Headlines

Scandinavia’s biggest network airline, SAS AB, is eliminating as many as 5,000 jobs, marking the first permanent staff cuts by a major European carrier in the face of collapsing travel demand, Bloomberg News reported. The Stockholm-based company said Tuesday that the dismissals, amounting to 40% of the workforce, are necessary because employees have an average notice period of six months and it needs to prepare for what may be years of sluggish demand.

HSBC Holdings Plc and Banco Santander SA took the biggest hits so far among European banks struggling to contain the impact of the coronavirus on their loan books, with the U.K.-based lender expecting as much as $11 billion of damage this year because of the outbreak, Bloomberg News reported.

African countries may seek to exchange their sovereign debt for new concessional paper to avoid using funds needed to battle the fast-moving coronavirus to pay private creditors, according to a United Nations body, Bloomberg News reported. The African Union, the UN Economic Commission for Africa and a group of finance ministers from the continent are designing a special-purpose vehicle for the swap.

UBS Group AG expressed confidence it can withstand a surge in bad loans while warning that the unprecedented outbreak will put pressure on key streams of income at its wealth management business, Bloomberg News reported. The bank -- which posted a 40% jump in profit to $1.6 billion -- said falling asset prices will erode recurring fee income while low interest rates hit lending income. Despite an expected drop in client activity, UBS indicated the “high quality” of its credit portfolio may shield it from more widespread defaults.

International law firm Hogan Lovells is holding discussions with some bondholders of distressed airline carrier Virgin Australia, ahead of a first creditors meeting set for Thursday, Bloomberg News reported. Virgin Australia became Asia’s first airline to fall amid the coronavirus pandemic when it was placed under voluntary administration last week. With total debt of about A$6.84 billion ($4.4 billion) and more than 10,000 creditors, it’s one of Australia’s most high-profile debt restructurings.

Some of Argentina’s key creditors are rejecting invitations to speak with the nation’s finance team this week as both sides jockey for more favorable terms in a $65 billion debt restructuring, Bloomberg News reported. Tensions are building as the clock counts down on two key deadlines: May 8 for a debt-exchange offer and May 22, when a 30-day grace period for coupon payments on dollar bonds maturing in 2021, 2026 and 2046 expires. To close a deal, the South American nation needs support from creditors owning at least two-thirds of the aggregate holdings.

Lufthansa might seek some form of protection from creditors while talking to the Berlin government about a 9 billion euro ($9.76 billion) rescue package, a company source said on Tuesday after government and airline sources said talks on a deal were continuing, Reuters reported. The company source said the type of creditor protection under consideration would require the company to be still solvent, with management staying on to oversee a restructuring.

A South African court placed state-owned SA Express under “provisional liquidation” on Tuesday after the airline’s administrators said rescue efforts weren’t likely to succeed, Reuters reported. SA Express, which flies to domestic and regional destinations, entered a form of bankruptcy protection earlier this year after losing a court battle with a contractor, logistics firm Ziegler. It later suspended all operations as the global COVID-19 pandemic caused demand for flights to plunge and governments to impose travel restrictions.

The German company that built three Coastal-class vessels for B.C. Ferries more than a decade ago is insolvent, Business in Vancouver reported. A B.C. Ferries official said Friday that the organization has no relationship with the Flensburger Schiffbau-Gesellschaft shipyard anymore, since the warranty period for the ships was two years. “We don’t have any service or maintenance relationship with them,” B.C. Ferries spokeswoman Deborah Marshall said Friday.

Iraq is planning painful cuts in social benefits relied on by millions of government workers. Saudi Arabia will likely have to delay mega-projects, the International New York Times reported on an Associated Press story. Egypt and Lebanon face a blow as their workers in the Gulf send back less of the much-needed dollars that help keep their fragile economies afloat.