Business Updates

Forth Ports, the BAA of shipping in Scotland – indeed the largest port owner in Scotland, has accepted a takeover offer from its largest shareholder, an investment company Arcus Partners, who are buying Forth through the Arcus European Infrastructure Fund 1 for a magnate sized £760m.

It has been a poor start to the new financial year for Allied Irish Bank who posted a loss of £9bn in their preliminary results for 2010. The credit rating agencies, which, let’s face it, are not exactly covered in glory have downgraded AIB and placed the Bank on a negative watch list. At the end of last month, following the completion of stress tests on the bank (Prudential Capital Assessment Review or PCAR) the bank was required to raise a further 9.2bnEuros in addition to the 4.2bn deferred from February. That’s a lot of money and as we all know Ireland has some difficult economic decisions to make, having a bank repair its balance sheet rather than lending money to business is unlikely to help.

This is set in contrast to the Italian bank, Banca Monte dei Paschi di Siena, Italy’s third largest bank, who are raising £2.22bn of capital in preparation for their stress test, this resulted in credit agency Standard & Poor’s upgrading the bank’s credit rating. So not only is the bank set in one of Europe’s most beautiful cities, it is also attracting the right attention, by taking proactive measures.

Staying in Italy, Fiat yesterday announced that they are increasing its stake in the Chrysler Group from 25% to 30%. You may recall that the American car manufacturer based in Detroit filed for Chapter 11(Bankruptcy in English) in June 2009. Fiat was offered a deal for a stake in the company, which could rise to 51% if financial targets are achieved, although this can only happen once the US Government has been fully repaid. Fiat’s increased stake is good news for the United Auto Workers Voluntary Employee Beneficiary Association who have a 60% holding, the US Government owns 8% and the Canadian Government the balance of 2%. Fiat will sell Chrysler cars under its own Fiat badge in Europe and Brazil.

This leads neatly onto the news that the Brazil is benefitting from its relationship with the Chinese, its largest trading partner and foreign investor (one to watch for emerging market funds). Chinese Airlines have placed orders for 20 planes, plus an option to buy 15 more aircraft, in a deal worth £861m with Embraer, (who really are "for the journey") the Brazilian aircraft manufacturer.