Toys “R” Us (Canada) Ltd said on Friday that it received U.S. and Canadian court approval to sell itself to Prem Watsa’s Fairfax Financial Holdings Limited, Reuters reported. The sale, which also includes Babies “R” Us stores in Canada, is expected to close this quarter, the company said.
A Chinese property developer whose owner bought a stake in SeaWorld Entertainment Inc. is piling up overdue loans worth hundreds of millions of dollars, as a government campaign to control debt starts to squeeze China’s property sector, the Wall Street Journal reported. Zhonghong Holding Co. disclosed in a regulatory filing on Monday that it defaulted on more than 1.1 billion yuan in borrowings, doubling in the past five weeks a pile of overdue debt that totaled 2.27 billion yuan ($360 million). In the filing with the Shenzhen Stock Exchange, Zhonghong said the debt came from “various kinds of borrowings” and didn’t disclose further details. Zhonghong is talking with creditors, which include financial institutions and banks, said a company representative. She declined to disclose further information, saying, “It’s complicated.” While Zhonghong is a relatively small developer of offices, shopping malls and other commercial real estate, its mounting defaults are seen as a bellwether of emerging problems in the real estate sector that could ripple across the banking system.
Perforadora Oro Negro, an offshore drilling contractor, filed for bankruptcy in the U.S. Friday, seeking an investigation into allegations that the owner of a major competitor teamed up with Mexico’s state-owned oil behemoth to drive Oro Negro out of business, WSJ Pro Bankruptcy reported. The company, which is carrying nearly $1 billion in debt, sought chapter 15 protection, the part of the U.S. bankruptcy code that deals with international insolvencies, in U.S. Bankruptcy Court in New York. If its request for chapter 15 is approved by Judge Shelley Chapman, who will oversee the case, Oro Negro will receive the benefits of U.S. bankruptcy law, including the so-called automatic stay that halts lawsuits and prevents creditors from seizing assets.
Wage talks between General Motors’ South Korean unit and its labor union ended without an agreement yesterday, a day before the deadline the company had set for filing for bankruptcy, Reuters reported. The Detroit carmaker had said that its loss-making South Korea unit was likely to file for bankruptcy protection if it failed to reach a restructuring agreement by today. GM said in February that it would shut down one of its plants in Korea, and it has been seeking wage concessions and government help to save its remaining three factories.
Fairfax Financial Holdings Ltd., the investment firm run by billionaire Prem Watsa, signed an agreement to buy the Canadian unit of Toys “R” Us Inc. for about C$300 million ($237 million), Bloomberg News reported. The stalking horse bid allows other potential buyers to enter competing proposals by Monday. Fairfax would then have the option of either increasing its offer or walking away. Under the terms of the deal, Fairfax would receive a break fee of about 4 percent if another bidder is chosen. After the takeover, Fairfax would be able to continue operating Toys “R” Us stores in Canada under the existing name, the person said. The deal would follow a Fairfax-backed consortium’s purchase of athletic equipment maker Performance Sports Inc. last year, a process that was also overseen by a bankruptcy court.
Bowing to criticism from the Singapore Exchange and other investors, embattled Noble Group is removing a provision in its $3.4 billion debt restructuring proposal that penalized shareholders voting against the plan, Reuters reported. The debt-for-equity swap is crucial for the survival of the Singapore-listed company, which has sold billions of dollars of assets, taken hefty writedowns and cut hundreds of jobs over the past three years to slash debt. Noble has secured the backing of its creditors, but it also needs approval from a majority of its shareholders. “If more than half of the shareholders vote in favor of the restructuring, all shareholders, irrespective of their vote at the special general meeting, will receive the same treatment and will participate in the restructuring,” Chairman Paul Brough said yesterday in a letter addressed to shareholders and sent to SGX.