There are signs in the Northern Mariana islands to declare the national pension fund bankrupt, a move that would put an abrupt stop to fortnightly payments to retirees, Radio Australia reported. The Retirement Association has angrily opposed the idea, calling on the government to cut back spending on what it sees as "bloated" agencies to ensure pension payments aren't jeopardised. It's a sorry turn-around for the fund, which five years ago was worth close to half a billion US dollars, but is now down to $US140 million. It's having to draw on its assets to meet pension payments. Observers say the reversal began after the government stopped contributing to the fund, after tax revenue plunged following the demise of CNMI's lucrative garment industry. Read more.
Daily Insolvency News Headlines
Fri., September 11, 2009
Fri., September 11, 2009
The parent company of Greek telecommunications company Wind Hellas Thursday said it has begun contacting strategic and financial investors about selling its assets, as part of a process to restructure the firm's €3.2 billion debt pile. Hellas II said in a statement that it expects to receive expressions of interest during the week of Sept. 21. The company said the assets it is looking at selling are shares in Wind Hellas and another of its subsidiaries, Hellas IV, as well as intercompany debt. People familiar with the matter told Dow Jones Newswires Monday that private equity firms TPG and Apax Partners are considering putting new cash into Wind Hellas. The two buyout firms are former owners of the company, previously known as TIM Hellas, which they sold to Weather Investments SpA, a holding company majority-owned by Egyptian financier Naguib Sawiris, in 2007 for €3.4 billion, including some €2.9 billion debt. Read more. (Subscription required.)
Fri., September 11, 2009
Frank Stronach, an immigrant from Austria, began in 1957 making sun visor brackets for General Motors in a Toronto garage. On Thursday, Mr. Stronach’s vision of becoming a full-fledged automaker came full circle. His company, Magna International of Canada, is likely to take control of the European operations of G.M., The New York Times reported. G.M. told the German government that it had decided to sell a 55 percent stake in the European unit to Magna and its Russian investment partner, Sberbank. G.M. will retain 35 percent, and Opel’s employees will hold the remaining 10 percent. G.M.’s decision was a relief for Chancellor Angela Merkel of Germany, who faces an election in less than three weeks. Magna had gained the support of the German government and of Opel’s unions by promising to maintain jobs in that country. But a final agreement is not expected before the election. G.M. stressed that it still needed union agreement for the revamping of the four Opel plants in Germany, which employ almost half of G.M.’s 55,000 workers in Europe. And the German government has yet to say how much money it will commit. It had initially pledged more than $6.5 billion in loan guarantees. Read more.
Thu., September 10, 2009
Thu., September 10, 2009
Creditors' trusts are becoming more common in their use as companies seek to quickly distance themselves from the voluntary administration process and continue on with their corporate lives, Mondaq reported. This is often for legitimate reasons, the most common being for publicly listed companies seeking to minimise the impact of voluntary administration on their listed status. A creditors' trust in its simplest form sees the creditors of a company forego their rights as creditors against that company and in return become beneficiaries under a trust to share in a "trust fund" that is established for this specific purpose. The Administrator usually becomes the trustee of the trust and has the main job of realising the trust fund and distributing it to the beneficiaries. Read more.
Thu., September 10, 2009
Global drinks giant Diageo PLC Wednesday rejected proposals from the Scottish government designed to safeguard the jobs of Scottish workers and said talks on the issue are now closed, Dow Jones reported. "We examined the alternative proposals thoroughly," said David Gosnell, Diageo's managing director for global supply. "They don't deliver a business model that would be good for either Diageo or Scotland." The proposals from the Scottish government set out to use public money to protect 900 workers, whose jobs are under threat from Diageo's planned restructuring. Read more. (Subscription required.)
In a related story, the U.K.'s largest labor union said it was "outraged and furious" at Diageo PLC's rejection of a Scottish government proposal designed to safeguard the jobs of Scottish workers. The global drinks giant Wednesday said it "regards the dialogue on its business case with the Scottish government as closed." Read more. (Subscription required.)
Thu., September 10, 2009
Australian retail sales came off the boil in July signaling the impact of the government's fiscal stimulus is fading quickly, and calling into question market expectations of a rise in interest rates in coming months, The Wall Street Journal reported. Housing finance also weakened in July, its first monthly drop since September 2008, evidence that recent widespread talk of rising interest rates may have put a brake on demand. The Australian dollar fell sharply after the data, backing away from earlier 1-year highs of US$0.8662, as traders revised lower the prospect for a rate hike at the Reserve Bank of Australia's next policy meeting on Oct. 6. It was recently trading at US$0.8599. Read more. (Subscription required.)
