Headlines

China’s HNA Group is looking to sell one of its prized regional airlines to a state-owned competitor, as debt woes threaten the core operations of the indebted airline-to-finance conglomerate, the Financial Times reported. The sale would mark the first formal divestment of a core domestic aviation business, a step HNA executives had vowed the group would not take but highlights the challenge of handling debts of at least $78bn accumulated during its rapid expansion.

India is examining options including an outright sale of Infrastructure Leasing & Financial Services Ltd., a person with knowledge of the matter said, as the government tries to stem defaults at the lender with $12.6 billion of debt, Bloomberg News reported. A plan to be presented to a bankruptcy court Wednesday by the state-appointed board of the lender includes selling the entire stake to a financially strong investor and ensure business continuity, the person said, asking not to be identified as the matter is private.

Rallye SA, the indebted parent of French retailer Casino Guichard-Perrachon SA, may soon face a new front in its battle against short sellers, Bloomberg News reported. Distressed debt funds betting against the company have been buying up a Rallye bond due in January 2022 that may enable them to force a default, according to people familiar with the matter. That’s because the bond includes a clause stating that if the company’s net worth falls below a certain level, the investors can call in the debt if a majority agree, said the people, asking not to be identified because it’s private.

Venezuela just forked over almost $1 billion to stay current on a bond backed by shares of its U.S. refiner Citgo, Bloomberg News reported. The question is why. Yes, the payment ensures that Venezuela’s state-run oil company PDVSA gets to hold onto Citgo Holding Inc. for now, but many analysts think it’s just a matter of time before it has to forfeit the company. "It is hard to visualize a scenario in which Venezuela does not sooner or later lose Citgo to one of its defaulted creditors," Francisco Rodriguez, chief economist at brokerage Torino Capital, wrote in a note on Monday.

Italy’s economy came to a standstill in the third quarter, with gross domestic product failing to tick up from the previous period, amid political tumult and volatility in the country’s financial markets, the Financial Times reported. GDP was flat in the July to September period, the worst performance since the fourth quarter of 2014, according to official data from the Italian National Institute of Statistics. It was expected to expand 0.1 per cent, according to a poll conducted by Reuters, from a rise of 0.2 per cent in the previous quarter.

Those who are awash in cash lack capital. Those who have adequate capital are thirsty for liquidity, Bloomberg News reported. That, in a nutshell, is the story of India’s financial crunch, and the surest way to ease it will require tapping Indians living overseas. In the past, New Delhi has resorted to such special hard-currency deposit programs to tide over balance-of-payment difficulties. A notable instance was in 1998, after India invited U.S. sanctions by testing a nuclear weapon.

The number of companies in England and Wales falling into financial distress is rising at the fastest pace since 2009, according to data on Tuesday that suggests the trouble suffered by big firms is indicative of a wider, deep-seated trend, Reuters reported. Department store House of Fraser, fast food chain Gourmet Burger Kitchen and home improvements retailer Homebase are among well-known British businesses to seek creditor protection in recent months.

Major companies on Tuesday ruled out involvement in a new rescue of Alitalia, complicating a plan led by Rome in which state-controlled railway Ferrovie dello Stato (FS) will bid for the airline and look to bring in partners, Reuters reported. Alitalia was put under special administration last year, leaving the government once again seeking a buyer to save the carrier. It will be the airline’s third rescue in a decade. FS said its board had decided to put in an offer to buy Alitalia, but gave no further details.

Indian lenders are being punished for their exposure to a shadow lender as the government fails to make good on its promise to halt defaults by the distressed financier, Bloomberg News reported. IndusInd Bank Ltd. has lost more than $1.9 billion of market value since it announced quarterly earnings as net income growth missed expectations and provisions for doubtful loans shot up. Investors also penalized the lender for not detailing all its loans to Infrastructure Leasing and Financial Services Ltd. L&T Finance Holdings Ltd.

It’s never been easy to figure out where China’s government ends and the private sector begins, but the dividing line is getting increasingly blurry as the nation’s stock market sinks, Bloomberg News reported. At least 47 non-state companies in China have disclosed plans to sell stakes to government-backed investors in 2018, company filings compiled by Bloomberg show. The pace of such deals accelerated in recent months as the country’s $3.2 trillion equity rout squeezed company founders who pledged their stakes as collateral for loans.