Headlines

Shockwaves from a default by the biggest bank in Azerbaijan are spreading to its neighbor on the opposite shore of the Caspian Sea, Bloomberg reported. Already burned by the International Bank of Azerbaijan’s missed payment and its effort to wrest a 20 percent principal writedown in a proposed debt restructuring, investors are starting to wonder if Kazakhstan’s Kazkommertsbank is the next domino to fall. Its $250 million of subordinated bonds are trading below par only two weeks before maturity, a sign the bank’s ability to come through is in doubt.

A state-run company in Mozambique skipped $134 million in payments on a government-guaranteed loan, the third time this year the southern African nation failed to meet its obligations as a standoff with creditors blocks debt restructuring talks, Bloomberg News reported. Mozambique Asset Management, one of three state-owned companies that took out undisclosed loans worth about $2 billion, failed to make the payment due May 23, Rogerio Nkomo, a spokesman for the Finance Ministry, said by phone.

Brutal competition and 457 billion rupees ($7 billion) of borrowings have finally caught up with billionaire Anil Ambani’s Reliance Communications Ltd. The Indian wireless operator rattled investors with its first full-year net loss amid signs it’s struggling to repay debt, Bloomberg News reported. Its $300 million junk-rated note due in 2020 declined as much as 13.9 cents on the dollar to 70.1 cents on Monday and the stock sank to a record low.

While investors find courage in positive data out of Europe, there’s one development that should give them pause. A growing number of small businesses in Europe complain they face excessive delays in being paid for their work, with large parts of the sector seeking tougher laws to address the problem, Bloomberg News reported.

The bank regulator in a rust-belt Chinese province has urged regional lenders to roll over maturing loans to struggling coal and steel companies, a policy that cuts against the Communist party’s pledge to shut down “zombie” enterprises, the Financial Times reported. Investors widely assume that Chinese banks keep lossmaking companies on life support by rolling over maturing loans, often under pressure from local governments.

In India, the vultures are circling. These vultures are investors looking for opportunities in distressed assets and bad debts. For years they had avoided investing in India, put off by a creakingly slow legal system and a labyrinthine bureaucracy. But a new bankruptcy law and a move this month to give India’s central bank expansive powers to tackle bad debt have excited investors both here and abroad who think investing in India’s distressed market could produce double-digit returns, the International New York Times reported.

Monte dei Paschi di Siena said on Monday it was in exclusive talks with a domestic fund and a group of investors over the sale of its bad loan portfolio, which it needs to offload before it can be taken over by the state, the International New York Times reported on a Reuters story. The negotiations mark the latest stage in a long-running process to rescue the world's oldest bank, which includes efforts to enable it to shed its bad loans.

Italy’s troubled mid-sized lenders Banca Popolare di Vicenza and Veneto Banca have “all the public guarantees necessary” to shore up their liquidity, Italy’s finance ministry said in a statement on Thursday. Pier Carlo Padoan, finance minister, made the statement after meeting with the bosses of struggling banks Banca Popolare di Vicenza and Veneto Banca on Thursday morning, the Financial Times reported. Both lenders are at risk of being bailed in under EU rules.

Kenya Airways expects to unveil a big capital restructuring in the next two months as part of its turnround strategy after returning to operational profitability following four years of losses, the Financial Times reported. Mbuvi Ngunze, who steps down as chief executive next week, said the airline, which slashed its loss before tax by 61 per cent in the year to March 2017, “is not out of the woods yet”.

The order book at Singapore shipyards fell by more than half last year as the city-state’s offshore industry was battered by the slide in oil prices.