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British firms call for immediate $10.3 billion in COVID aid

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British firms call for immediate $10.3 billion in COVID aid 1

via Reuters

By William Schomberg

LONDON (Reuters) – British firms called on Tuesday for another 7.6 billion pounds ($10.3 billion) of emergency government help, saying they cannot wait until finance minister Rishi Sunak’s March budget to learn if they will get more pandemic support.

With Britain back under lockdown and companies adjusting to life after Brexit, firms are taking big decisions about jobs and investment and need to know if their financial lifelines will be extended, the Confederation of British Industry said.

“We just have to finish the job. Now would be a very odd time to end that support,” CBI Director-General Tony Danker said in a statement.

Sunak has extended his support measures several times already and has said his response to the pandemic will cost 280 billion pounds during the current financial year, saddling Britain with a peacetime record budget deficit.

But he is facing calls on many fronts to spend yet more including from lawmakers, some from his Conservative Party, who want an emergency welfare benefit increase to be prolonged.

The CBI said Sunak should extend until June his broad job retention scheme, which is scheduled to expire in April, and then follow it up with targeted support for jobs in sectors facing a slow recovery such as aviation.

He should give firms more time to pay back value-added tax which was deferred last year, grant a similar deferral for early 2021 and extend a business rates tax exemption for companies forced to close by the lockdown as well as their suppliers.

“The rule of thumb must be that business support remains in parallel to restrictions and that those measures do not come to a sudden stop,” Danker said.

The CBI said its longer-term priority was an overhaul of the business rates system that it said was outdated and discouraging investment in low-carbon energy.

Danker said it was too soon to start raising Britain’s corporation tax rate, one of the lowest among rich economies after a Times report that Sunak was drawing up plans to increase it to start fixing the public finances.

“It would be wrong to raise business taxes when we don’t have a recovery,” Danker said.

($1 = 0.7380 pounds)

(Writing by William Schomberg; Editing by Alexander Smith)

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H&M, IKEA and Stora Enso backed TreeToTextile builds sustainable fibre demo plant

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H&M, IKEA and Stora Enso backed TreeToTextile builds sustainable fibre demo plant 2

STOCKHOLM (Reuters) – A venture part-owned by Finnish forestry group Stora Enso, Sweden’s H&M and IKEA said on Tuesday it was set to build a demonstration plant in Sweden for a new, more sustainable wood-based textile fibre after years of research.

To markedly reduce their climate footprint and pollution, large apparel and furniture brands are in dire need of affordable greener alternatives to cotton, traditional viscose and polyester. Several Nordic pulp makers are part of projects developing new clean ways https://www.reuters.com/article/us-nordics-forestry-idCAKCN0WF076 to turn trees into textile fibre.

TreeToTextile said in a statement its plant would have a production capacity of 1,500 tonnes and its owners would fund the bulk of the 35 million euro ($42.6 million) investment.

“The novel process is deliberately designed to have low energy demand and low chemical need. It is engineered to suit large scale production and includes a recovery systemfor reusing chemicals,” it said.

“By investing in a demonstration plant, we are finally on the go. With it we are turning years of R&D into reality to increase the biobased share on the textile market to support climate action.”

TreeToTextile, whose fourth part-owner is innovator Lars Stigsson, said the plant would be located at Stora Enso’s Nymolla mill in Sweden, and its construction would start in the near future.

Viscose is the main existing textile fibre from wood pulp – followed by the newer lyocell which has a cleaner manufacturing method. Production is dominated by Austria’s Lenzing, India’s Aditya Birla and China’s Sateri.

($1 = 0.82 euros)

(Reporting by Anna Ringstrom; Editing by Angus MacSwan)

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IHG books $153 million loss, Holiday Inn softens coronavirus blow

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IHG books $153 million loss, Holiday Inn softens coronavirus blow 3

By Tanishaa Nadkar

(Reuters) – InterContinental Hotels booked an annual loss of $153 million on Tuesday, pummelled by repeated COVID-19 restrictions and lockdowns, but said a faster recovery in its Holiday Inn Express brand had helped it outperform in key markets.

The company, which previously scrapped its final dividend, said 2020 was the most challenging year in its history as revenue per available room slumped 52.5%, with global travel and entertainment spending remaining under pressure.

Pinning its hopes on the global roll-out of COVID-19 vaccines and a wider economic rebound, IHG said the industry was unlikely to see a recovery until later in the year but hinted that global travel was starting to recover.

“People want to travel again…It is the thing that people have missed most and so there is enormous pent up demand to travel,” Chief Financial Officer Paul Edgecliffe-Johnson said, adding that “travel will come back very rapidly.”

Shares of the company were up 3.8% at 5,516 pence by 0845 GMT, amid a near 3% rise on the FTSE 350 travel and leisure index as Britain saw a surge in flight and hotel bookings after the government said would-be holidaymakers will be given clarity on making plans for the summer by April 12.

Demand remained stronger in IHG’s Holiday Inn Express business, which represents about 70% of its rooms in the U.S. market and has historically been impacted less and recovered faster than other segments in economic downturns, the company said.

“IHG is at the start of a prolonged period of commercial recovery,” Peel Hunt analysts said in a note.

Still, IHG reported a group operating loss of $153 million for the year ended Dec. 31, compared with a profit of $630 million last year.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Devika Syamnath and Alexander Smith)

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Aviva sells French business to Macif’s Aéma Groupe for $3.9 billion

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Aviva sells French business to Macif's Aéma Groupe for $3.9 billion 4

LONDON (Reuters) – Aviva has agreed the sale of its operations in France for 3.2 billion euros ($3.89 billion) to Macif’s Aéma Groupe, as part of the British insurer’s shift to focus on its core operations in Britain, Ireland and Canada.

London-based Aviva, led by boss Amanda Blanc, said the sale would increase excess capital by 2.1 billion pounds ($2.95 billion) and cash of around 2.8 billion pounds.

Aéma Groupe, formed in January through the merger of French mutual insurer Macif Group and Aésio Mutuelle, has 8 million customers and a turnover of 8 billion euros.

Aviva France has 3 million customers and 7.8 billion euros in revenue. It covers life insurance, property and casualty and asset management markets in France.

Aviva’s share price rose by 1.7% at the open in London.

“The transaction will increase Aviva’s financialstrength, remove significant volatility and bring real focus to the Group,” Chief Executive Officer Blanc said.

Aviva expects to use the proceeds of the sale to support debt reduction, invest for long-term growth and return excess capital to shareholders.

The sale is central to Blanc’s turnaround plan aimed at streamlining its business after prolonged share price weakness has concerned investors.

The insurer, which aims to complete the disposal by the end of 2021, is looking to sell its continental European and Asian businesses, it said last year.

Final bids for its Polish operations that could fetch around 2 billion euros are due on Friday, sources have previously told Reuters.

It is also in the process of selling its Italian business, sources had said.

($1 = 0.8218 euros)

($1 = 0.7108 pounds)

(Reporting by Clara Denina; Editing by Rachel Armstrong, Louise Heavens and David Evans)

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