Owners of $1.2 billion in debt issued by Etihad and other airlines it partly owned have given the struggling Abu Dhabi carrier an ultimatum to agree to a restructuring or potentially face legal action, two sources close to the situation said, Reuters reported. The move is the latest turn in the unravelling of Etihad’s strategy to embark on global partnerships with airlines, the most high profile of which have since gone bankrupt.
Creditors of Odebrecht’s ethanol unit Atvos have approved a restructuring plan, the Brazilian firm said in a statement late on Wednesday, Reuters reported. Under the plan, Atvos expects to reduce its net debt to three times its earnings before interest, tax, depreciation and amortization, a gauge of operational profit known as EBITDA, from the current six times, as it will transfer 46% of its debt to a new vehicle. It will start paying small suppliers in 90 days. Remaining creditors will start receiving partial payments in 2022.
Kenya’s biggest bank by assets, KCB Group, has restructured more than 110 billion shillings ($1 billion) of its loans to customers and up to a quarter of its book could be affected by mid-June, its chief executive told Reuters, Reuters reported. The central bank allowed lenders in the East African nation to offer relief to distressed customers in mid-March after the first COVID-19 case was reported. Total restructured loans for the industry stood at 273 billion shillings, 9.6% of the total, at the end of April, the central bank said in a presentation sent to the media on Thursday.
UK banks have hit out at the prospect of negative interest rates, saying the policy would slash their earnings and limit their ability to absorb an expected torrent of coronavirus-related loan losses, the Financial Times reported. With big British lenders on track to boost reserves to £18.5bn for bad debts in 2020, the Bank of England’s admission this week that it was eyeing negative rates for the first time in its 324-year history has caused deep concern in the sector.
This week as small businesses across Italy reopened after nearly two months of lockdown, Franco Magliocchetti, a 32-year-old restaurateur in Rome, spent most of his day sat glancing at rows of empty tables. Mr Magliocchetti and his business partner, Fabio Trovato, are crossing their fingers that the lifting of restrictions will see the country bounce back from what is forecast to be the sharpest recession in its modern history.
Lebanese Prime Minister Hassan Diab blamed “criminal” currency manipulation for the unraveling of the country’s decades-old peg as he touted his cabinet’s achievements despite an unprecedented financial crisis, Bloomberg News reported. Flanked by his entire cabinet during a televised speech on Thursday, Diab criticized what he said were years of neglect and mismanagement on the part of the state, saying his own government -- in place since January -- was on the path to restoring confidence in Lebanon.
Ashmore Group Plc and BlackRock Inc. are joining together to present a united front for restructuring talks in yet another emerging market.
South Africa’s third-biggest telecom operator, Cell C, plans to hive off assets into a new special purpose vehicle (SPV), the country’s competition watchdog said on Thursday, as part of a plan to restructure the company’s debt, Reuters reported. Gatsby SPV has been set up for the purpose of the proposed transaction, the Competition Commission said in a statement. It did not give details about the deal or indicate which assets of Cell C may be sold to Gatsby. The Commission said Gatsby SPV will be controlled by a trust that is yet to be formed.
Some of the world’s poorest oil-producing countries are slipping behind on payments for billions of dollars in oil-for-cash loans from commodity trading houses, putting them at risk of default, Bloomberg News reported. The so-called prepayment deals, in which a trading house advances a nation money to be repaid with future oil shipments, have been popular among some African and Middle East oil nations as the only way to raise funds. But they have also proved controversial: in some cases they create an opaque source of debt that governments find hard to pay back when oil prices plunge.
Even if Argentina defaults for the ninth time in its history, creditors say the issue could be cured quickly as the two sides work to restructure $65 billion in overseas bonds, Bloomberg News reported. Although an event of default will be hard to avoid for Argentina, there is willingness to resolve the negotiations, said Greylock Capital Management LLC’s Chief Executive Officer Hans Humes at an online event.
Resources by Country & Region
The EU adopted on 20 June 2019 the Directive (EU) 2019/1023 of the European Parliament and of the Council on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (hereafter the ‘Directive’).
Amendments of the Commercial Code by the “Loi Pacte” of 22 May 2019. With the adoption of the Law No. 2019-486 of May 22, 2019 (Action Plan for the growth and transformation of enterprises – “Loi Pacte”), some technical improvements should be mentioned.
Indeed, among several amendments introduced to the French commercial code, some provisions modify the current rules on insolvency. These changes are made before a major reform expected in the coming two years, as a consequence of the implementation of the Directive 2019/1023 of 20 June 2019.
On 5 July 2019, the Dutch Ministry of Justice submitted to Parliament a bill, the Act on the Confirmation of Private Plans, seeking to introduce a pre-insolvency procedure in the Netherlands, which one might refer to as the “Dutch scheme”. It is expected or hoped for that the bill will be adopted by Parliament this year and enter into force in January or July next year.
On 13 June 2019 the Parliament of Lithuania adopted the new Law on the Insolvency of Legal Entities (“Insolvency Law”). The law will come into force on 1 January 2020 and will replace two current laws, the Enterprise Bankruptcy Law and the Law on Restructuring of Enterprises.
Success and failure often stand close to one another. Companies that are still drawing up expansion plans today may already be in economic turmoil tomorrow. For insolvent foreign companies with a Slovak subsidiary, Slovakian company law offers some a surprise.
This updated edition describes the framework of the European Insolvency Regulation Recast (adopted in June 2017), reviews its major rules, highlights the differences from the old EIR 2000, and makes references to the most important and recent cases of the Court of Justice of the European Union. An essential guide for non-European judges, practitioners and scholars who are confronted with this domain of law, as well as anyone dealing with EU-related cross-border cases, this book serves as a concise and comprehensive introduction to the EIR Recast.
Chapter 15 for Foreign Debtors covers all aspects of the UNCITRAL Model Law on Cross-Border Insolvency as well as chapter 15 of the Bankruptcy Code, and provides details about the Foreign Representative, avoidance actions, creditor protections, concurrent proceedings, comity and much more. The book also includes an extensive appendix filled with more than 500 pages of sample case documents and forms related to chapter 15 proceedings.
This book is the latest addition to our list of publications and it provides basic information on Islamic finance. It is meant to be a useful reference tool to the majority of insolvency practitioners who do not work in this field. The chapters in this book were selected on the basis that it is expected that most INSOL members currently have very limited understanding of Islamic finance.
The book has 10 chapters, a country study, and an annexure with a glossary of Islamic finance terms. Following the introductory chapter there are chapters on: