Headlines

Insolvency experts expect to be hit by a wave of company collapses from January 1 after temporary relief measures to help businesses through the COVID-19 economic crisis expire, The Australian Financial Review reported. Practitioners in the area have spent the quieter-than-normal period working on existing insolvency matters, catching up on training and helping out in other service lines, according to leaders at three firms in The Australian Financial Review Top 100 Accounting Firms list.

Investors in Ethiopia’s Eurobonds are losing out on the rally in emerging-market debt. The country’s 2024 dollar securities dropped for a fourth day on Monday as conflict in the northern Tigray region continued, Bloomberg News reported. Clashes between government soldiers and fighters loyal to the region’s ruling party stoked fears of a broader civil war at a time when the government is struggling to end ethnic violence shaking Africa’s second-most populous country.

Mexican carrier Grupo Aeromexico will continue to reactivate travel destinations throughout next year, an executive told Reuters on Monday, adding that there is still much uncertainty stemming from the coronavirus pandemic, Reuters reported. The country’s largest carrier filed for Chapter 11 bankruptcy protection in a U.S. court earlier this year and has since tried to shore up its finances.

Pandemic-hit Norwegian Air faces a battle for survival this winter, it said on Monday after the country's government declared that it will not provide additional financial support for the cash-strapped carrier, Reuters reported. Norwegian Air, which has been hit hard by the coronavirus crisis and has grounded most of its fleet, said in August that it would run out of cash in the first quarter of 2021 unless it could secure fresh funds and has held talks with the government in the hope of winning support.

Britain’s Countrywide Plc has been approached by real estate management firm Connells Ltd about a possible buyout that would value the real estate agent at around 82 million pounds ($108 million), Reuters reported. Countrywide, which vies for market share with Foxtons, has been trying to recover from a botched 2015 restructuring that led to four profit warnings and a deeply discounted share issue. Shares in the debt-laden company jumped 45% on Monday after it disclosed Connells’ potential offer of 250 pence a share, and were at 210 pence by 1000 GMT.

Debt-laden China Evergrande Group said it has decided to terminate a reorganisation plan with Shenzhen Special Economic Zone Real Estate & Properties Group Co Ltd, ending a long-awaited backdoor listing plan in Shenzhen, Reuters reported. Market concern has mounted in recent weeks that Evergrande - whose borrowings totalled 835.5 billion yuan ($123.93 billion) at end-June - was headed for a cash crunch if it could not get Chinese approval for the listing plan that has languished for four years.

Argentina will seek an Extended Fund Facility (EFF) from the International Monetary Fund (IMF) to replace a failed $57 billion facility, Economy Minister Guzman said on Monday, potentially buying the South American country more time to make repayments, Reuters reported. The EFF is a longer-term program that typically requires more economic reforms than a standby agreement. Argentina would expect to repay the IMF between four and a half years and 10 years after the start of the agreement, Guzman said, adding that he aimed to secure a new deal by April.

Zambia is doing everything possible to avoid a sovereign debt default later this week, including sharing information on its Chinese debt with holders of its dollar-denominated bonds, its finance minister told Reuters on Monday, Reuters reported. Sources close to the main committee of bondholders, however, said little progress had been made in debt talks. Even before the coronavirus pandemic caused a global economic slowdown, Zambia was struggling with mounting debt due to low prices for copper, its main export.

With the economic malaise caused by the pandemic more than likely to persist over the next few years, there is a higher possibility businesses will be stricken with a high-pitch fever, gradually turning them into zombie companies, the Bangkok Post reported. The term originated in Japan to describe companies that were only generating enough cash to pay interest on their debts, also meaning an uncompetitive company that needs a bailout to successfully operate. These companies do not earn enough to reduce the principal amount of their debt.

Recent debt restructuring cases underscore Singapore's position as a regional insolvency hub, with the latest being a note holders' go-ahead last week for a Jakarta-based conglomerate's scheme to restructure US$231 million (S$311 million) of secured notes due next year, The Straits Times reported. The note holders, who are a class of creditors of PT MNC Investama holding at least 75 per cent value of the claims, voted last Thursday (Nov 5) in favour of the "pre-packaged" scheme of arrangement.