Canada

Reitmans Canada Ltd on Tuesday obtained preliminary approval to seek bankruptcy protection under the Companies’ Creditors Arrangement Act, the latest retailer seeking to restructure its operations as the COVID-19 pandemic causes prolonged store closures, Reuters reported. Reitmans, which was founded in 1926 and retails fashion apparel through 576 stores across Canada and online, said it obtained the order from a Quebec court, leading to an operational, commercial and financial restructuring.

The Canadian government is in talks to hire Lazard as the financial adviser for its new loan program for large companies, according to a person familiar with the matter, Bloomberg News reported. The program, known as the Large Employer Emergency Financing Facility, will allow firms with at least C$300 million ($214 million) in annual revenue to apply for credit if they can’t get it from banks or other sources.

Canada unveiled a loan program for large firms that have been hit by Covid-19 and can’t get financing by conventional means. The Large Employer Emergency Financing Facility is for companies and non-profit organizations with annual revenue of C$300 million ($214 million) or more, Bloomberg News reported. Firms in all sectors can apply for the funding except the finance industry. Companies that receive money will have to accept limits on executive pay, dividends and share buybacks.

Canada’s privately held Aldo Group Inc said on Thursday it would restructure under the Companies’ Creditors Arrangement Act (CCAA) as the impact of the COVID-19 outbreak weighed on the footwear retailer’s business, Reuters reported. The announcement follows the high-profile bankruptcies of Neiman Marcus Group NMRCUS.UL and J. Crew Group Inc, as retailers around the world face unprecedented disruption and heavy debt piles brought on by the pandemic.

Shopify Inc. surged on Wednesday to become Canada’s most valuable company -- but can the e-commerce giant survive being No. 1? Ottawa-based Shopify edged past Royal Bank of Canada to become the largest publicly listed company in Canada, Bloomberg News reported. The achievement comes with a dubious distinction, however: those that leapfrogged the value of Canada’s largest bank in the past have faltered. Royal Bank, incorporated in 1869, has been Canada’s most valuable company for years, but has been been eclipsed on a few occasions.

RioCan Real Estate Investment Trust is freezing new and early stage projects to cut costs during the coronavirus pandemic as rent collection slid, Bloomberg News reported. The move will save one of Canada’s largest retail landlords C$100 million to C$150 million ($71 million to $107 million) in development spending in 2020, RioCan said in its first quarter report Tuesday. The Toronto-based REIT said in a separate investor presentation that it collected 55% of its rent in the first quarter. The company expects 28% to still be received and has agreed to deferrals for 17% of its tenants.

The German company that built three Coastal-class vessels for B.C. Ferries more than a decade ago is insolvent, Business in Vancouver reported. A B.C. Ferries official said Friday that the organization has no relationship with the Flensburger Schiffbau-Gesellschaft shipyard anymore, since the warranty period for the ships was two years. “We don’t have any service or maintenance relationship with them,” B.C. Ferries spokeswoman Deborah Marshall said Friday.

Canada’s malls are facing a wave of skipped rents and could see vacancy rates triple by year-end, with the coronavirus poised to leave its scars on a fragile retail sector long after the pandemic ends. In the country’s enclosed regional malls -- a category that includes Toronto’s Eaton Centre and Pacific Centre in Vancouver -- only 20% to 25% of tenants paid rent in April, according to brokerage firm JLL Canada, Bloomberg News reported. Big box shopping centers and community strip malls took in only a little over half their expected rent.

Canada’s stellar credit rating is being put to the test as the oil crash and recession expose the country’s weak link: its provinces, Bloomberg News reported. Among the Group of Seven countries, only Germany and Canada have AAA ratings from S&P Global Ratings. But as pressure rises on the government of Justin Trudeau to aid provinces and key industries, Canada’s fiscal position is looking shakier. Going into the Covid-19 crisis, Canada’s provincial governments had C$853 billion ($602 billion) of debt securities outstanding, more than the national government.

Canadian companies are chopping costs, suspending dividends, and cutting CEO salaries to stave off loan defaults amid the coronavirus, Bloomberg News reported. But there hasn’t yet been a jump in formal bankruptcy filings, according to one of the country’s top restructuring lawyers. Instead, the emerging pain for big and small companies is spelling booming business for out-of-court proceedings, said Luc Morin, a Montreal-based insolvency and corporate restructuring partner at Norton Rose Fulbright.