Sanko Steamship, Elpida Memory, PGB, China Medical: Bankruptcy
The company had liabilities of 155.8 billion yen ($2 billion), according to Teikoku Databank Ltd., a Tokyo-based corporate research company. Yasunao Goto, a Sanko spokesman, declined to comment on the size of the liabilities or to name creditors, when called in Tokyo today.
The Tokyo District Court granted permission for closely held Sanko to continue operations under supervision and it will appoint a trustee to oversee a reorganization, the company said in an e-mailed statement today. The ship operator suffered from a drop in demand after the 2008 collapse of Lehman Brothers Holdings Inc. and didn’t cut expensive charters quickly enough as shipping rates fell, it said.
Sanko had won agreement from creditors to defer payments on some debts through tomorrow as it worked on an out-of-court restructuring plan. The Tokyo-based company was due to present a new business plan tomorrow.
Micron Agrees to Acquire Elpida in $2.5 Billion Transaction
Micron Technology Inc. (MU) agreed to buy bankrupt Japanese chipmaker Elpida Memory Inc. in a transaction valued at 200 billion yen, gaining memory chip-making assets that may help it avert price swings that fueled four straight quarters of losses.
Micron will pay 60 billion yen in cash at the closing of the deal, while the remaining 140 billion yen in future annual installments through 2019 will come from cash flow generated by Boise, Idaho-based Micron’s payment for chips made by Elpida, according to a statement today.
Acquiring Elpida, an Apple Inc. supplier, would double Micron’s share of the global market for DRAM, the most widely used memory chips in personal computers, to about 24 percent. That would help Micron vie with industry leader Samsung Electronics Co. while giving it greater control over supply gluts that have caused it to report losses amid falling prices.
PBG Jumps Most in 3 Weeks on Possible State Help: Warsaw Mover
PBG SA, the Polish builder that filed for bankruptcy last month, jumped the most in almost three weeks on a report that the company may ask the government for help to continue work on infrastructure projects.
The shares gained as much as 13 percent, the most since June 13, and traded 9.8 percent higher at 6.74 zloty at 2:36 p.m. in Warsaw, the highest since June 15. The stock has lost 91 percent of its value in 2012, data compiled by Bloomberg show.
PBG is considering asking Agencja Rozwoju Przemyslu SA, the state-owned fund for developing industry, for help as “one of its options,” Kinga Banaszak-Filipiak, a spokeswoman, said in a phone interview today. She confirmed a report in the Gazeta Wyborcza newspaper, which said on June 30 that the company is in talks to get assistance, citing Chief Executive Officer Wieslaw Rozacki.
PBG, which 15 months ago was Poland’s largest builder by market value, has asked a court for protection from creditors and offered to pay back at least 69 percent of its debt. The company had about 1.5 billion zloty ($447 million) of debt on June 4, it said in a statement.
Commerzbank’s Maritime Exit Raises Threat of Shipping Bankruptcy
Commerzbank AG (CBK)’s decision to pull out of ship finance may push some operators toward bankruptcy as they lose access to the world’s third-largest maritime lender.
“This is definitely a move in the wrong direction for the future prospects of the industry,” said Peter Sand, an analyst at Danish shipping association BIMCO. “Ship owners stuck in a financial moment they cannot get out of are likely to get closer to a bankruptcy as yet another option in the traditional ship finance banking market is lost.”
Commerzbank said June 26 that it will close its ship finance unit amid Europe’s debt crisis to focus on “business that is sustainably profitable.” That follows withdrawals by Lloyds Banking Group Plc (LLOY) and Societe Generale SA (GLE) as a shipping industry burdened by high fuel costs and low freight rates struggles to secure funding and refinance debt.
About $249 billion is needed in new debt and equity in the coming three years to cover orders for new ships and sales and purchases of existing vessels, according to a January 26 presentation by shipping fund manager Tufton Oceanic Ltd.
SEC Suspends China Medical ADR Trade on Information Accuracy
Trading of China Medical Technologies Inc.’s American depositary receipts was suspended by the U.S. Securities and Exchange Commission, which cited questions on the accuracy of the company’s information.
The regulator ordered a temporary suspension in the Beijing-based medical device company’s shares on June 29 until July 13, according to a statement on the SEC’s website. The action was caused by “questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the status of the company’s officers and directors, the accuracy of the company’s financial statements and filings with the Commission,” the SEC said.
The SEC enforcement action “further reiterates concern investors have expressed regarding financial reporting and corporate governance at Chinese companies over the past two years,” Kevin Barnes, an equity analyst at Absaroka Capital Management LLC, said by phone.
Bondholders of China Medical, which is registered in the Cayman Islands, directed the Wilmington Trust Co. to file a so-called winding-up petition on June 15 with the Grand Court of the Cayman Islands to liquidate the company after it defaulted on interest payment on two notes from December.
The company issued $150 million of 6.25 percent six-year convertible bonds in December 2010 and $276 million of 4 percent five-year convertible bonds in August 2008.
China Medical said it intended to implement a debt restructuring plan to improve its balance sheet, according to a Dec. 14 regulatory filing. The company hasn’t released any public statements since then.
Irish Bank Lobby Has ‘Serious Concern’ About Insolvency Bill
Irish Banking Federation Chief Executive Officer Pat Farrell said that he has a “serious concern” about the terms of proposed legislation that would allow debtors, including home owners, to seek write-offs of as much as 3 million euros, with creditor consent.
“We believe the whole intent of the bill was that it would be focused on the family home,” Farrell said in an interview with Dublin-based RTE on June 29. “The reality is that now it is bringing in speculative investments such as buy-to-lets; it also brings in perhaps” lending to smaller companies.
“The 3 million is obviously completely out of the ball park in terms of the average mortgage situation in this country,” he said. Farrell said banks’ “principal concern” with the Personal Insolvency Bill, published June 29, was that people who invested in properties-to-let would use available funds to pay off investment-related debt “at the expense of the actual mortgage loan.”
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