Headlines

CET Govora, the state-owned electricity and heat producer, has filed for insolvency, Business Review reported. The company was a supplier for several cities, including Ramnicu Valcea. CET Govora has debts of around EUR 200 million for the coal it got from another state-owned company, Complexul Energetic Oltenia. The company also has to recover money. For instance, it should receive RON 137 million from state-owned petrochemical plant Oltchim, which is at present in insolvency.

India's lower house of parliament on Thursday backed a new bankruptcy code, a crucial step towards establishing a debt resolution regime to strengthen the hands of banks seeking to recover $120 billion in troubled loans, Reuters reported. The Insolvency and Bankruptcy Code 2016, passed by a voice vote, is expected to be approved by the upper house next week as the main opposition Congress party has pledged its support. The government will repeal an ineffectual, century-old insolvency law and amend 11 laws now dealing with defaulters.

Kaisa Group Holdings Ltd., which last year became the first Chinese real estate developer to default on dollar bonds, is seeking to use U.S. bankruptcy law to help its debt reorganization in a Hong Kong court, Bloomberg News reported. The Shenzhen, China-based company filed a Chapter 15 petition in Manhattan court Thursday. Companies use that provision of U.S. bankruptcy law to deal with U.S. creditors or lawsuits when reorganizing in another country.

A fertiliser producer in north China will default on bond payments on Thursday, the latest casualty of a slowing economy and rampant overcapacity in commodity sectors including basic chemicals, the Financial Times reported. Defaults have contributed to falling Chinese bond prices in recent weeks, as well as a widening of the spread between safe government bonds and low-rated corporate notes. Traders said that as the implicit guarantee gradually fades, investors were paying more attention to corporate fundamentals.

Just days after the government announced state investment company 1 Malaysia Development Berhad (1MDB) would dissolve its board of advisers, which is headed by Prime Minister Najib Razak, a well-placed source has revealed that the troubled fund is expected to default on another bond, the South China Morning Post reported. The bond is a US$1.75 billion note bearing 5.99 per cent interest, which amounts to US$52.4 million and is due on May 11.

Lenders to struggling German oil and gas safety tools producer Bartec are set to appoint a financial restructuring adviser by the beginning of next week, according to two sources close to the situation. Lenders held a beauty parade on Wednesday to appoint a restructuring adviser as they push for a bigger equity injection from the company's private equity-owner Charterhouse. Three firms - Houlihan Lokey, Deloitte and Macquarie - are in contention, with a successful party likely to be appointed by Monday May 9, the sources said.

The number of debt judgments registered against businesses in the Four Courts during the first three months of the year, was up 24 per cent versus the same period in 2015, the Irish Times reported. New figures from the non-profit organisation Registry Trust show there were 295 judgments recorded, of which 158 were against incorporated businesses and 137 for unincorporated firms. The value of first quarter judgments totalled €25 million, up 118 per cent on the first quarter of 2015.

Malaysia will dissolve the advisory board of a state-investment fund headed by Prime Minister Najib Razak, as global investigations into 1Malaysia Development Bhd. continue, The Wall Street Journal reported. The dissolution comes nearly a month after a parliamentary inquiry into the fund, known as 1MDB, called for a law-enforcement investigation into its former chief executive and urged changes in its governance.

A government-orchestrated, privately backed €4.25bn fund — rushed into place last month as investors fretted about Italy’s vast pile of bad loans run up during a long recession — has not proved the silver bullet Italian bankers and officials had hoped, the Financial Times reported. Italian bank shares plunged again this week, alongside a wider fall in banking stocks, taking their losses since the start of the year to more than 30 per cent.

Mystery bond buyers are raising eyebrows in European markets by lending millions of euros to governments for the next 100 years, the Financial Times reported. First to bite was Ireland, a country hard hit by the eurozone debt crisis and forced into an international bailout just six years ago. At the end of March, the Irish debt management agency announced it had privately raised €100m through a 100-year bond at a yield of 2.35 per cent, a rate lower than US 30-year debt. It was, said the agency, “a big vote of confidence in Ireland as a sovereign issuer”.