Sky Business News Articles

London’s transport regulator has banned one of the capital’s most prominent ride-hailing services, days after Uber Technologies was awarded a new licence following a legal challenge.
Sky News has learnt that Ola, an Indian group which only began operating in London in February, has been told that its licence will not be renewed because of “public safety” failings.

Ola, which is backed by the Japanese technology giant SoftBank’s Vision Fund, is understood to have been told last week by Transport for London (TfL) that it was not “fit and proper” to hold a private hire operator’s licence.
The decision is a bitter blow to Ola, which claimed earlier this year to have 25,000 drivers registered on its platform in London and which also serves dozens of other UK cities, including Birmingham, Cardiff, Coventry and Liverpool.
In a statement issued following an enquiry from Sky News on Sunday evening, TfL said it had discovered a number of failures in Ola’s operations, including breaches of its regime which led to unlicensed drivers and vehicles undertaking more than 1,000 passenger trips on the platform’s behalf.

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Ola also stands accused of failing to notify TfL of these transgressions.

Image: The news comes just days after Uber Technologies was awarded a new licence following a legal challenge
The Indian group, which says it has carried out more than 1bn trips for passengers around the world, has 21 days to appeal against TfL’s decision.

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In its statement, which is expected to be released widely on Monday, Helen Chapman, TfL’s director of licensing, regulation and charging, said: “Our duty as a regulator is to ensure passenger safety.
“Through our investigations we discovered that flaws in Ola’s operating model have led to the use of unlicensed drivers and vehicles in more than 1,000 passenger trips, which may have put passenger safety at risk.
“If they do appeal, Ola can continue to operate and drivers can continue to undertake bookings on behalf of Ola.
“We will closely scrutinise the company to ensure passengers’ safety is not compromised.”
It was unclear on Sunday night whether Ola planned to appeal, although given its prediction that it could overtake Uber in London within a year of launch, it seems unlikely to withdraw from such a potentially lucrative market without a fight.
In August, Ola announced a strategic partnership with Gett, another ride-hailing service, to offer Gett’s corporate clients access to Ola’s platform in London.
Ola claims it has been in the vanguard of public safety improvements at its UK operations, introducing a requirement for drivers to clean and disinfect their cars between each ride.
Marc Rozendal, Ola’s UK managing director, said just weeks ago: “Partnering with Gett and its leading offering for corporates opens a large market for Ola’s platform as travel begins to resume in London, allowing us to further scale by meeting the clear demand from corporate users for consumer ride-hailing.
“This is yet another step in our mission to connect people and build mobility for people in the UK and around the world.”
Ola was founded in 2011 by Bhavish Aggarwal and Ankit Bhati, and now operates in more than 110 cities through 1m drivers using cabs, auto-rickshaws, and taxis.
The ban on Ola comes less than a week after Westminster magistrates’ court overturned a ban on Uber, granting it an 18-month licence following an appeal.
It was the second time that Uber had been found not to be fit and proper by TfL over concerns about passenger safety.
The latest extension of its licence came with 21 conditions agreed by the company with TfL, prompting Sadiq Khan, the mayor of London and TfL chairman, to vow to continue monitoring the company.
Ola was contacted for comment.

Cineworld is considering closing all of its cinemas in the UK and US this week because of the impact of coronavirus.
A company statement said: “We can confirm we are considering the temporary closure of our UK and US cinemas, but a final decision has not yet been reached.

“Once a decision has been made we will update all staff and customers as soon as we can.”
The news comes after the announcement that upcoming Bond film No Time To Die has been pushed back to April, after it was set to be released in cinemas next month.
The closure of all Cineworld’s 128 UK and Ireland cinemas, would put up to 5,500 jobs at risk.

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Image: Cineworld is one of the world’s biggest cinema operators
The decision may be announced as early as Monday with the chain’s bosses preparing to write to Boris Johnson and culture secretary Oliver Dowden to say the industry has become “unviable”.

Cinemas were closed in March when the UK went into a national lockdown, but reopened in England on 4 July.

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The industry has struggled during the coronavirus crisis and last month Cineworld announced half-year losses of $1.6bn (£1.3bn).
There was solid demand for Christopher Nolan’s action-thriller Tenet last month, but the postponement of the latest Bond film’s release will have been a huge knock-back for cinemas.
The film’s producers said the change was to allow it to be seen “by a worldwide theatrical audience”.
On Friday, the highly-anticipated Fast and Furious sequel F9 was also delayed again, while Disney’s live-action version of Mulan was released on Disney Plus last month rather than in theatres.

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Cineworld Action Group, which is run by employees of the cinema chain, claimed there was “no consultation with staff whatsoever” on the apparent decision.
“We have found out vital information about our jobs from the media throughout the pandemic. Workers have been left out of discussions that should’ve included our voices,” they wrote on Twitter.
The group also alleged that members of staff were sacked by scripted phone calls in March and that health and safety concerns were “consistently ignored”.
Cineworld previously said it had used government support schemes to support the wages of its 37,000 staff during lockdown.

Deliveroo has appointed investment bankers to oversee a long-awaited flotation as it unveils a blizzard of innovative features that it hopes will provide a compelling growth story for public market investors.
Sky News has learnt that the food delivery app, which last week said it was preparing to add 15,000 riders to its fleet by the end of year, has begun working with Goldman Sachs on its plans for an initial public offering (IPO).

A float is expected to take place in London next year, and is likely to value the company at more than £2bn, according to insiders.
Deliveroo declined to comment on Goldman’s appointment, and sources close to the company insisted this weekend that there was no definitive timetable for a public listing.
Further banks are expected to be appointed in the coming months.

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The company, which was launched by chief executive Will Shu in 2013, has seen a surge in sales as customers have turned to food delivery services during the coronavirus crisis.

However, the ongoing costs of its investment in technology led it to warn this year that a refusal by competition regulators to sanction a big investment from Amazon could undermine its chances of survival.

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The decision by watchdogs to approve the Amazon stake as part of a $575m fundraising has prompted Deliveroo to turn its attention towards further innovation in the fight against rivals Uber Eats and Just Eat Takeaway.com.
Sources said that Deliveroo now had 44,000 restaurants on its platform in the UK, as well as 16 on-demand convenience and grocery partnerships with the likes of Waitrose, Morrison’s, Aldi and the Co-Op.
In total, those partnerships cover 1,000 new stores on the Deliveroo app.
The company is now preparing to launch a series of other features aimed at strengthening Deliveroo’s appeal to customers, restaurants and riders.
These will include post-order tipping – allowing customers to reward riders after their delivery has arrived – in the UK and a number of other market.
Deliveroo also plans to offer a group-ordering function in its app which enables customers to share a single ‘basket’ among several users without the need to pass a mobile phone between different people.
Sources said this was likely to benefit restaurants through larger orders from multiple people in the same household or office.
The company is also expected to announce the launch of a service called Brought to you by Deliveroo, which will allow customers to order food from restaurants’ websites, but with the tech company fulfilling the orders’ delivery.
It is said to be the first time that a delivery platform will have offered such a service in Europe and Asia, and is being tested with chains including Nando’s.
Stephen Goldstein, Executive Vice President of Restaurants said: “These upgrades to our service will help restaurants reach as many consumers as possible while substantially improving the already market-leading Deliveroo customer experience – families, students and other groups can now easily and safely order together.
“These changes are particularly important given the current backdrop and are in addition to other support measures we have developed to help all restaurants, particularly small, independents that are the lifeblood of the industry and the high street.”
During the summer, Deliveroo ended a nine-month search for a permanent finance chief by appointing Adam Miller, a former executive at the travel group Expedia, to the role – a move which stoked speculation about its IPO preparations.
Other new services launched this year have included a direct tipping function to boost local restaurant operators during a period when tens of thousands of restaurant jobs are disappearing.
Among the groups to have called in administrators since the coronavirus outbreak in March are Carluccio’s, Casual Dining Group, the owner of Café Rouge and Las Iguanas, and Azzurri Group, the owner of ASK Italian.
Hospitality industry chiefs have warned that hundreds of thousands more job losses are inevitable without further government support.

The Chinese conglomerate which took control of British Steel earlier this year has set its sights on an even bigger UK deal by lodging an interest in Tata Steel UK, the owner of the vast Port Talbot plant in South Wales.
Sky News has learnt that Jingye Group told Tata’s parent company and the government that it is keen to explore a takeover of Britain’s largest steel producer.

Banking sources said this weekend that Jingye’s interest was at a tentative stage, and insisted that there was not a formal sale process for Tata Steel UK’s operations.
They added, however, that discussions between Tata’s Indian parent and the government had failed to make substantial progress in the weeks since investment bankers were drafted in to help ministers thrash out a deal.
“There are clear signs that Tata is open to getting rid of the UK business, and Jingye’s expression of interest is an obvious response to that,” one banker said.

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If Jingye, which concluded its acquisition of British Steel from liquidators in March, did acquire Tata Steel UK, it would reunite the Port Talbot and Scunthorpe steelworks – the two largest in the UK – under common ownership.

The Scunthorpe plan was owned by Tata until 2016, when it was sold to the investment firm Greybull Capital.

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The business, renamed British Steel, collapsed last year.
Jingye is said to have intensified its interest in the Port Talbot steelworks – where more than 3,000 people are based – after its bid to buy the Hayange plant in France was blocked amid political objections.
The Hayange site was instead bought by Liberty Steel, another major player in the UK and a logical alternative buyer for Tata Steel UK.
Although large parts of Britain’s steel industry have been under the control of foreign owners for more than a decade, the unification of two such big employers under Chinese ownership would draw inevitable political scrutiny.

Bankers called in to thrash out Tata Steel bailout

Jingye’s rescue of British Steel this year salvaged 3,000 jobs, and was accompanied by a pledge to invest £1.2bn in modernising the business.
Tata Steel UK is substantially larger, with a total workforce of about 8,000 people.
The Indian-owned group approached the government during the spring, seeking a £500m loan to help it weather the coronavirus crisis.
That request was rejected, leading to a subsequent plea for £900m of government cash in exchange for an equity stake of up to 50% in its UK business.
Whitehall officials balked at that proposal on the basis that Tata was not committing significant new capital of its own.
A further proposal has been anticipated for weeks, but has so far not been forthcoming, according to a source close to the company.
Alongside the work that Credit Suisse has been undertaking for the government on Tata Steel UK’s future, the management consultants McKinsey has drawn up a blueprint for the future of the UK’s wider steel industry at ministers’ request.
The consultant’s work is expected to help inform decision-making about which, if any, steel companies may merit government support, they said.
Since the start of the COVID-19 pandemic, only Celsa Steel UK, which is based in Cardiff, has received special funding under the government’s Project Birch scheme.
Both Jingye and Liberty have also sought financial aid from the government, although none has so far been forthcoming.
This weekend, a Tata Steel spokesperson said: “We remain in ongoing and constructive talks with the UK government on areas of potential support.
“As these discussions have not reached a conclusion, it would be premature to comment on any options that may or may not be under consideration.”
A spokesman for Jingye and British Steel declined to comment.

The introduction of a coronavirus testing regime at British airports would not impair the NHS’s ability to conduct widespread testing, according to the private sector sponsor of a programme that has so far failed to secure government backing.
Sky News has been passed a letter sent to Matt Hancock, the health secretary, by the boss of Collinson, an airport lounge operator which has helped to devise plans for a passenger-testing scheme at Heathrow Airport.

In it, David Evans, Collinson’s joint chief executive, urged Mr Hancock to endorse a system that he said could conduct at least 24,500 tests every day.
“While we understand the high demand, difficulty getting tests, and general negative media coverage around COVID-19 testing might have made government ministers reluctant to also move forward with airport testing, we’d argue that it’s more pertinent than ever that you do so,” he wrote.
“It is clearer now than ever that we will be living with this virus for some time, and so it is imperative that we find measures to both protect public health but also not put undue demand on businesses which provide employment to so many Britons.”

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Mr Evans said the programme it had drawn up with Swissport, the ground-handler which has cut thousands of jobs since the start of the pandemic, involved “private sector tests, and the capacity for them will in no way take away from the number available for use within the NHS or in the public testing centres across the country”.

The Collinson boss also said that its ability to “flex” the workload of the laboratories it would use meant that its “set-up could even be used to support the NHS with its current capacity challenges”.

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“We have trained medical staff ready to be redeployed into airport testing and have trained operational staff ready to support the effective and timely processing of tests, should you give us the go ahead to run a trial,” he added.
Despite pleas from aviation bosses, ministers have appeared sceptical about the likely efficacy of an airport-based testing regime.
The industry has been brought to its knees by the coronavirus crisis, with tens of thousands of jobs already axed by airport operators, airlines and support services groups.
John Holland-Kaye, Heathrow’s boss has described testing as “the lifeline that the UK’s aviation sector needs to get back on its feet”.
“Without this, our first class aviation sector risks becoming second class, giving Britain’s competitive advantage to others,” he said this month.
Earlier this week, a group of business associations including the CBI, wrote to Grant Shapps, the transport secretary, to beg the government to back such a regime.

The Italian food producer behind Buitoni pasta has joined the £100m race to acquire Hovis, the 134-year-old British bread brand.
Sky News understands that Newlat Food is among the parties vying to buy Hovis from its current shareholders.

Sources said that Newlat, which is listed on Milan’s stock exchange, had lodged an initial offer for Hovis, although it was unclear on Friday how it was positioned in the auction of one of the UK’s best-known food brands.

Image: Premier Foods, which owns Mr Kipling, is expected to use the sale to offload its stake in the firm
Newlat specialises in producing dairy and wheat products, and has a substantial market share in its native Italian market as well as in Germany.
Its interest in Hovis adds Newlat’s name to a field of turnaround funds and private equity investors competing to acquire the firm.

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This week, the British company – which is owned by The Gores Group and London-listed Premier Foods – filed results at Companies House for 2019 showing that it had increased its share of the UK bread market to 22% amid fierce competition with Kingsmill and Warburtons.

Sales are said to have surged during the initial part of the coronavirus pandemic, as British consumers stockpiled staple foods.

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Other bidders for Hovis include Endless, Epiris – the buyout firm which recently snapped up restaurant chains Bella Italia and Café Rouge – and Aurelius Equity Opportunities, Sky News reported last month.
RW Baird, the investment bank, is advising on the sale.
Premier Foods, which owns Mr Kipling, Bisto and Angel Delight, is expected to use the sale process to offload its 49% stake in the company.
It wrote off the remaining value of its Hovis stake four years ago.
Hovis employs more than 2,700 people and is focused on its bakery operations, having sold two flour mills in 2018.
Established in 1886, Hovis became one of Britain’s best-known food brands, cultivating a home-grown image with its famous 1973 television advert showing a boy pushing his loaf-laden bike up a steep hill.
It was named the UK’s most iconic TV commercial in a poll last year.
Like other producers, however, Hovis faces stiff challenges with the category in long-term structural decline as a growing number of consumers switch to gluten-free diets.

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COVID-19: Which sectors may not survive?

The UK bakery market is estimated to be worth £4bn in annual sales.
Under the deal struck with Premier in 2014, Gores paid £30m for its stake, of which half was deferred and contingent on future performance.
The transaction was motivated in part by Hovis’s declining fortunes and Premier’s strained balance sheet, which has also prompted it to sell other well-known brands during the last decade.
Hovis is now run by Nish Kankiwala, a former Pepsico and Burger King executive.
Newlat and Hovis declined to comment.

Wall Street shares were volatile after US President Donald Trump said he and his wife had tested positive for coronavirus just weeks ahead of the election.
As predicted, all three of America’s main share indexes – the Dow Jones, the S&P 500 and the Nasdaq – were down at the start of trading.

The Dow Jones Industrial Average opened 1.4% lower, the S&P 500 fell 1.24%, while the Nasdaq Composite dropped 2.15% at the opening bell.
Live updates on coronavirus from US, UK and around world
However, the market quickly rallied and pared back earlier falls, with the Dow regaining most of the lost ground and the S&P and Nasdaq also coming off their session lows.

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In Europe, stocks also trimmed or even reversed their losses by the close.

The UK’s top flight FTSE 100 Index recovered from the initial shock to end up 0.4% after losing as much as 1.2%.

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The German DAX closed 0.3% lower and France’s CAC 40 ended the day up slightly by 0.02%.
However, oil prices fell by 3%, to dip below $40 a barrel.
The financial jitters followed Mr Trump’s announcement on Twitter that he and his wife had tested for coronavirus after Hope Hicks, a senior adviser who recently travelled with the president, had also tested positive.

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He said: “We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!”
It sent sent investors scrambling to the perceived safety of the dollar, yen and gold.
Analysts said the news could hurt Mr Trump’s campaigning ability and heighten market volatility at a time when investorswere already skittish after an ill-tempered presidential debate heightened fears of a messy transfer of power.

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Trump on aide testing positive for COVID

“It’s one more insecurity heading into a tight, contentious election,” said Oliver Pursche, president of Bronson Meadows Capital Management in Connecticut.
“And given that Trump does not adhere to conventional norms and rules, who knows what he’ll do in terms of postponing the elections.”

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Meanwhile, data showed US job growth slowed more than expected in September as the recovery from the COVID-19 slump shifts into a lower gear, although the unemployment rate fell to 7.9% from 8.4% in August.
“My initial reaction was, ‘ouch!’ I don’t think it’s going to do anything for the market; it’s not positive enough,” said Patrick Leary, chief market strategist at Incapital in Minneapolis.

Britain’s biggest hospitality groups have issued a fresh plea for government aid and warned that more than half a million job losses will emerge across the sector within weeks unless it materialises.
Sky News has seen a letter sent this week to Paul Scully, the business minister, in which industry bosses called for extended tax cuts and a beefed-up grant scheme to cover operating costs in regions of the UK where local or nationwide lockdowns have been implemented.

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Image: The trade bodies have written to Business Minister Paul Scully to press for help
The letter – from the chief executives of UK Hospitality, the British Beer & Pub Association and British Institute of Innkeeping – was sent as data was published showing that new curfew restrictions on pubs, bars and restaurants sent sales plunging by nearly a quarter during the last week of September, according to the Coffer Peach Business Tracker.
The three trade bodies urged Mr Scully to help secure an amendment to the terms of the Treasury’s new Job Support Scheme by increasing the level of state subsidy.

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“Without this change we anticipate almost no hospitality business being able to use the scheme while the current restrictions are in force,” the letter said.

“The hospitality jobs at risk are only unviable in the short term because of the severe trading restrictions in place and these jobs will return once restrictions are eased, as demonstrated over the summer.”

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This week, the pub groups Young’s and Fullers have signalled plans to cut 1,000 jobs between them, with many more expected to follow as the Coronavirus Job Retention Scheme closes this month.

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COVID-19: Which sectors may not survive?

The trio also asked for an extension to the business rates holiday for companies subject to COVID-19 restrictions, as well as an extended VAT cut and urgent talks about how to deal with the rising debt mountain being accrued by hospitality businesses in the form of unpaid rent.
“This will be particularly critical to the recovery of city centre businesses, which have been so badly hit by the COVID crisis and have suffered the slowest recovery,” they wrote in relation to the business rates request.
“Confirming an extension of the holiday would underpin investment through the winter.”

Where jobs have been lost in the UK economy

In the letter to Mr Scully, the industry chiefs also said the current grant system offering up to £500-per-week did “not reflect in any way the ‘real life’ operating costs of running a hospitality business”.
They added that the impact of the pandemic on the sector was “being felt right the way through the supply chain”.
“Business failures at an operational level will have a far more widespread social and economic impact, particularly affecting the profitability and viability of many brewers.
“We would therefore also ask that consideration be given to measures to build confidence and resilience here through a cut in beer duty.”

An online greeting cards retailer which has thrived during the coronavirus pandemic is exploring a stock market flotation that would crystallise big gains for its backers.
Sky News has learnt that Moonpig Group, which has been owned by Exponent Private Equity since 2016, is in talks with investment banks about options that include a public listing.

The discussions are at an early stage and no decision has been taken yet by Exponent about whether to proceed with a float, according to insiders.
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Image: Kate Swann is one of Britain’s most respected corporate bosses
Moonpig, which has built its brand in the UK through a spate of television of advertising campaigns, sells online greeting cards and gifts.

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It has captured market share from high street rivals such as Clintons, and has seen sales and profits soar during the coronavirus crisis.

During the first two months of the UK-wide lockdown, the company claims to have added one ,million customers, and was the UK’s leading shopping app during the summer period.

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It also trades in the Netherlands under the Greetz brand.

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If it does opt for a float, it would mean a return to the stock market for Kate Swann, one of Britain’s most respected corporate bosses.
She ran WH Smith, where she confounded expectations by transforming the company’s financial and operating performance, before becoming chief executive of SSP Group, the travel catering business which has been forced to cut thousands of jobs during the COVID-19 pandemic.
Ms Swann also chairs the veterinary chain Independent Vetcare.

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Moonpig, which was previously part of Photobox Group, has seen sales increase to £172.8m this year, up 44%.
It recorded pre-tax profit of £33m, up 137%.
Exponent acquired the business from a syndicate of venture capital funds and individual shareholders.
A Moonpig Group spokesperson said: “As a high growth company we constantly evaluate our funding options, and regularly meet with advisers on this subject.”

The billionaire brothers behind one of Britain’s biggest petrol station operators have bought Asda from Walmart in a £6.8bn deal.
Sky News exclusively revealed earlier this week that a consortium led by Mohsin and Zuber Issa, the bosses of Blackburn-based EG Group, and TDR Capital, the London private equity firm, had been selected by the American retail giant as the preferred bidder to takeover the supermarket chain.

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Image: Walmart will retain a stake in the business with a seat on the board
Walmart will retain an equity investment in the business, with an ongoing commercial relationship and a seat on the board.
Asda will remain headquartered in Leeds and will continue to be led by current chief executive Roger Burnley.

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The sale brings Asda back under British ownership for the first time since 1999, when Walmart paid £6.7bn for the business.

The new owners have promised to invest more than £1bn in the business over the next three years as well as continue to offer low prices across its stores.

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The takeover has been welcomed by Chancellor Rishi Sunak, who tweeted: “Great to see @asda returning to majority UK ownership for the first time in two decades today.
“The new owners have already committed to investing over £1bn in the next three years and increasing the proportion of UK-based suppliers. I wish them the best of luck.”

Image: Chancellor Rishi Sunak has wished the new British owners ‘the best of luck’
The deal comes more than two years after Walmart plotted a merger of the British chain with rival Sainsbury’s, which was eventually scuppered by competition regulators.
Mohsin and Zuber Issa said in a statement: “We are very proud to be investing in Asda, an iconic British business that we have admired for many years.
“Asda’s customer-centric philosophy, focus on operational excellence and commitment to the communities in which it operates are the same values that we have built EG Group on.
“Asda’s performance through the COVID-19 pandemic has demonstrated the fundamental strength and resilience of the business, and we are excited to support Roger and his team as they continue to reposition the business to drive long-term growth.
“We believe that our experience with EG Group, including our expertise around convenience and brand partnerships and our successful partnership with TDR Capital, can help to accelerate and execute that growth strategy.
“After a successful period as part of Walmart we are looking forward to helping Asda build a differentiated business that will continue to serve customers brilliantly in communities across the UK.”

Track the UK economy’s recovery from lockdown

Mr Burnley said: “This new ownership opens an exciting new chapter in Asda’s long heritage of delivering great value for UK shoppers.
“With our combined investment, expertise and ambition; Asda, Walmart, the Issa brothers and TDR have an incredible opportunity to accelerate our existing strategy and develop an even more exciting offer for our customers as well as strengthen our business for our colleagues.
“In a constantly changing retailing environment, our new ownership will further enhance our resilience, whilst creating significant, additional opportunities to drive growth.
“For Asda colleagues, a strong and growing business is important for our long-term future.”
Gary Lindsay, at TDR Capital, said: ”Asda is a strong and well-managed business with one of the leading brands in UK retail.
“We are proud to be investing alongside Mohsin and Zuber, who have built EG Group into a global convenience retailer and will now bring that experience to bear at Asda.”

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COVID-19: Which sectors may not survive?

Walmart boss Judith McKenna said: “I’m delighted that Walmart will retain a significant financial stake, a board seat, and will continue as a strategic partner.
“Asda has been a powerhouse of innovation for the rest of the Walmart world, and we look forward to continuing to learn from them in the future.
“This important combination will continue to keep customers and colleagues at Asda’s heart, which is important to us all.”
The sale, which is subject to regulatory approvals, is expected to be completed in the first half of next year. 
Meanwhile, the GMB union has called for reassurances for more than 100,000 workers following the announcement.
National officer Roger Jenkins said: “We will be speaking to representatives of the consortium, as soon as possible, following the takeover and asking for confirmation of enhancing the relationship between GMB and Asda.
“We welcome their commitment to British suppliers and producers and supporting British Industry and jobs.
“The new owners must offer sound reassurances to more than 100,000 Asda workers.
“They have had enough uncertainty and need to know that their futures are safe and secure.”