Dubai said debt payment delay

The government-owned investment company behind Dubai's rapid development drive has asked its creditors for a six-month delay on repaying its debts. Dubai World, which has total debts of $59 bn ( £35 bn), is asking creditors if it can postpone its forthcoming payments until May next year. Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring. The company has been hit hard by the global credit crunch and recession. It was due to repay $3.5 bn of its debts next month. The malaise has also affected Dubai as a whole, where, following six years of rapid growth, the economy has slumped since the second half of 2008. This has led to Dubai property prices falling sharply. 'Shocking' The Dubai government said in a statement that the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary. "It's shocking because for the past few months the news coming out has given investors comfort that Dubai would most probably be able to meet its debt obligations," said analyst Shakeel Sarwar, of SICO Investment Bank. Dubai is one of the seven self-governing emirates or states that make up the United Arab Emirates. Analysts say the Dubai government has paid the price for a flamboyant economic model centred on foreign capital and giant construction projects. Some have speculated it is likely to turn to the more economically conservative Abu Dhabi emirate to bail it out. Global credit rating agency Standard & Poor's, which rules on a company's or government's ability to repay its debts, said the announcement "may be considered a [debt] default". As a result, it said it was downgrading its ratings on several Dubai government-related financial entities. The Dubai World announcement was made on the eve of the Eid al-Adha Muslim festival, which will see many government agencies and companies close in Dubai until 6 December.

General Motors will not close their German plant

General Motors (GM) has said that it will not be closing any of Opel's four plants in Germany as part of its restructuring plans. The US carmaker also said it would be cutting about 9 ,000 jobs in Europe, slightly fewer than the 10 ,000 it originally estimated. It also said the future of the Antwerp plant was uncertain. Earlier this month, GM cancelled the sale of its European operations to car parts maker Magna. Consultation period GM's European boss Nick Reilly said he saw Opel' s Eisenach plant as "a significant resource for the production of [Opel] Corsas for the long term". He had previously given assurances over Germany's three other Opel plants. "We have to reduce costs so we can make money in a lower [sales] market. There will be difficult decisions and we will reduce capacity by around 20 %, or 9 ,000 people," Mr Reilly said. About 50 % to 60 % of the job cuts would be made in Germany, he said. This means that about 4 ,000 jobs will have to go at GM Europe's plants outside Germany. The Antwerp plant employs about 2 ,500 people. Vauxhall's two plants in the UK, at Luton and Ellesmere Port, employ more than 4 ,000 people. Mr Reilly said that the carmaker was now entering a consultation period, which he hoped would be completed in December. Only then would GM be able to give specific information about which plants would be affected by job cuts, he added. He also said GM's European headquarters would be based at Germany's Ruesselsheim plant. GM pulled out of the deal to sell Opel and Vauxhall to Magna after months of negotiation, citing "an improving business environment". The decision caused anger in Germany and sparked walkouts at German plants. The German government had provided 1.5 bn euros ($2.3 bn; £1.4 bn) in bridging loans and had pledged a further 3 bn euros to help secure the Magna deal.

ING shareholder meet in share issue

Dutch financial services group ING has gained shareholder approval for a 7.5 bn euros ($11.2 bn; £6.8 bn) share issue, and plans to split the business. ING said 99 % of shareholders backed the proposals, which will see it sell its insurance business within four years to instead focus on its banking operation. While no date has yet been set for the share issue, it is expected to take place in the coming months. ING plans to pay off some of the 10 bn euros of state aid it got last year. 'Preferable' Like many global banks, ING required government financial support as a result of bad debts and the global credit crunch. The decision to split the firm in two was required by European Commission competition regulators as a result of ING gaining the state aid. "We think a split is preferable to keeping the bank and insurer together," said a spokesman for Dutch shareholder group VEB. "It will strongly reduce the risk profile, and this will benefit us as investors."

Toyota will solve the pedal fault

Toyota says it will make changes to accelerator pedals on 3.8 million already recalled vehicles in the US. It is the latest attempt to remedy a fault with the pedals which has been blamed for at least one fatal accident. In September, the car giant advised drivers to remove their floor mats after it warned the pedals could become jammed under it. In the latest move, Toyota will order dealers to shorten the accelerator pedals while it develops a replacement. Popular vehicles such as the Toyota Camry, the top-selling passenger car in America, and the Toyota Prius, the best-selling gas-electric hybrid, and the luxury Lexus brand are part of the recall. Government talks The first recall was prompted by a high-speed crash in August involving a Lexus ES350 that killed a California Highway Patrol officer and three members of his family. The government has attributed at least five deaths and two injuries to floor mat-related unintended acceleration in the Toyota vehicles . The carmaker and government regulators have been discussing a potential fix for several weeks. Dealers will begin work on customers' cars in January, with the new pedals becoming available in April. Some vehicles will have brake override systems installed as a precaution. The company said: "Toyota has and will continue to thoroughly investigate and take appropriate measures to address any defect trends that are identified."

US banking sector back to profit

The US banking industry returned to profit in the third quarter, but the government insurance fund went into deficit for the first time since 1992 , regulators announced Tuesday. The Federal Deposit Insurance Corporation said commercial banks and thrifts earned a collective 2.8 billion dollars in the third quarter. This came after a collective 4.3 billion dollar loss in the second quarter, and the profit was well above the 879 million dollars the industry earned in the same period in 2008. But the sector is still feeling the effects of the deep financial crisis triggered by a collapse of the US housing market and global credit crunch. "Today's report shows that, while bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance," said FDIC chairman Sheila Bair. More than 26 percent of all insured institutions reported a net loss in the latest quarter, and total loan balances declined by the largest percentage since quarterly reporting began in 1984 , the FDIC said. As projected in September, the FDIC's deposit insurance fund balance fell below zero for the first time since the third quarter of 1992. The fund balance of negative 8.2 billion dollars reflects a 38.9 billion dollar contingent loss reserve that has been set aside to cover estimated losses over the next year. The FDCI report showed total loans and leases declined by 210.4 billion dollars, or 2.8 percent, during the quarter. Loans to commercial and industrial borrowers declined by 6.5 percent, residential mortgage loan balances fell by 4.2 percent, and real estate construction and development loans dropped 8.1 percent. "There is no question that credit availability is an important issue for the economic recovery," Bair said. "We need to see banks making more loans to their business customers. This is especially true for small businesses that rely on FDIC-insured institutions to provide over 60 percent of the credit they use." The FDIC noted that 124 banks had failed so far this yer, and the number on the "problem list" grew to 552 ,the highest number in 16 years. "For now, the credit adversity we have been discussing for some time remains with us, and we expect that it will be at least a couple of more quarters before we see a meaningful improvement in that trend," Bair said. "Despite the challenges, I am optimistic that if we address these problems head-on, we will see clear signs of improvement in bank earnings and lending in 2010 The FDIC noted that it has 23.3 billion dollars of cash and marketable securities on hand. It has moved to bolster its position by approving a measure on November 12 to require insured institutions to prepay three years' worth of deposit insurance premiums -- about 45 billion dollars -- by the end of 2009. "This measure will provide the FDIC with the funds needed to carry on with the task of resolving failed institutions in 2010 , but without accelerating the impact of assessments on the industry's earnings and capital," Bair said.