Headlines

A massive restructuring of debt in India's ailing textile sector will likely provide relief to thousands of mills struggling with losses and revive demand for cotton in the world's second-largest producer, industry officials said Wednesday, The Wall Street Journal reported.

Its membership in the euro currency union hanging in the balance, Greece continues to receive billions of euros in emergency assistance from a so-called troika of lenders overseeing its bailout. But almost none of the money is going to the Greek government to pay for vital public services. Instead, it is flowing directly back into the troika’s pockets, the International Herald Tribune reported.

Three small Spanish savings banks agreed to merge and a larger bank separately said it would sell a key asset as local lenders scramble to shore up their capital bases in the midst of an unprecedented financial crisis, The Wall Street Journal reported. Unlisted savings banks Liberbank, Ibercaja and Caja3 said Tuesday their boards approved a three-way merger of relatively healthy lenders that will create a bank with more than €110 billion ($137.96 billion) in assets and a dominant position in the northern Spanish regions of Asturias and Aragon.

European Union countries could be obliged to bail out one another's struggling banks, according to a draft EU law that marks a big step towards greater EU financial integration likely to upset some members, particularly Germany, Reuters reported. Spain's banking troubles and the risk that a bank run in a country such as Greece could spread have given new impetus to delayed EU proposals for a law to deal with failing banks.

Some of China's biggest banks have cut off a handful of their European counterparts from borrowing and derivatives trading as they seek to reduce their exposure to the simmering crisis on the Continent, people familiar with the matter said, The Wall Street Journal reported. Chinese state-owned banks including Industrial & Commercial Bank of China Ltd., Bank of China Ltd. and Bank of Communications Co.

Lenders to UK waste manager Biffa are bracing themselves for a debt-for-equity restructuring if it is unable to sell certain divisions to reduce its 1-billion pound ($1.57 billion) debt, Reuters reported. Biffa is expected to breach loan covenants this year due to reduced waste volume on the back of lower consumption. . Its earnings will also be hit by a new UK landfill tax.

Property developer Patrick McKillen’s declaration that £660 million (€826 million) worth of debt on three London hotels could have been refinanced if more time had been given is “nonsense”, the National Asset Management Agency has argued. In the high court action in London, Mr McKillen’s legal team argued that Nama had acted unlawfully when it sold £660 million worth of debt secured on Claridge’s, the Berkeley and the Connaught to the billionaire Barclay brothers, the Irish Times reported.

Two of Japan's biggest corporate wipeouts of the past decade are expected to emerge from bankruptcy in the coming months. Yet the resurrections of Ashikaga Holdings Co. and Japan Airlines Co. stand in contrast, The Wall Street Journal reported. Lender Ashikaga is a classic "zombie company," taking nearly a decade to return to life on the stock market. JAL, on the other hand, will return less than three years after it became the biggest collapse ever by a nonfinancial-services company in Japan.

Greece handed 18 billion euros (14.39 billion pounds) to its four biggest banks on Monday, the finance ministry said, allowing the stricken lenders to regain access to European Central Bank funding. The long-awaited injection - via bonds from the European Financial Stability Facility rescue fund - will boost the nearly depleted capital base of National Bank, Alpha, Eurobank and Piraeus Bank.

Greece's radical left party has upended the country's politics with an idea as simple as it is seductive: Athens can renege on the deals it made in exchange for a bailout, and still remain in the euro. Greece's future, and possibly that of Europe's monetary union, may depend on how many Greeks buy into the idea, The Wall Street Journal reported. The Coalition of the Radical Left, known as Syriza, is competing with Greece's conservative New Democracy to become the biggest party in Parliament in June 17 elections that could send further shock waves through Europe.