HTTP://WWW.STOPNATO.ORG.UK ---------------------------Business this week
From The Economist print edition
In a tough week for Jean-Marie Messier, Vivendi's boss cancelled a Caribbean holiday to make time to sack Pierre Lescure, the over-independent chief executive of Canal Plus, a loss-making pay-TV unit, only days after the departure of Mr Lescure's deputy. Uproar followed from France's establishment, which fears that Canal Plus may not remain a staunch defender of French cultural exceptionalism for much longer.
See article:Face value: Jean-Marie Messier
United Pan-Europe Communications, a heavily indebted cable group, announced losses for 2001 of euro4.4 billion ($3.9 billion), up from euro2 billion in 2000. The Dutch-based company's shares plunged amid concerns that bankruptcy beckoned, as debt-restructuring negotiations dragged on. UPC has around euro11.2 billion in debts, some of which it hopes to convert to equity.
NTL, Britain's biggest cable operation, announced a long-awaited restructuring of its debts. Some $10.6 billion out of a total of over $17 billion will be swapped for equity to head off a financial crunch. The deal must be approved by other creditors that have lent some $6 billion.
Hewlett-Packard said that its shareholders had approved its takeover of Compaq Computer by a 2.8% margin, enough for it to go through despite any court challenges to the voting. Separately, the Securities and Exchange Commission cited HP over its relationship with Deutsche Bank, an HP shareholder. And the district attorney's office for the southern district of New York asked for documents about the votes of Deutsche and Northern Trust, which is the subject of dispute.
Barilla's taste for carbohydrates turned bitter after the world's biggest pasta maker had its offer of close to euro1 billion ($890m) sent back to the kitchen by Kamps, Europe's biggest baker. Barilla will have to make its offer more palatable if it is to swallow up the German firm.
Ford, the world's second-largest car maker, lost $800m in the first quarter compared with a profit of $1.1 billion a year ago. Part of the loss was attributable to new accounting standards which forced Ford to write off goodwill from acquisitions, including $708m at Kwik-Fit, its British car-repair chain.
Boeing reported a loss of $1.25 billion in the first quarter. It wrote off $1.8 billion of goodwill.
Coca-Cola lost $125m in the first quarter, its first loss in 20 years, after the world's leading soft-drink company accounted for the falling value of acquisitions to the tune of $926m.
Auditor-bashing broke out in unfamiliar territory: Russia. Foreign investors started legal action against PricewaterhouseCoopers over its audit of Gazprom, a partly state-owned gas giant, alleging a failure to detect asset-stripping. “False and misleading”, said overseas shareholders of the audit; “completely unfounded” responded PwC.
See
article:Troubled Russian audits
Rumours of an imminent settlement between Andersen and the Department of Justice over the criminal indictment of the accounting firm over its audit of Enron proved premature, after the lawyers for several interested parties fell out.
In a big vote of confidence BP made an about-turn with a big investment in Russia, after getting its fingers burned last time. The British oil company exhibited few fears about the financial probity of Russian business, raising its stake in Sidanco, a Russian oil firm, from 10% to 25%, at a cost of $375m.
The EU's wavering spirit of consensus manifested itself in the nomination for vice-president of the European Central Bank. Lucas Papademos, governor of Greece's central bank and an inflation hawk, got the nod only after Belgium's finance minister, favouring his own candidate, abstained after fraught discussions.
See
article:Succession at the ECB
J.P. Morgan Chase announced that profits had dipped to $982m in the first quarter, compared with $1.2 billion a year earlier. The firm's investment-banking operation contributed the bulk of the profit. Merrill Lynch, the world's leading stockbroker, also suffered a first-quarter decline in profits to $647m, down from $874m a year ago.
GE Capital, the financial-services arm of General Electric, is to cut 7,000 jobs out of a total of 90,000 and save a further $1 billion in 2003 as a way of boosting profits. The company also made big job cuts last year.
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America's consumer prices rose by 0.3% in March. Inflation hit 1.5% over the year to March, as rising energy costs hit home. Prices continued rising in the euro area too; by 0.6% in March alone, and by 2.5% over the year.
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