Mortgage broking platform provider Pisces Group has been released from voluntary administration after just five weeks, The Australian reported. The company, chaired by former Liberal leader John Hewson, was placed in voluntary administration in June, struggling to contain debts inherited after it acquired three smaller companies. Pisces Group’s original founder and business manager, Vincent Turner, said that the company had been placed back into the hands of management under a deed of company arrangement which will be in place for the next two years. Mr Turner said that the acquisitions took place before Dr Hewson took the executive chairman and company advisor roles. The debts hadn’t been a problem until after the global financial crisis when prospective customers, including banks, began placing greater emphasis on scrutinising their suppliers’ balance sheets. Read more.
Daily Insolvency News Headlines
Wed., July 22, 2009
National Australia Bank Ltd. plans to raise up to 2.75 billion Australian dollars (US$2.24 billion) in fresh capital to help shore up its balance sheet as loans continue to sour, The Wall Street Journal reported. Melbourne-based NAB said that total charges for bad and doubtful debts were A$1.064 billion for the three months ended June 30, as asset quality continued to deteriorate. Bad and doubtful debts for the six months to March 31 came to $A1.8 billion. NAB joins Australia's other major banks in bolstering its capital position as a buffer against deteriorating economic conditions. Australian banks have raised more than A$11 billion in new capital in a little over a year to cushion against rising loan defaults and to pursue acquisition opportunities, according to Dealogic. Read more. (Subscription required.)
Quebecor World has emerged from bankruptcy protection in the US and Canada, PrintWeek reported. In a statement, the print giant said it has effectively cancelled its shares and announced new issues of common shares, Class A Convertible preferred shares, and Series I and II Warrants. The new shares are expected to launch on the Toronto stock exchange within 30 days. It said it has drawn down some $540m from its $800m financing facility and has now fully paid back its debtor in possession credit facility. Quebecor World entered bankruptcy protection in Canada and the US equivalent at the beginning of 2008. The subsequent restructuring included closing its Corby plant in the UK. Most recently RR Donnelley made an unsuccessful bid for the company. Read more.
The European Commission on Wednesday cleared the Polish government's state aid of €251 million ($356.4 million) to the Gdansk Shipyard, ending a long-running legal battle, The Wall Street Journal reported. The commission, the European Union's executive arm, has been investigating state subsidies for the historic shipyard, where the Solidarity trade-union movement was born, since 2004. Much of the state aid cleared by the commission has already been paid to the shipyard. The commission said in its ruling that the state subsidies gave the shipyard an unfair advantage over rivals. However, it allowed the state assistance after the Polish government and the shipyard's owner, Ukraine-based Industrial Union of Donbass, or ISD, submitted a restructuring plan. The measures include a commitment to reduce the shipyard's production capacity, including closing two of the yard's three slipways. Under EU rules, state aid to companies generally is prohibited. Exceptions are made for businesses that boost employment in impoverished regions or those with restructuring plans in place that will ensure they can be weaned from state help. The commission's decision authorizes the funding provided since Poland joined the European Union in 2004, as well as an additional €35 million to further restructure the yard. Read more. (Subscription required.)
The eleventh-hour disclosure on Monday of Research in Motion Ltd.'s desire to buy certain assets of Nortel Networks Corp. raises questions about how well the debtor-in-possession insolvency-protection process under the Companies' Creditors Arrangement Act is serving the interests of creditors, according to an editorial in The Globe and Mail. On the face of it, the previously well publicized $650-million (U.S.) offer from Nokia Siemens Networks BV for Nortel's wireless assets and the last-minute $725-million bid by the private-equity firm MatlinPatterson Global Advisers LLC ought to be carefully compared with the $1.1-billion proposal from RIM for the wireless and some other assets of Nortel. But, as it stands, bidders for the wireless business apparently have to undertake not to bid for other Nortel assets until a year has passed. The CCAA is a brief, Depression-era statute with a strange history, which was rediscovered by ingenious lawyers at the end of the 1980s. Creditors might be better protected by a system in which a large debtor company is led by a highly active chief restructuring officer instead of a pre-existing board of directors, assisted by an accountancy firm as monitors. Under the CCAA, if some of Nortel's creditors are attracted by RIM's proposal, the Ontario judge who has to deal with any objections may well have a hard time making a decision that amounts to a good business solution. Read more.
A private equity firm specializing in distressed assets says it is bidding $725 million to acquire the cell phone network assets of Nortel Networks Corp., topping a previous $650 million bid from Nokia Siemens Networks, The Associated Press reported. MPAM Wireless, an affiliate of MatlinPatterson Global Opportunities Partners III LP, said it submitted the bid for Nortel's CDMA and LTE assets to Nortel and its creditors Tuesday. CDMA, or code division multiple access, is a rival standard to the dominant cellular standard GSM, or global system for mobile, while LTE is a next-generation wireless network technology. Nortel, a former telecommunications equipment powerhouse, sought bankruptcy protection in January and was planning to liquidate its business. MPAM said in a statement that it believes a "New Nortel" can emerge from bankruptcy as a whole company. MPAM said it had formed a team of advisers led by former Nortel executives Dion Joannou, Richard Piasentin and Tony Pirih. MatlinPatterson Global Advisers LLC is a $9 billion global private equity firm established in 2002. Read more.