Branson's Virgin To Pilot New Cruises Venture

By Mark Kleinman, City Editor

Sir Richard Branson is drawing up plans for a secret assault on the international cruises sector which will involve raising hundreds of millions of pounds in funding from external investors.

Sky News can reveal that Virgin Group has appointed the US-based corporate advisory firm Allen & Co to oversee the development of a cruise operation that would eventually aim to compete with industry giants including Carnival Corporation.

Virgin has been working with Allen & Co on a range of potential opportunities across the wider leisure sector, including an investment in a four-star city centre concept called Virgin Hotels.

The development of Virgin Cruises, which is expected to be the name of the new venture, is at an early stage, people close to the project cautioned on Friday.

However, Virgin executives and their advisers have already held detailed talks with banks about raising an estimated $1bn (£598m) of debt to finance the acquisition of the company's first vessels.

They also want to raise in the region of $700m (£418m) of equity by selling stakes in Virgin Cruises to outside investors.

Sir Richard and Josh Bayliss, chief executive of Virgin Management, are understood to believe the global cruises sector possesses many of the same characteristics which have led Virgin to build a significant presence in sectors such as aviation, rail and mobile telecoms.

The cruise market is dominated by fewer than a handful of companies, such as the FTSE-100 group Carnival, Royal Caribbean and Norwegian. Between them, the three companies have a global market share of approximately 80%.

"Cruises is a classic Virgin market, dominated by two or three players and where the product needs to be refreshed," an insider said.

The industry is forecast by Cruise Market Watch, an industry research group, to grow from 21.5 million passengers this year to 22.2 million passengers carried worldwide in 2015.

Virgin Cruises is expected to be headquartered in the US, reflecting North America's status as the world's biggest cruise market, the source said.

Globally, the industry is likely to generate revenue of $37.1bn (£22.2bn) this year, a 2.3% increase on 2013.

The plans for the launch of Virgin Cruises emerge as Sir Richard targets a flotation of his domestic US airline, Virgin America.

The carrier, which recently undertook a debt restructuring covering roughly $300m (£179.8bn) of borrowing obligations, has hired investment banks to prepare the listing.

A successful flotation of Virgin America would echo the model used several times by Sir Richard to take some of his business ventures, such as Virgin Mobile, to the public markets.

He has also frequently sold stakes in his companies to outside investors, including the sale of shares in Virgin Money, his banking operation, to an entity in Abu Dhabi and Wilbur Ross, a prominent US investor.

Other plans involving Virgin companies this year include the opening of the first City Centre hotel in Chicago in the autumn, with other venues expected in US cities served by the group's airlines.

The plan to break into the cruises market comes weeks after the publication of a new biography of Sir Richard by the author Tom Bower.

Mr Bower claimed the company's maiden flight of its space tourism venture was facing further delays, while Virgin insists it is on track to take off this year.

A Virgin spokesman declined to comment.

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Mt Gox Bitcoin Exchange Files For Bankruptcy

One of the world's largest bitcoin exchanges has filed for bankruptcy protection as it admitted hackers may have stolen all of its digital currency.

Mt Gox has revealed 850,000 bitcoins worth about $480m (£286m) are unaccounted for following cyber attacks and said it has 127,000 creditors.

Chief executive Mark Karpeles blamed a weakness in the exchange's computer system for the massive loss, which included 750,000 users' bitcoins and 100,000 of its own.

Debts at the company of £38m dwarf its total assets of £22.5m.

Mr Karpeles gave a grovelling apology in Japanese for the company's collapse, bowing in contrition and wearing a suit instead of his customary T-shirt at a news conference.

"I am sorry for the troubles I have caused all the people," he said.

However, he predicted the currency would continue to grow, claiming the industry is "healthy".

Angry investors are demanding answers over what happened to their bitcoins

Angry investors are demanding answers over what happened to their holdings of cash and bitcoins on the Tokyo-based exchange.

The collapse of the company has shaken the virtual currency world and heaped renewed regulatory attention on the bitcoin.

Created in 2009 as a way to make transactions across borders without third parties such as banks, supporters previously claimed security encryption made the currency immune to theft or counterfeiting.

Mt Gox took down its website on Tuesday after freezing withdrawals earlier this month in the wake of a series of technical difficulties.

Mr Karpeles said the company wanted to file a criminal complaint against what he said was a hacking attack but had no actual means of doing so.

It came as the Japanese finance minister said the collapse of the virtual currency was inevitable and Vietnam banned its use overnight.

Despite the problems facing the currency, the world's first bitcoin retail store has opened in Hong Kong.

However, Ken Lo, the CEO of ANXBTC, the exchange behind the store, said he believes an actual store will help break down some of the barriers to people adopting the virtual currency.

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Floods Fund: £2m To Support Tourism Firms

Tourism businesses affected by the recent flooding are to get a £2m boost from the Government.

Culture Secretary Maria Miller says the money will fund experts who will visit affected areas and offer practical advice to tourism firms such as how to access business support measures.

The advice sessions will be hosted by VisitEngland and run throughout March.

The fund comes on top of  the £10m set aside by Prime Minister David Cameron last month to help flood-hit businesses generally.

Ms Miller said: "We want to help all those tourism businesses that have been affected by the horrendous floods get back on their feet as quickly as possible.

"Experts will be put on the ground to help small businesses with practical advice and communications while a bespoke Easter marketing will bring people back to the areas hit."

Welcoming the funding, VisitEngland chief executive James Berresford said: "Our message to customers is 'Business as usual'.

"Despite many areas having been affected by bad weather and some travel disruption, the tourism infrastructure is largely unaffected."

VisitBritain chief executive Sandie Dawe said: "International tourism is worth around £1.5bn to the economies of south west England and Wales.

"We are already getting out the message that it is a great time to travel to Britain and will be intensifying that activity over the coming months."

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:: Watch Sky News' special programme 'Battered Britain: From The Air' about the effect of the recent storms on the UK's landscape on Sunday, March 2, at 4pm.

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Qantas To Axe 5,000 Jobs After £126m Loss

Australian airline Qantas has announced it will cut 5,000 jobs after posting a first-half net loss of £126m.

The airline, which is battling record fuel costs and fierce competition from subsidised rivals, is working to slash costs by £1.08bn over three years.

Part of the restructuring programme will see 5,000 full-time positions lost from its 32,000-strong workforce.

A wage freeze will also be applied across the whole company until the airline returns to a profit.

The airline also highlighted "significant changes" to its fleet plans and network and a reduction in capital expenditure of £500m over the next two financial years.

Chief executive Alan Joyce said: "We are facing some of the toughest conditions Qantas has ever seen.

"Hard decisions will be necessary to overcome the challenges we face and build a stronger business."

He added the Australia had been "hit by a giant wave of international airline capacity", with a 46% increase in competitor capacity since 2009.

Following a profit warning in December, ratings agencies Moody's and Standard & Poor's downgraded Qantas' credit rating to "junk" status, increasing the cost of financing for the airline.

Qantas has since been working on its finances to convince the government it deserves a debt guarantee and also lobbying the Australian government to relax the Qantas Sales Act, which limits foreign ownership in the airline to 49%.

The loss for the six months through December 2013 followed a £68m profit for the same period in 2012.

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'Cut Snobbery' To Get Youth Back In Work

By Rhiannon Mills, Sky News Correspondent

Making it compulsory for young people to improve their maths and English, as well as a Ucas-style website for work-based training, are among the latest Government plans to cut youth unemployment.

In a speech at a school in South London later, Nick Clegg will announce changes to how young people are helped to get into training and employment.

The Deputy Prime Minister will say: "Together, these changes will help us simplify your choices, end the snobbery surrounding vocational education that limits your prospects and support you as you make these decisions.

"We want every young person to be able to follow their chosen path.

"This is my commitment to you - to do whatever we can to ensure you get an equal shot at the life you want."

Nick Clegg will announce the plans in South London

Earlier this week the Lib Dem leader said there are record numbers of people going to university, with the number of people coming from disadvantaged backgrounds rising faster than average.

But this latest announcement will target the six out of ten young people who choose not to go to university and decide instead to go straight to work.

It will include plans for each local area to set up a website similar to the Ucas university application system, but this time dedicated to work-based training including apprenticeships or other vocational courses.

There will also be a focus on basic skills, so any 18-21-year-old who is looking for a job and does not have a C-grade in GCSE maths and English will retake the qualification or be given equivalent training to improve their basic skills.

If people refuse to do this training, they would not get their benefit.

Schools are also being encouraged to give better career advice, and 16 or 17-year-olds will also be able to get advice in job centres.

Work experience will be offered to any young person who has not had a job for six months.

The latest unemployment figures found the number of young people out of work had fallen to 917,000, however the director of the British Chambers of Commerce recently said 16 to 24-year-olds are almost three times more likely to be unemployed than members of the workforce as a whole.

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:: The Deputy Prime Minister's speech will be live on Sky News at 10am.

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RBS Confirms £8.2bn Loss And New Revival Plan

Royal Bank of Scotland (RBS) has reported a loss of £8.2bn - its biggest since the year it was bailed out by the taxpayer - and announced plans to help restore customer trust.

The loss for 2013 included its previously-announced provisions for mistakes of the past, which continue to haunt RBS and the rest of the UK banking industry in the wake of the financial crisis.

Ross McEwan, RBS chief executive, said the loss was "sobering" and "huge" and promised reform would turn around not only its financial fortunes but also its treatment of the customer.

Ross McEwan is restructuting RBS

Its share price fell 4% when the FTSE 100 opened for business.

The bank confirmed new cost savings of £5bn over the next four years - reported earlier by Sky News - with its focus shifting back to the UK and further away from investment banking.

It was its investment arm that accounted for most of its bonus pool for 2013, which had shrunk by 15% to £576m, though the scene was set for further reductions in later years as RBS said it would concentrate on serving personal and business customers.

The bank also announced it was lifting its proportion of UK assets to 80% of its business from 60% under pressure from the Government, which still holds a stake of over 80% in the lender, to concentrate on supporting the UK's economic recovery.

Mr McEwan said his revival plan would make the bank "smaller, simpler and smarter," shrinking from seven divisions to three.

He has not put a figure on the potential number of job losses his plans would entail.

The overhaul of its service and products for retail customers will see the Group outlaw different product rates for branch and online customers from mid-March.

Among its other pledges were bans on teaser rates for any product and an end to 0% balance transfers for credit cards.

The revival plan is designed to help get the bank into a position where it could return to private hands - likely to be some years away.

Following confirmation of the loss and bonus figures the deputy prime minister Nick Clegg told Sky News that RBS was a "loss-making bank" on a "life support system funded by the general public."

Mr McEwan defended the bonus handouts, saying: "We need to keep people engaged in the job they do all day every day - from the high street to those in our markets business in the United States.

"We need to pay these people fairly in the marketplace to do the job."

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RBS Reaches Deal To Award £550m Bonus Pot

By Mark Kleinman, City Editor

Royal Bank of Scotland (RBS) is to pay approximately £550m in staff bonuses for 2013 after securing the agreement of the Treasury agency that is its biggest shareholder.

Sky News has learnt that the taxpayer-backed bank will disclose the sum - which is higher than previous reports had suggested - alongside its annual results on Thursday.

The bonus pot for 2013 is certain to reignite a row over pay at RBS because it will also announce a loss for the year estimated at £8bn, the biggest since its bail-out by the Government in 2008.

UK Financial Investments (UKFI), the body which manages taxpayers' stake in the bank, is understood to have signed off on the payments in recent days.

The sum of around £550m will represent a fall on the 2012 bonus pot of £679m of just under 20%, which Chancellor George Osborne is expected to cite as evidence that RBS is exhibiting restraint on bonus payments.

Last year's figure was further reduced by £72m to £607m because of the clawback of previous years' deferred bonuses, undertaken as a consequence of RBS's £390m fine for its role in the Libor-rigging scandal.

RBS is expected to have reduced the 2013 bonus pool by at least £25m under a commitment it gave 12 months ago to reduce bonuses in subsequent years.

It is unclear whether RBS will also announce a plan on Thursday to seek shareholder approval at its annual general meeting in May to allow it to pay bonuses worth double the value of senior employees' basic salaries.

Other UK banks are planning to do so, but RBS found itself at the centre of another political row last month when Labour leader Ed Miliband urged David Cameron to use the Government's stake to block any such request.

At the World Economic Forum in Davos, Switzerland, Mr Cameron told Sky News: "With our particular responsibility for RBS, I can tell you that I don't only want to see the level of pay and bonuses come down overall, I want to see it come down per-person, per-capita as well."

The Prime Minister said last month that new European rules on bankers' pay, which the Government is challenging, could exacerbate the riskiness of banks.

He said: "This European directive... in some ways might make things worse, because you could see rates of pay go up.

"You can claw back a bonus, the taxpayer can get the money back. You can't claw back [basic] pay."

Thursday's bonus announcement will come as Ross McEwan, RBS's new chief executive, unveils a plan that will mean the bank's 120,000-strong workforce shrinking to barely two-thirds of that number following the sale and closure of several business units.

RBS and UKFI declined to comment.

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16.02 | 0 komentar | Read More

Energy Bills: New Rules To Boost Competition

The energy regulator has announced new rules in a bid to boost competition between suppliers and provide greater bill clarity.

Ofgem confirmed that new trading regulations - due to be implemented at the end of March - would force the so-called 'Big Six' energy suppliers to publish their wholesale generation prices to independent suppliers up to two years in advance.

The move was aimed at making it easier for smaller competitors - who do not produce their own energy - to budget better while giving consumers more information on the charges they face.

Ofgem said that a failure to ensure fair trade in the wholesale market would result in financial penalties while a range of other measures would result in the annual statements produced by the large companies being more "robust, useful and accessible."

The Big Six - British Gas, SSE, ScottishPower, npower, EDF and E.ON - endured a fresh public and political backlash on bills last year when inflation-busting increases were announced ahead of winter - rises that were later reduced when green levy costs were stripped from bills.

The row resulted in greater Government pressure on Ofgem to act on competition and price clarity. 

Its chief executive, Andrew Wright, said: "Our rules for a simpler, clearer, fairer energy market are coming into force, meaning that it is getting easier for consumers to pick out the best deals.

"Now we are also breaking down barriers to competition for new entrant suppliers. These reforms give independent suppliers, generators and new entrants to the market, both the visibility of prices and opportunities to trade that they need to compete with the largest energy suppliers.

"Almost two million customers are with independent suppliers, and we expect these reforms to help these suppliers and any new entrants to grow.

"We also want to ensure that information on revenues, costs and profits of the largest energy suppliers is as clear as possible for consumers.

"No other European regulator has gone as far as Ofgem in making this information accessible for consumers. Now we are taking further steps to ensure that it is published more quickly, and that it gives a robust, useful and accessible picture of company profits.

Both of these reforms will help ensure competition bears down as effectively as possible on prices."

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16.02 | 0 komentar | Read More

Mt Gox Bitcoin 'Theft' Faces Japan Probe

Authorities in Japan have confimed an investigation into the alleged theft of Bitcoins from Tokyo-based exchange Mt Gox.

Japan's Chief Cabinet Secretary made the announcement a day after the Mt Gox website was taken down by the company to protect users, leaving open the possibility of huge losses for investors and prompting the Bitcoin exchange industry to defend its future.

Yoshihide Suga told reporters: "I understand that ministries and agencies concerned - financial services, police and the finance ministry - are looking into the matter to learn the full scope of the issue.

The Mt Gox site went dark on Tuesday

"Once we have full knowledge of what happened, we will take action if necessary," he said.

Mt Gox - once the biggest player in Bitcoin trading - is expected to make an announcement concerning its future in the coming days.

It froze withdrawals earlier this month, claiming there was a bug in the software that underpins Bitcoin.

Investors fear they have lost everything

It has not confirmed the reported theft but a widely-shared document purporting to be a Mt Gox "crisis strategy" said the firm might have lost more than 744,400 Bitcoins in a theft that had gone unnoticed for years.

The figure represents almost 6% of all the Bitcoins in existence worth more than $400m (£240m) at prices quoted late on Tuesday.

It was also reported that in addition to the inquiry beginning in Japan, Mt Gox was served with a subpoena earlier this month by US federal prosecutors in New York.

Citing an unnamed "person familiar with the matter" the Wall Street Journal said the document demanded that Mt Gox preserve certain documents.

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