Headlines

On its website, AbitibiBowater Inc., Canada's largest forest-products company, has posted a message aimed at reassuring anxious shareholders and employees as it works to emerge from creditor protection, the Financial Post reported. If and how AbitibiBowater succeeds in its attempts to restructure about $6.5-billion of debt ($1.5-billion of which is secured), a process that began in earnest in mid-April, the industry in which it will operate will be far different from that of the 1940s, when a recovering post-war economy was strong and vibrant.

Junior oil and gas company Yangarra Resources Ltd said it filed a proposal with its creditors to restructure under the Canadian Bankruptcy and Insolvency Act, including a plan to merge with privately held Athabaska Energy Ltd., Reuters reported. If merged with Athabaska, the combined entity will raise C$500,000 by selling common shares at a price of no less than 5 Canadian cents a share, no later than 60 days after getting court approval for the proposal, Yangarra said.

The board of embattled Babcock & Brown Infrastructure has warned it faces voluntary administration if a $1.8 billion recapitalisation plan to pay down debt and bring in Brookfield Asset Management as a cornerstone shareholder is not approved, The Australian reported. BBI will internalise its management and revert to its original name of Prime Infrastructure in a plan to cut all links to its former parent, collapsed investment bank Babcock & Brown.

B. C. courts have turned over operations of Calgary's iconic Silver Dollar Casino to a subsidiary of accounting firm Grant Thornton LLP, granting the cash-strapped facility a new lease on life in time for Stampede, albeit through receivership, The Calgary Herald reported. The Silver Dollar was put under the management of the Vancouver-based company late last week after the Supreme Court of B. C. appointed Grant Thornton Ltd. as receiver manager of the casino. The move was approved by the Alberta Gaming and Liquor Commission, and a veteran in the Canadian and U. S.

Canwest, Canada's biggest media company, plans to pay almost C$10 million ($9.4 million) in bonuses to keep 20 key employees in their jobs as some of its television and newspaper operations are restructured under bankruptcy protection, Reuters reported. The proposed payments are disclosed in a court filing made by Canwest, which said on Tuesday that its key Global television network and its flagship daily newspaper, the National Post, have filed for protection from creditors. Speculation mounts that some of Canwest's holdings may be sold off.

Canada’s largest chain of big-city daily newspapers is soon to be run by a group of its creditors, led by Bank of Nova Scotia, The Globe and Mail reported. The dozen daily papers of CanWest Global Communications Corp. are held in the media company's CanWest LP subsidiary, which is in restructuring talks with lenders led by Scotiabank. These negotiations continue in the wake of the parent company's move on Tuesday to file for bankruptcy protection, with creditors agreeing to swap their debt for equity.

The European Commission Wednesday launched a market consultation on the troubled German lender Hypo Real Estate Holding AG's restructuring plan, saying it has doubts that the bailout complies with European Union state aid laws, Dow Jones reported. Hypo Re has received a combined €102 billion aid package, which includes loans from a banking consortium and the German government, as well as state guarantees.

Argentina, hoping to sell bonds on international markets again, is trying to clean up the fallout from its $100 billion debt default in 2001 and 2002, Reuters reported. In 2005, the government asked investors to accept steep losses on Argentine bonds, a proposal rejected by about a quarter of bondholders. Argentina has not been able to issue debt on global markets since the default, partly because of lawsuits from so-called holdouts who rejected the restructuring.

Latvia's halting austerity program and its proposal to modify mortgages are causing "another wave of distrust" to roll over the Baltic nation, the central bank said Wednesday, issuing a warning for the country hit hardest by economic strains across Europe, The Wall Street Journal reported. The criticism came as a government bond auction failed to attract buyers, and worries about the Latvian economy weighed on the currencies of Sweden -- whose banks are Latvia's major lenders -- and other countries.

The Japanese government may undermine banks by forcing them to defer debt repayments while easing accounting standards on the loans, the country’s former top financial regulator said. Shizuka Kamei, Japan’s newly appointed financial services minister, plans to submit legislation next month that would allow ailing small firms to postpone loan repayments for up to three years, Bloomberg reported. Banks won’t have to classify credits encompassed by the moratorium as non-performing, he said this week.