Tuesday newspaper round-up: Northern Rock, GlaxoSmithKline, Setanta

16th Jun 2009 06:16

The Government is working on a plan to use Northern Rock's own funds to buy back debt from the stricken bank's bondholders in a move that could release billions of pounds of capital for the nationalised group.The deal could mean that the Government would not have to inject all the £3bn in extra capital that it promised the bank last year. The bondholders include insurance groups, fund managers and hedge funds, the Times reports.The European Central Bank has given its starkest warning to date on growing strains in the eurozone credit markets. It said it is expecting fresh bank writedowns to hit $283bn (£173bn) by the end of next year. "Policy-makers and market participants will have to be especially alert in the period ahead. The credit cycle has not yet reached a trough," said the ECB's Financial Stability Report, the Telegraph writes.Millions of homes are expected to be denied superfast internet access for at least a decade because of a failure to reach agreement across the communications industry over who should pay for the upgrade. Today Lord Carter of Barnes, the departing Communications Minister, will promise only that all households will be able to get a minimum standard speed of 2 megabits, the Times reports.Cheaper food is expected to have driven down inflation in May, returning prices to the Bank of England's target. The fall in the Consumer Prices Index (CPI) - the Government's preferred measure of inflation - to 2% from 2.3% in April is, however, likely to have been limited by the rebound in petrol prices and the rise in tobacco and alcohol duties announced in the Budget, the Telegraph reports.President Barack Obama will outline on Tuesday the most sweeping changes to the US financial regulatory system since the 1930s in an attempt to prevent last year's financial crisis from happening again. The Obama administration, led by the president himself and treasury secretary Tim Geithner, will propose a number of key alterations to the existing complex framework of regulation in the US which many argue was partly responsible for allowing the credit crisis to occur in the first place, the Telegraph reports.GlaxoSmithKline on Monday stepped up its expansion into emerging markets, striking an alliance to sell more than 100 drugs of Dr Reddy's, the Indian generic pharmaceuticals maker, in Africa, the Middle East, the Asia Pacific and Latin America, writes the FT.Setanta Sports has just days to raise £20m or face losing the rights to its "jewel in the crown" - coverage of Premier League football next season. The Dublin-based broadcaster was saved from administration after an American billionaire stepped in with an 11th-hour rescue plan last week, and it resumed taking subscriptions from new customers on Saturday, the Independent reports. Ripplewood, the private equity group, is understood to be ready to return with a bid for General Motors Europe should the carmaker's Canadian suitor fail to complete its acquisition, The Times has learnt.About 5,000 British jobs hang in the balance at Vauxhall as Magna International, the Canadian car parts supplier, trawls through the accounts of the Luton-based carmaker. Investors' appetite for British government debt will be tested today with the first gilt sale of its kind in four years. The Debt Management Office (DMO)is expected to raise up to £5bn through the sale of 25-year gilts. Barclays Capital, Goldman Sachs, HSBC and Royal Bank of Scotland will find buyers for the bonds. The DMO last sold debt in this way in 2005, with the sale of a 50-year inflation-linked gilt, but it is rare for gilts to be sold on a syndicated basis. Britain usually sells gilts through auctions, the Times says.