Headlines

South Africa’s finance minister has warned that Africa’s most industrialised economy is on the verge of a sovereign debt crisis and its biggest contraction in almost a century, as the country’s coronavirus epidemic gathers pace, the Financial Times reported.

Argentina is still working with its creditors to reach a debt restructuring deal after talks stalled, though there is still distance to cover in economic and legal terms, Economy Minister Martin Guzman said on Thursday, Reuters reported. Guzman said the government is in negotiations with two main creditor groups, though the “biggest differences” remain with the Ad Hoc Bondholder Group, which includes AllianceBernstein, BlackRock, Ashmore and others.

Strains are emerging across China’s Rmb21tn ($3tn) trust industry, which has lured millions of ordinary investors seeking more profitable — but riskier — places to park their cash, the Financial Times reported. Dozens of disgruntled Chinese investors protested this week in Chengdu, capital of the southwestern province of Sichuan, after Sichuan Trust, based in the city, said the firm would struggle to make principal and interest payments on at least Rmb13bn worth of “trust of trust” vehicles due by the end of the year.

The IMF has warned Lebanon that its central bank has accumulated losses of as much as $49bn, as divisions between the government and the Banque du Liban threaten to derail vital bailout talks with the multilateral lender, the Financial Times reported. The BDL does not publish profit and loss accounts.

The global health and economic crises gripping Africa are hurtling the region into its first full recession in a quarter of a century. Economic growth in Africa, which had been forecast at 3.2 per cent, is now expected to be between zero and 1.0 per cent, according to the UN Economic Commission for Africa, the Financial Times reported in a commentary. The crisis highlights the needs for urgent economic and financial measures to help soften the blow. The G20’s decision to suspend debt service for the poorest countries will help. But Africa’s needs are much bigger and urgent.

The Spanish government has agreed to extend the country’s emergency paid leave schemes for an additional three months to the end of September — a costly measure that business and unions say is essential to prevent the widespread collapse of companies and job destruction, the Financial Times reported. The temporary schemes, known as ERTEs, had been due to expire on June 30 and currently cover more than 2m people who hope to return to their jobs as the crisis eases but who are far from sure of doing so.

A vote on a restructuring plan for loss-making South African Airways (SAA) was delayed until next month on Thursday, after some creditors and trade unions secured an adjournment after months of wrangling over the airline’s future, Reuters reported. The administrators, who took over SAA in December after almost a decade of financial losses, published their restructuring plan last week and now expect the vote to take place on July 14.

Wirecard collapsed on Thursday owing creditors almost $4 billion after disclosing a gaping hole in its books that its auditor EY said was the result of a sophisticated global fraud, Reuters reported. The payments company filed for insolvency at a Munich court saying that, with 1.3 billion euros ($1.5 billion) of loans due within a week its survival as a going concern was “not assured”.

Holders of Zambia’s Eurobonds are squaring up for what is likely to be a complex and lengthy debt-restructuring process. A group of lenders owning about a third of the nation’s dollar bonds, and in contact with another third, have formed a committee to negotiate with the government, Bloomberg News reported. Newstate Partners LLP will advise the creditors, who didn’t disclose who they were. Lazard Ltd. is representing Zambia. Zambia is looking to overhaul as much as $11 billion in foreign debt as part of efforts to unlock emergency funding from the International Monetary Fund.

Australian-listed oil and gas company FAR Ltd said on Wednesday its Senegalese unit had defaulted on its obligations to the Sangomar joint venture, as the company looked to sell its interest in the project, Reuters reported. The company owns 15% of the Sangomar oil and gas field being developed off Senegal, while Cairn Energy holds 40%, Australia’s Woodside 35%, and Senegal’s national oil company Petrosen 10%, which it has the right to increase to 18%.