10 NEWS TUESDAY 4 APRIL 2017 Watchdog mulls rules to improve persistent debts REBECCA SMITH @BexKSmith THE FINANCIAL watchdog has called for lenders to step in earlier when handling customers unable to make more than the minimum repayments on credit card debt – and even suggests waiving interest proportions and extra charges of long-held debt. The Financial Conduct Authority (FCA) said around 3.3m people were stuck in “persistent debt”, where they have shelled out more in interest and charges than they have repaid of their borrowing over 18 months. These customers are profitable for the firms who do not “routinely intervene” to help them, said the FCA. Following a thorough study of the market, it has set out proposals to make lenders take steps to help customers repay their balances more quickly and offer greater assistance to those who cannot. It wants firms to prompt customers to make faster repayments if they can afford to do so, when a customer has been in persistent debt for 18 months. Another measure outlined by the FCA involved card firms helping such customers by coming up with a repayment plan. At other times, they may have to reduce, waive or cancel any interest or charges to help progress the customers out of debt. The FCA said the steps will help save customers between £3bn and £13bn by 2030. Andrew Bailey, the FCA’s chief executive, said: “We expect our proposals to reduce the number of customers in problem credit card debt, as well as putting customers in greater control of their borrowing. “Persistent debt can be very expensive – costing customers on average around £2.50 for every £1 repaid – and can obscure underlying financial problems. Because these customers remain profitable, firms have few incentives to intervene.” The Financial Times was sold by FTSE 100 company Pearson to Nikkei in 2015 Financial Times: Most revenue no longer from print publishing WILLIAM TURVILL @wturvill THE FINANCIAL Times yesterday reported that print now contributes less than half of its revenue. The group, which has a circulation of 184,000, including 59,000 in the UK, according to ABC, said it reached 650,000 digital subscribers in 2016. The FT said the EU referendum and US election boosted its numbers. It said: “Driven by growth in digital subscriptions and a strong performance from both its conference business FT Live and its specialist financial publishing division, revenues from digital and services at the FT overtook those from print, marking another milestone in the FT’s business transformation.” GEORGINA VARLEY CITYAM.COM Startup loans group dishes out £300m SINCE its launch in 2012, the Start Up Loans Company (SULCo) has provided UK microbusinesses with over £300m. More than 11,000 new and earlystage companies are supported each year by the governmentbacked programme. Over 55,000 jobs have been created and more than 19,000 formerly unemployed individuals have launched their own businesses. Small business minister Margot James said: “Giving the UK’s small businesses the jump-start they need to grow and thrive is a key priority of our industrial strategy.” Matt Lovell and Rob Hampton, co-founders of seafood restaurant The Oystermen, secured the 46,400th loan that drove the total aid provided past the £300m mark. The Oystermen now anticipates a 300 per cent turnover growth in the next 12 months. The SULCo has also announced its planned merger with the British Business Bank. The move will help both organisations deliver the government’s manifesto commitment to support 75,000 microbusinesses by 2020. Hedge fund TCI pushes Safran for a review of Zodiac’s $9bn valuation Lekoil shares rise on GE provisional deal MAIYA KEIDAN ACTIVIST hedge fund TCI Fund Management yesterday called on Safran to set up an ad-hoc independent directors’ committee to review the company’s valuation of Zodiac Aerospace, according to a letter seen by Reuters. London-based TCI said in its letter to the board of Safran, which is planning a $9bn (£7.2bn) takeover of Zodiac, that such a committee was required by French law and under the recommendations of the local regulator. The hedge fund firm said this committee should appoint a major international financial institution to perform an independent fairness opinion on Zodiac shares. Investor TCI owns about four per cent of Safran and is also a shareholder of Zodiac. In mid-March, the pressure intensified for France-based aircraft parts maker Safran to rethink the proposed takeover after a Zodiac Aerospace profit warning sent the target’s shares tumbling. At the time, TCI called for Safran’s chairman to be ousted unless it abandoned the deal. The latest profit warning resulted from problems at its Zodiac Seats UK division. Reuters FRANCESCA WASHTELL @fwashtell SHARES in West Africa-focused oil and gas explorer Lekoil closed up almost six per cent yesterday after the firm signed a memorandum of understanding (MOU) with US utilities giant General Electric. Lekoil signed the MOU with GE Oil & Gas, a General Electric subsidiary, for the development of one of its fields in Nigeria. Once Lekoil has completed an appraisal programme, GE Oil & Gas intends to invest funds towards the project’s development capital. Lekoil expects the full field oil development cost to total around $400m (£319m), while subsequent upstream gas field development will cost around $600m. Its shares closed up 5.95 per cent to 24.5p last night.
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