Headlines

Insolvent AbitibiBowater Inc is “to a certain degree operating on fumes” and badly needs access to emergency financing, a Montreal bankruptcy court hearing was told Friday, The Globe and Mail reported. The newsprint giant, which is operating under the protection of the Companies Creditors' Arrangement Act, is burning through $200-million a month and is not comfortable with its precarious position in terms of payroll and financing day-to-day operations, Sean Dunphy, one of the lawyers for the Montreal-based company, said.

The global downturn could lead to unrest, more poverty and environmental challenges in Asia, regional leaders were warned on Monday, after they agreed on a $120 billion emergency fund to counter the crisis, Reuters reported. Asia has been hard hit by the collapse in global demand largely because of the region's heavy reliance on exports. Singapore, Hong Kong, Taiwan and Japan are in recession and growth elsewhere is the weakest in years. "Poverty is worsening in many countries. Businesses are struggling.

Most countries hammered by the financial crisis ran into trouble because their banks crumbled, their exports collapsed or they ran up too much debt. Armenia, a landlocked nation of three million in the Caucasus, has a different problem, The Wall Street Journal reported. Fiscally prudent and too isolated to be hit by early fallout from the crisis, the country is proving there is no haven from the downturn: The economy has been hit hard as Armenians who live abroad send less money home.

The European Union said Monday that Europe is suffering ''a deep and widespread recession'' and that unemployment will rise sharply over the coming two years, The New York Times reported on an Associated Press story. The European Commission said both the 27-nation EU and the 16 countries that use the euro currency will shrink by 4 percent this year, more than double its January estimates, when it forecast a 1.8 percent contraction for the EU and a 1.9 percent decline for the euro area.

Canada's government will take an ownership stake in troubled automaker Chrysler in exchange for more than $2 billion in loans, under a sweeping North American rescue plan, government officials said on Thursday. Chrysler filed for Chapter 11 bankruptcy protection in the United States earlier in the day and also entered into an alliance with Italian automaker Fiat SpA. Ottawa and Washington demanded the Detroit company partner with Fiat by Thursday as a condition for funding.

Canada's Industry Minister said Thursday it would take at least three years to stabilize Chrysler LLC, which has filed for bankruptcy, Dow Jones Newswires reported. The federal and Ontario government will extend US$2.42 billion of financing to Chrysler and have a 2% stake in the overhauled company under the restructuring plan approved by the U.S. and Canadian governments. They can divest the stake after three years.

Although Chrysler Canada has no plans to follow the lead of its parent company and file for bankruptcy protection, the head of the Canadian Auto Workers says its plants will be forced to close until the company's U.S. court-supervised restructuring is complete, The Canadian Press reported. Chrysler LLC said Thursday it will temporarily stop most of its vehicle production until it has completed a technology-sharing alliance with Fiat--a cornerstone of its restructuring plan. The shutdown is effective Monday and could last between 30 and 60 days.

Italian automaker Fiat SpA's next project is a deal with Germany's Opel after a landmark alliance with U.S. car maker Chrysler, Fiat's chief executive said in an interview published on Friday. Sergio Marchionne told La Stampa newspaper that Fiat also remained committed to Italy but needed to work with the government and unions on "structural problems". Fiat sealed an industry-changing deal with Chrysler, the smallest of Detroit's Big Three automakers, on Thursday. Fiat will take an initial 20 percent stake in Chrysler, which filed for Chapter 11 bankruptcy protection.

Fiat quietly ended its effort to market cars in the United States a quarter-century ago when the last of its vehicles to carry the Fiat nameplate, the 1983 Brava sedan, drove off a dealer lot. They had stylish exteriors and responsive handling, but Fiats were notoriously unreliable. This time around, the Italian automaker is hoping to make a more favorable and lasting impression on American consumers, with much-improved, fuel-efficient cars that could roll off the assembly lines of its new partner, Chrysler, in as little as 18 months, The New York Times reported.

The embattled Babcock & Brown has suffered a further blow with the resignation of four members of its board of directors, including managing director and chief executive Michael Larkin and chairman Elizabeth Nosworthy, Money Management reported. Currently in voluntary administration, BBL notified administrators Deloitte Touche Tohmatsu yesterday of the resignations of Larkin, Nosworthy and directors Roger Handley and Geoffrey Martin, effective April 29. Two company secretaries also resigned earlier this month.