Europe

British Steel’s Chinese bidder has written to the French government in an effort to save its stalling takeover of the collapsed UK manufacturer, the Financial Times reported. With the clock ticking down on a deadline for the deal to be completed, Chinese conglomerate Jingye has sent a letter to the French finance ministry to persuade Paris of the plan’s merits, said people with knowledge of the matter. UK officials agreed a £50m rescue deal with Jingye in November. Under the agreement, Jingye would take control of the group’s plants in Britain, France and the Netherlands.

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Europe’s syndicated debt market has become so cheap for leveraged companies that it’s winning back ground lost to alternative lenders in recent years, Bloomberg News reported. Junk-rated firms have obtained ultra-low pricing in debt sales this year amid fierce demand from yield-hungry investors. This is encouraging companies that had opted for private lenders in the past to switch to the public debt market. Chemicals firm Polynt-Reichhold this week turned to the loan market to raise more than 500 million euros ($540 million), after tapping Blackstone Inc.’s credit arm GSO in 2016.

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Climate change is creating substantial, unrecognised risk in the financial system as banks are failing to prepare for green regulation and carbon taxes that will have an impact on the companies they lend to, the Financial Times reported. According to a recent analysis by the consultancy Oliver Wyman, oil and gas companies — many of which are already under pressure from low fuel prices — will be two to three times more likely to default on their debt if the countries signed up to the Paris climate accord institute a $50 a tonne carbon tax.

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A group of UBI Banca investors holding 18% of the Italian bank’s share capital on Monday dismissed Intesa Sanpaolo’s takeover offer as unacceptable, casting doubt on a bid to create an Italian banking champion, Reuters reported. The CAR shareholder pact said that the 4.9 billion euro ($5.3 billion) offer, the biggest banking deal in Europe in a decade, was “hostile, unsolicited and not consistent with UBI Banca’s underlying values”.

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The head of Monte dei Paschi di Siena Marco Morelli will leave in April after steering the state-owned Italian bank through a painful restructuring, adding to uncertainty as Italy’s Treasury prepares its exit strategy, Reuters reported. Morelli’s departure, announced by the bank late on Thursday, adds to the question marks hanging over the world’s oldest bank, which was taken over by the Italian government in 2017 in an 8 billion euro ($8.6 billion) bailout to stop it from buckling under a pile of bad loans after years of mismanagement.

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Telefónica posted a net loss for the fourth quarter, as restructuring costs and impairments from Mexico and Argentina underscored the challenges the company faces as its overhauls its business and reorients its strategy in Latin America, the Financial Times reported. The Spanish telecoms company said that revenues during the quarter dipped 4 per cent to €12.4bn, slightly beating the €12.38bn expected by analysts polled by Bloomberg. The fourth quarter net loss of €202m fell short of analyst expectations of a €715.7m net profit.

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India’s shadow banking crisis and revitalized bankruptcy process are creating new opportunities for Deutsche Bank AG as it steps up lending to cash-strapped tycoons and for purchases of distressed assets, Bloomberg News reported. The German lender is seeing three times the volume of financing deals compared with 2018, when the shadow banking problems erupted, according to Rahul Chawla, the head of global credit trading at Deutsche Bank’s India unit.

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Intesa Sanpaolo, Italy’s biggest domestic lender, has launched a €4.86bn ($5.26bn) takeover bid for its rival UBI Banca in an audacious attempt to kick-start consolidation in Italy's fragmented banking sector, the Financial Times reported. Just before midnight on Monday local time, Intesa, based in Turin, unveiled an all-share offer to buy Italy’s fourth-biggest lender through notices detailing its plans to issue new shares to fund the deal. If successful, the combination would create the seventh-largest bank in the eurozone with €1.1tn in assets.

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HSBC has said it plans to slash about 35,000 jobs as part of a radical downsizing of its operations in Europe and the US, as it warned of the threat to its business from social unrest in Hong Kong and the coronavirus outbreak, the Financial Times reported. The London-based bank said it aimed to cut annual costs by $4.5bn and shed $100bn of assets adjusted for risk by the end of 2022 as it attempts its most drastic overhaul since the financial crisis in an attempt to kick-start its stuttering business. The bank did not publish a headcount reduction target but in an interview wi

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Investor sentiment in Germany dropped sharply in February as the effects of the coronavirus outbreak weighed on exporters, a survey revealed, adding to an increasingly gloomy picture for Europe’s biggest economy, the Financial Times reported. The Zew survey of financial market experts found that sentiment about the outlook for the German economy fell 18 points this month to a reading of 8.7. This is well below January’s score of 26.7 and significantly worse than the 21.5 economists in a Reuters poll had been expecting.

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