Germany

Germany's justice minister has promised tougher regulation of niche investment products after the insolvency of Prokon, a wind park group that lured investors with aggressive ad campaigns on prime-time television, in buses and commuter trains, Reuters reported. The company of 1,300, which operates 50 wind parks in Germany and Poland, had raised 1.4 billion euros ($1.9 billion) by touting profit-participation rights and promises of returns of at least 6 percent a year. Consumer groups had long warned that the company, founded in 1995, was not spelling out the risks to investors.

German wind park group Prokon, which had raised 1.4 billion euros ($1.9 billion) mainly from retail investors, has filed for insolvency, a court in the north German town of Itzehoe saidon Wednesday, Reuters reported. An administrator has been appointed for Prokon Regenerative Energien GmbH, the court said in a statement. The company, which operates 50 wind parks in Germany and Poland and employs roughly 1,300 staff, had raised money by selling so-called profit-participation certificates which were marketed to investors through advertising campaigns on German prime-time television.

German wind park operator Prokon said it had to stop interest payments and would not for now redeem the millions of euros worth of so-called profit-sharing certificates sold to mainly retail investors, as too many were demanding their money back, Reuters reported. "In the current situation we are unable to make repayments or interest payouts," the group's managing director Carsten Rodbertus said in a statement on the group's website on Friday, addressing its 75,000 certificate holders.

Prokon Regenerative Energien GmbH, a German clean-power developer, collected 1.4 billion euros ($1.9 billion) from investors seeking to profit from the booming wind industry. It may now have to file for protection from creditors, Bloomberg News reported. Prokon will be forced to file for insolvency this month if it doesn’t get agreement from almost all investors to delay withdrawals from profit-participation certificates, it said in a statement. The company has sold certificates to more than 75,000 investors, promising returns of 6 percent.

European banks battered by the downturn in the shipping market face a tough 2014: the European Central Bank has vowed to make the sector a core focus of its upcoming asset quality review and stress tests, the Financial Times reported. Lenders – in particular German banks – are increasingly seeking innovative ways to reduce their shipping portfolios before the regulator takes over direct supervision of about 130 European banks at the end of the year. Yet there is a sticking point: bankers say it is not clear whether the more creative solutions will be approved under the new regime.

The German state of Bavaria may offer insolvent bookseller Weltbild financial backing to try to avert thousands of job losses, a newspaper cited Bavarian state premier Horst Seehofer as saying, Reuters reported. There are a number of options ranging "from debt guarantees to bridge financing", the Sueddeutsche Zeitung quoted Seehofer as saying on Monday. Weltbild, owned by the Roman Catholic Church and which has 6,300 employees, filed for insolvency on Friday after failing to keep up with competition from Internet-savvy rivals such as Amazon.com (AMZN.O) and to obtain new financing.

German wind park operator Prokon has warned that it may have to file for insolvency if it is unable to strike a deal with investors who bought its profit-participation certificates, Reuters reported. "If we do not succeed - together with you, our investors - to stabilise the liquidity position very quickly, we will likely be obliged to initiate a self-administered insolvency plan at the end of January," Prokon said on its website on Saturday.

Roman Catholic Church-owned bookseller Weltbild, which competes with online retailer Amazon.com in Germany, filed for insolvency on Friday after its sales shrank and it unexpectedly found itself unable to obtain fresh financing, Reuters reported. Unlisted Weltbild, which has 6,800 employees, has been posting losses as it invests in a shift to more internet-based business. The company, which relies on catalogue sales and is part owner of Germany's second biggest brick-and-mortar bookstore chain, has struggled to keep up with Amazon and its sales fell in the second half of 2013.

Chancellor Angela Merkel will tell Germans their fate is so closely entwined with the European Union that it is imperative to come up with answers on how to permanently resolve the euro zone's sovereign debt crisis, Reuters reported. In an advance text of the traditional New Year's Eve address that she will deliver on Tuesday evening, Merkel said Germany had a lot of work to do to maintain its own economic strength.

Segro Plc. announced that on Monday that it completed the disposal of the Neckermann site in Frankfurt for 46 million euros, RTTNews.com reported on Tuesday. In July, Segro had said that it exchanged contracts for the Neckermann site sale in Frankfurt for 46.0 million euros in cash to a consortium of private investors. The site was a 309,000 sq m bespoke office and distribution facility formerly occupied by Neckermann, the mail order company, which filed for insolvency in July 2012 and fully vacated the site in January 2013.