Downing Street’s bungling of port giant’s investment signals choppy seas ahead

Published

5 days ago

October 11, 2024

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P&O Ferries is one of the few subjects on which Britain’s political class agree. Its summary sacking of 800 British seafarers and their replacement with cheaper, largely foreign agency staff is universally considered one of the most outrageous acts in the recent history of labour relations.

Louise Haigh was among the first and loudest to call it out, attending protests in Dover as shadow transport secretary the day it happened in March 2022. As a minister, however, the stakes are higher.

By describing P&O as “rogue operator” at the same time as her colleagues were trying to persuade its parent company to shell out £1bn, she has received a sharp lesson in the trade-offs required in office.

DP World has been smarting at the public response to P&O’s actions for more than two years, but it has never apologised, arguing it was justified by the survival of the company.

Reputations recover, bankrupt companies do not, appears to have been the view from Dubai.

So it should not have been a surprise that DP World’s leadership and its chairman, Sultan Ahmed bin Sulayem, took offence when P&O’s sins were deliberately and publicly dredged up a matter of days before he was due to endorse the government at its Investment Summit.

With control of a company that generated almost £14bn in revenues and operates in more than 60 countries, he has a choice about where and when to activate capital.

He will not now travel to London, the expansion of London Gateway is on hold, and the Investment Summit has suffered an embarrassing blow.

The vibes around the event were already less than perfect, with some investors reportedly yet to commit and critical arrangements amid general concern that Labour is courting overseas wealth while simultaneously plotting to tax it in the budget.

There is always a cosmetic element to these events. Multibillion-pound investments take months not days to agree, but royal receptions and prime ministerial handshakes help, and politically and practically, Sir Keir Starmer needs this one to be a success.

His government has an ambitious plan to deliver growth through investment in infrastructure and technology on a scale that is beyond the means of the UK capital markets. We are reliant on the kindness of strangers, as the saying goes, and that sometimes requires compromise.

To pick one at random, the head of Saudi Arabia’s Public Investment Fund is scheduled to attend on Monday, a year after he gave a keynote session at a similar event hosted by Rishi Sunak, with barely a peep of comment.

The summit occurs on the 101st day of the Starmer government, and Downing Street sees it as an opportunity to reset and move on from weeks of squabbling over advisers and freebies.

The bungling of DP World’s investment signals more choppy seas.

Business

PizzaExpress prepares to serve up new slice of debt to investors

Published

7 hours ago

October 16, 2024

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PizzaExpress prepares to serve up new slice of debt to investors

The parent company of PizzaExpress is hiring bankers to help it refinance a £335m bond ahead of its maturity, amid tough trading conditions for casual dining operators.

Sky News has learnt that Wheel Topco is close to appointing PJT Partners, the investment bank, to advise it on talks with its debtholders.

PizzaExpress trades from 359 sites in the UK and Ireland, and is one of Britain’s most ubiquitous restaurant chains.

According to its latest accounts, its bond matures in July 2026, with negotiations expected to get underway with bondholders in the coming weeks.

News of PJT’s imminent appointment comes a year after PizzaExpress explored a takeover bid for The Restaurant Group, which counts Wagamama as its main asset.

It decided against making a formal offer, citing “market conditions”.

In 2020, a group of bondholders took control of PizzaExpress after a financial restructuring which saw them injecting £40m into the business.

They parachuted in Allan Leighton, one of Britain’s most prominent businessman, as chairman, and named former Wagamama chief David Campbell as chief executive.

Mr Campbell has since left the company.

Last year, the company made a loss after tax of £7.5m, and said in filings at Companies House that it had “continued to experience strong macroeconomic headwinds” in the UK and Ireland.

A number of its rivals have also ben buffeted by difficult trading, with TGI Fridays recently being sold through a pre-pack administration to Breal Capital and Calveton, the owners of upmarket London restaurants such as Le Pont de la Tour and Coq d’Argent.

PizzaExpress declined to comment.

Business

Energy services group Hometree lands £50m from Canadian giant CPPIB

Published

7 hours ago

October 16, 2024

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Energy services group Hometree lands £50m from Canadian giant CPPIB

A residential energy services provider backed by leading City investors has secured a £50m funding boost from one of the world’s biggest pension funds.

Sky News understands that Hometree, which counts Legal & General (L&G) among its investors, will this week announce that it has agreed a mezzanine debt facility with a subsidiary of Canada Pension Plan Investment Board (CPPIB).

The new debt facility will add to a £250m loan from Barclays that Hometree secured earlier this year, and will be used to finance up to 35,000 residential solar panel systems, batteries and heat pumps.

News of Hometree’s expanded financing capacity comes as a fresh rise in the household energy price cap takes effect.

Average annual energy bills will increase by £149 following the revision to the cap.

“We’re delighted that CPP Investments has joined us in our mission to help homeowners decarbonise their homes by installing solar panels and heat pumps,” said Rory Duff, managing director of Hometree Finance,

“The energy transition will not happen without appropriate finance since very few people have the thousands of pounds needed for the upfront costs.”

Hometree, which was launched in 2016 by Simon Phelan, has set a target of decarbonising more than 1m homes by the end of the decade.

It has said it wants to build Europe’s leading residential energy services business, combining hardware installation, financing, repairs and ongoing maintenance.

The company has raised tens of millions of pounds in equity from investors including L&G, 2150 and Energy Impact Partners.

Business

Trio in battle to buy stake in accountancy firm Grant Thornton UK

Published

1 day ago

October 15, 2024

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Trio in battle to buy stake in accountancy firm Grant Thornton UK

A trio of buyout firms have been shortlisted to buy a stake in the UK operations of Grant Thornton, one of Britain’s six biggest accountancy firms.

Sky News has learnt that Cinven, EQT and New Mountain Capital – the backer of Grant Thornton’s US business – have made the cut in a process that could value the UK firm at more than £1.5bn.

Other contenders, including Permira and Carlyle are said to no longer be in contention, although insiders cautioned that the list was subject to change.

Grant Thornton has around 200 UK equity partners, who will have a say on the deal.

The firm has improved its financial performance following a turbulent period for its leadership, with a £1.3m fine being imposed for “serious failings” in 2022 in relation to its audit of Sports Direct, the sportswear empire founded by Mike Ashley and now known as Frasers Group.

It was also handed a £2.3m penalty the year before for demonstrating a “serious lack of competence” in relation to its work on Patisserie Holdings, the owner of the collapsed cafe chain Patisserie Valerie.

Since then, Grant Thornton has slashed the number of so-called public interest entity (PIEs) audit clients, a category which includes banks, insurers and other companies deemed to be of particular importance.

A spokesperson for Grant Thornton UK LLP said: “As all businesses do, we continually evaluate the external business and economic landscape and explore various avenues that will drive growth for our firm.

“This enables us to make informed decisions about what’s best for our people, our clients, and our firm.

“No decisions have been made and, whilst we are considering our options, we will not be commenting further.”

Cinven, EQT and Permira declined to comment.