Escaping the Payday Loan Trap

When Payday loans get out of hand it can quickly lead to a vicious circle of debt in which you find yourself taking out new loans each month just to meet the repayments on existing ones. Having too many payday loans and being unable to pay them can be a frightening experience as many of these companies will aggressively pursue money that is owed to them.

If you are in this situation the good news is you are not alone, and the law is on your side. An estimated 1.2 million people in the UK take out payday loans each year and, with astronomical interest rates often exceeding 2,500 percent APR, many find themselves in even deeper financial trouble. The credit counselling charity Step Change, which will help to draw up a debt management plan for free, says the number of people they advise on payday loan difficulties has quadrupled in three years.

Help is at Hand

The important thing in dealing with a financial crisis is not to panic. There are well-trodden paths, protected by law, which can lead you out of financial trouble and into a more stable future, and you do not have to take them alone. There are many sources of professional debt help, some free and some paid for, and it is best to consult them first. Payday loan companies typically use very heavy-handed tactics to get their money back so you will need the best advice behind you to deal with them.

The first step is to make sure your bank account and the money in it is protected. Depending on the payment arrangement you have agreed it might be possible for the company to withdraw the full outstanding amount of your loan if they know you are in trouble. So tell your bank to cancel any direct debits, standing orders or cheques and to refuse all future payments to the loan company.

Protect Your Money

The loan company might have required you to sign a continuous payment authority (CPA) and there is some confusion as to whether or not this can be cancelled. It can, under the terms of the Payment Services Regulations 2009, but if there is any doubt about your bank’s willingness to comply then either cancel your debit card and request a new one or move your money to a new account. Next write – never call as this will leave no record – to those you owe money to and explain that you cannot pay.

Debt advice organisations can help with sample letters and in devising a workable debt management plan which will offer the lenders reduced payments you can manage. They do not have to accept, and you may get a string of nasty telephone calls, but ultimately they have no choice short of taking you to court, where a judge is very likely to order even lower payments. Don’t allow yourself to be intimidated – with the right debt advice you will have all the support you need to get back on your feet.


Company Profile

1st Point Debt Solutions offers debt management solutions to help you resolve your debt problems.  If you require help on your payday loan debt, please visit Р


UK insurance group Aviva agrees to sell Russian life and pension arm

UK insurer Aviva plc (LON:AV) on Wednesday said it was disposing of its Russian life and pensions business to local non-state pension fund Blagosostoyanie for EUR35m (USD46m) in cash.

The deal is in line with Aviva’s plans to reduce its business and presence focus to the markets where it already has a top position, its chief executive Mark Wilson said in a comment.

According to Aviva, the price agreed with Blagosostoyanie is a slight premium to Aviva Russia’s IFRS book value.

Pending clearance from the Federal Antimonopoly Service (FAS) regulator in Russia, the transaction is expected to wrap up in the first half of this year, the vendor said.

Spain’s Abertis considers to sell UK airports in move to cut debt

Spanish mobility and telecom infrastructures manager Abertis Infraestructuras SA (MCE:ABE) is considering divesting its UK airports as one of the options under a strategic review aimed at cutting its EUR14.1bn (USD18.6bn) debt, a company spokesman revealed.

Abertis has been in talks with the Welsh government concerning the sale of its Cardiff airport over the past three months and expects to get an offer of around GBP50m (USD75.8m/EUR57.3m) in March. It could also divest Belfast airport and the contract to run the Luton airport.

Abertis has hired Citigroup Inc (NYSE:C) and AZ Capital SL to advise it on its alternatives related to the sale of non-core assets.

The airports division, which comprises 29 airports worldwide, accounted for 8% of the group’s total revenues of EUR4bn in 2012.

Luxury brands group LVMH eyes London-listed Burberry

French luxury goods maker LVMH Moet Hennessy Louis Vuitton SA (EPA:MC) may pursue an acquisition of Burberry Group plc (LON:BRBY), according to traders, quoting market speculations.

A big takeover in the fashion and leather goods segment would be a good fit for LVMH, with LVMH being manufacturer, while Burberry having to outsource its leather goods, Berenberg Bank analyst John Guy said, as cited by Reuters.

According to the analyst, there will be also an opportunity for LVMH to distribute Burberry’s beauty and perfumes lines and, besides, the French company’s centralised real estate management may help trim Burberry’s operational expenses as a percentage of sales.

A deal for Burberry could also help LVMH boost revenues, Bloomberg reported separately, citing Berenberg Bank. Burberry generates annual sales of some USD3bn (EUR2.3bn).

Competition concerns arising from a potential combination would be alleviated by the parties’ different business focuses, Guy told Reuters.

LVMH did not wish to comment, when reached by Reuters, while a source in the know told the agency the idea was totally far-fetched.

HSBC increases stake in Irish oil and gas explorer Providence

UK financial services major HSBC Holdings Plc (LON:HSBA) has increased its interest in Irish oil and gas exploration and appraisal firm Providence Resources Plc (LON:PVR) to 6.65% as of 15 February, the latter announced today.

Late last month, Providence Resources reported that HSBC’s holding amounted to 5.12%. Its current stake, comprising 4.29 million units, is worth GBP26.7m (USD40.7m/EUR30.9m) based on a share price of GBP6.215 earlier today.

The oil and gas firm’s other shareholders as of 22 February are the current CEO Anthony O’Reilly with a 15.45% stake, BlackRock Investment Management (UK) Limited with 10.8%, JPMorgan Chase & Co (NYSE:JPM) with 5.94%, Henderson Global Investment Limited with 3.88% and F&C Asset Management Plc (LON:FCAM) with 3.87%, according to its website.

French government mulls investment in Alcatel-Lucent — report

The French government may buy a minority stake in Alcatel-Lucent SA (EPA:ALU) as part of efforts to protect the telecommunications equipment company’s patents, Bloomberg reported today citing insiders.

An anonymous government official said that the investment was one of the options being contemplated, after in December the company agreed a EUR2bn (USD2.6bn) financing deal with Credit Suisse Group AG (NYSE:CS) and Goldman Sachs Group Inc (NYSE:GS), partially secured with its intellectual property. The purchase is reportedly likely to be carried out via state vehicle Fonds Strategique d’Investissement SA (FSI).

Other options being considered by the government include a combination between Alcatel-Lucent and rival Nokia Siemens Networks BV, as well as an investment in the French firm’s undersea cable business. According to the sources, the government will take a decision concerning its involvement in Alcatel-Lucent after the company names a successor to CEO Ben Verwaayen.

A spokesman for the French finance ministry, as well as representatives of Alcatel-Lucent, Credit Suisse and Goldman Sachs declined to comment. Bloomberg could not immediately contact a representative of the FSI for comment.

Growth for UK car manufacturing in January

Car manufacturing in the UK grew by 1.2% in January but commercial vehicle production slumped, the Society of Motor Manufacturers and Traders (SMMT) said today.

A total of 129,049 cars rolled out of the factories in the first month of the year, and strong domestic demand meant that output of cars built for the UK market increased by 26.1% year-on-year.

Mike Baunton, interim chief executive of the SMMT, said that despite ongoing economic challenges, growing demand for UK-built products in emerging global markets, combined with major new investment, indicates that 2013 will be a strong year for automotive manufacturing.

According to the SMMT, independent analysts have suggested that UK car manufacturing could grow a third bigger by 2016, with output expanding to almost two million vehicles each year.

The future looks rather less bright for commercial vehicle makers, however.

Output in this sector, which includes a range of vehicles from light panel vans to heavy trucks, as well as buses, coaches and minibuses, fell by 20.5% to 7,822 units in January. A 3.2% rise in output for the domestic market did little to offset a reduction of 37.2% in the production of commercial vehicles for export. In a reversal of the situation in January 2011, more than half of the UK commercial vehicle output in January 2012 was for the home market.

The SMMT expects further decreases in output over the course of 2013 as Ford scales backs its manufacturing.

January also saw a decrease in UK engine production, which declined by 5.1% to 219,757 units. Manufacturers make some 2.5 million petrol and diesel engines in the UK each year, but last month exports declined by 9.5% year-on-year while production for the the home market was 2.8% higher than a year earlier.

UK sponsors CVC, BC Partners to bid for French catering firm Elior

UK private equity firms CVC Capital Partners Ltd and BC Partners intend to make a joint bid for Elior SCA, valuing the French catering firm at EUR3.5bn (USD4.7bn), including debt, the Financial Times reported citing insiders.

Charterhouse Capital Partners LLP, which currently owns 62.3% of Elior, originally planned to sell only the French firm’s EUR2bn catering unit, but according to knowledgeable sources, it would choose to divest the entire business.

Elior was bought via a EUR2.5bn take-private transaction in 2006. Its co-founder Robert Zolade holds 24.7% of the company, Chequers Capital owns an interest of 7.8%, while several other investors hold the rest of the shares. Elior posted revenues of EUR4.2bn and EBITDA of EUR362m in the fiscal year to 30 September 2012.

Together with its advisors, the vendor is working with banks on a debt package of over EUR2bn (USD2.6bn) to back the purchase of the entire company, the sources said, adding that Charterhouse sought to draw interest from other bidders before launching a formal auction.

Swedish online gaming group Betsson acquires rival Cherryforetagen

Swedish online gaming firm Betsson AB (STO:BETS B) said it had sealed a SEK286m (USD45.4m/EUR33.8m) cash-and-stock deal to acquire domestic rival Cherryforetagen ab’s (STO:CHERB) online gaming sites, and

The buyer will pay an initial consideration of SEK225m through the issue of new Betsson B shares and provide the remainder of the purchase price in cash after 12 months. The brands being acquired posted revenues of SEK168.2m in 2012.

Through the takeover, Betsson AB’s subsidiary in Malta, Betsson Malta ltd, which had so far been responsible for the operation of the Automaten sites, will assume responsibility for their external marketing as well.

The buyer said that the deal served its strategy to concentrate on the business-to-consumer model in its core markets in the Nordics. It expects the acquisition to bolster its earnings per share as of the second quarter of 2013.

As part of the agreement, Cherry will buy from Betsson’s Maltese subsidiary for SEK1m.

HSBC sells Panama operations to Bancolombia in $2.1bn deal

UK financial giant HSBC Holdings plc (LON:HSBA) said Tuesday it had agreed to sell HSBC Bank (Panama) SA to Colombian lender Bancolombia SA (NYSE:CIB) for USD2.1bn (EUR1.6bn) in cash.

The offload, which will be carried out through HSBC Holdings’ fully-controlled unit HSBC Latin America Holdings (UK) Ltd, has yet to receive regulatory green light and is seen to close in the third quarter of this year.

The price is based on an estimated net asset value at completion of USD700m, the vendor said.

The disposal reflects HSBC’s group strategy for the region to zero in on the core markets of Brazil, Mexico and Argentina, HSBC Latin America’s CEO Antonio Losada said.