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16 <strong>NEW</strong>S MONDAY 16 JANUARY 2017 HS1 owners mull sale and bring in Bank of America FRANCESCA WASHTELL @fwashtell THE TWO Canadian pension giants that own the high-speed railway connecting London to the Channel Tunnel have appointed a US investment bank to explore a sale of the line. The Ontario Teachers’ Pension Plan and Borealis have brought in Bank of America Merrill Lynch to handle a £3.6bn potential sale of the 109km HS1 line that runs from the capital to Folkestone in Kent, the Sunday Times reported. In December, the funds confirmed they were exploring strategic options after receiving “a number of investment enquiries” about a sale of the only high-speed line currently operating in the UK. Borealis and the Ontario Teachers’ Pension Plan snapped up a 30-year concession for HS1 in 2010 from thentransport secretary Philip Hammond for £2.1bn to operate and manage the HS1 network. The railway line opened in 2007. Together, the pension funds manage the retirement savings of thousands of Ontario-based police, teachers, firefighters and council workers. Both Eurostar and high-speed Southern services operate on the line, which includes four international stations along its route: St Pancras, Stratford, Ebbsfleet and Ashford. HS1 has paid out robust dividends in the last couple of years, forking out £55m in 2015 and £200m in 2014, when it swung into a loss of £113.2m. Borealis and the Ontario Teachers’ Pension Plan also own stakes in London City airport, as part of the consortium that bid in the £2bn takeover in February. The UK’s second high-speed rail line, HS2, is planned to link London with cities including Birmingham, Sheffield and Manchester. The first phase of the £56bn railway is due to open in December 2026. HS1, the 109km high speed rail link, connects London to Folkestone in Kent CITYAM.COM Oil giant set to shift focus to subsea services FRANCESCA WASHTELL @fwashtell AIM-LISTED petroleum exploration firm Global Energy Development is today expected to announce a turnaround strategy that will refocus the group on the subsea oilfield services sector. The Colombia-focused energy group will also announce a multimillion-dollar conditional agreement to purchase more than 10 offshore subsea service vessels and other related equipment, City A.M. understands. The vessels are currently based in the Gulf of Mexico, though they are expected to remain there indefinitely as the group is targeting international subsea work. To bolster the turnaround strategy, Global Energy Development will also appoint a director of operations who has considerable experience in the subsea services field. Global Energy Development listed on London’s junior market in 2002. Implementing the new master plan will be subject to approval from shareholders at a general meeting, expected to be held next month, with the deal completing soon after. Chinese investors snap up stake in disruptive aerospace startup Gilo Venezuela’s hard currency income falls FRANCESCA WASHTELL @fwashtell CHINESE investors have scooped up a significant minority stake in British aerospace firm Gilo Industries Group. The science arm of conglomerate Kuang-Chi, which is headquartered in the city of Shenzhen, has bought a stake in Dorset-based Gilo, Sky News reported. The deal is expected to be announced in Asia today. The size and value of the investment has not yet been disclosed. The commitment to invest in the UK was a vote of confidence in the post-Brexit vote economy, a source told Sky News. The tie-up is thought to be the first in a series of investments across UK tech industries that could include telecoms and robotics. Gilo Industries Group was founded in 2012 by entrepreneur Gilo Cardozo. It has been dubbed “the Disneyland of engineering” for its wide range of commercial and recreational aviation products. The group manufactures jetbackpacks and rotary engines for unmanned aeronautical vehicles. DIEGO ORE AND ALEXANDRA ULMER VENEZUELA’S hard currency income fell 60 per cent in 2016 compared with the previous year, President Nicolas Maduro said last night, blaming low oil prices. The country with the world’s largest crude reserves receives over 90 percent of its foreign income from oil, whose price has fallen since mid-2014, worsening a recession in the Opec country. Venezuelans are struggling amid shortages of basic food products, spiraling inflation and a depreciating currency that has dragged down monthly minimum wages to below $10, and violent crime. Venezuela received $5.29bn (£4.4bn) in hard currency last year, a far cry from the $13.32bn in 2015. Reuters
CITYAM.COM MONDAY 16 JANUARY 2017 <strong>NEW</strong>S 17 Inflation uptick shows pound dip impacted prices ASHLEY COATES DATA released by the Office for National Statistics this week is likely to show an uptick in consumer price inflation, a sign that the fall in the value of the pound is having an impact on prices. An inflation rate of 1.5 per cent in the consumer prices index for December would be a marginal increase on 1.4 per cent for November, and 0.9 per cent for October. This would bring the average rate of inflation to 0.7 per cent for 2016, after a flat 2015, and the highest rate seen since August 2014. Economists are expecting inflation to reach the Bank of England’s target of two per cent soon, and continue to reach 2.5 per cent by June. Higher fuel prices are also believed to have been a reason behind for the rise, with global oil prices now at an 18-month high. The RAC recently reported that prices for petrol and diesel had gone up by 3p/litre in December to reach their highest since July 2015. The British Retail Consortium pointed out in its December survey that “the majority of the categories we monitor, particularly non-food, saw month-on-month increases in prices, with clothing and footwear seeing month-on-month inflation for the first time in nearly two years”. Despite having a good fourth quarter, retail sales are expected to have softened in December, following strong performance in the proceeding two months. Alan Clarke, an economist at Scotiabank, had warned that “with headline average earnings growth down to just two per cent, real earnings growth will turn negative”. “In turn, this is likely to be the main reason to expect economic growth to slow, as non-existent real earnings growth holds back household consumption,” Clarke added. The Goring Hotel opened in 1910 and is still run by members of the Goring family Family-run Goring Hotel back in the black after record turnover ALYS KEY THE GORING Hotel in Belgravia reported its highest ever turnover in 2016, coming in at more than £14m with a profit before tax of £2m. The return to profit will come as a relief to the hotel. The establishment reported an operating loss of more than £590,000 in 2015. The Goring, which is more than a century old, is the last hotel in London that is still run by the same family who built it. It has hosted a range of prominent guests including the Queen Mother and Lady Randolph Churchill. The Duchess of Cambridge and her family were based at the hotel for her wedding to Prince William. Firms to fork out more on rates than rent FRANCESCA WASHTELL @fwashtell A THIRD of London businesses have said they will be paying more towards new business rates than rent next year, according to the London Chamber of Commerce and Industry (LCCI). More than 40 per cent of London firms were concerned about the new rate valuation, which will come into effect on 1 April, according to an LCCI survey of more than 500 businesses. It has been estimated that London boroughs will be paying £9.53bn in extra tax over the next five years due to the changes, which were re-evaluated in October for the first time in seven years. “We said after the announcement that the revaluation of apparent 40 per cent plus hikes were a huge blow to London, with our primary concern being that businesses may decide to hold back on training, recruiting or investing in other areas,” said Colin Stanbridge, chief executive of LCCI. “These concerns are borne out in this survey, with only 18 per cent of businesses saying that the revaluation is fair.” Bad commercial property lending nosedives as banks tighten criteria FRANCESCA WASHTELL @fwashtell THE NUMBER of commercial property loans being written off has plummeted 63 per cent, falling to its lowest level since the credit crunch, according to Bank of England data. There were £846m worth of writeoffs in the sector, down from £2.27bn the previous year, between October 2015 and the end of the third quarter of 2016. Many banks have tightened their lending criteria to commercial property developers, according to peer-to-peer (P2P) property funding platform Saving Stream. As banks become more risk averse, alternative lenders and P2P platforms could be well-placed to benefit from the market. “The risk is that many sensible property investments and developments are not able to get funding from traditional sources,” said Liam Brooke, co-founder of Saving Stream. “A good crop of what are still high quality investment opportunities need funding, and P2P investors are taking on that risk that Basel III has dissuaded banks from getting involved with.” City frozen yoghurt chain lays out tasty plan for global roll-out FRANCESCA WASHTELL @fwashtell CITY-BASED frozen yoghurt startup Sloane Brothers will roll out to new stores across the UK early this year and is gearing up to go global in 2018. The group, which started with a store on Brick Lane in June 2015, will open “a number of new locations” this year and is preparing to respond to requests from overseas groups that have asked about franchising. Last year, the British-sourced froyo firm crowdsourced ideas for its first location outside of London and, after requests to open a store in Nottingham, launched its second site there in September. Sloane Bros is now crowdfunding for £150,000, which will be put towards securing the new UK locations, launching a B2B packaged products business and setting up financing infrastructure. Sales are expected to reach over £350,00 by December, Sloane Bros has said.
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TO NEW BREXIT REALITY

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