Headlines

British doorstep lender Provident Financial (PFG.L) sank to a first-half loss and suspended dividend payments, as it put aside 240 million pounds ($316 million) for an expected surge in bad loans in the coronavirus-driven economic slump, Reuters reported. However, shares in the company - already down about 50% this year - jumped as much as 14% as some analysts said the numbers were better than feared and hailed what they described as prudent planning.

Air New Zealand Ltd plans to draw on a NZ$900 million ($596.34 million) government loan within days to help it weather the coronavirus pandemic after reporting its first annual loss in almost two decades, Reuters reported. The funding injection will provide some much needed liquidity as the airline burns through cash, but it will come at a cost. Along with interest rates of 7-9%, the loan gives the government the right to seek repayment through a capital raising after six months or convert the loan to equity.

Croydon council has become the first to seek emergency financial assistance from the government in the wake of the coronavirus lockdown, ahead of what is expected to be a flurry of local authorities requesting bailouts, the Financial Times reoprted. The UK’s cash-strapped local authorities are among the most stretched in Europe, according to a new report by Moody's Investors Service, leaving them vulnerable to the economic contraction caused by the pandemic.

State Bank of India (SBI), the lead creditor to Jain Irrigation Systems (JISL), is likely to consider a Rs 4,000-crore debt restructuring plan for the company next week, sources close to the development told FE. According to the restructuring plan, of the Rs 4,000-crore debt, Rs 2,800 crore will be converted into a sustainable portion, payable at 8.5% interest to lenders, The Financial Express reported. The remaining Rs 1,200- crore unsustainable debt will be converted into debentures, payable after eight years at 0.01% interest.

One of Southeast Asia’s biggest conglomerates faces its gravest challenge yet as the pandemic roils Genting group’s collection of casinos, cruises and resorts, Bloomberg News reported. Cracks were already starting to show even before cruise operator Genting Hong Kong Ltd. said it would suspend payments to creditors. This week, the group holding company and a Malaysian unit could show some of their worst declines to earnings as second-quarter results are due.

Argentina’s government formally requested negotiations to begin with the International Monetary Fund on a new program to replace a record $57 billion agreement from 2018 which failed to lift its crisis-prone economy, Bloomberg News reported. Officials called for the beginning of consultations ahead of a program that will address $44 billion in payments owed to the multilateral lender as part of its previous arrangement that was never fully disbursed, according to a letter sent to IMF Managing Director Kristalina Georgieva and posted on Twitter on Wednesday.

AirAsia Group Bhd.’s long-haul arm said it needs to reach agreements with major creditors to restructure outstanding debt as it faces “severe liquidity constraints” that threaten its ability to resume flying and continue as a going concern, Bloomberg News reported. The warning came in an exchange filing Wednesday, in which AirAsia X Bhd. also reported a net loss for the three months ended June 30 of 305.2 million ringgit ($73 million), worse than a 207.1 million ringgit deficit a year ago. Sales tumbled 91% to 91.4 million ringgit.

The restructuring of NMC Health Plc through an Abu Dhabi court could cost as much as $140 million in consultancy and legal fees, almost half of what the hospital operator’s administrators are raising in new funding from creditors, Bloomberg News reported. “It’s not cheap and we have the best advisers and the best minds in the world working on the preservation of this business,” acting Chief Executive Officer Michael Davis said in a recent interview.

Norway’s gross domestic product contracted in the second quarter at the fastest pace ever recorded as efforts to contain the coronavirus plunged the economy into a deep recession, data from the national statistics office (SSB) showed on Tuesday, Reuters reported. The mainland economy, which excludes oil and gas production, shrank by 6.3% in the April-June period from the preceding three months, lagging a forecast of minus 6.1% in a Reuters poll of economists. “The decline in the Norwegian economy in the second quarter was the deepest ever recorded,” SSB said in a statement.

India’s central bank governor has warned that the state-dominated banking system will need to push ahead with an infusion of funds to withstand the country’s deepening coronavirus crisis, the Financial Times reported. Several of India’s largest and best-performing banks, including Kotak Mahindra, ICICI and State Bank of India, have been raising more equity in the months since the coronavirus pandemic broke out. But Shaktikanta Das, the Reserve Bank of India governor, said smaller private and public lenders needed to shore up their capital bases ahead of an expected bad loans shock.