Daily business and finance update 4th April 2023
Cineworld ditches sale plans
Cineworld ditches sale plans
The world’s second largest cinema chain has dropped plans to sell its UK, Ireland and US operations after failing to find a buyer. Instead it will raise $2.3bn in new funding and has come to an agreement with lenders to reduce its debt by $4.5bn. Cineworld - which operates 751 sites worldwide including brands Regal, Cinema City and Picturehouse - went bankrupt last September under a $6bn debt load as it struggled to recover audiences lost during the pandemic. The company has received offers for other assets in eastern Europe and Israel that it will pursue.
Oil prices jump
Oil prices surged 5% yesterday after OPEC made the surprising decision to cut production by 1.1m barrels a day, abandoning previous pledges that it would hold supply steady. The cartel of oil-producing countries, led by Saudi Arabia, is trying to boost prices amid concern about weaker global demand. The decision poses a new risk for the global economy with elevated oil prices likely to mean decades-high inflation will persist for longer forcing central banks to keep interest rates higher. The news provided a boost to the energy sector with shares in Shell and BP being the big winners.
Record Tesla sales
Tesla set a new quarterly delivery record, shipping almost 423,000 cars in the first three months of 2023 although it fell short of the pace required to meet Elon Musk’s long-held goal of 50% annual growth. The electric vehicle pioneer cut prices twice this year to boost demand as consumers face a squeeze in the cost of living. Analysts think that the company may have to slash prices again amid ongoing concerns over a weakening global economy. Tesla shares have risen more than 68% this year, but are still more than 50% below their November 2021 peak.
Government extends bank sell down
The sale of the remaining 41.5% in the Natwest Group owned by the taxpayer will be extended by two years, the government announced yesterday. Natwest, formerly Royal Bank of Scotland, received a £50bn bail out in 2008 during the Global Financial Crisis when the government took a 84% stake to stop the bank failing and damaging the wider economy. Since 2015 the taxpayer has been recouping its cash but the recent turmoil in the global banking market has dented its share price causing the government to rethink its original plans of completing the sell down by this summer.
Cuts ahead: Fast food chain McDonald's is temporarily closing its US offices this week ahead of an expected announcement on corporate job cuts.
Passport delays: There has been a "temporary increase" in demand for new passports ahead of more than 1,000 Passport Office workers starting five weeks of strike action.
Outlawed: Germany's accounting watchdog has fined EY and banned it from taking on new audits for two years, following its audit of failed payments firm Wirecard.
RIP: Nigel Lawson, the Conservative MP and former chancellor, has died at the age of 91.
Beauty sale: Skincare giant L’Oréal will pay $2.5bn to buy Melbourne-founded Aesop, a luxury cosmetics, shampoo and bodycare brand.
Liquid changes: London City Airport has scrapped the 100ml liquid limit by using high-tech scanners which also allow electronics to be kept in hand luggage at security.
Going to the US: British kids fintech GoHenry has been bought up by US investing app Acorns.
Number Of The Day
The proportion of homes sold in London last year for more than £1m, according to new data from the Land Registry.