Tuesday newspaper round-up: Thomas Cook, Mortgages, North Korea

10th Apr 2012 05:59

Debt-laden tour operator Thomas Cook is in advanced talks with its banking group about agreeing a £1.2bn deal to secure the future of the company. The beleaguered company said it was close to striking the agreement with its banking group, just months after the latest refinancing deal which secured an extra £200m. Thomas Cook will give away 5% of the company's shares to the banking consortium and pay a one-off fee in exchange for a two-year extension on its loans to 2015. The group is also exploring a possible sale and leaseback of up to 20% of its aircraft fleet, as part of the deal, which could take place in the next few months and generate about £100m. The group owns 91 planes at present, according to The Telegraph. Iconic electronics giant Sony is expected to shed 10,000 jobs worldwide over the next year as it tries to return to profit. The retailer is attempting to carry out sweeping reforms which would result in 6% of its global workforce being cut as it struggles with weak TV sales and swelling losses, Japanese media reported yesterday. About half of the job cuts will come from Sony's restructuring of its chemical unit, the Nikkei said. Sony is also merging its liquid crystal display (LCD) panel operation with Toshiba and Hitachi, The Telegraph reports. North Korea is preparing to carry out a third nuclear test after the planned launch of a ballistic rocket this week, according to South Korea's spy agency ? an act that would provoke a new diplomatic crisis in East Asia. The National Intelligence Service in Seoul has reported that large amounts of soil are being used to fill in a mine at North Korea's underground nuclear testing site. The information, gleaned from US satellite images, suggests that engineers are burying a nuclear warhead close to the northeastern town of Punggye-ri, where North Korea performed tests in 2006 and 2009, writes The Times. Shipyards have been turning out new vessels at a pace designed to service global demand that has simply failed to materialise, meaning the industry is now sinking under massive overcapacity given the downturn in shipping, new figures show. In the worst hit sectors, the fall in the ships' value and the rise in the price of steel - driven by rapacious demand from China as it builds itself anew - means that the difference between the prices fetched if vessels are sold on to keep sailing and those if they are broken up for scrap is now minimal, The Telegraph says. The poorest families are enduring the steepest price rises in a reversal of last year's trend, according to new research. Households with an income of less than £8,300 are suffering a 4.2% rate of inflation, according to Alliance Trust. Meanwhile, the highest earning households, those with income of more than £71,000, face an inflation rate of just 3.3%. The official consumer prices index measure of inflation stood at 3.4% for the same month, February. Researchers at the investment trust said that the worse inflationary climate for poor households was a consequence of rising utility and food prices, which form a greater proportion of their weekly budget than is the case for affluent families., according to The Times. Facebook will hand over $1bn to buy the photo-sharing software company Instagram, owner Mark Zuckerberg announced today. The app, which allows users to alter and post images on their smart-phones and tablets, will be paid for in cash and Facebook stock. Facebook will complete its initial public offering of stock next month. The service - used by 30 million people, including celebrities Hilary Duff, Mandy Moore and Jessica Alba - is increasingly becoming a rival for Facebook, which also relies on people posting pictures. The deal comes just days after the service began offering a version for Android phones in addition to its popular Apple app, The Daily Mail reports. Hundreds of thousands of households owing billions of pounds on interest-only mortgages are struggling to afford their debts, alarming new figures show. Estimates from the chief City watchdog suggest that more than 300,000 borrowers with these types of loans, which are supposed to be more affordable, have missed or were late with at least one payment. Collectively they owe between £14.8bn and £23.7bn to the banks, according to the Financial Services Authority (FSA). Last year the FSA raised concerns that banks were using strategies, such as moving borrowers on to interest-only loans, to mask the full extent of bad debt on their books, The Times says. AB