Daily Insolvency News Headlines

Bahamas (1)
China (1)
China (1)
Germany (1)
Greece (1)
Ireland (1)
Romania (1)

Tue., July 28, 2015

Tue., July 28, 2015

The Chinese government is struggling to contain the collapse of a stock-market rally it helped engineer, announcing late Monday that it will step up its purchases of shares to prop up sagging indexes, The Wall Street Journal reported. Chinese shares suffered their biggest one-day percentage drop in over eight years Monday, wiping out hundreds of billions of dollars of market value and putting an end to a three-week period of stability Beijing had achieved by intervening with stock purchases and other steps to stop the market’s slide. The Shanghai Composite Index, which includes China’s biggest companies, fell 8.5%, to 3725.56, with the losses coming mostly during a hectic last two hours of trading on Monday. More than two-thirds of the 1,114 companies in the index fell by the 10% daily maximum allowed under market rules. The smaller Shenzhen Composite Index fell 7%, to 2160.09, bringing its losses to 31% since it hit a record in mid-June. Tuesday morning, in early trading, Shanghai shares fell 4.2% and Shenzhen shares fell 4.3%. The big declines show investors have become skeptical of the market and the government’s ability to control its slide. Read more. (Subscription required.)

Tue., July 28, 2015

Yanis Varoufakis has insisted he did nothing improper as part of a five-month clandestine project he ran as Greek finance minister that prepared for his country’s possible exit from the euro, the Financial Times reported. The scheme, which was almost completed but not fully implemented, involved hacking into Greece’s independent tax service to set up a parallel payment system — accessing individuals’ private identification numbers and copying them on to a computer controlled by a “childhood friend” of Mr Varoufakis. It would have allowed transactions to continue in case of a prolonged bank holiday and the imposition of capital controls. Mr Varoufakis described the project in a 25-minute teleconference with private investors on July 16. A tape of the call was released on Monday by the London-based Official Monetary and Financial Institutions Forum, which hosted the session, after portions were published at the weekend by the Greek newspaper Kathimerini. Read more. (Subscription required.)

Tue., July 28, 2015

Spiraling German labor costs are starting to undermine the country’s famed competitiveness, threatening to hurt economic growth and investment in Europe’s largest economy, The Wall Street Journal reported. Propelled by a healthy economy and record-low unemployment, labor costs here are rising fast, as the government has further tightened its grip on the labor market, driving up companies’ wage bills. Official German data published this month showed that real wages in the first quarter rose at their fastest rate since late 1992, when wages in East Germany shot up following the country’s unification, and much faster than the eurozone as a whole. German businesses say they are feeling the pinch, but in Berlin, politicians have ignored a trend economists and managers warn that, if left unchecked, will hit growth and employment levels. Read more. (Subscription required.)

Tue., July 28, 2015

Romania seems to be receiving more than its fair share of attention — some good, some not so good. On the positive front, the economy, like others in central Europe that are plugged in to better German demand, is growing strongly. On the negative side, there are three main areas of concern. First, Romania is not immune to the problems in Greece, being principally affected through the banking system. There are four Greek-owned banks that are notably active in Romania, which together account for about 10 per cent of total bank assets. The situation is manageable, but the issue would become more acute if the Greek-owned banks started to pull credit lines aggressively and divert large amounts of cash back to Athens. That said, the NBR is in a relatively strong position, with some €30bn of FX reserves to ease the situation. Second, Romania’s €4bn International Monetary Fund precautionary loan expires in September and negotiations to extend it have broken down amid disagreements over subsidised gas prices and other fiscal issues. The loan was originally set up several years ago as an emergency reserve to be used in times of volatile markets or acute financial strain. Read more. (Subscription required.)

Tue., July 28, 2015

The cost of completing the stalled $3.5 billion Baha Mar mega-resort in the Bahamas has risen to $400 million, according to a letter from the project's developer. Baha Mar Ltd, run by Sarkis Izmirlian, has offered to invest $200 million in the project alongside the resort's main lender, China's Export-Import Bank, according to a letter viewed by Reuters. "We will lend $200 million alongside (China Ex-Im Bank) on a 50-50 basis into a new senior facility totaling $400 million that will fund the completion, opening and stabilization of Baha Mar," Izmirlian wrote in a July 23 letter to Liu Lange, president of the Chinese bank. Read more.

Tue., July 28, 2015

Priory Hall developer Thomas McFeely will contest an application to extend his bankruptcy by five years, the Irish Times reported. The application has been brought on grounds including his alleged failure to disclose all his assets, the High Court has heard. Mr McFeely (67) was adjudicated bankrupt in Ireland in July 2012 and his bankruptcy is due to expire on Thursday, July 30th this year. Chris Lehane, the official administering the developer’s bankruptcy, claims Mr McFeely has not been co-operating and, in those circumstances, has applied to the court to extend the bankruptcy by an additional five years. The matter was mentioned briefly before Mr Justice Caroline Costello at the High Court on Monday. Read more.

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