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Tue, Jul 28, 2009 - Page 10 News List

World Business Quick Take

AGENCIES

■AUTOMOBILES

VW to raise US$5.7bn

Volkswagen (VW), Europe’s biggest automaker, could raise fresh capital of up to 4 billion euros (US$5.7 billion) to finance the takeover of its main shareholder Porsche, the Financial Times said yesterday. On Thursday, VW said it would take control of the sports car icon after a lengthy battle for which of the two companies, linked by strong controlling family ties, would come out on top of a new group aiming to challenge Toyota to be the world’s No. 1 auto company. Porsche ended up with 10 billion euros of debt as it built up a controlling stake in VW and this cost ultimately weakened its own position. The Financial Times said VW wanted to buy Porsche’s sports car business as fast as possible and so was considering strengthening its capital base to do so. Raising fresh funds for the Porsche takeover, estimated to cost 8 billion euros, will protect VW’s credit ratings, the report said.

■FINANCE

UK to step up scrutiny

Up to 2,000 traders and managers could face extra checks and interviews by Britain’s financial watchdog to assess if they are fit for their jobs following the financial crisis, the Financial Times (FT) said yesterday. Traders, bankers and managers with significant influence in their companies are set to face the tests, the daily said. They include senior professionals at the largest 40 to 50 banks, insurers and other institutions supervised by the Financial Services Authority (FSA), the FT said, citing unnamed sources. The FSA was expected to announce yesterday that institutions would have up to six months to identify senior officials who carry out roles that might expose their company to significant risk, or who exert significant influence.

■FINANCE

Net outflows drop: Aberdeen

British fund manager Aberdeen Asset Management said yesterday net outflows of client money slowed in the third quarter, signaling a “strong” pipeline of new business. Redemptions from funds totalled £2.2 billion (US$3.64 billion) at the end of June after hitting £4.23 billion at the end of March “We have a strong new business pipeline in equities, fixed income and property,” chief executive Martin Gilbert said. Assets under management at the end of the quarter grew to £129.2 billion from £96.3 billion at end-March, boosted by the acquisition of £35.3 billion in assets through the purchase of Credit Suisse’s UK business. Market gains added another £9 billion to assets in the quarter. The fixed income business saw outflows slow sharply during the quarter to a net £2.71 billion, against outflows of £4.23 billion in the previous quarter, helped by outperformance in the company’s funds.

■AVIATION

Virgin Blue to raise capital

Australian budget airline Virgin Blue yesterday announced plans to raise A$231.4 million (US$190 million) in capital as it predicted record losses following the toughest 12 months in its history. The discount carrier also said chief executive Brett Godfrey would step down next year, a decade after launching Australia’s second-largest airline. Godfrey said the fund-raising would improve the airline’s liquidity and financial flexibility, giving it the ability to move into new routes and buy more aircraft when conditions improve. He said in the volatile aviation market the move was “prudent” for Virgin Blue, which is expected to post net losses of between A$160 million and A$165 million in the year to June, a sharp turnaround from last year’s A$98 million profit.

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