Executive Business Briefing

Here is a look at Monday's top business stories:

Stocks tumble in Tokyo

TOKYO, June 17 (UPI) -- Stock prices on the Tokyo Stock Exchange sank for a fourth straight session Monday as growing pessimism about Japan's upcoming economic package and the outlook for the U.S. stock market left foreign investors on the sell side.

Stocks also lost ground in Hong Kong, in Taipei, Taiwan, and in Seoul, South Korea, but rose slightly in Sydney, Australia.

Japan's blue-chip Nikkei Stock Average of 225 selective issues, which fell 224.21 points on Friday, sank another 256.52 points, or 2.4 percent, to 10,664.11 -- its lowest close since Feb. 28. The broader Topix index dropped 28.56 points, or 2.7 percent, to 1,025.70, its steepest decline since Sept. 17, 2001.

Declines hammered advances 1,363 to 81, while another 56 issues settled unchanged.

Volume declined to an estimated 810.16 million shares from 1.612 billion shares changing hands on Friday, when turnover was swelled by the settlement of the June Nikkei futures contract.

Analysts said the failure of Japanese Finance Minister Masajuro Shiokawa to provide any economic policy surprises during the weekend's Group of Seven finance ministers' meeting helped dampen sentiment.

Japan's latest economic stimulus package is expected to be compiled later Monday.

Shiokawa said the G7 finance ministers' statement calling for a stronger financial sector wasn't specifically aimed at Japan. Asked whether the U.S. was satisfied with Japan's tax reform plan, Shiokawa avoided answering the question directly. Instead, he classified the planned tax reforms into two groups -- those to be implemented in the near future, and those to be put into practice in the mid-to long-term.

Bank stocks continued to suffer some of the worst declines Monday, with investors miffed that the Finance Minister has not revealed a greater sense of urgency about fixing the sector's bad debt problem.

Foreign investors, who had bought bank stocks actively last month on expectations that an economic recovery in Japan would favor those stocks, led the selling, traders said.

In trading, Mizuho Holdings fell 4.0 percent, Sumitomo Mitsui Banking plunged 7.2 percent, Mitsubishi Tokyo Financial Group fell 4.4 percent and UFJ Holdings sank 5.2 percent.

Brokerage issues also suffered sharp falls in active trading as recent market weakness threatened to decimate brokerage trading commissions. Nomura Holdings fell 3.5 percent, Nikko Cordial sank 6.2 percent and Daiwa Securities Group fell 4.5 percent.

Among some of the other active issues, shares of mobile phone carrier NTT DoCoMo, Japan's biggest company in terms of market capitalization, fell 3.7 percent, Sony Corp. fell 2.1 percent, Canon dipped 2.4 percent and Matsushita Electric Industrial lost 2.2 percent.

Elsewhere in Asia, prices on the Hong Kong Stock Exchange fell for the fifth straight session after heavyweight HSBC made a further commitment to its Argentina branches by injecting more cash. The blue-chip Hang Seng Index fell 123.26 points, or 1.1 percent, to 10,832.26.

HSBC said it has injected $221 million into its branches in Argentina, despite concern that the country's commercial banking future remains murky. Investors were apparently unimpressed and sent the stock down 0.9 percent.

Uncertain economic recovery prospects in the U.S. also took a toll on the Hang Seng Index after the U.S. consumer-sentiment index dropped sharply in mid-June to 90.8 from 96.9 in May.

In an active property sector, Sun Hung Kai Properties fell 2.1 percent, Hang Lung Properties lost 1.7 percent and New World Development dropped 0.8 percent.

Meanwhile, Huaneng Power lost 4.5 percent, Shandong International Power fell 4.5 percent and Beijing Datang Power dropped 2.9 percent.

Prices also ended lower on the South Korean Stock Exchange, pressured by weakness in export issues. The Kospi Composite Inex lost 12,85 points, or 1.56 percent, to 809.16.

Exporters tumbled on a strengthening won and the gloomy outlook for the pace of the economic recovery in the United States, South Korea's largest export market.

In trading, the country's largest automaker, Hyundai Motor sank 4.5 percent, Kia Motors dropped 2.5 percent and KT Corp. dropped 2.1 percent.

Prices ended slightly lower on the Taiwan Stock Exchange. The Weighted Index slipped 24.31 points, or 0.44 percent, to 5,537.81.

In trading, United Microelectronics added 0.5 percent and Nanya Technologies rose 0.8 percent.

Elsewhere in the Pacific region, prices ended slightly higher on the Australian Stock Exchange, despite weakness in the mining sector. The blue-chip All Ordinaries Index added 4.80 points, or 0.15 percent, to 3,251.20.

Henry Walker Eltin crumbled 34 percent as investors rushed to sell shares of the contract miner after the company slashed its full year earnings forecast, citing massive losses in a joint venture.

Among other miners, BHP Billiton eased 0.1 percent and WMC fell 2.0 percent.

XO Communications files Chapter 11

RESTON, Va. June 17 (UPI) -- Telecommunications company XO Communications Inc. said it has filed for bankruptcy protection under Chapter 11 and said it has submitted two reorganization plans.

The company said the filing is limited to the parent corporation and that no operating units are part of it.

XO said it does not expect any reductions in work force or facility closings as a result of the filing and will continue to pay employees and provide employee benefits without interruption during the reorganization.

Dan Akerson, chairman and chief executive officer, said, "We are gratified that our secured lenders have the vision and confidence to see beyond today's troubled times and to recognize the potential long-term value of our company.

"We believe that our investment agreement with Forstmann Little and Telmex continues in full force and effect and provides for better overall economic recoveries for our creditors," he said.

"While we have every intention of enforcing our rights under this agreement we are also prepared to move forward with a standalone plan that provides clarity and assures our customers, vendors and employees that the company is moving forward with a plan that will achieve our goal of restructuring our balance sheet and provide the necessary financial stability for the company to emerge as a strong and viable competitor in the telecommunications industry," Akerson said.

The company noted because the Chapter 11 filing directly affects only XO Communications Inc., and not its operating subsidiaries, XO will conduct business as usual with regard to its customers.

"This financial restructuring and the related Chapter 11 filing are not a result of operational issues, but are driven by a need to deleverage the company and resolve our balance sheet issues," Akerson said.

"Simply stated, the company has too much debt, given the current and projected level of business operations," he added.

Nestle to merge U.S. ice cream business with Dreyer's

OAKLAND, Calif., June 17 (UPI) -- Nestle SA, the world's biggest food company, said it plans to merge its U.S. ice cream business with Dreyer's Grand Ice Cream Inc.

Under terms of the deal, Dreyer's will offer to buy out minority shareholders at $83 a share in 2006 and has the right to redeem all outstanding minority shares in 2007 for $88 a share.

Nestle is getting 55 million shares in Dreyer's, which values Nestle's present U.S. ice cream operations at $2.4 billion.

Dreyer, which had 2001 sales of $1.40 billion, will continue to trade on Nasdaq.

The deal needs the approval from regulatory authorities and Dreyer's shareholders. It is expected to be completed within a year.

The combination will bring together the Dreyer's brand with Nestle's Haagen Dazs and stand level with Anglo-Dutch group Unilever as the world's largest seller of ice cream by value of sales.

Nestle already has a 23 percent stake in Dreyer's and will now own two-thirds of a firm that also includes Dreyer's Dreamery, Starbucks and Godiva lines and Nestle's U.S. brands Drumstick, Nestle crunch and Butterfinger.

The deal extends Swiss-based Nestle's foray into the premium ice cream business after it fully took over the Haagen-Dazs brand in the United States and Canada late last year and bought Schoeller from Germany's Suedzucker.

T. Gary Rogers, chairman and chief executive officer of Dreyer's Grand Ice Cream, said, "For 75 years the people at Dreyer's have delighted consumers with quality ice cream.

"This alliance with Nestle, including the addition of the Haagen-Dazs and Drumstick brands, enables us to retain our entrepreneurial culture and spirit, and continue our commitment to brand building, innovation, and world class direct store delivery," Rogers said.