Headlines

Foreign and domestic investors are preparing to pounce on bad debts held by Chinese banks—a potentially lucrative but risky area that has disappointed investors in the past, The Wall Street Journal reported. Specialist investors are starting to raise funds on the expectation that the country's lenders, under pressure to improve their balance sheets, will soon sell nonperforming loans. Distressed-debt investors buy bad loans from banks at a fraction of the amount the banks originally lent.

A radical new option for the financial rescue of Cyprus would force losses on uninsured depositors in Cypriot banks, as well as investors in the country’s sovereign bonds, according to a confidential memorandum prepared ahead of Monday’s meeting of eurozone finance ministers, the Financial Times reported. The proposal for a “bail-in” of investors and depositors, and drastic shrinking of the Cypriot banking sector, is one of three options put forward as alternatives to a full-scale bailout.

Bahrain-based Arcapita Bank, the first Gulf company to file for bankruptcy in the United States under Chapter 11 rules, said on Saturday it had submitted a plan to reorganise the company, Reuters reported. The investment firm filed for bankruptcy in New York in March and was given court approval in November to take out a $125 million sharia-compliant loan to provide funding while it restructured its debts. Arcapita's case is being closely watched in the Gulf, where companies have little recourse to orderly ways of dealing with insolvency.

Financial benefits resulting from the agreement on bank debt does not necessarily equate to an alleviation of austerity, the secretary general of the Department of Finance has suggested. John Moran said that breathing space created by last week’s deal provided the Government with options for forthcoming budgets. But it does not automatically mean a dramatic shift in the State’s approach towards reducing the deficit, the Irish Times reported. “You basically have a choice with respect to the money that you are no longer spending,” he said.

Venezuela devalued its currency against the dollar on Friday, a move made by the government of ailing President Hugo Chávez to ease deepening shortages, but is also expected to stoke inflation and further weaken the economy, The Wall Street Journal reported. The bolívar—whose official name is the Strong Bolívar—was slashed by nearly a third of its value to 6.3 per dollar from a previous rate of 4.3 per dollar, Finance Minister Jorge Giordani told a news conference.

The Serious Fraud Office trial of three men associated with the collapsed firm Dominion Finance is due to begin in Auckland this morning, The New Zealand Herald reported. Dominion Finance Group and North South Finance were operating subsidiaries of the NZX-listed Dominion Finance Holdings. Both offered property and commercial loans. DFG went into receivership in September 2008, and NSF went into receivership in July 2010. DFH entered voluntary administration in October 2008 and was placed in liquidation in February 2009. It is estimated the group owes creditors $400 million.

Irish Prime Minister Enda Kenny said on Thursday that a new schedule for repaying debts incurred in support of the country's stricken banks will reduce his government's borrowing needs over the next decade and cut its budget deficit by €1 billion ($1.35 billion) a year, The Wall Street Journal reported. He told lawmakers that under a plan that had been discussed with the European Central Bank, the government will exchange new bonds with maturities of as long as 40 years for existing promissory notes with an average duration of between seven and eight years.

Liquidators will be appointed to the Irish Bank Resolution Corp, following the introduction of emergency legislation in the Dáil shortly after midnight by Minister for Finance Michael Noonan, the Irish Times reported. The legislation was drafted as part of a deal with the European Central Bank (ECB) that will result in a major improvement in the terms of Ireland's bank debt. The ECB's governing council will discuss the deal today at its monthly meeting in Frankfurt.

France's government supports an Egyptian takeover offer for the threatened Petit-Couronne oil refinery in Normandy, the industry minister said on Thursday, raising hopes the plant will outlive a mid-April deadline for closure, Reuters reported. The refinery owned by insolvent Swiss company Petroplus is due to shut on April 16 if administrators decide that five bids submitted so far, including the Egyptian one and others by Swiss, Libyan and French firms, do not constitute valid offers.

Struggling Japanese electronics maker Fujitsu is slashing 5,000 jobs, or nearly 3 percent of its global workforce, as it seeks to boost profitability by reshaping its computer-chip business and its overseas operations, the Associated Press reported. Fujitsu said Thursday the job cuts will be completed by the end of this fiscal year next month, and will rely on early retirement, layoffs and other methods. Details were undecided.