Headlines

Under pressure from its bankers, Gehl Co. must either forge new loan terms or face possible bankruptcy, its new French owner has said, Construction Equipment reported. After the West Bend construction equipment maker violated conditions of its loan agreement, Gehl's bankers demanded March 31 that it make early repayment of about $118 million of financing, the Manitou Group said in a statement last month announcing its 2008 results. Manitou acquired Gehl in a friendly takeover last year for about $310 million.

An Opel spokesman reacted to a New York Times newspaper report on Monday, which said US big-three carmaker GM may undergo what it called a "surgical" bankruptcy as early as June 1, Deutsche Welle reported. An Opel spokesman told dpa press agency that Opel wasn't worried about the effects of "a possible bankruptcy in terms of the measures taken up to now and business development." Carl-Peter Forster, the head of GM Europe, also said a possible bankruptcy at GM posed no danger to Opel. "Our production and the sale of cars in Europe won't be affected," he said.

Singapore said its recession will be deeper than previously expected, prompting the central bank to adjust the band within which the currency is managed to help the nation exit its worst economic slowdown on record, Bloomberg reported. The Southeast Asian economy may shrink between 6 percent and 9 percent this year, more than a January forecast for a contraction of as much as 5 percent, the trade ministry said in a statement today. That’s the third reduction in the government’s forecast in the past four-and-a-half months.

Leveraged buyouts may help push corporate defaults in Europe to a record 14.7 percent this year, according to Standard & Poor’s. Between 90 and 112 speculative-grade companies in western Europe rated by S&P may default this year, the New York-based firm said in a report today, increasing an earlier estimate of as much as 11.1 percent. Defaults will be “materially higher” among companies purchased in LBOs, where target firms are loaded with acquisition debt, S&P said.

Alliance Bank, a Kazakh lender listed in London, stopped paying creditors after discovering $1.1 billion of liabilities that weren’t reflected on its balance sheet, Bloomberg reported. Alliance won’t make debt payments “for at least three months,” the bank said in an e-mailed statement today, urging creditors not to seek early repayment. Previous management committed $1.1 billion of U.S. Treasuries “in third-party obligations” between 2005 and 2008 that weren’t properly reported, Alliance said.

Mexican mining company Grupo Mexico SAB threw a fresh punch in its fight to retain U.S. copper subsidiary Asarco LLC, pledging $1.3 billion in cash to take the unit out of Chapter 11 proceedings and defeat a rival bid by Vedanta Resources PLC, The Wall Street Journal reported. Though Vedanta's deal to acquire Asarco has a higher total--$1.7 billion--it includes just $1.1 billion in cash, plus a note for $600 million. A U.S. bankruptcy judge will have to determine which offer better serves Asarco's many creditors, including the U.S.

Auctioneers are seeing an increasing trend of properties under receivership this year, as more owners are expected to have financial difficulty amid the continuing global financial crisis, StarBiz reported. They said the overall supply of auction properties in the last few months had already risen by 10% to 20% compared with normal times. Property Auction House Sdn Bhd general manager Danny Loh said medium and low-cost houses were hit the hardest. Property Auction House Sdn Bhd general manager Danny Loh said medium and low-cost houses were hit the hardest.

Qantas Airways Ltd. said Tuesday it expects earnings to fall up to 93% this year and announced a further round of deep cuts in capacity, expenditure and up to 1,750 job losses as market conditions continue to deteriorate and industry price-discounting intensifies, Dow Jones Newswires reported. The airline slashed its full year profit before tax forecast for the year to June 30 to between A$100 million and A$200 million, from its previous forecast of around A$500 million. In fiscal 2008, the national carrier posted record profit before tax of A$1.41 billion and net profit of A$969.0 million.

The ripple effects of American International Group Inc.'s woes have spread from the bastions of global finance to U.S. transit authorities to little towns throughout Germany, The Wall Street Journal reported. The reach can be chalked up in part to a kind of infrastructure tax deal that gained popularity in the 1990s and spread among hundreds of municipal and state governments around the world. Now, the deals in many cases have backfired because of the giant insurer's problems. The notion was this: Localities could earn millions of dollars selling their infrastructure to U.S.

Bankruptcy-related mergers and acquisitions have hit their highest level globally since August 2004, and are set to keep rising as more companies are forced into distressed sales, according to Thomson Reuters data and restructuring practitioners. Thomson Reuters identified 34 announced deals in March alone, and 67 so far this year, where the target company was in bankruptcy or administration proceedings, the Financial Times reported.