Woolworths, Sigma, Shiraishi, Alitalia, Eclipse: Bankruptcy

Woolworths Group Plc appointed administrators for its chain of stores and MFI Retail Ltd. collapsed, putting almost 30,000 U.K. jobs at risk, as the economy’s slide caused consumer spending to slump.

Woolworths, which opened its first shop in 1909, had Deloitte appointed as administrators today after an attempt to sell the stores ended. MFI appointed administrators yesterday.

Retailers are under pressure as a spending slump hits the U.K. The government pledged 20 billion pounds ($30 billion) of loans and tax cuts this week to spur the economy. Home- improvement retailer Kingfisher Plc today said consumer confidence was “shaken,” while DSG International Plc, the largest consumer-electronics retailer in the country, scrapped its dividend.

“The consumer economy got bad enough, fast enough,” David Stoddart, an analyst at Altium Capital in London, said yesterday evening. He advises selling Woolworths stock, which was suspended yesterday for the second time in a week.

The administrators will look for a buyer for “all parts” of Woolworths, and have received “expressions of interest from a number of parties” for Woolworth’s retail and wholesale businesses in the last 24 hours, Deloitte’s Dan Butters said in an e-mailed statement today.

Deloitte named Neville Kahn, Nick Dargan and Butters as administrators to Woolworths Plc and to its wholesale business, Entertainment UK Ltd, it said. The stores will stay open past Christmas and workers at the outlets will be paid. Woolworths Group Plc hasn’t sought protection from creditors.

Woolworths has more than 800 stores across the U.K. selling goods from candy to appliances. It employs about 25,000 people at its stores and four distribution centers, according to the statement. Furniture chain MFI, which was hurt by weaker demand as house sales plunged, had about 190 British stores and 2,500 employees.

Sigma Finance Receivers to Auction the SIV’s Assets Next Week

Sigma Finance Corp., the last of the structured investment vehicles that collapsed in October, will seek bids next week for debt securities it owns.

Receivers at Ernst & Young LLP will auction the company’s securities “on or about” Dec. 2, Sigma said in a Regulatory News Service statement yesterday, without saying how much debt the company held.

Sigma, set up by London-based Gordian Knot Ltd., failed after investors refused to buy the short-term debt it issued to buy higher-yielding assets. Sigma had about $27 billion of debt securities, of which about $25 billion had been posted to banks as collateral for short-term loans, according to Moody’s Investors Service.

Oriental Shiraishi Tumbles in Tokyo After Bankruptcy Filing

Oriental Shiraishi Corp. plunged by a record in Tokyo trading after the Japanese civil-engineering company filed for bankruptcy protection.

Oriental Shiraishi dropped by its daily limit of 46 percent to close at 59 yen on the Tokyo Stock Exchange, both a record decline and record low for the company, which listed in April 1995. The company had the largest drop among 1,710 companies on the Topix index.

The affiliate of Taiheiyo Cement Corp., Asia’s biggest producer of the building material, filed for bankruptcy protection with the Tokyo District Court after accumulating about 60.5 billion yen ($633.4 million) in liabilities, it said in a release to the exchange yesterday.

The Tokyo-based company will be delisted from the Tokyo Stock Exchange on Dec. 27, the exchange said on its Web site. Oriental Shiraishi becomes the 29th listed company to go bankrupt in Japan this year. Twenty-two of those failures were in the real estate and construction industries, as banks cut back on lending and housing demand declined.

Lufthansa’s Multihub Strategy May Help in Alitalia Stake Talks

Deutsche Lufthansa AG may have an edge in talks with Alitalia SpA’s new buyers as it tries to acquire a minority stake in the unprofitable airline, Chief Executive Officer Wolfgang Mayrhuber said.

The German carrier’s “multihub” strategy “should be helpful, not counterproductive” in negotiations with investor group CAI,Mayrhuber said at a news conference at Milan’s Malpensa airport yesterday. Lufthansa, which has hubs in Frankfurt, Munich and Zurich, will today introduce a new brand for the Italian market as it looks to boost flights at Milan’s biggest airport beginning next year.

Alitalia’s bankruptcy commissioner last week formally accepted a takeover offer for the company’s main flight business from CAI, led by Roberto Colaninno. Lufthansa is competing with Air France-KLM Group to acquire a minority stake in the Rome- based airline. The French carrier abandoned takeover talks with Alitalia in April amid opposition from unions and after its plan to scale back operations at Malpensa angered northern Italian businessmen and politicians.

Cologne, Germany-based Lufthansa plans to double capacity at Malpensa, adding eight new European destinations, starting with Barcelona and Paris, on Feb. 2 under the new “Lufthansa Italia” brand. Alitalia in April cut two thirds of its flights at Malpensa in an effort to stem losses. The move to set up a new Italian brand doesn’t mean Lufthansa is “closing the door” on buying a stake in Alitalia, Mayrhuber said.

Fuji Heavy May Not Collect $24.8 Million From Bankrupt Eclipse

Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, may not collect $24.8 million in unpaid bills after Eclipse Aviation Corp. filed for bankruptcy, it said in a filing to the Tokyo Stock Exchange.

To contact the reporter on this story: Caroline Binham in London at cbinham@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons in London at aaarons@bloomberg.net

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