Headlines

New figures revealed that Greece's debt crisis is even worse than investors believed, delivering a fresh shock to European markets and all but ensuring that the International Monetary Fund and euro-zone countries will have to step in within weeks to bail out the country, The Wall Street Journal reported. The European Union's statistical authority said Thursday that Greece's 2009 budget deficit—already yawning—was wider than Athens had estimated. Also Thursday, Moody's Investors Service downgraded Greece's debt rating.

Unionized workers at Kumho Tire Co. have accepted the company's restructuring measures, including a reduction in wages and bonuses, in the second round of a vote held Wednesday, the company said Thursday, Dow Jones Daily Bankruptcy Review reported. Under the agreement, Kumho Tire workers will have to accept a 10% basic salary cut for 2010 and an additional 5% cut before the company's exit from a debt-rescheduling program, which may take two to three years. The company withdrew its original plan to cut about 1,200 workers in return for union concessions on wages.

Sydney company Chippendale Printing has entered voluntary administration, just over a week after it claimed to be merging with Beaver Press, now also in administration, MediaBizNet.com reported. Peter Allen, Quentin Olde and Matt Adams of Taylor Woodings have been appointed as administrators for the company, which entered voluntary administration this week. Chippendale managing director Fred Van Steel told ProPrint on Thursday 8 April the company was not in any financial trouble, despite persistent rumours claiming it was struggling.

Goldman Sachs is considering a takeover of the remains of insolvent German department store chain Karstadt if no other investor emerges, two sources familiar with the situation told Reuters. Goldman Sachs as well as Deutsche Bank are part of the Highstreet consortium, which owns about two-thirds of Karstadt's store space. "Is increasingly looking like Highstreet is keeping this option open as a last resort," one of the sources said on Wednesday. Goldman would look for a co-investor if it decided to bid for Karstadt, another source said.

The new gas deal with Russia offering Ukraine a 30% discount on the price of Russian natural gas supplies will help Naftogaz to avoid bankruptcy, the Ukrainian national energy company said in a statement on Thursday, RIA Novosti reported. Russian President Dmitry Medvedev and his Ukrainian counterpart Viktor Yanukovych agreed during their meeting on Wednesday in Kharkov in east Ukraine that Russia would grant Ukraine a 30% discount on the gas price of $330 per 1,000 cu m over the next ten years.

UBS and Credit Suisse should change their structure to allow their break-up in the case of an insolvency to limit the risks for the Swiss economy, a government commission said on Thursday, Reuters reported. In an interim report on the too-big-to-fail issue, the commission urged lawmakers to enable regulators to force the banks if necessary to adopt a structure that allowed to keep key businesses going in case of an insolvency.

The banking sector strongly criticised International Monetary Fund proposals to impose new taxes on the industry, claiming yesterday that they would hit profits hard, would not reduce the risk of future failures and were at odds with other plans to clean up the industry, the Financial Times reported. The IMF suggested a three-pronged assault on banks and other financial groups that would include a flat tax on the liabilities on their balance sheets and levies on profits and pay.

Swedish network equipment vendor L.M. Ericsson Telephone Co. has purchased Nortel Networks Corp.'s controlling stake in a South Korean joint venture for $242 million in cash, a move that should help boost its footprint in the Asian country, Dow Jones Daily Bankruptcy Review reported. Ericsson said Wednesday that it has bought Nortel's 50% plus one share stake in its joint venture with LG Electronics Inc., LG-Nortel. LG-Nortel will be renamed LG-Ericsson and will continue to have its headquarters in Seoul.

A group of Orco Property Group bondholders said on Wednesday the indebted developer's 10-year debt restructuring plan was not addressing properly the company's debt burden, Reuters reported. Luxembourg-based Orco proposed to restructure more than €400 million in debt held by bondholders through a scheme that looks to extend the average maturity of its bonds to eight years from three at present.

Receivers for the Crafar group are taking legal action to have the Crafar family removed from the farms after they refused to voluntarily leave, BusinessDay.co.nz reported. Michael Stiassney of KordaMentha says the receivership has been one of the most intense he has encountered and of a "magnitude unparalleled in the industry". Stiassney and fellow receiver Brendon Gibson have hit back at claims of rough treatment of the Crafar families and poor farm management.