Abu Dhabi is this weekend putting together a rescue package for Dubai, its debt-laden Gulf neighbour, in an attempt to restore calm in panicked international markets, according to the Sunday Times.
The FT adds that Dubai’s government is preparing a campaign to persuade the holders of a bond due for repayment next month to agree to a delay even if that sparks claims that the emirate has defaulted on the debts of a government-backed company, bankers said on Sunday.
The Bank of England has been secretly mediating on major financial restructurings to ensure that they are approved by creditors, in a return to a 1990s policy known as the "London approach". Most significantly, the Bank intervened in the struggle that Yell Group, the Yellow Pages publisher, faced when it pushed through amendments to the terms of its Ł4bn debt burden at the turn of November. The Bank's chief cashier, Andrew Bailey, made telephone calls that resulted in what a market source described as "gentle conversations" with creditors who were considering voting against the amendments, says the Independent on Sunday.
Lord Myners, the City minister, has launched an investigation into the giant profits racked up by investment banks, after claiming the scale of the windfalls “defies rational analysis”. A handful of banks, such as Goldman Sachs and Barclays Capital, are expected to post record profits this year, partly due to the continuing chaos in the financial world, writes the the Sunday Times.
The billionaire currency trader Joe Lewis has blocked the appointment of Archie Norman as chairman of Mitchells & Butlers, the Ł1 billion pub group. Norman, who was this month appointed chairman of ITV, the broadcaster, had been in talks about becoming non-executive chairman of M&B, which owns 2,000 pubs including the Harvester, All Bar One and O’Neills chains, reports the Sunday Times.
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