Europe

The U.K. government is loosening its bankruptcy rules to allow struggling businesses to continue trading if they can’t pay their debts because of the impact of the coronavirus. In another sign of how the pandemic is forcing governments to upend policy, Business Secretary Alok Sharma said the changes would allow British companies being reorganized to access supplies and raw materials, and not be placed into administration by creditors. There will also be a clause that temporarily removes the threat of personal liability for company directors during the pandemic.

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Like millions of people around the world, Zhang Chunzi borrowed money she thought she’d be able to repay before the coronavirus changed everything, Bloomberg News reported. Now laid off from her job at an apparel exporter in Hangzhou -- one of China’s most prosperous cities -- the 23-year-old is missing payments on 12,000 yuan ($1,700) of debt from her credit card and an online lending platform operated by Jack Ma’s Ant Financial. “I’m late on all the bills and there’s no way I can pay my debt in full,” Zhang said.

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Alitalia’s administrator has asked Italy’s government to raise to nearly 7,000 the number of its employees under a temporary lay-off scheme, with most of its aircraft standing idle during the coronavirus outbreak, Reuters reported. The request for 2,900 more workers to join the scheme came on Thursday in a letter sent by the state-appointed administrator to unions and government ministries and seen by Reuters. Alitalia’s total workforce is around 11,600.

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Ukraine’s largest private power producer DTEK is suspending interest payings on Eurobonds and bank loans and will ask creditors to restructure some of its debt due to the economic crisis caused by the coronavirus pandemic, it said on Saturday, Reuters reported. Ukraine has reported 311 cases of coronavirus, including 8 deaths, and the government last week declared an emergency across the whole country for the next 30 days.

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A dramatic increase in defaults during the next year due to the coronavirus will create a big opportunity for distressed debt investors, according to the world’s biggest publicly listed hedge fund firm, Bloomberg News reported. Money managers at Man Group Plc are intrigued by what they say could be the largest global distressed credit cycle in a generation. It all happened in just a month as the public health crisis rippled through economies all over the world, prompting a sell-off in sovereign and corporate bonds.

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Covid – 19 hits the economy hard. Shops are closed, production is suspended in many companies. The concerns of entrepreneurs are great, many are afraid of bankruptcy in the corona crisis, the Bandera County Courier reported. The federal government wants to prevent the worst with loans and grants. But even if Federal Minister of Economics Peter Altmaier (CDU) promised quick help on Wednesday, it may take time for the money to reach the companies. Many companies would have to file for bankruptcy because they are no longer solvent – even though rescue is approaching.

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British pub chain JD Wetherspoon has suspended payments to its suppliers in the Republic until its pubs reopen after the coronavirus crisis, The Irish Times reported. The company confirmed to The Irish Times that, in line with its UK policy, it has sought a moratorium on payments until its outlets reopen. In an e-mail first reported by UK sustainability website Footprint, the company wrote: “We are asking for a moratorium on payments until the pubs reopen, at which point we intend to clear outstanding payments within a short timeframe.

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Aer Lingus is laying off more than 60 contract workers who argue they qualify for Government payments to businesses that keep staff in jobs during the coronavirus crisis, The Irish Times reported. The airline told staff last week that it was cutting pay by 50 per cent in an effort to see the company through the coronavirus pandemic that has grounded flights across Europe and the United States and brought its industry to a standstill.

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As lockdowns shutter stores and keep consumers cooped up at home, there will be many losers from the outbreak of the Covid-19 virus. But there will also be a few winners, Bloomberg News reported in a commentary. Casino Guichard Perrachon SA, the French supermarket operator that’s been a target for short-selling hedge funds, is emerging as a beneficiary, in line with other grocers seeing a frantic stockpiling of food on both sides of the Atlantic. While Casino’s complex financial structure has long been a source of consternation, there are some jewels in its highly leveraged crown.

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The U.K. government’s rescue plan for small and medium sized companies may be only three days old, but there’s growing concern it won’t be able to stave off a wave of bankruptcies in the world’s fifth-largest economy, Bloomberg News reported. On Wednesday, a chorus of voices ranging from lawmakers to small business trade groups said the Coronavirus Business Interruption Loan Scheme, or CBILS, is too reliant on commercial banks and their traditional underwriting methods to rapidly deliver cash to desperate companies.

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