Unions reach job-saving deal at French courier firm

PARIS Thu Jan 30, 2014 5:10am EST

PARIS Jan 30 (Reuters) - Unions at France's second-biggest courier business have agreed a deal that saves 2,150 jobs but offers little solace to French President Francois Hollande's efforts to reduce unemployment.

Workers at Mory-Ducros had been locked in dispute with majority shareholder Arcole Industries for weeks, occupying several company sites after the courier business filed for bankruptcy in November and launched a restructuring programme that put 5,200 jobs in jeopardy.

The news delivered a blow to President Hollande's efforts to start bringing down unemployment, stuck near 11 percent, by the end of 2013. His promise was finally buried this week by jobless data showing a rise in claims.

The deal with unlisted industrial holding group Arcole protects 2,150 jobs and improves severance terms for the more than 3,000 employees who still face redundancy.

In a statement, six unions said they had agreed to lift their blockade and signed off on the new deal, in which Arcole promises to raise its total payout for redundancies to 30 million euros ($40.93 million) from 21 million euros.

Industry Minister Arnaud Montebourg, who participated in all-night talks to defuse the Mory-Ducros dispute, said that laid-off workers would be offered several options, including training and jobs with a public transport firm.

Hollande, facing further job losses, shifted economic gears in January to embrace a supply-side approach, offering companies a large reduction in labour costs to help them to regain a competitive edge and start hiring. ($1 = 0.7329 euros) (Reporting By Nicholas Vinocur; Editing by David Goodman)

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Germany's Strauss department stores seek creditor protection

DUESSELDORF, Germany Thu Jan 30, 2014 10:14am EST

DUESSELDORF, Germany Jan 30 (Reuters) - Strauss Innovation, a German chain of small department stores, said on Thursday it was seeking protection from creditors to try and rescue its business which has 96 shops across the country.

Strauss, owned by U.S. private equity firm Sun Capital Partners, has suffered from a mild winter hurting sales of cold weather clothing, industry sources said.

Earlier this week, German department store Karstadt said its sales fell 3 percent in the key Christmas period, while rival Kaufhof said the mild winter weather had dampened sales of clothes.

Department stores and other retailers have also been losing sales to online players. In Germany, online sales rose 54.5 percent over the Christmas period from the same time the year before. Across the continent, online transactions rose 37 percent in December.

In Britain, Debenhams, a 200-year-old department store chain with 156 stores, issued a profit warning earlier this month after heavy Christmas discounting.

Other German retailers have also run into trouble, including home improvement chain Praktiker, which filed for insolvency last year and drugstore group Schlecker.

Strauss Innovation was founded in 1902 in the western city of Duesseldorf and employs 1,400 staff. (Reporting by Matthias Inverardi, writing by Emma Thomasson. Editing by Jane Merriman)

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Germany's Schaeuble wants tougher rules after wind park insolvency

BERLIN Thu Jan 30, 2014 4:28pm EST

BERLIN Jan 30 (Reuters) - Germany needs to improve regulation and supervision of financial markets in order to protect investors, including those who have been affected by this month's insolvency of the wind park group Prokon, Finance Minister Wolfgang Schaeuble has said.

"It remains the goal of the German government to better regulate and supervise the grey zones of the financial market," Schaeuble was quoted as saying in an advance release from an interview being published in Friday's Handelsblatt newspaper.

"We keep pushing for regulatory measures on the level of the (Group of) 20 and we remain active at the national level too. That also includes dealing consistently with the Prokon case."

Prokon, which had raised 1.4 billion euros ($1.9 billion) mainly from retail investors, filed for insolvency this month after a growing number of stakeholders asked for their money back following media reports about the business.

Prokon, which operates 50 wind parks in Germany and Poland and employs roughly 1,300 staff, had raised money by selling profit-participation certificates - offering high interest payments - through advertising on prime-time German television.

With profit-participation certificates, the investor also participates in losses. Unlike shares, the securities do not give holders any say in the company.

Consumer groups accused Prokon of attracting investors with promises of potential returns of at least 6 percent a year without giving sufficient warning of the risks. Its insolvency deals a blow to thousands of retail investors who had hoped to profit from Germany's shift from nuclear to renewable energy sources such as wind and solar.

Germany has long pushed for stronger financial market regulation internationally - and Schaeuble said his ministry had asked the German financial regulator Bafin to look into improving investor security.

But he also cautioned: "Even better regulation will only help up to a point if investors only look at the returns and not the risks." (Reporting by Annika Breidthardt; Editing by Kevin Liffey)

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Detroit museum pledges to raise $100 million for art, city pensions

DETROIT Wed Jan 29, 2014 5:18pm EST

DETROIT Jan 29 (Reuters) - The Detroit Institute of Art (DIA) said on Wednesday its board of directors approved a commitment to raise $100 million to help protect its art collection and city retirees in Detroit's bankruptcy.

Added to the total already pledged by U.S. philanthropic foundations and by Michigan's Republican Governor Rick Snyder, some $820 million has now been committed to city pensioners and the museum.

"We are hopeful this agreement will allow Detroit's bankruptcy to move forward smoothly as we all work toward a brighter and better future for Detroit," DIA board chairman Eugene A. Gargaro said in a statement.

The city's emergency manager has been looking at assets the city could use to meet some of the pension fund liabilities and thus avoid making steep cuts to retiree benefits. The aim of the fundraising is to help avoid those cuts and keep the artwork in the museum's hands.

The museum statement added that as part of a deal to raise $100 million from corporate and individual donors, the city of Detroit would transfer "free and clear legal title to the museum building, the art collection and all related assets."

The DIA would continue operate with donor funds and taxes raised from Detroit's suburbs.

On Tuesday the W.K. Kellogg Foundation committed $40 million, bringing the total pledged by foundations to $370 million. Governor Snyder unveiled a plan last week to tap up to $350 million in state funds over 20 years for Detroit retirees.

Kevyn Orr, Detroit's state-appointed emergency manager who took the city to U.S. Bankruptcy Court in July, has opened the door to monetizing city-owned works at the institute, which have been appraised at as much as $867 million. That could include selling the artwork or using it as collateral for loans.

Orr has also eyed severe cuts in the city workers' retirement benefits. Detroit's two pension funds are the city's biggest unsecured creditors and Orr has pegged the unfunded pension liability at $3.5 billion.

Overall, Detroit faces some $18 billion in long-term debt.

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UPDATE 1-Detroit presents debt adjustment plan to creditors

Wed Jan 29, 2014 5:32pm EST

Jan 29 (Reuters) - Detroit's creditors got their first look Wednesday at the city's proposed plan to adjust its debt and emerge from bankruptcy, though no details were immediately available.

The city's Emergency Manager Kevyn Orr presented a proposed debt adjustment plan to creditors participating in court-ordered mediation. The proposal provides "fair and equitable treatment" for all parties, Orr said in a statement.

The plan, which the city said reflects discussions held to date with creditors, was distributed to creditors on a confidential basis. The city said changes could still be made before the plan is scheduled to be unveiled in court no later than March 1, an occasion that will mark a major milestone in Detroit's bankruptcy case.

"There is much work still to do and we believe the proposed plan provides the roadmap for all parties to resolve all outstanding issues and facilitate the city's efforts to achieve long-term financial health," Orr said in the statement.

Detroit, which faces the March 1 deadline to submit a plan for emerging from municipal bankruptcy, said it expects to file one with the U.S. Bankruptcy Court in about two weeks.

With the city sinking under a debt load topping $18 billion, Detroit filed the biggest municipal bankruptcy in U.S. history in July. Pension funds, retirees, and bond holders are among Detroit's major creditors.

Prior to the filing, Orr, a former corporate bankruptcy attorney, put out a proposal to creditors that called for paying just pennies on the dollar for some $11.5 billion of debt considered unsecured. That debt included a $3.5 billion unfunded liability for the city's two pension systems, as well as $1.45 billion of pension debt and certain general obligation bonds sold by Detroit.

U.S. Judge Steven Rhodes in December ruled that Detroit is bankrupt and that the city could cut pension benefits as part of its restructuring.

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WR Grace's bankruptcy exit financing deal gets court approval

Wed Jan 29, 2014 5:37pm EST

Jan 29 (Reuters) - Chemical maker W.R. Grace & Co received approval to line up about $1.55 billion in bankruptcy exit financing, a court filing showed on Tuesday.

Grace will use the money to pay all outstanding claims, including $1.1 billion to its lenders, removing the last obstacle to its emergence out of bankruptcy protection.

The remaining amount will go towards funding trusts that will be created to pay asbestos-related injury claims, an earlier court filing showed.

The company is likely to emerge from bankruptcy on Jan. 31.

Grace filed for Chapter 11 protection in 2001, making it one of the longest bankruptcies in the history of the United States, after an asbestos leak at one of its mines led to a slew of lawsuits.

The case is W.R. Grace & Co, et al, Case No. 01-01139, U.S. Bankruptcy Court, District of Delaware.

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Brazil's Óleo e Gás may use assets to guarantee loans - judge

SAO PAULO Tue Jan 28, 2014 8:10am EST

SAO PAULO Jan 28 (Reuters) - Bankrupt oil producer Óleo e Gás Participações SA, controlled by Brazilian tycoon Eike Batista, received court authorization late Monday to use its assets to guarantee a loan critical to keeping the company in operation.

Gilberto Clovis Faria Matos, the judge handling Óleo e Gás' bankruptcy protection filing, ruled that company assets may be used as collateral for up to $200 million of debtor-in-possession, or DIP, financing, according to documents filed with the Rio de Janeiro state court of justice.

Óleo e Gás, whose EBX business empire collapsed last year, has delayed detailing its restructuring plan to creditors until Jan. 31 as it tries to secure new funding, the company said in a statement on Friday.

Óleo e Gás was previously known as OGX Petróleo e Gas SA. It filed Latin America's largest-ever bankruptcy protection application on Oct. 30.

In recent weeks, Óleo e Gás obtained a bridge loan to pay for operations while it seeks the debtor-in-possession loan.

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Foundation pledges for Detroit pensions, art rise to $370 mln

Tue Jan 28, 2014 4:54pm EST

Jan 28 (Reuters) - Foundations seeking to protect Detroit's public pensions and its art museum in the city's bankruptcy process raised their pledge total to $370 million on Tuesday with the addition of a $40 million commitment from the W.K. Kellogg Foundation.

A group of U.S. philanthropic foundations announced earlier this month that they were prepared to step in with funding assistance to help preserve the Detroit Institute of Arts' collection and assist in shoring up the cash-strapped city's employee pensions.

Michigan Governor Rick Snyder followed up that commitment with a plan he unveiled last week to tap up to $350 million in state funds over 20 years for Detroit retirees.

"The Kellogg Foundation's commitment strengthens this effort, and we are hopeful the fund will continue to attract commitments from individual donors and institutions," said a statement from the foundation working group, which includes the Ford Foundation and the Kresge Foundation.

Kevyn Orr, Detroit's state-appointed emergency manager who took the city to U.S. Bankruptcy Court in July, has opened the door to monetizing city-owned works at the institute, which have been appraised at as much as $867 million. Orr has also eyed severe cuts in the city workers' retirement benefits. Detroit's two pension funds are the city's biggest unsecured creditors and Orr has pegged the unfunded pension liability at $3.5 billion.

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Batista's Oleo e Gas denied more time to develop several oil finds

By Sabrina Lorenzi

RIO DE JANEIRO Tue Jan 28, 2014 6:52pm EST

RIO DE JANEIRO Jan 28 (Reuters) - Brazil's oil regulator ANP denied a request by Brazilian businessman Eike Batista's bankrupt Óleo e Gás Participações SA to extend rights to develop several offshore oil and gas discoveries, the company said on Tuesday.

The ANP denied the request earlier this month. The time limits on some of the areas that were the subject of Óleo e Gás's request had already expired in September and November. Other areas in the request will expire through August 2015.

Óleo e Gás had asked for an extension so that it could adapt the discovery evaluation plans to the needs of a restructuring proposal it hopes to submit to a Rio de Janeiro bankruptcy judge by Friday. Óleo e Gás, then known as OGX Petróleo e Gás Participações SA, filed Latin America's largest-ever bankruptcy protection petition with a Rio de Janeiro judge on Oct. 30.

The areas to which the ANP denied extensions do not include any of the areas where Óleo e Gás is producing or close to producing oil and gas.

"The eventual return of some of these areas will not affect our business plan because their value was not included in any of our projections," the company said in a statement.

Rights to the Itacoatiara discovery in the Campos Basin east of Rio de Janeiro expired in September. The Belém discovery in the Santos Basin south of Rio de Janeiro expired in November.

The Tubarão Area, Tubarão Tigre and Tubarão Gato areas in the BM-C-41 block expire in February and March. The company had declared the areas commercially viable only to ask the ANP to withdraw the declarations for lack of technology needed to develop them.

The ANP turned down that request.

The ANP also denied extensions on the Videma, Tulum and Vésuvio discoveries in the Campos Basin and Natal discovery in the Santos Basin.

The ANP has also said it will decide by the end of March if Óleo e Gás has the financial resources to develop other areas it owns under concession contracts to risk losing them to their partners or the state.

Companies must register all discoveries, however small, with the ANP. Many declared discoveries never become producing oil fields. Discovery evaluation plans are required by the ANP before they allow companies to move toward development that can lead to eventual production.

OGX rose 3.45 percent in Sao Paulo trading on Tuesday to 0.30 real. (Writing by Jeb Blount; Editing by Eric Walsh)

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Michigan plan for Detroit pensions snubs bondholders -Fitch

Mon Jan 27, 2014 2:23pm EST

Jan 27 (Reuters) - Michigan Governor Rick Snyder's proposal to allocate $350 million in state funds towards Detroit's pensions is another troubling sign for bondholders that could ultimately hurt the state and its local governments in the municipal debt market, Fitch Ratings said on Monday.

The credit rating agency said the move "demonstrates continued weak support for bondholder security and repayment stemming from Detroit's bankruptcy."

"In Fitch's opinion, action that suggests pensions' claim on limited resources should be given priority to that of bondholders could establish a troubling precedent, at least in Michigan and perhaps beyond, given the paucity of significant municipal bankruptcy filings historically and the resulting focus on the Detroit case," Fitch said in a statement.

Michigan's largest city filed for Chapter 9 municipal bankruptcy in July with an eye toward treating pensions and certain general obligation bonds approved by Detroit voters as unsecured debt with creditors receiving only pennies on the dollar.

On Oct. 1, Detroit defaulted on a $9.37 million interest payment for those bonds.

The city's treatment of bonds backed by a full-faith and credit pledge roiled the $3.7 trillion U.S. municipal market. General obligation bonds traditionally are considered secured debt, making them one of the safest bets for investors.

Snyder last week pitched a plan that would need legislative approval to raise $350 million to aid Detroit's retirees after a group of foundations pledged more than $330 million to protect the city's pensions and art museum. Michigan's money would come from the state's share of a multi-state settlement with U.S. tobacco companies.

Comments by Snyder that state funds will not bail out bondholders or Wall Street "suggests an 'us versus them' orientation to debt repayment that undermines willingness to pay public debt in Michigan," Fitch said.

Fitch also noted that unlike Michigan's implicit support for Detroit's treatment of GO bonds as unsecured debt, Rhode Island in the Central Falls bankruptcy case decided "to protect GO bondholders by applying a statutory lien to all such local government debt in the state."

Detroit's October bond default led a trio of bond insurers that guaranteed payments on the bonds to sue the city in November, claiming the city violated Michigan law by paying operating expenses using property taxes that had been levied exclusively to pay off the bonds. Detroit has asked the U.S. Bankruptcy Court to dismiss the lawsuits.

The next payment date for the bonds is April 1 when nearly $47.6 million in principal and interest is due to bondholders, according to the lawsuits.

On Dec. 3, Judge Steven Rhodes ruled that Detroit is bankrupt and that its pensions could be subject to cuts as part of the city's restructuring. Kevyn Orr, Detroit's state-appointed emergency manager, has pegged the unfunded pension liability at $3.5 billion.

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