Headlines

The coronavirus pandemic will bankrupt most airlines worldwide by the end of May unless governments and the industry take coordinated steps to avoid such a situation, an aviation consultant warned, Bloomberg News reported. Many airlines have probably been driven into technical bankruptcy or substantially breached debt covenants already, Sydney-based consultancy CAPA Centre for Aviation warned in a statement Monday. Carriers are depleting cash reserves quickly because their planes are grounded and those that aren’t are flying more than half empty, it said.

South Korean structured notes, favored by local retail investors, could face massive losses after European banking shares plunged more than 40% in the past month, Bloomberg News reported. At least four Korean products linked to the Euro Stoxx Banks Index are likely to record losses of more than 50% if the underlying gauge stays at around the current level until their maturity, according to terms compiled by Bloomberg. The gauge has fallen 45% since a mid-February high on disappointment over European Central Bank stimulus measures. Korea Investment & Securities Co.

Vodafone's Indian joint venture was thrown a potential lifeline on Monday after the government proposed that telecoms groups should be given a period of 20 years to pay about $13bn in retrospective levies and penalties, the Financial Times reported. The application submitted to the Supreme Court comes after it ruled in October that telecoms companies must pay the historic fees within months, in a judgment that threatened the survival of Vodafone Idea and hit foreign investor confidence. It is unclear if the Supreme Court will accept the application when it next meets.

Nigerian banks still trying to recover from an economic contraction in 2016 now face a triple whammy of coronavirus, plunging oil prices and volatile markets that could further delay progress, Bloomberg News reported. The 2014 collapse in crude dried up foreign exchange in Africa’s biggest producer of the commodity, resulting in the first recession in 25 years and a currency devaluation. Businesses struggled to make repayments, heaping piles of toxic loans onto the books of lenders.

South Africa’s Taste Holdings is in the process of placing its food businesses into voluntary liquidation after a failed attempt to offload its Domino’s Pizza franchise, Reuters reported. Taste’s move to liquidate the business comes after South Africa entered its second recession in two years in the final quarter of last year. It will see 770 employees lose their jobs, while 55 stores owned by the company have closed, said Taste, whose food businesses own and license Domino’s Pizza franchises in South Africa.

Production lines fell silent across Europe on Monday. Factories across the region were mothballed. Manufacturers fought to contain the damage of an unprecedented loss of business, the Financial Times reported. As the coronavirus spread, whole countries entered lockdown. Carmakers one after another announced work stoppages as the industry faced its worst disruption in a decade.

Debenhams, the British department store group that went through two insolvency processes last year, has asked landlords for an immediate five-month rent holiday because of the likely impact of coronavirus on trading, the Financial Times reported.

Germany plans to ease bankruptcy rules to give companies hit by the coronavirus more time to secure financial aid, Bloomberg News reported. The Federal Ministry of Justice is preparing legislation to suspend a rule that forces companies to arrange help or file for insolvency within three weeks of getting into difficulties. The waiver, previously introduced to help businesses hurt by severe flood damage, will be restricted to companies affected by the outbreak that are eligible for government aid or are securing other forms of refinancing, the ministry said in a statement Monday.

China’s industrial output contracted at the sharpest pace in 30 years in the first two months of the year as the fast spreading coronavirus and strict containment measures severely disrupted the world’s second-largest economy, data showed on Monday, Reuters reported. Urban investment and retail sales also fell sharply and for the first time on record, reinforcing views that the epidemic may have cut China’s economic growth in half in the first quarter.

Europe must provide liquidity to companies hit by the coronavirus outbreak to avoid a banking crisis, a group of German economists said on Friday, Reuters reported. The warning came as Germany’s top bankers headed to Berlin to confer with the finance minister on possible measures. The economists, affiliated with the Leibniz Institute for Financial Research SAFE, said a liquidity crunch in the economy could result in a new banking crisis. “Only coordinated fiscal policy measures have the potential to reduce the default risks of banks and thus stabilize the financial system,” they wrote.