Editor: John Arnold. E-mail jarnold@creditman.co.uk
Pat Williams. E-mail pwilliams@creditman.co.uk
Site: Business Credit Management UK
URL: http://www.creditman.co.uk
Issue: Vol 6 Issue 6
Dated: 10 February 2002
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
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UKGRANT THORNTON PREDICTS A PAINFUL INCREASE IN VAT
Tax and budget supremo at Grant Thornton, Mike Warburton, on Friday warned consumers and businesses to prepare for an increase in VAT on Budget day (April 17).
Warburton warned, "An increase in VAT could be very painful, particularly for low income earners, who could see their weekly income reduced by as much as 2.5% if the Chancellor increases VAT from 17.5% to 19%.
"An increase in VAT could also mean that businesses will be forced to cut their profit margin in order to continue to offer the same value for money prices to their customers. Businesses that pass on the increased charges to their clients may find that they are no longer competitive."
Warburton predicts that VAT will be increased to pay for the improvements to public services that labour has pledged. He commented, "While there is sufficient money in the coffers to meet this requirement, we predict that the Chancellor, in typical 'prudent' style, will decide to raise the money now in order to plan ahead for future expenditure."
If he does this through increased taxation, VAT will be an easy target for the Chancellor as VAT in the UK is currently below the average rate in Europe. Brown could therefore easily argue that VAT in the UK should increase to bring it into line with the rest of Europe. What's more the last time that VAT was raised in the UK was in 1991 when it was increased from 15 to 17.5%.
While the impact of an increase in VAT will not be popular, the rewards for the public coffers are handsome. If Brown decides to increase VAT to 19%, he stands to raise £5.5 billion.
One other option would be to increase the upper rate threshold of Class 1 National Insurance Contributions (NIC) from £29,000 to £34,500. However, Warburton reckons this is less likely given that it will only raise £1 billion as opposed to £5.5 billion.
Warburton added, "It is unlikely that the Chancellor will raise both VAT and National Insurance at once. But I predict that he will increase one or the other. The best time to increase VAT is when inflation is low and given the current economic climate together with the amount that he stands to gain by increasing VAT, it looks like the most likely candidate."
To soften the blow for low-income earners, the amounts payable under tax credits could be increased. The working families tax credit, employment and childrens' tax credits are the credits most likely to be reviewed. However, Warburton criticised the tax credit system for not being user friendly enough. He said, "There is a lack of public information surrounding existing tax credits. As a result, not enough people are aware that tax credits are available and those that are most in need are not claiming. By increasing tax credits, the Chancellor can be seen to be redressing the balance without having to cough up too much extra cash."
FURTHER RATE CUT WOULD BENEFIT STRUGGLING MANUFACTURERS - CBI
The CBI said last weeks decision to leave interest rates on hold was disappointing but understandable.
Ian McCafferty, Chief Economic Adviser, said: "We recognise that a small cut in interest rates is not the only solution to pulling manufacturing out of recession. However, with inflation clearly under control and signs of the slowdown spreading to consumer services, a rate cut would have injected some much needed confidence across all sectors.
"Job losses across the economy are set to accelerate in coming months, suggesting that consumer spending will slow once the New Year's sales period is over. It is vital for the economy as a whole that spending is not allowed to fall away before there are clear signs of a global recovery."
CHAMBERS ACCEPT BANK’S DECISION TO HOLD
Reacting to the Bank of England's decision to hold interest rates at 4.00 per cent, Ian Fletcher, Chief Economist at the British Chambers of Commerce, said:
"With so much conflicting data and views on the economy, it is understandable members of the MPC should wish to sit on their hands. UK manufacturing is suffering from very weak exports and for its sake, the worst thing the MPC could do now is to make a policy mistake, by jumping in one direction too soon.
“If demand starts to falter at home, we would seek further interest rate cuts in the months ahead, but at this stage it is too early to judge whether that is happening.”
DAVID IRWIN WELCOMES GOVERNMENT COMMITMENT TO CUT RED TAPE.
David Irwin, head of the Small Business Service last week welcomed the Government's plan to reduce unnecessary red tape and benefit small businesses.
Speaking from a seminar on how to implement the plan at No 10 Downing Street last week, David Irwin said:
"I welcome this Regulatory Action Plan - it is good news that the Government has identified 250 measures that will reduce or eliminate regulation for business. I would encourage Ministers to continue to look for ways to cut unnecessary red tape.
"The SBS sees this as the start of a continuing process, where as well as Government legislating sensibly at the outset, they will also tackle unwieldy or out of date regulation from current legislation.
"I am pleased that the Government is responding to my message to think small first in all regulatory matters, and that they are listening to the needs of real businesses on the ground."
For more information on the Regulatory Reform Action Plan please go to the Cabinet Office website at http://www.cabinet-office.gov.uk/regulation/actionplan
The Small Business Service is an agency within Government championing small businesses. It has been in existence since April 2000, and operates across all Government Departments.
IOD WELCOMES ELIMINATION OF IRRITATING REGULATIONS
The IoD has welcomed the Government's Regulatory Reform Action Plan as a big step in the right direction.
The Plan sets out a large number of measures to reduce or eliminate irritating regulatory burdens, including 64 which can be dealt with using the new tool of regulatory reform orders.
Examples include tidying up fire safety regulations, removing some detailed weights and measures regulations and making it easier to design business tenancies to suit the parties.
Richard Baron, Deputy Head of the Policy Unit at the IoD, said:
"The Plan is an impressive list of improvements. Some of them are individually small or have been announced before, but the cumulative effect should be noticeably helpful to businesses. Importantly, this is not intended to be the final word: the Government is open to further ideas.
"We now need to see the commitment to regulatory reform sustained. In particular, we need the next round of reform to tackle the key area of labour market regulation. It is tempting to shy away from this area, but a reduction in the regulatory burdens which go with employing people would bring significant economic benefits to the UK."
DTI GIVES SMALL BUSINESSES STRONGER VOICE IN GOVERNMENT
New Small Business Champions boost services for small firms to ensure effective support for Britain's growing businesses
Trade and Industry Secretary Patricia Hewitt has outlined plans to strengthen support for small business when she named a new "independent voice for small firms" in Government.
William Sargent, currently head of the Small Business Council, will take on an enhanced role as the 'independent voice for small firms'. He will attend the Ministerial Panel on regulatory accountability and will have access to the Prime Minister to discuss small firms matters.
Ms Hewitt also announced a new Chief Executive for the Small Business Service, Martin Wyn Griffith, who is currently Chief Executive of Business Link Berkshire and Wiltshire. He will concentrate on improving delivery of business support services through the Business Link branded operators and other SBS partners.
The appointments reinforce the priorities set out for the DTI by Ms Hewitt as part of the DTI Review in November 2001. The Review identified the need for a small business champion to provide an independent voice for small firms with a remit to advise Government on issues affecting Britain's small businesses.
Patricia Hewitt said:
"Small businesses make up 99% of Britain's business community. By helping small firms improve their business performance we can help drive up the UK's productivity and competitiveness.
"At the DTI we are focussed on the needs of small businesses and cutting regulation. Today's new appointments underline the commitment set out in the DTI Review to strengthen and enhance the support network we offer the UK's 3.7 million small firms.
"William Sargent's role has been enhanced to provide a prominent and independent voice for small and medium sized businesses that is influential across Whitehall. William will provide advice and comment on Government policy as it concerns small businesses but look particularly into regulations that impact significantly on small firms.
"Martin Wyn Griffith will focus on improving the delivery of services to our small business customers. Martin's experience as an entrepreneur and at the sharp end of Business Link makes him ideally suited to the role at a time when my review of the DTI will bring about sweeping changes in the way the Department works."
William Sargent said:
"I know the concerns and issues of small and medium sized businesses are very much at the heart of the DTI. I hope in this new role I will help to ensure that small business issues are taken seriously across Whitehall."
Martin Wyn Griffith said:
"I am delighted to have been appointed to this key post and look forward to building on the good work taken forward by David Irwin over the past two years. I am passionate about helping entrepreneurs to succeed and I will now be in a position to make a real difference to the success of the UK's small businesses. We intend to make it easier for entrepreneurs to access finance from lenders and investors, develop the skills base of their employees and reduce the barriers to starting and growing a business.
"We also intend to dramatically increase the quality and take-up of Business Link branded services by our small business customers, working in partnership with the wide array of business support providers in the private, public and voluntary sectors."
Both appointees will take up their new roles in April this year.
The SBS has operated as an Agency of the DTI since April 2000. It delivers its services through a network of 45 independent Business Link branded local operating companies across England and works closely with the devolved administrations in Wales, Scotland and Northern Ireland.
The Small Business Council was set up in May 2000 to advise the government, and particularly the Secretary of State at DTI on the needs and concerns of small businesses. It is an advisory non-departmental public body. The SBC consists of 19 entrepreneurs from many sectors, sizes and types of small business, from all regions across the UK, and an academic who specialises in small business research.
The Secretary of State for Trade and Industry, Patricia Hewitt launched two reviews of DTI priorities and structure and of support for business last year. A series of reforms designed to improve the way in which the DTI serves business, employees and consumers were announced on November 22 2001 following an extensive consultation involving business, trade unions, consumer groups and other interested parties.
William Sargent - Biography
William Sargent was appointed Chair of the Small Business Council at its inception in March 2000. He is co-founder and Joint Chief Executive of Framestore CFC. Framestore is one of the world's leading companies in the creation of digital images and services for the advertising, film and television markets. Framestore CFC has won most major craft awards in the UK and USA, including eight consecutive Primetime EMMY awards, and two Technical Academy Awards (Oscar's). William Sargent worked with the Chancellor, Gordon Brown, and Secretaries of State for Trade and Industry Margaret Beckett on their Productivity Seminars in 1998 and 1999.
Martin Wyn Griffith - Biography
Martin is currently Chief Executive of Business Link for Berkshire and Wiltshire, one of the UK's leading Business Links with a reputation for innovative service development, high performance standards and an organisation culture that is customer- focussed and entrepreneurial.
Martin joined Business Link in Swindon in 1996 as a Business Adviser and was appointed Chief Executive in 1999. He is an entrepreneur who started and grew his own successful film and video production company in London and Los Angeles and has eighteen years experience in the creative industries.
NEW CONSTRUCTION ORDERS: DECEMBER 2001
Orders in 2001 rose by two per cent compared to orders in 2000 but orders in the fourth quarter of 2001 fell by two per cent compared to the same quarter a year earlier. Orders in the fourth quarter of 2001 fell by 13 per cent compared to the previous quarter, with falls in all sectors except public housing. This was largely due to low December orders in the infrastructure and private commercial sectors.
Private housing orders in 2001 fell by two per cent compared to 2000. Orders in the fourth quarter of 2001 fell by 13 per cent compared with the previous quarter but rose by six per cent compared with the same quarter a year ago. Public housing and housing association orders in 2001 rose by 20 per cent when compared to the previous year. Public housing and housing association orders in the fourth quarter of 2001 rose by 26 per cent compared to the previous quarter, and by 4 per cent compared to the same quarter a year earlier. All comparisons in this sector are affected by large variations due to its relatively small size.
Infrastructure orders in 2001 fell by one per cent compared with the previous year. Orders in the fourth quarter of 2001 were 34 per cent lower compared with the previous quarter, and were 30 per cent lower than in the same quarter a year earlier. This was due to low orders in December in the water, roads and other infrastructure sectors.
Public non-housing orders (excluding infrastructure) in 2001 were five per cent higher when compared with the previous year. Orders in the fourth quarter of 2001 were 5 per cent lower compared with the previous quarter, but were 21 per cent higher compared to the same quarter a year earlier.
Private commercial orders in 2001 were five per cent higher compared to the previous year. Orders in the fourth quarter of 2001 were nine per cent lower compared to the previous quarter, but seven per cent higher than in the same quarter a year earlier.
Private industrial orders in 2001 fell by four per cent compared with the previous year. Orders in the fourth quarter of 2001 were 15 per cent lower than in the previous quarter, and 16 per cent lower compared to the same quarter a year earlier.
Parsippany, NJ, February 5, 2002 - The GETPAID® Corporation, a leading supplier of receivable management software and services, announced today the selection of its products by IDEXX Laboratories, Inc. (NASDAQ: IDXX), a world leader in providing diagnostic, detection and information systems for veterinary, dairy, and water testing applications.
"We selected GETPAID for its ability to facilitate workflow as well as invoice follow-up, tracking and reporting," comments Ed Garber, Director of Financial Planning and Analysis. "We are especially excited about the significant increase in productivity we expect from GETPAID. Using this system we will uncover and have a chance to correct problems much earlier than before, translating to increased customer service."
"IDEXX is an innovative and global company. With GETPAID they are instituting an online collaborative network that will act as a driving force to streamline the receivable management process," states Dianna Piumelli, president and COO of The GETPAID Corporation. "We are pleased that IDEXX Laboratories has selected GETPAID and we look forward to working with them as they expand their total customer service offerings."
Collaborative Approach to Problem Resolution
Using GETPAID, you can build a Dispute Resolution Network, bringing together the entire organization in a joint effort to resolve disputes quickly and deliver a heightened level of customer service. Access is available via the Internet to ensure involvement of remote and field users such as sales and satellite offices.
About IDEXX Laboratories, Inc.
IDEXX Laboratories, Inc. (www.idexx.com) is a world leader in providing diagnostic, detection and information systems for veterinary, dairy, and water testing applications. The Company's largest business is focused on animal health, combining biotechnology and information technology to create new opportunities and solutions for today's veterinary industry. Its veterinary business includes in-clinic diagnostic products, diagnostic reference laboratories and professional services, computer software and related informatics, and pharmaceuticals. Headquartered in Westbrook, Maine, IDEXX employs more than 2,000 people and offers products to customers in more than 50 countries.
About The GETPAID Corporation
The GETPAID Corporation is the leading provider of collection and dispute resolution software used by thousands of commercial collectors in B2B credit departments to manage billions of dollars in past due receivables. GETPAID is based in Parsippany, NJ, with offices worldwide.
The GETPAID product line includes advanced collection and dispute resolution systems with multiple currency and languages for global use, a powerful report writer, and a web-enabled product.
The GETPAID Professional Services team is comprised of experts who deliver installation, system configuration, training and on-going support services to the more than 500 installations worldwide in a wide array of companies, industries and environments.
For more information, contact GETPAID at 1-800-395-9996 or visit www.getpaid.com
BUSINESS MORE EFFECTIVE WITH PROACTIVE MONITORING SERVICE
Risk management is now quicker and more accurate with the launch of a new proactive monitoring service from ICC Credit. The new service enables the user to react more quickly to both credit problems and sales opportunities.
ICC Credit, the credit service provider, is continuing its drive to ensure best practice in credit management with the launch of this enhanced Monitoring service. Adrian Howells, marketing director for ICC Credit said,
“Effective monitoring is vital to both minimise bad debt risk and maximise sales opportunities. A credit manager is swamped with a plethora of information. What they need is the key exceptions that impact on the business in a dramatic way, such as company bankruptcies. Our enhanced monitoring service allows the user to concentrate on these key exceptions.”
The real-time, electronic delivery of information means that users can more easily anticipate problems, acting swiftly to mitigate risk, identify improving customers, increase the credit limits of existing ones within credit guidelines or even identify new customers in key sectors.
The enhanced service is split into three levels. The base level will notify users on-line of any changes to all of the companies that they choose to monitor. Advanced monitoring enables the user to take the monitoring information via email providing the credit or sales teams with proactive changes to a customer’s financial health. Premium monitoring will allow the user to group customers into different risk levels and to set the parameters, thus enabling focused risk management.
For details of the service call 0800 783 4045 or see www.icc-credit.co.uk
You can obtain your ICC Credit Information Reports by going to http://www.creditman.co.uk/icc/icchome.html
The Charity Commission, the government organisation responsible for regulating and supporting charities, last week appointed receivers and managers to Swansea based CATCH! the brain injured children's charity. Richard Hill & Barry Jones, of KPMG, will take up the post jointly.
The Charity Commission's formal inquiry into the affairs and management of CATCH! has found evidence of serious mismanagement in the administration of the charity. The receivers and managers have been appointed to act on the charity's behalf and to minimise the risk to the charity's assets.
The Commission has repeatedly expressed concern to the trustees at the low levels of direct charitable expenditure made by CATCH! over a number of years. The role of Mr Hill and Mr Jones is to establish the current financial position of the charity and to consider options for the future.
Mrs Ceinwen Thorne, Regional Operations Manager at the Charity Commission, said:
"The Commission is concerned with protecting and maintaining public confidence in the integrity of charity. The receivers and managers will consider all reasonable options before coming to a view about the future of this charity."
CATCH! is a registered charity No. 501833 based in Swansea with a fundraising office in Manchester.
The appointment of the receivers and managers is being made under Section 18 (1)(vii) of the Charities Act 1993 which empowers the Commission to appoint by order the receivers and managers in respect of the affairs of the charity. The formal inquiry was opened in December 1998.
The Charity Commission is a government organisation whose aim is to give the public confidence in the integrity of charity. It is accountable for its decisions to the courts and for its efficiency to the Home Secretary. It carries out a wide range of functions, including the registration, monitoring and support of charities and investigation of alleged wrongdoings. There are five Commissioners, appointed by the Home Secretary.
BOGUS WINE COMPANY - CORKED!
An investment wine company that promised clients shrewd financial advice but duped people into buying wine at up to three times its true value has been wound up in the High Court.
Liquid Acquisitions Limited was wound up on 30 January 2002 following a DTI petition. The company was found to have:
- Knowingly misled potential and existing customers by presenting itself as an expert in the fine wine market able to give shrewd advice on wines to be bought and sold when in reality the company was simply a wine merchant.
- Bought wine from a single supplier at a reasonable price and then sold it on to the client at a highly inflated price, making a substantial profit for themselves. Some customers were charged £4765 for a case of wine which only cost £780.
- Falsely suggested the wines offered would be an exceptional investment opportunity because they would be free from capital gains tax and inheritance tax.
- Falsely suggested that if certain wines were not bought within a short time the opportunity to purchase them would be lost.
The Judge ordered that the DTI's costs in bringing the proceedings should be paid by Andrew Dunne who controlled the company throughout.
This court decision follows a number of other winding-up orders made against similar companies engaged in the sale of wine for investment purposes including:
Consumer and Competition Minister Melanie Johnson said:
"I welcome the action that's been taken on this and other wine investment companies who cheat the public.
"These companies preyed on those unfamiliar with the world of wine investment. People thought they were getting good advice and building a solid investment for the future when in fact they were simply buying overpriced wine.
"Anyone thinking about investing in wine needs to make sure they are buying genuine goods at genuine prices. Take advice from an independent expert who knows the investment wine market. Take time to ask difficult questions, consider the answers carefully and check them with someone you can trust."
The petition was presented in October after an investigation under Section 447 of the Companies Act 1985.
The registered office and place of business were at Dudley House, 145/147 Croydon Road, Beckenham, Kent BR3 3RB.
The petition was presented under Section 124A of the Insolvency Act 1986.
All public enquiries concerning the companies should be made in writing addressed to:
The Official Receiver
Public Interest Unit
21 Bloomsbury Street
London WC1B 3SS
COMPANY INSOLVENCIES INCREASES DESPITE STRONG CONSUMER DEMAND
Despite strong consumer spending levels throughout the second half of 2001, the level of company liquidations in England and Wales rose by 7% in the fourth quarter compared to the previous quarter, and by 7.5% in 2001 as a whole compared to the previous year, according to information from the DTI and PricewaterhouseCoopers. In total, 17,584 companies became insolvent in 2001, including 4,545 in the last quarter, driven in part by shocks to the international economy.
Across industries, the manufacturing sector continues to suffer more acutely than other sectors. Manufacturing insolvencies in the third quarter of 2001 (the most recent figures available) increased by nearly 10% on the previous quarter.
Yet while the overall amount of company liquidations increased during the year, the annual rate of insolvencies as a percentage of companies registered has remained static throughout 2000 and 2001 at just over 1%.
According to PricewaterhouseCoopers, a combination of strong consumer demand and a more accommodating attitude from banks towards companies in crisis over the last quarter has saved the picture from being worse.
Tony Lomas, Business Recovery Services partner at PricewaterhouseCoopers, commented:
"If the market thought that large swathes of businesses would recoil from the shocks to the international economy and increasing pressure from banks, there is not much evidence of this happening. Banks have steadfastly avoided making judgements about the future potential of businesses in the immediate aftermath of the events of last September. While not all businesses have escaped the worst effects of the economic downturn, this attitude among lenders means circumstances are far more positive than one might have expected."
Q4 2001 insolvency statistics for England and Wales were released on Friday 1 February 2002 by the Department of Trade and Industry and reported by us in last weeks edition of the Business Credit News UK.
*** FORTHCOMING CREDITORS MEETINGS ***
For detailed information on the British Isles insolvency's (liquidation's, receiverships, administrations, dividends, creditors) please visit http://www.insolvency.com/cgi-bin/gazette/liq/nots.plNEW SERVICE COMING SOON! WATCH OUT FOR OUR ANNOUNCEMENTS!!
TW LW TW LW
USA 1.41 1.41 Canada 2.27 2.25
Austria 22.43 22.57 Portugal 327.13 328.86
France 10.70 10.76 Belgium 65.82 66.17
Finland 9.70 9.75 Italy 3159.51 3176.17
Germany 3.19 3.20 Sweden 15.03 15.13
Holland 3.59 3.61 Switzerland 2.39 2.41
Spain 271.51 272.94 Ireland 1.28 1.29
Australia 2.79 2.75 Denmark 12.12 12.18
Hong Kong 11.03 11.02 Euro 1.62 1.64
Africa Com 16.31 16.25 Saudi Arabia 5.30 5.29
India 68.87 68.41 Malaysia 5.37 5.36
Singapore 2.59 2.59 Norway 12.75 12.86
Japan 189.57 188.58
TW This week LW Last week.
An Enron-appointed committee released a damning report on the company's abuse of off-balance-sheet financing.
Tyco admitted that it had spent $8 billion over three years on 700 unannounced small acquisitions, but said that the deals were not "material".
General Electric's shares fell as investors fretted over similarities between the complex accounting employed by the world's biggest company and that used by Tyco and Enron.
Accounting woes hit Elan, an Irish drug company. Its shares fell by 50% in a single day after it conceded that profits for its latest year would have been considerably lower had it included two off-balance-sheet entities not included in its American accounts.
Invenys, a British electronics firm, blamed a slipping share price on the Enron effect and denied that its heavy indebtedness would force a rights issue.
Problems mounted for Kirch, a cash-strapped German media company. It emerged that Dresdner Bank was unlikely to extend an April deadline for repayment of a Euro460m ($400m) loan. Meanwhile, Kirch's biggest lender, Bayerische Landesbank, urged fellow creditors to co-operate on a rescue that would keep Kirch in German hands.
British Airways announced an operating loss for the latest quarter of GBP187m ($270m), blaming a weak world economy and the after-effects of September 11th.
Ryanair, an Irish no-frills carrier, said that net profits for its latest quarter were up by 35% compared with the same period a year ago to EURO28.8m ($25.8m) as travellers continued to flock to low-cost airlines.
Source - The Economist
DAEWOO TROUBLES PERSIST.
One of Korea's largest groups, Daewoo is to receive assistance from the Government as outlined in the following story in the Korea Times. Problem is going to be whether the company can turn its financial fortunes around and be in a position to eventually pay back the debt rescheduling program being worked out.
Obviously it can only go so far with a debt to equity arrangement as there is only a certain amount of equity to convert......one has to wonder at what point a bankrupt company is declared bankrupt, and further funds cease to be injected.
There is always the argument of course that a corporation the size of Daewoo must be saved, if for no other reason than the impact on its workforce of a closure, and in turn the economy of Korea itself..............but there must also come a time when the use of public funds whether directly from the Government itself, or from managed funds which in turn are managing investors funds, has to be questioned and hard decisions made as to whether further money can be invested into a corporation that continues to disappoint by its failure to achieve its financial targets.
CRV to Be Set Up for Daewoo Capital
By Park Yoon-bae
Staff Reporter
The government yesterday decided to set up a corporate restructuring vehicle (CRV) for the troubled Daewoo Capital, in order to normalize its operations by taking over its debts.
The decision was made during a meeting of the Public Fund Oversight Committee, which was attended by vice ministers of the Finance-Economy Ministry and the Planning-Budget Ministry and the deputy head of the Financial Supervisory Commission.
A government official said the envisaged CRV is set to take over Daewoo Capital's debts, worth 4.9 trillion won, and then issue stocks based on its obligations.
The new stock issues will be distributed to creditor financial institutions of Daewoo Capital and sold to local and foreign investors.
According to an examination of Daewoo's assets and liabilities by accounting agencies, it would be more beneficial for creditors to normalize the firm under a restructuring program than to liquidate it.
The private equity arm of the collapsed Daewoo Group is currently allowed to keep afloat under a creditor-initiated ``work-out'' restructuring program.
``If a corporate restructuring vehicle grants debt rescheduling or debt- for-equity swap to Daewoo Capital, the highly-indebted firm might have a high chance of normalization. And it could be sold to local and international investors more easily,'' said a market watcher.
He said creditors of Daewoo Capital would also be able to recoup their credits from the ailing company as quickly as possible.
Daewoo Capital owes 1.9 trillion won to the state-run Korea Asset Management Corp. (KAMCO), 974.4 billion won to Daewoo Securities and 645 billion won to Seoul Investment Trust Management Co.
In other developments, the Public Fund Oversight Committee decided to work out a concrete plan to privatize nationalized Chohung Bank by issuing depositary receipts (DRs) abroad by the end of June.
The committee also plans to hammer out details on a plan to list the state- owned Woori Financial Group in the first half of this year under a privatization timetable announced by the government last month.
Woori was created in April last year by combining nationalized financial institutions, including Hanvit Bank, Peace Bank of Korea, Kwangju Bank, Kyongnam Bank and Woori Investment Bank.
The committee also reported to the government what progress 14 weak banks made in implementing their normalization programs in the third quarter of last year.
London Bridge Software announced pre-tax profits of 4.73 million pounds, on turnover of 74.1 million, for the year ending 31st December 2001. Earnings per share stand at 1.7p, on increased capital.
Signet announced pre-tax profits of 43.6 million pounds, on turnover of 898.5 million, for the nine months ending 27th October 2001. Earnings per share stand at 1.7p.
Smith & Nephew announced pre-tax profits of 193.6 million pounds, after exceptional credit, on turnover of 1,205 million, for the year ending 31st December 2001. Earnings per share stand at 14p, on reduced capital.
MERGER NEWS
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/s to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973:Completed acquisition by Grampian Country Foods Group Ltd of part of the business of Uniq Ltd known as Malton Foods
Proposed acquisition by Skandia Insurance Company Ltd of Lynx Group plc
SIBELCO/FIFE MERGER - PATRICIA HEWITT EXTENDS DEADLINE FOR SALE OF FIFE BY SIBELCO
Patricia Hewitt, Secretary of State for Trade and Industry, has varied the terms of undertakings given by the building materials company SCR-Sibelco SA on 31 October 2001, to allow Sibelco more time to sell the Fife companies - Fife Silica Sands Limited and Fife Resources Limited.
This follows the advice of the Director General of Fair Trading (DGFT). Sibelco will now have until 18 February 2002 to sell Fife, which should allow the company time for negotiations with potential purchasers.
Should Sibelco fail to find a suitable buyer by that time, a Trustee must be appointed to arrange for Fife to be sold. Today's variation of terms of undertakings allows Sibelco to postpone any such appointment until 19 February 2002.
The acquisition by SCR-Sibelco of Fife Silica Sands Limited and Fife Resources Limited was referred by the then Secretary of State for Trade and Industry to the Competition Commission under the Fair Trading Act 1973. The CC submitted its report on 12 April 2001, concluding that the merger was against the public interest and recommending that Sibelco should be required to divest itself of the Fife companies.
The Fair Trading Act 1973 empowers the Secretary of State to refer to the CC for investigation and report actual or proposed mergers which create or intensify a market share of over 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.
Copies of the CC report (Cmd 5139) are available from The Stationery Office, priced £18.50.
PROPOSED ACQUISITION BY COMPASS OF RESTORMAMA, RAIL GOURMET AND GOURMET NOVA.
Competition Minister Melanie Johnson has asked the European Commission to refer part of a proposed merger of companies providing foodservices to the UK competition authorities.
The merger - which would result in the acquisition of Restorama AG, Rail Gourmet Holding AG and part of the business of Gormet Nova by Compass Group PLC - is currently being considered by the European Commission under EC Merger Regulation.
Melanie Johnson said:
"The Director General of Fair Trading has advised that the proposed merger appears to raise competition concerns in the UK in relation to the provision of on-train foodservices which warrant further investigation. I agree and am therefore requesting the European Commission to refer this aspect of the case to the UK."
If the Commission refers this aspect of the merger to the UK authorities, it will be considered under the merger provisions of the Fair Trading Act.
Rail Gourmet Holding AG, Restorama AG, Gourmet Nova Finland OY and the Manchester Airport (Sungate) business of Gourmet Nova UK (together 'RGR business') are a group of companies, which constitute part of the foodservice concerns of SAirlines (ultimately owned by SAirgroup ('Swissair')).
The proposed concentration between Compass and RGR Business was notified to the European Commission on 14th January 2002 under the terms of the EC Merger Regulation (Council Regulation 4064/89 as amended). In accordance with Article 19 of the Regulation, the UK received a copy of the notification on 16th January 2002.
Under Article 9(2)(a) of the EC Merger Regulation a Member State may inform the European Commission that a merger threatens to create or strengthen a dominant position as a result of which effective competition will be significantly impeded on a market within that Member State which presents all the characteristics of a distinct market.
If the Commission agrees with the Member State's assessment it can either:
(a) deal with the case itself in order to restore effective competition on the market concerned; or
(b) refer the whole or part of the case to the Member State in question with a view to the application of the Member State's competition law.
The UK has previously made twelve Article 9 requests to the Commission for a case to be referred to the UK authorities. These requests were in the cases of Cargill/Cerestar (2001), Govia /Connex South Central (2001), C3d/ Rhone Capital /Go Ahead (2000), Interbrew SA/Bass Holdings Ltd (2000), Nabisco Group Holdings Corp/United Biscuits (Holdings) plc/Horizon Biscuit Company Ltd (2000), Hanson plc/Pioneer International Ltd (2000), Anglo American plc/Tarmac plc (1999), Exxon Corporation/Mobil Corporation (1999), Electricite de France/London Electricity plc (1999), Redland plc/Lafarge SA (1997), GEHE/Lloyds (1996), Tarmac/Steetley (1992).
18 - 22 February Advanced Credit Analysis FT Knowledge Course 80 Strand, London For further details tel 020 7010 2508 Website www.nyif.com/emea Email finlearn@ftknowledge.com Friday 22 February 2002 Debt Sale & Purchase Credit Today, Savoy Hotel, London The second annual debt sale and purchase conference chaired by Rob Levick. For details e-mail carleen@credittoday.co.uk 6 - 7 March 2002 Softworld Accounting & Finance Software and E-business event. Grand Hall, Olympia, London Register in advance at http://www.softworld.co.uk/afs2002/register.html 11-13 March 2002 BCR's 2002 Receivables Finance International Conference Four Seasons Hotel, Singapore Website http://www.factorscan.com/static/asianpacific.htm Tel: +44 208 466 6987 Fax: +44 208 466 0654 Email mb@bcrpub.co.uk Wednesday 13 March 2002 ICM National Conference and Exhibition Heritage Motor Centre, Gaydon near Warwick For full details tel 01780-722907 or e-mail training@icm.org.uk Monday 25 March Wessex Branch of the ICM meeting Do Not Get Stung by Guarantees Presented by Jo Johnson of Moore Blatch Solicitors Royal Southampton Yacht Club Southampton 7.00pm for registration and refreshments 7.30pm Speakers 4 April Credit Today Awards 2002 Grosvenor House Park Lane London Black Tie Single Booking 120.00 plus vat. 10% discount to Credit Today subscribers Telephone 01403-786-726 or 020-7407-4700 E-mail sgc@mag-subs.demon.co.uk or awards@credittoday.co.uk or visit www.credittoday.co.uk 7 - 13 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning London, 80 Strand, WC2R 0RL Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 17 and 18 April Credit 2002 - The Definitive Event for the Commercial and Consumer Credit Industry Brompton Hall, Earls Court, London For more information contact vtolson@advanstar.com Website www.credit-expo.co.uk 22 - 28 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - Hong Kong, location tbc Time: 08.30 Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 10 - 16 June The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - New York, location tbc Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 21 June The ICM Fellows Luncheon Churchill Room, The House of Commons Westminster, London Guest Speaker Norman Lamb MP Cost 49.50 GBP inc of vat and all drinks Contact ICM Training Department on 01780-722907 E-mail sheila@icm.org.uk 3 to 5 July Receivables Finance International Europe (2002) Marriott Hotel, Prague Tel: +44 208 466 6987 Fax: +44 208 466 0654 Email mb@bcrpub.co.uk Wednesday to Friday 9 to 10 October International Credit Exhibition & Conference Raffles City Convention Centre Level 4 Swissotel Singapore , The Stamford Singapore Website http://www.internationalcredit001.com/ E-mail info@internationalcredit001.com If you have an event coming up which is credit management related and you would like us to make an entry in the Diary section please e-mail the details to jarnold@creditman.co.uk
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Business Credit Management UK: John Arnold jarnold@creditman.co.uk
Business Credit News UK: Pat Williams pwilliams@creditman.co.uk