Business & City Summary

Aer Lingus flies pounds 193m into the red

Aer Lingus, the Irish state airline, will today announce a loss of about Ir pounds 190m ( pounds 193m) for the year to last March, including an operating loss of nearly Ir pounds 50m - increasing the urgency of hopes for Brussels' approval of a Ir pounds 175m state rescue package.

A conservative write-off provision of Ir pounds 113m on the value of the Aer Lingus holding in GPA Group will be shown in the balance sheet under reserves. Company sources said last night that the projected loss was much lower, following further progress in the bail-out of GPA by General Electric of the US.

USAir loses dollars 177m

USAir, the US carrier in which British Airways has a stake of just under 25 per cent, lost dollars 177.6m in the third quarter. The figure compares with a loss of dollars 105.5m for the same period last year, and includes a dollars 67.2m provision for a restructuring plan that cut 2,500 jobs.

SE backs industry

The Stock Exchange is seeking tax reforms to encourage investment in industry through the equity market. In its Budget submission, the exchange says capital gains tax should be reformed so that individuals who reinvest all the proceeds of any sales of equities 'would not immediately incur capital gains tax liability'.

Mergers lose steam

The world's flow of mergers and acquisitions has lost steam, with the recession in Europe and economic uncertainty in many key countries contributing to a 28 per cent fall in cross-border M&A worldwide, KPMG Corporate Finance said. The first three quarters of 1993 produced 1,133 deals worth dollars 41bn compared with 1,367 valued at dollars 57.4bn in the same period last year. Cross-border sales throughout the EC were down 58 per cent, or dollars 20bn, while acquisitions declined dollars 3bn.

Rhone and friends

About 24 per cent of Rhone-Poulenc, the chemicals group, will be placed in friendly hands on its privatisation. Four shareholders - Credit Lyonnais, Assurances Generale de France, Societe Generale and Banque Nationale de Paris - which hold 18 per cent, will be joined by an as yet undecided group of shareholders who will pay 2 per cent more than institutional investors in the privatisation, and up to 20 per cent more than individuals in the offering. The core shareholders must keep all their shares for at least three months and retain at least 80 per cent for a further 15 months.

Offer accepted

Scottish Hydro-Electric said it accepted new, five-year price control proposals made last month by Offer, the electricity watchdog. The company called the cost reduction targets challenging, but said it was confident of meeting them.

World Markets

New York: In quiet trading shares moved in a narrow range. By the close the Jones Industrial Average was up 9.78 points at 3,645.10.

Tokyo: Subdued trade ended with the Nikkei average 103.51 points higher at 20,173.42.

Hong Kong: After gyrating wildly in the morning, the Hang Seng index steadied to close 41.39 points better at 8,902.8.

Sydney: Continued profit-taking sliced 23.8 points off the All Ordinaries index to 2,051.7.

Bombay: The first full session since the brokers' strike left the index down 8.84 at 2,738.56.

Johannesburg: Gold share gains were held back by the firm financial rand and fears that bullion's rally would not be sustained.

Frankfurt: In moderate trade the DAX index added 15.8 points to 2,042.56 on interest rate hopes.

Paris: In a session interrupted by technical problems the CAC-40 index firmed 2.26 to 2,149.68, helped by a strong bond market.

Zurich: The SPI gained 7.65 points to 1.667.39 in active trade.

London: Report, page 37.