Brexit trade talks, BP, Frankie & Benny’s, aviation sector, Hovis, Iceland Foods, Intu Properties, Honda, Sanctuary Students: your commercial news round-up

Do you need a recap of this week’s news from the business and legal world? Take a look at LCN’s commercial news round-up, which provides a brief overview of some of the week’s main stories. And to test how much attention you’ve been paying to the news this week, head over to LCN’s Instagram stories and take part in our weekly quiz on Friday!

• Trade talks between the UK and Japan aimed at reaching an agreement on a post-Brexit trade deal began on Tuesday. The two countries are in negotiations to replace the current agreement that Britain has with Japan via the European Union. If a new deal is not confirmed by 1 January 2021 both countries will default to World Trade Organisation trading terms. In 2019 trade between the UK and Japan totalled £31.4 billion, according to British government figures, with 9,500 UK-based businesses exporting goods to Japan. As the UK embarks on free trade negotiations with countries around the world, it hopes that an agreement with Japan will help it to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – an agreement which stretches from Australia to Chile.

• Multinational oil and gas company BP has revealed plans to cut 10,000 jobs as the global demand for oil plummets due to the pandemic and subsequent lockdowns ordering people to stay indoors and avoid travel. While redundancies were paused during the pandemic’s peak, the oil giant announced that around 15% of staff will leave by the end of 2020. BP employs around 15,000 people in the UK and it is expected that about 2,000 of those jobs could be cut.

• The Restaurant Group – which runs Frankie & Benny’s – has confirmed that up to 3,000 jobs will be cut and 125 Frankie & Benny’s restaurants will be closed. Following the closure of restaurants in the UK on 23 March as the UK went into lockdown, the Restaurant Group says it will enter into an insolvency procedure known as a ‘company voluntary arrangement’, which will enable it to restructure the restaurant chain by closing 125 unprofitable restaurants.

• Up to 70,000 jobs are under threat in the UK’s aviation sector, the New Economics Foundation reports – a job crisis that could be as severe as that which devastated the mining industry in the 1980s, according to City AM.

Following the grounding of airlines globally due to the coronavirus crisis, carriers and airports have announced significant cuts. British airways is due to cut 12,000 jobs and Heathrow Airport has warned that 25,000 jobs are at risk if the government’s quarantine rules are not relaxed or air bridges not established within the next two weeks.

• Hovis will be put up for sale later this year as shareholders try to cash in on its improved financial performance amid the coronavirus crisis. Investment firm The Gores Group has reportedly hired bankers to sell its controlling 51% stake in Hovis, which it acquired six years ago, according to Sky News.

• Meanwhile, Iceland Foods has also experienced a revenue boom during the coronavirus crisis, with chief executive Tarsem Dhaliwal and founder Malcolm Walker teaming up to take back full control of the supermarket’s shares. After buying out South African investment firm Brait’s 63.1% stake in Iceland Foods for £115 million, Dhaliwal, Walker and their related parties now own 100% of the group.

• Administrators are on standby as Intu Properties enters a significant fortnight that will determine the impact of the coronavirus crisis on Britain’s biggest shopping centre-owner. KPMG is being lined up by Intu Properties to deal with its insolvency process if lenders deny granting a standstill on its vast debt obligations. Chief executive Matthew Roberts has requested an 18-month standstill but without lenders’ agreement and following the expiration of a waiver already in place, the company could fall into administration.

• Honda is investigating a suspected cyber-attack after the Japanese car manufacturer began experiencing issues with its IT networks in Japan and Europe earlier this week.

“At this point, there is no effect on either Japanese production or dealer activities, and no customer impact. In Europe, we are investigating to understand the nature of any impact”, a Honda spokesperson said.

• Student housing provider Sanctuary Students has enlisted debt collectors to collect payment from tenants who are withholding this term’s rent following the forced closure of universities during the coronavirus crisis. The company confirmed that student loan payments had not been halted and offered to provide “flexible payment options through an agreed payment plan” in a bid to support students with financial concerns. Many students who use the housing provider for their student accommodation are taking part in a rent strike.

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