Headlines

Seven months after Japan Airlines Corp. filed the country's biggest nonfinancial bankruptcy petition, the carrier unveiled a restructuring plan that accelerates a big reduction in its work force and cuts unprofitable routes more deeply than expected, The Wall Street Journal reported. The carrier plans to refinance its roughly 300 billion yen, or about $3.5 billion, in debt by the end of March, according to a person familiar with the matter, ensuring months of protracted negotiations with its main lenders in the coming months.

Anglo Irish Bank made an €8.2 billion loss for the first six months of the year after writing off €5.8 billion on loans sold or heading for Nama and €2.5 billion on loans remaining at the bank. Provisions and impairments totalling €8.3 billion were offset by an operating profit of €151 million, which left the bank with an €8.2 billion loss for the six-month period. The loss surpassed the previous record set by Anglo last year for the highest loss for a six-month period taken by an Irish company. The bank lost €4.1 billion for the corresponding period last year – the six months to March 2009.

Diversified industrial company Scales Corporation is unaffected by the receivership of its parent South Canterbury Finance (SCF), it said yesterday, The National Business Review reported. SCF was placed into receivership today after failing to strike a deal with new investors. Scales, which posted an unaudited $10.1m pretax operating profit for the year ending June 30, was one of the bright spots on SCF's books, along with Helicopters NZ and Dairy Holdings.

New Zealand's government has provided NZ$1.6 billion ($1.2 billion) to protect depositors of collapsed South Canterbury Finance and extended a loan of NZ$175 million to the group's receivers to pay off debt, it said on Tuesday, Reuters reported. Privately-owned South Canterbury, one of New Zealand's largest finance companies, announced on Tuesday it could not meet an end-of-the-day deadline to secure new capital and called in receivers.

Eircom warned that it could breach the covenants on its €3.8 billion net debt within the next 12 to 18 months as the company’s revenues continue to shrink in the recession, The Irish Times reported. It also wants a reduction in labour costs of €90 million over the next three years to make the business more competitive. This is all against a backdrop of declining sales across the group. Revenues fell by 8.5 per cent in the year to the end of June to just more than €1.8 billion. On a positive note, Eircom trimmed its operating costs by 11.5 per cent.

Swedish investment bank HQ AB said it is entering liquidation after its license was revoked over the weekend, Dow Jones Daily Bankruptcy Review reported. The Swedish financial-supervisory authority, Finansinspektionen, Saturday pulled the bank's license, citing violation of both Swedish accounting and capital-requirement regulations. The regulator said HQ had overvalued its trading portfolio and inaccurately reported its financial position, believing a correct valuation would have shown that the bank has been undercapitalized since December 2008.

Japanese Prime Minister Naoto Kan on Monday approved a rehabilitation program for Japan Airlines which is undergoing a state-backed restructuring, Dow Jones Daily Bankruptcy Review reported on an Agence France-Presse story. Transport Minister Seiji Maehara informed Kan about the program a day before the struggling carrier submits it to the Tokyo District Court, government officials said. Maehara told reporters that Kan agreed to the program, but he stopped short of revealing details.

Former glamour funder Strategic Finance, whose directors include ex-All Black captain Jock Hobbs, is in the red to the tune of a shocking $195.5 million, grim news for 13,000 investors, The New Zealand Herald reported. A bleak report issued on the doomed Strategic Finance - in receivership and liquidation - by John Cregten and Andrew McKay of liquidators Corporate Finance revealed the huge deficit which they said was still subject to the cost of receivership and liquidation. The final amount might be more.

Leading political and economic commentators are reminding New Zealanders that a receivership of South Canterbury Finance could actually have positive effects for the economy, TVNZ reported. Brian Gaynor, of Milford Asset Management, said today that he was not "too concerned" about the option of a receivership through statutory management. "There's a lot of nervousness about statutory management or receivership, but the thing about this company is that nearly every investor is covered by a government guarantee so they get their money back.

Metrofinanciera SA, a closely held provider of mortgage loans in Mexico, sought bankruptcy court protection from U.S. creditors, Bloomberg reported. The company, based in Monterrey, Mexico listed both debt and assets of more than $500 million in Chapter 15 documents filed today in U.S. Bankruptcy Court in Corpus Christi, Texas. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad.