Headlines

Chinese group Zhejiang Youngman Lotus Automobile could make a fresh bid for failed Swedish carmaker Saab next week, sources with knowledge of the situation said on Wednesday, Reuters reported. Saab was declared bankrupt by a Swedish court in December after protracted rescue efforts by owner Swedish Automobile. A key stumbling block was the refusal of former owner General Motors to allow its technology, which underpins Saab cars, to fall into Youngman's hands.

Portugal is trading in default territory after investors offloaded the country’s bonds this week amid rising fears of contagion. Worries are mounting that the private sector and Greece will fail to agree a restructuring package for Athens’ debt, the Financial Times reported. Many investors were also forced to sell Portuguese bonds after Standard & Poor’s downgraded the country to junk on Friday. Other funds sold Portuguese debt after Lisbon was removed from Citigroup’s European Bond Index, which these investors track, because of its fall to junk status.

With a deadline looming to submit plans showing how they will satisfy new capital requirements, European banks are taking unorthodox steps to boost their cash buffers—but the steps do little to fundamentally strengthen their shaky finances, The Wall Street Journal reported. The European Banking Authority last month instructed 31 banks to come up with a total of about €115 billion (about $146 billion) in new capital by June 30, the latest attempt by regulators to quash continuing concerns that the Continent's banks have dangerously thin cushions to absorb sudden losses.

Britain's bankers should not pay themselves big bonuses at a time of poor share price performance, more-or-less explicit tax-payer subsidy and falling living standards for most other workers, Bank of England Governor Mervyn King said on Tuesday, Reuters reported. As banks gear up for their annual round of bonus payments, King said they should put the money aside to bolster against future financial market shocks.

Moody's Investors Service downgraded Catalyst Paper Corp. on Tuesday after the company signed a deal to significantly cut its debt under a recapitalization plan that will see its bondholders take control of the firm, CanadianBusiness.com reported on a Canadian Press story. The agency downgraded Catalyst to Ca from Caa3 and its senior secured notes to Caa3 to Caa2. The company's senior unsecured notes were downgraded to C from Ca. Under the Moody's rating system, anything less than BBB is considered too risky for conservative fund managers such as pension plans.

A famed entrepreneur who was once rated Ireland's richest person was declared bankrupt yesterday as a bank pursues him for debts exceeding €2.1 billion ($3.3 billion), The New Zealand Herald reported. Lawyers for tycoon Sean Quinn withdrew his opposition to a Republic of Ireland bankruptcy order sought by the former Anglo Irish Bank, the reckless lender at the centre of Ireland's calamitous property crash.

Italian yellow pages group Seat Pagine Gialle urged creditors to agree a restructuring of its 2.7 billion euros ($3.44 billion) of debt, warning it would otherwise go into special administration, Reuters reported. Turin-based Seat said on Tuesday its board would meet shortly, likely by the end of January, to approve a final debt restructuring proposal and set a last deadline. Seat said that if its final proposal is not accepted, it would make no more extensions and start special administration proceedings under Italy's so-called Marzano law.

Last week’s claims that Greek public debt restructuring talks had “collapsed” would have sent jitters through the eurozone had not Standard & Poor’s downgrades created bigger waves, the Financial Times reported in a commentary. As it is, the private bondholders’ bluff may be counterproductive. It should galvanise Athens’ official creditors in their effort to capture more of the market discount on Greece’s debt. If they jettison their misguided wish for a “voluntary” debt ex­change, a deal remains achievable.

The European Central Bank's increasingly swollen balance sheet has helped bring a measure of calm to volatile markets, but some believe it could itself become a problem and bring more volatility to the 17-nation currency bloc, The Wall Street Journal reported. Nearly a year of anticrisis-lending measures have sent the ECB's books to a record €2.73 trillion ($3.46 trillion), some 29% of the euro zone's gross domestic product, its highest percentage ever.

Ireland's High Court declared Sean Quinn, once the country's richest men, bankrupt on Monday, preventing the former tycoon from returning to the corporate arena for at least five years and marking yet another twist in a complex legal battle over nearly 3 billion euros (2.4 billion pounds) in debts, Reuters reported. Quinn, 65, who turned a rural quarrying operation on his family farm into a 4 billion euro globe-spanning empire, has come to personify the rapid unravelling of Ireland's "Celtic Tiger" economy.