Headlines

Financially troubled Slovenia bought itself some breathing room Wednesday by raising more than $1.3 billion with a bond sale, easing fears that near-term funding problems could force it into an international bailout, The Wall Street Journal reported. But the former Yugoslav republic that for years was seen as post-communist success story still faces serious challenges as it tries to shore up an ailing banking sector and revive growth in its flagging economy.

The Hong Kong government has proposed measures to provide greater protection for creditors and simplify company liquidations in the first reform of the city's insolvency laws in almost 30 years, the South China Morning Post reported. Under the reform, companies are banned from selling their assets at below market prices up to five years before they wind up. Such below-market transactions mean companies can unload all valuable assets and leave too little for creditors such as employees, bankers or suppliers.

A federal appeals court has resolved a split among judges in U.S. Bankruptcy Court in Manhattan that could help determine when recognition as a foreign main proceeding should be granted in Chapter 15 bankruptcy petitions, Thomson Reuters News & Insight reported. The ruling by the 2nd U.S. Circuit Court of Appeals also helped clarify that liquidators of investment funds chartered offshore will not be precluded from U.S. courts under Chapter 15.

German PV developer Solen has declared bankruptcy and filed for insolvency at the Meppen district court after failing to repay the interest on a loan, PV-Tech reported. According to the company, poor results as a result of cuts in the German Renewable Energy Act (EEG), falling PV prices over the last two years and high interest rates resulting from a corporate bond have meant that the firm has been unable to fulfil its obligation to its creditors. Despite the declaration of bankruptcy, the business is operating as usual.

South Korea unveiled a Won17.3tn ($15.4bn) supplementary budget on Tuesday to support the stalling economy, as domestic consumption remains sluggish while exports slow because of the weaker yen and cooling global demand, the Financial Times reported. The supplementary budget was larger than expected, mainly because it contained plans to raise debt to make up for anticipated tax revenue losses resulting from the slowing economy, and delays to the attempted sale of state holdings in two banks.

Spanish fishing firm Pescanova sank deeper into scandal on Tuesday as shareholder anger mounted over accounting failings and the chairman's undeclared sale of shares in the period leading up to insolvency proceedings, Reuters reported. Pescanova, a household name in Spain and one of the world's largest fishing groups, filed for insolvency on April 15 on at least 1.5 billion euros ($2 billion) of debt run up to fuel expansion before economic crisis hit its earnings.

The Polish government will work to correct “a giant mistake” that is the country’s private pension system, introduced in 1999 and responsible for the bulk of Poland’s public debt, its finance minister said Tuesday, The Wall Street Journal Emerging Europe blog reported. The government in recent years has wrestled with privately managed pension fund companies, which receive a percentage of gross salaries and invest it in the capital market.

Prosecutors in Italy are seeking to seize 1.8 billion euros ($2.4 billion) of assets from Nomura Holdings Inc. as part of an investigation into Banca Monte dei Paschi di Siena SpA’s use of derivatives to hide losses. Sadeq Sayeed, Nomura’s former European head, and Raffaele Ricci, a managing director in fixed-income sales, are also being probed for colluding to obstruct regulators and making false statements, prosecutors in Siena, where the bank is based, said in a statement today.

A credit boom in China failed to keep economic recovery on track in the first quarter, suggesting the cash sloshing around the economy is not yielding the desired effect of stoking growth and could instead exacerbate property and inflationary risks, Reuters reported in an analysis. A rapid rise in credit in recent months has been driven by the fast-growing shadow banking sector rather than formal bank lending, raising two major concerns.

The European Parliament Tuesday made the final approvals necessary to cap bankers bonuses at a maximum of twice salary – and only then with shareholder approval – in a move aimed at curbing excessive risk taking while boosting capital buffers and increasing funds that can be lent to small businesses, The Wall Street Journal MoneyBeat blog reported. European Commission President, Jose Manuel Barroso, said the new capital requirements would enable banks to “absorb future shocks themselves, without asking the taxpayer for help.” The new rules will come into effect Jan.