Headlines

Businesses are increasingly using a little known procedure to stave off the threat of insolvency. The number of company voluntary agreements, which allow businesses to renegotiate their debts, increased by 32% in the last year to 924 from 699 in the previous year, according to accountancy firm Wilkins Kennedy, The Guardian reported. To enter a CVA a company's arrangement for repaying creditors must be approved by three-quarters of them and supervised by an insolvency practitioner.

Spain will put its bank rescue fund in charge of the bad assets separated out from the nation’s struggling lenders that are receiving a European bailout, Bloomberg Businessweek reported. The FROB fund will be the main shareholder in a so-called bad bank, according to a proposal that will be approved by the Cabinet on Aug. 24, Economy Minister Luis de Guindos told the Efe news agency in an interview Sunday. All the banks receiving loans from European rescue funds will have to transfer their non-performing assets to the bad bank, he said.

UK budget hotel chain Travelodge agreed a 635 million pound ($999.6 million) debt restructuring that will give lenders control of the business but confirms a significant loss for its Dubai owners who bought the company in 2006. The announcement comes after lending sources told Reuters in February that the group's lenders would assume control of Travelodge after it breached loan agreements in 2011.

Banks in the Netherlands are suffering rising losses on their domestic real-estate loan books, and warn that the pain isn't over as the industry struggles with structural overcapacity and a weak economy, The Wall Street Journal reported. Financial services company SNS Reaal NV on Thursday said nonperforming loans in its Dutch property loan book rose 38% to €1.33 billion ($1.63 billion) in the first half, representing 42% of its total outstanding loans.

The German government stuck to its insistence yesterday that Greece must comply with the reform and austerity conditions agreed in its €130 billion rescue package, but Berlin did not flatly reject any extension of the debt-repayment terms it faces, the Irish Times reported. Angela Merkel, the German chancellor, will meet Antonis Samaras, the Greek prime minister, for bilateral talks in Berlin next week, at which “everything can be put on the table”, according to Steffen Seibert, the chancellor’s spokesman.

Portugal’s fiscal reforms are giving investors the greatest confidence in its debt in more than a year, even as its economy struggles under the weight of austerity, Bloomberg reported. Credit-default swaps on Portugal dropped as low as 725 basis points today, from 1,515 in January and 1,237 in May. The contracts have fallen by the most of any government this year and by more than every nation except Ireland in the past month.

The euro zone will slip into recession and won't grow until 2013, according to the latest Reuters poll of economists who also don't expect any new aggressive policy response from the European Central Bank. The latest monthly survey results, released on Thursday, follow news that the euro zone just barely skirted recession in the first half of the year, with only Germany growing in the three months to June and France, the second largest euro zone economy, flatlining.

Pilots for Air France-KLM have backed proposals to alter their contracts and working conditions as part of the airline's three-year restructuring plan, aimed at reducing operating costs and debt, Reuters reported. Labour union SNPL, which represents more than two-thirds of the pilots, said on Thursday 67 percent of its members had voted for the plan. The agreement reached with pilots does not include job cuts, but does feature voluntary transfers with bonuses to Air France-KLM's low-cost arm Transavia.

Europe's banks are making more progress in whittling away their problem with bad loans, but the cloud of uncertainty hanging over the euro zone has slowed the sector's deleveraging, The Wall Street Journal reported. A study by financial-services firm PricewaterhouseCoopers estimates European banks sold a record €27 billion ($33 billion) in noncore loans in the first half of the year, and may sell as much as €50 billion over the whole of the year, after €36 billion in 2011.

Belize has threatened to withhold a coupon payment due on a $547m bond this month, which could plunge the Central American country into formal default and casts a cloud over restructuring talks with creditors, the Financial Times reported. The bond maturing in 2029 is a product of a previous debt restructuring in 2006 and represents roughly half of Belize’s total public debt, according to the government. “We simply cannot afford this coupon payment given the financing shortfalls and other challenges we face,” Dean Barrow, Belize’s prime minister, said.