Daily Insolvency News Headlines

Wed., July 29, 2015

Wed., July 29, 2015

Instability continued to roil China’s stock markets on Tuesday in spite of new pledges of support from the government, the International New York Times reported. Coming off its biggest one-day decline since 2007, Shanghai’s main share index seesawed throughout Tuesday — falling as much as 5 percent as trading opened and rising 1 percent at one point — to end down 1.7 percent. The precarious display on China’s bourses after several weeks of relatively calm movements has shaken global financial markets. Prices for metals like copper, of which China is a major buyer, fell to six-year lows during the past two days. Oil has also slumped, trading closer to the six-year lows it reached this spring. “This is not the first time that massive volatility has found its way into the Chinese equity market,” said Peter Alexander, the founder and managing director of Z-Ben Advisors, a financial consultancy based in Shanghai. “But this is the first time in modern history that the Chinese markets are on the global radar screen.” Read more. (Subscription required.)

Wed., July 29, 2015

Dubai-based real estate agency S&K Estate Agents said a deteriorating property market in the emirate contributed to its decision to file for bankruptcy and be liquidated, Reuters reported. "Simply put, the revenue being generated by the business drastically reduced over the first half of 2015, without enough income to cover operational costs," S&K said in an emailed statement released through a public relations firm. The company said its reputation had suffered from client complaints and a recruitment drive did not yield results quickly enough to save the business. "Current Dubai market factors didn't help, as 2015 property transactions, both in number and value, have plunged," said S&K, which had about 80 employees and an office in Los Angeles as well as Dubai. Read more.

Wed., July 29, 2015

Countries should be able to exit the euro as a “last resort” if they are unable to manage their debts, the German government’s independent economic advisers say, in a sign of Berlin’s hardening attitude towards propping up fellow members of the single currency, the Financial Times reported.The mere suggestion of a country leaving what was supposed to be an irreversible currency union had long been taboo. But Germany’s finance minister, Wolfgang Schäuble, broke it two weeks ago by suggesting a possible five-year eurozone “timeout” for Greece. The recommendation from the German Council of Economic Experts on Tuesday that, in some cases, eurozone members should be cut loose is another sign of the rapid shift in thinking in Germany amid mounting frustration over Greece. “A permanently unco-operative member state should not be able to threaten the existence of the euro,” the economists said in a special report, published on Tuesday, calling for countries to exit the eurozone if it is necessary as an “utterly last resort”. The five-member independent panel, known as the “wise men”, also argued that creditors should be forced to shoulder losses if states go bankrupt, encouraging them to scrutinise more closely the risks before they invest. Read more. (Subscription required.)

Wed., July 29, 2015

Standard & Poor’s warned Brazil on Tuesday that its investment grade rating was at risk as falling growth and political infighting hurt efforts to restore order to public finances. The agency placed Brazil’s foreign currency rating, which is one notch above junk, on negative outlook for possible downgrade, initially weakening Brazil’s currency, the real, up to 2 per cent against the dollar, the Financial Times reported. The S&P announcement came just four months after the agency last affirmed Brazil’s investment grade rating and one week after the government of President Dilma Rousseff revised budget targets. The government is under pressure to rein in spending and restore the budget to a primary fiscal surplus, the balance before interest payments, a measure that is considered a crucial indicator of the health of public finances in Brazil. Read more. (Subscription required.)

Wed., July 29, 2015

Bookmaker Ladbrokes is to retain 144 shops nationwide and continue to employ over 700 people in Ireland following the High Court’s approval of its rescue plan on Tuesday, the Irish Times reported. The UK bookmaker, which entered the examinership process in April in order to restructure the business, will now close 52 of its 196 outlets while about 90 people will leave the business as a result of a voluntary redundancy scheme. Jackie Murphy, retail director, Ladbrokes (Ireland) Limited said, “We are pleased that the process is now almost complete and the business has will soon be exiting examinership. Throughout this process we have always maintained that our company provided the best option for the future stability of the Irish business. We will now have a sustainable cost base for the company, allowing us to grow a competitive business based in Ireland, run from Ireland, which invests in Irish sport and supports the Irish economy.” Read more.

Wed., July 29, 2015

It is one of the cheapest places on earth to drill for oil — but also among the most dangerous. And, right now, Kurdistan’s intrepid band of western operators are sweating. Tumbling oil prices and a dispute over crude sales between war-torn Iraq’s federal government and the Kurdish administration have left three foreign operators — Genel Energy, Gulf Keystone Petroleum and DNO — owed hundreds of millions of dollars. A cash crunch now looms for these companies, unless the Erbil-based Kurdistan Regional Government, locked in a fierce battle with fighters from the Islamic State in Iraq and the Levant, known as Isis, can pay them. Oil is Iraqi Kurdistan’s lifeblood, and the region has plenty. “It has been prolific,” says Jessica Brewer of Wood Mackenzie, the energy consultancy. Iraqi Kurdistan’s oil and gas reserves amount to 13bn barrels of oil equivalent, making it a substantial energy province. Read more. (Subscription required.)

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