Headlines

The European Commission said on Monday it had found recapitalisation and restructuring aid measures in favour of the cooperative banking sector in Cyprus to be in line with EU state aid rules, Cyprus Mail reported. In a statement, the Commission said the measures would enable the cooperative banking sector to become viable in the long term without continued state support, while limiting the distortions of competition created by the aid.

The TSX-listed stock of North American gold producer Veris Gold on Monday climbed after the company announced that a restructuring committee announced earlier this month was investigating strategic alternatives and to plan the financial restructuring of the company, Mining Weekly reported. The special committee had retained investment bank Raymond James & Associates as its sole investment banking advisor to provide financial advice concerning a variety of potential business transactions that may be undertaken in the course of the financial restructuring of the company.

The drawn-out period of forbearance agreements between LDK Solar and US bondholders looks over and the heavily indebted PV manufacturer could start insolvency proceedings in the Cayman Islands should bondholders not agree on a settlement, PV-Tech reported. LDK Solar said that it had made considerable progress with its key offshore creditors in line with two options, both proving hard for creditors of its convertible notes to bear. The company said that it remained optimistic about reaching a settlement in the next few days.

Ukrainian parliament Speaker Oleksandr Turchynov, handed presidential powers as lawmakers prepare to form a coalition government, warned that the economy was in a “pre-default situation,” Bloomberg News reported. Lawmakers in Kiev worked on reshaping government after ousting Viktor Yanukovych from the presidency for a role in the violence that killed at least 82 people last week. The U.S. and the European Union pledged aid for a new cabinet. Border guards stopped Yanukovych at an airport in the eastern city of Donetsk two days ago. He wasn’t detained.

Spain's government is studying measures to help struggling companies restructure their debts, which could include transferring banks' exposures to such firms to a newly-created external fund, a banking source familiar with the talks said. Spanish investment bank N+1 has produced a study, seen by Reuters, on the potential creation of a vehicle that would aid debt-for-equity swaps by allowing banks to exchange loans for stakes and transfer those stakes to an externally-managed fund.

Suntech Power Holdings Corp., the Chinese solar-panel maker that defaulted on $541 million of bonds, filed for bankruptcy court protection from U.S. creditors as it liquidates in the Cayman Islands, Bloomberg News reported. The company filed its Chapter 15 petition late Friday in U.S. Bankruptcy Court in Manhattan as part of a restructuring agreement with petitioners seeking an involuntary filing last year. In November, Suntech told the court that the proposed action by U.S. creditors could derail restructuring efforts.

Greece was set to resume protracted talks with a troika of international inspectors Monday, as the government aims for a deal that would unlock a fresh tranche of aid—but without painful new cutbacks ahead of local elections this spring, The Wall Street Journal reported. The talks, which have dragged on since September, come amid signs Greece has surpassed budget and economic targets set by its creditors, potentially strengthening Athens's negotiating position and easing the need for further politically contentious austerity measures in the months ahead.

Sree Metaliks, a maker of sponge iron in Odisha, could well be the second company where promoters may end up relinquishing management control over loan default. Agarwals, the founders of the company, face the prospect of losing the company as its key lender, IFCI, plans to sell its convertible debentures to any bidder to recover its dues, the Economic Times reported. The move to change management of a defaulting company is rare and comes within a month of the Reserve Bank of India and finance ministry prodding lenders to chase away defaulting borrowers.

The Financial Markets Authority has dropped civil proceedings against four Lombard directors as the failed finance company's receivers have reached a $10 million settlement with the men, their insurers and an unnamed "third party", The New Zealand Herald reported. The receivers had made civil claims against the directors for alleged breach of duties but announced today a settlement had been reached.

Creditors of Hypo Alpe Adria should contribute to the costs of winding down the nationalised Austrian lender, the finance ministry said on Thursday, listing insolvency or voluntary debt haircuts as possible options, Reuters reported. The comments widen a split between the government and bank supervisors over how to handle Hypo, whose chronic capital needs have required 4.8 billion euros ($6.6 billion) in taxpayer support since 2008.