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Babcock International, the London-listed defence contractor, is weighing a possible bid for some of the assets of Harland and Wolff, the shipbuilder which is close to collapse.

Sky News has learnt that Babcock, which has a market value of £2.4bn, has expressed an interest in Harland and Wolff’s Belfast shipyard which is famous for having built The Titanic.

News of its interest comes amid reports that Harland and Wolff could fall into administration as soon as next week.

The company has been struggling under the weight of a substantial debt-pile, and was dealt a hammer blow soon after the general election when the government decided against guaranteeing a £200m loan to it.

It was unclear this weekend how serious or advanced Babcock’s interest was in Harland and Wolff’s Belfast shipyard or its other assets.

Several other trade and financial bidders are understood to have signalled their interest in bidding, according to defence industry sources.

Bankers at Rothschild, who are running a sale process to gauge interest in the company and its assets, have set a deadline for proposals of later this month.

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Navantia, the Spanish shipbuilder which has a joint contract with Harland and Wolff, is likely to be among the rival bidders.

Teneo is reported to have been put on standby to act as administrators.

Pic: PA
Image:
Pic: PA

Founded 163 years ago, Harland and Wolff operates from three sites other than Belfast: one at Appledore in south-west England, which used to be owned by Babcock; and two in Scotland.

In recent weeks it has been engulfed by management turmoil, with the departure of its chief executive and, this week, its finance chief.

On Friday, Russell Downs, the company’s interim executive chairman, said he had ordered a probe into what he described as an apparent “misapplication” of more than £25m of corporate funds.

Its shares, which are listed on London’s junior AIM stock market, have been suspended for months, and will be delisted if the holding company collapses into insolvency proceedings.

The parent company’s administration will not mean that its operating facilities are insolvent, as they are held in separate corporate entities.

However, there are concerns that such a move would prompt the Ministry of Defence to re-tender a contract that Harland and Wolff has a share in to build three Fleet Solid Support ships for the Royal Navy.

A worker at Harland and Wolff MIG welds an anode onto the rudder as workers at Harland and Wolff in Belfast begin work on the first ship to go through refit at the yard since the takeover by London-based energy company InfraStrata stepped in with a ??6m rescue deal that saved from yard from closure.
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A worker at Harland and Wolff MIG welds an anode onto the rudder. Pic: PA

John Wood, the former chief executive who was forced to step down recently, told The Sunday Times that he was preparing a rescue bid for Harland and Wolff.

He indicated to the newspaper that he could seek an injunction to prevent its holding company being placed into administration.

Babcock has been deeply embedded in Royal Navy shipbuilding contracts for decades, and would be a logical acquirer of Harland and Wolff assets.

Joe Passmore looking on as workers at Harland and Wolff in Belfast begin work on the first ship to go through refit at the yard since the takeover by London-based energy company InfraStrata stepped in with a ??6m rescue deal that saved from yard from closure.
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Workers at the Harland and Wolff shipyard. Pic: PA

The FTSE-250 group has largely recovered from its own travails of several years ago, announcing last November that it would pay its first dividend for four years.

Shares in Babcock have risen by over 20% during the last year.

Babcock said that it did not comment on speculation.

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Water companies blocked from using customer cash for ‘undeserved’ bonuses

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Water companies blocked from using customer cash for 'undeserved' bonuses

Nine water companies have been blocked from using customer money to fund “undeserved” bonuses by the industry’s regulator.

Ofwat said it had stepped in to use its new powers over water firms that cannot show that bonuses are sufficiently linked to performance.

The blocked payouts amount to 73% of the total executive awards proposed across the industry.

The regulator has prevented crisis-hit Thames Water, Yorkshire Water, and Dwr Cymru Welsh Water from paying £1.5m in bonuses from cash generated from customer bills.

It said a further six firms have voluntarily decided not to push the cost of executive bonuses worth a combined £5.2m on to customers.

Instead, shareholders at Anglian Water, Severn Trent, South West, Southern Water, United Utilities and Wessex will pay the cost.

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David Black, chief executive of Ofwat, said: “In stopping customers from paying for undeserved bonuses that do not properly reflect performance, we are looking to sharpen executive mindsets and push companies to improve their performance and culture of accountability.

“While we are starting to see companies take some positive steps, they need to do more to rebuild public trust.”

The announcement came in an Ofwat update on firms’ financial resilience and bonuses.

Industry lobby group Water UK said: “Almost all water company bonuses are already paid by shareholders, not customers.

“All companies recognise the need to do more to deliver on their plans to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers.

“We now need the regulator Ofwat to fully approve water companies’ £108bn investment plans so that we can get on with it.

“Ofwat’s financial resilience report provides yet more evidence that the current system isn’t working, with returns down to 2% and eight companies making a loss.

“It is clear we need a faster and simpler system which allows companies to deliver for customers, the environment and the country.”

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Google could be forced to sell its Chrome browser over internet search monopoly claims

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Google could be forced to sell its Chrome browser over internet search monopoly claims

Google must sell its Chrome browser to restore competition in the online search market, US prosecutors have argued.

The proposed breakup has been floated in a 23-page document filed by the US Justice Department.

It also calls for lawmakers to impose restrictions designed to prevent its Android smartphone software from favouring its own search engine.

If the rules were brought in, it would essentially result in Google being highly regulated for 10 years.

Google controls about 90% of the online search market and 95% on smartphones.

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Court papers filed on Wednesday expand on an earlier outline for what prosecutors argued would dilute that monopoly.

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Google called the proposals radical at the time, saying they would harm US consumers and businesses and shake American competitiveness in AI.

The company has said it will appeal.

The US Department of Justice (DoJ) and a coalition of states want US District Judge Amit Mehta to end exclusive agreements in which Google pays billions of dollars annually to Apple and other device vendors to be the default search engine on their tablets and smartphones.

Google will have a chance to present its own proposals in December.

A trial on the proposals has been set for April, however President-elect Donald Trump and the DoJ’s next antitrust head could step in.

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Dozens of partners take early retirement from accountancy giant PwC

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Dozens of partners take early retirement from accountancy giant PwC

Dozens of partners at PricewaterhouseCoopers (PwC), Britain’s biggest accountancy firm, will next month take early retirement as its new boss takes steps to boost its performance.

Sky News has learnt that PwC’s 1,030 UK partners were notified earlier this week that a larger-than-usual round of partner retirements would take place at the end of the year.

Sources said the round would involve several dozen partners – who command average pay packages of about £1m – leaving the firm.

PwC named about 60 new partners earlier this year under Marco Amitrano, who was appointed as its new UK boss in the spring.

Mr Amitrano is understood to have informed partners about the changes in a voice memo, although one insider disputed the idea that the numbers involved were “significant”.

The partner retirements come as the big four audit firms contend with a sizeable bill from increases in the Budget in employers’ national insurance contributions.

It emerged this week that Deloitte is cutting nearly 200 jobs in its advisory business, according to the Financial Times.

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An ongoing shake-up of the audit profession is not being restricted to the big four firms, with Sky News revealing on Wednesday that Cinven, the private equity firm, was in advanced talks to buy a controlling stake in Grant Thornton UK.

The deal, which is expected to value Grant Thornton at somewhere in the region of £1.5bn, was announced on Thursday morning.

PwC declined to comment.

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