Headlines

Nortel Networks Corp., which has been selling off all of its businesses under court protection from creditors, said Thursday it lost US$115 million in its latest quarter, the Winnipeg Free Press reported on a Canadian Press story. The former telecom hardware maker, which keeps its books in U.S. dollars, said the loss amounted to 23 cents per share in the quarter ended June 30 compared with a loss of $1.6 billion or $3.22 per share a year ago. Revenue totalled $1 million for the quarter compared with $145 million in the second quarter of 2010.

Russian conglomerates Kaskol and RU-COM will increase their energy holdings by together acquiring Composite Technology Corp.'s assets out of its U.S. bankruptcy proceeding in a deal valued at more than $11 million, Dow Jones Daily Bankruptcy Review reported. The Russian companies' joint venture, called CTC Acquisition Corp., will pay $1 million in cash and take on the responsibility for at least $10.5 million of Composite Technology's liabilities, according to a purchase agreement filed Tuesday with the U.S. Bankruptcy Court in Santa Ana., Calif.

With the sense of economic crisis deepening in Europe after the United States debt downgrade, investors have played Who’s Next with the shrinking list of nations that still hold the top rating of AAA. And their sights have landed on France, the International Herald Tribune reported. The head of the French central bank, Christian Noyer, leaves the Élysée Palace in Paris after a meeting with the heads of major French banks and President Nicolas Sarkozy.

New steps to save the euro are raising anxiety levels among Germany's influential economic policy establishment, which sees them as an existential threat to the principles that helped raise the country from the ashes of World War Two, Reuters reported. Many saw Chancellor Angela Merkel's decision last month to let the euro zone rescue fund buy the bonds of vulnerable member states on the open market as a step toward a "transfer union," in which Germans are forced to pay for the sins of others.

Greece's ambitious reform program suffered a double setback Wednesday after it emerged that talks with the country's creditors on a bond swap plan have stumbled and fresh data showed a sharp increase in the budget deficit, The Wall Street Journal reported. Citing poor private sector participation, officials said that a plan to swap Greek government debt maturing by 2020 into new, longer-dated securities, might be extended to include bonds falling due in 2022 or even 2024.

Commercial printer Blue Star Group has won the support of bond holders for a debt restructuring after saying the alternative was receivership, but the "close call" for hundreds of workers has angered the union representing them, The New Zealand Herald reported. Bond holders voted 76.9 per cent in favour of the refinancing proposal, surpassing the 75 per cent required.

Some European suppliers are preparing to demand cash-strapped Swedish Automobile be declared bankrupt, hoping the threat will pressure the carmaker into paying debts, an auto industry group said on Wednesday. Car production at Saab, rescued from bankruptcy in early 2010 by Netherlands-based Swedish Automobile, ground to a standstill in April because suppliers who had not been paid refused to deliver components. Lars Holmqvist, head of the European Association of Automotive Suppliers, told Reuters that Spanish auto panels maker Matrici S.

Germany may propose the creation of a euro zone “stability council” to undertake competitiveness checks and impose sanctions on profligate EU states, the Irish Times reported. The proposal, floated yesterday by German economy minister Philipp Roesler, includes plans for debt controls that would be written into state’s constitutions. “We need a new stability pact for Europe” to bring about a “new culture of stability”, said Mr Roesler. “It’s not enough to just open rescue umbrellas,” he told reporters at a news briefing in Berlin.

One of the most common catchphrases in the consulting business is that there are opportunities to be found in every crisis, Spiegel Online reported. The global financial crisis of 2008 indeed provided the German economy with the chance to shine. German businesses enjoyed stronger growth than most rivals once the worst of the crisis was over. Germany emerged as a world champion of the economic rebound. But is the worst truly over? With its downgrading of the United States' top credit rating on Friday, Standard & Poor's triggered fears that we may be facing a double-dip recession.

Former Anglo Irish Bank chief executive David Drumm faced the final round of questions from creditors in Boston yesterday before a final decision on whether he should be discharged from bankruptcy, the Irish Times reported. Public trustee Kathleen Dwyer has set August 31st as the last time objections can be raised to his discharge – which, if granted, would effectively shield him from multiple claims.