Headlines

Shares in Swedish Automobile NV soared more than 40% Thursday, following a report in Swedish media that the company's Saab Automobile unit is looking to close a long-term funding deal with a U.S. investor, Dow Jones Daily Bankruptcy Review reported. Saab Automobile's chief executive and major shareholder, Victor Muller, declined to comment on the reports. Read more.

The forces of contagion in the eurozone appear unstoppable. On Thursday investors drove yields on both Italian and Spanish debt to new highs, as fears grew that last month’s Greek rescue deal would prove insufficient to stop Europe’s financial rot, the Financial Times reported in a commentary. Without swift action from the European Central Bank, this will prove to be a contagion process with a disastrous end. Why do we face these problems? Government bond markets in a monetary union are inherently fragile.

Denmark's banking sector needs to consolidate in coming years to better withstand tougher international market conditions, the Danish Finance Minister said in an interview, The Wall Street Journal reported. "A structural adjustment needs to take place in the Danish banking sector, we have many small banks," Finance Minister Claus Hjort Frederiksen said. The country's banking sector is highly fragmented, counting more than 100 banks—many of which are tiny, local lenders—serving a population of just 5.6 million.

UK holidays firm Holidays4u, which specialises in budget holidays and flights to Turkey, has gone into administration during the peak summer holiday season, leaving around 12,000 passengers to be repatriated by the UK airline authority, Reuters reported. The websites of Holidays4u and related Augeanflights on Wednesday said only that joint administrators had been appointed and that more information would follow.

A receiver continues to manage the affairs of a British Columbia-based street light technology company that received $1.5 million in investments from city-owned Hydro Ottawa, the Ottawa Citizen reported. Streetlight Intelligence Inc., a Victoria-based company that made energy-saving automated dimmer switches for street lights, went into receivership in May.

Lehman Brothers Holdings Inc. said it settled $20 billion of intercompany claims with liquidators for Lehman Hong Kong and won the affiliate’s support for its liquidation plan, Bloomberg reported. Details of the agreement, which is subject to court approval in the U.S. and Hong Kong, weren’t provided in Lehman’s statement today. Edward Middleton, a partner at KPMG China and one of the Hong Kong liquidators, said in the statement that the settlement will benefit creditors by speeding liquidations.

Whitcoulls creditors have voted in favour of a pittiful 3c in the dollar return instead of liquidating the company that owes them $21.5 million, The National Business Review reported. Unsecured creditors have just voted with an overwhelming majority of 84% in favour of a return of just 3c at a watershed meeting with Australian-based administrators Ferrier Hodgson in Auckland. Ferrier Hodgson asked the unsecured creditors of Whitcoulls' parent company Red Group Retail to accept 3 cents in the dollar, instead of liquidation, in a deed of company arrangement (DOCA).

After weeks of uncharacteristic and increasingly unsettling silence, Prime Minister Silvio Berlusconi is expected to address Parliament about the economy on Wednesday. On Tuesday, the financial markets pummeled Italy, sending interest rates on its benchmark 10-year bond well above 6 percent, the International Herald Tribune reported. Most alarming to economists is that Italy’s position in the markets is deteriorating even though the Parliament passed austerity measures last month.

Ever since it embarked on its ambitious austerity program in June 2010, the U.K. has been regarded as a canary in the economic coal mine. Recent data suggest that if the canary isn't exactly dead, it's certainly ailing, The Wall Street Journal Agenda blog reported. But there are some aspects of the challenge facing the U.K. that are very particular to its situation and disqualify it as a good test of austerity in general.

Kevin Podmore has been given three months to come up with $20 million to help repay investors in his failed Wellington finance company, St Laurence, or face possible bankruptcy, Stuff.co.nz reported. St Laurence was put in receivership in April last year owing 9400 investors $245m plus interest. Podmore and three companies he controlled had offered a $20m guarantee as part of an earlier moratorium repayment agreement, to cover any shortfall in repayments to investors if St Laurence was put in receivership.