French Finance Minister Bruno Le Maire said on Wednesday he would make proposals to restructure the debts of companies struggling with loans taken on during the coronavirus crisis, Reuters reported. Many French companies are emerging from the pandemic with severely strained balance sheets after they borrowed massively under a state-guaranteed loan programme designed to help them through the crisis. While the programme helped depress bankruptcies last year to record low levels, economists expect a surge in filings as various state support schemes are wound down.
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A significant part of the French aluminum businesses belonging to embattled British metals mogul Sanjeev Gupta has sought protection from creditors, the company said on Sunday, Bloomberg News reported. Alvance Aluminium Group entered voluntarily into “conciliation proceedings” supervised by a court-appointed agent for its three downstream businesses, its spokesman said in a statement. The mediator will try to stave off insolvency by working out arrangements between the French units and their creditor, a process that could last as long as 10 months.
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Air France on Tuesday said it would receive a new bailout from the French government worth 4 billion euros ($4.7 billion) to help the beleaguered airline cope with mounting debts as a third wave of pandemic lockdowns around Europe prolong a slump in continental air travel, the New York Times reported. The support comes on top of €10.4 billion ($12.3 billion) in loans and guarantees that Air France and its partner, the Netherlands-based KLM, received from the French and Dutch governments last year.
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France’s economy will rebound less than previously expected this year due to the latest four-week nationwide lockdown aimed at halting a surge in coronavirus cases, Bloomberg News reported. French Finance Minister Bruno Le Maire cut the country’s 2021 GDP growth forecast to 5% from 6%, following an 8.1% contraction last year. A Bloomberg survey in March showed economists were expecting the economy to expand 5.7%.
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The French government and the European Commission have reached an agreement in principle on fresh financial support for Air France, which has been hurt by a drop in air travel since the start of the pandemic, Finance Minister Bruno Le Maire said on Sunday, Bloomberg News reported. “It’s very good news for Air France, it’s very good news for the whole French aviation sector,” Le Maire said in an interview on LCI television. “It was a long and difficult negotiation, but I think we’ve reached a good agreement” with EU Competition Commissioner Margrethe Vestager.
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France and Italy are set to extend virus restrictions as Europe struggles to contain a sharp increase in infections due to new variants, Bloomberg News reported. The resurgence in the outbreak is a setback for governments, whose plans to get life back to normal and revive their economies have already been stymied by a slow vaccine rollout across the European Union. The French virus spike has been particularly bad, and Germany and Spain last week imposed border restrictions to travelers coming from the country. French President Emmanuel Macron is due to address the nation at 8 p.m.
The fall in French corporate insolvencies during the coronavirus pandemic reflects extensive government support that has masked disparate performances among SMEs, as has the stability of corporates’ aggregate net debt, according to a Fitch Ratings report. Fitch expects arrears and defaults among SMEs to increase as support is withdrawn and this is reflected in the firm's French SME CLO performance expectations, which already incorporate pandemic-related stresses.
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France amassed its biggest-ever green bond orderbook in its second sale of new debt, extending a pole position in the market to finance environmental projects, Bloomberg News reported. The nation raised 7 billion euros ($8.3 billion) from the securities maturing in 2044. Investors bid over 34.5 billion euros, about 50% more than for its first such offering in 2017, reflecting the surge in appetite for assets aimed at mitigating climate change. That still lagged the records set in Italy’s recent debut deal.
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Greensill Capital’s talks to sell parts of its operating business to Athene Holding Ltd. have stalled, Bloomberg News reported. The deal talks between Athene, an annuity seller backed by Apollo Global Management Inc., and Greensill have been held up by a breakdown in discussions with key technology supplier Taulia Inc. Greensill Capital filed for administration in the U.K. on Monday, and Athene emerged as the only credible potential buyer after the supply-chain finance company’s swift collapse.
France finally unveiled its long-awaited plan for using state aid to prevent a wave of bankruptcies in the nation after the pandemic, hailing it as a model for the rest of Europe, Bloomberg News reported. The innovative program, which has now been approved by the European Union, will combine private and public money to provide as much as 20 billion euros ($24 billion) to strengthen the finances of small and medium-sized companies. The so-called participative loans adopt some of the advantages of equity and debt and are a central plank of President Emmanuel Macron’s stimulus.
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