Russia will be hit by a wave of bankruptcies unless it cuts interest rates very soon, a top financial official warned yesterday, CNNMoney.com reported. Anatoly Aksakov, president of Russia's regional banking association and deputy chairman of parliament's financial markets committee, said that firms were running out of cash. "Bankers believe that keeping the situation as it stands will cause a wave of bankruptcies, not only credit institutions but also a number of businesses and companies," Aksakov wrote in a letter to the central bank.
Dubai World has reached agreement with a "substantial majority" of creditors to back its $14.6 billion debt restructuring, the state-owned conglomerate said, putting the emirate on track to clear the last big hangover from a debt crisis, Reuters reported today. Dubai's economy has rebounded strongly from a local property crash which triggered a wave of debt restructurings at state-owned entities at the turn of the decade — most notably Dubai World's request for a debt standstill on $25 billion of obligations in 2009 that resulted in a global markets sell-off. It has been in talks with lenders for months to secure a renegotiation of terms of the debt deal it signed in 2011 which followed the 2009 standstill request.
Dutch carmaker Spyker has filed for bankruptcy due to insufficient funds from a bridge loan, Automobile Magazine reported yesterday. Spyker Companies, which also includes subsidiaries Spyker Automobielen and Spyker Events & Branding, had been losing money ever since its deal to purchase Saab from General Motors fell through in 2012. When General Motors announced it would close the Saab brand in 2009, Spyker stepped in to buy out the company, and the sale went through in 2010. The two companies intended to continue production of Saab cars in Sweden. After Saab began to lose money, Spyker was unable to compensate for losses, and Saab filed for bankruptcy in 2011. Spyker filed a lawsuit after this claiming that GM took action against the Saab-Spyker deal, but the claim was dismissed, and Saab was then sold off to a Chinese company that eventually formed National Electric Vehicle Sweden. A few other deals with various partners fell through, and Spyker continued to lose money until reports surfaced last month that it could not pay its bills and was in danger of eviction from its factory in the Netherlands. Now, the bankruptcy filing is a result of this inability to pay, as Spyker’s statement says that “committed bridge funding did unfortunately not reach the company in time.”
A $1 billion pact between Nortel Networks Corp.'s U.S. unit and bondholders won court approval Thursday over the protests of the one-time Canadian technology giant, the Wall Street Journal reported today. The ruling from Bankruptcy Judge Kevin Gross means distressed-debt investors could stand to recover as much as $5 billion from Nortel’s collapse in 2009, including more than $1 billion in interest on $4 billion worth of debt. The Canadian parent company tried to derail the deal between Nortel U.S. and bondholders, arguing the settlement was the product of a defective process. The U.S. unit defended the settlement as a compromise on a claim for interest that could have reached $1.6 billion.
Creditors approved Brazilian shipbuilder OSX Brasil SA's revamped plan to emerge from bankruptcy yesterday, giving a boost to efforts by controlling shareholder Eike Batista to keep the company afloat while refinancing over $2.6 billion in debt, Reuters reported yesterday. OSX's own bankruptcy protection plan, as well as those from subsidiaries OSX Construção Naval SA and OSX Serviços Operacionais Ltda, were approved by an assembly of creditors in Rio de Janeiro, according to a securities filing. OSX had introduced a revamped plan a month ago. The plan still requires approval from a Rio bankruptcy court and from state-controlled lender Caixa Econômica Federal, with which OSX Construção Naval still has a loan in arrears, the filing said.
The owner of the New Elk coal mine near Trinidad, Colo., has filed for chapter 15 protection after the bottom fell out of its coal export market, the Denver Post reported today. Toronto-based Cline Mining Corp. is seeking court approval to reduce $55 million in debt by turning ownership of the company over to its secured lenders. Prices for metallurgical coal, also known as coking coal, reached $330 per metric ton in 2011. But amid a supply glut and declining world demand for steel, the price recently has hovered around $115.
Nortel Networks Corp. bondholders will soon know whether a $1 billion settlement with the failed company will pass muster in a U.S. bankruptcy court, Dow Jones Daily Bankruptcy Review reported today. Approval of the settlement, allotting bondholders $1 billion in interest on their investment in Nortel's distressed debt, will have a "direct and substantial" impact on the Canadian company and its creditors — including disabled and retired workers in Canada and Europe — are counting on it for payment, said Ken Coleman, a lawyer for Nortel's Canadian parent company. If the pact fails, it will be a blow to the hedge funds that snapped up Nortel's debt at a steep discount after the company collapsed in 2009. Bond prices indicate investors are expecting payment in full, with much interest.
Argentina is struggling to win over U.S.-based investors on a bond exchange designed to lower refinancing risks and possibly give it more leverage in negotiations with holdout creditors, Reuters reported yesterday. The sovereign, which launched a tender and exchange offer on local law bonds yesterday, may find a healthy local bid from the state-owned pension system. Yet several U.S.-based holders of Argentine debt said that they had refused to take part in the deal, citing its poor economics and possible legal risks.
Iron ore miner Northland Resources SE has filed for bankruptcy with more than $650 million in debt following a failed attempt to refinance the business, the Oslo-Norway listed company said yesterday, Reuters reported. In its third-quarter earnings report last month Northland said that its total debts by the end of September stood at $657 million, while cash and cash equivalents were $10.5 million. Spot iron ore prices have fallen more than 47 percent this year as large, low-cost miners such as Vale, Rio Tinto and BHP Billiton boosted output amid slowing demand growth in top buyer China. Northland's key mining assets are located in northern Sweden and Finland. The development of its projects has been plagued by cost overruns.
Troubled Dutch sportscar maker Spyker has filed for protection from its creditors and appointed an administrator to help it restructure, Reuters reported yesterday. The company, formed in 2000 to resurrect an early 20th century Dutch auto marque, once fielded a Formula 1 racing team and briefly owned Swedish auto maker Saab before selling it on to Chinese-owned NEVS AB in 2012. Spyker has had a bumpy history since its revival, almost going under after selling the F1 team in 2007 at a loss, and again after its 2010 purchase of Saab foundered, forcing it to seek outside help. Earlier this year, a U.S. court dismissed the company's $3 billion lawsuit against General Motors. Spyker had accused General Motors of derailing its plan to sell Saab to a different Chinese buyer from the one that subsequently bought it.
