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First investment for the Capital for Enterprise Fund

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KeTech, a Bedford-based software company, has become the first investment done by the Capital for Enterprise Fund, the Government venture initiative launched in January 2009 to support companies hit by the credit crunch.The Fund will provide £75 million of equity, made up of £50m of Government funds and an additional £25 million from Barclays, HSBC, Lloyds TSB and RBS. Its target purpose is to provide equity and quasi equity of £250,000 to £2 million for companies which meet the European Union’s definition of a Small to Medium Sized Enterprise and have viable business models and growth potential in need of long term capital.
It was reported that the Fund has three other investments in the pipeline.KeTech Group sells software integration services to companies such as Chiltern Railways, Metronet and Mitie, will receive £2m as part of a £4.5m refinancing that includes £2.5m in invoice discounting from Centric Commercial Finance. The company had doubled its sales to £16m since 2006 and employs 100 people at six UK sites.

FinSMEs

13/08/2009

HSBC acquires an Indonesian bank

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HSBC has completed a mandatory tender offer for the remaining shares of PT Bank Ekonomi Raharja Tbk held by the general public.

HSBC acquired 10.08% of the shares (269,012,500) for a consideration of approximately US$ 71.6 million brings HSBC’s total shareholding in Bank Ekonomi to 98.96%. 1% of the Bank will remain unlisted and in Indonesian ownership as required by local regulation.

According to a statement, HSBC was required to make a mandatory tender offer to public shareholders after it acquired 88.89% in Bank Ekonomi on 22 May 2009.

The acquisition, made by HSBC Asia Pacific Holdings (UK) Limited, its wholly-owned subsidiary, almost doubled HSBC’s presence to 208 outlets in 26 cities in Indonesia.

Bank Ekonomi has a strong SME banking franchise and provides commercial banking services with over 2,300 staff and 93 outlets. It is listed on the local stock exchange.

FinSMEs

13/08/2009

Unemployment soars to 2.43 million

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The figures about the labour market released by the Office for National Statistics (ONS) on August 12th show that the crisis is hitting hard, maybe worse than ever, the UK economy.

According to the official data, the unemployment rate was 7.8% for the three months to June 2009, up 0.7 over the previous quarter and up 2.4 over the year. The number of unemployed people increased by 220,000 over the quarter and by 750,000 over the year, to reach 2.43 million, the highest level since 1995.

According to the Chartered Institute of Personnel and Development (CIPD), the real number of unemployed people is closer to 4.5 million, once 2.1 million people classed as “economically inactive but who want a job” are taken into account.

John Philpott, CIPD chief economist, said: “The ONS data overall paints a picture of a labour market in deepening distress, continuing to shed jobs at an alarming rate and with the genuine level of joblessness already above 4.5 million”.

Commenting on these figures, Richard Lambert, CBI Director-General, was quoted saying: “These numbers are grim, but broadly in line with expectations. They would have been a lot worse but for the way that flexible working practices and pay freezes and cuts have limited the damage.

“The most recent surveys of employment intentions look a bit less dire than was the case a few months ago, and the pace of deterioration in the labour market may have slowed a little. But as the Bank of England suggests today, it is possible that pay moderation may have only delayed, rather than limited, further increases in unemployment. So it is too soon to call the turn, and we still expect the unemployment rate to hit three million early next year”.

FinSMEs

13/08/2009

BoE Inflation Report, credit conditions are likely to remain tight

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There aren’t good news from the Bank of England’s Inflation Report.

According to the BoE quarterly document, much of the world economy remained in recession, with levels of activity in many countries significantly lower than a year ago.

The document highlights that financial market strains eased and bank funding conditions improved a little, although financial environment remained fragile.

In the United Kingdom, even though business confidence grew to some extent from the very low levels of last autumn, the credit conditions are likely to remain tight as banks continue to repair their balance sheets.

Bank lending to companies fell in the second trimester of 2009 reflecting both weaker growth in the origination of new loans and facilities, and some companies paying down bank debt.

According to the report, the huge stimulus from the easing in monetary and fiscal policy and the past depreciation of sterling should lead to a slow recovery in economic activity but the timing and strength of it remains uncertain.

Commenting, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: “The inflation report acknowledges the present fragility of the British economy and indicates that any recovery will be slow and protracted. We believe this is the correct view, and it reinforces the need for continuing with an expansionary policy stance”.

FinSMEs

12/08/2009

One North East to create new block for business in Durham

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Regional Development Agency One North East is buying the former ice rink in Durham City Center to build a major new commercially-led development which will secure the renovation of the Riverside and Freeman’s Quay area.

According to a statement, the operation, which plans to knock down the site, will create a new block of around 14,000m2 office space, capable of accommodating an estimated 1,600 jobs and potentially creating a further 400 jobs.

The project is a key part of the Durham City Vision initiative, which is one of the principal regeneration initiatives in County Durham, and one of One North East’s strategic priorities for investment. Its members are Durham County Council, Durham University, Durham Cathedral, North East Chamber of Commerce and One North East.

John Mowbray, Chair of Durham City Vision and Director of Corporate Affairs for Northumbrian Water, was reported as saying: “the acquisition of the ice rink by One North East secures another significant piece in the jigsaw which will see major developments to improve, not only the look of Durham City, but also its economy over the next few years making it a better place to live, work and particularly, invest in”.

David Cramond, Director of Capital Development at One North East, said: “the former ice rink site presents a highly important and unique redevelopment opportunity in Durham.

“The ice rink building is widely accepted as an eyesore which dominates this length of the river, and is out of step with the adjacent modern Walkergate development, the award winning Freeman’s Place Leisure Centre and new hotel developments.

“One North East has acted to secure public sector control of this strategically located site and the demolition of an eyesore on the edge of a World Heritage Site.

“It has taken a lot of hard work by One North East and all our partners in Durham City Vision to reach this stage. We are now confident that development can move forward quickly and will have a major long-term economic impact on the city.”

The Regional Development Agency will now focus on seeking a developer to secure the regeneration of the area.

FinSMEs

12/08/2009

Skymark Performance Films creates 40 jobs

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After that a fire destroyed its factory, Skymark Performance Films is investing to expand its site on Mannerberg Way, Scunthorpe, and create around 30 to 40 new jobs, mostly for non-skilled people.

The expansion follows a devastating fire that destroyed the company’s factory in Leominster, Herefordshire, on 17 June 2009 and will increase the total number of positions to around 80.

According to a statement, Skymark Performance Films, a private flexible packaging manufacturer, will install a new printing equipment, which will be operational by the end of September.

Dan Richards, Sales Development Manager at Skymark, was reported as saying: “while we cannot make a big impact on the redundancies taking place in the town of Scunthorpe, we can bring optimism to a significant number of people.

“Following the devastating fire at our Leominster facility, we have already completed our first investment in new equipment to restore lost production. This enables us to offer continued support to our current customers and to develop further”.
Cllr Mark Kirk, leader of North Lincolnshire Council, said: “this is without doubt a huge investment in Scunthorpe and is a major boost to the local economy. It couldn’t come at a better time, with the recent announcement of job losses elsewhere in the town”.

FinSMEs

11/08/2009

Opportunity to visit Vietnam for West Midlands companies

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UK Trade & Investment’s Staffordshire international trade team is organising a visit to Vietnam to present the companies of the West Midlands region from 28 November to 6 December 2009.

In particular, the aim of the visit is to take a group of companies representing the expertise of the region to research the market place, obtain new clients and develop partner relationships, ultimately to increase export revenue to the UK.

Participating companies will be supported through:
-Pre-visit and in market briefing by UK Trade & Investment staff;
-British Consulate hosted reception in Ho Chi Minh City;
-Excellent networking opportunities through the support of the British Consulate and participation in a group visit;
-New contacts and shared intelligence within the market visit group;
-Reduced costs through group travel and financial package;
-Subsidised tailored market research through the Overseas Market Introduction Service to enable them to meet potential partners during their visit.

According to the International trade adviser Wendy Hall, who is leading the visit, “Vietnam has one of the fastest growing and most vibrant economies in Asia. It has both a large market for capital goods and an increasing domestic market for consumer goods. In the first nine months of last year, Vietnam imported British goods worth £117.9m.

“Priority sectors are transport, rail, environment, financial and legal services and ICT, and other growth areas include industrial machinery, leather, manufacture, telecommunications and sound recording equipment, professional services, scientific instruments and medical and pharmaceutical products.

“There are many exciting opportunities for West Midlands companies in Vietnam, which has been designated as a High Growth Market by UK Trade & Investment, and we will be on hand throughout the visit to help them make the most of these.”

A pre-visit briefing by UK Trade & Investment staff and representatives from Vietnam will be held at North Staffordshire Chamber of Commerce early in November.

Entrepreneurs who want to explore export opportunities in the Asian country have to present their application by September 30.

For more information, contact Wendy Hall at:
International Trade Adviser,
UK Trade & Investment North Staffordshire
Chamber of Commerce Commerce House,
Festival Park Stoke-on-TrentUK ST1 5BE
mail:[email protected]
Tel: 01782 224408

FinSMEs

11/08/2009

Tata secures private sector loan for Jaguar Land Rover

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The Government welcomed news that Tata has secured private sector funding for Jaguar Land Rover’s short term financial needs.

The Indian owner of JLR told the UK Government it no longer needs support for the carmaker, after obtaining private funding from direct bank loans and guarantees that would allow it access to a £340m European Investment Bank loan.

Business Secretary Peter Mandelson was reported as saying: “the fact that the banks and commercial capital markets are meeting JLR’s funding is a clear sign of confidence in the company, its products and the automotive sector.

This additional funding will allow JLR to invest in future models and successfully launch the new XJ saloon on schedule and updated Land Rover models later this year.

“The Government had offered bridging finance from the Automotive Assistance Programme if necessary. We understand the Tata group will now be successful in resolving longer term financial needs but we are willing to help again if necessary.

“This is a good and encouraging outcome for JLR, its workforce and its supply chain”.
JLR plays an important role in the UK car industry spending more than £400m a year on R&D and it was reported to be a key player in the UK’s transition to a low carbon future.

According to statistics published in a BIS’ statement, the JLR business employs some 14,641 people, predominately in the UK, including some 3,500 engineers at two product development centres in Whitley, Coventry and Gaydon, Warwickshire.

JLR business basically relies on exports: 78 % of Land Rovers are sold in 160 countries and 70% of Jaguars are exported to 63 countries, with sales to customers conducted principally through franchised dealers and importers.

FinSMEs

11/08/2009

One North East welcomes more low carbon jobs

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Regional Development Agency One North East welcomed a second major biomass facility in the region.MGT Power announced today plans for a second facility, the 295MW Tyne Renewable Energy Plant (Tyne REP), to be built on industrial land owned by the Port of Tyne in North Shields.

The plant, which will be fuelled by some 2.4 million tonnes of clean wood chip fuel per year and provide up to 295MW of clean energy, represents an investment of over £400m, with the creation of 600 construction jobs, 150 on-site jobs, 300 – 400 indirect jobs and an annual spend of £30m in the local economy.

According to a press release published today, Ian Williams, Director of Business and Industry at One North East, said: “One North East welcomes this plan for further investment from MGT Power, which will further strengthen North East England’s position at the forefront of the new low-carbon economy”.

FinSMEs

10/08/2009

LDA, Free “Fit for the Future” business seminars

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PricewaterhouseCoopers (PwC) and the London Development Agency (LDA) are hosting three free business strategy seminars for small and medium sized businesses called “Fit for the Future”.

The first seminar, on September 22, will be on ‘HR strategies to help grow your business’, a forum covering ways for companies to structure their pay/bonuses/incentives to help grow their business.

The second one, on October 19, will be about ‘Releasing cash from across your business’ – ways to free-up cash to give you options ranging from survival to strategic investment.

The third seminar, on November 25th will be related to ‘Accessing finance’ – hear about alternative sources of finance, how best to present to potential lenders to get hungry responses and review and negotiate with preferred lenders.

The seminars will begin at 16:45 with coffee and registration. Presentations will follow at approximately 17:00. Each event will provide a a chance for attendances to ask questions and network after the event.

The seminars will take place at PwC’s One Embankment Place office, London, WC2N 6RH.

Finsmes

10/08/2009

CBI: Business find it easier to get new loans

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Businesses are finding it easier to obtain new credit for the first time this year and expect the situation to improve at a similar rate over the coming three months, the CBI said.

However, CBI’s latest Access to Finance Survey (conducted between 15th and 24th July 2009 among 73 firms) also showed the cost of finance has continued to rise.

Of those firms seeking new credit lines in the past three months, 27% said that availability had improved, while 10% said it had worsened. The resulting rounded balance of 18% stands in contrast to May’s deterioration (-20%) and represents the first improvement in credit supply since the survey began in January.

This improvement was mainly driven by the very largest firms with over 5,000 employees, who saw a strong rise in new credit availability over the past three months, following much more difficult credit access at the start of 2009.

Firms expect conditions for existing credit to remain similar over the coming three months, while the availability of new credit is expected to continue improving at a similar rate to the past quarter.

On the other hand, Small and medium sized enterprises (SMEs) saw a moderate decline in the availability of existing credit lines (-12%) and expect a similar tightening over the next three months. While the supply of new credit improved slightly (+8%), firms predict it will remain flat in the coming three months.

Although new credit has become more available, businesses continued to find it more expensive. Half of firms saw a rise in the cost of new credit over the past three months and one in five (21%) reported a rise of more than 100 basis points.

SMEs reported that they are increasingly seeing finance being linked to base rate instead of LIBOR but despite that, over half of them saw a rise in the cost of new finance over the last three months, and a net 50% said that overdraft availability had worsened.

FinSMEs

10/08/2009

FSB against High Street Bank Monopoly over SMEs Seeking Finance

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The Federation of Small Businesses (FSB)challenges the potential monopoly of power being built up by high street banks over small firms seeking finance.

In a statement published today, the UK’s leading business organisation with over 215,000 members, warns that bank mergers, recapitalisation and schemes targeted at the big banks to stimulate lending as a result of the banking crisis risk leaving businesses without resourses for their investments and needs if they are refused credit by the major high street lenders.

Accordind to FSB, struggling lenders should not be sold off to other high street banks as this would stifle competition in the sector and alternative sources of finance should be provided locally even replicating the model of the Essex County Council’s Bank of Essex around the country.

As even stated by a committee of MPs one month ago, the Post Office Network should be turned into Post Bank offering support for small firms.

John Wright, National Chairman of FSB, was reported as saying: “It is important to consider the impact of the banking crisis and what it means for future relationships with small businesses to avoid getting into a similar situation.

“Despite Government bailouts and interest rates set at a record low, small firms are still finding it tough to access affordable loans and overdrafts from banks. This is compounded by the fact that much of the support provided by the Government is only available through the banks and often this isn’t replicated at branch level. The FSB would like to see more alternative sources of finance provided locally such as through Regional Development Agencies, local councils or post offices. This would increase the choice of finance on offer to business owners, thereby enhancing their prospects of survival and helping them play their part in stimulating the economy and getting the UK out of recession and onto a steady recovery

FinSMEs

09/08/2009

24/09/2009, Venture Capital Forum in Belfast

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Northern Ireland Science Park Connect is seeking 6 qualified applicants for the upcoming Venture Capital Forum, which will showcase local promising companies to an exclusive audience of capital providers from UK and Ireland as well as well as venture funds based in Northern Ireland.

Applicants must be Northern Ireland based, represent a non-publicly traded company, research organisation or academic institution with a high-tech focus, have a technology or product with potential for commercialization in the areas of Hitech, Biotech, Cleantech or Digital Media and look to raise over £500,000.

The finalists will have the opportunity to receive presentation coaching from seasoned investors and will present to the audience of venture capital providers at the 24th September VC Forum.

The deadline to submit an application is August 25th 2009.

FinSMEs

08/08/2009

supply2.gov.uk will be free

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Small businesses in the UK will have free access to http://www.supply2.gov.uk/, the Government portal for the advertisement of lower-value (typically below £100,000) contract opportunities, a BIS statement says.

The site is the first major initiative to unite buyers and suppliers in a single location, making it easier for business and government to work together. Searching for lower-value contracts across the UK was previously only available as part of a commercial subscription service, which cost up to £180 per year.

This fee will now be removed, providing firms with better access to public sector contracts to help their businesses grow.

Business Minister Shriti Vadera was quoted as saying: “Small businesses are facing significant pressure in this downturn and new contracts are essential for their return to growth and we want to support them by making it easier to access the thousands of Government procurement opportunities that are directly relevant to them.

“This free service is an interim step along the way to introducing a single website for all public sector contracts next year”, she added.Debasish Sen, Federation of Small Businesses Trade and Industry committee member, said that “making supply2.gov free to access is a first step in the right direction and something the FSB has been pushing for, for a long time”.

According to the statement, since it launched in June 2006, http://www.supply2.gov.uk/ has published more than 132,000 contract notices with many under the value of £100,000 – making them ideally suited to small and medium sized businesses. Over 6,800 public sector buyers have registered including local government, health, education and housing authorities, emergency services and the Olympic Delivery Authority.

FinSMEs

07/08/2009

Birmingham, New Look for the Science Park

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A new vision for the Birmingham’s Aston Science Park aimed at redirecting its activity to support the Region’s high-tech start-up and early-stage businesses.

The Park was founded in 1982 and has been one of the premier science parks in the UK ever since.

After 27 years, the new Birmingham Science Park Aston, owned by the City Council, will be called to catalyse the innovation economy of Birmingham and the Region by promoting high-value employment and the Region’s enterprise culture.

Dr David Hardman MBE, Managing Director of Birmingham Science Park Aston said that “it will position itself at the heart of the Digital District and drive translation of IT, communications and digital media technologies into successful businesses. The park will act as a focal point for business and technical expertise, providing access to a menu of business support services and funding either directly or through partnership”.

FinSMEs

07/08/2009

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