Headlines

Accountants KPMG are predicting that the number of people facing insolvency in 2009 will reach record levels, the BBC reported. The group estimates that 150,000 people in the UK will go bankrupt or enter official debt arrangements, up from an estimated 104,000 in 2008. It expects people heavily in debt owing to spending on day-to-day expenditure or holidays will be "ill-equipped" to cope with the economic downturn. Research by KPMG suggested that creditors had to write off at least £1.1 billion in bad debts in 2008. Read more.

German automotive supplier Honsel has been given more time by its banks to repay loans as the global economic crisis hit demand for cars, Reuters reported. The company said it now has until the end of March to pay off loans. Main shareholder RHJ International will provide additional liquidity, the company said. Honsel, which makes engine and transmission parts, posted about €900 million ($1.29 billion) sales in its fiscal year 2007/2008. Read more.

Austrian private bank Bank Medici was placed under state supervision on Friday amid bigger exposure to the Bernard Madoff scandal than previously disclosed. A source close to the matter told Reuters on Friday the bank holds over $3 billion in funds exposed to what could be Wall Street's biggest fraud. It is still not clear how much cash has been lost. Austria appointed a supervisor to the bank, financial regulator FMA said, in the first known case where a government has stepped in to run a bank caught in the alleged $50 billion Madoff fraud.

Singapore Tin Industries (STI)’s facilities in Singapore are being sold off amid what appear to be tensions between the shareholders in the company, which is in receivership, MetalBulletin reported. In a statement, China’s Yunnan Tin Co (YTC), the 42% owner of STI, said the firm had been “running improperly” and that there had been “problems with foreign shareholders”. Sources told MB that YTC was not aware that the Singapore assets were being sold off until tender documents were made public.

Factories in China and India joined much of Europe in slashing output and jobs at a record pace in December, another sign the biggest emerging markets were wilting under the recession gripping industrialized nations, Reuters reported. Economists and policymakers had seen China, Russia, India and Brazil, with their vast markets and rising wealth, as the engines of growth that could save the world from recession. Those hopes are fading fast and forecasts are getting gloomier.

LyondellBasell Industries, the world's third-largest independent chemical company, told lenders on Monday it is considering filing for bankruptcy protection amid plunging sales and a cash crunch, people familiar with the matter said. The Wall Street Journal reported that LyondellBasell, which is based in the Netherlands and has large U.S. operations, has hired bankruptcy counsel and told lenders it is trying to line up as much as $2 billion in bankruptcy financing. A Chapter 11 filing may be imminent.

Oilexco Inc., a North Sea producer of oil and gas, lost more than half its market value in London trading today after saying its U.K. subsidiary was likely to file for insolvency administration as early as next week, Bloomberg reported. Calgary-based Oilexco North Sea Ltd. has been informed by Royal Bank of Scotland Group Plc that lenders aren’t prepared to provide further financing, Oilexco said today in a statement. The unit “does not have any other source of funding,” it said, adding that the parent company “remains solvent.” Oilexco hired Morgan Stanley and Merrill Lynch & Co.

The doors permanently close on 55 ABC Learning childcare centres today after the collapse of the nation's largest childcare provider, the Australian Associated Press reported. The giant of Australian child care, ABC Learning Centres went into administration and receivership in November, owing more than $1 billion. ABC Learning operates just over 1000 centres, of which 241 have been deemed unprofitable. Those centres are in the hands of a new receiver and will continue operating until March under the banner ABC2 Group thanks to $34 million from the federal government.

European countries still deal with insolvent firms far more harshly than America does, and most such firms end up in liquidation, a recent Economist analysis found. They often treat creditors badly too, meaning that neither side ends up satisfied. Observers worry that Europe will cope with the coming flood of defaults far less effectively than America, meaning a slower recovery. In recent years several European countries have tried to change their systems so that companies have a better chance of survival.

Ukrainian state energy company Naftogaz said on Tuesday it has published its 2007 audited accounts, allowing it to avoid technical default on a $500 million Eurobond, Reuters reported. Bondholders had agreed in November to extend the deadline for receiving the accounts--one of the conditions of the bond--until the end of this year after the financially ailing company missed a summer deadline.