Headlines

Cuts to the Czech fiscal budget are welcomed by investors, and rating agencies have raised the country’s outlook as the newly-elected government follows its promises of fiscal austerity with actions, The Wall Street Journal New Europe blog reported. But the country’s national police and firefighters oppose 10% cuts to pay and steeper cuts to expenditure for investment and operations, and on Wednesday they announced plans for mass demonstrations on September 21 in Prague.

Insolvent Nortel Networks Corp. has a preliminary agreement to sell its Multi Service Switch business for US$39 million in cash, The Canadian Press reported. The former Canadian technology giant, which is being dismantled and sold under court protection, said the bid was submitted by PSP Holding LLC, an entity formed by Ottawa-based Samnite Technologies Inc. and Marlin Equity Partners. The Multi Service Switch business provides non-optical equipment and as of last fall employed about 300 people. Nortel did not provide current employee numbers in its announcement.

Dubai World's willingness to sell prized assets such as ports operator DP World to pay down its debt pile is considered such a drastic move that analysts see it more as a last-resort bargaining tactic. Documents obtained by Reuters this week revealed the surprising news that the debt-laden conglomerate was willing to let go of "strategic assets" such as DP World, Jebel Ali Free Zone and Dubai Maritime City (DMC) as part of a $19.4-billion fundraising effort as it tries to reach a restructuring deal with creditors by October 1.

The High Court yesterday gave troubled builder McInerney Homes protection from its creditors in the first case of its kind to involve a business with debts destined for State bad bank, Nama, The Irish Times reported. McInerney has been wrestling with €236 million in debt owed to Irish and British banks since last year, but was close to selling a stake to US-based private equity house, Oaktree Capital, for €40 million, a deal that would have recapitalised the business.

A major property mogul is contesting a principal lender’s decision to write down his property portfolio by £30 million to £35 million, Bridging & Commercial reported. RT Properties was taken into receivership by the Royal Bank of Scotland on Tuesday, after the bank took over all but two of property baron Roy Thomas’ assets. The company ran into trouble after it was charged a fixed rate loan breakage of £14.8 million by RBS. Mr Thomas owned Swansea Airport and Swansea’s Dragon Hotel and Marks and Spencer store.

Allied Farmers is having to renegotiate the terms of its bank facility with Westpac following the receivership of its subsidiary Allied Nationwide Finance, The National Business Review reported. Allied Farmers, which took over the stricken Hanover finance loan book last December, was granted an extension on the Westpac facilities until March next year. However, the receivership of Allied Nationwide has meant that the milestones for the agreed debt terms, including debt retirement and a restructuring initiative, will require renegotiation, the company said in a statement.

AbitibiBowater Inc., the world’s biggest newsprint maker by capacity, won court approval to borrow as much as $1.35 billion to help fund its exit from bankruptcy, Bloomberg reported. U.S. Bankruptcy Judge Kevin J. Carey gave the company permission to obtain the funds after no objection to the financing proposals was filed, according to court documents filed yesterday in Wilmington, Delaware. Units of JPMorgan Chase & Co., Barclays Plc and Citigroup Inc. will be the agents for a $600 million asset-based loan and each will contribute $100 million, court papers show.

Dubai World plans to raise as much as $19.4 billion by selling off prized assets over eight years to pay off creditors burned by its overambitious expansion, according to a document obtained by Reuters on Wednesday. The state-owned conglomerate told creditors at a July 22 meeting, held at Dubai's lavish Atlantis Hotel, that its capital structure was inappropriate and needed "urgent" restructuring, according to the document handed out at the meeting.

Mexican auto-parts company Sanluis Corporacion SAB said Wednesday that its unit Sanluis Co-Inter has filed for bankruptcy protection as it seeks to restructure its debt, Dow Jones reported. At the end of June, Sanluis Co-Inter defaulted on $88.1 million in notes that were issued in 2002 under a debt refinancing, prompting holders of around $132 million in mandatorily convertible debentures due June 2011 to accelerate payment, demanding cash. The default of the June 2010 notes came after Sanluis rescheduled $146 million in bank debt, to which the Co-Inter notes are subordinate.

Mexico's Labor Minister, Javier Lozano, said he isn't optimistic about the prospects of a group of investors for saving airline company Mexicana from bankruptcy and rejected a proposal by the new owners to lay off three-quarters of the carrier's flight attendants, Dow Jones Daily Bankruptcy Review reported.