DealZone

Carrying a heavy burden

Library photo of farmers carrying paddy stalks during a harvest at a field in Deli Serdang district of the Indonesia's North Sumatra province June 30, 2009. Indonesia's statistics bureau has projected 2009 unmilled rice output to rise 1.13 percent to 60.93 million tonnes, or the equivalent of around 38 million tonnes of milled rice. REUTERS/Y.T Haryono (INDONESIA AGRICULTURE FOOD) British petrochemicals giant Ineos today announced it has received the overwhelming support of its lenders for proposals to ease the terms on much of its 7.5 billion euro debt load.

The deal leaves the company’s debt burden untouched while lenders will accept a back-dated increase in interest payments as well as a one-off fee.

The company spent months preparing a new business plan and discussing options with lenders and financial advisers. They correctly predicted that lenders would have little appetite for a more severe restructuring, such as asking lenders to write off debts in exchange for an equity stake.

Instead, lenders accepted that Ineos could cope with its large debt load if it had the right business plan in place. Asset sales appear to be part of the equation, though the company has repeatedly stated it is under no time pressure to make such sales.

Time will tell whether this works out for Ineos but many restructuring experts worry that lender aversion to writing off debts means companies are being left with excessive debt burdens, even after a round of restructuring.

Deals du jour

Barclays mulls a sale of its private-equity arm, AIG says it will pursue a New York public offering for its life-insurance unit, and CIT’s assets appear attractive, but only to bargain-hunters. For these stories and all the rest of the latest deals news from Reuters, click here.

And in the newspapers (some external links might require subscriptions):

* Bank of America Corp (BAC.N) is operating under a secret U.S. regulatory sanction that requires it to overhaul its board and address perceived problems with risk and liquidity management, The Wall Street Journal reported, citing people familiar with the situation.

* Citigroup Inc (C.N) is close to a secret agreement with one of its main regulators that will increase scrutiny for the bank, the Financial Times reported.

Deals du jour

U.S. officials consider giving CIT Group Inc a temporary loan as part of an aid package to help the lender avoid collapse; U.S. asset manager Franklin Resources Inc (BEN.N) drops out of a consortium negotiating to buy American International Group Inc’s (AIG.N) asset management unit; and The New York Times Co agrees to sell its New York City classical music radio station for $45 million, to help pay off debt. For these stories and all the other latest deals news from Reuters, click here.

And here’s what’s in the newspapers and online (some links may require subscriptions):

* Belgium’s Solvay (SOLB.BR) has narrowed the list of bidders for its pharmaceuticals business to Swiss company Nycomed and Abbott Laboratories (ABT.N) of the United States, FT.com reported on its website.

Deals du jour

In China, two regulators are facing off over GM’s controversial plan to sell its Hummer unit to a little-known Chinese outfit. In the United States, the sale of a stake in Facebook gives the whole a value of some $6.5 billion. And in Germany, Software AG is buying IDS Scheer in the country’s first major corporate takeover of 2009. For more on these stories, and all the other latest deals news from Reuters, click here.

And here’s what the papers are saying (some external links may require subscriptions):

* China National Petroleum Corp (CNPC) could make a binding offer for up to 75 percent of the Argentine unit YPF of Spanish oil major Repsol (REP.MC) in the next few days, ABC reported, citing sources close to the talks. Reuters story here.

Deals du jour

Suntory and Kirin consider joining forces to create one of the world’s biggest beer and soft drinks companies, with annual sales of $41 billion. Meanwhile Friends Provident and Venture Production are both fending off unwanted approaches. For all the latest deals news, click here.

And here’s the latest dose of market chatter:

* McGraw-Hill has hired Evercore Partners Inc, a top U.S. merger advisory boutique to sell BusinessWeek magazine, Bloomberg said, citing a person close to the situation.

* Bank of America Corp is trying to avoid paying billions of dollars in fees to U.S. taxpayers for guarantees against losses at Merrill Lynch, saying the rescue agreement was never signed and the funding never used, Bloomberg said, citing people familiar with the matter.

Deals du Jour

The following deal-related stories appeared in today’s newspapers:

* British private equity firm Silverfleet Capital has begun exclusive talks to buy German sausage maker Kalle Nalo from rival Montagu Private Equity, the Financial Times said.

* The world’s biggest mutual funds firm, Fidelity Investments, has sought potential candidates to succeed its president Rodger Lawson who rejoined the company in mid-2007, The Wall Street Journal reported.

* Four of the biggest names in the UK digital media scene are teaming up to launch an investment fund for internet start-ups, the Financial Times reported. Michael Birch, co-founder of Bebo, the social network acquired by AOL last year for $850 million, is the cornerstone investor. He is joined by Brent Hoberman, Peter Dubens and Jonathan Goodwin.

Deals du Jour

Despite the sluggish performance of the stock markets recently, there is no shortage of deals to report.

Some corporate finance stories in the newspapers include:

* AIG (AIG.N) has resumed talks to sell its American Life Insurance Co unit to MetLife Inc (MET.N) in a deal that could help the stricken insurer raise more than $15 billion, according to the Financial Times.

* Datang Telecom (600198.SS) is in talks to sell a 20 percent stake to China’s national pension fund worth as much as 3 billion yuan ($428.6 million), China Daily reported.

Deals du Jour

Reports of new Asian share sales attracted headlines on Wednesday, with China National Pharmaceutical Group planning a $1 billion IPO, China Merchants Bank seeking $3 billion and BBMG Corp looking for cornerstone investors.Other corporate finance stories in the newspapers include:* French water utility Veolia Environnement (VE.N) plans to sell a 30 percent stake in its Czech unit Dalkia, daily Hospdarske Noviny reported, citing Dalkia’s board chairman.* The Russian government has reached a deal on the purchase of services conglomerate Sistema’s (SSAq.L) stake in telecoms giant Svyazinvest, Kommersant newspaper said.For all the latest deals news, click here.

Deals du Jour

New European regulations made headlines on Tuesday as the former chief executive of Man Group hit out at proposed changes to hedge fund rules and the first details of new European bank regulations emerged.

Other stories to make the newspapers include:

* Bondholders to Northern Rock, the UK bank rescued by the state, are being repaid ahead of the British government due to a contract breach in 2008, the Guardian reported.

* London Residential Opportunities, a new residential property fund, is looking to raise 50 million pounds ($81.16 million) in equity ahead of floating on the London Stock Exchange later this year, according to the Daily Telegraph.

Wrestling for control

wrestleDespite objections, and a rival bid from PAI Partners, a group of three distressed debt investors proved successful in their aggressive bid to wrestle control of French roofing company Monier through a debt for equity swap.

The restructuring deal sees Monier’s 1.9 billion euro debt load halved in exchange for senior lenders taking full ownership of the firm.

Previous owner PAI had its fingers prised from a prized asset through a combination of its rivals’ tight focus and a collapse in Monier’s earnings, which helped propel lenders into the driving seat.