Oceania

CBL Insurance has finally entered liquidation amid accusations of massive solvency breaches, Insurance Times reported. Nathan Gedye, lawyer for the Reserve Bank of New Zealand, said CBL Insurance’s balance sheet was insolvent by $86.6m in 2013, $102m in 2014, $104m in 2015 and $98.6m in 2016, according to The New Zealand Herald. The company’s solvency position as at December 2017 was 25 per cent compared to the ratio required by direction of the Reserve Bank of 170 per cent and the required 100 per cent under licence, a shortfall of $136.5m.

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Australia’s big banks are set for their worst earnings season since the global financial crisis. A softening housing market, margin pressure from rising funding costs, and the ballooning cost of dealing with the fallout from an inquiry into misconduct in the financial industry, are all squeezing profits, Bloomberg News reported. Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. are expected to report their first declines in full-year cash profit since 2016, while Westpac Banking Corp.

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Former prime minister Dame Jenny Shipley gave evidence for a second day at Auckland High Court rejecting claims that Mainzeal, a construction company she chaired, was insolvent as early as 2008, Stuff.co.nz reported. Mainzeal was put into receivership in early February 2013, but liquidators Andrew Bethell and Brian Mayo-Smith of BDO allege the company traded while insolvent, and are suing some of its former directors, including Shipley, for up to $75 million in damages to repay Mainzeal's creditors. Shipley betrayed no nerves while giving evidence of her involvement with Mainzeal between 20

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Shareholders in Australia’s big banks shouldn’t get too comfortable. Bank stocks rallied in relief that the interim report from an inquiry into misconduct didn’t contain any specific recommendations. But criticism ran deep as Commissioner Kenneth Hayne lambasted the banks over their culture, conduct, compliance and remuneration practices, Bloomberg News reported. He also took aim at the securities and banking regulators for their timid approach and failure to take court action.
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HFW has won an appeal against a Supreme Court ruling with “significant implications” for insolvency proceedings in Australia, Australasian Lawyer reported. The firm helped Rio Tinto subsidiary Hamersley Iron Pty Ltd overturn a Supreme Court decision that Hamersley could not set off its claims against Forge Group Power Pty Ltd. "Today's decision is not only good news for Hamersley, but for many other unsecured creditors. The rights between contracting parties in the event of insolvency is something impacting almost all businesses,” said partner Matthew Blycha who led the HFW team.
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A planned $500 million bond sale from Papua New Guinea, a country that has tried and failed to sell foreign debt before, will test whether investors are still receptive to riskier borrowers after a selloff in emerging markets, The Wall Street Journal reported. The offering could conclude this week, and would mark the first sale of junk-rated sovereign-dollar debt since July, when Angola sold $500 million in 30-year bonds, according to Dealogic. In recent months, rising U.S. interest rates and a stronger dollar have hit emerging-market stocks and bonds.
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The Reserve Bank of Australia is downplaying risks to the housing market from rising mortgage interest rates, saying that the cost of funding a home loan is still below that a year ago, The Wall Street Journal reported. In minutes of its Sep. 4 policy meeting released Tuesday, the RBA said that at the time of the board gathering, lenders accounting for around 40% of the market had raised mortgage lending rates.
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Australia’s Wiggins Island Coal Export Terminal obtained court approval on Tuesday for a $3.2 billion debt refinancing plan, offering respite to its owners who would have had to start repayments this month, Reuters reported. The Queensland-based terminal, known as WICET, is 40 percent owned by miner and commodities trader Glencore and was built to service a consortium of eight coal companies during a period of high commodity prices. It will now have the maturity of $2.6 billion in senior debt extended from this month until September 2026, court documents showed.
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Insolvency practitioners could face fines of up to $75,000 if they don't report serious issues in failed businesses, if proposed legislative amendments go ahead, Radio New Zealand reported. The penalties were one idea floated in a Supplementary Order Paper on the proposed amendments to the Insolvency Practitioners Bill. The legislation aimed to get rid of errant behaviour by so-called friendly liquidators, administrators and receivers who did not give all creditors a fair go. Submissions on the bill close on Friday.
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One of the longest stalemates in Australian corporate history could be nearing a resolution. Vodafone Hutchison Australia Pty, the joint venture between Vodafone Plc and a unit of Victor Li’s CK Hutchison Holdings Ltd. that runs the nation’s third-largest mobile network, is in talks to merge with homegrown challenger TPG Telecom Ltd., the companies said in statements Wednesday.
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