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India’s top court ordered several telecom carriers, including Bharti Airtel Ltd., Vodafone Idea Ltd. and many defunct ones, to pay the government as much as 920 billion rupees ($13 billion) in past dues, dealing a blow to the businesses already struggling to make profits and pare debt, Bloomberg News reported. The Supreme Court, in a ruling read out by a two-judge bench headed by Justice Arun Mishra, said it will decide on the timeline for payments. Thursday’s decision possibly puts an end to the two-decades-old legal dispute over airwaves fees owed to the government.
Norwegian Air Shuttle has sealed a long-awaited joint venture with one of China’s biggest banks in a deal designed to bolster a balance sheet strained by the low-cost carrier’s breathless pace of expansion, the Financial Times reported. The joint venture, 70 per cent owned by a subsidiary of state-controlled China Construction Bank, will be responsible for financing 27 Airbus A320neo aircraft that Norwegian expects to be delivered in 2020-23.
Japan’s financial system is becoming more susceptible to the effects of financial stress abroad, the Bank of Japan has warned, as stagnant returns at home prompt its lenders to ramp up their exposure to US leveraged loans, the Financial Times reported. In its semi-annual Financial System Report, the central bank said that the ratio of overseas to domestic loans at Japanese banks had reached a record high, as the banks fill the gap in international markets left by retreating European rivals.
Chinese defaulted bonds just sold at a discount of as much as 97% in an anonymous auction. Six defaulted notes changed hands, with the cheapest selling for as little as 3 yuan in an auction organized by the China Foreign Exchange Trade System on Wednesday, Bloomberg News reported. That’s a record low for a sale of this type. One didn’t sell, according to an exchange statement on its official WeChat account. The sale is a sign of investors’ increasing tolerance of risk in China’s nascent distressed debt market amid a broader boom in onshore high yield trading.
Suspend your disbelief, and like the protagonist of the popular Bollywood movie “3 idiots,” keep muttering: “All is well, all is well.” If it isn’t yet, it will be. That seems to be the whole approach behind the ongoing efforts to restructure an Indian financier, Dewan Housing Finance Corp., which some months back started defaulting on its outstanding debt of $12 billion, a Bloomberg View reported. Trouble is, the rescue is entirely fictional. The only reason it’s even being attempted is to delay — as long as possible — the collapse of this large shadow lender.
Royal Bank of Scotland slumped to a loss in the third quarter after a poor performance from its investment bank compounded a £900m hit from the payment protection insurance scandal, the Financial Times reported. NatWest Markets, the once high-flying investment bank that has been drastically scaled back since the financial crisis, recorded an operating loss of £193m in the quarter after its rates trading business was bruised by a historic rally in government debt.
The merit of Saudi Arabia’s new bankruptcy law, part of efforts to help the kingdom attract investors, should become clearer in about a year after courts handle initial cases, a World Bank representative and senior government official told Reuters. A lack of modern bankruptcy regulations had created difficulties for struggling companies seeking to restructure debt with creditors since the 2009 global financial crisis and the more recent dip in oil prices, Reuters reported.
FundingSecure, which offered loans against classic cars and Picasso paintings, has become the second British peer-to-peer lender to collapse in six months, the Financial Times reported. The decision to call in administrators at CG Recovery on Wednesday following rising defaults and legal issues leaves about 3,500 investors exposed to potential losses if the debts cannot be recovered. CG said FundingSecure’s outstanding loan book was worth about £80m and that it was too early to predict how much money they would be able to return to creditors and investors.
KPMG has been paid about £2.3m for its work on winding down Patisserie Valerie, despite being replaced as administrator to the failed bakery chain due to a conflict of interest, the Financial Times reported. The Big Four accounting firm, whose insolvency partners earned £875 an hour for the work according to its latest disclosure to creditors, will cease to be administrator as it cannot pursue legal claims against Patisserie Valerie’s auditor, which is expected to be the next stage in attempting to recoup money for creditors.