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General Motors Co
April 24 (Bloomberg) --Fiat SpA and Magna International Inc. are the “main” bidders for a stake in General Motors Corp. (GM)’s Opel division in Germany, a state minister said in an interview yesterday.
Fiat, Italy’s largest carmaker, and Magna, North America’s biggest auto-parts maker, are the only car-industry suitors for Opel, said Hendrik Hering, the economy minister for the state of Rhineland-Palatinate. The state government opposes Fiat acquiring a holding in Opel because it may cost 5,000 to 8,000 jobs in Germany as GM reorganizes the unit, he said.
“We shouldn’t invite every investor at any cost,” Hering said by telephone. Opel employs 3,400 workers at an engine factory in Rhineland-Palatinate. Fiat’s “overcapacities and high debts are problematic.”
Detroit (GM)-based GM, surviving on U.S. loans, may file for bankruptcy protection unless it can restructure out of court by June 1. GM said in March that Opel, which is seeking 3.3 billion euros ($4.3 billion) in state aid, is running out of cash. GM Chief Executive Officer Fritz Henderson said April 17 that Opel has attracted interest from more than half a dozen “serious” investors, without identifying them.
“Job losses in Germany will be unavoidable,” said Hering. Opel, based in Ruesselsheim, employs a total of 26,000 workers at four German factories.
Southampton Football Club was effectively relegated to the third tier of English soccer yesterday when it was docked 10 points for breaking league insolvency rules.
There had been doubt over whether such a penalty would be imposed after the club’s holding company -- rather than the soccer unit itself -- went into administration, a form of protection from creditors.
The Football League ruling body said yesterday that the sanction was applicable, so Southampton is set for demotion. It’s second-last in the Championship, four points from safety with two matches left. The league said the points would be deducted this season if it avoided relegation, or next season if it made the drop. Southampton expects to appeal the ruling.
The team was relegated from the Premier League after the 2004-05 season and last year finished 20th in the second tier. On April 2, the team’s holding company entered administration. A league review found that the company was financially dependent on the team, and so imposed the sanction.
“The board concluded that an administrator had been appointed in respect of the club or part of its undertaking,” the league said on its Web site. It was left with “no alternative” to the point deduction.
Southampton directors Rupert Lowe, Michael Wilde and Andrew Cowen resigned earlier this month. The shares of the holding company, Southampton Leisure Holdings Plc, were suspended April 1, and efforts to refinance or find a buyer for the club have begun.
Waterford Wedgwood USA Inc., a unit of the Irish maker of fine crystal and china, filed a voluntary petition for Chapter 7 protection.
Waterford Wedgwood listed assets of $1 million to $10 million and debts of $500 million and $1 billion, according to a filing in federal bankruptcy court in Manhattan. In Chapter 7 liquidations, a court-appointed trustee oversees the dissolution of the business.
Dublin-based Waterford Wedgwood Plc, which traces its roots back more than 200 years, went into receivership on Jan. 5 after losing money for five years and failing to find a buyer.
The U.K. and Irish units of Waterford Wedgwood were sold to KPS Capital Partners LP in March.
The case is In Re Waterford Wedgwood USA, 09-12512, U.S. Bankruptcy Court, Northern District of California (San Francisco).
The Vita Group, the polymer producer formerly known as British Vita that was acquired by buyout firm TPG Inc. in 2005, said the High Court approved a restructuring of its finances.
The reorganization will cut the company’s senior debt to about 100 million euros ($130 million) from 400 million euros, the London-based company said in a statement. Vita will also have 95 million euros of new money available to increase working capital, it said.
Vita will have “one of the strongest balance sheets in the polymer industry and sufficient financial resources to work through the current environment,” Chief Executive Officer Joe Menendez said in the statement. Vita is “on a stable footing for the future.”
British Vita missed an interest payment in December on some of the 663 million pounds ($954 million) of loans used to finance its buyout. The company’s senior loans were valued at 15.5 percent of face value at an auction to settle credit- default swaps on its debt.
The restructuring is expected to be completed by the end of the week, the company said.
Alexon Group Plc, a Luton, England-based clothing company, said today that Deloitte LLP will be appointed as administrators to Epcoscan Ltd., its subsidiary which trades as Bay Trading.
Chuo Corp., a Japanese yarn maker, filed for bankruptcy protection today with the Tokyo District Court after accumulating about 34 billion yen ($350 million) in liabilities.
The company made the announcement in a filing to the Tokyo Stock Exchange.
U.K. proposals on easing access to new financing for insolvent companies must go further, according to the European High Yield Association, a lobby group for the leveraged finance industry.
Chancellor Alistair Darling’s 2009 budget on April 22 told the U.K.’s Insolvency Service to seek feedback on providing so- called super-priority lending to borrowers being restructured. The service will also seek views on extending to large companies the same protection from creditors that smaller companies get when renegotiating debt agreements.
“On the whole, these initiatives are welcome but they are really just a step down a road going in the right direction,” Gilbey Strub, managing director of the London-based High Yield Association, said in a statement. The government should “travel a little farther down that road.”
Thirty-five companies worldwide defaulted in March, the highest number in a single month since the Great Depression, according to Moody’s Investors Service. Giving a struggling business time to reach agreement with its creditors and gain new financing can help it survive, saving jobs. Leveraged buyouts in Europe owe about 140 billion euros ($185 billion) and may affect 6 million employees, according to the High Yield Association.
Almost 5,500 U.K. companies became insolvent in the first three months of the year, 57 percent more than in the year- earlier quarter, the Financial Times reported, citing analysts at PricewaterhouseCoopers.
London saw the highest number of insolvencies, at 1,323, a 20.3 percent increase; eastern England’s 75.4 increase, to 328, was the highest of any U.K. region, the newspaper added.
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