Headlines

Espírito Santo International SA's main unit, Rioforte Investments, is preparing to file for creditor protection in Luxembourg because of mounting pressure to repay debt with funds it doesn't have, The Wall Street Journal reported. In the latest sign of stress, Rioforte is unlikely to repay €897 million ($1.22 billion) in debt held by Portuguese telecom giant Portugal Telecom SGPS SA, according to a person familiar with the situation. The deadline for the majority of the debt is by midnight Tuesday.

Some large shareholders in Grupo Oi SA could sue partner Portugal Telecom SA if a debt investment made by the latter ends up in default, which could delay the companies' planned merger, a source close to the deal said, Reuters reported. Shareholders of Rio de Janeiro-based Oi want to push Portugal Telecom to take a smaller stake in the company resulting from the merger, depending on the outcome of the debt negotiations later on Tuesday, said the source, who declined to be identified because of the sensitivity of the issue.

Bulgaria is asking the European Central Bank to take over supervision of its lenders after runs on deposits triggered the worst financial crisis in 17 years, Bloomberg News reported. Bulgaria’s central bank has contacted the ECB’s Executive Board to start the procedure to join the Single Supervisory Mechanism, it said in an e-mailed statement today. The request follows an announcement by President Rosen Plevneliev after a meeting with leaders of the country’s biggest parties and senior government officials yesterday.

British regulators said on Tuesday that they planned to cap the fees and interest that so-called payday lenders can charge for short-term loans, the International New York Times reported. The Financial Conduct Authority, which began regulating consumer credit companies this year, is calling for a cap on interest and fees of no more than 0.8 percent per day on payday loans, beginning in January. Fixed default fees would be capped at 15 pounds, or about $26, and the overall cost of any loan would not be allowed to exceed the amount borrowed.

Banks shouldn’t count on a fresh round of European Central Bank cash to trade sovereign debt and reap big profits, Mario Draghi said, Bloomberg News reported. “The convenience to use the ECB cheap money to buy government bonds is much less” than in a previous funding round which started in 2011, the ECB president said in testimony to the European Parliament in Strasbourg, France yesterday.

When the Insolvency Service of Ireland (ISI) came into being over a year ago, the then minister for justice, Alan Shatter, said it was the “light at the end of the tunnel” for tens of thousands of distressed borrowers who were no longer able to service their debts as a result of years of reckless borrowing and reckless lending, coupled with the worst recession in the history of the State, the Irish Times reported in an analysis.

Creditor banks of Alitalia have reached agreement on how to share the burden of a debt restructuring for the Italian airline, UniCredit Chief Executive's Federico Ghizzoni said on Monday, Reuters reported. The green light from the banks, together with an agreement between Alitalia and the unions on job cuts, are key factors for the airline to seal the final terms of a rescue deal with Abu Dhabi's Etihad.

Just 124 deals on debt were done under the auspices of the Insolvency Service of Ireland (ISI) in the second quarter of 2014 according to figures published today, the Irish Times reported. The State agency set up last year to help distressed borrowers admitted the number was low, but it insisted the rate of pick-up was increasing as people became more familiar with the options open to them. However critics have said that low number of applications being successfully processed proves that the agency has been a “failure”.

Spanish wireless networks provider Gowex filed for bankruptcy on Monday, a week after an accounting fraud at the firm was revealed, while the High Court said its founder could face a jail sentence of more than 10 years. Law firm Velez & Urbina said Gowex had decided to file for bankruptcy because it was in a state of "imminent insolvency" and faced a "financial standstill" after a high number of contracts were ended and new projects were canceled.

Less than three weeks before Argentina risks a default, government officials still haven’t met with hedge funds who won a court ruling forbidding the country to make bond interest payments before they get $1.5 billion, Bloomberg News reported. “We have not seen any indication that Argentina is serious about even beginning a negotiation,” NML Capital, one of the holders of bonds from Argentina’s 2001 default that sued for full repayment, said in a statement July 11.