IMF: downturn might slow
The global economic meltdown may be starting to abate, and recovery could emerge next year if countries act together and immediately adopt policies aimed at ending the recession, the head of the IMF said on Thursday. “The fact that the current downturn is highly synchronized and associated with deep financial crises suggests that it is likely to be persistent, with a weaker-than-average recovery,” the IMF said in the analytical chapters to its semiannual World Economic Outlook released in advance of the report’s publication next week.
Mirage may file bankruptcy
Billionaire Carl Icahn and an investment fund believe MGM Mirage Inc should file for bankruptcy, the Wall Street Journal reported on Thursday. They want the Las Vegas-based casino operator to restructure its more than US$13 billion in debt as soon as possible. MGM Mirage spokesman Alan Feldman said the company had productive discussions with its lenders and declined to comment further.
Diamond output halved
Botswana, the world’s largest diamond producer, will slash its output by more than half this year because of plummeting demand for the gems, the main diamond company announced yesterday. Debswana, jointly owned by the Botswana government and De Beers, said in a statement that the country was going to produce 15 million carats of diamonds this year against 33 million carats last year. The mining industry in Botswana has cut 4,500 jobs as global demand for the precious stones has plummeted.
Biggest mall owner bankrupt
General Growth Properties Inc, the second-largest US mall owner, declared bankruptcy on Thursday in the biggest real estate failure in US history. Ending months of speculation, General Growth, along with 158 of its 200-plus US malls, filed Chapter 11 while it tries to refinance its debts. The company received approval on Thursday from federal bankruptcy Judge Allan Gropper to use its cash collateral to operate its businesses during bankruptcy. Chicago-based General Growth owns such valuable properties as South Street Seaport in New York, Fashion Show in Las Vegas and Faneuil Hall Marketplace in Boston.
AIG to sell car business
Insurer American International Group Inc (AIG) said Thursday it will sell its car insurance unit, 21st Century Insurance, to Zurich Financial Services Group for US$1.9 billion. Under terms of the agreement, Zurich’s Los Angeles-based insurer Farmers Group will pay US$1.5 billion in cash and US$400 million in subordinated, euro-dominated capital notes backed by Zurich Insurance Company, AIG said.
Volkswagen sales plummet
German auto maker Volkswagen (VW) is likely to suffer a 10 percent slide in sales in the first quarter in a global auto market that is 20 percent weaker, a member of VW’s board of directors said on Thursday. “We are going to have a world market that is down about at least 20 percent and we will be down about 10 percent in the first quarter,” said Christian Klinger. VW chairman Martin Winterkorn said there was some uncertainty as to whether VW’s first quarter earnings would turn out negative or positive.