Business & Finance
A US subsidiary of deeply troubled engineering giant Alstom SA "significantly" underreported losses and is being investigated by the FBI and the Securities and Exchange Commission, the company acknowledged. It identified the unit as Alstom Transportation Inc. of Hornell, N.Y., which builds trains. The top two executives have been suspended, it said. The matter will require a $58 million charge against this year's accounts, the Paris company said, adding to problems that also include record losses, a huge debt load, drastically reduced shareholder equity, the sell-off of prized assets, and heavy layoffs.
Texas Pacific Group, the Fort Worth buyout specialist, appears to be a partner in pursuing the takeover of British retail chain Debenhams PLC, reports said. The Financial Times and other news sources said Texas Pacific and CVC Capital Partners Ltd. of London together are rivaling Permira, another European equity capital investor, which has offered $2.5 billion for Debenhams' 102 stores in Britain and Ireland. The bidding may ultimately lead to an auction for the chain, which specializes in apparel and targets customers in the 33-to-55 age bracket, The Times (London) said.
Chiquita Brands International, the banana giant, was to hand over ownership of a large but troubled division in Panama to a workers' cooperative in a ceremony attended by President Mireya Moscoso as the Monitor went to press. The union representing 3,200 workers at Puerto Armuelles Fruit Co. agreed to a $20 million buyout in April after Chiquita cut off subsidies, citing $90 million in losses. Chiquita accounts for 89 percent of banana exports from Panama, and Puerto Armuelles makes up almost one-third of Chiquita's operations there.
Union leaders reacted with fury to the announcement of 2,000 job cuts by Network Rail, the company that operates Britain's trains, calling the move "obscene," threatening strikes, and urging that the system be nationalized again by the government. The layoffs will be phased over three years as part of an overall $21.4 billion cost-cutting program, Network Rail said.