Europe’s top banking supervisor is writing to the region’s biggest lenders to warn that many of them are failing to do enough to prepare for a likely increase in bad loans due to the fallout from the coronavirus pandemic, the Financial Times reported. Andrea Enria, president of the European Central Bank’s supervisory board, said the shortfalls in banks’ preparations for a likely rise in bad loans was one factor to be considered in its decision on whether to allow them to resume dividend payments and share buybacks.
The shares of Chinese property developers have been a short seller’s nightmare for more than a decade. Nothing seemed able to dent the rally. That has now begun to change, the Financial Times reported in a commentary. Superficially, October was good for Chinese real estate. A rebound in activity pushed new home sales by floor area to their highest levels in recent months. Investment rose 13 per cent while property sales jumped 15 per cent. New construction starts grew 3.5 per cent, compared with a decline in the previous month.
Negotiations between the International Monetary Fund and Argentina over a new IMF loan program are “very fluid and constructive,” with Argentine officials expected to come to Washington in the coming days for more talks, IMF spokesman Gerry Rice said on Thursday, Reuters reported. Rice told a regular news briefing that a recent IMF staff mission to Buenos Aires, made “good progress” in defining the initial elements of Argentina’s economic reform plans.
The South African government has transferred 1.5 billion rand ($98 million) to administrators for national airline South African Airways (SAA) but the funds cannot be used yet, the administrators said on Thursday, Reuters reported. The administrators said the conditions the Department of Public Enterprises (DPE) attached to how the money should be spent were in contravention of labour and companies laws. “We are unable to utilise the funds until the conditions have been amended by the DPE,” they added in a statement. A DPE spokesman said the department would comment later.
Norwegian Air proposed on Thursday to convert debt to equity, offload planes and sell new shares in an attempt to survive the COVID-19 pandemic, which has brought the company to its knees, Reuters reported. As part of the plan, the Oslo-based carrier, which recently applied for bankruptcy protection in an Irish court, aims to raise up to 4 billion Norwegian crowns ($455.4 million) from the sale of new shares or hybrid instruments, it said.
AirAsia X Bhd expects the outcome of its ongoing scheme of arrangement under its debt restructuring exercise to inject fresh equity will only be known by the end of June next year, The Edge Markets reported. The long-haul budget airline said this when announcing to Bursa Malaysia today that it was changing its financial year-end to June 30, 2021, from Dec 31, 2020. AirAsia X said the outcome would not be known by this month so the basis of preparation of its audited financial statements and audit opinion (AFS) was uncertain and the AFS would be of limited value to shareholders.
Chinese industrial activity has snapped back to pre-coronavirus growth levels, with factory surveys hitting multi-year highs in November, but the headline expansion masks struggles for smaller firms and looming pressures for exporters, Reuters reported. Readings from the official and Caixin’s Purchasing Managers Indexes hit three- and 10-year highs respectively last month, a reflection of the industrial sector’s strong overall recovery. Official data also shows industrial profits for large firms grew at their fastest pace since 2017 in October.
Tina Green, the ultimate owner of the failed retail group Arcadia, will pay a final £50m promised to its pension fund within days as the political outcry over the collapse of the company intensifies, the Financial Times reported. Lady Green, who is the wife of retail tycoon Philip Green, was set to make the payment in September 2021 as part of an agreement struck with The Pensions Regulator and the trustees last year. However, in a statement on Wednesday, she said the payment would be made within the next 10 days, completing the £100m commitment made at the time.
South Africa’s National Treasury and the state-owned Land and Agricultural Development Bank are being accused of dragging their heels in negotiating a rescue package for the stricken lender, leaving creditors in the dark as debt repayments loom, Bloomberg News reported. Asset managers and other lenders are yet to receive a response to their queries about financial covenants and the mechanism of a new bond program that will be 60% backed by the government, according to the country’s biggest specialist fixed-income money manager.
Prezzo, the Italian restaurant group, is being sold to real estate company Cain International, the latest in a series of casual dining chains to change ownership as the pandemic piles more pressure on an industry struggling with high debt and too much competition, the Financial Times reported. Cain, a privately held, London-based group that has invested more than $5.9bn in real estate debt and equity since it was founded in 2014, will buy the company as a going concern, it said in a statement on Wednesday.
Resources by Country & Region
Adjusting a pre-insolvency scheme to respond to the COVID-19 crisis by Nuno Líbano Monteiro and Catarina Guedes de Carvalho
According to the OECD, Portugal is in the top three countries in terms of implementing new measures to face this COVID-19 pandemic. However, regarding the legal framework of insolvency and restructuring, the only direct, exceptional and temporary measure approved by the Portuguese authorities was to suspend the time limit for the debtor itself to petition for insolvency, with effect from 7 April 2020. No pre-insolvency exceptional measures have been adopted.
The Directive (EU) 2019/1023 on preventive restructuring frameworks ("the Directive") was passed on 20 June 2019 bringing about a change of paradigm in corporate restructuring. A change that should allow the States of the European Union to catch up with countries adhering to the Anglo-Saxon model, both in restructuring and insolvency matters and also upstream, in financial matters, due to the influence of the insolvency legislation on the provision of credit ex-ante.
Was court-life across Europe prepared for the COVID-19 crisis? by José CARLES, Laurent Le PAJOLEC and David ORSULA (Co-chairs of the Insolvency Tech & Digital Assets Wing)
COVID-19 and the correspondent lockdown measures have affected our lives in many ways. From a legal perspective, it has proven that jurisdictions that were already adapted to technology have provided a better response in the administration of justice.
In January 2020, the world woke up facing a phenomenon that some had predicted but few wanted to hear about or were prepared for: a global pandemic, now commonly called the COVID-19 crisis. Immediately, many economists were convinced that the world was heading for a stock market crash and an economic crisis. They were right. The stock market sank, and all countries that imposed strict lockdown measures face a significant contraction in their GDP.
The past experience with the European Insolvency Regulation (2000) has shown that even if all the courts in the Member States are only bound by decisions delivered at the EU level by the CJEU, all interested parties involved in an insolvency case (namely courts, insolvency practitioners, chartered accountants, lawyers and even debtors themselves in certain cases) may find it of great interest to look at the decisions made by other courts in other Member States for guidance.
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: