Headlines

The first government-guaranteed finance company has hit the wall, with receivers appointed to South Island-based Mascot Finance today, The National Business Review reported. Mascot has 2558 debenture holders with $70 million invested and its government guarantee was issued less than two months ago. This guarantee will ensure that investors receive all their principal back. The company also has 3.85 million redeemable preference shares that are traded on the Unlisted exchange.

The board of General Motors' German Opel subsidiary met on Friday to agree a restructuring plan that could cost thousands of jobs and open the way to state support, Reuters reported. The meeting comes a day after thousands of workers protested in Ruesselsheim, calling for an independent Opel after 80 years as a unit of GM. It is the first carmaker in Europe to ask for government support to survive.

European Union governments agreed Thursday to raise the coverage level for bank deposits to €50,000 ($63,565) from the end of June and to €100,000 from the end of 2010, The Wall Street Journal reported. The decision aims to "help restore confidence in the banking sector by strengthening depositor protection," said the Council of the European Union, the EU institution where governments are represented. The EU had set a previous minimum coverage level of €20,000.

A group of multilateral lenders on Friday unveiled a lending package of up to €24.5 billion ($31 billion) to help central and eastern Europe’s battered banking systems weather the financial crisis, the Financial Times reported. The World Bank, the European Bank for Reconstruction and Development and the European Investment Bank, which announced the package in London, hope the move will encourage the international banking groups that control most of the region’s banks to support their subsidiaries.

China is preparing for a wave of bond sales by local governments, as the economic slowdown pushes officials to overhaul a system that has left cities and provinces chronically strapped for cash, The Wall Street Journal reported. Lawmakers discussed a plan for local-government bonds last week, and analysts expect it to be finalized at March's annual legislative session. The tentative plan envisions local governments selling around 200 billion yuan, or $29 billion, of bonds this year through the central government, according to economists in China.

Hayman Advisors LP, the firm that earned $500 million betting on the U.S. subprime mortgage-market collapse, says Europe’s monetary union is about to fall apart, Bloomberg reported. Richard Howard, a managing director for global markets at Dallas-based Hayman, said Germany may opt to shore up its own economy, Europe’s biggest, rather than bail out fellow euro nations such as Austria, Italy and Spain as their banks sag under the weight of bad debts. That might lead to defaults and compel Germany to renounce the euro, he said.

Unions in Guadeloupe scored a victory in getting a deal to raise some workers' salaries, but said Friday they will not end a general strike now concluding its sixth week on the French Caribbean island, the Associated Press reported. Leaders of the strike-organizing Collective Against Exploitation, or LKP, paused for handshakes and photos with small business owners after signing the deal just before midnight Thursday. The agreement raises some workers' salaries by $250 (€200) a month.

Property developer Dan McEwan has been adjudicated bankrupt in the Auckland High Court on the application of a creditor owed $978,000, The National Business Review reported. Associate Judge David Robinson struck out a supporting application to bankrupt him over a $4 million debt after the first one succeeded. NBR has been contacted by dozens of investors caught up in property ventures promoted by the McEwan Group. They complain of losses ranging from $50,000 to more than $1 million with little hope of recovery.

Part-nationalized Lloyds Banking Group unveiled a 10 billion pound ($14.28 billion) loss for 2008 and said it had not finalized a plan to put billions of pounds of assets into a UK government-backed insurance scheme, Reuters reported.

Telecom equipment company Nortel Networks Corp. plans to cut its work force by 3,200 jobs worldwide, or more than 10 percent of its global work force, in an effort to restructure its operations while under court protection, the Associated Press reported. The Canada-based telecom equipment maker said Wednesday the new round of job cuts will be made over the next several months. The reduction is on top of 1,800 job cuts already announced. Nortel filed for creditor protection Jan. 14 in Canada and the United States.