Headlines

Insolvent German retailer Arcandor's former banking unit Valovis has applied for €500 million ($706.3 million) in state guarantees, the Handelsblatt paper said in its Thursday edition. Robert Gogarten, head of the bank, was quoted as saying that there was no urgent need for the funds but that it was prudent to ensure "sufficient liquidity". Valovis Bank has made a formal request for the guarantees with the German rescue fund SoFFin, Handelsblatt said. Read more.

Kazakhstan's largest bank BTA must agree with its creditors on a plan to restructure its $13 billion debt by September 18, the financial regulator said on Wednesday. BTA has warned investors that a failure to restructure debt could lead to its bankruptcy, Forbes reported on a Reuters story. BTA's creditors face losses of 55 to 97 percent depending on the bank's losses this year and whether trade finance is included in the scheme. The government took over BTA in February and accused its ousted chairman Mukhtar Ablyazov of fraud, a charge he denies.

Ssangyong Motor Co. resumed production Thursday at its sole assembly line after a sometimes-violent strike that halted output for over two months and endangered the company's efforts to survive, The Associated Press reported. Workers at South Korea's fifth-largest automaker, which has been struggling to emerge from court-approved bankruptcy protection, were assembling vehicles including the luxury Chairman W sedan at its factory in Pyeongtaek, about 45 miles (70 kilometers) south of Seoul, said company spokesman Lee Won-muk.

Estonia's recession deepened in the second quarter, but the quarterly rate of decline eased, suggesting the country's economic fall may be bottoming out, The Wall Street Journal reported. The Baltic country's gross domestic product was 16.6% lower in the second quarter compared with the same quarter of 2008, Statistics Estonia said Wednesday. In the first quarter, economic output was down 15.1% from a year earlier. The national statistics agency said lower manufacturing and construction, due to reduced domestic and external demand, weighed on second-quarter output.

The credit crisis may succeed in delivering something that shareholders have long hoped for: it may force the break-up of ING into its basic constituents of bank and insurer, even if newish chief executive Jan Hommen cannot bring himself to say as much out loud. The Dutch bancassurer's results, while displaying underlying progress in Hommen's "back to basics" strategy, also show just how much of a credit hangover the group is suffering. ING turned in a net profit of €71 million , against €1.9 billion a year ago thanks to €1.4 billion of "market impacts", i.e.

Britain was left lagging behind Germany and France today as Europe's two biggest economies officially came out of recession for the first time in a year, The Daily Mail reported. The French and German economies both grew by 0.3 per cent in the second quarter of this year, surprising economists who had expected to see a 0.3 per cent fall.

A group of banks that financed the £450 million leveraged buy-out (LBO) of car wash group IMO will take control of the struggling business leaving a rival group of hedge fund investors with nothing, The Times reported. In a High Court decision that lawyers say will damage hedge funds’ interests in dozens of ailing private equity deals, a judge awarded 100 per cent of IMO’s equity to the banks, led by HBOS.

Bankrupt Canadian newsprint producer AbitibiBowater Inc on Tuesday reported a second-quarter operating loss more than four times greater than a year earlier, Reuters reported. The company, based in Montreal, but incorporated in the United States, crumpled under an overwhelming debt load and filed for bankruptcy protection in April. AbitibiBowater has cut millions of tonnes of mill capacity in recent months as it battled to keep pace with declining newsprint demand.

Prime Minister Stephen Harper is showing little inclination to intervene in the sale of Nortel's prime assets to a foreign buyer, saying he is reluctant to erect protectionist barriers in Canada while preaching the benefits of freer trade in the Americas, The Globe and Mail reported. Mr. Harper rejected a call from Research In Motion Ltd. for the government to simply block the sale of Nortel Networks Corp.'s wireless assets to Ericsson for $1.13-billion, but left open the prospect of a review under the Investment Canada Act.

The Rann government has rejected calls for a parliamentary inquiry to investigate a collapsed aquaculture company and its dealings with government ministers and officials. The state opposition called for a select committee to be established after The Australian revealed numerous contacts between ministers and Andrew Ferguson, chief executive of Australian Bight Abalone, which went into voluntary administration last month. Mitch Williams, acting Liberal spokesman on fisheries, yesterday said the 1200 people who invested $43.8 million in the company deserved answers.