Nationalisation part II
Leading figures in the Labour party made a swathe of pledges at its party conference in Brighton, including nationalising assets developed under private finance initiative. Some of the policy statements were a repeat of those made during this year’s general election campaign, including re-nationalising utilities such as the water companies. Leader Jeremy Corbyn promised to introduce controls on private rents in his conference speech, citing their existence in cities across the globe. Meanwhile, shadow chancellor John McDonnell said Labour would cap the total cost of credit for credit cards if elected.
Dyson joins party
Building electric car
Dyson’s eponymously-named founder and chief executive Sir James has announced plans to invest £2bn in developing a “radical” electric car. The engineering company said 400 staff had been working on the project for the past two years at its Wiltshire headquarters. The vehicle is due for launch in 2020. Around half the funds have been earmarked for developing a solid-state battery to power the car.
Carillion’s salvation?
Potential takeover
Shares in Carillion (CLLN) rose by as much as 20 per cent on the day reports surfaced of a potential takeover offer. An unnamed construction company based in the Middle East is close to making an offer for the troubled support services group, according to reports by CityAM. Carillion declined to comment on the reports. Shares in the group lost three-quarters of their value in July, after management revealed a serious deterioration in cash flows, a jump in net debt and the suspension of the dividend. Any takeover is likely to be complicated by its £650m pension deficit – more than double Carillion’s market capitalisation.
Brent riding high
Turkish threats
Brent Crude hit its highest level in more than two years, with prices benefiting from increased Chinese demand and Turkish threats to disrupt oil flows from Iraq’s Kurdistan region. The price of Brent hit almost $60 a barrel – its highest point since July 2015 – after Turkey said it could cut off a pipeline that carries oil from Iraq. Opec, Russia and some other oil-producing countries have cut production by about 1.8m barrels a day since the start of the year, helping boost prices 15 per cent during the past quarter.
Cash-strapped DX
Property sold
Beleaguered postal delivery group DX (DX.) has been trying to get its financing in order to fund its recovery plan. It entered an agreement with ChanceryGate to sell and lease back certain freehold properties for £4.5m. It has also agreed a £2m unsecured loan with a fund controlled by major shareholder Gatemore Capital Management. The proceeds of the sale and loan will be used to repay its £5.8m term loan from HSBC. Management said the group is in discussions with its larger shareholders regarding a broader refinancing, necessary because its funding requirements exceed its existing resources.
Holiday confusion
More cancellations
Ryanair (RYA) announced that it will fly 25 fewer aircraft from November this year and a further 10 fewer from April next year, as part of its effort to reduce the risk of further flight cancellations. This slower growth will mean it will now have more spare aircraft and crews across its bases this winter. Management is planning to be more diligent in planning pilot holidays ahead of time, and is so confident that no more flights will be dropped that a number of low-fare seats will be offered in the winter. Less than 1 per cent of the 50m Ryanair passengers carried during the winter season will be affected, and those that are have already been notified.
Bye bye Mr Austerity
Schaeuble to depart
German finance minister Wolfgang Schaeuble was reported to be leaving his position, just days after chancellor Angela Merkel won a fourth term in the national elections. Mr Schaeuble has been an advocate of austerity within the eurozone, becoming a contentious figure in Greece for pressuring the government to make public spending cuts as the price of the country’s bailout. He will become president of the Bundestag, a role likely to be much harder after the right-wing Alternative for Germany party won 13 per cent of the vote and 94 parliamentary seats.
