QUESTIONS CONTINUE TO swirl around Royal & Sun Alliance's planned rights issue, the FT says, because...
QUESTIONS CONTINUE TO swirl around Royal & Sun Alliance's planned rights issue, the FT says, because the company is going to have to admit a big slice of the new money will go to cover US asbestos and environmental claims.
That in turn raises questions about the position of finance director Julian Hance, in place since 1998, the paper adds, becuase shareholders need still need persuading of RSA's financial strength.
The FT expects nearly half of any new money raised in a deeply discounted rights issue will go to covering these particular US-related issues.
THE STATE-CONTROLLED French phone operator France Telecom yesterday offered to buy out the minority shareholders in Orange in a £5bn all-share deal that would consequently bid farewell to the mobile group's independence, writes the Daily Telegraph.
France Telecom is offering Orange shareholders 11 of its own shares for every 25 Orange shares they hold in order to gain the 13% of Orange it does not already own.
This values Orange shares at 667.5p. At that price UK investors have made a gain on the 607p price at which the shares were issued when France Telecom floated the business in 2001. British institutions, that bought the shares at 640p, have also made a profit.
But although this offer signals the end the mobile company's ten years of semi-independence, the Times adds, France Telecom says that it won't change anything in Orange's operation or its board.
STAYING IN France, the Daily Telegraph reports that the country faces EU sanctions after it yesterday revealed that government borrowing could exceed 4% of GDP this year.
This comes after France admitted that it might break the 3% ceiling of the European Union's Stability and Growth Pact.
European Commission president Romano Prodi gave the French government a stark warning last week that Brussels would not allow anyone to make "a mockery of the eurozone's system of fiscal discipline".
Unless France sorts out its finances before October 3 Paris it might become the first EU state to face sanctions for breaching the pact's limits and having to pay a hefty fine of up to £5.2bn.
BACK IN the UK, manufacturing saw its best performance in 15 months during August as output, orders and exports showed a rising activity, writes the Times today.
Latest figures from a CIPS/Reuters purchasing managers' survey reveal that UK manufacturing enjoyed its second month in a row of a rising trend.
On the backdrop of this, FTSE 100 index increased more than 1% to close at 4,204.4 points. European shares were also up after receiving better economic news, and light at the end of the tunnel could also be seen in Asia after Japan made overnight gains.
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