This is not always the fault of the microlenders – Third World governments can be pressured by the major banks to use regulation

This is not always the fault of the microlenders – Third World governments can be pressured by the major banks to use regulation to limit microlenders’ scope.Nevertheless, microcredit experts from all over the world who met in Harare this week were enthusiastic about the potential of “village banks”. The experts said the loan system already reaches 2.6 million African families and many more in Latin America, where it has been operating for 15 years.Zambuko Trust’s director, David Tendani Kombanie, said he was aiming to give 50,000 loans by 2005. “One of the main advantages of microcredit is that it focuses on women. This means we have a repayment rate in the region of 94 per cent because 80 per cent of our clients are women,” he said. His trust is principally backed by Opportunity International, the Australian government and USAid.Mr Kombanie would like Zambuko to expand into rural areas but he also needs to keep down the cost of operations.The disastrous state of Zimbabwe’s economy, including the doubling of fuel and paraffin prices since June, worries him “As yet we are not seeing our clients defaulting … But clearly, the effects of the macro-economic environment will begin to have an impact on them in due course,” he said.. Silentnight, the UK’s biggest bed manufacturer, unveiled a £23m recommended cash offer yesterday to acquire Cornwell Parker, maker of the Parker Knoll reclining chair.

Silentnight, the UK’s biggest bed manufacturer, unveiled a £23m recommended cash offer yesterday to acquire Cornwell Parker, maker of the Parker Knoll reclining chair.
Silentnight, which owns the Sealy, Rest Assured and Silentnight bed brands, is making the acquisition as part of a wider strategy to diversify within the furniture market. The group is in talks with “a number of other parties” concerning other possible deals.The announcement came as Cornwell reported a pre-tax loss of £6.9m for the year ended 31 July. That compared with a £3.2m profit the previous year.Bill Simpson, Silentnight’s chief executive, said: “I think we can grow the [Cornwell] business back to where it was…. We can give it the focus and direction which, frankly, have been lacking.”Cornwell, which makes Stag cabinet furniture as well as its famous chairs, operated without a chief executive for about 18 months until Andrew Stafford, a former ICI director, was appointed to the role in July.Mr Simpson said: “I have had 36 years in furniture. Mr Stafford is a very competent manager and chief executive but he has only been in the business for a short time.”Mr Stafford, who is expected to leave the company if the deal is approved, said the Cornwell board had recommended the takeover because it was in the best interest of shareholders.He said: “This offer gives them the opportunity to realise their investment in cash at a time when market sentiment towards smaller companies and the furniture and fabrics sector is not very favourable.”The Silentnight bid values Cornwell shares at 55p.

That represents a near 50 per cent premium on the 37p price at which the smaller company was valued before it revealed it was in talks on 22 September Cornwell’s shares closed up 2p at 54.5p yesterday Silentnight shares ended unchanged at 175.5p.. Om Gruppen, the Swedish stock exchange group, appeared last night to have failed to inject new life into its flagging bid for the London Stock Exchange as shareholders queued up to reject a higher offer valuing the LSE at £983m. Om Gruppen, the Swedish stock exchange group, appeared last night to have failed to inject new life into its flagging bid for the London Stock Exchange as shareholders queued up to reject a higher offer valuing the LSE at £983m.
OM raised its offer by 53 per cent to £34 a share and increased the cash element. But influential shareholders said that the latest offer, which would increase the LSE’s shareholding in the enlarged OM from 18 to 33 per cent, did not change their fundamental view that the LSE was not for sale.Michael Spencer, chief executive of Garban-Intercapital, the dealer broker, said: “There is a sufficient atmosphere that the LSE should be allowed to get its act together with its go-alone strategy that [the offer] would have to be well north of £40- or £50-a-share to stand a chance of succeeding.”His views were echoed by Brian Winterflood, of Winterflood Securities, the leading small companies broker, who said: “Thirty-three per cent is better than 18 per cent but this will not win the day This is the best stock exchange in the world. Let’s not lose it.”Angela Knight, chief executive of Apcims, the retail stockbroking group, which speaks for 30 per cent of Stock Exchange votes, added that the offer “misses the point for most shareholders”. UBS Warburg, which owns more than 3.8 per cent of the LSE, also said the revised offer did not change its view that the LSE would be better off merging with Euronext, the pan-European exchange grouping the Paris, Amsterdam and Brussels bourses.The clear lack of enthusiasm for the OM bid was reflected in the behaviour of the LSE share price. After jumping nearly 10 per cent at the opening, LSE shares fell back to £28.20, a rise of 6.8 per cent.

At that level the shares were still trading a full 20 per cent below the OM offer price, indicating widespread scepticism about the chances of the bid succeeding.Based on Thursday’s closing prices, OM’s offer was worth £35.3 or 57 per cent more than the value of the previous offer.OM shares fell 14 kronor to 355 kronor yesterday cutting the value of the LSE bid to £34 share. OM shares have already fallen from a peak of 450 kronor as doubts about its chances of winning have mounted.Yesterday’s revised terms give LSE shareholders the choice of a paper-only offer of 1.4 OM shares or a cash alternative worth £20 in cash and 0.5 OM shares, worth £32.15 in total.The improved offer comes six days before a meeting of LSE shareholders at which they had been expected to vote to retain the 4.9 per cent limit on individual shareholdings. This would, in effect, scupper the OM bid.Per Larsson, OM chief executive, who has toured regional centres in the UK and Ireland in a vain attempt to drum up support for the bid, insisted the timing of the move had nothing to do with the decision of the LSE to call the meeting a day before day 39 – the last day on which the LSE is allowed under the City takeover code to reveal new information to help its defence.”The LSE is at a crossroads Shareholders have to make a choice. They have told us that they do not believe that the LSE can go it alone,” he said.Edmond Warner, chief executive of Old Mutual Securities, warned that while the current mood of LSE shareholders was such that OM’s bid was unlikely to succeed whatever the price, this should not be taken as an endorsement of a go-it-alone strategy for the exchange..

Orange and France Telecom have delayed until early next year plans to seek an estimated 100bn euro (£60bn) initial public offering of the enlarged mobile group. Orange and France Telecom have delayed until early next year plans to seek an estimated 100bn euro (£60bn) initial public offering of the enlarged mobile group.
The so-called New Orange, which includes the formerly UK-listed company and the mobile assets of France Telecom, becomes the most high profile victim of the market slump affecting telecoms, media and technology stocks.Hans Snook, Orange chief executive, and Michel Bon, France Telecom chairman, had hoped to sell up to 20 per cent of the mobile group for around 20bn euros before the year end. The money would have been targeted to reduce the French group’s 60bn euro debt mountain as well as provide cash and an equity currency to expand the mobile group.Mr Bon said: “The process of combining the mobile assets of France Telecom with Orange to create a leading global wirefree business is now well advanced. We are able to confirm our intention to float the enlarged Orange early in the new year.” Mr Snook said: “I look forward enormously to introducing the enlarged Orange to all the group’s customers and potential investors early in the new year.”The delay comes amid a sharp downturn in telecoms and technology stocks, although many issues, including Vodafone staged a partial recovery yesterday. The slump in stock markets has crippled the market for new equity issues and corporate bonds, which have seen record volumes of issues in recent quarters to fund the heavy capital demands of telecoms companies. Data published by Thomson Financial Securities yesterday showed that companies had raised a global sum of $150bn from flotations and shares issues in the first nine months of the year, which was 65 per cent higher than the same period last year.One senior banker said: “France Telecom is going to wait and see how the market develops Orange is a very strong brand and has good coverage.