Headlines

Nearly 12% of South Korean firms became insolvent last year due to the downturn in construction and real estate, marking the highest level since 2019. These companies, burdened with more debt than assets, face complete capital erosion and financial instability, the Chosun Daily reported. According to the Federation of Korean Industries (FKI) on March 23, about 4,466 companies, or 11.9% of all 37,510 externally audited companies (excluding financial firms), are expected to be completely insolvent.

Brazilian airline Gol said on Monday it had entered an exit financing commitment with certain investors, without naming them, as it eyed exiting chapter 11 bankruptcy proceedings, Reuters reported. Under the deal, the parties have committed to purchasing up to $1.25 billion of the $1.9 billion debt instruments to be issued as part of the process, which will be used to repay obligations under a debtor-in-possession financing. Read more.

More than 8,300 bounce back loans issued to the construction sector during the pandemic are suspected to have been fraudulent, according to a Construction News report. The loans, issued from May 2020 as emergency relief of up to £50,000 for small companies, were backed by 100 per cent government guarantees. Data obtained by Construction News under the Freedom of Information Act from the British Business Bank, which facilitated the scheme, showed that 8,356 bounce back loans to the industry were flagged as suspected frauds by lenders at the end of January.

The International Monetary Fund (IMF) will discuss a new $20 billion loan for Argentina during an informal meeting this week, Bloomberg News reported. The IMF will discuss a four-year extended fund facility of about 15 billion Special Drawing Rights. Argentina's lower house last Wednesday passed a decree issued earlier in the month supporting a new IMF program, allowing the government to begin talks with the IMF to bolster central bank reserves and potentially undo capital controls.

An Ontario court on Friday gave Hudson’s Bay, Canada’s oldest company, permission to start liquidating all but six of its stores on Monday, the Associated Press reported. The approval from Ontario Superior Court Judge Peter Osborne allows the retailer, which dates back to 1670, to begin selling off inventory at most of its 80 Hudson’s Bay stores, three Saks Fifth Avenue locations and 13 Saks Off 5th shops in Canada. “This is the art of the possible and we are where we are today. In my view, there is no other alternative,” Judge Osborne said.

A large number of home buyers face a roadblock at the doors of MahaRERA when projects that they have invested in land at the National Company Law Tribunal (NCLT) following initiation of insolvency and bankruptcy proceedings, the Times of India reported.

Liberty Galati, the sole integrated steel producer in the region, hopes to resume full operations at a capacity of 2 million tonnes per year, about two-thirds of its nameplate capacity according to the pre-insolvency request approved by the court this month – and the revised European Union’s strategies in the sectors of defense and energy may help it survive, Romania-Insider.com reported. Liberty Galati has two months to come up with a recovery plan, which must necessarily envisage an output of over 172,000 tonnes per month, according to the pre-insolvency request consulted by Profit.ro.

During Donald Trump’s first presidency, China was determined not to yield to American pressure over trade like Japan did in the 1980s, the Wall Street Journal reported. Now, faced with an even greater economic assault from the second Trump presidency at a time of sluggish growth at home, Beijing may take a page from Tokyo’s playbook—on one specific issue it sees as in its own interest. Like Japan decades ago, China is considering trying to blunt greater U.S.

Mexico’s inflation slowed more than expected in the first half of March, as the central bank is set to meet this week to consider a sixth straight rate cut and likely a second straight half-point reduction, Bloomberg News reported. Consumer prices rose 3.67% from a year prior, below the 3.7% median estimate of analysts surveyed by Bloomberg and less than the 3.81% in the previous two-week period. Core inflation, which leaves out volatile items including food and fuel, also decelerated to 3.56% from 3.66% in late February.

Employees at major Japanese companies have been promised the biggest pay increases in 34 years. That’s a good sign for the economy, but forces smaller firms with smaller budgets to get creative to stay competitive in the labor market, the Wall Street Journal reported. Rather than raising base salaries, which can be costly enough to strain a company’s finances to the point of bankruptcy, small and medium-sized enterprises are looking at boosting benefits.