Headlines

George Osborne will tomorrow vow to stick by his controversial plan to wipe out Britain's £109bn structural deficit in one parliament, saying the alternative of delay would only hit the poor and consign the country to a decade of debt, the Guardian reported. In his speech to the Conservative party conference in Birmingham, the chancellor will announce that every Whitehall department will have its head office staff cut by a third, promise to give the armed forces the tools to finish the job, and dismiss Britain's public service structure as designed for the 1950s.

Russian billionaire Roman Abramovich may take legal action against the Government over its decision to make subordinated bondholders in Irish Nationwide (INBS) pay part of the bill for dealing with the building society’s huge property losses, The Irish Times reported. Minister for Finance Brian Lenihan said that he expected bondholders in INBS and nationalised lender Anglo Irish Bank to make “a significant contribution” towards meeting the cost of a bill of up to €40 billion for cleaning up their years of reckless lending.

A High Court Judge has rejected embattled property developer Nigel McKenna’s last-ditch attempt to put a bankruptcy bid against him on hold, The National Business Review reported. Mr McKenna is under siege financially, with creditors from a number of troubled projects taking action to try to get their money back. Fletcher Construction, which Mr McKenna owes more than $800,000 from the construction of the Holiday Inn in Wellington, is trying to have him bankrupted. It filed a bankruptcy notice against him nearly a year ago, in November 2009.

Ireland's cost of borrowing slid on bond markets Friday as investors took a positive view of the country's latest efforts to take control of Europe's worst deficit and a titanic bank-bailout effort, the Associated Press reported. The interest rates, or yields, on 10-year Irish bonds fell in early trade to 6.4 percent, a two-week low and 4.2 percentage points above the yields of benchmark German bonds. Earlier this week the Irish treasuries were at a euro-era high of 6.9 percent and 4.7 points above their German counterparts.

European aluminum maker Almatis Holdings BV said it has emerged from U.S. bankruptcy proceedings on Thursday, earlier than initially planned, Reuters reported. "Today after just five months, we conclude chapter 11 proceedings and can focus fully on the growth and further development of our business again," Chief Executive Remco de Jong said in a statement. Almatis had said Sept 20 that it expected to exit bankruptcy by the middle of October. At the time, it received court approval for its reorganization under the control of Dubai International Capital LLC, or DIC.

Greece’s parliament has pushed through legislation that in effect grants a tax amnesty to millions of citizens, in a move at odds with organisations overseeing the country’s bail-out, the Financial Times reported. The law will allow the government to collect about €2bn ($3bn) over the next two years, far short of an estimated backlog of unpaid taxes over the last decade of about €35bn.

Structured Finance, hurt by the failure of Auckland's Westin Hotel, convinced its trustee to hold off on receivership after a trust deed breach, buying time to squeeze more value from its loan book, Stuff.co.nz reported. The firm triggered a review event when total tangible assets fell below 80 per cent of aggregated repayments due, its accounts for the year ended March 31 show. Perpetual Trust, the trustee for holders of $33 million of debentures covered by a moratorium, has allowed Structured Finance to continue trading in the belief investors will get more back that way.

Allied Farmers’ auditor has been unable to verify the company’s financial statements and cannot form an opinion on its going concern status, The National Business Review reported. PricewaterhouseCoopers issued a heavily qualified opinion on Allied’s financial statements in the rural services and finance company’s annual report released to the market this morning. The auditor said there was insufficient evidence to verify whether the company would be able to generate sufficient cashflows from its funding initiatives to qualify a going concern assumption.

Talks with Karstadt's one remaining creditor that filed a complaint against the company's insolvency plan are ongoing, administrator Klaus Hubert Goerg said in a letter to Karstadt staff, holding up Karstadt's sale to billionaire investor Nicholas Berggruen, Dow Jones Daily Bankruptcy Review reported. Originally, Karstadt was to be handed over to Berggruen at the end of September, but the complaint is preventing court approval for the insolvency plan needed to finalize the sale. The talks with the U.K.

The heads of Germany’s largely state-owned Landesbanken have agreed to the need for a radical overhaul and consolidation of their institutions, after talks with finance ministry officials in Berlin, The Irish Times reported. A week after two of the largest Landesbanken, WestLB and BayernLB, agreed to merge and create Germany’s third-largest bank, representatives of the other banks appear open to further mergers before the end of 2011.