A-Tec Unit, Japan Air, Exista, Honsel, Irish Banks: Bankruptcy
A-Tec Industries AG, the Austrian engineering company that filed for insolvency protection last month, may sell its AE&E construction unit after loan- reorganization talks failed, a creditor association said today.
A-Tec is negotiating with several parties on AE&E’s disposal, said Hans-Georg Kantner, a member of the Kreditschutzverband von 1870 creditor-protection group and a delegate to A-Tec’s creditor committee. The committee will meet to discuss strategy after the talks with AE&E’s lender banks collapsed today, he said.
Representatives from A-Tec were seeking 97 million euros ($132 million) in bridge financing from the unit’s banks -- including BNP Paribas, Commerzbank AG, Erste Group Bank AG and Raiffeisen Bank International AG -- after they suspended the division’s 798 million-euro credit line in mid-October.
The committee, which includes holders of 302 million euros worth of A-Tec’s bonds as well as suppliers and tax authorities, was awaiting the results of the AE&E bank talks before proceeding with reorganizing the Vienna-based parent’s debt. AE&E’s disappearance would leave “nothing left to distribute” for A-Tec’s creditors, Wolfgang Hrobar, a committee representative from the Alpenlaendischer Kreditorenverband association, said Oct. 28.
Japan Air to Fire Staff for First Time as Part of Turnaround
Japan Airlines Corp., reorganizing in bankruptcy protection, will fire staff for the first time in its 59-year history after failing to persuade enough workers to accept early-retirement.
The flag carrier will cut 250 workers, including 90 cabin attendants and 110 pilots, it said today in a statement. The tally also includes 50 workers who have been on leave, it said.
The firings bring the carrier closer to its goal of shedding 16,000 workers, about a third of its staff, by March as it pares costs following its January bankruptcy filing. The airline had eliminated 8,000 positions as of September through early-retirement offers, attrition and unit sales, and it expected to reach the full target using similar measures.
The latest round of early-retirement incentives was accepted by 20 pilots and 50 cabin crew, the Tokyo-based carrier said. The airline is awaiting court approval for its 872 billion yen ($10.5 billion) turnaround plan.
Prasa in Talks With Creditors to Avert Bankruptcy, Cinco Says
Grupo Prasa, a privately held Spanish real-estate company, is in talks with its lenders to avert the need to file for protection from creditors, Cinco Dias reported today, citing unidentified people with knowledge of the situation.
The Cordoba-based company, which belongs to the Romero Gonzalez family, has around 2 billion euros worth of debt the newspaper said, without naming its main creditors.
Iceland’s Exista Is Placed Under Creditors’ Control, FT Says
Exista HF, an Icelandic investment company, has come under the control of creditors in a debt-for-equity transaction, the Financial Times reported today.
The company was the biggest shareholder in Kaupthing Bank HF, one of three Icelandic banks that collapsed in 2008, plunging the country into crisis, the newspaper said.
Exista was controlled by the brothers Agust and Lydur Gudmundsson, whose shareholding has been wiped out. An Icelandic court approved the transfer of its equity to unsecured creditors, including international institutions and hedge funds, the FT said.
SaarGummi Gmbh Submits Insolvency Filing, Administrator Says
SaarGummi GmbH has submitted an insolvency filing a week after affiliate SaarGummi Deutschland sought protection from creditors, administrator Schultze & Braun said Nov. 12 in a statement. The filing affects the holding company only and not its operating units, the law firm said.
Honsel Sells Its Fonderie Lorraine Unit in Restructuring Step
Honsel AG has completed the first step in its restructuring, with an agreement reached to sell its French unit Fonderie Lorraine to ZF Friedrichshafen AG. Honsel’s insolvency administrator said Honsel is now in a “position to continue its operations in a sustainable and profitable manner,” the company said in an e-mailed statement Nov. 12.
Irish Credit-Default Swaps Rise to Distress on Bank Bailouts
The cost of insuring the bonds of Irish banks soared to distressed levels amid concern that the government won’t be able to afford the cost of bailing out the nation’s banks.
Irish and international banks’ loan losses in the country may total at least 85 billion euros, central bank Governor Patrick Honohan said in Dublin Nov. 10. Morgan Kelly, an economics professor dubbed “Doctor Doom,” said on Nov. 8 that mortgage defaults may push the cost of Ireland’s bank bailout to 70 billion euros, more than the government’s estimate of 50 billion euros.
Credit-default swaps on subordinated debt of Allied Irish Banks Plc, the nation’s second-largest lender, cost 6 million euros in advance and 500,000 euros annually to insure 10 million euros of the bank’s debt for five years. Swaps tied to the subordinated debt of Bank of Ireland, the country’s biggest bank, cost 33 percent upfront and 5 percent a year.
“Concern seems to be mainly targeted at Ireland and its banks and everything looks like it’s going against them at the moment,” said Simon Adamson, a bank credit analyst at CreditSights Inc. in London. “Whatever they say to reassure people, it doesn’t seem to be having any effect.”
U.K. Builders Express Interest in Rok Purchase, 700 Laid Off
Several U.K. builders are interested in buying Rok Plc, the Guardian reported Nov. 13, citing PricewaterhouseCoopers LLP administrator Rob Hunt.
Balfour Beatty Plc, Carillion Plc and Mears Group Plc have each indicated interest in buying all or part of the failed U.K. social-housing-services company, the Guardian said, without saying where it got the information.
More than 700 employees of the U.K. building-services company that failed last week were laid off by administrators from PwC, the Financial Times reported Nov. 11, citing administrator Mike Jervis. The job losses are mainly in Rok’s maintenance and improvements division, which carries out repairs for local authority, private residential and commercial customers, the Financial Times said.
IMF Wants Ukraine to Liquidate Nadra, Rodovid, Izvestia Says
The International Monetary Fund urged the Ukrainian government and the central bank to liquidate the country’s lenders VAT Nadra Bank and PAT Rodovid, Ekonomicheskie Izvestia newspaper reported Nov. 11, citing an unidentified central bank official with knowledge of the matter.
To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.