Headlines

The Reserve Bank of India's (RBI) new restructuring tool unveiled on Monday will raise banks' moral hazard risk because the high debt of these over-leveraged companies means their market capitalisation does not match the haircuts banks are likely to take, the Economic Times reported. Under a new 'Scheme for Sustainable Structuring of Stressed Assets' (S4A), RBI allowed banks to take equity in debt laden firms permitting them to split total loans of struggling companies into sustainable and unsustainable based on the cash flows of the projects.

Buoyed by an improving steel market, Essar Steel Algoma is now hinting it may be healthy enough to emerge from insolvency protection without a new buyer or outside investment, SooToday.com reported. In addition to reviewing bids from prospective purchasers, company officials "have been evaluating other potential restructuring alternatives, including a potential replacement [debtor-in-possession financing] and a standalone restructuring plan," Rajat Marwah, Essar Algoma’s chief financial officer, said in a sworn affidavit.

A vote in favor of a British exit from the European Union could require the U.K. government to implement emergency tax increases and fresh cuts to public spending, Treasury chief George Osborne will say Wednesday, as polls show support for exiting the EU is gaining ground, The Wall Street Journal reported. In a speech in southern England, Mr.

Retail tycoon Philip Green faces tough questions on Wednesday from British lawmakers when they hope to get to the bottom of why he sold department store chain BHS to Dominic Chappell, a serial bankrupt with no retail experience, Reuters reported. After more than a month of hearings into the demise of BHS, which put 11,000 jobs at risk and left a gaping pensions' deficit, the star witness is finally due to appear before a joint session of parliament's Business, and Work and Pensions select committees.

Liquidators of Queensland Nickel have been forced to seek fresh court summonses to grill Clive Palmer and his associates after the outgoing federal MP hit them with a compensation claim blaming them for the demise of the business, The Guardian reported. Lawyers for FTI Consulting were due to question Palmer’s nephew and Queensland Nickel managing director Clive Mensink in the federal court on Tuesday but failed to serve him in person before he went on holiday to Hong Kong.

Greece’s central bank governor has urged the country’s creditors to rework a core element of Athens’ new bailout, saying ambitious budget surplus targets agreed with the leftwing Syriza government are “unrealistic and socially unattainable.” Yannis Stournaras called for “a new deal” that would reduce the fiscal surplus, before debt payments, Athens must achieve — from 3.5 per cent to 2 per cent of national output — beginning in 2018.

Singapore said it would overhaul its system to combat money laundering, weeks after it ordered the local arm of a Swiss bank to shut down operations in relation to a laundering and bribery probe, The Wall Street Journal reported. Monday’s announcement comes as prosecutors in Singapore investigate what they said last month was the city-state’s largest-ever money-laundering investigation, involving embattled Malaysian state investment fund 1Malaysia Development Bhd., known as 1MDB.

Turkey needs “a new growth model, a new story. Growth based on hot money flows is over.” Those are the words of Cemil Ertem, chief adviser to Recep Tayyip Erdogan, Turkey’s president, in a television interview on June 9, the Financial Times reported. Mr Ertem is one of many government figures who have castigated Turkey’s central bank for not lowering interest rates quickly enough, and who see foreign portfolio investors and an ill-defined “interest rate lobby” as the enemies of Turkish prosperity.

China Vanke, the mainland's biggest property company by sales, said it will submit details of a proposed $9.3 billion restructuring involving subway operator Shenzhen Metro Group to the stock exhange this week, and expects to resume trading by early July, Reuters reported. Vanke's shares were suspended on the Shenzhen Stock Exchange in December and it announced the deal with Shenzhen Metro in March as its management fought to retain control of the company in a battle with its major shareholder, financial conglomerate Baoneng.

The Reserve Bank of India relaxed guidelines on Monday for lenders restructuring large stressed loans, in a move that could allow banks to more effectively manage bad loans, Reuters reported. Indian banks are grappling with about $120 billion in stressed loans, or 11.5 percent of the total, and RBI Governor Raghuram Rajan has set a deadline of March 2017 for them to clean up the bad loans on their balance sheets. The central bank said late on Monday that lenders would be allowed to carve up stressed loan accounts into two categories.