Headlines

It will take years for the global economy to recover from the jobs taken away by the pandemic, and in Europe the recession will be significantly deeper than forecast just two months ago, the New York Times reported. Those were the findings yesterday in two reports, from the Organization for Economic Cooperation and Development and the European Commission, that provided the latest readings on how widespread and deep the economic impact of the coronavirus will be. The O.E.C.D. looked at jobs; the commission measured economic contraction.

Refinancing pressure is mounting at China’s industrial firms following unprecedented pandemic-induced shocks to the sector and a dearth of bond issuance in the past three months, Bloomberg News reported. Offshore bond sales from high-yield energy and other industrial companies hit a two-year low in the first half of 2020, with no sales from April to June, according to Bloomberg-compiled data. It couldn’t have come at a worse time for them as $3.1 billion of bonds, or more than a quarter of their debt, need to be repaid or refinanced over the next 12 months, the data show.

South African Airways cleared another hurdle needed to ensure the state-owned carrier’s survival when most labor groups agreed to sweetened severance packages for retrenched workers, Bloomberg News reported. The National Union of Metalworkers of South Africa and the South African Airways Cabin Crew Association, which were fiercely opposed to plans to cut the workforce to 1,000 staff from about 4,700, agreed to fresh terms including unpaid training courses for some of the staff beyond their departure, the government said in a statement late Tuesday.

Petroleos Mexicanos’s nearly $105 billion in debt already makes it the biggest borrower of any oil company in the world. And it’s accruing more, Bloomberg News reported. Pemex, as the Mexican state oil company is known, is asking some of its contractors if they can wait until next year to be paid money that is owed to them now. Three contractors that are being asked to defer payment are waiting on $115 million in payouts, but the amount owed to companies across Pemex’s supply chain could easily total billions of dollars.

The U.K. government announced up to $38 billion in fresh stimulus measures intended to boost the country’s economy as it exits lockdown, a path that is also being considered by other rich nations as they seek to prevent the economic shock of the pandemic from snowballing into a multiyear slowdown that could leave deep scars on their societies, businesses and economies, the Wall Street Journal reported.

Next year is going to be a "watershed year" for business failures an insolvency expert is predicting, unless companies can come up with a plan now to get out of debt and survive, the New Zealand Herald reported. John Fisk, national leader of restructuring for PwC and chair of the Restructuring Insolvency and Turnaround Association New Zealand, said that insolvency applications had come down significantly under lockdown but massive amounts of government subsidies meant many businesses weren't addressing the underlying issues related to debt.

Canada will ramp up issuance of long-term debt this year to finance its record budget deficit, Bloomberg News reported. The federal government plans to sell C$106 billion ($78 billion) of 10-year and 30-year bonds in the fiscal year that ends March 31, according to budget documents released Wednesday. That’s more than six times the C$17 billion of such bonds it sold last year.

DavidsTea is seeking court protection from creditors so it can continue operating while it restructures and plans to close a significant number of its stores, the Globe and Mail reported. The Montreal-based company said today that it will seek an order in Quebec Superior Court to allow it to restructure under the Companies’ Creditors Arrangement Act. It also plans to seek similar orders for its U.S. subsidiary under chapter 15 of the U.S. Bankruptcy Code.

Wirecard’s administrator said today that more than 100 investors have expressed interest in buying the collapsed German payments firm’s core business and holdings, Reuters reported. The firm filed for insolvency last month owing creditors 4 billion euros ($4.5 billion) after disclosing a 1.9 billion euro hole in its accounts that its auditor EY said was the result of a sophisticated global fraud. “The aim is to find timely investor solutions in the interest of creditors, employees and customers,” administrator Michael Jaffe said in a statement after a creditors meeting.

Mexico’s Aeromexico yesterday scheduled meetings with investors to discuss debt restructuring after becoming the third large Latin American carrier to file for chapter 11 bankruptcy protection last week, Reuters reported. Management of the airline part-owned by Delta Air Lines Inc. proposed focusing on the modification of payment terms for stocks and other certificates in the meetings now planned for July 20, according to a statement sent to the Mexican stock exchange.