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Tag >> UK
Sep 02

UK government toys with restructuring moratorium

Posted by nicklord in UKrestructuring


The UK government is seeking comments to a white paper it has issued on the idea of creating a restructuring moratorium. Such a moratorium would allow companies that face cash flow issues to seek a moratorium on their debts as they seek to restructure them. The move would add a new layer of flexibility to the existing bankruptcy and administration regimes.

The paper is a response to the £90 billion of private equity related leveraged loans that are due to mature between now and 2015.

Aug 10

UK bank task force a political dance

Posted by dbedell in UKSMEsmall and medium-sized businessRiskDealsCreditCashbank lending


The six largest banks in the UK will set up a task force to evaluate the business lending landscape in the UK and look at ways to increase credit to UK companies. However, at first glace it appears this is just the next step in the political dance that the UK coalition government and the banking community have been sashaying to for quite some time.

First, the government says small businesses--the fuel for the furnace of recovery--need access to more credit in order to grow; then the banks say we have no money to lend because you are making us hold more in reserve; then--surprise, surprise--the banks all return to profit; then the government says okay now lend to small business; then the banks say they don’t want our money; then the government says okay, really guys, you must lend more to small business; then the banks say okay we will set up a task force to look at it….and the dance goes on.

Jul 25

UK banks forced to lend

Posted by nicklord in Vince CableUKChina


A senior figure in the UK's coalition government yesterday announced plans to force banks to lend to small businesses. Vince Cable, Secretary of State for Business, said in an interview with The Sunday Times, that he would use a "carrot and stick" approach to make sure banks extended credit to small business. At the moment, he said, banks were "not acting in the national interest."

His proposals will be outlined later Monday in a working paper being released by the UK Treasury. Specifically he is looking to target bonuses and dividends of banks that were not deemed to be lending enough. At the moment, such a system is in place with the partially nationalized banks RBS and Lloyds. The extension of this proposal to other UK banks would be a major escalation of the policy.

Jul 08

UK CFOs face newly empowered shareholders

Posted by nicklord in UKStewardshipFSA


CFOs in the UK face the grim prospect of facing shareholders who will have to comply with a new Stewardship Code. This Code has been set up by the Financial Reporting Council to make shareholders take a more active role in the companies they own. By empowering shareholders this way, the UK authorities hope to make them responsible for monitoring the governance of UK companies.

The Stewardship Code does not mention what shareholders are expected to do in specific areas of governance; rather it focuses on the general approach they should take. It contains six principles covering: the monitoring of investee companies; the escalation of activities taken to protect or enhance shareholder value; collective engagement; voting policy; managing conflicts of interest; and public reporting and reporting to clients.

Jul 02

Corrupt practices enforcement ramps up

Posted by Karen1 in UKSecurities and Exchange CommissionFCPADOJ

According to the Global Enforcement Report 2010, the US leads the rest of the world when it comes to enforcing what are known as outbound bribery cases. These are instances in which corporate execs based in a particular country try to bribe foreign officials in order to gain business. In fact, the US could claim credit for 76 percent of the 515 cases pursued between 1977 and 2010. The UK, which was next line, accounted for only 4 percent of total cases. The report was prepared by TRACE International, a non-profit association that provides anti-bribery compliance solutions.
Given these numbers, it may seem surprising for the US to actually be stepping up its efforts in this area. However, that's exactly what's happening. "The Department of Justice's appetite for pursuing these types of cases is only increasing," says Jeff Taylor, Ernst & Young's leader in fraud investigation and dispute services for the Americas. The DOJ is adding several prosecutors dedicated to pursuing violations of the Foreign Corrupt Practices Act, or FCPA, Taylor adds.
Similarly, the SEC created a new unit focused on FCPA cases, headed by Cheryl Scarboro. The primary mission of the unit is to be more proactive in enforcing the provisions of the FCPA, Scarboro said earlier this year.

Several goals are driving the intensified efforts behind FCPA enforcement, Taylor said. For starters, the agencies' past efforts have largely succeeded. That, in itself, is providing the motivation to build on the record.
Moreover, the efforts send a message that there is a proper way to do business, no matter where in the world a transaction may take place. That's not to say that business practices don't vary from one area to another - obviously, they do. However, the practice of, for instance, paying officials to perform an administrative task, can easily morph from a legitimate transaction to one that seeks special treatment for the company. "There are some exceptions, but they're fraught with peril," Taylor notes.
Perhaps most importantly, the US is trying to use its dominant role among world economies to foster an environment in which most companies and governments play by the rules. That way, those who do follow the rules aren't left at a disadvantage and those that would stray are more leery of getting caught by the FCPA or similar regulation in another country. In the long run, all benefit.
While progress is slow, momentum is heading in the right direction. One sign: in April, the United Kingdom passed the Bribery Act 2010. Among other goals, the Act will "help tackle the threat that bribery poses to economic progress and development around the world," according to this summary by the UK's Ministry of Justice.

Jun 24

British business cheers budget

Posted by nicklord in UKTaxGeorge Osbornebudget


The emergency budget unveiled by the UK government on Tuesday was unashamedly pro-business, giving British businesses everything they could have wanted. While the headlines have focused on the drastic cuts to public spending that the budget outlined, a more subtle trend was the way in which the tax burden has shifted from companies to individuals.

The key area affecting most businesses was the reduction in the main rate of corporation tax to 27 percent this year and then by a further 1 percent a year to 24 percent in 2013. This was accompanies by a cut to the small companies corporation tax rate to 20 percent. This was more generous than the 3 percent reduction to 27 percent that most were expecting.

Jun 09

Europe’s banks face funding drought

Posted by nicklord in UKspainPortugalNetherlandsIrelandGermanyFranceeuropebondsBanks


It has been almost seven weeks since any European bank issued senior unsecured bonds in the market. Partly to blame is the rapid rise in spread levels, which over that time have increased by 50 bps to 100 bps for double AA-rated banks in Northern Europe and by much more for their cousins from Southern Europe.

But an equal cause of the drought has been the EU-wide guarantee schemes that individual countries set up from October 2008 in the wake of Lehman Brother's collapse. Many of these schemes were due to end last year but they have been extended. Reports suggest that Germany, the Netherlands, Sweden and Hungary are likely to extend their guarantee schemes beyond June 30th. France Italy and the UK are likely to let their schemes lapse (although the UK allows the government guaranteed bonds issued by banks to be refinanced until 2014).

May 20

UK’s CBI calls for pay, tax cuts

Posted by nicklord in UKRichard LambertGeorge OsborneCBI



The Confederation of British Industry (CBI), the largest industry lobbying group in the UK, last night called for stringent curbs on public sector pay as well as new tax cuts for companies. The call came in speeches at the group's annual dinner which was attended by new Chancellor, George Osborne.

Apr 27

UK and US a study in contrast on corporate debt

Posted by mcole in UKRiskrecoveryleveraged loansdistressdebtCredit Ratings


An increasing number of companies are in financial distress in the UK, where the recovery is taking even longer to materialize than it is in the US. What's more, businesses don't have as many options to patch up their balance sheets as their counterparts do in the US.

More than 160,000 companies experienced significant or critical distress in the first quarter, owing 55 billion pounds to their creditors, according to a study released this week by Begbies Trayno, a restructuring specialist in the UK. This is up 14 percent from the fourth quarter of 2009.

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