Daily Insolvency News Headlines

Wed., February 25, 2015

Wed., February 25, 2015

Eurozone finance ministers on Tuesday approved Greece’s plan meant to ease the hardships created by its international bailout, extending that loan program by four more months, the International New York Times reported. In revising the terms of the bailout program, the new Greek government pledged to take a disciplined approach to budgets, spending and tax collection, while remaining committed to relieving the “humanitarian crisis” caused by years of economic hardship and high unemployment. Many Greeks blame the austerity-budget requirement of the bailout program, agreed to by a previous government, for those privations. But in trying to achieve that delicate balance — to meet the demands of its European creditors in order to keep the loan money flowing, but without reneging on the anti-austerity campaign promises on which it was elected in January — the government of Prime Minister Alexis Tsipras may find a difficult road ahead. The finance ministers of the 19 euro-currency countries, who last Friday had agreed to consider an extension of Greece’s 240 billion euro, or $272 billion, loan program, on Tuesday afternoon quickly approved the subsequent plan. Read more. (Subscription required.)

Wed., February 25, 2015

Spain’s government, predicting strong economic growth after years of harsh spending cutbacks, will offer tax breaks to encourage long-term hiring and help struggling single-parent families, Prime Minister Mariano Rajoy said Tuesday, The Wall Street Journal reported. The Spanish leader announced the measures during a state of the nation address that spelled out themes of his campaign for a second term. He said Spain’s expected growth this year—2.4% of gross domestic product and 500,000 new jobs—would quickly evaporate if voters choose a government led by the far left in elections expected late in the year. Without naming it, Mr. Rajoy took swing at Podemos, an upstart far-left party that is challenging Spain’s long-dominant parties, racing to the top of some polls ahead of Mr. Rajoy’s conservative Popular Party and the center-left Socialist Party. “The welfare state is not maintained through demagoguery; it is destroyed,” Mr. Rajoy said in the televised address to parliament. He referred to promises by left-wing opponents to hike pension payments and the minimum wage. Read more. (Subscription required.)

Wed., February 25, 2015

China’s superrich are nervously watching as the Chinese currency weakens against the dollar, The Wall Street Journal reported. Because of the extreme concentration of money at the apex of Chinese society, national stability rests to an extraordinary extent in the hands of just two million or so families. They are the top 1% of urban households, and already, their confidence in China’s future under President Xi Jinping is shaky. Many are fleeing with their cash--not all of it, but enough to bid up prices of luxury real estate from Mayfair to Manhattan to Mission Bay, a waterfront neighborhood of Auckland, New Zealand. Financial authorities are trying to ensure that the remainder doesn’t disappear across the borders. A potential trigger for a disorderly exodus of capital, one that could threaten the entire fragile financial system, would be a precipitous decline in the value of the Chinese currency. That’s one reason—an important one—why a sharp yuan drop is unlikely, even though a slowing economy is increasing domestic pressure on the government to let the yuan fall in a bid to boost exports. Read more. (Subscription required.)

Wed., February 25, 2015

South Africa recorded its worst economic growth in five years in 2014 as Africa’s most developed economy counted the cost of a wave of strikes, infrastructure bottlenecks and fragile business confidence, the Financial Times reported. An unprecedented five-month wage strike in the platinum mining sector, followed by a weeks-long strike by more than 220,000 metalworkers and engineers, dragged growth down to 1.5 per cent for the year. Mining and manufacturing however rebounded in the fourth quarter, with the economy expanding 4.1 per cent on a quarter-on-quarter basis. But the annual growth compared to a revised 2.2 per cent in 2013 and was the worst performance since a 2009 recession triggered by the global financial crisis. It is against this bleak backdrop that Nhlanhla Nene, finance minister, will deliver his budget on Wednesday amid growing expectations of tax increases and public spending cuts as he faces the challenge of balancing the government’s books. Read more. (Subscription required.)

Wed., February 25, 2015

Eighty-six years old and still job hunting. Wong Siu-ying had to stop passing out leaflets on a Hong Kong flyover when she hurt her knee in August. With two-thirds of her social security income spent on rent and no steady allowance from her three children, retirement isn’t an option, the Irish Times reported. “It isn’t enough,” Wong said of the roughly HK$2,200 ($284) a month she gets from the government, which provides a benefit to the elderly as a supplementary income, with the expectation families will pay for living expenses. “The most important thing is to find work.” In a city with the most Rolls Royce cars per capita, Wong is among the growing number of elderly forced to sweep streets, collect cardboard for recycling, or hand out pamphlets to stave off poverty. The Organization for Economic Cooperation and Development and World Health Organization forecast Hong Kong will have the highest share of population aged 65 years and over in Asia by 2050, outpacing Japan. Read more.

Wed., February 25, 2015

Another insolvency claim has been filed against Rigas kugu buvetava (Riga Shipyard), according to information provided by Firmas.lv. The insolvency case was initiated by the Riga Northern District Court on February 20, according to information published on the Insolvency Administration's website. The claim was filed by the foreign company Nordweg Ship Repair. The court will review the case on March 5, as LETA learned from the court. Riga Shipyard CEO Janis Skvarnovics told LETA that the company has not received any documents from the court, he was therefore unable to comment on the case. Skvarnovics explained that Riga Shipyard had signed a contract with Nordweg Ship Repair, a company which carried out various activities as a subcontractor. "A number of these activities, in our opinion, were not accomplished, for this reason, we have filed a claim against this company," Skvarnovics added. The Riga Northern District Court told LETA, however, it has not yet received Riga Shipyard's claim against Nordweg Ship Repair. In the spring of 2014, several insolvency claims were filed against Riga Shipyard. Skvarnovics blamed the claims on one of the company's minority shareholders. These insolvency claims were artificial and intended to generate major publicity, the claimant was expecting Riga Shipyard to go bankrupt any moment. All these attempts failed, Skvarnovics said in an interview with LETA. Read more.

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