THE MASSIVE cash call being sought by Royal & Sun Alliance to prop up reserves has run into trouble ...
THE MASSIVE cash call being sought by Royal & Sun Alliance to prop up reserves has run into trouble according to The Times, which says unknown pensions fund liabilities have put the whole deal in jeopardy.
The deficit could be £750m, the paper warns, which is three-quarters of the £1bn the company hopes to raise through the rights issue.
Institutional investors are unlikely to support the issue of new shares unless the company can show it has the pensions fund issue under control, the paper quotes analysts.
MEANWHILE IN GERMANY Munich Re, the world's largest re-insurer lost its triple-A credit rating last night after another day of stock market falls.
The change was already on the way according to the FT, which says Moody's Investor Service had already lowered its credit rating outlook on the stock - before dropping it to 'Aa1'.
The trouble, as with most insurers these days, is Munich Re's dwindling capital reserves - it recently had to pump $2bn into its US subsidiary American Re to cover the cost of higher claims.
Munich Re is also suffering particular problems relating to the ongoing weakness of the German economy, where the financial services sector's poor performance yesterday helped Frankfurt's DAX index of leading German shares to its worst level in five years.
TREASURY PLANS for public sector borrowing are going adrift according to The Times, which says chancellor Gordon Brown may have to borrow up to £5bn more than expected because of a surge in government spending during the summer months.
Coming just days after prime minister Tony Blair said he wanted redistribution of wealth, the signs are that the next Budget will see government step up revenue raising.
ANOTHER DAY another massacre of jobs in London according to The Daily Telegraph, which reports on 300 redundancies announced by Dresdner Kleinwort Wasserstein yesterday.
Officially there will be a month of consultations with the investment bankers affected, but most were escorted out of the building with the ubiquitous cardboard box by yesterday afternoon, the paper says.
Now the rumour mill suggests there may be no future for DKW given parent company Allianz' focus on cutting dead wood from its holdings.
SHAREHOLDERS IN Aberdeen Asset Management's Progressive Growth fund will have to wait a few weeks more to see the proposals for compensation yet to be put forward by the fund manager.
The decision to provide investors with compensation came after claims the split capital trust was marketed as a low-risk investment: since inception its underlying asset value has fallen more than 70%.
AAM blamed the complex nature of the fund for the delay in working out how much each shareholder would be awarded.
FUNDS UNDER MANAGEMENT in Scotland dropped more than 5%, or nearly £50bn by value over the past year, according to The Scotsman.
However, the story is not all gloom as recent estimates suggest a further 15,000 jobs in financial services will be created north of the border as more firms move from England.
And Glasgow is cementing its reputation as one of the fastest growing UK fund management centres, now in fourth place behind London, Edinburgh and Manchester.
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