Italy

Seat Pagine Gialle, the indebted Italian directories group that publishes the country’s Yellow Pages, saw its shares fall by more than 16 per cent after it secured a further 14 day extension to agree the terms of its financial restructuring with its debt and equity holders to avoid administration, the Financial Times reported. The publisher’s bondholders and shareholders last month agreed to convert €1.2bn ($1.6bn) of the company’s debt into equity but talks have stumbled over the conversion price.

Italian directory firm Seat Pagine Gialle will not pay a 52 million euro coupon on its 1.3 billion euro subordinated Lighthouse bond on Wednesday, it said late on Tuesday, Reuters reported on an International Financing Review story. The company's board is now asking Lighthouse bondholders to agree to postpone the coupon until mid December, after discussions between stakeholders failed to result in a consensual restructuring, Seat PG said in a statement.

The fate of Italian directories firm Seat Pagine Gialle hangs in the balance as it looks increasingly unlikely that all senior creditors will relent to junior bondholders' demands, sources close to the matter said, Reuters reported. The company on Monday asked lenders for more time to negotiate terms on a proposed debt-for-equity swap put forward by the subordinated holders of Seat PG's "Lighthouse" bond, the sources said.

Italian Prime Minister Mario Monti will propose billions of euros in new austerity measures next week—according to a person familiar with the matter—to reinforce Italy's pledge to balance its budget by 2013, a key part of its efforts to restore investor confidence in the country, The Wall Street Journal reported. The planned measures—a mix of tax increases, public spending cuts, and infrastructure projects—are a first step in the Italian premier's broader push to introduce tougher reforms aimed at rebooting Italy's economy, the person said. Mr.

Banks acting as primary dealers of Italian debt are growing uncomfortable with their obligation to buy at bond auctions as the euro zone crisis worsens, increasing the risk that Italy fails to raise enough cash to stay afloat, Reuters reported in an analysis. Since October, Italy's borrowing costs have risen to levels deemed unsustainable, making long-term investors reluctant to buy and increasing the risk that the banks able to bid at auctions are left holding a rapidly depreciating stock of bonds. Borrowing via debt auctions is vital if governments are to cover their budget deficits.

Italy's largest bank, Unicredit, on Monday highlighted the obstacles faced by prime minister-designate Mario Monti when it sent out a plea to shareholders for extra funds to protect against bad loans to Greece and losses on subsidiaries in eastern Europe, The Guardian reported. Unicredit, which operates in 22 European countries with more than 168,000 employees, said it needed to boost its reserves by €7.5bn after it plunged into loss, was forced to ring-fence €48bn of toxic assets, and told staff that 5,200 of them would be made redundant.

Technocrat leaders in Italy and Greece rushing to form governments will face a critical test of their ability to limit the damage from the euro zone debt crisis when financial markets open on Monday, Reuters reported. Italy's president asked former European Commissioner Mario Monti on Sunday to form a government to restore market confidence in an economy whose debt burden is too big for the euro bloc to bail out.

Italy spends almost a third of its annual budget on pensions and as a ratio of gross domestic product (GDP), the spending is the highest in the world. Not even 37% of the 55-64 age cohort are gainfully employed, Finfacts reported. If Ireland extended the same pension benefits that are available to its politicians and the rest of the public service, to the rest of the citizenry, the costs would be similar to Italy's. Ireland's annual pension costs of €7.5bn amount to over 15% of total annual revenues and 5% of GDP.

Prime Minister Silvio Berlusconi’s pledge to resign failed to quell a growing investor panic Wednesday over indebted Italy’s ability to pass austerity measures and pay its bills, sending the nation’s borrowing rate soaring to levels that could force the world’s eighth-largest economy to seek international help, The Washington Post reported. The negativity spread to global markets, as Italian borrowing rates surged above 7 percent and stock markets in Milan, Paris, Frankfurt and New York dropped markedly.

Debt-choked Italian directory group Seat Pagine Gialle said it was confident that a debt restructuring accord could be reached that would allow it to continue operating, as it reported a 17.7 percent fall in nine-month core earnings, Reuters reported. Seat, which is in the process of restructuring its 2.7 billion euro debt, said nine-month revenues fell 10.5 percent to 695.6 million euros from a restated 2010 figure. Operating free-cash flow stood at 290.7 million euros it said and earnings before interest, tax, depreciation and amortisation (EBITDA) totalled 273 million euros.