Financial vultures kill Peacocks - the scandal of financial parasites destroying jobs
Bailed out bank pulls the plug on 249 jobs
249 workers have been shown the door at Peacocks' head office in Cardiff following the retail company going into administration. They were sacked yesterday by the administrators stripping down the company to make it as attractive as possible to potential buyers.
But Peacocks' workers lost their jobs, not because the company was making a loss, but because of a financial deal made in 2006 with hedge funds charging exorbitant rates of interest to take over the firm, made during the financial bubble years, turned sour. Eventually the RBS bank pulled the plug on Peacocks.
Peacocks' is still a profitable company but couldnít afford to pay the interest on a loan its bosses took out with New York hedge funds to buy the company.
According to the Western Mail:
"Peacocks has been burdened with a loan of £149m that was taken out at a massive 17.18% interest rate when chief executive Richard Kirk led a management buyout in 2006.
"It has been reported that the money is owed to two hedge funds, Och-Ziff and Perry Capital, the same New York hedge funds that bankrolled the bid by the US-based Glazer family for Manchester United.
"Yet the details are difficult to confirm, partly because a holding company called 'Hanson Number 2a', registered in the Cayman Islands, holds the Peacock Group's debt."
And RBS, which was bailed out in 2008 and is still owned by the government decided that even though Peacocks' could afford to pay for further loans to keep it going, the bank decided not to extend its line of credit because it can make more money elsewhere. Basically it decided to pull the plug on hundreds of livelihoods.
On January 12 the head of RBSís investment bank, John Hourican, had personally made £250,000 by sacking 3,500 workers. The shares of RBS had gone up by 5.5% that day as a result of the job losses and he had been given 21.3m shares which become due to him in April. According to the Financial Times their value rose by £250,000.
Less than a week later he had shaken his head at re-funding Peacocks' loan and the firm went into administration.
Cardiff workers were squeezed by off shore hedge funds and a failed bank still owned by the government. Vince Cable, the Lib Dem business secretary, could have picked up phone and ordered RBS to save their jobs but the government has a policy of not interfering in the bank that taxpayers, including Peacocks' workers, had bailed out. So workers at Peacocks' helped bail out RBS but RBS would not save their jobs.
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