Headlines

A Scottish shopping centre sold at auction for £310,000 on Tuesday after being placed on sale with a reserve price of £1, as a tough retail climate cuts into property values, the Financial Times reported. The Postings shopping centre in Kirkcaldy was sold by the asset manager Columbia Threadneedle, which set the low reserve price because the centre — which has several vacant units — currently costs more to run than it earns in rent. The centre, built in the 1980s, most recently changed hands for £10.3m in 2003, according to Estates Gazette.

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Russian billionaire Mikhail Fridman has offered to buy Dia Group in a deal that gives the struggling Spanish supermarket chain an equity value of €417m, a deep discount from its €2.7bn valuation at the end of 2017, the Financial Times reported. Mr Fridman’s holding company, LetterOne, which owns 29 per cent of Dia through its L1 Retail fund, has offered to purchase the rest of the company for €0.67 a share, a premium of 56 per cent to Monday’s closing price. LetterOne bought much of its existing stake early last year, when shares were trading at about €4.

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Last-ditch talks to save Interserve, one of the UK’s biggest government contractors, have narrowed in on a debt-for-equity swap, with hopes rising that a restructuring will be announced this week, the Financial Times reported. The group’s board met on Tuesday after weeks of fraught negotiations with lenders and the Cabinet Office over rescuing a company that employs 45,000 people across services such as schools and hospitals. “Everyone is running ragged trying to find a settlement,” said one person involved in the talks. “It’s a bit like Brexit.

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Sunrise Records, a Canadian chain of record stores, agreed to buy most of HMV Group Plc in an auction overseen by the embattled music retailer’s administrators, fending off a rival bid by retail magnate Mike Ashley, Bloomberg News reported. Douglas Putnam, who runs Sunrise and bought HMV’s Canadian unit in 2017, will gain control of 100 stores across the U.K., KPMG LLP said Tuesday. The remaining 27 shops will be shut down, putting 455 employees out of work.

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Prayers for a sudden return to dovish monetary policies have been answered, and now investors are living with the aftermath: a world awash with $8.6 trillion in negative-yielding debt, Bloomberg News reported. That’s one reason money managers are wading once more into the fringes of fixed-income markets across the globe. Consider the action over the past week: Serial defaulter Ecuador managed to sell $1 billion in new bonds even as the government is in talks for International Monetary Fund financing.

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The Next Shadow-Banking Crisis in India

Just a year ago, India’s third-largest mortgage lender was bragging about how it had shrunk its financing costs by replacing bank loans with market borrowings, a Bloomberg View reported. Now, Dewan Housing Finance Corp. is confronting the fallout of that seemingly clever strategy, one that many of its peers face as well: a dangerously high exposure to India’s struggling developers. At the end of March 2018, Dewan had brought its cost of funds down to 8.4 percent, a reduction of almost 2 percentage points in three years.

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There’s been enough bad news about South Africa’s state-owned electricity company in recent months to rattle the hardiest bond investor. Or so you’d think. Even before President Cyril Ramaphosa said on Tuesday the nation won’t allow Eskom Holdings SOC Ltd. to fail, the company’s bonds were trading as if its troubles were over, Bloomberg News reported. The premium investors demand to hold the company’s 10-year dollar bonds rather than U.S. Treasuries dropped this week to the lowest since the securities were issued in August.

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Brazilian fertilizer company Fertilizantes Heringer SA has said it is filing for bankruptcy protection, closing down nine plants in Brazil and laying off their workers, Reuters reported. Heringer, among the largest players in the Brazilian fertilizer market with annual output of around 6 million tonnes, explained in a securities filing late on Monday that its liquidity situation deteriorated recently, leading to the decision. Reuters last week reported that the company was closing down 10 installations including plants and regional offices, and laying off an unspecified number of workers.

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Holiday airline Germania collapsed on Tuesday and canceled all flights immediately, the latest to succumb to turbulence in the European airline industry as it failed to secure financing to navigate a short-term cash squeeze, Reuters reported. The insolvency of the German company, which carried about 4 million passengers a year, followed the failure of Germany’s second-biggest carrier, Air Berlin, in 2017. Britain’s Monarch Airlines and Alitalia also filed for insolvency in 2017. German charter carrier Small Planet Airlines hit financial trouble last year after an expansion drive.

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