Headlines

Unsecured creditors in this country of Australian company Redgroup Retail, whose activities include 90 book stores in New Zealand, were owed $21.5 million when the company went into voluntary administration a fortnight ago, The National Business Review reported. In a presentation to a meeting of New Zealand creditors in Auckland yesterday, administrators Ferrier Hodgson also said entitlements of employees in this country at the time had been $2.1m, with the company having 1171 New Zealand staff.

The Department of Finance provided repeated warnings to the Government about the risks involved in running pro-cyclical budgetary policy during the boom years, a report has revealed, the Irish Times reported. However the report, drafted by a team commissioned to investigate the department’s performance over the past 10 years, criticised it for not altering the tone of its warnings as they were ignored in successive budgets. The report adds that the department also warned about the dangers of an overheated construction sector.

The European Commission has ruled out any move by the incoming government to compel senior bondholders to bear losses on their investments in Ireland’s banks, the Irish Times reported. Although Fine Gael and Labour each pledged during the election they would impose losses on the holders of senior bank debt, economics commissioner Olli Rehn made it clear yesterday such a manoeuvre would not find support in Europe. The stance of the commissioner, who did not elaborate, was in line with the European Central Bank’s opposition to any default on senior bank bonds.

The National Asset Management Agency imposed no haircut on AIB’s loan on the Montevetro building in Dublin as the loan was provided after the Government announced plans for the agency, the Irish Times reported. AIB lent about €30 million to the developer of the building, Real Estate Opportunities, in which Treasury Holdings is a major shareholder, after April 2009 when Nama was unveiled. No discounts were imposed on development loans provided after April 2009 following an agreement between the banks and Central Bank governor John Hurley.

Pacific Investment Management Co. sees the potential for better returns from selling insurance against sovereign defaults than owning government bonds, according to London-based managing director Andrew Balls, Bloomberg reported. “Rather than taking exposure to interest-rate risk, it may be attractive to sell protection against the default of a country,” Balls told reporters at a media briefing in London today. “I would see the probability of default from the U.S. or U.K.

Does Europe need a default? As euro-zone leaders work to defuse the dangerous debt crisis that is raging at their periphery, more and more observers seem to believe that part of the solution should be a major cut in the face-value of outstanding Greek and possibly Irish government bonds, The Wall Street Journal reported in a commentary.

Rosneft is set to take on Gazprom when Russia puts the Kovykta gas field on the block on Tuesday as the country's top crude producer aims to muscle in on the gas export monopoly's plans to supply China. Gazprom and state holding firm Rosneftegaz have been allowed to bid for the right to develop the Kovykta field, which is located near Lake Baikal and has reserves of 2 trillion cubic metres. That's enough to meet world demand for eight months.

General Motors Corp. is pushing to speed up a restructuring at its European Opel operation, long an unprofitable quagmire for the auto maker and the missing link in its budding turnaround, Dow Jones Daily Bankruptcy Review reported. GM Chairman and Chief Executive Dan Akerson, impatient with the losses, is turning his attention to the Opel problem now that the company has returned to the public markets and is producing a solid profit in North America, people familiar with the matter said.

Portugal's plan to cut its budget deficit could be hurt by a rise in oil prices and raw materials, but the government is ready to launch new austerity measures to stay on track, Finance Minister Fernando Teixeira dos Santos said Monday, The Wall Street Journal reported. "We have correction mechanisms that will allow us to meet the targets we have set," Mr. Teixeira dos Santos said at a Reuters-Radio TSF conference in Lisbon.

The struggling Japan Airlines Corp will get capital of 10-20 billion yen ($122.1-$244.1 million) from eight firms, including Daiwa Securities Group Inc and Tokio Marine & Nichido Fire Insurance Co, Reuters reported on a Nikkei business daily story. The carrier, hoping to complete its court-led rehabilitation by the end of March and relist by the end of 2012, is also turning to 12 banks for 280 billion yen in loans, Nikkei said.