Headlines

Renewable energy giant Abengoa has avoided the largest bankruptcy in Spanish history – for the time being at least – by securing an agreement with its creditors, the Irish Times reported. The Seville-based firm needed the backing of 60 per cent of its lenders by Monday in order for the so-called “standstill accord” to come into affect. Abengoa managed to secure the support of 75 per cent of creditors, giving it up to seven months in which to restructure.

Banks in the United Arab Emirates will suspend legal action against small and medium sized enterprises (SMEs) struggling to repay debt for up to three months to prevent a surge in defaults that may jeopardise the economy, Reuters reported. The initiative, which involves businesses working with lenders to restructure their loans, is intended to give breathing space to SMEs, which contribute around 60 percent of UAE's gross domestic product.

Skymark Airlines Inc. exited bankruptcy administration and forecast its first operating profit in three years after reducing its fleet, cutting routes and securing new funding, The Japan Times reported on a Bloomberg News story. The carrier expects to report ¥1.5 billion ($13 million) in operating profit and sales of ¥70 billion for the year ending March 31, Skymark said in a statement Monday. Skymark also said it’s targeting an “early relisting” of its shares after filing for bankruptcy protection last year. Private equity firm Integral Corp.

The southern Chinese city of Shenzhen has raised deposit requirements for some home buyers, the latest in a series of measures being introduced across the country to calm property markets, according to the official Xinhua news agency, the Irish Times reported. Authorities in Nanjing, in the eastern coastal province of Jiangsu, issued similar measures on Monday, underlining how the government’s tightening campaign has spread to more “second tier” cities.

Global miners have bought back billions of dollars of their debt in a display of financial strength designed to address investor concerns over their leverage as they try to deal with the after-effects of the commodities slump, the Financial Times reported. Miners including Barrick Gold and Anglo American completed $2.5bn of bond repurchases this month. They join other miners including Vedanta Resources, Glencore and Fortescue Metals Group to have bought back part of previously issued debt in recent months.

Brazilian airline Gol Linhas Aereas Inteligentes SA said Monday it has hired U.S.-based PJT Partners Inc. as a financial adviser, as the country’s deep economic recession is hurting demand for air travel, The Wall Street Journal reported. Gol said in a statement it hired “PJT Partners to advise the company in connection with measures to strengthen its capital structure and liquidity and to improve the profile of its debt.” In February, Moody’s Investors Service downgraded its rating on Gol because the airline faces a cash crunch in coming months as debt payments come due.

Japan’s prime minister insists he will raise consumption tax to 10 per cent next year and has hinted that another economic stimulus package is being planned, the Financial Times reported. Shinzo Abe said before leaving for Washington he would press ahead with the tax rise unless there was a natural disaster or economic blow as big as the Lehman Brothers bankruptcy. But Mr Abe also began to prepare for another fiscal stimulus, already under discussion within his party, and warned of downside risks to the global economy.

The debt restructuring of a leading Chinese steel company has caught the attention of the market in what some analysts see as a landmark case for reform of the troubled sector, the South China Morning Post reported. Bohai Steel, a steelmaker based in northeast China Tianjin is struggling with debt of 192 billion yuan (HK$228.96 billion). Analysts believe the lack of a government bailout may signal China’s desire to develop a test case for other loss-making state-owned enterprises and local governments to follow.

Small Irish firms whose loans have been sold to foreign “vulture funds” may face millions of euro in tax charges and penalties from Revenue, the Irish Times reported. This comes after it was discovered that the acquisition of distressed loan books, typically by special purpose vehicles (SPVs), can trigger a demand for withholding tax on the interest paid on individual loans, for which the borrower is liable. Companies must generally deduct 20 per cent tax on payment of interest under Irish law.

Brazil’s economic crisis is as bad as its political one, The Wall Street Journal reported. Latin America’s biggest economy appears headed for one of its worst recessions ever. It stalled in 2014, shrank 3.8% last year and now faces a similar contraction this year. Unemployment rose to 9.5% on Thursday as wages fell 2.4%, both trends forecast to worsen. One in five young Brazilians is out of work, and Goldman Sachs says Brazil may be facing a depression. The deteriorating outlook forms a dire backdrop for Brazil’s political straits.