Daily Insolvency News Headlines

Thu., October 23, 2014

Thu., October 23, 2014

The eurozone's unprecedented tests of its biggest banks' financial health will fail at least 11 institutions - almost a tenth of the 130 banks being tested by the ECB, The Telegraph reported. According to the Spanish newswire EFE, banks across six countries have failed the European Central Bank's stress tests, the results of which will be released on Sunday. The identities of the banks are unknown, but they are mainly in the eurozone's struggling states, in particular Greece and Italy. Three of the banks are from Greece and three from Italy, with two from Austria and one each from Cyprus, Belgium and Portugal. Among the banks that have been identified as potential red flags are Austria's Volksbanken, Italy's Monte dei Paschi di Siena and Portugal's BCP. However, this list may not be comprehensive, with Ireland's Permanent TSB widely expected to have failed the stress test. Germany's Nordbank and Commerzbank have also been highlighted by banking analysts. Spain's economy minister, Luis de Guindos, said on Wednesday he was confident about the biggest Spanish banks' performance ahead of the tests. Read more.

Thu., October 23, 2014

Irish state-owned lender Permanent Tsb (PTSB) is selling a portfolio of mostly bad mortgage loans with a gross value of 468 million euros ($594 million) ahead of European stress tests that could require it to boost its capital, Reuters reported. PTSB said on Wednesday the mortgages, which includes 350 million euros of non-performing loans, were being sold by wholly owned-subsidiary Springboard to a company called Mars Capital Ireland No.2 Limited. PTSB declined to give details of the sale price, but said the impact on the group's profit and loss account and core equity tier 1 capital ratio -- a key measure of financial strength -- would be positive. Had the sale been completed ahead of the bank's second quarter results, it would have reduced the group's non-performing loans by around 4 percent and the loan to deposit ratio by around 1 percent, it said. "Proceeds from the sale will be used to further reduce the group's funding requirements in line with the group's ongoing restructuring of its balance sheet," PTSB said in a statement. Irish finance minister Michael Noonan last week said PTSB would not require further state assistance if it encountered problems in upcoming European stress tests of the banking industry as it was strong enough to raise capital from private investors. Read more.

Thu., October 23, 2014

Korea's leading robot vacuum cleaner manufacturer Moneual has filed for court receivership after failing to pay bonds worth 500 billion won ($474.1 million) that matured last week, The Korea Times reported. The Suwon District Court will soon decide whether to approve its request. Major creditors include the National Agricultural Cooperative Federation, the Korea Development Bank and the Industrial Bank of Korea. The firm's payment failure sent shockwaves through the investment market since the company was known as a financially healthy and technologically-innovative entity among investors. The Seoul-based company, extolled by Bill Gate in 2007 for its technological prowess, reported 1.27 trillion won in sales and 110 billion won in operating profit last year. Nearly 80 percent of its sales were generated in the overseas markets. Its liquid assets were valued at 359.1 billion won as of the end of 2013. Read more.

Thu., October 23, 2014

A Brazilian court has approved a bankruptcy protection petition filed by MMX Sudeste Mineracao SA, an iron-ore mining company controlled by Brazilian tycoon Eike Batista, the company said on Wednesday in a securities filing, Reuters reported. It was the third time in a year that a unit of the former billionaire's EBX industrial group has sought protection from creditors. The decision was taken by a court in Belo Horizonte in the Minas Gerais state. MMX Sudeste made the request after negotiations with creditors and efforts to seek new investors failed, MMX said in a filing on Oct. 15. MMX Sudeste holds nearly all the significant assets of Batista's MMX Mineracao e Metalicos SA, part of an EBX mining, oil, energy, shipbuilding and port group that suffered a spectacular collapse in 2013. The MMX Sudeste petition will probably determine if parent MMX can continue as a viable company. Delays in developing MMX iron ore mines in Minas Gerais and an iron ore terminal near Rio de Janeiro have crimped MMX revenue while increasing debt. Read more. (Subscription required.)

Thu., October 23, 2014

Bulgaria's central bank will have to revoke the licence of Corporate Commercial Bank (Corpbank) unless the Balkan country changes its laws, the central bank's spokesman told Reuters on Wednesday. Under current laws, if a bank's capital is negative, the central bank should withdraw the bank's licence, shut its operations and seek its bankruptcy within five working days. "Under current legislation the Bulgarian National Bank has no other option but to revoke the bank's licence. If the parliament makes legal changes, a rescue or restructuring of the bank will be legally possible," the spokesman said. An international audit said that Corpbank needs to write off 4.2 billion levs on total assets of 6.7 billion and the central bank has asked its administrators at the bank to carry out the necessary accounting calculations by the end of the month. Read more.

Thu., October 23, 2014

South Africa will sacrifice economic expansion in the next two years by limiting spending growth and raising more taxes as it seeks to avoid a debt trap, Bloomberg News reported. The government will cut its expenditure limit by 25 billion rand ($2.3 billion) and plans 27 billion rand of “structural increases” in revenue in the period, the National Treasury said in the mid-term budget released in Cape Town today. “We have reached the turning point,” Finance Minister Nhlanhla Nene told reporters before his budget speech to Parliament. “Fiscal consolidation can no longer be postponed.” South Africa is cutting back on consumption spending as total debt approaches 50 percent of gross domestic product, a level the government considers unsustainable. Tighter fiscal policy at a time when the central bank is raising interest rates to curb inflation may limit economic output and delay efforts to slash a 25.5 percent jobless rate. Read more.

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