Headlines

The official overseeing an audit of Ecuador's foreign debt said his committee found evidence of abuses and irregularities tied to almost all of the country's bonds and will recommend a default on $10.3 billion in national debt, the Associated Press reported yesterday.

South Korea’s overall debt default ratio rose to a four-month high in October while the ratio of business start-ups against failures tumbled to a near 4-year low, central bank data showed on Wednesday, Forbes reported. The debt default ratio, which represents the percentage of defaults against total commercial debt and corporate bonds issued from settlement, rose to 0.03 percent in October from September's 0.02 percent, Bank of Korea data showed.

Pepsi Bottling Group Inc., the world's second-largest soft-drink distributor, lowered its 2008 earnings forecast and said it will eliminate 4.6 percent of its workforce in North America, Europe and Mexico, Bloomberg reported. Pepsi Bottling, which is 33 percent-owned by PepsiCo Inc., will cut 3,150 jobs, mostly in Mexico. Earnings per share will be $2.20 to $2.26 this year, down from the $2.32 to $2.38 Pepsi Bottling forecast in June, the Somers, New York-based company said today in a statement. The shares fell in New York trading.

Spanish property group Tremon on Monday said it had filed for administration after failing to meet debt payments, hurting shares in banks which have total exposure of around 1 billion euros ($1.27 billion), Reuters reported. Tremon is the second large Spanish property group to seek administration this year following Martinsa Fadesa. Among its biggest creditors are Banco Popular, with around 200 million euros exposure, unlisted savings bank Bancaja with 100 million followed by Banco Pastor with 95 million.

The Irish government is on the brink of launching a multi-billion euro rescue plan for the country's banks as the share price of a second major institution fell below €1 yesterday, the Irish Independent reported today. Officials are going through an expert report forensically examining the loans given out by the banks to work out their levels of bad debt. The finance ministry held talks with the financial regulator and the central bank on Tuesday night, and the government has accepted that it will have to put public money into the banks.

Labor strife has repeatedly frustrated the efforts of Alitalia to restructure but, for once, wildcat strikes aimed at thwarting its takeover seem unable to halt a deal, the International Herald Tribune reported. While hundreds of flight cancellations dominated headlines as protests entered their second week, CAI, a consortium of Italian businessmen, was quietly but swiftly nearing the finish line in its bid to buy and resurrect the airline, which has been operating under bankruptcy protection.

Kohlberg, Kravis, Roberts & Co. Partner Scott Nuttall resigned from the board of embattled Masonite International Corp., a door maker the private-equity firm bought for $1.9 billion three years ago, Bloomberg reported today. Masonite, which is in talks with lenders to avert bankruptcy, announced the departure in a statement yesterday. Fred Lynch, the chief executive officer of the Mississauga, Ontario-based company, will replace Nuttall on the board, according to the statement. New York-based KKR said Nov.

PIK Group, one of Russia’s largest residential construction companies, plunged as much as 43 percent in London on Monday after JPMorgan Chase & Co. downgraded the developer to "underweight" from "overweight" on concern that it may default on some debt, The Moscow Times reported today. The developer may be unable to repay $700 million of debt due this year as the Moscow city government seeks to overturn housing orders PIK won in October and renegotiate prices, Elena Jouronova, a property analyst at JPMorgan in Moscow, wrote in a note to clients Monday.

Masonite International Corp., taken over by Kohlberg, Kravis, Roberts & Co. three years ago, may file for bankruptcy unless the company's lenders agree to ease the terms of its bank loans, Bloomberg reported today. The door and fiberboard maker, which KKR bought for $1.9 billion, is negotiating with a group led by Scotia Capital for a reprieve of at least 30 days in exchange for higher interest payment and fees. Masonite, based near Toronto, and lenders holding $1.5 billion of the debt have a call scheduled for 11 a.m. Eastern time today.

German Chancellor Angela Merkel said Monday after meeting with leaders of Adam Opel GmbH that it was "not yet determined" whether the automaker would be given 1 billion euros ($1.25 billion) in loan guarantees from the government, the Associated Press reported yesterday. Opel, a subsidiary of General Motors Corp., is seeking the guarantees because the company expects difficult credit conditions on the open market due to the world financial crisis. Merkel said that government officials planned further talks on the issue and should come to a decision by Christmas.