Headlines

Sony, which has 2,500 suppliers of components and materials, is to cut the number by half in a “life-changing” effort to streamline its cumbersome procurement network and cut costs by about 500 billion yen (£3.3 billion), the Times Online reported. The move by the entertainment and electronics group marks another shift in the Japanese business environment which, over the past six months, has undergone more radical changes than at any other time in the past 20 years.

Units of Italian bank Intesa SanPaolo Group have agreed to shell out €20 million ($27 million) to Parmalat SpA to resolve allegations stemming from the Italian dairy firm’s collapse into bankruptcy in 2003, Bankruptcy Law360 reported. Read more. (Subscription required.)

Britain may lose its AAA credit rating for the first time as government finances deteriorate in the worst recession since World War II, Bloomberg reported. Standard & Poor’s lowered its outlook on Britain to “negative” from “stable” and said the nation faces a one in three chance of a ratings cut as debt approaches 100 percent of gross domestic product. The pound fell the most in four weeks against the dollar, the FTSE 100 Index slid as much as 2.8 percent and the cost of insuring U.K. debt against default rose.

Canadian companies have taken "pre-emptive action" to slash jobs since last fall and that cost cutting has fuelled a drop in business bankruptcies, while sowing the seeds for an early recovery in the labour market, a new report says. The research, released yesterday by CIBC World Markets, suggests that downsizing is allowing more companies to stay afloat during the recession, the Toronto Star reported. It highlights data that show business bankruptcies fell 4.4 per cent in the 12 months ending March 31.

Recent defaults by two small Mexican mortgage firms were isolated and new measures to guarantee debt and to wean companies from short-term loans have improved the sector's health, a senior government official said. Javier Gavito, the head of Mexico's Federal Mortgage Society, or SHF, told Reuters on Wednesday that his development bank in recent months has brokered deals for mortgage companies to extend maturities on their debt as a condition for rolling over their short-term loans with banks.

One of Putnam County's largest employers is seeking protection from its creditors in a Canadian court, LimaOhio.com reported. W.C. Wood Corp., a Canadian manufacturer with a plant in Ottawa, filed a Companies' Creditors Arrangement Act application for protection in the Canadian courts. It has also filed a Chapter 15 application, which assures that any action stemming from the CCAA would also apply to the company's U.S. plant. The action will allow W.C. Wood to hold off creditors while it works on a restructuring plan.

The Canadian government will not move to limit interest rates on credit cards, Finance Minister Jim Flaherty said on Thursday, confirming that new credit card rules in Canada will not be as far-reaching as those just introduced in the United States. Flaherty said the government will not limit credit card interest rates because of a belief "in consumer choice", Reuters reported. Read more.

Fiat SpA is convinced it has more than a 50 percent chance of succeeding in its bid for Opel because it does not think the other contenders have the expertise to revive the car maker, Reuters reported on an Italian newspaper story. But General Motors Corp, which is selling Opel, has Fiat at the bottom of a list of three contenders, German magazine Der Spiegel said in its online edition, citing what it described as an internal GM ranking list of the bids.

Companies seeking to stave off liquidation must act early by identifying signs of insolvency and bring in expert advice, an accountancy firm says, the Brisbane Times reported. "Early action and sound professional advice are vital and can save a company from liquidation," Hall Chadwick Chartered Accountants partner Richard Albarran said. Mr Albarran said that 2,148 Australian companies entered voluntary administration in 2008.

Two top executives from bankrupt technology company Nortel Networks Corp. have been hit with a proposed shareholder class action accusing them of failing to disclose the company's bleak financial condition to investors, Bankruptcy Law360 reported. According to the complaint, Nortel issued several press releases stating a positive financial outlook and growing revenue projections throughout May and June 2008. But in actuality, the company was facing a drop in demand for its products, overstated financial results and a largely unsuccessful restructuring effort, the suit contends.