Headlines

The stress test conducted on nationalized German lender Hypo Real Estate uncovered a possible capital shortfall of €2 billion ($2.59 billion) under adverse circumstances, people familiar with the matter said Tuesday, The Wall Street Journal reported. Hypo Real Estate is thus the first bank to appear to fail a test of its soundness conducted by the Committee of European Banking Supervisors, which also is reviewing the health of 90 other major banks. However, analysts said the result is far from surprising and says little about how the overall process will play out.

George Osborne and Vince Cable will spell out next week the dangers of a double-dip recession caused by a drying up of bank lending to Britain's hard-pressed small and medium-sized businesses, The Guardian reported. A green paper, to be rushed out by the chancellor and business secretary before next week's parliamentary recess, will acknowledge the scale of the lending rationing crisis, which could "abort" the fragile recovery.

HBJ Gateley Wareing's partnership has approved the firm's purchase of Halliwells' Manchester commercial practice, LegalWeek.com reported. The acquisition was confirmed by a partnership vote held last Friday. The Halliwells commercial practice covers employment, intellectual property, construction, corporate, pensions and corporate recovery, and accounts for more than 300 members of staff.

Greece raised €1.95 billion ($2.53 billion) in a debt auction Tuesday, passing its second market test in a week ahead of a key fiscal checkup by the European Union and International Monetary Fund, the Associated Press reported. The sale came a week after Greece tapped the market for the first time since receiving joint EU and IMF rescue loans, selling €1.625 billion in 26-week bills at a 4.65 percent yield. Debt-ridden Greece narrowly avoided bankruptcy in May and was pledged up to €110 billion in rescue loans from the IMF and the 15 other EU countries using the euro.

Almatis Group said it has lined up $592 million to fund a potential restructuring plan that would see it exit bankruptcy under the ownership of Dubai International Capital, Dow Jones Daily Bankruptcy Review reported. In court papers filed Monday, the aluminum company said it expects to ask the bankruptcy court shortly for permission to strike a deal with various firms that are willing to back the Chapter 11 plan of reorganization that current Almatis owner Dubai International Capital wants to sponsor.

A Mexican provider of tourism services at a beachfront hotel in Cozumel filed for Chapter 15 bankruptcy protection Tuesday, The Wall Street Journal Bankruptcy Beat blog reported. Cozumel Caribe SA blamed its bankruptcy filing on the “drastic” drop in foreign tourists visiting the Hotel Park Royal Cozumel, from where the company operates.

Israel's only rehabilitation and training center for the blind and sight-impaired will be sent into receivership, the Haifa District Court said yesterday after the government refused to cover the nonprofit organization's NIS 11 million deficit, Haaretz.com reported. Sources at Migdal Or (Tower of Light ) told Haaretz the operating expenses for the center and its various units are higher than what the state is willing to invest. The center, located in Kiryat Haim near Haifa, is operated on behalf of the Social Affairs Ministry at an annual budget of NIS 14 million.

Online reservation company 1800Hotels has continued to make “numerous” holiday bookings even after seeking bankruptcy protection last Tuesday, a leading US travel company has claimed to a Florida court, The Irish Times reported. Mark Travel, which handles reservations for major tour operators, said the firm’s Dublin-based parent company was trying to compel it to take these bookings without showing any ability to pay. The bankruptcy laws were supposed to act “as a shield, not a sword.

The results of European Union stress tests designed to uncover the depth of rot in the continent's banking system come out later this week - and an accurate reading would go far to answer the key question of whether Europe's debt crisis is finally over, the Associated Press reported. Some experts expect gloom whatever the result: Bad news could send markets into a tailspin again. Too rosy a picture, on the other hand, may alarm investors that the tests have not been rigorous enough.

Westpac has extended for another six months a $19 million loan facility to troubled finance and rural services firm Allied Farmers, The National Business Review reported. The move follows Allied’s announcement last week that it had negotiated the sale of a 23.3ha property forming part of the Five Mile development near Queenstown. Allied had already gained an extension of the debt facility with Westpac to September 24 this year, from an initial expiry date of June 30. The latest extension runs until the end of March next year.