North Africa/Middle East

Defaulted Lebanon gave the first glimpse of its restructuring plans by setting a goal of halving one of the world’s biggest debt burdens as early as this year and moving to a more flexible exchange rate, according to a draft document seen by Bloomberg. The government is discussing a reform plan submitted by the Finance Ministry and drafted by a group of advisers including other ministries and Lazard Ltd, Bloomberg News reported.

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Healthcare company NMC Health said on Wednesday it expects to be placed into administration in due course, following weeks of uncertainty relating to its debt levels and undisclosed shareholder dealings, Reuters reported. NMC said in a statement it was unable to reach agreement with its creditors despite strenuous efforts to address their concerns. Abu Dhabi Commercial Bank, one of the major lenders to NMC Health, filed an application earlier this month in a UK court to put the company into administration.

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As the coronavirus crisis deepens in emerging economies around the world, collapsing currencies, commodity prices, export earnings and tourism revenues threaten to shred the finances of many governments, leaving them scrambling to avoid default, the Financial Times reported. Zambia has already called in advisers to restructure its debt while Ecuador has asked for more time to make coupon payments on three dollar bonds. Few analysts believe they will be the last.

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Lebanon’s foreign-exchange crisis is intensifying, prompting another appeal by the government for financial aid after its debt default last month, Bloomberg News reported. Local banks have reduced the amount of dollars customers can withdraw from their accounts and even forced them to accept conversions into the local currency in some instances. Two of the largest have almost stopped dispensing foreign exchange entirely, while the central bank has greatly cut its supply, said senior bankers, who didn’t want to be named.

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Lebanon said it will allow small depositors to withdraw funds from dollar accounts at a weaker rate than the decades-old fixed regime, the first official move away from the country’s currency peg amid a severe liquidity crisis, Bloomberg News reported. With hardly any dollars circulating in the banking system, lenders will pay out at a “market rate” in Lebanese pounds to clients with accounts of up to $3,000, according to a central bank circular issued Friday.

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NMC Health Plc convertible bondholders are working with PJT Partners Inc. as the troubled Middle Eastern hospital operator prepares for a restructuring, people with knowledge of the matter said, Bloomberg News reported. PJT is advising a group of investors in NMC Health’s $360 million of convertible bonds due 2025, the people said, asking not to be identified because the information is private.

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Abu Dhabi-based Gulf Marine Services (GMS) said on Tuesday it had reached an agreement with its syndicate of banks to restructure its debt that will help it weather the coronavirus crisis, gCaptain reported. London-listed GMS provides support vessels for offshore oil and gas and other energy installations. It has been hurt by a downturn in the oil and gas services industry triggered by a prolonged slide in oil prices that has turned into a deep slump since the coronavirus crisis destroyed demand and a production cut agreement between OPEC and its allies collapsed.

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A decade after the global financial crisis pushed Dubai’s real estate sector -- known for its outlandish projects such as man-made palm-shaped islands -- to the brink of collapse, the deadly coronavirus pandemic threatens to send it back there again, Bloomberg News reported. S&P Global Ratings is warning that home prices could slump to 2010 levels as unemployment across key sectors such as tourism and retail eviscerates demand. Prices are currently about 5% to 10% above what they reached a year after the debt crisis in 2009, according to data from real estate services firm Asteco.

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Lebanon kicked off talks to restructure its $90 billion debt pile on Friday with a promise to present a comprehensive recovery plan for its “broken” economy before the end of this year, Bloomberg News reported. In a video presentation to bondholders, Lebanon’s top finance officials said the economic overhaul would require external funding, but did not set concrete targets for cutting the deficit or restoring growth and spoke only in general terms about the steps required.

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Limitless World LLC is close to hiring financial and legal advisers for the Dubai-based developer’s third restructuring as the emirate’s on-going property slump is set to worsen, Bloomberg News reported. The company told creditors that it’s in the “final stages” of engaging advisers to work on a restructuring plan as it’s “unable to pay accrued profit at the end of March,” according to a letter sent to banks and seen by Bloomberg. Limitless’ board has recently been reorganized to comprise three members, who are being advised “on all matters” by a team from Dubai World, the letter said.

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