Business and City Summary

Bosses substitute PRP for basic pay

One in five employers offer profit-related pay schemes as a substitute for increases in basic pay. According to a poll of 300 companies prepared by Industrial Relations Services, the employment rearcher, employers use PRP to contain wage costs rather than to encourage workers.

The survey showed that almost one in 10 private companies run PRP schemes. A quarter said that the plans were operated to replace a portion of the wages bill and reduce employees' tax liability.

Cocoa output cut

Members of the International Cocoa Organisation will reduce cocoa output by 375,000 tonnes over the next five years to balance supply and demand. Cocoa prices have risen about 30 percent in the past year, but the plan is expected to have less impact than a scheme drawn up by coffee producers last year to keep up to 20 per cent off exports off the market, helping push coffee prices to seven-year highs.

Belgians fired

The Belgian government is to replace the entire top management team at the state-owned telecommunications company Belgacom. It is due to be privatised later this year but has been dogged by rumours about financial mismanagement. However, the Communications Minister, Elio di Rupo, said there was evidence of fraud.

Kuwaiti visitor

The Kuwaiti Oil Minister, Abdulmohsen al-Mudej, will visit Britain this week for talks with government ministers and private companies interested in co-operating on oil-related ventures. He will meet the President of the Board of Trade, Michael Heseltine, and the Energy Minister, Tim Eggar.

US jobs lost

Northrop Grumman, the US aerospace group, is planning to cut another 2,000 jobs in its B-2 Stealth bomber programme in 1995. The redundancies come on top of 1,400 jobs being cut in 1994 and take total B-2 workforce numbers down to 8,000.

Russia fund

Robert Fleming has raised more than dollars 55m for its Russia Securities Fund. The trust will aim for capital growth by investing in newly-privatised Russian companies. It will concentrate initially on companies in the oil and gas, telecommunications, energy generation, distribution and mineral extraction sectors.

Renault share-out

The French government will set aside 10 per cent of shares in Renault for employees and pensioners when it sells a stake of about 28 per cent in the car maker later this year. Employees will have longer to pay than the general public, receive a 20 per cent discount and be able to claim a free share for every share held for three years up to a maximum of Fr5,000 ( pounds 623).

Investment launch

Venton Underwriting Agencies and Butterfield Securities have launched Venton Underwriting Group, an investment company that will invest in Lloyds syndicates managed by Venton. It aims to raise up to pounds 25m through an invitation to subscribe for 100p shares, although only 20p will have to be paid up front. The rest must be provided through a letter of credit or other collateral. No further calls will be made unless it makes an underwriting loss or until it is listed on the exchange.

New manager

Richard Hill, former head of global foreign exchange proprietary trading at Barclays de Zoete Wedd, has joined forces with two colleagues to form Tigon Treasury Management. It will open for business on 3 October and will handle foreign exchange trading and currency risks for banks and corporate treasurers.

Pump privatisation(First Edition)

Officials in Kuwait have approved plans to privatise the emirate's 77 petrol stations.

Cockerill to bid(First Edition)

The Belgian steel group Cockerill Sambre is expected to bid for the eastern German steel maker Eko Stahl next week.

Israel extends

(First Edition)

Israel's government extended a programme designed to encourage capital investment from abroad. Instituted in 1959, the measures include grants of up to 38 per cent of total investment and neared halved rates of corporation tax of 20 per cent. They are extended until December 1997.