Nyrstar NV, one of the world’s largest zinc smelting companies, is collapsing under the weight of its own debt, Bloomberg News reported. The shares plumbed fresh lows on Tuesday and the price of its bonds due next year is now 50 cents on the euro. Analysts say the company is headed for an inevitable restructuring, and the shares will soon be worthless. Here are five charts that explain how this powerhouse producer was pushed to the brink. When it listed in Brussels in 2007, Nyrstar made its money buying zinc ore from mines and smelting the raw material into a refined metal.
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Shares in Europe’s biggest zinc smelting company Nyrstar crashed to a record low on Monday after ABN Amro said they were virtually worthless and advised clients to “abandon ship,” the Financial Times reported. “Given Nyrstar’s liquidity position and the company’s large debt and interest burden, we believe a debt restructuring process is inevitable,” said ABN analyst Philip Ngotho in a report, reiterating his sell rating and setting a 1 cent target price, down from €1.
Brussels has been “overly generous” to Italy’s government, allowing it to flout the EU’s budget rules last year, the head of an independent watchdog has said, fuelling criticism of the European Commission’s policing of the bloc’s public finances, the Financial Times reported. Niels Thygesen, the chair of the European Fiscal Board, told the Financial Times the European Commission had gone “beyond” the necessary flexibility allowed to Italy during the country’s budget negotiations with Brussels in 2017.
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Brussels is pressing for sovereign debt from across the eurozone to be bundled into a new financial instrument and sold to investors as part of a proposal to strengthen the single currency area, the Financial Times reported. A European Commission paper on the future of the euro, seen by the Financial Times, advocates the launching of a market of “sovereign bond-backed securities” — packaging different countries’ national debt into a new asset.
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Brussels has warned Italy to cut its record public debt by April to avoid breaching EU budget rules, the Financial Times reported. The European Commission said on Wednesday that Italy’s debt represented “a major source of vulnerability” as it urged Rome to meet its commitments to adopt pension reforms and other “structural measures” worth 0.2 per cent of gross domestic product. Valdis Dombrovskis, vice-president of the commission in charge of eurozone issues, said “as of today there would be a case to open an excessive deficit procedure for Italy”.
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Belgian financial services group KBC has cut its forecast for loan-loss provisions in Ireland and announced a €39.5 million second-quarter net profit for its Irish arm, the Ifish Times reported. KBC Bank Ireland, which has €14 billion of Irish loans still outstanding, slashed its full-year Irish loan-loss provisions to a range of zero to €40 million, from a previous guidance of between €50 million to €100 million. The bank said first-half profits reached €73.7 million.
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A Belgian magistrate judge is investigating whether the Swiss bank UBS engaged in fraud, money laundering and other crimes in an effort to help wealthy individuals avoid taxes, the Brussels prosecutor’s office said on Friday, the International New York Times DealBook blog reported. UBS is suspected of having directly approached Belgian customers, without going through its Belgian subsidiary, to encourage clients to engage in transactions meant to evade taxes. UBS acknowledged the inquiry, but it said little more.
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Athens has “annoyed” and “frustrated” its eurozone partners with combative negotiating tactics, said Belgium’s finance minister, who warned Greece that the single currency could safely ride out its exit, the Financial Times reported. Johan Van Overtveldt, an economist who took charge of the finance ministry in the eurozone’s sixth-largest economy in October, said the currency bloc had sufficient safeguards in place to endure a Greek departure, adding he believed other ministers shared this view.
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The Swiss private banking arm of HSBC has been charged by Belgian authorities with assisting wealthy individuals to avoid paying taxes on several billion dollars in assets, the International New York Times DealBook blog reported. A Belgian investigating magistrate judge has charged the unit, HSBC Private Bank (Suisse), with serious and organized tax fraud, money laundering and unlawful exercise of the profession of financial intermediary, according to a statement by the Brussels prosecutor’s office. The activity under scrutiny occurred from 2003 to the present, prosecutors said.
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