The German government on Tuesday gave the two rival bidders for the Opel unit of General Motors Co. until the end of this week to clear up lingering problems with their offers, The Wall Street Journal reported. The U.S. auto maker has been under intense political pressure from German politicians to back an offer for a majority stake in Opel and its U.K. affiliate, Vauxhall, led by Magna International Inc., an Austro-Canadian car-parts maker. However, GM has flagged problems with the Magna proposal, notably on intellectual property rights related to the Russian partners in the consortium. GM said last week that it couldn't do a deal with Magna based on the existing proposal. The company said Tuesday that it had made progress in "clarifying issues" with Magna and rival bidder RHJ International SA, a Belgian investment group. German officials have been pressing both bidders to raise the equity portion of their bids, two weeks after they submitted final offers. A ministry official said that proposal wasn't accepted during Tuesday's discussions, and both bidders have until the end of the week to revise their offers. Read more. (Subscription required.)
Daily Insolvency News Headlines
Wed., August 5, 2009
Lossmaking Montreal diagnostics specialist Adaltis Inc. said Tuesday it has filed for bankruptcy in Canada to effect an orderly liquidation of assets, property and operations, The Montreal Gazette reported. The filing is voluntary and does not include its Chinese operation. The move also ends the July 3 court-granted protection from creditors, Adaltis said. The position of creditors and other stakeholders won't be known until the liquidation procees is completed, the company added. The directors have resigned and RSM Richter Inc. has been named trustee. Read more.
Qantas Airways Ltd. Chief Executive Alan Joyce said he doesn't expect Australia's national carrier to merge with another airline for at least a decade, The Wall Street Journal reported. Mr. Joyce also predicted that at least one competitor will drop out of the cramped Pacific route between Australia and the U.S, and confirmed that Qantas has suspended plans to list its frequent flyer business indefinitely. Merger talks between Qantas and British Airways PLC. fell through last year and Qantas has also held merger discussions with Singapore Airlines Ltd. and Malaysian Airline System Bhd. Since then, a sharp economic downturn has devastated the global aviation industry, forcing many struggling businesses into mergers or bankruptcy. While industry conditions have stabilized since April, Mr. Joyce acknowledged that the short-term outlook for the industry "is dire," with another 20 airlines expected to collapse this year. Mr. Joyce said Qantas learned from its experience with British Airways that mergers between national airlines are "extremely hard" to achieve on commercial terms acceptable to both parties. Tough regulatory hurdles and the potential for management to become distracted also present difficulties, he said. Read more. (Subscription required.)
Bankrupt telecommunications giant Nortel Networks Inc. reportedly won approval from courts in Canada and the U.S. on Tuesday to sell off its enterprise solutions business for $475 million, Bankruptcy Law360 reported. Avaya and Nortel announced the agreement in July, but the courts had yet to approve the move for an auction. Under the deal Avaya would purchase Nortel's enterprise solutions business for $475 million as part of Avaya's effort to broaden its reach and strengthen its position in the telecommunications industry, the company said in a July statement. Nortel, which had considered four other offers before striking a deal with Avaya, had resolved 10 objections to the proposed bidding procedures, including those from potential bidders, Nortel's lead U.S. attorney said at Tuesday's hearing held by videoconference, Reuters reported. Read more. (Subscription required.)
Creditors filed for the liquidation of the troubled Ssangyong Motor with the Seoul Central District Court, Wednesday, a desperate move to put pressure on occupiers of a building at the company's plant amid growing fears that the occupation will soon threaten the survival of not only the automaker but also its suppliers, The Korea Times reported. Choi Myung-hoon, the spokesman for the creditors, said, "With the standoff continuing, more than 1,900 part suppliers are exposed to bankruptcy. So we have no choice but to liquidate the company to recoup 300 billion won ($245 million)." The filing was made as police were unable to remove the occupants of a paint shop from the automaker's Pyeongtaek plant. Officers of the court said it was unlikely the petition would be accepted as it is sticking to a previous deadline of Sept. 15 for management to submit a self-rescue plan to avoid liquidation. But they agreed the move could affect its decision on whether to approve the corporate survival program. Read more.
In a related story, The Associated Press reported that helicopter-borne police commandos fought a pitched battle with militant strikers, seizing all but one key building at its chaotic factory and increasing pressure on hundreds of hold-out protesters to give up. Read more.
Tue., August 4, 2009
A unit of Russian residential developer PIK Group, which is in debt to the tune of $1.3 billion and engaged in lengthy restructuring talks, faces a bankruptcy lawsuit, court filings showed on Monday. Leasing Force has filed the bankruptcy lawsuit against OOO PIK Development in the Moscow Arbitration Court, the court database showed. A PIK spokeswoman declined to comment, saying the company had not fully examined the court filing, Reuters reported. Several creditors have sued PIK for overdue debts, including state bank VTB for 2.7 billion roubles ($86.68 million), holding company Sistema, the former owner of PIK peer Sistema Hals, for 950 million, and a unit of Renaissance Capital investment bank for 443.6 billion. PIK's largest creditor, top Russian lender Sberbank, which is owed 10.7 billion roubles, may restructure the bulk of the debt into a single facility, analysts have said. Creditors are usually reluctant to test Russia's bankruptcy laws, largely untried in court, as way of getting back their money. Read more.