Headlines

Instead of fixing Cyprus’s problems, a tough rescue package for the Mediterranean nation has helped turn what began as a banking fiasco into a deep slump across an economy that, according to forecasts by the International Monetary Fund, will shrink by 9 percent this year and 4 percent next year, the International Herald Tribune reported. That is bad enough, but, given the I.M.F.’s record of underestimating the pain to be suffered by earlier bailout recipients like Greece, the bleak forecast could prove too optimistic.

A leading shareholder of insolvent German home improvement retailer Praktiker is considering buying out banks in a move to save the company, Germany's leading tabloid newspaper reported on Saturday. "An insolvency is not the end. Together with other investors we are considering buying the loans held by banks," Isabella de Krassny told Bild. She and her husband Alain de Krassny together own about 15 percent of Germany's No. 3 DIY chain, according to Thomson Reuters data. Praktiker could return to profitability if costs were cut substantially, de Krassny told the paper.

The average asking price for residential property in the U.K. rose to a fresh all-time high in the early weeks of July, with further price increases expected in the coming year, fueling concerns that the government's Help to Buy program could be creating a fresh housing market bubble, The Wall Street Journal reported. Alongside robust housing data, a separate survey Monday showed that small and medium-size U.K. businesses were increasingly upbeat about their prospects in the second half of the year.

The number of companies close to insolvency dropped sharply in the second quarter, underpinning hopes of a sustainable recovery in the UK’s economy, the Financial Times reported. This is the third quarter in a row that the number of companies on the verge of insolvency has fallen, according to Begbies Traynor, the restructuring specialists whose red flag alert monitors early signs of distress in small and medium-sized companies across the UK. The number of companies showing critical signs of financial distress fell 39 per cent from June 2012 to June this year, Begbies said.

Indebted Spanish media company Promotora de Informaciones SA has weighed filing for Chapter 11 bankruptcy protection in the U.S., according to several people familiar with the matter, the latest indication of the troubled financial state of Spain's largest media company, The Wall Street Journal reported. The possible move by Prisa, as the company is known, comes as it seeks to refinance about $3 billion of debt, the people said. The discussions of different restructuring options are still fluid and nothing has yet been decided, they added.

Russia’s Sukhoi Civil Aircraft company – the maker of the Sukhoi Superjet (SSJ) – has accumulated $2 bn in debt and failed to meet its credit obligations. The problem needs to be settled by the year end, otherwise the company will default, RT.com reported. Sukhoi Civil Aircraft is now more than $600 million in debt to the State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank), with an additional $300 million unsettled to related parties, Kommersant daily reports.

Praktiker AG, the German home-improvement chain formerly owned by Metro AG, filed for insolvency after the sale of a division collapsed, and said it will focus on restructuring the business, Bloomberg reported. Units that own the Praktiker and Extra-Bau+Hobby stores and online outlets applied at Hamburg’s local court for protection from creditors, the Kirkel-based retailer said today in a statement. The Max Bahr chain won’t be affected by the insolvency move, it said.

Europe’s long-running economic troubles have been, for the most part, confined to the feeble countries of Europe: Greece, Spain, Portugal and Italy. But more and more they are coming home to roost in France, raising questions about whether one of the Continent’s biggest economies may become the next sick man of Europe, the International Herald Tribune reported. By many measures, France is already moored in malaise.

Brazilian power company Energisa SA on Thursday agreed to acquire control of Grupo Rede Energia SA, sealing a deal aimed at steering the former rival out of bankruptcy protection. Energisa has offered to pay creditors 1.95 billion reais ($862 million) and pump an additional 1.1 billion reais of fresh investments into the company, Reuters reported. Rede Energia has been struggling since energy regulator Aneel seized eight of its units last August in an effort to prevent it from halting electricity service in six states.

Australia's largest organic poultry farm, Inglewood Farms, has gone into receivership owing $60 million, The Chronicle reported. The announcement was made following news the company's directors wanted to resign after shareholders indicated that they would not provide additional funding to support ongoing operations. The company, which is a subsidiary of RM Williams, employs about 100 people and operates on a 1710 hectare property near Inglewood.