A round-up of today's business news in brief
Change of heart by Bank of England
Bank of England governor Mervyn King was forced into a policy U-turn yesterday in an attempt to ease pressure on the UK banking system.
The bank, in an effort to inject more liquidity, offered to lend £10 billion on three-month terms to cash-strapped banks and allow mortgages to be used as collateral. The move by the bank, which had stood out among central banks in taking a strident "tough love" line with UK banks during the credit squeeze, came less than a week after Mr King warned that such action could sow "the seeds of a future financial crisis".
The policy retreat intensified pressure on Mr King and the bank as critics said it might have been able to prevent a run on the Northern Rock bank by providing such liquidity beforehand - like its peers the US Federal Reserve and the European Central Bank.
The bank insists the U-turn was necessary "to alleviate the strains in longer-maturity money markets" where interest rates have remained far above its official 5.75 per cent rate. - (Financial Times service)
Dublin company noted by Moody's
Debt ratings agency Moody's has put on watch credit notes linked to the beleaguered bank Northern Rock that were issued by a Dublin company.
Saphir Finance, based in AIB International Centre in the IFSC in Dublin, was set up by investment bank Lehman Brothers as a special purpose vehicle.
Northern Rock has issued sterling-denominated preference shares to Saphir, which in turn issued sterling-denominated perpetual non-cumulative securities to investors.
Moody's acted on credit notes, issued by Saphir, that are secured by stg£400 million non-cumulative preference shares of Northern Rock.Saphir is administered by AIB.
Irish group to buy the Racing Post
Irish investment group FL Partners is understood to be proceeding with its acquisition of the Racing Post newspaper, in spite of a newspaper report in the UK yesterday suggesting that the deal might be off.
A story in the Times newspaper said Trinity Mirror, owner of the Racing Post, was considering abandoning the sale as the offer submitted was not high enough. However, it is understood that the deal is proceeding and could be closed in the next couple of weeks. FL Partners, which is headed by corporate financiers Peter Crowley and Niall Hughes, is believed to be paying £190 million.
Flynn adds to his Blackrock
Property developer Michael O'Flynn has increased his shareholding in Blackrock, the property company spun off from Fyffes, through his company Rosecastle.
The wholly-owned subsidiary of O'Flynn Construction now holds 62.5 million shares in the company, representing 10.7 per cent of Blackrock's issued share capital.
New Ryanair flights from Cork
Ryanair has announced plans to operate two new services from Cork airport flying to Glasgow Prestwick and East Midlands.
The new daily routes will commence on December 13th and will bring the number of Ryanair destinations offered from Cork to six.
O'Donoghue to head Mallow West
Former Waterford Wedgwood boss, Redmond O'Donoghue, is to chair Greencore's Mallow West development in Cork, which the food company says could create up to 1,000 jobs.
Greencore is working in conjunction with Cork County Council on the development, which will be centred on the site of the group's former sugar plant, close to the north Cork town.
