South African state airline SA Express escaped liquidation on Tuesday after a judge granted a three-month delay in liquidation proceedings, giving the government more time to clarify its plans for the domestic and regional carrier, Reuters reported. SA Express, a different business to national flag carrier South African Airways (SAA), was placed under provisional liquidation in April after its administrators said they could not secure funding for turnaround efforts.
Resources Per Country
The head of the International Monetary Fund called on private creditors to join the Group of 20 in providing debt relief for the world’s poorest nations, saying that the alternative to suspension and restructuring is defaults, Bloomberg News reported. A debt-service suspension would provide time for restructuring debt on a case-by-case basis in countries where debt sustainability needs to be restored, Managing Director Kristalina Georgieva said in a webcast with the U.S. Chamber of Commerce Tuesday.
Uganda’s central bank cut its benchmark interest rate for a second time this year to a new low as risks to inflation remain benign and the outlook for economic growth is tilted toward the downside, Bloomberg News reported. The monetary policy committee reduced the rate to 7% from 8%, Governor Emmanuel Tumusiime-Mutebile said Monday in a speech broadcast online. That is the lowest level since the central bank introduced the policy rate in 2011 at 13%. Returning to pre-pandemic levels of economic activity will be gradual, partly due to weak external demand, Tumusiime-Mutebile said.
Creditors of South African Airways (SAA) on Monday approved another delay in the publication of a rescue plan after the cash-strapped airline’s administrators requested an extension because of an objection by trade unions, Reuters reported. The rescue plan for SAA, which has not made a profit since 2011, was due to be published on Monday. It has been repeatedly pushed back amid fierce wrangling over the airline’s future.
Switzerland has opened a probe related to $2 billion of loans to Mozambique that were organized by banks including Credit Suisse Group AG and VTB Bank PJSC, in a scandal that has already attracted the attention of prosecutors in the U.S, Bloomberg News reported. The criminal probe started in February against “persons unknown” on suspicion of money laundering in connection with the credit, the Office of the Attorney General said on Friday. The target of the proceedings is not any specific person or entity, the office said.
South Africa’s Comair , which is under bankruptcy protection, intends to halve its fleet of aircraft as part of efforts to rescue the company, its administrators said on Friday, Reuters reported. Comair, which operates the local British Airways franchise and budget airline kulula.com, filed for business rescue, a South African form of bankruptcy protection, last month after restrictions aimed at curbing the spread of the coronavirus forced airlines to stop flying.
With an external debt burden approaching $50 billion, a plea from Angola to reschedule its repayments is a stark reminder that some African economies were in deep trouble even before the coronavirus outbreak, Bloomberg News reported. Details are sparse. President Joao Lourenco said on May 30 sub-Saharan Africa’s fourth-biggest economy had started talks to renegotiate its debt, without specifying which loans or Eurobonds are affected. The finance ministry has since announced plans to “re-profile” borrowings from nations that buy its oil.
South African farmers are increasingly turning to commercial lenders to top up their working capital as the Land and Agricultural Development Bank battles a liquidity crisis, Bloomberg News reported. The Land Bank, which supplies about 30% of loans in the agricultural industry, missed a loan repayment in April that triggered a cross-default provision in some of its bonds. As the state-owned lender works with its funders and National Treasury to restore its financial affairs, farmers are looking elsewhere.
A privately owned power transmission company accused the Zambian government of taking steps to expropriate its assets, as a dispute over supplies to a key mine in Africa’s second-biggest copper producer escalated, Bloomberg News reported. The feud is centered around electricity provision to Konkola Copper Mines, the Vedanta Resources Ltd. unit that the government placed under liquidation a year ago, and which has a $144 million unpaid power bill.
As China tightens its belt economically in response to the coronavirus, African leaders are anxious about the future of infrastructure projects, trade and, in some cases, are requesting debt relief, VOA reported. China is Africa’s largest trading partner with over $200 billion in combined imports and exports annually.