A-Tec, TCB, Japan Airlines, Takefuji, Karstadt: Bankruptcy
A-Tec Industries AG, the Austrian engineering company that has filed for insolvency protection, lost two-thirds of its market value in Vienna.
A-Tec’s stock fell 3.79 euros, or 66 percent, and traded at 1.96 euros at 9:10 a.m. in Vienna. The company’s shares have lost 77 percent this year, giving the company a 52.8 million euro market value.
A-Tec sought insolvency protection Oct. 20 because of its inability to redeem a 92 million-euro ($129 million) bond due Nov. 2. The company is trying to restructure its debt under self-administration, a new type of insolvency protection in Austria that gives management 90 days to negotiate an agreement and avoid insolvency.
The company has a 798 million-euro revolving credit facility and 302 million euros of outstanding bonds, according to Bloomberg data. A-Tec forecast a full-year operating loss on Oct. 14 because of cost overruns on an Australian power station project.
Citic Pacific Ltd., an arm of China’s biggest state-owned investment company, ended an agreement on Oct. 18 with an A-Tec unit to build an electricity-generating station at a $5.2 billion iron-ore project in Western Australia. The Austrian company hasn’t disclosed details of its Australian operations’ finances.
A-Tec will offer to pay the legal minimum of 30 percent of the securities’ face value, Chief Executive and majority shareholder Mirko Kovats said on Oct. 20.
Company officials met with bank representatives in Vienna yesterday, said Johanna Abel-Winkler, who is managing the restructuring process. According to Wirtschaftsblatt newspaper the banks include Raiffeisen Zentralbank Oesterreich AG, Raiffeisenlandesbank Oberoesterreich, Hypo Alpe Adria Bank, Investkreditbank, Raiffeisenlandesbank Burgenland, BNP Paribas, Commerbank AG, Dresdner Bank, Stadtsparkasse Duesseldorf, Volksbank Muenchen and Barclays. Wirschaftsblatt didn’t say where it got the information.
TCB Files for Bankruptcy With 258 Million Yen in Liabilities
TCB Holdings Corp., a Tokyo-based provider of Internet services, filed for bankruptcy protection with liabilities of 258 million yen ($3.2 million). The company made the announcement on Oct. 20 in a press release.
TCB shares will be delisted on Nov. 5, the Tokyo Stock Exchange said in a separate release.
Japan Air Increases ETIC Funding Request to 400 Billion Yen
Japan Airlines Corp. increased a request for capital from a state-backed turnaround fund to 400 billion yen ($4.9 billion) as it restructures under bankruptcy protection.
Chairman Kazuo Inamori also intends to personally visit lenders to ask for funding to refinance debt, he told reporters in Tokyo on Oct. 20. State-backed Enterprise Turnaround Initiative Corp. of Japan previously agreed to inject 350 billion yen into the airline.
The carrier’s performance in the six months ended September beat expectations, Inamori, 78, said, as it worked to pare costs by shedding staff and cutting services. JAL filed for Japan’s fourth-largest bankruptcy in January after posting losses in three of the previous four years.
JAL has won creditor support for an 872 billion yen turnaround that includes 522 billion yen of debt-forgiveness, 16,000 job cuts and the end of services on 49 routes. The plan still needs court approval.
The carrier’s four biggest lenders at the end of March 2009 were Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc. and the Development Bank of Japan.
Inamori, the founder of electronics company Kyocera Corp., took over as JAL chairman in February after the government appointed him to oversee restructuring efforts. He has said he wants the carrier to exit bankruptcy protection within two years.
The airline has forecast an operating profit of 64.1 billion yen this fiscal year and 75.7 billion yen the following year.
JAL was delisted from the Tokyo Stock Exchange in February, wiping out shareholders in a company that was worth more than $6 billion less than a year earlier.
Iceland Waters Down Debt Relief Bill Amid Pensions Hurdle
Iceland’s government will water down plans to forgive overdue home loans after the country’s pension funds argued the proposals threatened to deplete the value of their mortgage assets.
After meeting “financial companies, the pension funds, the municipalities and members of the labor and employers’ unions, the Prime Minister noted there was slim support” for blanket debt relief, Finance Minister Steingrimur J. Sigfusson said in an interview on Oct. 19. “This process will take some time.”
The compromise dilutes government pledges prompted by mass protests outside the Parliament on Oct. 4. The unrest, which attracted bigger crowds than in the weeks before former Prime Minister Geir H. Haarde was ousted last year, prompted his successor, Johanna Sigurdardottir, to indicate she may support a proposal to forgive $2 billion in mortgage debt, or 17 percent of Iceland’s 2009 gross domestic product.
The Interest Group of the Homes, which represents households demanding debt relief, said lenders should write off as much as 220 billion kronur ($1.95 billion) in mortgages to help the 39 percent of homeowners who are technically insolvent.
The debt reduction would wipe out the impact of consumer price increases on the inflation-linked debt, according to Fridrik O. Fridriksson, chairman of the group.
Iceland’s banks are state-controlled successors to the failed lenders that brought down the economy two years ago. The resolution committees of Kaupthing Bank hf and Glitnir Bank hf agreed on behalf of creditors to take stakes in the new lenders, Arion Bank hf and Islandsbanki hf, to cover part of their claims. Creditors of Kaupthing, Glitnir and Landsbanki Islands hf are owed as much as $86 billion in total.
A write down of about $2 billion is equivalent to about 8 percent of total assets at Iceland’s three biggest banks, their 2009 balance sheets show.
Russia Revokes License of IIB’s Retail Lender on Insolvency
Russia’s central bank revoked the license of the retail lending unit of lawmaker Sergei Pugachyov’s ZAO International Industrial Bank after it ran out of funds.
“Over a lengthy period of time OOO Mejprombank Plus provided loans to the bank’s sole holder and affiliates, which has left it entirely without capital,” Bank Rossii said yesterday in an e-mailed statement, referring to the IIB retail unit, also known as M Plus.
The retail unit, which participates in Russia’s deposit insurance system, had about 2 billion rubles ($65 million) in deposits, RIA Novosti said today. The Deposit Insurance Agency will guarantee as much as 700,000 rubles each per customer, according to a statement posted yesterday on the bank’s website.
The regulator’s decision comes two weeks after M Plus’s parent IIB lost its license. IIB failed to repay 200 million euros of bonds in July and sent a default notice on $200 million of bonds maturing in 2013. Bank Rossii had given IIB time to satisfy creditors’ claims and plans to recover 32 billion rubles of loans extended to the bank within the next few months, Bank Rossii First Deputy Chairman Alexei Ulyukayev said Oct. 5. He said at the time the regulator saw no reason to revoke M Plus’s license.
The government should ensure that IIB creditors get paid, Bank Rossii Chairman Sergey Ignatiev said this week.
Aiful Said to Suspend Television Ads on Refund Claim Concerns
Aiful Corp., Japan’s third-largest consumer lender, will suspend television ads a month after rival Takefuji Corp. filed for bankruptcy because of claims for interest refunds, two people with knowledge of the matter said.
Aiful will halt TV spot advertising from Nov. 1, the people said, declining to be identified because the decision hasn’t been made public. The move was driven by concerns that the ads would encourage more borrowers to seek refunds, they said.
Japan’s four-year crackdown on the consumer lending industry forced Aiful and its rivals to repay billions of dollars in overcharged interest, helping push Takefuji into bankruptcy last month. Acom Co. and Promise Co. said last week more borrowers are asking about interest refunds following Takefuji’s collapse.
Aiful resumed television ads almost 10 months ago in 14 areas including Hokkaido, Hiroshima and Nagasaki after halting them for more than a year. The Kyoto-based company on Dec. 24 reached an agreement with creditors that helped it to avoid bankruptcy.
Aiful’s shares tumbled 50 percent at Oct. 19’s close since Takefuji filed for bankruptcy protection at the Tokyo District Court on Sept. 28. Bigger rivals Acom and Promise dropped to the lowest since their stock market listings in 1993.
Takefuji’s collapse made it the biggest casualty of the crackdown on coercive lending to consumers that included capping rates at 20 percent and allowing borrowers to seek refunds for overcharged interest.
An auction to settle credit-default swaps on Takefuji Corp. will be held Oct. 28 after the Japanese consumer lender filed for bankruptcy, according to a website run by bid administrators Markit Group Ltd. and Creditex Group Inc.
U.K. Greengrocery Chain Goes Into Administration, FT Reports
Stokes, a family-owned U.K. greengrocery company, went into administration yesterday after attempts at reorganization failed to halt a decline in cash flow, the Financial Times reported.
Ten outlets have been closed and 17 continue to operate; KPMG, the administrator, is seeking a buyer for the business, which operates in southwest England and Wales, as a going concern, the newspaper said.
Karstadt Administrator Not Getting Paid Yet, FT Deutschland Says
Klaus-Hubert Goerg, the insolvency administrator for Karstadt, won’t get paid yet as a court in Essen, Germany has received complaints about the amount he is claiming, Financial Times Deutschland reported, citing court documents.
The court has to make a decision if the 32.3 million euros ($45 million) granted to Goerg are appropriate, according to the FTD.
Cattles Says Creditors Will Take Loss of 1 Billion Pounds
Cattles Plc, a financial services company, said its creditors faced an aggregate loss of about 1 billion pounds ($1.27 billion), and its shares have little or no value.
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