Asia

The global downturn could lead to unrest, more poverty and environmental challenges in Asia, regional leaders were warned on Monday, after they agreed on a $120 billion emergency fund to counter the crisis, Reuters reported. Asia has been hard hit by the collapse in global demand largely because of the region's heavy reliance on exports. Singapore, Hong Kong, Taiwan and Japan are in recession and growth elsewhere is the weakest in years. "Poverty is worsening in many countries. Businesses are struggling.
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Most countries hammered by the financial crisis ran into trouble because their banks crumbled, their exports collapsed or they ran up too much debt. Armenia, a landlocked nation of three million in the Caucasus, has a different problem, The Wall Street Journal reported. Fiscally prudent and too isolated to be hit by early fallout from the crisis, the country is proving there is no haven from the downturn: The economy has been hit hard as Armenians who live abroad send less money home.
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With the economic slump prolonged, more and more firms and individuals have become unable to service their debt payments and are filing for court receivership or debt rescheduling programs, The Korea Times reported. According to the Seoul Central District Court, a total of 72 local firms filed for court receivership in the first three months of this year, up 243 percent from the same period last year. The number of filings reached 21 each in the first and second quarter of last year.
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The holding company for Norwegian-based tape storage company Tandberg Data filed for bankruptcy in its home country court on April 24 after it could not cover a loan payment to New York City-based Cyrus Capital, eWeek reported. Tandberg, a major OEM for both IBM and Hewlett-Packard, becomes the first major storage supplier to file for bankruptcy protection since the recession began last summer. As a result of the legal action, Cyrus Capital will acquire the assets of the company and become majority owner. The new operational HQ for the company will be in Dortmund, Germany.
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Australian tourism group Stella, which owns the Harvey World Travel and United Travel brands in New Zealand, has rejected a report in an Australian newspaper claiming the company is close to collapse, The New Zealand Herald reported. The Australian yesterday said it understood accountants close to UBS, Stella's main banker, had recommended it place Stella into receivership or sell assets immediately to stem losses. UBS supported private equity player CVC Asia Pacific in buying two-thirds of the tourism business last year from the now-collapsed Gold Coast financier MFS.
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The global Stella tourism empire, which owns the Harvey World Travel chain and manages one in five Gold Coast holiday apartments, is in danger of collapse, threatening to cost banking giant UBS hundreds of millions of dollars. Private equity firm CVC Asia Pacific and UBS are understood to have lost up to $1 billion on Stella after buying two-thirds of the struggling giant last year from the now-collapsed high-risk Gold Coast financier MFS. Stella today denied that it had been advised to appoint receivers.
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Fiat will sign on Tuesday a letter of intent to buy a majority stake in General Motors' struggling Opel unit, the website of German magazine Spiegel said on Thursday, citing sources. GM is also in constructive talks with Austria's Magna Steyr, said the website, without saying where it obtained the information. The carmaker and Germany's economy ministry prefer a speedy agreement with Fiat, reported Spiegel Online, which has separate editorial staff from the magazine. It cited people close to the negotiations.
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A Tel Aviv court has appointed a receiver for the Israeli rough diamond trader Stelman, the Israel Diamond Exchange reported. Stelman’s bank debts are reportedly over $20 million. Stelman is a family-owned company with headquarters in Antwerp. According to reports, it is currently striving to reach debt settlements. Stelman was a major Diamond Trading Company (DTC) sightholder and a leading rough diamond trader. According to reports, aside from a debt of $5 million to Erez Daliyot, no Israeli diamond companies are owed money by Stelman.
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Bankruptcy petitions in Hong Kong rose to a more than five-year high in March as the recession in the city deepened, government data showed Friday. The government said individuals and non-limited companies filed 1,872 bankruptcy petitions during the month, up from 1,500 in February, Dow Jones Newswires reported. March's figure was the highest since July 2003, when 1,899 bankruptcy petitions were filed as Hong Kong was recovering from the Severe Acute Respiratory Syndrome crisis. The data come amid signs of a further deterioration in local economic conditions.
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All around Asia, leveraged finance professionals are reinventing themselves as restructuring specialists, a survival strategy amid layoffs and a slowed pipeline of splashy public offerings, mergers and acquisitions, The Wall Street Journal reported. Investment banks and law firms here also are rushing to put together teams for dealing with what bankers are predicting will be a wave of business in the region in the second half of this year. In the U.S. and Europe, bankruptcy and restructuring specialists tend to focus on those situations for entire careers.
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