Daily Insolvency News Headlines

Angola (1)
Brazil (1)
Bulgaria (1)
Germany (1)
Ireland (1)
Portugal (1)
Venezuela (1)

Tue., October 21, 2014

Tue., October 21, 2014

Portugal's Novo Banco -- the successor to bailed-out Banco Espirito Santo (BES) -- has moved closer to a rescue deal for its Angolan unit, with the African nation's central bank agreeing a recapitalisation plan for the local business, Reuters reported. Novo Banco will retain a 9.9 percent stake in BES Angola (BESA) under a deal which will see some of its loans to the unit converted into equity, the National Bank of Angola said on Monday. Shareholders, as well as investors approved by the Angolan authorities, will also buy around $650 million of new shares in BESA Angola to bolster its capital, the central bank added. BES had a 56 percent stake in BESA before the Portuguese lender's rescue in early August, which also saw BESA taken into administration by the Angolan central bank. Portugal had to rescue BES to the tune of 4.9 billion euros ($6.3 billion), carving out a good bank -- Novo Banco -- and a bad bank that inherited the toxic debts of the collapsed business empire of the bank's founding Espirito Santo family. Read more.

Tue., October 21, 2014

In the famous Big Mac index of global currency values against the US dollar, Venezuela makes a surprise entrance as the third most expensive place in the world to eat a burger, the Financial Times reported. This unexpected finding can be explained by two factors: the array of fixed exchange rates set by a country that has to import almost everything apart from oil and the rampant inflation that has pushed up prices more than 60 per cent in 2014. For investors in the country’s debt, it is not good news. Nor is the fact that oil prices are dropping, reserves are falling and the country is experiencing a widespread shortage of basic goods. As one local blogger wryly pointed out, how will the Economist carry out its Big Mac index in future when McDonald’s may not be able to source the necessary ingredients to make burgers? Against this gloomy economic backdrop international investors are reassessing the likelihood of Venezuela making payments on its external debt. Read more. (Subscription required.)

Tue., October 21, 2014

German exports tumbled 5.8 per cent in August compared with July – the biggest drop since the peak of the global financial crisis in January 2009. The economy now risks slipping into recession in the third quarter, and the government has already lowered its growth forecasts for 2014 and 2015, the Financial Times reported. Those developments are unsettling a Germany corporate sector that has been a robust counterweight to the gloom in much of Europe ever since it staged a rapid recovery from the 2009 crisis, thanks to booming emerging market demand for machinery, chemicals and autos. After years of near-record low unemployment, many are now in the unfamiliar position of contemplating cuts to their workforce – if they have not begun making them already. “[There is] no reason to believe that in Germany we live on the island of the blessed,” said Nicola Leibinger-Kammueller, chief executive of Trumpf, the family-owned laser-cutting machine maker, which achieved a 10 per cent increase in revenues in its last fiscal year. She called German companies’ current reluctance to invest at home a “warning signal” for the domestic labour market. Trumpf anticipates only a single-digit percentage increase in sales in its new fiscal year, which began in July. Indeed, with Chinese demand slowing, Russian orders slumping and the eurozone still in the doldrums, some companies have been left with a surfeit of production capacity and workers. Read more. (Subscription required.)

Tue., October 21, 2014

The European Union’s banking watchdog said Bulgaria’s central bank and deposit insurance fund were breaching the bloc’s deposit-guarantee law by not allowing depositors to access their savings at Bulgaria’s Corporate Commercial Bank, The Wall Street Journal reported. Monday’s recommendation by the London-based European Banking Authority comes after the watchdog opened an investigation last month into whether measures taken by Corpbank’s temporary management breached an EU law that requires depositors to be compensated for up to €100,000 ($127,851) no later than 25 working days after they first were unable to access their deposits. Bulgaria’s central bank placed Corpbank, the country’s fourth-largest lender by assets, under its administration and suspended shareholders’ rights in June after a run drained the bank of cash to meet client demands. The lender suspended all client payments after it ran out of liquidity. In its recommendation, the EBA asked the Bulgarian National Bank to ensure that depositors at Corpbank and its subsidiary, Commercial Bank Victoria, have access to deposits protected under EU law by Tuesday. Read more. (Subscription required.)

Tue., October 21, 2014

Two businessmen in dispute with AIB over more than €6 million in property debts say the bank forged their signatures on loan documents, the High Court heard yesterday, the Irish Times reported. Earlier this year, State-controlled AIB appointed EY as receivers to properties in Ireland and Britain belonging to businessmen Brendan McCleary and Brendan Hamilton on foot of a series of loans the bank claims are overdue. However, the High Court heard yesterday that both men have made a number of allegations of fraud against the bank, including that their signatures were forged on documents that reduced the loans’ terms to five years from 20. As the loans are not overdue, they say, they are challenging the bank’s right to appoint receivers to the properties. Their claims centre on more than €6 million borrowed jointly and individually. AIB is contesting the allegations. Mr Justice Brian McGovern admitted the case to the commercial court yesterday. Mr McCleary and Mr Hamilton, who are business partners, have reported the alleged fraud to the Garda and to the London Metropolitan Police. Both forces are in various stages of following up those complaints. The businessmen also commissioned handwriting expert Stephen Cosslett, of Key Forensic Services, a British firm contracted to a number of UK police forces, to analyse the documents they dispute signing. He found that in the case of both men there is “strong evidence” that they were not responsible for signing a number of the disputed documents. Read more.

Tue., October 21, 2014

Grupo Oi SA, the Brazilian telecommunications company struggling with rising debt and shrinking market share, said the demise of an investment vehicle that owed the company's Portugal Telecom SGPS SA unit almost 1 billion euros ($1.28 billion) is unlikely to impact operations, Reuters reported. In a filing with Brazil's securities watchdog CVM, Oi said its Oi, Portugal Telecom and TelPart units will not be affected by the collapse of Rioforte, as the vehicle is known. Oi pledged to list shares of CorpCo, the firm that will encompass Oi's and Portugal Telecom's assets into a single company, by the end of the first quarter. Read more.

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