RBS To Spin Off Remnants Of Investment Arm

By Mark Kleinman, City Editor

Royal Bank of Scotland (RBS) is in talks to spin off one of its last-remaining investment arms as the bank pares back its non-core activities amid Government pressure.

Sky News can reveal that the lender is at an advanced stage of discussions about handing control of a division called the RBS Special Opportunities Fund to its management team.

The deal, which could be finalised before the end of the year, reflects a growing trend among global banks to downsize their principal investment businesses because of more punitive capital treatment by international regulators.

In RBS's case, the outsourcing of its Special Opportunities Fund (SOF) is also a consequence of growing pressure from Chancellor George Osborne to focus on consumer and small business lending.

The bank's new chief executive, Ross McEwan, will outline a revised strategy for RBS at its full-year results in February.

There have been fresh calls this week for RBS to be broken up following the publication of two critical reports relating to its treatment of struggling small business (SME) customers.

RBS holds a 13.5% direct stake in the SOF, which describes itself as "a discreet £1.1bn third-party fund" but which has provoked occasional controversy since the bank's rescue in 2008 by continuing to make new investments.

The fund has been part of RBS's non-core division since 2008, and owns assets including Moneycorp, the currency provider, and Target, a financial services outsourcing provider.

Under the management of Lindsey McMurray, SOF has been shrinking its portfolio of investments through a series of asset sales and flotations.

These have included the recent stock market listing of Arrow Global, the debt collection agency which snapped up a £900m portfolio of student loans from the Government on Monday.

Among the other businesses it has been an investor in are Catalina, a Bermuda-based acquisition vehicle that is currently engaged in bidding for the insurance assets of the struggling Co-operative Group. RBS SOF sold its stake in Catalina to Apollo Management, another investment firm, earlier this year.

It was also a shareholder in Four Seasons, the nursing home group.

The deal being proposed is for Ms McMurray and her team, who manage the fund's investments on behalf of all investors, is understood to involve removing it from RBS's non-core arm.

This will allow it to raise new capital to invest although it is unclear whether RBS will retain its minority shareholding.

Ms McMurray joined RBS in 2002 from Cabot Square Capital, an investment firm which at the time was part of Credit Suisse First Boston.

Ms McMurray and RBS declined to comment.

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Big Six Energy Firms Face New Profits Storm

The big six energy companies made £23 more in average profit from each UK household on aggregate last year - a rise of 75% on 2011 - and profits are still rising, according to the industry's regulator.

Ofgem said the latest average profit for all suppliers from the average dual fuel customer hit £53 in 2012 but was measured at double that on November 21 this year at £105.

The regulator announced the figure after releasing its analysis of the companies' accounts for 2012, which found average profit margins of 20% for energy generation.

The revelation prompted the watchdog to suggest it may insist on greater clarity in future to ensure that the profits are a fair reflection of investment in future power generation.

It found that the average profit margin for supply to household customers was 4.3% - in line with the claims made by the industry - as energy use rose and bills went up.

EDF is involved in the planned new Hinkley Point nuclear power station

But it calculated the profit margin made in generating energy in 2012 at 20% - slightly lower on the previous two years - but still high in the context of rising household bills.

The study sought to explain the disparity between supply margin and that for generation by pointing out that the generation part of a business needed significant sums of money over the long term to invest in building new power stations.

Ofgem said it was now considering whether companies needed to provide additional profit measures in generation which took account of capital investment to help ensure greater transparency.

The big six - SSE, E.ON, EDF Energy, Scottish Power, npower and Centrica's residential arm British Gas - have faced a backlash from politicians and consumer groups since the latest round of bill increases - up to 11% in some cases - was announced.

npower's Pembroke power station replaced old gas capacity

Of the firms, only E.ON is yet to confirm its increase ahead of the coming winter.

Ofgem's report follows analysis of statements the companies have had to submit annually since 2009 as part of efforts to subject the firms to greater financial scrutiny.

The statements showed that across all six suppliers, overall profits for energy supply and generation fell from £3.9bn in 2011 to £3.7bn in 2012.

However, profits in supply to households and businesses increased from £1.25bn in 2011 to £1.6bn.

Energy companies have insisted their profits are fair, reflect wholesale costs and the country's need to invest in future supply.

Amid the criticism of the industry over the latest rises to bills, the firms highlighted the growing cost to households from so-called green levies.

The environmental and social charges could be placed under general taxation by the Government in the coming Autumn Statement.

The firms have pledged to cut the rises to bills to match any reduction to the charges confirmed by the Chancellor on December 5.

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Scottish Independence: £600 Better Off Claim

Key Economics Of An Independent Scotland

Updated: 3:23pm UK, Tuesday 26 November 2013

For those without the time to sift through all 650 pages of the Scottish White Paper, here are some of the key points on the economics of an independent Scotland.

:: The Big Picture

At present, Scotland has only limited autonomy to change taxes or spending - with many of the key decisions taken in Westminster.

An independent Scotland would have the autonomy to determine its own taxes and spending plans. However, the White Paper says that the country will accept some constraints on these in order to keep the pound.

It would have the independence to control the flow of both people and goods across its borders - though, again, the White Paper says the plan would be to leave this flow unchanged.

The paper presents a vision of a country which could become a small, independent dynamic economy with a vital corporate sector, low taxes and high exports.

Whether this is possible remains a matter for debate. The Scottish economy is indeed a dynamic, relatively prosperous area, albeit with a high reliance on oil revenues.

However, attractive as independence might seem to many, it would come with some costs and constraints, as the White Paper reflects (occasionally).

:: The Public Finances

Scotland generates more tax than the rest of the UK thanks largely to North Sea oil revenues.

However, it also spends more, per head, than the rest of the UK. The upshot is that its net position is remarkably similar. In 2012/13 Scotland had a primary deficit (eg borrowing before interest costs) of 5.3% of GDP deficit. So did the rest of the UK.

However, the estimates for where Scotland will be in the coming years differ depending on whose numbers you use.

The White Paper calculates that the deficit will be between 1.6% and 3.2% of GDP by 2016/17 – the potential year of independence if there is a "yes" vote in next year's referendum.

However the Institute for Fiscal Studies thinks the deficit will be significantly higher at just over 4% of GDP by then.

The real difference of opinion occurs in the following years. The IFS thinks that as North Sea oil revenues decline and Scotland's growth rate remains steady, it could be left with a big hole in its public finances, equivalent to 4.1% of national income.

This is what Danny Alexander's claim of a £1,000 tax rise for each Scot is based on.

Alex Salmond, by contrast, believes that North Sea revenues will last longer, and that Scotland will be able to generate enough growth as a small, dynamic independent economy, akin to Singapore or Hong Kong, to avoid such an outcome.

However, the SNP has not provided any long-term forecasts to compare with the IFS's numbers.

:: The National Debt

Britain has a sizeable pile of debts built up over recent decades - by 2016/17 they will stand at £1.6 trillion. The White Paper accepts that some of this should be borne by an independent Scotland (which in turn means Scotland will have to service that debt, paying interest on it for many years into the future).

It suggests two ways of calculating the scale of that debt:

1. A population share: under this, the national debt would be split between Scotland and the rest of the UK based on their population sizes. Under this, the White Paper says Scotland would take responsibility for around £130bn - leaving it with total debts equivalent to 76% of GDP. This is a relatively high debt-to-GDP ratio by international standards.

2. An historical share: under this plan, the national debt would be split based on how much in the way of debt (or surpluses) Scotland and the rest of the UK generated in recent years. Because Scotland has generated a series of budget surpluses due to North Sea oil revenues, its share of the debt would considerably lower at approximately £100bn - 55% of Scottish GDP.

:: Currency

The White Paper says that Scotland will keep the pound, becoming a part of an effective currency union with the rest of the UK.

It says that it is entitled to do so as an effective shareholder of the Bank of England. The Bank would set monetary policy (in other words, interest rates and various banking regulations) for the entire currency area.

Westminster politicians have raised questions over whether the UK Treasury, or indeed the Bank itself, would be willing to authorise this. The SNP suggests it will be a Scottish right.

The White Paper says that an independent Scotland would agree to be bound by fiscal rules and an independent Scottish Fiscal Commission to keep its public finances in check. What this might mean in practice is that the country will not have the tax-and-spend independence it would otherwise have with a fully independent currency.

It's a similar analogy to the euro, where the single currency's members are having to sign up to a "fiscal compact" barring them from borrowing excessively.

:: Financial Regulation

One area covered in only scant detail in the report is precisely what would happen in the event of a future financial crisis - a significant question given that Scottish banks (RBS, HBOS) were at the centre of the recent financial crisis.

The report says that the Bank of England would remain in place as a lender of last resort if a bank was in trouble. However, it also says that while the Bank of England would be partly responsible for broader "macroprudential" financial regulation in Scotland, Edinburgh would also have her own independent financial regulator which would take on the job of the Financial Conduct Authority in Scotland. Whether this complex system of structures would cohere remains an open question.

And there is a deeper, more worrying issue: the Bank of England's Lender of Last Resort function kicks in only if a bank is having cash-flow issues, not if it is fundamentally insolvent.

If a bank is to be bailed out, taxpayers tend to have to step in to rescue the failed institution. Quite which taxpayers that would be is left unclear in the document.

:: North Sea Oil

One of the key elements underlying the White Paper is that the UK Government has benefited from billions of pounds of North Sea oil related revenues over recent decades, and not been set aside for future generations (let alone for those in Scotland specifically).

Indeed, unlike in some countries, including Norway, where a chunk of the proceeds of revenues is put into a fund for the future, Britain's revenues went towards current spending, helping boost the overall economy and public finances through the 1980s and 1990s.

Even today, Scotland is responsible for 94% of North Sea oil revenue (though this is not an enormous total earner for Britain, at 0.4% of GDP).

As a result, the country, which has 8.3% of the population, pays 9.2% of total taxes. However, at present that extra revenue is compensated for by extra spending.

The White Paper suggests that in future the oil revenue could be put towards a sovereign wealth fund, called the Scottish Energy Fund. However, some will ask whether this is really compatible with the rest of the White Paper's calculations, which seem to imply a large role for North Sea revenues in paying off the country's net debt.

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Zero-Hour Contracts 'Unfairly Demonised'

A survey of workers on controversial zero-hour contracts has found their growing use has been "unfairly demonised".

The report by the Chartered Institute of Personnel and Development (CIPD) suggested that those on zero-hours were just as happy with their job as the average worker and more content with their work-balance balance.

Unions have been among the vocal critics of such contracts, which offer no guaranteed hours of work.

But just over half of the 456 people questioned said they did not want to work more hours.

Four out of five zero-hours workers said they were never penalised if they were unavailable for work because of other commitments, the CIPD reported.

Peter Cheese, chief executive of the human resource-focused group, said: "The use of zero-hours contracts in the UK economy has been underestimated, oversimplified and in some cases, unfairly demonised.

"Our research shows that the majority of people employed on these contracts are satisfied with their jobs.

"However, we also recognise that there is a need to improve poor practice in the use of zero-hours contracts, for example the lack of notice many zero-hours staff receive when work is cancelled.

"If this is unavoidable then employers should at least provide some level of compensation.

"In addition, it seems that many employers and zero-hours staff are unaware of the employment rights people on these types of working arrangements may be entitled to."

The CIPD said that where zero-hours contracts are being used for the right reasons, they provide flexibility for workers and employers.

The study confirmed CIPD's previous estimate that around one million people in the UK are on zero-hours contracts, although other surveys have suggested that the figure is much higher.

Steve Radley, director of policy at the manufacturers' organisation EEF, said: "The debate on zero-hours contracts has become unbalanced and needs greater focus on the benefits it can bring to both workers and employers.

"With skills in scarce supply, zero-hours help employers to tap into specialist skills when they are needed and to draw on the experience of older workers.

"For many workers, zero hours give them the flexibility and they allow older workers to taper the transition from work to retirement."

But TUC general secretary Frances O'Grady said: "Whilst not every employee on a zero-hours contract is exploited, this survey shows that job insecurity and low pay are concerns for a significant number of workers, including white collar staff.

"The CIPD guidance will help enlightened employers manage zero hours contracts better.

"But the real problems lie with bosses who aren't interested in good practice and are more concerned with squeezing staff to boost their profit margins.

"That's why we need legislative action to stamp out the growing abuse of workers on zero hours contracts and other forms of insecure work."

Shadow trade minister Ian Murray said Labour would outlaw the "exploitative" use of zero-hours contracts.

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Royal Mail Rise 'As Expected', Say Ministers

By Mark Kleinman, City Editor

The Government has risked stoking the row over Royal Mail's £3.3bn privatisation by saying the share price rise since the company listed on the stock market was "expected" by ministers.

Sky News has obtained a copy of the annual review of the Shareholder Executive (ShEX), the body which manages the Government's stakes in state-owned businesses, which was quietly published late last week by the Department for Business, Innovation and Skills (BIS).

The document claims that ShEx showed "real strengths" in delivering the Royal Mail flotation, saying: "In challenging circumstances, and following years of failed attempts to privatise Royal Mail, ShEx delivered a sale of 60% of the shares in Royal Mail to a mix of long-term high-quality institutional investors and almost 700,000 members of the public.

"Nearly £2bn was raised for the Exchequer, and the Government still holds a 30% stake in a company that has, as expected, increased in value following the introduction of private sector ownership."

The remark is potentially inflammatory and is likely to attract the attention of MPs on the Commons BIS Select Committee, which will question the Business Secretary Vince Cable about the Royal Mail sell-off on Wednesday.

Mr Cable has consistently dismissed the surge in Royal Mail's shares as "froth" that will subside following the frenzy among both retail and institutional investors to secure an allocation of stock in last month's privatisation.

The stock dipped just over 1% on Monday to end the day at 533.5p, still more than £2-a-share higher than the offer price.

MPs are likely to ask why Mr Cable decided not to increase the sale level if they expected the share price to increase, as indicated by the ShEx annual report. Advisers to the Government said last week that they had considered raising the price but were deterred from doing so by a hostile reaction from institutions.

Adrian Bailey, chairman of the BIS Select Committee, asked: "If the price was expected to go up, why did the Government not increase the sale price during its last-minute deliberations?"

A spokesman for BIS said: "We always made clear that the Government would retain a stake in Royal Mail so that the taxpayer could benefit from any increase in the company's value following private sector involvement. We have retained a 30% stake which represents good value for money for the taxpayer."

Mr Cable will appear on Wednesday alongside Michael Fallon, the Business Minister; Mark Russell, chief executive of ShEx; and William Rucker, chief executive of Lazard, the independent adviser to the Government.

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Atlantic Array Wind Farm Dropped By Energy Firm

Energy giant RWE has pulled out of the development of one of the world's largest offshore wind farms off the north Devon coast.

The German group, which also owns big six supplier npower, said the costs of the 240-turbine Atlantic Array project were "prohibitive in current market conditions".

The project was due to supply power to hundreds of thousands of homes.

RWE said the reasons for scrapping its interest in the project included "significant" technical challenges, though the decision was made at a time of political turmoil over the country's energy policies.

Its statement blamed problems in the Bristol Channel, including substantially deeper waters and adverse seabed conditions.

The scheme had also drawn criticism from environmentalists who were worried about its impact on marine wildlife and campaigns which had branded the project for the 720-ft (220m) tall turbines as unsightly.

Paul Cowling, director of offshore wind at RWE Innogy, said: "This is not a decision we have taken lightly; however, given the technological challenges and market conditions, now is not the right time for RWE to continue to progress with this project."

The decision leaves the project's future hanging in the balance.

It is not known if any other firm will take over the Atlantic Array, and RWE insisted it was still committed to other schemes including the Galloper and Triton Knoll wind farms off the east coast.

The decision was made against a backdrop of bickering between politicians and the energy industry, with companies warning that investment was at risk because of Labour's threat to impose a 20-month freeze on household bills if it wins the 2015 election.

Firms cited that uncertainty and wrangling within the coalition about the future of green levies, currently part of household bills, as reasons to be cautious with their spending despite warnings the UK faces an energy capacity crisis.

Prime Minister David Cameron is reported to have spoken of the need to get the charges out of household bills.

The debate on the country's energy policy continues alongside a row about profits for suppliers.

Regulator Ofgem revealed on Monday that the average profit per household to a supplier was £105 annually on November 21, compared to £53 in 2012.

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Energy Regulator Admits Market Not Working

The energy regulator has admitted the market is not working and he can only work within a tight framework to bring reforms amid "deep distrust" over rising bills.

Ofgem's chief executive Andrew Wright told the Energy and Climate Change Committee of MPs he "completely understands" frustration and anger about increases to household bills of up to 11% ahead of the coming winter.

He also warned that Labour's proposed energy price freeze "puts at risk the proper functioning of the industry" but admitted consumers were not convinced that price rises were either fair or justified.

The watchdog has released figures which reveal that the average profit for the big six suppliers from each dual fuel customer was at £105 currently - almost double the figure for 2012.

Mr Wright said: "I completely understand why people feel frustrated and angry about rising energy bills.

"Prices have more than doubled over the last 10 years at a time when incomes have been squeezed, and consumers are not convinced that price increases they see are either fair or justified.

"There is a deep distrust of anything the energy companies do or say. Partly that reflects the history - in that respect to some extent that's their own fault.

"There's a legacy of years of aggressive doorstep selling for example, we see poor customer service, confusing tariffs, all of these things have compounded that mistrust of energy suppliers and when anyone tries to take action by changing supplier then they experience a market that is both confusing and difficult to navigate.

"Consumers have a perception that the market isn't working well and that is something that we agree with. We think that the retail market is not working as well as it should and that's why we've put in place the retail market reforms to try to make the market simpler, clearer and fairer."

Those included limiting firms to just four tariffs.

Mr Wright continued: "It's not surprising that consumers jump to conclusions that price rises are being driven by profiteering, and that is the basic problem that we have and the question is what do we do about it."

He told the committee that Ofgem could only work within its tight remit to help boost competition in the sector amid wider political debate about whether it was fit for purpose.

Labour, which has pledged to introduce a regulator with greater teeth, came under fire from Mr Wright over its plan for a 20-month freeze to bills if it wins the 2015 general election.

Energy companies had previously warned such an intervention risked crucial investment in the country's energy infrastructure.

Following Ofgem's report on Monday analysing 2012 energy firm profits, industry body Energy UK argued the figures did not take into account the provision for securing energy supplies for the future.

Npower owner RWE confirmed on Tuesday that significant cost pressures had forced it to pull out of the massive £4bn Atlantic Array windfarm project.

British Gas, E.ON, EDF, npower, ScottishPower and SSE together recorded underlying earnings - before interest payments and tax - of £1.19bn during the calendar year, up from £221m in 2009.

Suppliers have blamed rising wholesale energy prices, higher distribution costs and Government green levies for the increases though the levies may be taken off bills by the chancellor George Osborne next week.

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John McAfee Accused Of Threats In Dispute

Anti-virus software pioneer John McAfee has been accused of sending threatening emails and having associates in an armed motorcycle gang by a former property manager at his Oregon apartment.

Mr McAfee, who says he lost most of his software fortune in the financial crisis, moved to the luxury apartment building in southeast Portland after arriving in the US from Belize last December.

The 68-year-old fled the Central American nation after authorities said they wanted to question him in connection with the fatal shooting of a neighbour. He has denied any involvement in Gregory Faull's death.

Before arriving in the US, Mr McAfee spent a week in a Guatemalan jail for allegedly being there illegally.

Now the eccentric entrepreneur is facing a civil stalking complaint filed by Connor Hyde, a property manager with the Riverstone Residential Group.

Mr Hyde's court filing, obtained by The Oregonian newspaper, says Mr McAfee sent threatening emails and has access to weapons and armed associates from a motorcycle club.

Crystal Pierce, senior property manager at The 20 on Hawthorne, said Mr Hyde no longer works at the location. She said the company does not comment on legal matters.

British-born Mr McAfee said he moved to Montreal two months ago and had only just learned of the situation in Portland.

He said he had issues with building management over "wilful lapses of security" but was not forced to leave.

"I've never been evicted from anything," he said.

Mr McAfee said he had a "severe problem" with Mr Hyde, but never threatened him with anything except lawsuits.

"He gave keys out to all of his friends, and friends of friends," he said. "People were partying in vacant condos."

Judge Steven Evans granted a temporary protective order against Mr McAfee and scheduled a hearing for January 3.

Mr McAfee said he does not plan to attend that hearing. He said the protective order was inconsequential because he is no longer living in Oregon.

The former tycoon sold his stake in the software company named after him in the early 1990s.

He moved to Belize about four years ago to reduce his taxes. He has dabbled in yoga, ultralight aircraft and the production of herbal medications.

He told The New York Times in 2009 that he had lost all but £2.47m ($4m) of his £61.7m ($100m) fortune in the US financial crisis. However, a story on the Gizmodo website quoted him as describing that claim as "not very accurate at all".

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WHO Sorry Over Greece HIV Injection Claims

The World Health Organisation (WHO) has been forced to backtrack after wrongly claiming Greeks were intentionally infecting themselves with HIV to claim benefits.

WHO said HIV rates had risen "significantly" in the debt-ridden country, with "about half" of new HIV infections self-inflicted, allowing people to receive benefits of €700 (£585) per month.

The report, prepared by University College London's Institute of Health Equity, said: "HIV rates and heroin use have risen significantly, with about half of new HIV infections being self-inflicted to enable people to receive benefits of €700 per month and faster admission on to drug substitution programmes."

The findings were reported by news organisations around the world, but after the claims came under further scrutiny, WHO was forced into a humiliating climbdown.

The organisation's head of public affairs Gregory Haertl said on Twitter that there had been a "typo" in the report, adding: "People r not giving themselves HIV in Greece to get benefits." 

In an official statement, the WHO said the sentence should have read: "half of the new HIV cases are self-injecting and out of them few are deliberately inflicting the virus."

The organisation apologised for the error, which it blamed on "an error in the editing of the document".

It said the sources of the statement were 2011 reports from the Lancet and the Greek Documentation and Monitoring Centre for Drugs, which mentioned "accounts of deliberate self-infliction by a few individuals".

The WHO said: "Greece has reported a significant, 52% increase of new HIV infection in 2011 compared to the 2010, largely driven by infections among people who inject drugs in recent years.

"The reasons for this increase remain multifaceted and WHO welcomes efforts of the ad hoc working group and other entities to fully understand the underlying reasons and recommend appropriate measures to extend the benefits of the comprehensive package of interventions for harm reduction to all people who inject drugs."

Figures from the Hellenic Centre for Disease Control and Prevention, also known as Keelpno, showed the HIV infection rate in Greece has nearly tripled in 10 years - up from 3.9 in every 100,000 people in 2003 to 10.9 in 2012.

There were 1,180 HIV infections last year compared with 434 in 2003, while the disease was transmitted through injections in around a tenth (8.9%) of cases in 2012.

The majority of infections (53%) occur among Greek men aged 25-39.

Prostitution also increased, "probably as a response to economic hardship", it said, adding that Greeks were less likely than they were in 2007 to visit a doctor or dentist when they were feeling unwell.

Greece is going through its sixth consecutive year of recession amid brutal austerity cuts.

The country has twice been bailed out by the international community, although its draft budget for 2014 predicts economic growth of 0.6% next year.

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Primark Owner ABF Eyes £250m Tilda Rice Deal

By Mark Kleinman, City Editor

The FTSE-100 group which owns Primark, the thriving clothing retailer, is examining a £250m takeover bid for Tilda, one of Britain's most popular food brands.

Sky News has learnt that Associated British Foods (ABF) has registered an interest in buying Tilda, which has been put up for sale by its founding shareholders.

ABF, a conglomerate which owns businesses such as Allied Bakeries, Silver Spoon sugars, Twinings Tea and Ovaltine, is understood to be interested in adding Tilda to its fast-growing collection of ethnic food assets.

The company's Westmill Foods division is home to brands such as Green Dragon, a maker of Thai rice products, and the Amoy range of sauces.

Members of the Thakrar family which controls Tilda are examining a sale of part of all of the company more than four decades after they arrived in Britain, having fled the Ugandan regime of Idi Amin.

Tilda, which is stocked by all of the major supermarket chains and has a huge share of the retail trade in packaged rice, has appointed investment bankers at Rothschild to oversee the auction, which is said to be in its second phase.

ABF is by no means the only bidder, with insiders suggesting that Tilda has attracted strong interest from trade buyers and private equity groups.

A source close to the Primark owner acknowledged its interest but said it would be disciplined about not overpaying for acquisitions.

The Spanish food company Ebro and Mars, which owns Uncle Ben's rice, have been named by analysts as other likely bidders for Tilda, with the price-tag expected to be in the region of £250m.

A sale at that price would cap a remarkable success story for the Thakrars, who arrived in north London in the early 1970s cleaning and packing rice and pulses after their expulsion from Uganda by Idi Amin's regime.

They focused the company initially on targeting sales within the UK's fast-growing community of immigrants from India and Bangladesh but quickly realised the much broader potential demand.

Now employing 200 people in the UK, Tilda has grown so ambitiously that six years ago it began exporting its rice products to India, one of the world's most voracious consumers of the food.

The Thakrars identified an opportunity to build their business in India amid changing consumption and buying habits in the world's second most populous nation.

Tilda is expected to make earnings before interest, tax, depreciation and amortisation of roughly £25m this year, with food companies often trading at multiples of about ten times their annual profits.

Spokespeople for ABF and Tilda declined to comment.

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