Japan
Nemaska Lithium, a Canadian lithium producer backed by SoftBank, has filed for bankruptcy protection as it scrambles to raise emergency funding to keep its flagship project alive, the Financial Times reported. The Toronto-listed company has been struggling to finance development of Whabouchi, a lithium mine and processing facility in Quebec, amid a cost blowout and a steep fall in the price of the metal, a constituent of electric car batteries. Nemaska on Monday said it was seeking protection from its creditors to give it sufficient time to complete a refinancing.
Japan needs to remain vigilant about its banks’ overseas investments in bundled credit products because the underlying loans may be less spread out across industries or individual companies than they appear, a senior regulatory official said, Bloomberg News reported. ‘’Even if banks individually think they are well-diversified, it is possible that overall risks in the market are concentrated in the same sector or the same debtors,” said Tokio Morita, director-general of the Financial Services Agency’s Strategy Development and Management Bureau.
Carlos Ghosn, the longtime head of Nissan Motor Co. and Renault SA, is preparing for the first of two trials in 2020 for what prosecutors and his former colleagues at Nissan call a pervasive pattern of financial misconduct and raiding of corporate resources for personal gain, Bloomberg BusinessWeek reported. He denies wrongdoing, saying that he’s the victim of a plot by Nissan executives and Japanese government officials to prevent further integration with Renault. A guilty verdict in either case could put the 65-year-old in a Japanese prison through the 2020s.
Prime minister Shinzo Abe has launched Japan’s first fiscal stimulus since 2016 with a larger-than-expected ¥13.2tn ($121bn) package to repair typhoon damage, upgrade infrastructure and invest in new technologies, the Financial Times reported. Described as a “15-month budget”, the spending package is one of the largest since the 2008-09 financial crisis as Japan seeks to fend off weakness in the global economy, drag from a recent rise in consumption tax and the risk of a slowdown after next summer’s Tokyo Olympics.
Japan Post Bank Co. said it would be cautious about future investment in bundled corporate loans after raising holdings last quarter, as financial authorities increase scrutiny of the practice, Bloomberg News reported. The postal savings giant boosted its holdings of collateralized loan obligations by 15% from June to 1.52 trillion yen ($14 billion) as of Sept. 30, an earnings presentation showed Thursday.
SoftBank is tightening governance at companies it backs as the Japanese conglomerate and its $97bn investment powerhouse try to limit the outsized control of start-up founders and restore confidence in their bets following the near collapse of WeWork, the Financial Times reported. The Tokyo-based group is expected to outline tougher governance standards and restrictions on dual-class share structures on Wednesday as it takes a multibillion-dollar writedown because of bad bets on investments such as the US-based office-sharing group, said people briefed on the plan.
Japan’s financial system is becoming more susceptible to the effects of financial stress abroad, the Bank of Japan has warned, as stagnant returns at home prompt its lenders to ramp up their exposure to US leveraged loans, the Financial Times reported. In its semi-annual Financial System Report, the central bank said that the ratio of overseas to domestic loans at Japanese banks had reached a record high, as the banks fill the gap in international markets left by retreating European rivals.