Headlines

Diluting Chinese savings to bail out America’s failing banks and bankrupt households, though highly beneficial to the US national interest in the short term, will destroy the dollar’s global status, the Financial Times reported. America’s policy is pushing China towards developing an alternative financial system. For the past two decades China’s entry into the global economy rested on making cheap labour available to multi-nationals and pegging the renminbi to the dollar.

Switzerland's largest bank, UBS, confirmed a first-quarter net loss of 2 billion Swiss francs ($1.76 billion) on Tuesday on the back of yet more writedowns, as client withdrawals continued, and said it remained cautious, The New York Times reported. UBS said losses were driven by writedowns on risk positions, in particular 1.9 billion francs on monolines, and by losses at its investment bank.

Lion Nathan is keeping quiet about its exposure to the collapse of New Zealand’s biggest pub chain. A group of companies under the CEA banner went into receivership last week. CEA owns 20 bars and clubs in Wellington and the South Island. It is 50% owned by Australian resident Jugeshinder Singh; the other half is split into three tranches, all of which are owned by companies associated with Australian private equity firm Investec Wentworth. Lion Nathan supplies all of CEA's venues with either beer, wine or spirits or a combination of these.

India’s phenomenal growth of the last five years was powered in large part by huge injections of cash and investment. Investment accounted for about 39 percent of the country’s gross domestic product in fiscal year 2008, up from 25 percent five years ago. At its peak, more than a third of investment came from abroad, according to Credit Suisse. But in the last three months of last year, foreign loans and direct investment fell by nearly a third, to their lowest level in more than two years, The New York Times reported.

American International Group Inc. is close to selling its Japanese headquarters for about $1 billion, in a deal that would mark one of the largest divestitures the insurance company has made to pay off its government debt, people familiar with the matter said. At least two suitors have been vying for the property, but the expected buyer is a Japanese insurance company, The Wall Street Journal reported. AIG owes the U.S. government about $45 billion as part of a rescue package that could total as much as $173.3 billion.

Kazakhstan's fourth-largest bank, Alliance, said on Monday it had achieved progress in debt restructuring talks and would hold its next meeting with creditors in late May, Reuters reported. Alliance, which has about $4 billion in outstanding foreign debt, said creditors were ready for constructive talks with management and shareholders towards "a long-term solution as part of a restructuring and recapitalisation plan". Seven international banks representing more than 60 creditors were forming a committee, it said in a statement without naming the committee members.

Russian miner Norilsk Nickel, the world's largest nickel producer, is seeking to reschedule debts linked to the 2007 takeover of Canada's LionOre, London's Independent on Sunday reported. Norilsk declined to comment when contacted by Reuters after the newspaper reported it "is looking to ease the terms of the loan taken out on its $6.4 billion purchase of Canadian rival LionOre in 2007". The London offices of investment banks Rothschild and Lazard have been approached by Norilsk to help "sort out its debt difficulties", the Independent on Sunday reported.

Chrysler may not be filing for bankruptcy in Canada, but that doesn't mean there's a dearth of work for lawyers up north, The AmLaw Daily reported. Five Canadian firms have lined up to navigate various parties through the thicket of legal issues emanating from Chrysler's Chapter 11 filing. Canada's largest law firm, McCarthy Tétrault, is fielding a 16-lawyer team on behalf of Chrysler Canada. The firm has helped Chrysler Canada overcome a pricing tax dispute that threatened to scuttle the company's alliance with Italian automaker Fiat.

Experts are warning that shadowy investors, such as hedge funds, could force waves of bankruptcies in the months ahead as they seek to profit from the recession by buying up large amounts of debt of struggling companies, The Guardian reported. Activist lenders, including hedge funds or vulture funds, buy debt of distressed companies at a heavy discount to profit from a potential insolvency, a sale of assets or a debt-for-equity swap that would give them control of the business – a strategy called "loan-to-own".

Efforts to create a harmonious trans-Tasman business environment have extended to company failures, with the Australian and New Zealand Governments agreeing to start work on streamlining insolvency regulations, The New Zealand Herald reported. Commerce Minister Simon Power and Australian Corporate Law Minister Nick Sherry have jointly announced a project to review cross-border insolvency procedures.