IMF: Cyprus shy of spending cut target
NICOSIA, Cyprus -- The International Monetary Fund says Cyprus will need to make more spending cuts to meet a key target of its financial rescue program.
IMF official Delia Velculescu said during a teleconference Wednesday that more permanent cuts to government spending, including the public sector wage bill, are needed for authorities to achieve a primary surplus of 4 percent of gross domestic product by 2018. A primary surplus does not count the cost of servicing existing debt.
She said the IMF is still "flexible" on the specifics, given that there's still time to go before 2018, but the cuts need to be balanced and sustainable.
Velculescu said the country must revise its foreclosure legislation to tackle the high number of bad loans that are holding back economic growth.
-- The Associated Press
Suit filed on behalf of 658 in GM crashes
DETROIT -- A Texas lawyer has filed a lawsuit against General Motors on behalf of 658 people who were injured or killed in crashes in which faulty ignition switches are suspected of having a role.
The lawsuit filed Tuesday in U.S. District Court in Manhattan in New York City names 29 people who were killed in crashes and 629 who were hurt. All the crashes occurred after GM emerged from bankruptcy protection in July 2009. That makes them exempt from GM's efforts to shield itself from claims attributed to crashes that occurred before the bankruptcy, attorney Robert Hilliard said in a statement.
Hilliard also said he will ask judges for permission to file another 248 cases from before the bankruptcy, including 21 deaths.
"It's certainly not a legal given that GM will be successful in its attempts to use this 'get-out-of-jail-free' bankruptcy card," said Hilliard, of Corpus Christi, Texas.
The lawsuit alleges that GM knew about the defective switches that can cause engines to stall since as early as 2001, yet it didn't recall any cars until this year. The switches can cut off the engine, knocking out power steering and brakes and disabling the air bags, which wouldn't protect people in a crash.
GM spokesman Jim Cain wouldn't comment on Hilliard's lawsuit but said the company wants to do the right thing for people harmed by ignition-switch issues with the Cobalt and other recalled small cars.
-- The Associated Press
Sales incentives cut into Fiat's profits
MILAN -- Italian carmaker Fiat SpA, which controls Chrysler, on Wednesday said second-quarter profits dropped by more than a half because of lower performance in North and Latin America.
Fiat, whose shareholders vote Friday on the merger with Chrysler, said net profit was $263 million, compared with $582 million in the same period last year.
Incentives helped drive North American sales up 10 percent, but the incentives also cut into profits. Earnings before interest and tax in the region dropped 18 percent to $800 million. The automaker said the drop in second-quarter earnings also reflects a $183 million U.S. tax charge.
Chrysler issues its earnings Aug. 11.
Fiat and Chrysler CEO Sergio Marchionne conceded North America was "a disappointing story" and that the company needs to be "a lot more disciplined on the pricing side," which means also passing along costs to customers of new features and enhancements added to new models.
In June, Chrysler led major automakers in U.S. incentive spending per vehicle with an average of $3,480, according to the TrueCar.com automotive website.
-- The Associated Press
IPO to fatten China pork exec's holdings
Wan Long, who runs the world's biggest pork supplier, will become a billionaire when his company WH Group Ltd. completes an initial public offering in Hong Kong.
WH Group is set to raise at least $2.05 billion, based on data in its IPO prospectus. The company received enough orders for its sale of 2.57 billion shares at 80 cents each, people with knowledge of the matter said.
Wan owns 9.1 percent of the Luohe, China-based meatpacker through two holding companies, Sure Pass and Rise Grand. The stake is valued at more than $1 billion, based on data in the IPO prospectus.
Born in 1940, Wan joined WH Group's predecessor Luohe Cold Storage in 1968, a decade after the state-owned company was founded in central China's Henan province. He became the head of the factory in 1984, according to its prospectus.
The company is raising money to repay part of a $4 billion loan that funded its purchase of Smithfield Foods Inc., the biggest Chinese acquisition of a U.S. firm. WH Group revived the share sale this month, after scrapping plans to raise as much as $5.3 billion in April.
-- Bloomberg News
Argentine minister, hedge funds huddle
NEW YORK -- Argentina's economy minister resumed efforts Wednesday to solve the South American nation's financial crisis without a default.
Minister Axel Kicillof arrived late Wednesday morning at a New York City office building. He had his first face-to-face meetings Tuesday evening with lawyers for U.S. hedge funds.
A court-appointed mediator described the meetings as "a frank exchange of views and concerns" but also said divisive issues remained unresolved.
Court orders require the hedge funds to be paid roughly $1.5 billion for bonds they bought on the cheap if Argentina makes scheduled payments to bondholders who swapped their bonds at lesser value after Argentina's 2001 default.
A midnight Wednesday deadline to avoid a default put added pressure on negotiators.
A judge ordered the around-the-clock negotiations, saying "real people will be hurt" by a default.
-- The Associated Press
Business on 07/31/2014