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Foreign firms among those tapping Bank of England for £16bn

·2-min read
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A slew of European titans have taken advantage of a debt lifeline offered by the Bank of England, including Dulux maker Akzo Nobel, chemicals company Bayer and Chanel.

Household names from aviation, retail and industry were among the 53 companies to borrow £16.2bn under the Covid Corporate Financing Facility (CCFF), the Bank revealed in its first week of naming firms. 

British firms Marks & Spencer, easyJet, British Airways, Burberry, John Lewis and Rolls-Royce were among companies using the emergency scheme from the Bank, which makes cheap funding available to businesses fighting through the coronavirus crisis.

The list of blue chip names highlights how few industries have escaped unscathed. Online fast fashion firm Asos was another to secure support after a plunge in consumer spending even hit internet retailers able to stay open. 

A number of foreign firms have also used the facility from the Bank of England, despite support being offered in the countries where they are headquartered.

The heaviest user of the scheme is German chemicals business BASF, which has just 850 UK staff and drew down £1bn, while Japanese car makers Honda and Nissan were also among the foreign companies asking for Bank help. A further 99 firms including JCB are yet to use the facility but can tap the Bank of England's support if needed.

Under the CCFF, the Bank buys short-term debt known as commercial paper that is issued by Britain’s biggest businesses to help them get through the coronavirus pandemic. It provides credit for large investment grade firms.

Companies that make a “material contribution to the UK economy” are eligible, including those with foreign-incorporated parents according to the Bank’s guidelines. 

Sunak and Bailey vs coronavirus
Sunak and Bailey vs coronavirus

Campaigners upped the pressure on the Government and Bank of England over the firms they are propping up with their loan schemes. 

Tottenham Hotspur FC risked more criticism over its response to the pandemic after taking a £175m lifeline. The club was forced to reverse its decision to furlough staff amid public pressure.

Spurs said it would not use the money provided by the Bank for player acquisitions but needed it for financial flexibility. The club said it faced a £200m hit to revenues from Covid.

Labour MP Margaret Hodge wrote to Chancellor Rishi Sunak on Wednesday to accuse him of allowing support for “unscrupulous companies and shameless tax avoiders”.

Caroline Stockmann, chief executive of the Association of Corporate Treasurers, said several larger firms still risked falling into a funding “gap”.

She said: “The question of most significance is who is not on this list and why.  This isn’t just a question of process, but whether some ‘unloved’ companies in sectors such as hospitality, travel and construction are missing out."

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