Headlines

UK sandwich chain Pret A Manger has said it will cut 2,890 jobs, or almost a third of its workforce, as it reshapes its business after a steep drop in demand for its takeaway food in the pandemic, the Financial Times reported. The company, owned by the Luxembourg-based consumer goods group JAB Holdings, said on Thursday that its UK staff numbers would fall to 6,000 after sales dropped to the levels of a decade ago, “when the business was considerably smaller”.

South African state defence firm Denel is not planning to seek new government equity injections despite a liquidity crunch aggravated by the coronavirus crisis, its interim chief executive told Reuters on Thursday, Reuters reported. Denel, which makes military equipment for South Africa’s armed forces and clients around the world, is one of several troubled state-owned companies in the country that have been kept afloat by government bailouts in recent years. It has struggled to pay salaries this year amid export restrictions and declining revenue.

Lebanon’s central bank has told domestic banks to recapitalize through new means, urge big depositors to move funds back to the country and provision for a 45% loss on their Eurobond holdings, according to several circulars published on Thursday, Reuters reported. Central Bank Governor Riad Salameh later told Reuters the measures aimed to strengthen the banking system, paralysed by the worst financial crisis in Lebanon’s history which has been compounded by this month’s Beirut port blast and COVID-19.

The Finance Ministry has asked public sector banks to monitor cases where insolvency proceedings could be initiated against individuals who are guarantors of corporate debtors that have defaulted on loans, The Tribune reported. The Insolvency and Bankruptcy Code (IBC) provides for a time-bound and market-linked resolution of stressed assets. The Code also provides for initiation of insolvency proceedings against personal guarantors of corporate debtors, even though the provision has not been used much by lenders to recover dues.

Greece’s conservative government has drafted a bill which overhauls its insolvency code, seeking to help over-indebted households and businesses make a fresh start after a crippling decade-long debt crisis, Reuters reported. More than 1 million individuals and 300,000 businesses owe money to banks and the state, legacy of a decade-long financial crisis that shrank the country’s economy by a quarter.

Rolls-Royce Holdings Plc’s biggest-ever loss presents Chief Executive Officer Warren East with some difficult choices to fortify the British manufacturer against the damage done by the coronavirus pandemic, Bloomberg News reported. The shares fell as much as 10% after the jet engine-maker said Thursday that it’s planning to raise at least 2 billion pounds ($2.6 billion) from disposals and is considering other options to raise cash.

Germany extended another crisis tool to prevent corporate bankruptcies, a move that critics say will store up bigger problems later for Europe’s largest economy, Bloomberg News reported. The longer suspension on insolvency filings has raised alarm bells that it’s masking a growing credit risk that could explode into a wave of bankruptcies when the moratorium ends. It may also be creating a cohort of zombie companies that hold back investment and innovation and act as a drain on the economy.

An Indian court on Thursday halted insolvency proceedings against Reliance Group chairman Anil Ambani, the younger brother of India’s richest man, and barred him from disposing of any of his assets, Reuters reported. Anil Ambani, who runs a business group separate from his billionaire brother Mukesh Ambani, had filed a plea with the Delhi High Court challenging the appointment of a resolution professional over a roughly 12 billion rupee ($163 million)personal guarantee that he had given to the State Bank of India for loans to his companies.

Fitch Ratings downgraded Offshore Drilling Holding, S.A.'s (ODH) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to 'C' from 'CC,’ Fitch Ratings reported. Fitch also downgraded the company's USD950 million senior secured notes due Sept. 20, 2020 to 'C'/'RR4' from 'CC'/'RR4'. The downgrade reflects ODH's ongoing negotiation with its bondholders' representatives regarding a potential restructuring of the company's capital structure, as disclosed on Aug. 11, 2020.

Africa looks particularly vulnerable as the coronavirus crisis continues to batter the global economy, the Financial Times reported in a commentary. The IMF forecasts sub-Saharan economies will shrink by 3.2 per cent this year — the continent’s first contraction in three decades — and that government budget deficits will reach 7.6 per cent of gross domestic product, also a record. At the same time, the debt service burden of many African sovereigns has been surging. Scarce resources are diverted to interest and principal payments.