Business

AMMAN — Jordan has many investment opportunities to offer in many economic sectors, such as the ICT, water, renewable energy, transportation and vocational education and training, Jordanian Businessmen Association (JBA) Vice President Thabit Taher said on Thursday.

At a meeting with Singaporean Ambassador to Jordan Shamsher Zaman, Taher said JBA signed a memorandum of understanding with the Singaporean union of industries in 1996, and Jordan signed a free trade agreement (FTA) with Singapore in 2004; yet the commercial exchange volume is still low, according to a JBA statement.

The Asian country represents a gateway for the Kingdom to penetrate eastern Asia, and Jordan has the potential to be a base for Singaporean products to reach Arab, US, European and Canadian markets without customs fees, thanks to FTAs Jordan has signed with these countries.

Zaman expressed his country's keenness to expand bilateral relations, noting he would follow up on exchanging visits by businessmen in both countries to boost the commercial exchange volume, the statement added.

AMMAN –– The Amman Stock Exchange (ASE) is set to launch future plans to stimulate trading, among which is to encourage family-owned companies to be listed at the bourse, ASE Chief Executive Officer Nader Azar said Wednesday. 

"There are dozens of successful family-owned business in Jordan and we will be trying to convince them to go listed at the bourse," he added at a meeting with the press. 

According to official figures, around 90 per cent of small- and medium-sized businesses in Jordan are family owned. 

Azar said that ASE is also working on amending its legislation to open over-the-counter (OTC) trading for small companies and troubled firms.

 A stock that is traded OTC market is usually because the company is small and unable to meet exchange listing requirements. Under OTC, stocks are traded by broker-dealers who negotiate directly with one another over computer networks and by phone.

ASE currently operates first market, second market and third market. 

Azar also pointed out that the Amman Bourse is part of a joint project with regional exchanges that include Muscat, Beirut and Tunisia to implement a new version of the trading system developed by a French company, expected to be completed before the end of the next year, noting that the features of the advanced system would allow larger trading of shares and securities.

ASE is also on the legislative process of being transferred from a state-owned entity into a public shareholding company that seeks profits. 

The bourse chief noted that in June last year, the Cabinet approved transferring the ASE into a public shareholding company, adding that the legislation is currently at the Lower House. 

The Amman Bourse was established in 1999 as a non-profit institution with administrative and financial autonomy. 

Foreign investors 

Investors from over 100 countries own shares in companies listed on the ASE as they believe in long-term investments in stable Jordan, the bourse chief said Wednesday. 

Azar said the market capitalisation was around JD18 billion at the end of 2015, with 50 per cent of it owned by non-Jordanians. 

Out of the 50 per cent of shares owned by non-Jordanians, Azar pointed out that 37 per cent of ASE shares were investments by Arab governments, sovereign and different investment funds and wealthy families, while the remaining 15 per cent was owned by foreign investors from over 100 countries. 

"Half of the world's nationalities are investing in ASE for long-term investments because they believe in the stability of Jordan and the performance of our companies," he said.

Azar added that the value of shares traded since the beginning of 2016 at ASE reached around JD770 million, raking seventh among 18 Arab bourses. 

The largest bourse in Arab countries is the Saudi, according to Azar, which he said it saw trading valued at JD76 billion since the beginning of the year.

AMMAN — Public Works and Housing Minister Sami Halaseh on Tuesday described a conference and exhibition on Iraq reconstruction, scheduled to be held in Amman in May, as a golden opportunity for Jordanian contractors and engineers.

Speaking at a press conference, organised by the Federation of Arab Contractors (FAC), Halaseh said the ministry had previously signed cooperation agreements with the federation that would provide investment opportunities for Jordanian contractors. 

On the sidelines of the exhibition, there will be a conference dedicated for discussing ways to reconstruct Iraq and examining present and future investment opportunities in Iraq in all sectors. 

The conference sessions will address Iraq's current, pending and future schemes, urgent needs, available investment opportunities, the role of Iraqi and Arab banks in reconstruction and investment, and the role of international organisations working in Iraq, FAC President Fahed Hammadi said.

Other subjects on the event's agenda include laws related to reconstruction and investment, possibility of securing necessary funds and loans from Arab financial institutions, he added, noting that Arab economists and officials will also attend the event to discuss the conference's work papers. 

Hammadi also highlighted that the event constitutes a real opportunity for Jordanian companies to start partnerships with their international counterparts seeking to establish commercial ties with Iraq through Jordan.

The conference will also provide local companies an opportunity to present their products and services to a wide variety of Arab and European participants, the FAC president concluded.

AMMAN — Central Bank of Jordan (CBJ) Governor Ziad Fariz said Tuesday that the national economy could restore the growth rates achieved in the years after the global financial crisis, especially in the medium term.

Noting that the Kingdom succeeded in overcoming the repercussions of the hardest exterior crises during this period  Fariz said the International Monetary Fund (IMF) and the World Bank share this "positive view" with Jordan. 

Speaking at the annual meeting organised by the Association of Banks in Jordan, he said that the fund estimated economic growth rate in 2016 at around 3 per cent, expecting the momentum of regression in some external sector indicators to slow down while others improve. 

The new crisis lies in the security deterioration in Syria and Iraq, as their repercussions affect the Kingdom's economy, Fariz said, noting that nonetheless Jordan is dealing with the situation in a way better than before.

He also said that the budget and current account deficits, as well as the energy sector's losses, are a lot less than before. 

The reserves of the CBJ reached secure levels, which reflected on important market indicators including the dollarisation rate, which stood at  17 per cent compared to 24.8 per cent in 2012, according to the CBJ governor. 

The interest rates on government bonds for five years were 4.12 per cent compared to 7.75 per cent at the end of 2012, Fariz said, adding that the return on dollar-denominated government bonds issued last year currently stand at 5.3 per cent compared to 6.3 per cent when they were issued. 

Fariz said the decrease in fuel prices and interest rates generally will contribute in enhancing local demand and make up for part of the decline in external demand and the drop in the cost of debt service.  

He added that the results of the national reform programme appear in the recovery of the Jordanian economy from the pressures it faced since 2010, which reached the climax in 2012 in light of the global financial crisis, the increase of oil prices and the frequent disruptions in the pumping of Egyptian gas, which came in parallel with the repercussions of the Arab Spring and the influx of Syrian refugees to Jordan. 

He said that economic indicators showed an improvement in performance as the budget deficit decreased to 2.3 per cent of the gross domestic product (GDP) in 2014, the losses of the electricity company were addressed, inflation rates decreased and the current account deficit amounted to 7.3 per cent of the GDP.

As of 2015, Jordan started facing a new set of regional challenges, especially the security conditions decline in Syria and Iraq, which led to an almost full closure of the Kingdom's trade routes in the two countries, Fariz continued. 

According to the CBJ governor, it was expected from the beginning that 2015 was going to be a hard year on national economy, which was true as economic growth rate receded to 2.4 per cent in light of the varying decrease in national exports, tourism gains and foreign investments. 

Jordan was also affected by the repercussions of the decline in global oil prices, which affected national exports, expatriate remittances, Fariz said, adding that it was apparent in the drop of exports by 7.1 per cent, remittances by 1.5 per cent and not achieving the required level for the 2015 budget deficit.

He also said that the drop in exports and expatriate remittances continued in the first two months of 2016.

Positive indicators include lower oil prices, completing the liquefied natural gas port and several renewable energy projects, which all contributed to reducing the energy bill significantly to reach around 9.9 per cent of the GDP compared to 21.4 per cent in 2012.

The reform priorities for the next three years include addressing debt, the burdens of debt service, and conducting structural reform to stimulate growth and overcome poverty and unemployment, Fariz concluded. 

WASHINGTON — Public debt has soared in advanced economies to the highest levels since World War II as governments struggle against slow growth and deflation, the International Monetary Fund (IMF) warned Wednesday.

Levels of government borrowing have picked up since the financial crisis and continue to rise as economic powers like Japan and Europe remain mired in very slow growth, and many emerging and poorer economies struggle with the plunge in income from commodities like oil and metals.

The higher borrowing makes it harder for governments to spend any more to support growth, as the fund has urged.

On average for advanced economies, the IMF said in its new Fiscal Monitor report, "public debt now exceeds the level observed during the Great Depression and is approaching the level immediately after World War II”.

For advanced economies, debt has risen to over 107 per cent of gross domestic product (GDP), with Japan at almost 250 per cent.

Emerging market economies are better off at just under 50 per cent of GDP, but their needs are rising and many face greater challenges, including sharply higher fiscal deficits, than the advanced economies.

The strain between higher debt and the need to keep spending is contributing to the slow pace of growth. 

The IMF lowered its global growth forecast for 2016 on Tuesday to 3.2 per cent and warned of the risk that growth could stall worldwide if action was not taken.

"Advanced economies are facing the triple threat of low growth, low inflation, and high public debt. This combination of factors could create self-reinforcing downward spirals," it said.

Slow growth means that the financing needs of many countries are rising just as the availability of funds is tightening. The US central bank in particular has begun to raise interest rates, hiking the costs of borrowing for most countries.

As a result, more countries are approaching the World Bank and IMF for support. 

The World Bank says loan requests have surged to levels only seen during financial crises. The IMF has also seen a rise in requests for support programmes, the most recent from Angola, whose financial position has been devastated by the crash in oil prices.

 The IMF urges countries with some fiscal space to spend more while others need to focus spending on anything that will accelerate growth: infrastructure, education, business creation and research and development.

"A lasting solution to the debt overhang problem is not possible without higher medium-term growth," the IMF indicated.

In its latest Global Financial Stability Report, the IMF warned that although world financial markets have calmed after turmoil earlier this year, more needs to be done to ensure global financial stability amid slowing growth, weak commodity prices and worries about China's economy.

The IMF said the financial system risks have risen since the last report in October and market turmoil could easily recur and intensify if no action is taken to clean up bank balance sheets, particularly in China and Europe.

"If the growth and inflation outlooks degrade further, the risk of a loss of confidence would rise. In such circumstances, recurrent bouts of financial volatility could interact with balance sheet vulnerabilities," the IMF added in the report.

"Risk premiums could rise and financial conditions could tighten, creating a pernicious feedback loop of weak growth, low inflation and rising debt burdens," it continued.

Worries about China's growth slowdown and transition to a more consumer-driven economy helped spark the most recent financial turmoil, and the IMF said China's struggling state enterprise sector is straining bank balance sheets. 

The report estimates that bank loans to companies potentially at risk in China could translate into potential bank losses of approximately seven per cent of the country's GDP.

"This may seem like a large number, but it is manageable given China's bank and policy buffers and continued strong growth in the economy," said Jose Vinals, head of the IMF's Monetary and Capital Markets Department.

The report complements the IMF's gloomy World Economic Outlook publication released on Tuesday, in which the crisis lending institution cut its growth forecasts for the fourth time in the past year.

The report comes as finance ministers and central bankers from around the world convene in Washington this week for the spring meetings of the IMF, the World Bank and Group of 20 finance ministers and central bank governors. The formal meetings begin on Friday and continue through Sunday.

Negative interest rates crucial to growth

The IMF stability report said negative interest rate policies, along with bond purchases, were "crucial" to boosting economic growth, marking a sharp contrast with German Finance Minister Wolfgang Schaeuble's criticism of the European Central Bank's negative rates as causing problems for German banks and depositors alike.

Although they have reduced bank profit margins, the report said banks would ultimately benefit from stronger growth and the ability to cut non-deposit funding costs.

However, should the IMF's worst-case market disruption scenario occur, its modeling suggests that potential global output growth could be reduced by 3.7 percentage points over five years, effectively the loss of nearly a year's worth of growth at current levels.

Conversely, the fund argues in the report that actions to reduce liquidity risks, clean up non-performing loan problems left over from the last financial crisis in advanced economies  and reduce vulnerabilities in emerging market banks could add 1.7 percentage points to annual baseline growth by 2018, roughly half of this year's estimated growth.

The report also made a case for bank consolidation, particularly in Europe. It argued that banks whose business models are no longer viable following the financial crisis hold some 15 per cent of bank assets in advanced economies.

ISLAMABAD — Pakistan's parliament has adopted a law that will convert the cash-strapped national airline into a limited company but bar the government from giving up its management control, officials said on Tuesday.

The passage of the law, which blocks selling off a majority share in Pakistan International Airlines (PIA), late on Monday, was a major setback for Prime Minister Nawaz Sharif who made the privatisation of the company a top goal when he came to power in 2013.

The privatisation of 68 state-owned companies, which include loss-making enterprises like PIA and Pakistan Steel Mills, is also a major element in a $6.7 billion international Monetary Fund (IMF) package that helped Pakistan stave off a default in 2013.

The government had struggled to meet its deadline to sell PIA, which has accumulated losses of more than $3 billion, after a delay of many months in amending a 1956 law that barred it from being privately owned.

After months of legal wrangling between government and opposition representatives, a joint session of the upper and lower houses of parliament unanimously passed a bill that blocks the privatisation of the airline.

"Management control of the company and any of its subsidiary companies... shall continue to vest in majority shareholders, which shall be the federal government and whose share shall not be less than 51 per cent," the law reads.

The IMF did not respond to e-mails and calls seeking comment.

Privatisation Commission Chairman Mohammad Zubair, who is a member of Sharif's ruling party, said the government would remain the major shareholder.

"We have agreed with the opposition parties that PIA will not be privatised," he told Reuters. "It is only being converted into a private entity to ensure more efficient running."

He said the bill was a compromise because resistance from unions and opposition parties was "too strong".

The government has struggled to restructure loss-making companies, which cost it an estimated $5 billion a year, and which include power distribution companies and steel giant Pakistan Steel Mills.

In February, the government shelved plans to privatise power supply companies. It has, however, made some progress, including raising more than $1 billion by selling its stake in Habib Bank Ltd.

But while the loss-making firms are a drain on resources, about an eighth of the government's fiscal revenue last year, few fear Pakistan will slide into crisis.

The IMF has released instalments of its package despite the missed targets, and the government is exploring other sources of support, like ally China, which plans to invest $46 billion in an economic corridor through Pakistan.

Separately, A multi-million dollar port being developed by China in Pakistan is set to be at "full operation" by the end of the year, a Chinese official said Tuesday, part of Beijing's ambitious economic plans in the region.

Gwadar port, on Pakistan's southwest coast, will see roughly one million tonnes of cargo going through it by 2017, said Zhang Baozhong, chairman of the Chinese public company in charge of the development. 

Current trade there is "basically nothing", he told reporters on the sidelines of a seminar about the port's development Tuesday. 

"We hope a big jump will take place... Our dream is to make Gwadar a regional trading centre," he added.

Gwadar, in Balochistan province, forms what officials call the "heart" of the China Pakistan Economic Corridor, a grand $46 billion project giving Beijing greater access to the Middle East, Africa and Europe through Pakistan. 

The port was built in 2007 with technical help from Beijing as well as Chinese financial assistance of about $248 million. 

Zhang said the tonnage will initially comprise "quite a number" of construction materials for the city's development, which Pakistani officials envision turning into another Dubai. 

Exports will at first focus on the local fishing industry, he continued, with a modern processing plant planned for the area, though he would not give a timeline for the plant. 

"We shall try to process it here... So that the locals can benefit," he told reporters after the seminar.

Desperately poor Balochistan has been roiled since 2004 by a separatist insurgency aimed at seeking greater control over the province's resources.

Some Baloch nationalists have accused the Chinese of conspiring with the Pakistani elite to plunder the province while doing little to share profits and create jobs for local people.

RIYADH — Fitch Ratings on Tuesday lowered Saudi Arabia's long-term credit rating, saying the plunge in oil prices had "major negative implications" for the world's biggest crude exporter.

The agency also noted increased tensions with long-time rival Iran and greater uncertainty over economic policy, now overseen by Deputy Crown Prince Mohammed Bin Salman.

Fitch downgraded the kingdom's credit rating to AA- from AA, which still denotes expectations of very low default risk.

The outlook remains negative, indicating a further cut is likely.

Fitch said it had revised downwards its oil price assumptions for this year and next, to $35 and $45 a barrel, which "has major negative implications for Saudi Arabia's fiscal and external balances".

In February, another agency, Standard and Poor's, cut the kingdom's credit rating by two notches, to A-, citing the impact of lower oil prices on the kingdom's finances.

Last month, Moody's placed Saudi Arabia and other Gulf oil producers on review for downgrades.

Oil prices have collapsed from above $100 in early 2014, and on Tuesday traded at just over $40.

The government has said oil income made up 73 per cent of revenue in 2015, compared with an average of 90 per cent in the previous decade.

The kingdom reported a record budget deficit of $98 billion last year and projects a shortfall of $87 billion in 2016.

To cope with the gap, it raised retail fuel prices by up to 80 per cent in December and cut subsidies to electricity, water and other services.

It has also delayed some major projects under King Salman, who acceded to the throne last year.

King Salman named his son Prince Mohammed to posts including defence minister and head of the Council of Economic and Development Affairs.

"Control over economic policy making has been concentrated in the hands of Prince Mohammed," Fitch said. "This may have contributed to an acceleration of the economic policymaking process, but has also reduced the predictability of decision-making."

The agency also noted that Saudi Arabia faces high geopolitical risks relative to AA-rated peers.

"Tensions have risen between Saudi Arabia and its long-standing regional rival Iran, and are expected to persist, although a direct confrontation is highly unlikely. Saudi Arabia's military intervention in Yemen and in Syria shows a greater assertiveness in foreign policy," it added.

Separately, a report indicated this week that the oil-rich Gulf states are expected to borrow between $285 billion and $390 billion through 2020 to finance budget deficits resulting from low oil price.

The six Gulf Cooperation Council (GCC) states, which heavily rely on oil earnings, are expected to post a shortfall of $318 billion in 2015 and 2016, Kuwait Financial Centre (Markaz) said in a report.

The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.

Their public finances have been hit hard since oil prices shed more than two thirds of their value since mid-2014.

Oil income made up over 80 per cent of public revenues in GCC states before the price decline.

Markaz said GCC states will finance their deficits partly through borrowing and the rest by tapping their huge fiscal reserves.

OPEC kingpin Saudi Arabia last year borrowed $26 billion from local banks and used over $100 billion of its reserves that stood at $732 billion at the end of 2014, the report added.

With the exception of Oman and Bahrain, GCC states have huge fiscal reserves and a low level of public debt allowing them to raise large volumes of domestic and international debt, the report said. 

The GCC states posted a combined deficit of $160 billion last year compared to a surplus of $220 billion in 2012.

In an earlier report in February, Markaz expected GCC public debt to rise to 59 per cent of gross domestic product in five years, from 30 per cent at the end of 2015.

According to sources familiar with financing, Saudi Arabia is seeking a bank loan of between $6 billion and $8 billion, in what would be the first significant foreign borrowing by the kingdom's government for over a decade.

Riyadh has asked lenders to submit proposals to extend it a five-year US dollar loan of that size, with an option to increase it, the sources said, to help plug a record budget deficit caused by low oil prices.

The sources declined to be named because the matter is not public. Calls to the Saudi finance ministry and central bank seeking comment were not answered.

Reuters reported that Saudi Arabia had asked banks to discuss the idea of an international loan, but details such as the size and lifespan were not specified.

The kingdom's budget deficit reached nearly $100 billion last year. The government is currently bridging the gap by drawing down its massive store of foreign assets and issuing domestic bonds. But the assets will only last a few more years at their current rate of decline, while the bond issues have started to strain liquidity in the banking system.

London-based boutique advisory firm Verus Partners, set up by former Citigroup bankers Mark Aplin and Andrew Elliot, is advising the Saudi government on the loan, the sources added.

The firm has sent requests for proposals to a small group of banks on behalf of the Saudi ministry of finance, the sources continued. They noted that banks participating in the loan would have a better chance of being chosen to arrange an international bond issue that Saudi Arabia may conduct as soon as this year.

A spokesman for Verus Partners was not immediately available to comment.

Rating cut

Analysts say sovereign borrowing by the six wealthy Gulf Arab oil exporters could total $20 billion or more in 2016, a big shift from years past, when the region had a surfeit of funds and was lending to the rest of the world.

All of the six states have either launched borrowing programmes in response to low oil prices or are laying plans to do so. With money becoming scarcer at home, Gulf companies are also expected to borrow more from abroad.

Bankers said a sovereign loan from Saudi Arabia could attract considerable demand, given the kingdom's wealth; its net foreign assets still total nearly $600 billion, while its public debt levels are among the world's lowest.

The pricing of the loan is likely to be benchmarked against international loans taken out by the governments of Qatar and Oman in the last few months, according to bankers.

Because of banks' concern about the Gulf region's ability to cope with an era of cheap oil, those two loans took considerable time to arrange and the pricing was raised during that period.

Oman's $1 billion loan was ultimately priced at 120 basis points over the London Inter Bank Offered Rate (LIBOR), while Qatar's $5.5 billion loan was priced at 110 basis points over, with both concluded in January.

"The indications are that a Saudi deal would have to price higher than that, as the world has changed significantly since those deals," one Middle East-based banker said, referring to the rating agencies' actions.

TOKYO — After losing some $3 billion overseas in nearly six years, Japan's Nomura Holdings Inc., is axing a brokerage unit and hundreds of jobs in Europe and the Americas, sounding a partial retreat from its latest drive to become a global player.

Announcing changes in its wholesale operations, Japan's biggest brokerage said in a statement on Tuesday it will "close certain businesses" in its Europe, Middle East and Africa region and "rationalise" unspecified operations in the Americas. 

It didn't say exactly which units are involved, nor how many jobs affected, but said it would disclose full details on April 27.

People with direct knowledge of the matter said Nomura's European equities research team will close. In total, 500-600 jobs would go in Europe, with other cuts in the Americas, separate people familiar with the matter said, declining to be named because they were not authorised to speak to the media.

The retreat signals the latest blow for Nomura management's international aspirations. The brokerage bought Lehman Brothers equities and investment banking business in Europe and Asia in 2008, at the height of the global financial crisis, as part of a concerted strategy to expand from its domestic stronghold and become a major force in international finance.

An earlier US push in the 1990s, selling commercial mortgage-backed securities, suffered heavy losses after the 1998 Russian debt crisis. 

Nomura's London-based cash equities execution platform Instinet will be unaffected by the cuts, people with knowledge of the matter said, as will its Europe-based Asian equities sales and trading business.

With Nomura's overseas business set to report a sixth straight annual pretax loss for the year ended March 2016, investors welcomed news of the cuts. Nomura spokeswoman Joey Wu declined to comment on the job loss figures.

Nomura shares gained as much as 8.7 per cent in Tokyo trading before closing up 7.4 per cent, while the benchmark Nikkei average  gained 1.1 per cent. The shares were languishing near three-year lows last week.

"By restructuring some of its businesses, Nomura can stop the bleeding and, in the long run, move towards profitability in its international division," said Masayuki Otani, chief market analyst at Securities Japan, Inc. 

From April 2010 to December 2015 alone, Nomura's overseas business lost 325 billion yen ($3.01 billion).

Regional divide

The move comes as investment banks globally review their trading operations, with new regulations making it harder to turn a profit. But equities business has provided one of the few growth areas for investment banks in Europe, despite Nomura's problems in the region.

Reuters reported last month that Deutsche Bank is hiring 100 people to boost its share trading operations. Meanwhile Credit Suisse has said that it will continue to expand its equities business, despite making deep cuts across the rest of its global markets division.

Moves by other banks away from their home regions, however, highlight the struggle to stay competitive. Britain's Barclays has closed its cash equities business in Asia, Asia-focused Standard Chartered closed its equities franchise, and France's Societe Generale has shut its India equities research desk.

Nomura's announcement comes five months after the brokerage said it will invest further in its Americas operations over the next two to three years, seeking to strengthen mergers and acquisitions advisory services and primary equity and debt businesses in the region.

As of December 31, Nomura had 3,433 employees in Europe and 2,501 in the Americas, company data shows. Over half of its total 29,069 employees are based in Japan.

LONDON — Tata Steel agreed to sell one of its main British steelworks to investment firm Greybull Capital for £1 on Monday, saving a third of the 15,000 jobs placed in jeopardy by the Indian conglomerate's decision to sell up in Britain.

Prime Minister David Cameron has been under pressure to keep the plants open to save jobs after Tata, one of the world's biggest steelmakers, said on March 30 it would sell its loss-making British business.

As Tata formally announced the sale of its steel assets in Britain, turnaround specialist Greybull Capital LLP. said it would buy the Indian company's Long Products Europe division in Scunthorpe, northern England, which employs 4,400. It declined to rule out further purchases of Tata's British steel assets, including its plant at Port Talbot in Wales.

The sale to Greybull, for a nominal pound or 1 euro, includes a £400 million ($570 million) investment and financing package for the Scunthorpe business, as well as agreements with suppliers and unions on cutting costs.

"We're expecting no redundancies going forward, the business plan calls for no redundancies," Greybull cofounder Marc Meyohas told reporters on a conference call.

The Greybull deal, which is subject to a ballot by union members, includes two additional mills, an engineering workshop and a design consultancy in Britain, plus a mill in Hayange, in northeast France.

The purchase will see the business renamed “British Steel”, in a revival of a historic name last used almost two decades ago.

Cameron, already grappling with a divided ruling party ahead of a June 23 referendum on membership of the European Union (EU), has been scrambling to try to find buyers for Tata's Scunthorpe plant and its other main plant at Port Talbot, to save jobs.

Britain's eurosceptic media has blamed Brussels for preventing London from taking greater steps to protect the steel industry while the opposition Labour Party has called on Cameron to do more to save the plants.

Tata, which owns iconic brands such as Jaguar Land Rover and Tetley Tea, is offloading its British steel operations, citing a global oversupply of steel and cheap imports from China, high costs and weak domestic demand.

British Steel?

The deal for the Scunthorpe plant, which Tata had been trying to sell since 2014 before revealing talks with Greybull were underway in December, is expected to complete in eight weeks subject to certain conditions being met.

Greybull, which is not taking on pension liabilities, said about half of the £400 million package would come from shareholders of Greybull and half from banks and government loans.

"We're expecting the company to be profitable in year one and that's very much the management plan," said Meyohas, who co-founded Greybull in 2008 after 12 years as chief executive officer of technology services company Cityspace.

Though the deal is positive for the Scunthorpe workers, there is deep unease in Port Talbot, Britain's biggest steel plant, where 4,000 people could be out of a job if Tata fails to find a buyer.

"While very welcome, it does not mean that we are out of the woods yet," said Gareth Stace, director of trade association UK Steel.

"A long-term investor is needed, in the very short term, for the remainder of the whole of the Tata Steel UK business, including Port Talbot," added Stace.

Scunthorpe produces steel mainly used in construction and infrastructure projects, whereas Port Talbot produces slab, hot rolled, cold rolled and galvanised coil which is used in products from cars to washing machines to food cans.

Finding buyers for Port Talbot and Tata's other assets, could take some time given the complexity of any deal, including negotiations over everything from pensions liabilities to energy subsidies.

Greybull said to date it had been wholly focused on the Scunthorpe deal, but declined to rule out future interest in the Port Talbot plant.

"Whether it's Tata or any other assets, we'll review it as and when is appropriate," Meyohas said.

Another potential bidder for the Port Talbot plant is Sanjeev Gupta, the boss of metals trader Liberty House Group.

‘Loss-making’

Gupta told Reuters on Friday that he was serious about making an offer and had the backing of a group with $7 billion of revenues, hitting back at critics who have questioned his capacity to take on a business dragged down by heavy debt and weak sales.

However, much will depend on how much any potential investor is willing to pay to even hope of turning around the business.

"It's a loss-making business and a loss-making business is not worth a lot in itself to buy," Gupta indicated. "It's more of a question of what are the resources required in turning it around."

Tata, under former Chairman Ratan Tata, bought its UK steel operations in 2007 after outbidding Brazil's CSN to buy Anglo-Dutch steelmaker Corus for $12 billion as a way to access the European market.

But the Indian conglomerate, controlled by philanthropic trusts endowed by the Tata family, struggled to turn the steelmaker around.

Like competitors such as ArcelorMittal, the world's top steel producer, Tata has been hit by plunging prices due to overcapacity in China, the world's biggest market for the alloy.

China said on Monday it wants to work with the rest of the world to find an appropriate resolution to overcapacity in the steel sector, after Britain asked Beijing to hurry up and tackle the problem.

Tata Steel is the second-largest steel producer in Europe with a diversified presence across the continent. It has a crude steel production capacity of over 18 million tonnes per annum (mtpa) in Europe, but only 14mtpa is operational.

The closure of Tata Steel's operations in Britain would leave a hole in manufacturers' supply chains, dealing a blow to thousands of smaller firms across the country and creating a logistical headache for the car industry.

Some of Tata's customers are already looking for new sources of steel which is used in everything from car roofs to Heinz baked bean cans, cladding on Ikea buildings and some of the country's coins.

While bigger names have the luxury of a global supply chain to fall back on, smaller companies, which account for around 95 per cent of British manufacturing firms, face a tougher task if Port Talbot in south Wales closes.

Tata sells around half of its products into the domestic market, the firm said in 2014.

"It would be entirely undesirable from my point of view," said Tony Mullins, executive chairman of QRL Radiators Group, a Tata Steel customer that makes heating radiators near the Welsh town of Newport, employing around 150 staff.

Looking abroad for steel would leave firms like QRL that use British steel exposed to swings in the currency exchange rate and higher transportation costs. It might also need to hold more stock if it is buying from the other side of the world, having an impact on working capital.

"We have to be competitive, we have to produce quality products and historically with Tata that has been possible for us," Mullins added.

Driving force

Britain, the birthplace of the modern steel industry, has been struggling to compete since its post-war heyday and has shed thousands of jobs in recent years.

Since 2001 imported supplies have met more than half of its domestic demand, according to the International Steel Statistics Bureau (ISSB), as local producers struggled with high energy costs, green taxes and fierce competition.

Germany is the biggest foreign supplier of steel to British manufacturers and construction firms, followed by China, Spain, Belgium and the Netherlands, the ISSB indicated.

The government maintains that the main problem is the collapse in the price of steel. China has flooded European markets with relatively cheap steel as a result of its own falling demand.

Britain imported 826,000 tonnes of Chinese steel in 2015, up from 361,000 two years earlier, according to industry data.

According to the ISSB, China has produced more steel in the last three years than Britain has since the industrial revolution.

Those British steelmakers that remain have been kept going by local manufacturers, a resurgent car industry and foreign demand.

"Hot-rolled coil is produced [at Port Talbot] and that predominately goes into the automotive sector... that's the bodywork," Dominic King, head of policy and representation at industry group UK Steel, told Reuters.

Five carmakers built almost 99 per cent of Britain's 1.6 million cars last year and all source steel from Port Talbot, with some already looking for alternatives should the site shut.

The country's biggest carmaker Jaguar Land Rover (JLR) , which made just under a third of national output last year, gets around 30 per cent of its steel from the site while Nissan, which operates Britain's biggest single car plant in northern England, buys 45 per cent from there.

Showing the cost constraints within the industry, John Leech, who heads up the automotive team at KPMG and works with some of the country's biggest carmakers, said JLR could not afford to give preferential treatment to a more expensive product even though it is owned by Tata Motors, part of the same family of companies as Tata Steel.

"To compete against BMW and Mercedes, Jaguar Land Rover needs to makes sure its cars are cost-competitive and that means using materials that are sourced cheaply and competitively," he added.

JLR said: "Like all other independent businesses, we make our own purchasing decisions based on the right commercial reasons." The firm added that it continued to use Tata Steel and did not see any short term impact on its business.

A spokesman at General Motors-owned Vauxhall, which uses Tata's high-strength lightweight steel in its Astra hatchback model said it was "considering the scenario of UK steel plant closures on supply sources".

"There are a number of sources of steel in Europe that are used by our plants in Spain, Germany and Poland," the spokesman said, when asked whether the firm was looking elsewhere.

Leech said timing could be key, with Tata Steel saying it wants to exit Britain as soon as possible.

"It will mean a lot of fast footwork behind the scenes but... the ability to get the same steel from other European or Chinese plants in [a one to three-month] time frame is a possibility," he added.

Buy British

For many of the workers leaving the Port Talbot plant at the end of their shift last week the news has come as a shock, given the investment made under Tata's ownership.

"Tata certainly have influenced training more than the old regime..." said Dave Bowyer, 59, a steelworker for 40 years and Unite union representative, whose ancestors were steelworkers.

"The workforce itself has become far more technical. Our craftsman and production guys, even the guys on the shop floor — a number of them have got degrees," he added

UK Steel's King said there were many advantages to the British product which continue to attract buyers.

"One is customer service, that you have that close link with the manufacturer... you know in the UK that they are going to be meeting the energy targets, the environmental targets that are out there [and] that engineering skill," he added.

The industry is also known for its highly-skilled flexible workforce with no strike action in 30 years.

Rollo Reid, technical director and grandson of the founder of REIDsteel, one of Britain's largest steel construction companies which sources almost 90 per cent of its steel from Tata, worries that if Port Talbot closes, prices will rise.

"There will be one less competitor and when the other European ones go out of business, there will be less competitors and then the price will go up and we'll be completely within the hands of the Chinese," he said.  

WASHINGTON — Lending to needy countries by the World Bank surged to a level last year normally only seen during financial crises, the bank said Monday.

Facing slowing growth and low commodity prices, developing countries borrowed the most money from the World Bank in 2015 since the 2008-2009 crisis.

“As developing countries continue to face strong economic headwinds, demand for lending from the World Bank has risen to levels never seen outside a financial crisis,” the World Bank indicated in a statement.

During its 2015 fiscal year, lending to emerging-market and low-income economies totalled $42.4 billion, up from $40.8 billion in 2014.

Of that total, lending for emerging, or middle-income countries, was $23.5 billion in 2015, compared with only $14 billion in 2006. The bank projects that lending for emerging economies this year will surpass $25 billion.

Hit particularly hard by the sharp fall in oil and other commodity prices and China’s cooling economy, a number of developing countries are suffering from strained finances and economic difficulties.

“Developing country governments are feeling the pressure to find additional ways to accelerate growth, in the current downturn,” said Jan Walliser, a World Bank vice president, in the statement.

A large part of its support has been to help countries diversify sources of growth and buffer themselves against future shocks, the bank said.

The World Bank, which holds its spring meetings with the International Monetary Fund this week in Washington, has set a goal of ending extreme poverty by 2030.

“We are in a global economy where growth is expected to remain weak, so it is critically important that the World Bank play our traditional role of helping developing countries accelerate growth,” World Bank President Jim Yong Kim said in the statement.

Separately, the World Bank said Monday that China’s economic slowdown will hit growth in developing East Asia and the Pacific from this year until at least 2018, warning of volatile global markets and urging caution.

Regional growth is forecast to slow from 6.5 per cent in 2015 to 6.3 per cent this year and 6.2 per cent in 2017 and 2018, the bank indicated in its latest outlook.

However, Southeast Asian economies led by Vietnam and the Philippines are still expected to see healthy expansion, with both forecast to see growth rates of more than 6 per cent, it added.

According to the bank, the regional outlook reflected China’s gradual shift to slower, more sustainable growth, expected at 6.7 per cent this year and 6.5 per cent in 2017 and 2018, from 6.9 per cent in 2015.

China is in the midst of reforms as it moves to make domestic consumption a key economic growth driver instead of exports and as manufacturing gives way to services taking on a bigger role in the economy.

“Continued implementation of reforms should support the continued rebalancing of domestic demand,” the report said on the Chinese economy.

“In particular, growth in investment and industrial output will moderate, reflecting measures to contain local government debt, reduce excess industrial capacity and reorient fiscal stimulus toward social sectors,” it added.

Victoria Kwakwa, incoming World Bank East Asia and Pacific vice president, indicated in a statement that the region’s developing countries accounted for “almost two-fifths of global growth” last year.

“The region has benefited from careful macroeconomic policies, including efforts to boost domestic revenue in some commodity-exporting countries. But sustaining growth amid challenging global conditions will require continued progress on structural reforms,” she said.

Major drag       

The forecasts were made against a backdrop of slowing world growth, weak global trade, low commodity prices and volatile financial markets, with China’s economic slowdown a major drag.

Excluding China, regional growth is projected to pick up from 4.7 per cent last year to 4.8 per cent this year and 4.9 per cent in 2017 and 2018, powered by Southeast Asia’s robust economies, the bank indicated.

“Among the large developing Southeast Asian economies, the Philippines and Vietnam have the strongest growth prospects, both expected to grow by more than 6 per cent in 2016,” it said.

“In Indonesia, growth is forecast at 5.1 per cent in 2016 and 5.3 per cent in 2017, contingent on the success of recent reforms and implementation of an ambitious public investment programme,” the bank added.

Vietnam is forecast to grow 6.5 per cent this year, 6.4 per cent in 2017 and 6.3 per cent in 2018, down from 6.7 per cent last year.

Expansion for the Philippines is seen at 6.4 per cent this year and 6.2 per cent in 2017 and 2018 from 5.8 per cent in 2015.

The region, however, faces “elevated risks” from a weaker-than-expected recovery in advanced economies and from the possibility of China’s slowdown being steeper than anticipated, said World Bank chief regional economist Sudhir Shetty.

“This is a very volatile time for the global economy. This is a time for all countries to be cautious,” he told reporters in Asia during a video conference call from Washington.

“There is not a lot of room to manoeuvre on the macroeconomic side,” he warned.

Countries should “rebuild fiscal buffers because... there’s going to be bad shocks down the road, which will require the use of fiscal policy,” he said.

Shetty also called on countries to continue with flexible exchange rates “to adjust to whatever shocks there are” and to push through with needed structural reforms.

East Asia and the Pacific under the World Bank covers China, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Cambodia, Laos, Myanmar, Mongolia, Fiji, Papua New Guinea, the Solomon Islands and East Timor.