LONDON: Britain’s catering company Compass Group Plc. is selling its travel concessions unit Select Service Partner, to investors including Macquarie Bank and EQT Partners for about 1.82 billion pounds in cash.

Compass said while a consortium led by Macquarie Bank will acquire the motorway services arm of Select Service Partner, EQT will buy the airport and railway food concession business of the unit.

The company also announced that it has sold 90 per cent of its European Inflight catering business, a further part of its travel concession catering business.

The company will return 500 million pounds from the sale to shareholders through buybacks over the next 18 months and pay 275 million pounds to its pension plans. It is also earmarking 250 million pounds to acquire the 51 per cent stake it does not hold in Levy Restaurants in the U.S. and the rest to pay back debts.

The Select Service Partner unit offers catering for roadside, railway, and airport concessions in some 26 countries under brands like Upper Crust and Burger King. It has outlets at sites like London’s Waterloo Station and Paris’s Gare du Nord.

The unit had operating profit before goodwill of 114 million pounds for the year ended 30 September 2005, on sales of 1.8 billion pounds.

Compass’ finance director Andrew Martin said the company will now be focusing on its core contract catering and support services and with the sale it will be able to exploit the organic growth opportunities from a strong financial base.

The catering company’s another unit, Eurest Support Services, is facing legal cases relating to supplies contracts with the United Nations. The U.N. had suspended the company as a registered vendor pending an inquiry into charges that the unit had obtained information concerning a three-year contract to supply food and water to the U.N’s peacekeeping forces in Liberia, before it bid for the contract. Compass said in February that investigations conducted by lawyers and auditors had found irregularities in obtaining the contract and the action taken by some members of the staff was not above board.

The company will have a new chief executive, Richard Cousins, formerly with plasterboard maker BPB, from June this year, when incumbent Michael Bailey steps down.

Compass shares rose to 236.25 pence, giving the company a market value of 5.10 billion pounds.

LONDON: Icelandic investment company FL Group Hf has sold its 16.9 per cent holding in budget airline easyJet Plc. for around 227 million pounds, ending speculation that it is in race to acquire the airline. The company said it earned a profit of 98 million pounds in the sale.

FL Group chief executive Hannes Smarason said the company as an investor looks at maximising investments and it felt it was the appropriate time to realise a profit. easyJet shares had almost tripled since the company made its first investment two years ago.

FL Group was seen by many as considering a bid for the airline as it increased its holding above 16 per cent. However, easyJet’s founder Stelios Haji-Ioannou had maintained that he had not received any offer from the company. And Haji-Ioannou, who has 16.6 per cent holding in the airline, while his brother and sister own about 12 percent each, had said he has no intention to sell the company.

FL Group has investments in Icelandair and Finnair and it said it is not planning to sell these stakes.

The shares were placed by JPMorgan Cazenove Ltd. on behalf of FL Group. It said in a regulatory statement that in total 68 million shares were sold.

easyJet shares were down 8.4 per cent at 328 pence, valuing the group around 1.3 billion pounds. Nearly 136 million pounds were wiped off the market value of the company in just a day. The Luton, England-based airline company’s stock had risen 71 per cent in the past 12 months mostly on account of the speculation that it is an acquisition target for FL Group.0

LONDON – Figures from the Office for National Statistics reveal that the UK government’s budget deficit in 2005 surpassed the limit imposed by the Maastricht treaty on Stability and Growth.
The budget deficit for the year 2005 was £43.7 billion or 3.6 percent of the total output.

This is more than the 3 percent guideline imposed by the EU regulations. The UK was in the red in 2004 as well when the budget deficit was pegged at £37.6 billion or 3.2 percent of the GDP. According to the EU guidelines, member nations are to restrict the budget deficit to under 3 percent of the GDP in the fiscal year.

Reacting to these figures, the Treasury said, “As set out in the Budget last week, the UK treaty deficit is forecast to fall to 3% in the coming fiscal year, and will reach 1.6% by 2010/11. The UK continues to have the lowest average debts and deficits of any major European economy with the public finances sustainable and increases in public investment fully affordable.”

The ONS said that the last time the budget deficit was contained to under 3 percent was in 2003. These figures for the current year are for the calendar year and the fiscal year figures are not available, but it is expected that they are in the red as well.

The budget deficit for February was also larger than expected and there is not increased pressure on Chancellor of the Exchequer Gordon Brown to increase taxes. The International Monetary Fund has said that the Chancellor is facing a mega-deficit and could have to raise taxes for as much as £6 billion.

EDINBURGH: Hall of Broxburn, one of Scotland’s largest food farms, is axing 150 workers at its West Lothian plant with immediate effect. This is a sequel to the planned industrial action by Unison, representing workers engaged in public services, over pension dispute. The strike is likely to impact pig production in Scotland as there will be no inspectors to certify the processing.

The owners of Hall of Broxburn, Grampian Country Foods, warned the proposed five-day strike, which is part of the industrial action, will lead to 1000 more job losses.

However, Unison has now agreed that there will be inspectors to certify meat at the plant next week, though the strike by the meat hygiene workers will be on.

In the light of the threatened strike, the firm had said it would not be able to accept pigs at Broxburn for processing next week.

Grampian Country Foods’ managing director Cameron Davidson had warned that the strike could have threatened the survival of Halls. He said the employees understand their colleagues genuine concerns over pensions but they are “mystified as to how nine people on strike can jeopardise 1,000 jobs at Hall’s and the future of the pig industry across Scotland”.

The plant processes up to 12,000 pigs each week.

The Grampian Country Foods Group has already closed down the only other large pig processing plant in Scotland at Buckie 12 months ago. If Halls too closes down, Scottish pig producers will have to find other outlets in England for their processing needs.

The Scottish pig herd, once known as the most technically efficient in the European Union, has been facing sharp decline in recent years because of higher welfare standards. Producers have to either invest in new equipment and facilities or quit the industry. Many have opted to leave it.

The pension dispute had seen some 200,000 government workers striking work in Scotland Tuesday last.

The Meat Hygiene Service employs 184 staff in Scotland, including 155 inspectors. Of these, 160 are Unison members. Hall’s uses nine Meat Hygiene Service members as meat inspectors at the Broxburn plant.

LONDON: Britain’s largest ports operator Associated British Ports Plc. rejected an indicative takeover offer of 2.2 billion pounds from a Goldman Sachs-led consortium Wednesday.

The company said in a statement that its board considered the non-binding indicative offer and concluded that it is wholly inadequate.

The offer had been in cash at 730 pence-a-share. AB Ports has large properties, including land used for the port operations. It handles a quarter of Britain’s seaborne trade and has four port operations in the U.S.

British ports have become attractive targets for offshore investors in view of their income sources, large property holdings and improving shipping operations around the world. Recently, Dubai Ports World had bought Peninsular & Oriental Steam Navigation Co., the U.K.’s oldest port company, for $6.8 billion, while an Australian investment fund had annexed PD Ports for 337 million pounds.

Goldman Sachs said it is working with Borealis, the investment vehicle of Ontario pension fund OMERS, and GIC Special Investments, the private equity arm of the Government of Singapore Investment Corporation to bid for AB Ports, which owns and operates 21 U.K. ports, including Hull in northeast England and Plymouth in the southwest. AB Ports also handles car imports at four U.S. ports.

AB Ports had operating profit of 167.6 million pounds in 2005, with the U.S. operations contributing 4.3 million pounds. The company has said its earnings at the U.K. ports are set to accelerate in the second half of 2006 after the opening of two new facilities at the port of Immingham, on the northeast coast of England.

AB Ports shares dropped 14 pence to 717 pence Thursday, which analysts said has been as a result of the stock going ex-dividend.

LONDON: More than half the government’s flagship city academies are listed among the worst schools in the country in the new league tables. Seven of the 13 semi-independent academies, which are open long enough to provide data on results of the compulsory tests taken by 14-year-olds in English, mathematics and science, appear in the list of the worst 200 state schools in England.

Nine of the 11 academies reporting results were in the table last year, which shows results for the key stage three tests.

It has come to light that at the Manchester academy in Moss Side, students aged 14 had failed to reach even standards of 11-year-olds in primary schools. The academy scored average points of 26.8. In all English state schools, the average was 34.5.

Among the other academies — state schools backed by private sponsors — showing low average results are the Capital City academy in Brent, north London, Unity in Middlesbrough and City academy, Bristol. The results for Capital and Bristol both improved on the previous year, while Unity’s results remained the same.

Schools minister Lord Adonis said the academies would be “among the very best schools” in future years. He said these institutes cannot be criticised for not being at the top of the performance table as they started in the game way behind. “But they are getting there, as today’s results show.”

There are critics of the scheme. Steve Sinnott, general secretary of the National Union of Teachers, asked the minister to call of the 5-billion-pound academies programme.

The academies programme has been mooted by the government with a view to transform failing comprehensives in poor areas with backing from wealthy private sponsors. Teachers’ representatives have described the scheme as back-door privatisation of state schools, while some of the MPs have called for halting the programme, which aims to build 200 academies by 2010.

EDINBURGH: A ban on smoking has come into effect in Scotland Sunday, making it the first part of Britain where pubs, restaurants and workplaces are to remain no-smoking zones.

Health experts hope the ban will have a clear impact on the people’s health and result in a big drop in the number of deaths due to passive smoking, which is estimated around 1,000 a year in the region with a population of five million. They expect that Scotland, which is considered the “sick man of Europe” because of a life style marked by heaving drinking and smoking, unhealthy diets and sedentary way of life, will see a major change in the life style because of the ban.

A major promotion of the ban is being undertaken at various levels. On the first day of the ban, at the Edinburgh airport, volunteers were seen handing out leaflets explaining the ban. There are banners put up in the city declaring, “Welcome to a smoke free Scotland.”

First minister Jack McConnell, head of Scotland government said, “We have an unhealthy reputation and we are going to change that. We have a record as a country that has too much heart disease, too much cancer, too many stroke victims.”

He said in the years ahead, people will look back on today as the day that Scotland took the largest single step to improve its health for generations.

The new law makes smoking inside an enclosed public place an offence, attracting an on-the-spot fine of 50 pounds.

Ireland is the first country, which had imposed a nation-wide ban on smoking in 2004. Several other countries have since followed suit banning smoking in public places. England, Wales and Northern Ireland are expected to impose ban on smoking early next year.

Scotland has carried out several surveys, which have shown that more than 60 per cent of its people support the ban.

About 30 per cent of the Scottish people are known to smoke, a higher rate than the rest of Britain. They also enjoy a lower life expectancy.

There are people who oppose the ban. They describe it as an attack on individual freedom and intrusion into the life of working class people. Pub and restaurant owners are also concerned about the ban as they expect it would affect their businesses.

Pro-smoking group Forest said the smokers were being victimised and told them to stand up to the “bullying tactics of health fanatics”.

As the ban was a few hours away, pubs, clubs and restaurants across the country had thousands of smokers assembled, puffing on their final cigarettes, with some venues holding special events to mark the occasion.

As the ban came into force, anti-smoking enforcement officers, mostly from environmental health departments, were seen in pubs across the country to ensure that no one was breaking the new law.

There are fears that as the ban becomes effective, smokers could make regular trips to England across the border to have a puff. The Scottish Licensed Trade Association said there will be “smoke commuters” travelling to England to have a cigarette. The association said the ban could be devastating for pubs in the Borders.