Headlines

Shares in AirAsia’s long-haul unit skidded after the Malaysian carrier launched a last-ditch plan to save the business, blaming “severe liquidity constraints” caused by the coronavirus pandemic, the Financial Times reported. AirAsia X’s Kuala Lumpur-traded stock fell 10 per cent on Wednesday a day after the company warned of “an imminent default of contractual commitments [that] will precipitate a potential liquidation of the airline”. The proposed restructuring comes as the future of AirAsia, owned by Malaysian tycoon Tony Fernandes, hangs in the balance.

EasyJet’s losses soared to more than £800m this year, sending the low-cost airline into the red for the first time in its 25-year history, as the coronavirus pandemic continues to threaten the future of companies across the global travel industry, the Financial Times reported. In a sign of increasing desperation for airlines, easyJet chief executive Johan Lundgren urged the British government to prop up the sector further as the company slashes winter flight schedules because of plunging passenger demand.

Germany has presented plans to strengthen financial regulator BaFin’s powers and tighten accounting rules, one day before the start of a parliamentary probe into one of the country’s biggest corporate failures, Bloomberg News reported. The collapse of Wirecard AG this year exposed significant cracks in Germany’s financial oversight, as authorities failed to catch accounting issues at the digital-payments company despite ample warning. Slow decision-making and fragmented responsibilities appeared to allow the problems to go undetected.

As 2020 dawned, bankers throughout Europe were still digging out of the last crisis, with weak lenders in Greece and Italy peddling soured loans and policy makers channeling public funds to frail institutions, Bloomberg News reported. Now, as Covid-19 wreaks havoc, a gathering tsunami of distressed credit risks wrecking a decade of efforts aimed at bolstering the fragile financial industry. The fallout could also undermine the extraordinary efforts by governments and central banks to prevent an economic meltdown.

China Evergrande Group shares fell after the embattled developer completed about 71% of its sales target in the two months through October, offering its steepest discount in history that could squeeze margins, Bloomberg News reported. The shares fell as much as 2.7% after it said contracted sales were 142 billion yuan ($21 billion) between Sept. 1 and Oct. 8, according to an exchange filing Friday. It generated 173 billion yuan for the two months through October last year.

Just over six years ago, Dubai-listed Arabtec Holding had investors eating out of its hands. At a lavish shareholder meeting at Abu Dhabi’s St. Regis Hotel, the contractor that helped build the world’s tallest skyscraper, Dubai’s Burj Khalifa, outlined plans for listings in London, Hong Kong and New York, Reuters reported. Those plans never materialised.

The parent of Malaysia Airlines has warned leasing companies that state fund Khazanah will stop funding the group and force it into a winding down process if restructuring talks with lessors are unsuccessful, according to a letter seen by Reuters. The warning from Malaysia Aviation Group (MAG), the holding company for the state carrier, raises the stakes in negotiations for a financial shake-up known as “Plan A” and sets out an alternative plan to divert funds to a sister airline unit called Firefly, Reuters reported.

Countries could face years of negotiations to rework their debt with China as a growing number of loans run into trouble following decades of aggressive lending by the world’s largest official creditor, Bloomberg News reported. Chinese lenders at times lack coordination and don’t follow standard relief terms to renegotiate debt, adding uncertainty to the outcome of talks to overhaul $28 billion in loans in a number of countries, according to research by Rhodium Group, a New York-based economic and policy consultancy.

Measures taken by Transocean Ltd. to stave off a bankruptcy filing could be exactly what ends up sending the offshore drilling company into Chapter 11 alongside some of its biggest peers, Bloomberg News reported. The world’s largest owner of deep-water oil rigs recently engineered a bond swap to trim some of its $9 billion debt load and ease the crunch caused by slumping energy prices. But other creditors, led by Whitebox Advisors LLC and Pacific Investment Management Co., say the transaction amounts to a default because it pledges assets that Transocean already promised to them.

The UK’s economic recovery faltered in September due to the Eat Out to Help Out scheme ending and the renewal of lockdown restrictions, Business Sale Report reported. Business profits remained unchanged from a month earlier, down 21 per cent, while businesses on average reported that profits were down 42 per cent on what they would normally expect for the month of September. According to the Opinium-Cebr Business Distress Tracker, 35 per cent of businesses said that trading conditions were good at the end of September, down from 39 per cent a month earlier.