Headlines

The largest shareholder of ailing Brazilian airline Gol Linhas Aereas Inteligentes SA is nearing a deal to raise $1.3 billion of funds from investment firm Castlelake LP to stave off the risk of defaulting on its bonds, Bloomberg News reported. Abra Group Ltd., which also owns Colombian airline Avianca Holdings SA, outlined Castlelake’s proposal to its investors last week. Under the plan, the investment firm would refinance Abra’s secured bonds due 2028, which could default after Gol raised a bankruptcy loan as part of its chapter 11 procedure in the U.S.

Azul SA shares slumped to a record low Thursday as the Brazilian airline is weighing options from an equity offering to a U.S. chapter 11 filing to address approaching debt obligations, Bloomberg News reported. The troubled carrier is also actively working get a merger Gol Linhas Aereas Inteligentes SA over the line to convince creditors that a new combined entity would have lower debt levels and better growth prospects. But that approach is seen as less attractive given Azul’s imminent cash needs and weak financial results.

Brazilian lawmakers approved a long-awaited financial aid plan for the airline sector that is expected to provide 5 billion reais ($914 million) in credit for troubled carriers, Bloomberg News reported. The program, already passed by the Senate, was cleared in the lower house on Wednesday. It now needs to be signed by president Luiz Inacio Lula da Silva, who campaigned on a pledge to restore prosperity in Brazil and wants to cut fares enough to allow the poor to fly regularly.

A Hong Kong court on Wednesday dismissed a petition to liquidate Chinese education firm XJ International Holdings Co., dealing a blow to a group of bondholders that includes some of Asia’s most prominent hedge funds, Bloomberg News reported. Deputy High Court Judge Doreen Le Pichon threw out the wind-up petition on technical grounds, saying that XJ had shown there is a dispute that a put option hadn’t been properly exercised, according to a judgment dated Aug. 28 posted on the judiciary’s website.

South Korea’s financial market regulator has asked lenders with exposure to troubled real estate project finance loans to finalize their cleanup plans by Sept. 6, setting a tight deadline after growth in risky loans exceeded the regulator’s previous estimates, Bloomberg News reported. Project finance exposure of all financial institutions stood at 216.5 trillion won ($162 billion) as of June 2024, of which at least 21 trillion won, or 9.7%, was risky, the Financial Supervisory Service, the Korean financial watchdog, said on Thursday.

The Bank of Mexico cut its forecast for economic growth this year and next, according to the central bank's quarterly report on Wednesday, citing weaker foreign manufacturing demand while inflation remains stubborn, Reuters reported. The central bank for Latin America's No. 2 economy now expects 2024 gross domestic product growth of 1.5%, down from a previous forecast of 2.4%, and 1.2% growth next year from a prior forecast of 1.5%.

German inflation slowed to the European Central Bank’s target in August — supporting the case for another cut in interest rates next month, Bloomberg News reported. The 2% reading — the lowest since 2021 — was down from 2.6% in July and less than all but one economist surveyed by Bloomberg had estimated. A report earlier Thursday showed that price pressures also eased significantly in Spain, reaching a one-year low. The disinflation trend is expected to play out in the euro zone’s other two biggest economies — France and Italy — when numbers are published Friday.

The U.K.’s top financial regulator is set to delay the next wave of bank capital reforms, according to people with knowledge of the situation, the latest example of a major global rulemaker abandoning its timetable for the changes until the US finalizes its package, Bloomberg News reported. The Bank of England is poised to announce in coming days that it will postpone its entire package until January 2026 at the earliest as it monitors international developments, the people said, asking not to be identified discussing information that isn’t public. A BOE representative declined to comment.

The Central American country of El Salvador, the first country in the world to declare bitcoin legal tender, now has more than $340 million in bitcoin, according to Arkham Intelligence, TheStreet.com reported. The country has been gradually accumulating new bitcoin at a rate of approximately one bitcoin a day since March, indicating the country may scoop up over 100 bitcoins by the close of 2024. The country’s current bitcoin reserves stand at 5,856 bitcoin, reflecting holdings of $344 million in cryptocurrency based on current bitcoin prices.

Angola’s Finance Ministry said it will extend the practice of paying local suppliers with Treasury bills because the oil-rich nation’s government doesn’t have sufficient cash, Bloomberg News reported. The state may sell new securities to cover the payments to suppliers, Yona Amado, coordinator of arrears at the ministry’s Public Debt Management unit, said at a conference in Luanda, Angola’s capital. “This may cause some discomfort for creditors,” Amado said.