Headlines

The coronavirus pandemic is deepening the pain for Japan’s regional lenders, heightening concerns that a potential wave of business closures will test policymakers’ ability to avert a damaging banking-sector crisis, Reuters reoprted. Many central government and bank officials see the risk of a crisis emerging in the next few months, when more struggling firms could go under and hit regional banks already weakened by a shrinking domestic economy and years of ultra-low interest rates.

Privately held restaurant group PizzaExpress said on Tuesday it could shut nearly 15% of its UK restaurants, putting 1,100 jobs at risk, as part of a restructuring deal to help reduce debt and infuse capital, Reuters reported. The company, which operates 449 restaurants in the UK and is currently owned by Chinese private equity firm Hony Capital, said it had started a sale process to find a new owner. PizzaExpress said it will soon launch a company voluntary arrangement in the UK as part of an agreement with some of its secured creditors and its majority shareholder.

Japan Airlines Co. posted its biggest quarterly net loss in at least eight years and decided to forgo paying an interim dividend as it contends with the devastating impact of the coronavirus, Bloomberg News reported. The carrier’s first-quarter loss was 93.7 billion yen ($890 million), the most since it re-listed on the Tokyo stock exchange in 2012 after emerging from bankruptcy. Since then, it only posted one other quarterly loss; in January-March of this year. The Covid-19 outbreak has damaged the aviation industry globally and forced airlines into unprecedented cutbacks.

Indonesia’s flag carrier needs cash fast as losses soar past a half-billion dollars and unpaid bills pile up, yet negotiations for government aid move slowly and still may not yield enough to cover the shortfall, Bloomberg News reported. A first-half loss of $713 million, announced last week, was just the latest piece of bad news for PT Garuda Indonesia. The airline already missed a payment on an asset-backed security in late July, shortly after extending the repayment of a $500 million sukuk -- an Islamic bond -- by three years because of its cash crunch.

Itau Unibanco Holding SA’s Chief Executive Candido Bracher said on Tuesday that next year he sees Brazil’s 90-day default ratio reaching higher levels than in previous crisis, Reuters reported. “Brazil’s GDP is poised to drop by unseen levels, so it is natural that there will be higher loan delinquency rates,”, Bracher told journalists in a conference call. Itau’s 90-day delinquency ratio reached a peak of 5.6% in 2009 and 4.8% amid a recession in 2016. Its second-quarter loan default was at 2.7%, but Bracher said he sees it going up next year, as grace periods extended to clients end.

Argentina has reached an agreement with creditors to restructure around $65 billion in sovereign debt, breaking a deadlock in talks that will help the country climb out of default and banish fears of a damaging and protracted legal standoff, Reuters reported. The economy ministry said in a statement here on Tuesday it had reached an accord with major creditors after agreeing to adjust some payment dates and legal clauses to sweeten what had been touted as its "final" proposal made in early July.

There is no recovery in sight yet for Africa’s worst-performing stock market as investors look to bank earnings this month to assess how hard the coronavirus pandemic hit Kenyan lenders, Bloomberg News reported. Net foreign-investor outflows and reduced dollar earnings led the Nairobi Securities Exchange 20 Share Index to slide for seven consecutive months through July, falling to the lowest in 17 years, according to data compiled by Bloomberg.

Virgin Atlantic Airways Ltd is seeking protection from creditors in the United States under Chapter 15 of the U.S. Bankruptcy Code, which allows a foreign debtor to shield assets in this country, according to a court filing on Tuesday, Reuters reported. Virgin Atlantic’s filing in U.S.

Corporate insolvencies dropped to their lowest point in four years during the second quarter – but experts have warned that it is looking like the calm before the storm, Foodservice Equipment Journal reported. 274 companies in the UK entered administration in the second quarter of 2020, representing a 28% reduction on Q1, according to analysis by KPMG. The quarter was almost entirely a period of lockdown, with government measures having a dramatic impact as consumer spending plummeted.

The German body in charge of regulating auditors is examining the work of EY, the auditor that approved the books of collapsed payment services firm Wirecard, the German Economy Ministry said on Monday, Reuters reported. The ministry said Auditors’ Regulator (Apas) had upgraded a preliminary investigation that had been running since October 2019, when the Financial Times first reported allegations of fraud at Wirecard, into a full formal regulatory inquiry.