Headlines

Grupo Aeromexico has wound up discussions with two labor unions but remains in talks with two more, it said yesterday in an update on negotiations that are a requirement for the airline to receive a second tranche of bankruptcy financing, Reuters reported. Aeromexico filed for chapter 11 protection in a U.S. court in June, after the coronavirus pandemic slammed the global travel industry. The carrier was approved for up to $1 billion in debtor-in-possession (DIP) financing, and received an initial $100 million payment in September.

India is set to swing from being a cautious spender in 2020 to opening the fiscal floodgates as Prime Minister Narendra Modi seeks to pull Asia’s third-biggest economy back from the worst of the pandemic, Bloomberg News reported. Curbs imposed by the finance ministry on more than 80 government departments and ministries earlier in the year to preserve cash were relaxed this quarter. In addition, this year’s budget will be increased from its current 30 trillion rupees ($407 billion) when new spending plans are announced Feb.

China’s top credit-rating firm was banned from rating new bonds for three months, after an investigation found it ignored red flags at a state-owned coal miner whose default last month rattled the country’s bond market, the Wall Street Journal reported. China Chengxin International Credit Rating Co. had an AAA rating on the miner when it failed to repay the equivalent of $153 million in short-term debt on Nov. 10. The default occurred just weeks after the company, Yongcheng Coal & Electricity Holding Group Co., raised the same amount from a sale of three-year-debt.

Mexico will likely approve a bill making the central bank the nation’s dollar buyer of last resort following changes that will ease concerns it could force the institution to take illicit funds, a top senator said, Bloomberg News reported. Lawmakers will hammer out details with central bank and finance ministry officials in January, clearing the way for the lower house to approve the proposal in February, Senator Alejandro Armenta said. If the bill is modified, the senate would have to hold a final vote before it becomes law.

Blažek, famous Czech brand for menswear, has filed for insolvency, PragueMorning.cz reported. The company registers more than 150 creditors for a total debt of almost 87 million CZK. As iHNED.cz reports, the company’s founder is considering the entry of a new investor. The company became insolvent from the forced closure of stores during the first and second waves of the epidemic. Like many retailers, Blažek was already struggling with the shift to online shopping even before the pandemic struck this spring.

Italy’s main banking and industry associations have urged European Union authorities to temporarily ease EU bank rules on loan defaults and credit provisioning to help businesses cope with the impact of the COVID-19 pandemic, Reuters reported. In a letter to the head of the European Commission, Ursula von der Leyen and other senior officials, the groups called for less stringent definitions to be applied to credit defaults to stop temporary liquidity problems forcing firms into bankruptcy.

A European Central Bank push to make it easier for the region’s chronically unprofitable banks to merge is facing opposition from some national regulators, with one top official warning it could backfire and damage the integration of the financial system, Bloomberg News reported. Proposals by ECB supervisory board chair Andrea Enria to give banks more freedom to source funds in one country and lend them in another could generate costs for taxpayers if lenders run into trouble after the money moves, said Tom Dechaene, a director at Belgium’s central bank.