Headlines

Troubled Italian airline Alitalia's debts have soared to some 2.3 billion euros, the company's special administrator said Sunday as a pilot and air crew strike caused a seventh day of cancelled flights, Agence France-Presse reported today. Augusto Fantozzi told RAI television he had "around two billion in ordinary debt for the supply of goods and services," before taking into account a 300-million-euro government loan. Alitalia's last publicly recorded debts going back to mid-2008 were 1.2 billion euros, although that figure did not include bills from suppliers.

Japan, the world's second-largest economy, has fallen into recession, the government said Monday. The country's gross domestic product contracted at an annual rate of 0.4 percent from July to September, marking the second consecutive quarter of negative growth, the Washington Post reported today. Japan's economy minister warned that the situation could worsen: Collapsing sales of Japanese goods in the United States and Europe amid the global downturn threaten to make the country's export-dependent economy even weaker in coming months.

Rafael Correa, Ecuador's left-wing president, has heightened fears that the Andean nation will default on parts of its $10 billion (£6.8 billion) foreign debt, saying an internal audit due out this week will determine if the debt is "illegitimate," the Financial Times reported today. "If there are sufficient grounds for illegitimacy, we won't pay this debt," he said.

Iceland agreed that European regulations require it to guarantee accounts of hundreds of thousands of Britons and other foreigners who are frozen in the online arm of one of the nation's collapsed banks, the government said Sunday. Recognition of the legal principle, which came in talks with European Union representatives, is a significant step toward freeing up a $2.1 billion bailout package from the International Monetary Fund, the Wall Street Journal reported today.

In a brief from Thomson Financial today, Dermasalve Sciences Plc says that the company cannot, by reason of its liabilities, continue in business and will start insolvency proceedings shortly. The company says the same course of action is also to be undertaken in respect of its subsidiaries, Dermasalve Ltd and Healthy and Essential Ltd. The company says it has also received notice of the resignation of Hanson Westhouse Ltd as nominated adviser and broker with immediate effect. Read more.

Legislators from across the political spectrum yesterday began work on how best to conduct the Lehman minibond probe amid concerns over whether they will get access to all the documents they need, The Standard reported today. Raymond Ho Chung-tai, chairman of the 26-member subcommittee, which will conduct the probe, said the inquiry could take at least a year.

For decades, the steamy Pearl River Delta area of southern Guangdong Province served as a primary engine for China’s astounding economic growth. But circumstances have changed quickly. The slowdown in exports contributed to the closing of at least 67,000 factories across China in the first half of the year, according to government statistics. Labor disputes and protests over lost back wages have surged, igniting fear in local officials. The shutdown of the Weixu shoe factory, called China Top Industries in English, is the latest casualty, the New York Times reported today.

Despite assurances from the developer, Singapore is looking for ways to avoid ending up with a mammoth unfinished project on a prominent piece of land if U.S. casino operator Las Vegas Sands Corp. is unable to complete a $4.9 billion gaming venture, the Wall Street Journal reported yesterday. Sands said in a filing with the U.S. Securities and Exchange Commission last week that it was in danger of not meeting obligations to its lenders on a $3.8 billion portion of its debt unless it raises capital, cuts spending on developments or increases its Las Vegas earnings by year end.

Administrators of the European arm of failed investment bank Lehman Brothers Holdings Inc. are meeting with creditors in London on Friday to sketch out the group's assets and liabilities, The Straits Times reported today. PriceWaterhouseCoopers, which was drafted in as administrator to Lehman Brothers International (Europe) to unravel the complex web of the firm's tens of thousands of trades and attempt to claw back funds for creditors, said it will provide an update after the meeting.

Commercial printing company Grafikom shut down operations this week, throwing about 500 employees out of work, including 78 in Calgary and 67 in Edmonton, the Edmonton Journal reported yesterday. The Toronto-based, privately held company went into receivership on Monday, owing banks $49 million, according to documents filed with Ontario Superior Court. Grafikom group has a payroll of $1.2 million due as of last Tuesday and cannot pay it, said an application filed in Ontario Superior Court under the Bankruptcy and Insolvency Act.