Europe

German engine block and cylinder head maker Weber Automotive has filed for insolvency, following a spat between its family owners and French private equity group Ardian about the right restructuring strategy, Reuters reported. Finances have deteriorated despite solid orders, Weber Automotive said in a statement on Monday as it announced the filing, adding that the owners lacked unity about future financing of the maker of drivetrain components.

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UK business secretary Greg Clark has travelled to India and China over the past two weeks to meet companies viewed as potential bidders for British Steel, as efforts intensify to rescue the ailing business and save thousands of jobs, the Financial Times reported. In the past few days, the cabinet minister met JSW, one of India’s largest steel manufacturers, according to two people briefed on the matter, and other businesses. This followed a trip last week to China, whose Baowu has been linked with a move for British Steel.

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A key gauge of the health of Germany’s manufacturing industry sank by far more than expected in May, adding to concerns about the health of the global economy ahead of the release of key US economic data. A steep drop-off in foreign demand is hitting factories across the eurozone and raising expectations that the European Central Bank will revive its crisis-era stimulus, the Financial Times reported. Manufacturing orders in Germany dropped 2.2 per cent month-on-month in May, and were down 8.6 per cent from the same month in 2018.

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Ratings agency DBRS believes there is a low risk that the borrowers of the €290 million worth of mortgages being sold by lender Finance Ireland will default, The Irish Times reported. Finance Ireland said this week that it intends offering almost 1,400 home loans on which the borrowers owe €290 million for sale in bonds known as residential-mortgage-backed securities. DBRS Ratings, which assesses businesses’ ability to pay their debts, has given the Finance Ireland bonds ratings of between BB and AAA, meaning that it believes there is a low risk of the borrowers defaulting.

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Mining company Power Resources Group (PRG) said on Friday it was buying Metalysis, a British high-tech specialist which was backed by asset manager Neil Woodford, out of administration, Reuters reported. Metalysis, which manufactures 3D printing powder, fell into administration in June, around the same time Woodford’s equity income fund, was frozen. His fund had a 1.6 million pound stake in Metalysis, which has received a total of 92 million pounds ($115 million) through numerous funding rounds, most recently in 2018.

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Germany’s benchmark Bund yield touched a fresh record low on Thursday, as fears about a global economic slowdown and the prospect of renewed eurozone economic stimulus drew investors into government bonds, the Financial Times reported. Demand for the debt sent its yield down to as low as minus 0.403 per cent, taking it deeper into negative territory, meaning any investor holding the paper until maturity faces a loss.

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As Eurozone retail sales saw an unexpected contraction on the month in May this helped to limit the downside pressure on the Pound Sterling to Euro (GBP/EUR) exchange rate, Euro Exchange Rate News reported. Although the previous month’s reading saw a positive revision investors were still disappointed to find that sales had slowed, suggesting a weaker level of consumer confidence. Given the current weakness of the Eurozone manufacturing sector this slowdown in retail sales raised concerns that the service sector could also falter in the months ahead.

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Spain’s arduous economic recovery has reached a milestone after the number of people employed finally surpassed pre-crisis levels, the Financial Times reported. But while the figure of 19.52m with jobs, announced by the labour ministry on Tuesday, represents a new peak and the highest since 2007, other statistics present a bleaker picture of the negative effects of a decade of turmoil and its effects on millions of workers. Despite the rising job numbers, Spain still has an unemployment rate of 13.6 per cent, according to EU statistics, the worst in the 28-country bloc after Greece.

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Countries that perform well on environmental, social and governance metrics are viewed by investors as less likely to default, a new study that examined credit default swap spreads on sovereign bonds has found, the Financial Times reported. In an analysis of 59 countries between 2009 and 2018, Hermes Investment Management found that countries with the best ESG scores tend to have the lowest CDS spreads and vice versa, suggesting a link between credit risk and ESG performance.

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