Headlines

The Indian textiles industry is running the risk of defaulting payment to creditors due to the global credit crunch and bankruptcy of the overseas retail and textiles majors, according to rating agency Fitch, the Economic Times reported. “Some of the weaker players with limited financial flexibility have started to default, and a few are currently negotiating debt-restructuring packages,” said Priyambada Balaji, associate president of Fitch Rating.

Ecuador’s default on $3.9 billion of international bonds means it’s only a matter of time before the country drops the U.S. dollar as its currency, Goldman Sachs Group has said, Bloomberg reported. Ecuador’s use of the dollar gives President Rafael Correa no outlet for providing credit to the economy as access to foreign financing dries up and revenue from sales of oil, the nation’s biggest export, tumbles.

A Milan court began deliberations Wednesday in the market rigging trial of Parmalat founder Calisto Tanzi and seven others, the Associated Press reported. The case is the first of several trials seeking to assign blame in the 2003 collapse of the dairy empire to come to a close. Parmalat collapsed under €14 billion in debt exactly five years ago in what remains Europe's largest corporate bankruptcy. Prosecutors have demanded 13 years for Tanzi, who denies wrongdoing, and up to six years in jail for other former Parmalat executives and banking consultants on trial.

Several former top Alitalia officials have been placed under investigation as part of a probe into the national carrier's bankruptcy earlier this year, the ANSA news agency reported Wednesday. ANSA said Rome prosecutor Nello Rossi had placed eight former top officials, including presidents and CEOs active from about 2000-2007, under investigation. Alitalia, which has been losing some $3 million a day, filed for bankruptcy protection in August, plagued by labor unrest, competition from budget airlines and high fuel prices.

Ukraine’s hryvnia plunged 17 percent in two days to a record low against the dollar as a pledge by President Viktor Yushchenko to support the currency failed to ease concern that most of the country’s loans risk default, Bloomberg reported. The currency fell 7 percent today, reaching 9.65 per dollar at 2:30 p.m. in Kiev, adding to a 44 percent drop this year. It continued to slide after Yushchenko said Ukraine will buy hryvnia and called for licenses to be revoked for lenders found speculating against the currency.

Administrators for Woolworths announced plans Wednesday to close all the retailer's stores by the early new year, signaling the end of the road for the venerable British company and the loss of almost 30,000 jobs, the Associated Press reported. Deloitte, which was appointed to run Woolworths after it filed for a form of bankruptcy protection last month, said it would shut down the group's 800-strong chain of stores around the country in stages from Dec. 27 to Jan. 5., unless it manages to sign a last-minute rescue deal.

BNP Paribas bowed to the inevitable Thursday and said it was suspending its takeover of the Belgian financial services company Fortis, following a court ruling that effectively froze the deal, the International Herald Tribune reported. BNP Paribas had offered €14.5 billion, or $21 billion, for Fortis after the Belgian company neared collapse in the aftermath of the implosions of AIG and Lehman Brothers. But the Brussels Court of Appeals found on Dec.

The British government is in talks with Jaguar Land Rover about a possible government bailout, a senior official said Wednesday. Business Secretary Peter Mandelson said the government was in talks with Jaguar Land Rover's owners "because they argue that they are under particular strain." But he added that the government had yet to commit to providing them with any assistance. Government intervention would depend in large part on the severity of the downturn in the automotive market, he said.

The High Court yesterday placed the Independent Power Tanzania Limited (IPTL) under receivership, pending determination of winding up proceedings by its minority shareholder, VIP Engineering and Marketing Limited, the Daily News reported. Judge Katherine Oriyo appointed the Administrator General as provisional liquidator of the country’s giant electricity generating company with immediate effect after granting an application filed by the VIP Engineering Company. The liquidator has 14 days to conduct investigations and file a state of affairs’ report before the court.

The biggest losers from Ecuador's debt default announced Friday are not foreign bond holders, the Latin Business Chronicle reported. Rather they are Ecuadorian companies, which now will have a virtually impossible time getting international credit--just as all markets are suffering from a credit crunch. "Ecuadorian exporters of shrimp, banana and flowers will likely find it difficult to secure trade finance," UK-based risk consultancy Exclusive Analysis said.