Headlines

With record numbers of business bankruptcies this year, cash flow management in private enterprises has come back into focus as business owners try to offset poor economic conditions, the Financial Review reported. The Insolvency and Trustee Service Australia (ITSA) says the proportion of debtors reaching a business-related debt agreement in the June quarter – 25 per cent of all debt agreements – was the highest business proportion since the September quarter 2003.

Greece has a primary surplus for the first time in, well, a very long time. The budget, mind you, is still in deficit, after social security payments, interest on the debt, and payments to local government, Bloomberg reported. Nonetheless, this is a major achievement. Greece may still be borrowing to fund its debt payments, but at least it's not also borrowing to fund new spending. The government has slashed spending by 8 billion euros, or 20 percent, for the first seven months of the year while tax revenue has risen about 11 percent, to 30.8 billion euros.

Greece has completed the sale of a controlling stake in the gaming company Opap to a group of Greek and eastern European investors, boosting the country’s chances of achieving this year’s €1.6bn target for privatisation revenue, the Financial Times reported. A contract signed on Monday in Athens provides for Emma Delta, an equity fund led by Jiri Smejc, the Czech billionaire, and Dimitris Melissanides, a Greek oil tycoon, to pay €650m for the state’s 33 per cent stake in Opap.

IVG Immobilien AG, the German property company seeking to restructure 3.2 billion euros ($4.3 billion) of debt, said creditors submitted a proposal that would wipe out most of its share capital. The shares fell as much as 26 percent, Bloomberg reported. Under the proposal, new shares would be issued in a debt-for-equity swap, the Bonn-based company said in a statement on Saturday evening. That would cut its share capital to 0.5 percent of the current value, IVG said.

Greece’s announcement Monday that it ran a primary surplus for the first seven months of this year – a key condition for further help from Athens’ euro zone partners — is set to intensify a debate that has been bubbling in the background for some time: How should the currency union deal with the still-massive debt loads of some of its members?

Banks may see some of their restructured assets turning into bad loans this fiscal with gross NPAs touching around 5 per cent of the system, which calls for an urgent need to revamp the corporate debt restructuring mechanism, according to a BCG-Ficci report, The Economic Times reported.

Drug store chain Dayli will close with the loss of 2,000 more jobs after no investor put up cash to prevent Austria's biggest retail collapse in two decades, its court-appointed administrator said on Monday, Reuters reported. "Investors claimed up to the end they wanted to cover the running losses but the money did not come," administrator Rudolf Mitterlehner said in a statement, adding creditors and a bankruptcy court had agreed to pull the plug. The decision closes the last 522 Dayli stores and a warehouse.

Jaypee Group, owner of India’s most indebted cement maker, plans to sell some of its plants and real estate in a bid to cut liabilities by about 25 percent. The builder of India’s only Formula One racing track seeks to reduce debt by 150 billion rupees ($2.5 billion) by selling its cement plants in southern and western India, some of its power generation units and property in a year, Suren Jain, managing director at Jaiprakash Power Ventures Ltd. said in an interview. The flagship Jaiprakash Associates Ltd. has $10 billion of total debt, according to data compiled by Bloomberg.

While the country’s economy is often held up as a model, German banks are among Europe’s most troubled. They required a bailout bigger than the one American banks received, and many are still struggling to recover, the International Herald Tribune reported. But there is remarkably little discussion about fundamentally changing the structure of the German banking system.

Ratings agency expects Irish banks to ramp up the rate of repossessions of buy-to-let properties for those in arrears with their mortgages and, as a result, doesn’t expect some of our biggest banks to return to profitability until 2015, the Irish Times reported. These were key observations from a largely positive commentary issued by S&P yesterday as a supplementary analysis to a research update on the outlook for Ireland that it published last month.