Bank of Ireland in talks with sub debt holders

Fri Nov 23, 2012 6:10am EST

By Chris Spink

LONDON, Nov 23 (IFR) - Former subordinated bondholders in Bank of Ireland and Allied Irish Banks are seeking recompense for being forced to take just one cent for every EUR1,000 of such bonds they held.

This follows hedge fund Assenagon's successful suit in the English High Court against Anglo Irish Bank in July for executing similar coercive actions.

All three of Ireland's major lenders carried out below par tender offers for their junior debt as a way of bolstering their capital as part of a state-backed recapitalisation process between 2009 and 2011, using so-called exit consents from 2010 onwards.

This ended with Anglo Irish wholly nationalised and 99% of Allied Irish Banks' equity in state hands, too. However, a last-minute EUR1.1bn investment by US investors, led by Fairfax Financial, WL Ross, Capital Research and Fidelity, restricted the state's stake in Bank of Ireland to 15%.

A group of such bondholders holding Bank of Ireland debt are now in discussions with the institution. "A standstill agreement has been reached between Bank of Ireland and the bondholders to allow them to talk and reach a settlement. This agreement is indefinite," said an legal source with knowledge of the situation.

The group has also lodged letters with the Irish Ministry of Finance, alongside a number of bondholders in Allied Irish. The latter are at an earlier stage of proceedings and have yet to engage fully with the bank. The Ministry did not immediately respond to a request for comment.

Separately the Irish Bank Resolution Corp, which now manages Anglo Irish and Ireland's other nationalised financial institution Nationwide Building Society, has confirmed to IFR that it is appealing July's High Court decision in London concerning Assenagon.

"I can confirm that IBRC is currently appealing the London High Court decision to the Court of Appeal," said an IBRC spokesperson. The appeal, which is not expected to be heard before next March, will have an impact on the other cases against Irish banks if it is successful.

In July when the High Court decision was handed down, IBRC said that the liability management exercise that swept up Assenagon "was proportionate in the circumstances and was fair, transparent and  all noteholders were provided with comprehensive notice in advance."

The institution added that "these [Anglo Irish] securities would have been valueless without the recapitalisation of the bank by the Irish state".

While Bank of Ireland is now the most robust of the institutions, it may be less likely to compensate investors since it did not ultimately make use of subordinated liability orders from the state to force tenders on hold-out investors in subordinated bank debt.

Indeed, the state could reactivate such SLOs to force Assenagon and other subordinated bondholders who manage to reinstate their holdings to tender those investments.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

REFILE-Gruner + Jahr shuts down Financial Times Deutschland

Fri Nov 23, 2012 8:22am EST

By Harro Ten Wolde

FRANKFURT Nov 23 (Reuters) - German business newspaper Financial Times Deutschland (FTD) will close after piling up millions of euros in losses during its 12 years of operation, publisher Gruner + Jahr said.

The paper, published in the salmon pink colour of its British namesake, is pulling the plug after accumulating what German media said were 250 million euros ($322.1 million) in losses since 2000.

The FTD, which has faced tough competition from a plethora of established national newspapers since its launch in 2000, has a circulation of about 100,000 but never made a profit.

Some 330 employees will lose their jobs, sources familiar with the publisher's decisions said.

The FTD was seen as a breath of fresh air in Germany with a modern design, international perspective and audacious journalism style.

It was alone, for instance, in criticising a long-standing German practice of allowing interviewees to "authorise" - or check - interview transcripts.

Industry analysts have been predicting the FTD's demise for years due to its lack of profitability. Losses in the last year were some 10 million euros, German media reports said.

"This is not a good day for financial journalism in Germany," said one journalist at the newspaper, which will publish its final edition on Dec. 7.

Germany is home to Europe's largest print media market and has proven relatively resilient to the technological, cultural and demographic forces that have shuttered newspapers in many other developed countries, but that is now changing.

The loyalty of German readers - who previously stuck to their favourite daily newspaper - has eroded in recent years as consumers get more of their news online.

Last week, the respected Frankfurter Rundschau filed for bankruptcy. The DAPD news agency, which had relied heavily on a newspaper client base, took a similar step a few weeks earlier.

Europe's largest economy is slowing as the three-year-old debt crisis ravaging much of the euro zone takes its toll, compounding the hit to advertising revenues and limiting the willingness of consumers to pay for newspapers they can read mostly for free online.

Advertising income for German newspapers is on the slide, falling 6 percent in the first 10 months of this year from 2011, data from Nielsen Media research showed.

G+J, controlled by German media conglomerate Bertelsmann , launched the FTD 12 years ago as a joint venture with Pearson, but the publisher of the Financial Times sold its 50 percent stake to its German partner in 2008.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

CORRECTED-Fortune favours the brave in financials market

Fri Nov 23, 2012 10:30am EST

(Corrects to show that Cairn has no exposure to peripheral credits in 14th paragraph)

* Subordinated debt rallies despite negative events

* 2012 performance difficult to match

By Helene Durand

LONDON, Nov 23 (IFR) - Investors willing to stick their necks out and buy financial institutions' paper in the dark days of 2011 have been rewarded with handsome returns over the last year, but the sector's phenomenal rally is likely to make the hunt for yield more challenging in 2013.

With Italian 10-year yields approaching 7.75% and Spain's hovering above 6.7%, the prospect of a sovereign default loomed over the entire European banking system. Synthetic credit reflected the market's fears with Markit's Senior Financials index at 353bp and the Subordinated at almost 590bp.

For those who believed that policymakers would not let the euro fail, however, rewards have been handsome. One year on and the iTraxx Senior stands at 170bp with the Subordinated at 295bp, while Italian and Spanish 10-year yields are below 5% and 6% respectively.

The chances of widespread bank failures due to a lack of liquidity were taken off the table when the European Central Bank announced unlimited funds to European banks through the Long Term Refinancing Operation (LTRO).

"Our view at the end of last year was that there was less than a 5% chance of the euro breaking up and as soon as the first LTRO kicked in, we saw hybrid debt fly," said Alex Lasagna, COO and head of investor relations at Algebris.

"We were well positioned to benefit from that as we had bought before the rally. It was never a gamble. We always felt that the risk/rewards were extremely attractive."

Despite the December and February LTROs, investors had to endure a volatile ride until July, when Mario Draghi said he would do whatever it takes to save the euro. Although the ECB has not yet spent a single cent on the Outright Monetary Transactions (OMT) programme, the market has headed in one direction.

And for those positioned down the capital curve, the returns have been spectacular.

Cairn Capital, for example, that launched Cairn Subordinated Financials Fund in October 2011, recently said in a note to investors that the fund had delivered a net return of 30.4% in 2012 and 40.3% since launch.

The story is similar for other funds focused on subordinated financial debt. A CoCo fund launched by Algebris in March 2011 has delivered a 48% return year-to-date, while three Swisscanto CoCo funds show returns over the same period of more than 20%.

"Owning the market was the biggest factor for (performance in) bank capital last year," said Roberto Henriques, financials credit analyst at JP Morgan.

As the end of 2012 approaches, few expect performance in the coming year to be driven in quite the same way.

OLD OR NEW STYLE?

"The likelihood of achieving the same type of return is lower but we still have strong expectations in terms of achieving strong returns," Andrew Jackson, CIO at Cairn. "The universe of assets is shrinking which should help performance."

Jackson said that Cairn's approach would remain cautious, with no exposure to credits in the peripheral jurisdictions.

Algebris's Lasagna agreed, saying that while volatility had nearly halved since the LTROs, there were still some opportunities in the sector, especially if policy makers continued to muddle through.

"Banks will have to roll their old hybrids into new Basel 3 compliant instruments which will be complex. We love it because it's so difficult to price and gives plenty of opportunities."

Algebris's enthusiasm for new-style instruments is not shared by all, even though some banks, like Barclays for example, are keen to push the innovation agenda

Jackson explained that he didn't think investors are being compensated for the risk they are taking given that there is more investor-friendly paper available in the secondary market at attractive levels. "For choice, we would rather look at legacy instruments," he said.

ALPHA, NOT BETA

Last year's stellar returns came despite investors having to dodge issuers offering to buy back debt for as little at 25%-30% of face value, or deciding to break market convention, and the economics of ownership, by refusing to call bonds at their first call date .

If anything, the pace of such things happening is picking up, and then there is the increasing noise around burden-sharing in Spanish banks.

Another opportunity for investors to generate returns has been the downward direction of European bank credit ratings. In November, Moody's said it had downgraded around two-thirds of the senior unsecured ratings of non-peripheral euro-area banks over the 12 months ended 30 September 2012, and nearly 90% of banks in the euro area periphery.

"We like downgrades, we like the fact that it can cause forced sellers for those investors who follow the index," said Cairn's Jackson.

Lasagna said Algebris looks at each institution's balance sheet and decides where it wants to be in the capital structure.

Fear of systemic risk has resulted in high correlation in risk markets but the OMT has removed the so-called tail-risk.

"2012 has essentially been a 'beta' year. If we're right that correlations between asset classes decline, the benefits of alpha should be more apparent," said Stephen Dulake, head of credit research at JP Morgan. (Reporting by Helene Durand, Additional reporting by Alex Chambers, Editing by Julian Baker)

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

PRESS DIGEST-New York Times business news - Nov 23

Fri Nov 23, 2012 2:02am EST

Nov 23 (Reuters) - The following are the top stories on the New York Times business pages on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

* Evidence suggests that Steven Cohen participated in trades that the government says illegally used insider information, but he has not been charged. ()

* Tony Hall, a former BBC news executive who went on to head the Royal Opera House, has been selected to steer the broadcaster through its worst crisis in years. ()

* Glencore International gained regulatory approval for its $32 billion takeover of Xstrata after it agreed to sell assets and reduce its operations to appease European antitrust authorities. ()

* Retailers are trying to lure shoppers away from the Internet, where they have increasingly been shopping to avoid Black Friday madness, and back to the stores. The bait is technological tools that will make shopping on the busiest day of the year a little more sane - and give shoppers an edge over their competition. ()

16.47 | 0 komentar | Read More

UPDATE 1-Australian tax office to pursue coal baron Tinkler

Fri Nov 23, 2012 4:00am EST

* Federal tax office has until Dec 10 to prepare case

* Irish stud farm owned by Dubai ruler subpoenas Tinkler

* Two Tinkler firms in liquidation this week

* Pressure rises on lenders to act on Whitehaven stake - analyst

By Jane Wardell

SYDNEY, Nov 23 (Reuters) - The Australian government was granted permission by a court on Friday to prepare legal action against coal baron Nathan Tinkler as creditors close in on the former billionaire, threatening to end a rags-to-riches story built on the nation's mining boom.

The New South Wales Supreme Court gave the Deputy Commissioner of Taxation leave to prepare a case against Tinkler's holding company, the latest of a series of legal actions over unpaid bills and commercial disputes.

Further adding to Tinkler's woes, court documents also showed an Irish racehorse stud owned by Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, has subpoenaed Tinkler personally to provide information in an unrelated case.

The emergence of two new, powerful potential foes is likely to unsettle Tinkler's lenders and raises questions about the future of his main asset, a near one-fifth stake in Whitehaven Coal, Australia's largest independent coal miner.

"He's exposed to great liability," Marina Nehme, a senior law lecturer at the University of Western Sydney, told Reuters. "It's like a house of cards falling."

Tinkler, 36, enjoyed a heady rise from mining pit electrician to Australia's youngest billionaire in just a few short years, riding on the back of the country's once-in-a-century mining boom.

But a slide in coal prices has hit his net worth and a series of lawsuits have followed.

Liquidators were appointed this week to two firms of which he is director, Patinack Farm Administration Pty Ltd and Mulsanne Resources Ltd, over debts totalling more than A$28 million.

Tinkler paid creditors A$500,000 ($520,000) this week to stop wind-up petitions against Tinkler Group Holdings Administration Pty Ltd.

But the relief was short-lived when the Australian tax office stepped in to take over the action as a potential creditor. Senior deputy court registrar Rebel Kenna gave the tax office until Dec. 10 to prepare a case against the company.

The Australian Taxation Office declined to provide any further details on the case.

Andrew Korbel, a partner at Corrs Chambers Westgarth, who represented Tinkler Group Holdings Administration on Friday declined to comment outside court. Tim Allerton, a Sydney-based spokesman for Tinkler, also declined to comment.

HORSE PLAY

Court documents show the Kildangan Stud Unlimited subpoena is to be heard by another New South Wales state court next week.

Kildangan is part of Darley, the global breeding operation owned by Sheikh Mohammed, a keen equestrian and breeder with horse studs around the world.

Located in County Kildare, Ireland, the Kildangan Stud is home to eight stallions, including Sharmadal, the sire of two winning mares, Marquardt and Happy Hippy, bought by Tinkler's Patinack Farm.

"This is a commercial matter between Kildangan Stud and Mr Tinkler relating to thoroughbred stallion nominations and we have no further comment on the matter," Darley's managing director Joe Osborne told Reuters in an email.

Stallion nominations involve fees for broodmares to mate with selected stallions.

Tinkler spent millions of dollars building Patinack into Australia's largest thoroughbred racing and stud operation.

He built his empire spanning horse racing, sports clubs and coal on debt, scraping together A$1 million from lenders for an underrated coal deposit that quickly soared in value.

He then leveraged his gains in a series of bold moves, culminating in the $5 billion merger of his companies Aston Resources and Boardwalk Resources with Whitehaven this year.

But Nehme said the combined legal actions raise the spectre of several unpleasant scenarios for Tinkler, including civil and criminal charges if he is found to have been operating the liquidated companies while they were insolvent.

The value of Tinkler's holding in Whitehaven has shrunk below A$600 million from A$1.1 billion at its peak as Chinese demand for coal cooled.

Sources previously told Reuters the stake is heavily leveraged. His main backer, U.S. hedge fund manager Farallon Capital Management LLC's asset manager Noonday, has been looking at options including pressing for the sale of shares or converting some of the loans into equity.

"Additional pressure from entities including the Australian Taxation Office puts pressure on Noonday and Farallon to do something about Tinkler's stake," said Matthew Trivett, a coal and speciality metals analyst at Patersons Securities.

Noonday and Farallon could call in the loans to ensure the transfer of ownership of the stake before other creditors begin chasing the stake, Trivett said.

They would likely take a hit, but might decide to "book the loss to take the assets away from Tinkler," Trivett said.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

Australian tax office to pursue coal baron Tinkler

Fri Nov 23, 2012 2:45am EST

* Federal tax office has until Dec 10 to prepare case

* Irish stud farm owned by Dubai ruler subpoenas Tinkler

* Two Tinkler firms in liquidation this week

* Pressure rises on lenders to act on Whitehaven stake - analyst

By Jane Wardell

SYDNEY, Nov 23 (Reuters) - The Australian government was granted permission by a court on Friday to prepare legal action against coal baron Nathan Tinkler as creditors close in on the former billionaire, threatening to end a rags-to-riches story built on the nation's mining boom.

The New South Wales Supreme Court gave the Deputy Commissioner of Taxation leave to prepare a case against Tinkler's holding company, the latest of a series of legal actions over unpaid bills and commercial disputes.

Further adding to Tinkler's woes, court documents also showed an Irish racehorse stud owned by Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, has subpoenaed Tinkler personally to provide information in an unrelated case.

The emergence of two new, powerful potential foes is likely to unsettle Tinkler's lenders and raises questions about the future of his main asset, a near one-fifth stake in Whitehaven Coal, Australia's largest independent coal miner.

"He's exposed to great liability," Marina Nehme, a senior law lecturer at the University of Western Sydney, told Reuters. "It's like a house of cards falling."

Tinkler, 36, enjoyed a heady rise from mining pit electrician to Australia's youngest billionaire in just a few short years, riding on the back of the country's once-in-a-century mining boom.

But a slide in coal prices has hit his net worth and a series of lawsuits have followed.

Liquidators were appointed this week to two firms of which he is director, Patinack Farm Administration Pty Ltd and Mulsanne Resources Ltd, over debts totaling more than A$28 million.

Tinkler paid creditors A$500,000 ($520,000) this week to stop wind-up petitions against Tinkler Group Holdings Administration Pty Ltd.

But the relief was short-lived when the Australian tax office stepped in to take over the action as a potential creditor. Senior deputy court registrar Rebel Kenna gave the tax office until Dec. 10 to prepare a case against the company.

The Australian Taxation Office declined to provide any further details on the case.

Andrew Korbel, a partner at Corrs Chambers Westgarth, who represented Tinkler Group Holdings Administration on Friday declined to comment outside court. Tim Allerton, a Sydney-based spokesman for Tinkler, also declined to comment.

HORSE PLAY

Court documents show the Kildangan Stud Unlimited subpoena is to be heard by another New South Wales state court next week.

Kildangan is part of Darley, the global breeding operation owned by Sheikh Mohammed, a keen equestrian and breeder with horse studs around the world.

Located in County Kildare, Ireland, the Kildangan Stud is home to eight stallions, including Sharmadal, the sire of two winning mares, Marquardt and Happy Hippy, bought by Tinkler's Patinack Farm.

Tinkler spent millions of dollars building Patinack into Australia's largest thoroughbred racing and stud operation.

No further details were available on the hearing. Kildangan and Darley did not respond immediately to requests for comment.

Tinkler built his empire spanning horse racing, sports clubs and coal on debt, scraping together A$1 million from lenders for an underrated coal deposit that quickly soared in value.

He then leveraged his gains in a series of bold moves, culminating in the $5 billion merger of his companies Aston Resources and Boardwalk Resources with Whitehaven this year.

But Nehme said the combined legal actions raise the spectre of several unpleasant scenarios for Tinkler, including civil and criminal charges if he is found to have been operating the liquidated companies while they were insolvent.

The value of Tinkler's holding in Whitehaven has shrunk below A$600 million from A$1.1 billion at its peak as Chinese demand for coal cooled.

Sources previously told Reuters the stake is heavily leveraged. His main backer, U.S. hedge fund manager Farallon Capital Management LLC's asset manager Noonday, has been looking at options including pressing for the sale of shares or converting some of the loans into equity.

"Additional pressure from entities including the Australian Taxation Office puts pressure on Noonday and Farallon to do something about Tinkler's stake," said Matthew Trivett, a coal and specialty metals analyst at Patersons Securities.

Noonday and Farallon could call in the loans to ensure the transfer of ownership of the stake before other creditors begin chasing the stake, Trivett said.

They would likely take a hit, but might decide to "book the loss to take the assets away from Tinkler," Trivett said.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

Twinkies bakers say they'd rather lose jobs than take pay cuts

By Carey Gillam and Martinne Geller

KANSAS CITY, Mo./NEW YORK | Wed Nov 21, 2012 9:02pm EST

KANSAS CITY, Mo./NEW YORK Nov 21 (Reuters) - Enough is enough, say bakery workers at Hostess Brands Inc.

After several years of costly concessions, the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) authorized a walk-out earlier this month after Hostess received bankruptcy court approval to implement a wage cut that was not included in its contract.

With operations stalled, the company that makes Twinkies and other famous U.S. brands said last week that liquidating its business was the best way to preserve its dwindling cash. It won court approval on Wednesday to start winding down in a process expected to claim 15,000 jobs immediately and over 3,000 more after about four months. [ID: n L1E8ML3WU]

Interviews with more than a dozen workers showed there was little sign of regret from employees who voted for the strike. They said they would rather lose their jobs than put up with lower wages and poorer benefits.

"They're just taking from us," said Kenneth Johnson, 46, of Missouri. He said he earned roughly $35,000 with overtime last year, down from about $45,000 five years ago.

"I really can't afford to not be working, but this is not worth it. I'd rather go work somewhere else or draw unemployment," said Johnson, a worker at Hostess for 23 years.

With 18,500 workers, Hostess has 12 different unions including the B CTGM, which has about 5,600 members on the bread and snack item production lines, and the International Brotherhood of Teamsters, which represents about 7,500 route sales representatives, drivers and other employees.

Unlike some non-unionized rivals, the maker of Wonder Bread and Drake's cakes had to navigate more than 300 labor c ontracts, with terms that often strained efficiency and competitiveness, Hostess officials have said. In some extreme cases, contract provisions required different products to be delivered on different trucks even when headed to the same place.

Aside from those so-called onerous labor contracts, Hostess has grappled for some time with rising ingredient costs and a growing health consciousness that has made its sugary cakes less popular. It filed for bankruptcy in January, only three years after emerging from a prior bankruptcy.

Lance Ignon, speaking on behalf of Hostess, said the company recognized how difficult the past few years had been for workers and wished it did not have to ask them for more givebacks.

"But the reality was that the company could not survive without those concessions," Ignon said.

FRUSTRATIONS, COMPLAINTS

Workers had a laundry list of frustrations, from rising healthcare costs to decreased wages and delayed pension benefits. They even cited a $10-per-week per worker charge they said Hostess claimed was needed to boost company capital.

"They have taken and taken and taken from us," said Debi White, who has worked at Hostess for 26 years, most recently as a bun handler at its bread and roll plant in Lenexa, Kansas.

"They have been walking around stomping their foot saying either you give in ... or else we're going to close you now. Well, go ahead, we're tired of their threats," she said. "That's how we feel."

Hostess workers are now scrambling to figure out when their health insurance runs out -- or if it already has -- and where and how to apply for job retraining and unemployment benefits.

Following a summer and autumn spent in labor negotiations trying to find a common path to reorganization, Hostess' management gained concessions from some unions, including the Teamsters.

The fear of thousands of job losses, for its own members and other unions, led the Teamsters to plead with the BCTGM t o hold a secret ballot to determine if bakery workers really wanted to continue with the strike, even with the th r eat of closure.

Teamsters officials complained that bakery union leaders did "not substantively look for a solution or engage in the process," and complained that the BCTGM c a lled for its strike on Nov. 9 without first notifying the Teamsters.

They said that, unlike the bakery union, the Teamsters voted to "protect all jobs at Hostess." Teamsters General Secretary-Treasurer Ken Hall said Wednesday's court approval for liquidation marked "a sad day for thousands of families affected by the closing of this company."

Bakery union President Frank Hurt has said that any labor agreements would only be temporary as Hostess was doomed anyway. The union said new owners were needed to get Hostess back on track and the only way they would return to work was if Hostess rescinded its wage and benefit cuts.

"Our membership ... just had no confidence in this management group being able to run a business," said Conrad Boos, a BCTGM local business representative in Missouri.

Hurt was not immediately available to comment on Wednesday but the union said in a court filing its sole objective was to leave Hostess with "a real, rather than an illusory or theoretical, likelihood of establishing a stable business with secure jobs." On Wednesday, Hostess' lawyer Heather Lennox said the company had received a "flood of inquiries" from potential buyers for several brands that could be sold at auction, and expects initial bidders within a few weeks.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

PRESS DIGEST - Wall Street Journal - Nov 22

Thu Nov 22, 2012 2:02am EST

Nov 22 (Reuters) - The following are the top stories in the Wall Street Journal on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.

* A Facebook experiment in democracy is fading. On Wednesday the social network announced several updates to its governing policy that may ultimately limit the community's ability to overturn future policy decisions. ()

* Hewlett-Packard Co's allegations of accounting fraud at its Autonomy software unit on Tuesday overshadowed another rough quarter for the technology company. By Wednesday morning, some analysts had downgraded HP's stock in research notes with titles like "Throwing in the towel," and "More Shoes Than Imelda Marcos." ()

* Hostess Brands Inc secured a bankruptcy judge's permission to go out of business and put thousands of employees out of work after a failed last-ditch mediation session. ()

* Just months after Banco Santander SA pulled off a successful Mexican initial public offering, the Spanish bank is aiming to repeat the feat in the U.S. by launching an IPO of its fast-growing American car-financing unit, according to people involved with the effort. ()

* French auto maker Renault SA plans to hire additional workers and make new car models in Spain after wrangling concessions from local unions, raising pressure on its French unions as the car maker pushes to cope with a sharp slide in its European car sales. ()

16.47 | 0 komentar | Read More

PRESS DIGEST-New York Times business news - Nov 22

Thu Nov 22, 2012 2:03am EST

Nov 22 (Reuters) - The following are the top stories on the New York Times business pages on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.

* Hewlett-Packard's troubled purchase of the software company Autonomy is an example of the problems older technology companies face as they try to get the jump on their younger rivals. ()

* Weak growth and a resulting decline in tax receipts prompted Britain to borrow much more than expected last month, official figures showed on Wednesday, underlining the fragility of economic recovery and the risk that the government could miss its deficit reduction target. ()

* A federal bankruptcy judge on Wednesday approved plans for Hostess Brands to wind down its operations, but there is little doubt that its best-known brand, Twinkies, will live on. ()

* While Thanksgiving gas prices in the United States are higher than a year ago and at a record level, oil experts say plentiful global supplies will help prevent a jump in prices. ()

16.47 | 0 komentar | Read More

REFILE-UPDATE 3-Failed talks with union spell end to Twinkie-maker Hostess

Tue Nov 20, 2012 11:00pm EST

By Tom Hals

Nov 20 (Reuters) - Hostess Brands Inc will proceed with a plan to go out of business after the maker of Twinkie snack cakes said last-minute talks with striking workers broke down on Tuesday.

Hostess and its striking bakers union were pressed by New York Bankruptcy Judge Robert Drain into mediation to try to end the walkout and save the company and its 18,500 jobs. Drain acted as a mediator during the private talks.

Hostess, which also makes Wonder Bread and Drake's cakes, will ask Drain to approve a plan to begin a piece-meal lidquidation of the 82-year-old company. It has said that its operations were crippled by the bakers' strike and that winding down is the best way to preserve its dwindling cash.

Hostess plans no further comment prior to an 11 a.m. ET hearing on Wednesday.

A representative of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), which went on strike Nov. 9, did not immediately respond to a request for comment.

Ken Hall, the general secretary of the Teamsters, Hostess' largest union expressed disappointment at the failed talks. The Teamsters had accepted an 8 percent cut in wages in an attempt to save the company.

"This is a tragic outcome and our thoughts and prayers go out to all Teamster Hostess members and all Hostess employees," Hall said in a statement.

The BCTGM leaders have said they believe there are buyers prepared to bid for the company, and bankers and analysts expect the company's best-known brands to live on under a new owner or owners.

Bankers have said rivals including Flowers Foods and Mexico's Grupo Bimbo were very likely to be interested in parts, but not all of, the brands. Neither company could be reached for comment.

Private equity firms have also shown interest. Sun Capital Partners is interested in bidding for all of Hostess, according to a source familiar with Sun's plans, and Metropolous & Co is also interested, according to Daren Metropolous, a principal at the firm.

Officials at Sun did not respond to requests for comment.

Hostess runs 33 bakeries, 553 distribution centers, about 5,500 delivery routes and 527 bakery outlet stores throughout the United States. Bakery operations ceased last week, though product deliveries to stores continued in order to sell already-made products.

The company has blamed union wages and pension costs for contributing to its unprofitability. Hostess Chief Executive Gregory Rayburn has also said the company's labor contracts have deterred would-be bidders for the company and its assets.

In addition to its unionized workforce, analysts, bankers and restructuring experts have said that a fleet of inefficient and out-of-date factories has also eaten up costs. They have said some brands may be more valuable once they were separated from the factories and sold to non-union competitors.

The case is In re Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More