Headlines

Italy has warned that the EU should offer flexibility on its budget targets should the country’s sudden coronavirus outbreak in its industrialised northern regions have a prolonged impact on an economy already teetering on edge of a recession, the Financial Times reported. Ten Italians have died from the virus and the infection count has risen to 322. The majority of cases were clustered in the regions of Lombardy and Veneto, which together make up a third of output for the eurozone’s third-largest economy and about half of its exports.

After more than a decade of share price outperformance, the skies have darkened for IndusInd Bank Ltd., as the Indian lender faces challenges from worsening asset quality to a transition to new leadership, Bloomberg News reported. IndusInd has a hefty exposure to India’s troubled telecommunications sector as well as to real estate where several developers are struggling amid the country’s prolonged shadow banking crisis.

Bank of Montreal shares fell after the lender reported earnings that showed credit weakness in its key U.S. operations, Bloomberg News reported. Earnings at the company’s U.S. banking division, which includes Chicago-based BMO Harris Bank, fell 21% to C$351 million ($264 million) in the fiscal first quarter, marking a setback for Chief Executive Officer Darryl White, who’s put an emphasis on the U.S. for growth. The bank set aside C$149 million for soured loans for the U.S., more than double the amount in the fourth quarter and up from C$6 million a year ago.

Lebanon is trapped in a full-scale emergency. It confronts a debt crisis, with sovereign borrowings amounting to 160 per cent of gross domestic product. It faces a fiscal crisis, with the budget deficit likely to reach 15 per cent of GDP last year, officials acknowledge, the Financial Times reported in a commentary. Then there is the currency crisis. Lebanon is almost out of dollars, in an economy that is 70 per cent dollarised. The Lebanese pound is still pegged to the dollar, but has lost more than 60 per cent of its value in the parallel exchange market.

Over the past six months, executives at Hong Kong-based investment firm SC Lowy have been inundated with calls from bankers in China hoping to sell them distressed debt, the Financial Times reported. This is a first in the 11 years since the $2bn firm was established and underscores how China, after spending two decades trying to clean up bad debt by itself, is finally warming up to foreign capital.

Green Growth Brands Inc., once a suitor of Aphria Inc., is selling its CBD business and restructuring debt amid what the company is calling “serious financial difficulty,” Bloomberg News reported. In a further sign of the problems plaguing the cannabis industry, Green Growth said it will sell its CBD business to BRN Group Inc., a cannabis brand-management company, so it can focus on its marijuana operations. No terms were given. Shares tumbled as much as 42%, the most ever, to 25 cents in Toronto on Tuesday.

For the third time in six months, British billionaire Mark Coombs is betting on bonds that many on Wall Street deem destined for default, Bloomberg News reported. Ashmore Group Plc, the $98 billion money manager led by Coombs, has been piling into Lebanon notes due March 9 just as many of its rivals warn a missed payment is all but certain. The firm boosted its holdings to more than 25% of the $1.2 billion of bonds, enough for a blocking stake if there’s a restructuring.

Ghana is considering to buy out the debts of independent power producers as a step toward restructuring contracts and reducing its power bill, according to people familiar with the matter, Bloomberg News reported. West Africa’s second-biggest economy currently pays as much as $500 million per year for power it doesn’t consume and is in talks to end the practice. Deals that obliged the government to pay for power regardless of whether or not the supplies were needed, have left the country with almost double the generation capacity it requires to meet peak demand of 2,700 megawatts.

Following last week’s revocation of its operator licence, Addison Global’s MoPlay brand has announced that the company is now insolvent and has stopped withdrawals from customers, Inkedin reported. The operator was suspended after the UK Gambling Commission explained in a statement that it suspected ‘that Addison Global Limited has breached a condition of the licence (section 120(1)(b) and is unsuitable to carry on the licenced activities (section 120(1)(d) of the Act).’  Since the suspension, Moplay has ceased processing withdrawals, with the site now offline in the United Kingdom.

Taxpayers picked up the bill for a wave of insolvencies last year, with the cost of payouts to redundant staff jumping by 16%, Minutehack reported. A total of £346.1 million was paid out by The Insolvency Service to former employees of businesses which ran into trouble during 2019, according to a Freedom of Information request made by real estate adviser Altus Group. The payout was the highest in seven years, with the recent raft of retail and dining insolvencies contributing to the increase.