Headlines

Dubai World will transfer two of the emirate's biggest property developers to the Government as it completes a debt restructuring in the wake of the financial crisis, The National reported. Agreements have been signed on the terms for the separation of Nakheel and Limitless "operationally and financially" from Dubai World, the board of directors said in a statement. In addition, Nakheel said it had secured unanimous approval from banks for its US$10.9 billion (Dh40.03bn) debt restructuring, which will trigger the issuance of a Dh6bn Islamic bond.

Nakheel PJSC, the builder of man-made islands off Dubai’s coast, said the company got the approval of all its bank creditors to restructure debt, Bloomberg reported. Nakheel “received acceptance from 100 percent of the banks and the required majority of its trade creditors giving their consent to the Nakheel restructuring plan,” it said today in an e-mailed statement. Nakheel also signed agreements on its operational and financial separation from Dubai World, it said. The legal separation will happen upon completion of Nakheel’s restructuring, the real-estate company said.

Europe's hopes for a significant contribution by private bondholders to a new bailout for Greece are fading, as it becomes clear that banks have sold off a substantial proportion of their Greek government-bond holdings despite pledges by some of the institutions not to do so, The Wall Street Journal reported. Greece has about €64 billion ($93 billion) of benchmark bonds coming due in the next three years, among other liabilities, and euro-zone leaders had hoped that private lenders would voluntarily take on longer maturities in order to improve the country's battered finances.

In the last few years, Chinese cities’ efforts have helped government infrastructure and real estate spending surpass foreign trade as the biggest contributor to China’s growth. Subways and skyscrapers, in other words, are replacing exports of furniture and iPhones as the symbols of this nation’s prowess, the International Herald Tribune reported. But there are growing signs that China’s long-running economic boom could be undermined by these building binges, which are financed through heavy borrowing by local governments and clever accounting that masks the true size of the debt.

The Basel Committee for Banking Supervision (BCBS) warned on Wednesday that the failure of many countries to implement workable resolution regimes, could hinder banks from being allowed to fail, Reuters reported. The report also said that as well as gaps in national resolution toolkits, there were still many shortcomings with respect to the resolution of a financial group in a cross-border context.

Ireland's credit rating may be cut to junk by Moody's Investors Service after Portugal yesterday lost its investment grade rating, analysts said Wednesday, the Irish Times reported. Moody's, which slashed Portugal four notches yesterday to Ba2 from Baa1, in April lowered Ireland's credit rating to the lowest investment grade Baa3 and left country's outlook on negative. The ratings company cut Portugal's rating in part because the nation may not be able to return to debt markets in the second half of 2013.

Struggling retailer Homeform, owner of Moben Kitchens and Dolphin Bathrooms, appointed Deloitte as administrators on Wednesday and sold its Sharps Bedroom business, Reuters reported. Homeform, which has over 160 showrooms in the UK and 1,208 staff, said last month it was looking to appoint administrators after trading in its kitchen and bathroom units was hit by cash-strapped customers curbing spending during tough economic times. Deloitte, a business advisory firm, said Moben, Dolphin and another of Homeform's businesses, Kitchens Direct, had been closed down and were up for sale.

Sweden's National Debt Office Tuesday said it has given its all-clear to Saab Automobile's request to sell 50.1% of Saab Automobile Property AB, with the final decision on the matter now resting with the government, Dow Jones Daily Bankruptcy Review reported. The NDO considers the Swedish government to have enough collateral to cover the guarantees for Saab Automobile's state-backed loans in the European Investment Bank, even without the shares in Saab Automobile Property.

In their recent plan to tackle high levels of household debt, South Korea’s regulators included steps to prevent overspending using credit cards. For good reason, The Wall Street Journal Real Time Korea blog reported. South Koreans are particularly fond of plastic money, with almost one million credit cards issued each month in this nation of around 48 million people, and every economically active Korean holding on average 4.8 cards. That’s up from 4.3 in 2002, when excessive borrowing using credit cards caused a lending bubble.

International banks and insurers will meet on Wednesday to thrash out a plan for the private sector to contribute to Greece's bailout effort as fears grow that the proposal will be derailed, Reuters reported. The Institute of International Finance (IIF) lobby group said it will chair the meeting of private-sector creditors. It needs to resolve how a deal can get past credit rating agencies without it being termed a default, and how accountants will deal with it. A lot of work remains to be done and Wednesday's meeting will not be decisive, several sources said.