Malev Liquidation, Nortel U.K. Unit, Danish Banks: Bankruptcy
Hungary will liquidate Malev Zrt. (MALEV) in the “near future” and is seeking a compromise with Budapest Airport on compensation stemming from the collapse of the state- owned carrier, the Development Ministry said.
“Malev’s liquidation can start in the near future once a court concludes that the company is insolvent,” the Development Ministry said in an e-mailed response to questions. The government, which is in “continuous negotiations” with the management of Budapest Airport, is “seeking a rational, manageable compromise,” the ministry said.
Malev, weighed down by debts of 60 billion forint ($272 million), halted flights on Feb. 3 after 66 years in operation. Malev went bankrupt after the European Commission, the regulatory arm of the European Union, ruled last month that the airline must return the equivalent of $390 million in government aid from 2007 to 2010.
German construction company Hochtief AG (HOT) owns 50 percent of the airport. Plunging revenue as the result of Malev’s collapse may trigger a clause in Budapest Airport’s privatization contract that will force the government to pay the operator 1.5 billion euros ($2 billion), with “critical consequences” for the budget, according to a state document published on Dec. 5. The government sold a majority stake in the airport in 2005, and Hochtief has been a shareholder since May 2007.
Nortel Networks Sues Unit to Keep Patent Documents Secret
Nortel Networks Inc., the bankrupt former maker of telephone equipment, sued its U.K. unit in an effort to keep documents related to the $4.5 billion sale of Nortel’s patents secret.
U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, ordered the unit, Nortel Networks UK Ltd., not to make public a group of documents for at least 14 days while the two units try to resolve their dispute about the information.
The unit is involved in a court action in the U.K. and wants to use the documents as part of that case.
“I have not yet seen the documents, but from the descriptions I have received, it appears that a large portion of them contain privileged information,” Gross said in court.
Last year Apple Inc. (AAPL) and Microsoft Corp. (MSFT) formed a joint venture called Rockstar Bidco LP, and bought Nortel’s patents for $4.5 billion after outbidding Google Inc. (GOOG) in the biggest patent auction in history.
‘Zombie Banks’ Fair Game in Regulatory Revamp, Denmark FSA Says
Denmark’s financial regulator defended its determination to impose more rigorous bank-capital standards amid warnings from industry groups that the measures are depriving firms of credit and stifling growth.
“The whole approach in Denmark is that it’s better to get the risks on the table,” Ulrik Noedgaard, director general of the Financial Supervisory Authority in Copenhagen, said in an interview. “We feel we get the balance right, and that getting these sorts of zombie banks out of the equation is good.”
Surprise audits by the FSA last year led to Amagerbanken A/S (AMAG), Fjordbank Mors A/S (FJORD) and Max Bank (MAX) A/S failing, after they were found to have understated their bad loans. Since then, most of the country’s 120 banks have been frozen out of debt markets as investors balk at the prospect of losses.
The approach is spooking banks and spurring a wave of loan retrenchment that’s left businesses without the funds to grow, said Karsten Dybvad, the head of the Confederation of Danish Industries. Denmark’s $300 billion economy is in the grip of a credit crunch that’s getting worse, he said.
Iceland Banks Forgave $1.6 Billion in Private Debt Since Crisis
Iceland’s banks have forgiven household debt equivalent to about 13 percent of gross domestic product since the island’s financial collapse at the end of 2008.
Lenders wrote off 196.4 billion kronur ($1.6 billion) in household debt from the fourth quarter of 2008 through the end of 2011, the Icelandic Financial Services Association said in a statement on its website. About 108 billion kronur of that was forgiven after the Supreme Court ruled that loans indexed to foreign exchange rate moves were illegal, it said.
The island’s biggest banks failed in October 2008, after defaulting on about $85 billion in debt. The collapse plunged the island’s economy into a crisis that sent unemployment surging nine-fold and triggered a recession that lasted through half of 2010.
Moody’s Says Irish Personal Insolvency Draft Credit Negative
Moody’s Investors Service said Ireland’s proposed personal insolvency laws, introducing debt forgiveness for “unsustainable” home loans, is credit negative for Irish residential mortgage-backed securities.
“A quarter of all Irish mortgage debt is susceptible to a writedown under the proposal,” Moody’s said in a statement. The proposal is “credit negative because many mortgage loans will be written down and many borrowers will become discouraged from maintaining their mortgage repayments.”
Ireland is reshaping its bankruptcy and insolvency laws after a real-estate bubble collapsed in 2008, trebling unemployment and leaving some homeowners unable to meet their loans. Almost 13 percent of private residential mortgages were either more than 90 days in arrears or had been restructured at the end of September, according to the country’s central bank.
RCapital Announces Restructuring of Little Chef’s Parent Company
Private-equity firm RCapital, the owner of the U.K.’s Little Chef restaurant chain, has completed “a formal restructuring process” to carry out the planned closures of a number of outlets after encountering a “deadlock” in negotiations with some landlords, it said in a statement.
Solarhybrid to Sell Some Solar Millenium U.S. Projects, Welt Say
Solarhybrid AG (SHL), which bought the U.S. project pipeline of insolvent competitor Solar Millenium AG (S2M), plans to sell a part of the projects instead of developing them, Die Welt reported, citing Chief Financial Officer Albert Klein.
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