Headlines

Risky borrowers are running into trouble in China and that is putting pressure on trust companies, an important corner of the country’s shadow-banking system, The Wall Street Journal reported. The fear is that this could further reduce the credit available for private businesses, acting as a drag on an economy whose growth is already slowing. Lightly regulated trust companies have been critical lenders for these firms, as traditional banks deal mostly with favored state-owned enterprises. These problems could also bounce back on many small investors.

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Jet Airways shut down its operations on April 17 following the refusal by its lenders to advance any funds for its operations, The News Minute reported. Subsequently, State Bank of India filed an application with the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against the airline company. News has now come in that Etihad Airways has expressed its interest in the resolution of the Jet Airways imbroglio.

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India’s battle against the world’s worst bad-loan ratio is being stalled by some unforeseen parties: regulators and federal investigators, Bloomberg News reported. A spate of legal challenges mounted by the country’s markets regulator, anti-money-laundering agency and its tax department accentuate conflicts between bankruptcy law and other regulations that pre-date them. In many cases, the court battles being fought by these agencies to hang on to powers to seize and sell assets of those violating their rules are derailing a 270-day resolution deadline set by the insolvency law.

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St Helens College is at “high risk of insolvency” without action to mitigate its financial position following an underfunded merger, according to an FE Commissioner report. The college did not properly predict how much money it would need for a 2017 merger with Knowsley College to form the SK Colleges Group, which was supported by £14.1 million from the ESFA’s restructuring facility, FE Week reported. As a consequence of which, FE Commissioner Richard Atkins wrote in a report published today, the current underlying position of the college is “not sustainable”.

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Green shoots are showing in Europe’s manufacturing sector after a torrid year — but it is probably too early to call an end to the slowdown, the Financial Times reported. Industrial production expanded month on month in all five of the eurozone’s largest economies in May, a welcome relief given the gloom that has shrouded the bloc’s manufacturers in the past year. Economists polled by Reuters expect to see a 0.2 per cent month on month expansion of industrial production across the eurozone when May’s figures are published on Friday. That would be the best performance since January.

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Indian tycoon Anil Ambani plans to raise about 217 billion rupees ($3.2 billion) by selling assets from roads to radio stations in a bid to cut debt…Ambani is waging a war on debt. He said on June 11 that his Reliance Group repaid 350 billion rupees in the past 14 months through asset disposals, Bloomberg News reported. But a large pile remains. The four biggest group companies still have about 939 billion rupees of debt. And that excludes Reliance Communications Ltd., Ambani’s former flagship firm, that recently slipped into insolvency.

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South African wireless carrier Cell C Pty Ltd. has begun talks to delay debt payments and hired consultants to probe its business practices and advise on a restructuring, sending shares in its biggest investor to a decade low, Bloomberg News reported. Cell C is laboring under 8.9 billion rand ($639 million) of debt and trying to secure new funding from a consortium of investors. The company has begun a round of cost cuts, has frozen hiring and is reviewing its contracts, wrote Douglas Craigie Stevenson, Cell C’s chief executive officer, in an open letter.

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Job cuts and restructuring announced by Deutsche Bank AG this week risk making it harder for the German lender to claw back market share at its surviving Asian units, Bloomberg News reported. Over the past five years, Deutsche Bank has fallen down the rankings for Asian debt capital markets and wealth management, while it has lost the top spot to rivals in fixed-income, currencies and commodities trading. Despite these slips, the businesses contributed to a record profit for the firm in the first quarter of 2019.

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A proposal by the biggest owner of Eskom Holdings SOC Ltd.’s debt to convert its $6.4 billion holding into equity has become a rescue option as South Africa seeks to restructure the troubled power utility, Bloomberg News reported. In return, the Public Investment Corp., which manages about $150 billion and is responsible for the pensions of more than 1 million state workers, wants a say over Eskom’s messy finances, including board representation, said five people with direct knowledge of the talks.

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A Brazilian appeals court judge has allowed bank creditors of Odebrecht SA to take possession of shares in petrochemical company Braskem SA pledged as collateral for loans they made to the corruption-ensnared conglomerate, according to a document seen by Reuters. The new injunction, granted on Wednesday in favor of Brazil’s largest lender, Itau Unibanco Holding SA, overturns a ruling banning any sale or possession of Braskem shares by banks, Reuters reported. State-controlled lender Banco do Brasil has filed a similar request.

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