PRESS DIGEST – British business press – May 22

The Times

UNITED UTILITIES HITS ITS LEAKS TARGETS BUT REFUSES TO RULE
OUT.

Philip Green, chief executive of the water company United
Utilities (UU.L: ), has said the company is “well positioned” to
cope with a tough new regulatory code imposed by Ofwat, but
warned he cannot rule out further jobs cuts. 500 employees were
laid off during the previous year, as United Utilities attempted
to meet Ofwat’s demand for it to cut household bills in real
terms by 0.4 percent by 2015. United Utilities posted pre-tax
profits of 500 million pounds, against 531 million pounds the
previous year.

BILLIONAIRES COULD SEAL THE DEAL FOR PRU

Wealthy Asian investors are considering whether to become
involved with Prudential’s (PRU.L: ) takeover of AIA, the Asian
subsidiary of AIG. The influential Singaporean sovereign wealth
fund GIC has boosted foreign interest in the deal by agreeing to
be an underwriter for the British insurance company’s 21 billion
dollar rights issue. The property magnate Cheng Yu-tung is also
thought to have received an approach from Prudential about
becoming a sub-underwriter for the deal.

TEMPUS

Lloyds Banking Group (LLOY.L: ) (Likely to successfully raise
more from shareholders after good recovery)

Royal Bank of Scotland (RBS.L: ) (Strong capital buffer,
expected to tap shareholders)

Barclays (BARC.L) (Appears cheap, but exposed to US
regulatory clampdown)

HSBC (HSBA.L: ), Standard Chartered (STAN.L: ) (Well capitalised
and more liquid than UK-focused competitors)

Daily Telegraph

BHP BOSS: ‘CHANGE MINING SUPERTAX’

Marius Kloppers, chief executive of the mining group BHP
Billiton (BLT.L: ), has called for the Australian government to
make changes to its planned mining “supertax” which proposes a
levy of 40 percent retrospective profit tax on all mining
projects in the country. Kloppers suggested amendments to the
plans such as varying the tax from commodity to commodity to
take account of the different investment characteristics and
margins of each. Kloppers also said the proposed tax has cut the
value of BHP’s proposed Pilbara iron ore merger with Rio Tinto
(RIO.L: ).

BP SHARES FALL ON COVER-UP CLAIMS

Oil giant BP (BP.L: ) saw its share price lose four percent
amid accusations from the US government that the company is
attempting to downplay the seriousness of its oil spill in the
Gulf of Mexico. BP figures put the number of barrels of oil
escaping into the ocean at 5,000 per day, but scientists believe
that the figure could be closer to 85,000 barrels. Democratic
Representative Ed Markey said: “BP has not been telling the
truth. It’s obvious they are trying to limit information.” BP’s
share price is down 23 percent since the Deepwater Horizon rig
exploded on April 20.

BRIXTON’S WHEELER PLOTS RETURN TO SECTOR WITH ‘SCORES TO
SETTLE’

Tim Wheeler, controversial former chief executive of
property group Brixton (BXTN.L: ), is planning to raise 20 million
pounds for a venture called Residential Land Fund, which will
look to buy and build on brownfield land through joint ventures
with housebuilders. City analysts have questioned whether
Wheeler will be able to raise the funds. Wheeler was dismissed
from Brixton after demanding 1.88 million pounds on top of his
pension in order to retire, a move that allegedly hindered a
vital rights issue.

The Independent

WE’RE WORRIED ABOUT CHEAP ALCOHOL, SAYS TESCO.

British supermarket chain Tesco (TSCO.L: ) has been accused of
hypocrisy for launching a new drinks promotion on lager a day
after its chief executive, Sir Terry Leahy, wrote a newspaper
article calling for the government to act to prevent the sale of
cheap alcohol. Tesco’s promotion equates to selling beer for 70
pence per pint, significantly cheaper than is available from a
pub. Leahy wrote that Tesco “will support Government-led action”
on tackling the sale of cheap alcohol. Responding to the
criticisms, a Tesco spokesperson said: “To be effective, any
action on price has to involve the whole retail industry”.

BP CALLS IN COSTNER’S 26 MILLION DOLLAR VACUUM CLEANERS.

Oil and gas firm BP (BP.L: ) has said it is willing to use a
technology developed by a company owned by the actor Kevin
Costner to clean up oil being spilt from its well in the Gulf of
Mexico. The machine, called the Ocean Therapy, uses centrifugal
force to separate oil from seawater. BP has said it is willing
to use the devices, one of which is capable of cleaning between
5 and 200 gallons of water per minute, provided that they “meet
regulations with regard to discharge”.

LENDERS WARN OF 400 BILLION POUND FUNDING GAP AS MORTGAGES
FALL.

Figures from the Council of Mortgage Lenders indicate the
government lent 10.2 billion pounds to homebuyers and people
remortgaging during the month of April — a 12 decrease since
March and the lowest figure in the past 10 years. The CML
remarked that whilst mortgage availability was improving, total
lending had declined by six percent in the first four months of
the year compared to the same period in 2009.

The Guardian

PUBLIC FINANCES 5.5 BILLION POUNDS BETTER THAN EXPECTED.

Chancellor George Osborne has resolved to continue cutting 6
billion pounds from the public spending budget despite news that
increased tax receipts meant March’s public sector borrowing was
5.5 billion pounds less than predicted. The overall annual
deficit came to 11 billion pounds less than previously forecast.
Much of the unexpected boost is said to have come from employees
using their share options ahead of the 50 pence tax rate for
high earners coming into effect in April. The Treasury restated
that Britain’s deficit is the largest since 1945, and stringent
measurements are still required to reduce it.

VODAFONE TO HAND UP ON EGYPT AS INDIA AND EUROPE CALL

Telecoms firm Vodafone (VOD.L: ) could pull out of Egypt to
focus on its activities in Europe, sub-Saharan Africa and India.
State-owned Telecom Egypt is understood to have made an informal
approach to buy Vodafone Egypt, in which Vodafone has a 55
percent stake. A deal would be worth around three billion
pounds. Around 75 percent of the population of Egypt own a
mobile phone, but prices and margins are coming under pressure,
leading to speculation that Vodafone may look for an early exit.
A cash injection would help fund the cost of mobile phone
spectrum in Europe and India.

Stock Market Money

PRESS DIGEST – British business press – May 22