Headlines

Brazilian telecom carrier Oi SA disclosed on Tuesday a new strategic plan aiming to divest up to 7.5 billion reais ($2 billion) in non-core assets and focus on its fiber-to-home (FTTH) broadband service, Reuters reported. The company, which filed for bankruptcy protection in June 2016 to restructure approximately 65 billion reais of debt, plans to sell towers, data centers, real estate assets, its Angolan subsidiary Unitel and other non-strategic assets between 2019 and 2021.

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Views on the state of the German economy darkened again in July, according to a key survey, as analysts weighed factors including rising tensions in the Gulf, the US-China trade dispute and uncertainty around the UK’s exit from the EU, the Financial Times reported. The Zew survey of financial market experts indicated deteriorating views on both the current state of and outlook for Europe’s powerhouse industrial economy.

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A group of lenders led by State Bank of India has filed a case in the nation’s Supreme Court seeking to annul a ruling that gives almost equal rights over the country’s largest distressed steel mill’s obligations to lenders and its 1,936 vendors, Bloomberg News reported. Earlier this month an Indian bankruptcy court, that allowed ArcelorMittal’s $6 billion purchase of Essar Steel India Ltd. said the money has to be shared proportionately among all creditors. The judgment will enable vendors such as Associated Road Carriers Ltd.

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GAM has drawn a line under a crisis that has engulfed the Swiss asset manager for nearly a year by selling a final tranche of £600m of bonds back to British industrialist Sanjeev Gupta, the Financial Times reported. The sale, which was announced on Monday evening, will allow GAM to pay back investors in its Absolute Return Bond Fund range, who have been frozen in the former flagship strategy since it suspended trading last August.

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Conditions in China’s credit market are helping to stoke startling growth in the nation’s pile of asset-backed securities, according to a top underwriter. Almost all types of bonds have been affected by the fallout from a surprise government takeover of a troubled lender in May, Bloomberg News reported. But banks are the main holders of China’s ABS and have better access to funding, largely preventing a sell-off in the sector, said Zuo Fei, general manager of the innovation financing department from China Merchants Securities Co.

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A Dangerous Debt Ruling in India

India’s insolvency tribunal has made a dangerous decision. Unless its judgment is quashed, credit costs for India Inc. will surge, shares of state-run banks will swoon and foreign investors will flee. The case concerns the country’s most high-profile bankruptcy, Essar Steel India Ltd, a Bloomberg View reported. Insolvency judges recently ruled that creditors whose claims are backed by collateral won’t get preferential treatment in the $6 billion sale of the company’s plant to ArcelorMittal. Secured creditors will stand in line with unsecured creditors.

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Tongaat Hulett Ltd. is asking 10 lenders for a break from payments on as much as 11 billion rand ($793 million) of debt so it can recover from the impact of having to restate accounts, according to Chief Executive Officer Gavin Hudson, Bloomberg News reported. The embattled South African sugar maker is spending about 1 billion rand a year servicing the borrowings and is looking to negotiate a freeze by the end of July, Hudson said in an interview at Tongaat’s 19th century Durban headquarters, an old farmhouse surrounded by sugar-cane fields.

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Suzlon Energy Ltd., which became India’s biggest convertible-note defaulter in 2012, said it missed payments on dollar-denominated convertibles due Tuesday. The stressed wind-turbine maker faced a July 16 deadline to repay $172 million outstanding on such securities that were issued as part of a debt restructuring, Bloomberg News reported. While that revamp helped the company’s shares surge in 2014-2015, they’ve since slumped after India’s shift to auctions for building wind projects increased competition and diluted Suzlon’s market share.

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The extended grounding of Boeing Co.’s 737 Max plane forced Ryanair Holdings Plc to scale back growth plans for next summer, putting the airline industry on notice that the crisis is starting to affect longer-term plans, Bloomberg News reported. With a return date for the Max still uncertain after two fatal crashes, Ryanair is likely to receive barely half of the 58 planes it was expecting for the 2020 peak schedule, the Irish company said Tuesday, estimating that the reduction will wipe 5 million passengers from its full-year tally.

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China’s efforts to shore up sagging economic growth are leading to a resurgence in indebtedness, underlining the challenge President Xi Jinping’s government faces in curbing financial risk, Bloomberg News reported. The nation’s total stock of corporate, household and government debt now exceeds 303% of gross domestic product and makes up about 15% of all global debt, according to a report published by the Institute of International Finance. That’s up from just under 297% in the first quarter of 2018.

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