy, added: "I know these are difficult times for many customers and totally understand the frustration that so many household costs keep on rising when incomes aren't keeping pace.

"We haven't taken this decision lightly, but what's pushing up energy prices at the moment are costs that are not all directly under our control, such as the global price of energy, charges that we have to pay for using the national grid that delivers energy to the home, and the cost of the Government's social and environmental programmes.

"Energy efficiency is the best way to keep bills down, and I encourage anyone who has not benefitted from them to go online and check if they are eligible."

The cost of energy bills sparked a political frenzy last month when the Labour leader Ed Miliband pledged to freeze prices for 20 months if his party won power at the 2015 general election.

Shares in both SSE and British Gas-owner Centrica fell sharply in the wake of the announcement, wiping a combined £2.7bn off the value of the firms.

Caroline Flint, Labour's Shadow Energy and Climate Change Secretary, said: "These latest price rises show clearer than ever why Labour's price freeze is needed.

"People are sick and tired of being left out of pocket because of David Cameron's failure to stand up to the energy companies.

"Britain's energy market isn't working for ordinary families and businesses. Labour's energy freeze will save money for 27 million households and 2.4 million businesses and our plans to reset the market will deliver fairer prices in the future."

In an interview with Sky News, Energy Secretary Ed Davey said: "I think British Gas is going to lose a lot of customers over this.

"British Gas in their press release is trying to blame the Government for social and environmental costs but we've looked at their figures and it looks like they're being very inefficient in managing these Government programmes."

Ministers have been encouraging households to switch suppliers as the best way of keeping their bills as low as possible.

12.06 | 0 komentar | Read More

Royal Mail Staff To Strike In November

The first national postal strike in almost four years will be held on November 4, union bosses have confirmed.

A 24-hour stoppage is being planned by the Communication Workers Union (CWU) amid a bitter row with Royal Mail over pay and pensions which threatens to disrupt the busy Christmas delivery season if left unresolved.

The union ballot of around 115,000 of its members at Royal Mail and Parcelforce returned a 4-1 decision on a 63% turnout in favour of industrial action, which is linked to the recently completed privatisation of the service.

The vote was returned despite a windfall under the flotation that left full-time staff who took up free share options sitting on paper earnings worth £3,545 by close of trading on Tuesday.

Those shares cannot be sold for three years under the terms of the sale.

A Royal Mail spokesman said the company was "very disappointed" at the result of the ballot, adding: "Any action, or the threat of disruption, is damaging to our business, especially in the run up to Christmas, our busiest time."

However, Billy Hayes, general secretary of the CWU told Sky's Jeff Randall Live:

"We're promising to protect the people who do the Christmas deliveries year in year out. We're about protecting our people's terms and conditions.

"We don't want a strike. It's going to be in (chief executive) Moya Greene's hands now."

Royal Mail chief executive Moya Greene

Dave Ward, deputy general secretary of the CWU, said earlier: "Postal workers have spoken very clearly that they care about their jobs, terms and conditions far more than they care about shares.

"The stakes have become much higher for postal workers since privatisation, making this ballot more important than ever.

"Postal workers will not be the people who pay for the profits of private operators and faceless shareholders.

"The question now is whether this privatised Royal Mail still wants an agreement.

"We have offered the company a two-week period to reach an agreement and having already had many hours of negotiation, this is achievable if there is a will.

"What we want is a groundbreaking, long term, legally binding agreement that not only protects postal workers' job security, pay and pensions, but will also determine the strategy, principles and values of how the Royal Mail Group will operate as a private entity.

"This means there will be no further breakup of the company, no franchising of individual offices or delivery rounds, no introduction of a cheaper workforce on two-tier terms and conditions and no part time industry.

"It will mean - regardless of who owns Royal Mail - this company will not be able to enter the race to the bottom and replicate the employment practices and service standards of its competitors."

The union also announced a new ballot of its members at Royal Mail that would potentially enable postal workers to boycott competitors' mail to supplement the strike action.

The Royal Mail said it was offering an 8.6% increase in pay, allowance and overtime payments over three years.

An additional £300 lump sum in year one (pro-rata for part-timers) was also on offer as part of the proposed agreement, it added.

The company's spokesman said: "The three-year pay offer and groundbreaking deal on protections on offer from Royal Mail addresses points raised by CWU, and talks to reach agreement are continuing to further address these points.

"Royal Mail will do all that we can to protect our business and minimise the impact of any industrial action on our customers' mail."

12.07 | 0 komentar | Read More

Shutdown: Congress Passes Bill To Stop Default

America looks set to avoid a financial catastrophe after Congress voted to pass a bipartisan deal to end the fiscal impasse.

A last-minute agreement to avert a threatened US default and reopen the Government was reached on Wednesday.

After the details were finalised it was put to the US Senate and later the House of Representatives, before being signed by President Obama.

Senate minority leader Mitch McConnell struck a deal with Democrats

Speaking at the White House he said: "There's a lot of work ahead of us. We need to earn back the trust of the American people that's been lost over the past few weeks."

The deal was struck by Senate majority leader Harry Reid and GOP leaders Mitch McConnell, and calls for the Treasury to have authority to continue borrowing through February 7, and reopen the Government through January 15.

It means a fresh round of negotiations ahead of those dates, and Mr Obama said: "Hopefully next time (a deal) won't be in the 11th hour."

The agreement comes just a day before the deadline to raise the Government's $16.7tn (£10.5tn) borrowing limit. Had no deal been reached, the Government would have started to default on its planned payments.

Notably absent from the fresh agreement is a long-held Republican demand to defund aspects of President Obama's signature health care law.

The Senate deal makes only one modest change in the programme that requires individuals and families seeking subsidies to verify their incomes before qualifying.

Republican House speaker John Boehner said: "We fought the good fight, we just didn't win."

He gave a fist pump in front of photographers as he left late talks before the vote.

The agreement sent the stock market soaring on Wednesday, pushing the Standard & Poor's 500 index close to a record high.

Most traders had expected some sort of deal, given that a failure to reach a deal could have pushed the US into another recession.

Eric Wiegland, a senior portfolio manager, said: "Investors have become, unfortunately, accustomed to some of the dysfunction. It's become more the norm than the exception."

12.07 | 0 komentar | Read More

Royal Mail CEO Paves Way For Stamp Price Rise

By Mark Kleinman, City Editor

The boss of Royal Mail appeared to pave the way for increases to the price of first-class stamps on Tuesday as the newly-privatised company's soaring shares valued it at nearly £5bn.

In an interview with Sky News to mark the first day of unconditional trading for Royal Mail shares, Moya Greene said the postal operator's products were cheaply priced compared to many European rivals and that the company would need to be competitive.

"We are very proud of the value that we provide for 60p, but we also know that in that field, where we have structural decline on the letters side, we have to be very careful about pricing," she said. "We are very pleased that if you compare our prices to other countries in the European Union, if you look in various weight categories between zero and 100g, we are at the low to middle of the spectrum.

"I don't think you're going to see a company that is going to be senseless about the pricing lever [but] we [both] need to stay competitive and retain the loyalty of our customer base."

Asked if that meant a price rise was imminent, Ms Greene said:

"Well, we didn't raise stamp prices last year... The average UK household spends 50p each week on stamps. We have to price only for the value that we deliver."

Under a deal with Ofcom, the industry regulator, Royal Mail has the freedom to set the price of first-class stamps until 2019 while second-class stamp prices remain tightly-constrained.

In the prospectus for the sale of shares published last month, the Government acknowledged that price rises were possible but said:

"Despite the significant increases in prices that were implemented in April 2012, the UK letter market remains competitively priced when compared with European countries. Following such significant increases (including above RPI [retail price inflation] price increases in [the full year ending 2012], the directors expect any price increases to be broadly in line with the RPI over the three financial years ending in FYE 2016."

A Royal Mail spokesman denied that Ms Greene had been suggesting the imminent arrival of price increases.

Ms Greene appeared to back the view expressed by Vince Cable, the Business Secretary, that the 38% surge in Royal Mail's share price on Friday's trading debut represented "froth".

"I think the Secretary of State has called that one properly," she said. "We need to look forward to the next six-to-nine months. It's a pivotal moment. We are so proud to see the company get to this point in its evolution, but we...need to set reasonable expectations. I must say I agree with what he has had to say on that."

The Royal Mail also addressed the imminent threat of strike action with the result of a ballot of Royal Mail workers due on Wednesday.

"We have to find other ways to resolve differences. We cannot always just be pushing the button for industrial action. We have a very competitive offer [of an 8.6% pay increase over three years] on the table," said Ms Greene.

"We have to be very careful about disappointing our customers, disappointing the British people. The trust they have in our service can be easily broken. The channels of communication are always open. My message would be 'let us look forward and continue on the path we have started'."

Ms Greene declined to say whether a revised offer was on the cards in the next few days but said: "I can only say that the channels of negotiation continue. Let us see how we can get to a successful conclusion."

She also appeared to issue a veiled threat to Royal Mail staff, saying that a strike-free company was "the only we can continue to provide high-quality jobs with good protections and benefits. It is a competitive world that we are in, [so] if we ever disappoint our custs...then we put a lot at risk."

Ms Greene dismissed concerns that the Government was guilty of undervaluing the company and short-changing taxpayers, saying: "I think the Government has handled the execution of this very well to give us a very broad shareholder base.

"I think it is important that Royal Mail remains a British company. It is a cherished institution, it goes back 500 years."

12.06 | 0 komentar | Read More

Royal Mail: Free Shares Worth £489m For Staff

Around 100 million free shares have been allocated for eligible employees of Royal Mail, giving a total initial market value of £489m.

Each eligible full-time employee in Royal Mail is entitled to 725 free shares with an initial market value of £3,545.25 - above the £3,000 maximum amount that can be allocated to an individual member of staff in a tax year under HMRC rules.

Royal Mail said due to the strong performance of the shares, this limit has been exceeded.

A total 613 shares worth £2,997.57 at the closing mid-price on Tuesday have been awarded to each eligible full-time employee.

Royal Mail intends to allocate the 112 surplus shares to individual full-time employees as soon as possible in the next tax year.

Less than 0.5% of around 150,000 of eligible full-time and part-time Royal Mail employees based in the UK chose to opt out of receiving free shares.

Price correct at 08:35 BST

Royal Mail's value continued to grow when full dealing began on the London Stock Exchange earlier, though some individuals expressed frustration they were unable to sell.

Investors - lured by the promise of healthy dividends - sought out shares with the price rising more than 3% in early trading when the stock became available to the wider market following its conditional launch.

In the first day of dealing for many of the 690,000 small investors who bought stock the shares opened at 478p before climbing further to 490p in the first hour.

Its closing price of 489p implied a rise in the company's value of £140m in one day, to reach £4.9bn. The initial offer had valued Royal Mail at £3.3bn.

That compares with the 330p per share price they were sold for on Thursday, meaning small investors who were allocated shares worth £750 originally are today sitting on paper profits of more than £360.

But not everyone was able to trade - the Department for Business confirming that those who applied for shares via the post had been told they would receive a letter within a week setting out how they could sell their shares.

Those who applied online should, the department said, receive an email within two days of listing, giving them an ID and password to sell their shares via the official website.

Only institutional investors such as pension funds and those individuals who ordered stock through a broker offering conditional trade were able to sell before Tuesday.

Royal Mail staff in London have met union reps today

Around 150,000 postal workers are having to sit on stakes now worth more than £3,200 each because they can not sell their shares for three years under the terms of the 10% free-holding.

While fewer than 390 staff eligible for the offer turned it down, staff are known to bitterly oppose the privatisation and Wednesday will see the result of a strike ballot by members of the CWU over issues linked to the sale.

CWU members are expected to back industrial action, with any strike set to be held on or after October 23.

The windfall for investors has prompted further questions about whether the Government short-changed the taxpayer over the privatisation.

Dave Ward, CWU deputy general secretary, said: "The Royal Mail share price has soared further today, bringing more proof that the company was undervalued by the Government's City mates.

"The taxpayer has lost over #1 billion already in this bungled fire sale of a cherished national institution," he said.

The Business Secretary Vince Cable - who has defended the pricing of the sale - has been asked to give fresh evidence to a committee of MPs over the privatisation while investment bank Lazard was also set to be questioned.

Sky News learned on Monday that some members of the Business, Innovation and Skills Select Committee of MPs wanted to interview executives from the syndicate of banks responsible for pricing the initial public offering at 330p-per-share.

Chief executive of Royal Mail Moya Greene, who hinted at possible stamp price increases in an interview with Sky's City Editor Mark Kleinman, opened trading at the London Stock Exchange alongside the business minister Michael Fallon and Treasury chief secretary Danny Alexander.

She said: "This marks the exciting next phase in our company's long and proud history.

"With the support of our new shareholders, we are in a strong position to move forward, to compete effectively across our markets and to grow our business.

"Royal Mail will continue to be an essential part of the fabric of the UK, providing the universal postal service that is cherished by the 29 million households and businesses across the country that we serve."

12.06 | 0 komentar | Read More

Grangemouth Refinery To Stop Fuel Production

All fuel production is to be halted at the Grangemouth refinery ahead of a planned strike by staff this weekend that experts warn could cripple fuel supplies in Scotland.

The decision was announced as the owners of the site started peace talks in a bid to halt the planned 48-hour stoppage.

Ineos said on Sunday it had agreed to go to independent arbitration with the Unite union  - a move seen as easing the prospect of a strike.

Grangemouth produces an estimated 13% of the UK's motor fuel capacity while it is understood all of Scotland's needs are met through supplies from the site, which takes one week to be fully shut down.

The Scottish Government said contingency planning was under way in case the talks were unsuccessful.

Grangemouth provides all of Scotland's fuel needs

Unite confirmed on Friday its members would go on strike from October 20 in a dispute over alleged unfair treatment of a plant worker, Stephen Deans, who is also a union official.

The union and company are also arguing over terms and conditions at the plant.

Ineos has said the petrochemical site would have to close by 2017 unless a "survival plan" involving cutting pension entitlement and pay was implemented.

The company argues that the refinery, located on the Firth of Forth, is currently not profitable - losing more than £576m in the last four years and continues to lose £10m per month.

It claims the pension scheme is £200m in deficit and pension costs of 65% of salary are "unsustainable".

Speaking ahead of Monday's talks at Acas in Glasgow, Unite Scottish Secretary Pat Rafferty said: "We welcome Ineos's change of heart to join us at Acas.

"We've repeatedly urged the company to sit down with us at the conciliation service to resolve the issues surrounding the unfair treatment of our convenor and the future of Grangemouth.

"Over the weekend we have been working tirelessly to secure these talks and hope that the company will engage in them in an open, constructive manner."

An overwhelming mandate for strike action was received by Unite from the workforce, with 81.4% voting for walkouts and 90% for other forms of industrial action, on an 86% turnout.

Calum MacLean, Ineos chairman, said: "We have always been prepared to go to Acas if this helps to resolve a strike that Grangemouth petrochemical plant and refinery cannot afford.

"We hope to be able to resolve the dispute and address the financial issues that threaten the survival of the entire site."

Energy Secretary Ed Davey said he had worked hard to get the parties to agree to talks and called the move "a very welcome and encouraging step".

12.06 | 0 komentar | Read More

MPs To Probe 'Underpriced' Royal Mail Sale

By Mark Kleinman, City Editor

A panel of MPs is poised to extend a probe into the privatisation of Royal Mail by summoning the City bankers who advised ministers on the sell-off to give evidence.

Sky News has learnt that some members of the Business, Innovation and Skills Select Committee (BIS) want to interview executives from the syndicate of banks responsible for pricing the initial public offering (IPO) at 330p-per-share.

Following a 38% jump on Friday, the postal operator's shares closed up 4% on Monday, valuing the company at 475p-a-share, or £4.75bn - almost £1.5bn more than the level at which the Government decided to privatise it.

Conditional trading in Royal Mail shares has now concluded, with thousands of private investors likely to offload their holdings of 227 shares each when full trading begins on Tuesday.

Some City analysts believe the company's share price will continue its upward momentum in the coming days because of the scale of demand to hold the stock from institutional investors who saw their orders scaled back or rejected altogether by the Government's advisers.

Vince Cable, the Business Secretary, dismissed the initial price surge as "froth".

He told the BIS Committee ahead of the flotation last week that he was convinced the sale had been properly priced.

Adrian Bailey, the Labour MP who chairs the committee, said the appetite of its Conservative members for a full inquiry into the privatisation had yet to be established.

But he added: "I don't think we can let the matter rest.

"It seems that the Government has given its advisers a lot of money for depriving the taxpayer of £750m of value."

Another committee member said it would be important to interview the bankers on the deal to establish the precise methodology for valuing the company.

The National Audit Office is also expected to examine the sale, on which the Government was advised by Lazard, one of the City's top independent investment banks.

The bookrunners – the banks which helped to place the shares with investors – were Barclays, Bank of America Merrill Lynch, Goldman Sachs and UBS, who are each expected to take fees amounting to several million pounds.

On Saturday, the Financial Times reported that the Government had examined whether it could raise the price at which shares in Royal Mail were sold but that institutions threatened to withdraw if ministers attempted to do so.

Royal Mail and BIS declined to comment.

12.06 | 0 komentar | Read More

Buyout Firms Eye Debut On West End Stage

By Mark Kleinman, City Editor

Some of the world's biggest private equity firms are mulling takeover bids for the company behind the landmark London theatres that are home to productions including The Lion King and Dirty Dancing.

Sky News has learnt that half a dozen investment groups have been given access to financial information about Ambassador Theatre Group - owner of venues including the Donmar and Lyceum - meaning that a controlling stake in the company could change hands within months.

The interested private equity funds are understood to be BC Partners, Blackstone, Carlyle, Charterhouse, Lion Capital and Permira, which collectively manage tens of billions of pounds of investments.

Ambassador's majority shareholder, Exponent Private Equity, has invited the firms to consider making offers ahead of a wider auction that had been planned for early next year.

A number of international theatre groups are also understood to be interested in examining Ambassador's books. Any buyer is likely to want to see the company's performance during the crucial Christmas trading period, which accounts for about half of its annual trading profits.

Exponent acquired a roughly 55% stake in the UK's largest theatre operator in 2009 in a deal valuing it at just over £130m. The remainder is owned by a number of wealthy individuals and Ambassador's founders, Howard Panter and his wife, Rosemary Squire.

Ambassador's minority investors are said not to be keen to sell their shares as part of the current sale process, but one insider said the existing shareholder agreement contained a clause known as drag rights, which may mean that any buyer of Exponent's stake has the power to compel other investors to sell at the same time.

UBS, the Swiss bank, is handling the sale, which is likely to value Ambassador at between £250m and £350m. Exponent is expected to make a handsome return on its investment, which could also reap a windfall for Greg Dyke, the former BBC director-general who now chairs Ambassador as well as the Football Association.

The company owns about a dozen venues in London's theatreland, which are staging productions such as Jersey Boys, which is transferring to Ambassador's Piccadilly Theatre in March next year.

The Lion King, which is staged at the Lyceum, is one of the West End's most successful and long-running musicals.

In total, Ambassador owns 39 venues in Britain. It was established by Mr Panter and Ms Squire in 1992, and sold to Exponent four years ago in a deal that combined the existing ATG and the theatre portfolio of Live Nation, the American entertainment giant.

Since then, the company has expanded through bolt-on acquisitions including its debut appearance on New York's Broadway this year, when it paid around £40m to buy the Foxwoods Theatre, home to Spiderman: The Musical.

A sale process will take place at a buoyant time for London's theatre industry. Ambassador saw a 17% surge in sales to £111m in the 12 months to March 2012, while operating profits during the same period rose nearly 70% to £15.5m. Both measures are understood to have grown again during the subsequent 12 months.

Overall West End ticket sales were up in 2012 for the ninth consecutive year running despite an anticipated decline during the London Olympics.

Fears about the economic environment and the Games proved relatively unfounded with attendance increasing to almost 14m, up 0.56%, and box office sales setting a new record of £530m, up 0.27%.

12.06 | 0 komentar | Read More

UK To Relax Visa Rules For Chinese Nationals

Visa rules for Chinese nationals coming to Britain will be relaxed by the Government in a drive to boost visitor numbers, Chancellor George Osborne has announced.

Mr Osborne, who is leading a UK trade delegation to China, said the changes will "streamline and simplify" the visa application process for tens of thousands of Chinese visitors.

The move comes amid signs of a thaw in relations with Beijing which have been frosty since David Cameron met the Tibetan spiritual leader, the Dalai Lama, last year.

The changes will reduce the need for Chinese visitors to the European Union to submit separate visa applications for Britain, with selected Chinese travel agents able to apply for UK visas by submitting just the EU's Schengen area visa form.

A new 24-hour "super priority" visa service will become available from next summer, while officials are also looking at expanding a VIP mobile visa service, currently operating in Beijing and Shanghai, to the whole country.

The move will make it easier for tourists to visit

The service involves visa teams going out to applicants to collect their completed forms and biometric data, with the whole process taking less than five minutes.

The move will be welcomed by businesses in the UK who have complained that the existing regime is discouraging high-spending Chinese visitors from coming to Britain.

In 2012, 210,000 visas were issued to visiting Chinese nationals who went on to contribute around £300m to the British economy.

Mr Osborne said: "These changes will streamline and simplify the visa application process for Chinese visitors, while ensuring the system is strong and secure. This is good news for British business and tourism."

Mayor of London Boris Johnson, who is also on a trade visit to China, said he was pleased the Government had listened to him on simplifying the visa system for Chinese people.

Chinese nationals contribute £300m to the British economy

He said: "I'm pleased that the Government has listened to the many voices, mine included, who have called repeatedly for a streamlining and simplification of the Chinese visa system.

"Whilst I await the detail, it would appear the Government's announcement of a pilot scheme available through select travel agents is a welcome step forward.

"The move will hopefully encourage ever greater numbers of Chinese tourists to London.

"Only today I launched the first ever Chinese language website dedicated to studying in and visiting London. Chinese visitors now have all the information they need to access London, and changes to the visa system that will hopefully make getting here a good deal easier."

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London Battles For Slice Of £5bn ISS Float

By Mark Kleinman, City Editor

London is facing a battle to secure a slice of one of the biggest stock market listings anticipated next year as its owners step up preparations for a £5bn flotation.

Sky News understands that the private equity groups behind ISS, a Danish cleaning and catering company that ranks among the world's largest private sector employers, have appointed investment banks to oversee its initial public offering (IPO).

The investment arm of Goldman Sachs and EQT Partners, a Swedish buyout firm, have enlisted bankers from Goldman and UBS for the flotation.

ISS, which has around 500,000 staff, will be floated in Copenhagen but its shareholders are also evaluating the possibility of a dual listing in London, insiders said this weekend.

A decision to include London would deliver a further boost to the City's IPO market, which has been revived in the last 12 months and on Friday saw the spectacular stock market debut of the privatised Royal Mail.

ISS has made at least two previous attempts to list, in 2007 and 2010, and is best-known in the City as the aborted merger partner of G4S, the UK security firm which breached a contract to provide personnel at last year's London Olympics.

G4S and ISS agreed a merger in 2011 but it was abandoned after a revolt by G4S shareholders.

The Danish group is now chaired by Sir Charles Allen, the former ITV boss who also played a key role on the organising committee of the 2012 Olympics.

A £5bn flotation of ISS would value the company at roughly ten times its annual profits, the mid-point at which analysts expect its shareholders to be able to exit their investment.

A large stake in ISS is now owned by Ontario Teachers Pension Plan and Kirkbi, the investment vehicle of the family behind the Lego empire.

Kirkbi is also a big investor in Merlin Entertainments, the theme park operator which plans to announce a London flotation as soon as there is greater clarity about the fate of negotiations over the US government's debt ceiling.

ISS and the investment banks declined to comment.

12.06 | 0 komentar | Read More

Boris And Osborne Make Chinese Trade Visits

By Mark Stone, China Correspondent in Beijing

The Chancellor and the Mayor of London will arrive in Beijing later on separate trade visits to China.

Both George Osborne and Boris Johnson will spend a week in the country, promoting British business but also trying to attract more Chinese investment in the UK.

Mr Osborne's arrival will signal the end of a diplomatic spat between Beijing and London which has lasted more than a year.

Both men are expected to sign a number of multimillion pound investment deals in which Chinese companies will fund or part-fund UK infrastructure and building projects.

Mr Osborne is expected to announce the names of the Chinese backers behind an £800m development at Manchester Airport.

Using Chinese money, five million square feet of land next to the airport will be developed into retail, office and manufacturing space.

Creating 16,000 new jobs over 15 years, the airport will be turned into a hub destination in its own right.

Similar projects in Amsterdam and Frankfurt have proved successful and eased congestion at other airports.

An £800m investment in Manchester Airport will create thousands of jobs

Speaking in Washington before leaving for Beijing, the Chancellor said: "I want to use my visit to China this week to strengthen strategic ties between Britain and China in areas that will drive our countries' growth."

A key strand of Mr Osborne's trip will be so-called "e-trade".

He is travelling with the UK Trade Minister Lord Green, City Minister Lord Deighton and the Minister for Science and Innovation, David Willetts.

With them are executives from a variety of British technology companies who will try to showcase the best of Britain's digital technology industry in China.

The delegation will hope the trip allows UK companies to gain access to the rapidly expanding Chinese market.

"The Chinese economy is changing," Mr Osborne said.

"Those who think it is just a low wage, low tech economy are making a mistake.

"It is becoming a cutting edge player in industries like technology and this is a huge opportunity for Britain."

Chinese tech company Huawei is investing £1.3bn in British broadband

The Chancellor will lead the delegation to the Shenzhen-based headquarters of Huawei, the world's largest telecommunications manufacturer, and TenCent, the world's third largest gaming and social media firm.

Huawei's growing footprint in Europe and America has caused controversy, with some suggesting that Chinese involvement in Western telecoms firms poses a security risk.

Despite that, Huawei has already pledged to invest £1.3bn in the UK's broadband network over the next four years.

Mr Osborne's visit is a clear endorsement of the company.

Alongside the commercial strands of his visit, the Chancellor will also hold governmental meetings with his Chinese counterpart Ma Kai.

Known as the UK/China Economic Financial Dialogue, the discussions will focus on a range of financial issues including the global economic recovery, the US debt ceiling debacle and London's efforts to become a Chinese currency trading hub.

Significantly, the talks represent the first face-to-face bilateral ministerial contact between the UK and China for over a year.

The UK has been in the political dog house with China since May 2012 when David Cameron and Nick Clegg chose to meet and be photographed with the Dalai Lama, the exiled spiritual leader of Tibet.

Mr Cameron and Mr Clegg met the Dalai Lama last year

The meeting enraged Beijing given the controversial claim China holds over Tibet.

Ministerial meetings between the two countries were cancelled and Beijing made its disapproval very clear.

Diplomatic sources in the Chinese capital have suggested the move was designed by Beijing not only to punish the UK but to send a clear message to other countries that it is not worth upsetting the world's second largest economy.

However, British officials are always keen to stress that despite the Dalai Lama meeting, for which the UK refused to apologise, trade between the two countries been unaffected by the spat.

Diplomats point out that inward Chinese investment to the UK in the last 18 months has been greater than the past 30 years combined.

The London Mayor's trip is separate but the broad objectives are the same.

Mr Johnson is travelling with the chief executives of several large companies including Justin King of Sainsbury's and Marc Bolland of Marks & Spencer.

He will spend three days in Beijing, where he will visit a UK brands fair, take a ride on the subway and attend a private meeting with China's richest man, Wang Jianlin, whose company Dalian Wanda is investing heavily in the Nine Elms area of London.

Mr Johnson will then travel to Shanghai before ending his trip in Hong Kong.

Both men are effectively cashing in on the thawing of diplomatic relations between the two countries.

By the end of the week, they hope to have signed a variety of deals, forged new relationships and facilitated meetings between UK and Chinese firms.

12.06 | 0 komentar | Read More