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The end of the government’s furlough scheme in October looms large for all of UK business. For retail and hospitality companies, another deadline is just as chilling: the end of the one-year “holiday” on business rates next March, the Financial Times reported in a commentary. Since rates are linked to rental values dating from 2015 — and a revaluation has just been postponed — shop chains could snap back into paying a hefty levy based on rents calculated long before Covid-19 devastated their businesses.
Lloyds Banking Group is preparing for a surge in customer defaults, after Britain’s largest retail bank warned that the coronavirus crisis had inflicted more damage on the economy than it had expected, the Financial Times reported. The bank’s shares tumbled more than 7 per cent on Thursday to their lowest level in eight years after the lender set aside another £2.4bn to cover future bad loans and slumped to a second-quarter loss.
Religare Finvest, which is the NBFC arm of embattled financial services conglomerate Religare Enterprises Ltd (REL), is hopeful of completing its debt restructuring by December this year, The Hindu Business Line reported. “We don’t expect the final restructuring plan to go beyond the third quarter of the year, maybe even earlier than December,” said Nitin Aggarwal, Group CFO, Religare Enterprises Ltd and CEO, Religare Broking, adding that once it is through, the company will be much different.
Argentina economy minister Martin Guzman emphasized on Thursday that the country’s proposal to creditors to restructure around $65 billion in foreign debt was the maximum effort it could make, and hinted the deadline for a deal could be extended, Reuters reported The South American nation is racing to clinch a deal to avoid a messy and protracted legal standoff with creditors after it slipped into default for the ninth time in May. The deadline for a deal set by the government is currently Aug. 4.
Ecuador will extend the deadline for creditors to vote on its $17.4 billion debt restructuring plan to Monday following a lawsuit by a small group of bondholders, the finance ministry said on Thursday, Reuters reported. The South American nation originally said the vote would end on Friday, but pushed the deadline back at the request of the U.S. Court for the Southern District of New York following a suit by investment funds Contrarian Capital Management and GMO.
Galeria Karstadt Kaufhof, Germany’s biggest department store – alongside eight affiliated companies – filed for administrative insolvency earlier this year after announcing they would close 62 out of 172 branches and make 8,000 of the approximately 30,000 employees redundant, Lawyer Monthly reported. The management agreed on the corresponding social collective agreements with the unions Verdi and NGG shortly before the protective shield procedure – which was sought by the company early April due to the impact of Coronavirus – was completed.
An independent survey commissioned by insolvency firm Jirsch Sutherland has found that of the 1,000 business owners and directors surveyed, 51 per cent said they were expecting to explore restructuring or insolvency options in the next six months, Accountants Daily reported. The prospect of JobKeeper coming to an end was far from their primary concern, with just one in 10 worried about the phase-out of the wage subsidy scheme. Instead, cash-flow concerns continue to keep business owners up at night, with 36 per cent nominating it as their stressor.
High-grade eurozone government debt yields dropped to their lowest levels in over two months as a cocktail of negative news sent investors scrambling for safe assets, Reuters reported. Poor corporate earnings, record deaths from COVID-19 in six U.S. states and frictions over a stimulus plan in the United States hit risk sentiment on Wednesday, and had investors retreating to safe assets such as government bonds. Fears of rising COVID-19 infections also hit Asia and Europe this week, with several countries imposing new restrictions and Britain quarantining travellers from Spain.
In a world riven by disease and credit risk, traders are betting central bankers will pin down global borrowing costs for years to come -- regardless of the consequences, Bloomberg News reported. With banks awash with cash, money markets are signaling that unsecured lending rates will stay near historic lows across Europe and the U.S., even as rising corporate bankruptcies add pressure to bank balance sheets. Eurodollar futures, benchmarked to the three-month London interbank offered rate for dollars, suggest borrowing costs will barely budge until at least the first quarter of 2023.