Headlines

Temporary administrators of Banca Carige said they had to find a buyer by April for the Italian bank, after unveiling a 630 million euro (£540 million) capital shortfall, Reuters reported. The European Central Bank on Jan. 2 placed Italy’s 10th largest bank under special administration - its first ever such move - after the top investor in the Genoa-based lender blocked a 400 million euro cash call.

Construction business Arrow International has gone into voluntary administration after a contractual dispute left it with insufficient cashflow to meet operating costs, The New Zealand Herald reported. Administrators from accountancy BDO were appointed at 2.30pm today. "This is not the outcome we wanted or expected, but in light of a recent adjudicator's decision, we had no choice but to take this course of action," the company's board said in a statement.

Denis O’Brien’s saw its debt burden increase in the three months to the end of December as earnings dipped, increasing pressure on the telecoms group as it seeks to lower its borrowings ratios, The Irish Times reported. The Jamaica-based group, which completed a massive debt restructuring earlier this year, told its bondholders on Wednesday that its net debt amounted to 6.8 times earnings before interest, tax, depreciation (ebitda) at the end 2018, its fiscal third quarter, according to sources.

Half of European Union countries are experiencing economic imbalances that differ widely, the EU Commission said on Wednesday, as the bloc discusses how to improve convergence among its 27 members after Britain leaves. In a regular check-up of EU governments’ economic policies and achievements, the Commission renewed its warning that gaps that are harmful to the whole bloc not being addressed in several states, while a growing number of them face shortfalls, Reuters reported.

Troubled UK outsourcing company Interserve has agreed new terms for a debt-for-equity swap with its lenders as it tries to appease shareholders and avoid collapsing under its £631m debt mountain, Global Construction Review reported. The original plan would have cut existing investors’ holding to 2.5%, but it was rejected by New York hedge fund Coltrane and Dutch hedge fund Farringdon Capital Management, who together hold approximately one-third of Interserve’s shares. Coltrane had also called for the entire Interserve board to be removed apart from chief executive Debbie White.

Brazilian state bank Caixa Economica Federal is preparing an extraordinary provision of 7 billion reais ($1.87 billion) due to expected defaults on home loans and a loss of value in the real estate held by the bank, two sources told Reuters. The move is being done at the behest of newly appoint Chief Executive Pedro Guimaraes, said the sources, who requested anonymity to discuss private matters, Reuters reported. If the proposal goes into effect, it will reduce profit to 10 billion reais in 2018, against the bank’s expectations for 16 billion reais, the sources said.

India’s Jet Airways Ltd said on Wednesday it grounded seven more aircraft as the carrier failed to make payments to its lessors, taking the tally of planes hamstrung by the defaults to 13, Reuters reported. Jet is "actively engaged" with all its aircraft lessors, the airline said, adding that its aircraft lessors have been supportive of the company's efforts to improve liquidity. With debts of more than $1 billion, Jet has defaulted on loans and has not paid pilots, leasing firms and suppliers for months.

Hopes of a trade truce between China and the U.S. and a more dovish Federal Reserve are giving South Africa’s rand a boost -- and President Cyril Ramaphosa some breathing space as he struggles to stabilize the state-owned electricity company while curbing government debt levels, Bloomberg News reported. Given the outlook for South Africa’s economy -- sluggish growth, a widening fiscal deficit, and the threat of a credit-rating downgrade to junk -- the rand shouldn’t be a popular investment.

In the first half of this decade Greece almost crashed out of the eurozone, or faced having its membership suspended, in a process known as Grexit, the Financial Times reported. With the UK one month from its scheduled withdrawal from the EU, and no one sure what will actually happen, what lessons does Grexit hold for Brexit? George Papaconstantinou published an article on this subject last week on ING bank’s website. As Greece’s finance minister from October 2009 to June 2011, he was at the centre of events during the early phase of his nation’s sovereign debt crisis.

While the eurozone has made progress in reform, it so far lacks the ambition necessary to promote growth and jobs, increase economic stability and strengthen the international role of the euro, the Financial Times reported. Results have been achieved on banking union, capital market unions and reform of the European stability mechanism. However, key elements are still missing, including the existence of a shared safe financial asset. The quest to create a genuine safe financial asset in the eurozone may have been going on a long time, but the need is real.