Headlines

A unit of Bahrain investment house Arcapita has filed for bankruptcy protection in the United States, the company said in a statement, Reuters reported. Falcon Gas Storage Company, a non-operating subsidiary of Arcapita, also intends to file a motion for joint administration with its parent company for the ongoing Chapter 11 restructuring, it said in the statement late on Monday. In March, Arcapita became the first Gulf entity to file for Chapter 11 bankruptcy protection in the U. S. after it was threatened with legal action if it did not repay a hedge fund in full.

China's Hony Capital plans to sell or outsource the operations at Elpida Memory's Hiroshima DRAM plant to Semiconductor Manufacturing International Corp (SMIC) if its bid for the bankrupt Japanese chipmaker is successful, the Nikkei business daily said on Tuesday. The scenario involving Hony, which is bidding along with fellow private equity firm TPG Capital, and China's top chipmaker, was drawn up by the Chinese government, the Nikkei said citing a banking source, and is one of a few being mentioned surrounding the takeover of Elpida.

A group of Brazilian and foreign investors led by buyout firm Laep Investments may bid for Brazilian power distributor Celpa, betting that a bold turnaround could save the debt-laden company from near-bankruptcy. Laep, a private equity firm that invests mainly in distressed companies, may team up with two energy funds from the United States and one from Canada to bid for Celpa, Luiz Cezar Fernandes, chief executive for São Paulo-based Laep, told Reuters. He declined to elaborate on potential terms.

After a strong rally at the beginning of the year, French bank shares are back in the doldrums, Dow Jones reported. Despite launching major restructuring plans, bolstering the capital buffers regulators say are needed to absorb possible future losses, slashing their enormous balance sheets, reducing their risk exposure and lowering their funding needs, their shares are once again languishing close to last summer's painful lows.

Spain has joined seven other euro-zone economies in recession, according to data released Monday, providing further evidence that austerity policies are failing to regenerate confidence in the region's economies and heightening pressure on the government as the country braces for a week of antiausterity protests, The Wall Street Journal reported. Almost every piece of new economic data in recent weeks has reinforced the impression that large swaths of the European economy are contracting.

European countries have narrowed their differences over new rules on bank capital ahead of a key meeting of finance ministers, but European officials say a big gap remains over whether member states should be allowed to impose higher requirements on their own banks, The Wall Street Journal reported. The ministers meet Wednesday in a gathering called specifically to pin down rules over how much capital banks in the bloc should be forced to hold on their balance sheets. Also in dispute is whether banks should be able to count capital held in insurance subsidiaries as their own.

Embattled miner Kagara has gone into voluntary administration after failing to meet its debt obligations, putting up to 325 jobs at risk, The Australian. The Perth company announced yesterday it had appointed Taylor Woodings as voluntary administrator after suspending its shares from trading last week because it had failed to refinance a $40 million debt facility with ANZ. Administrator Michael Ryan said the administration process would provide the company and stakeholders with breathing space and protection to make decisions about the future in a considered way.

National Australia Bank illustrated the tough market facing sellers of UK banking assets on Monday, scrapping plans for a sale of its British banking operations and saying it would instead shrink them by cutting 1,400 jobs, Reuters reported. The Australian bank, which operates 337 Clydesdale and Yorkshire bank branches, looked at a number of options including a sale or expansion but decided neither was realistic given the UK's return to recession last week.

Spain’s government and its banks are discussing a new scheme to segregate problematic property loans into one or more asset management companies to relieve the burden on struggling lenders, according to officials and bankers, the Financial Times reported. The “bad bank” scheme is the latest attempt by the centre-right government of Mariano Rajoy, prime minister, to avoid an international rescue programme of the sort required by Greece, Ireland and Portugal.

Spanish officials moved to shore up confidence in the ailing local economy after new data showed unemployment at an 18-year high, after credit-ratings firm Standard & Poor's slapped Spanish government debt with a two-notch downgrade, The Wall Street Journal reported. Spain's statistics bureau Friday said the country's jobless rate rose to 24.4% in the first quarter, from 22.9% in the fourth quarter of last year, inching toward its highest level on record. More than half of workers under 25 years old were without jobs.