North America

Cinepolis de Mexico SA, Mexico’s biggest chain of cinemas, is seeking to restructure more than $1 billion in loans, Bloomberg News reported. The global movie theater giant has enlisted Lazard Ltd. for talks with lenders including Banco Bilbao Vizcaya Argentaria SA, HSBC Holdings Plc, Banco Santander SA and the Mexican government development bank Bancomext, the people said. Talks started early last month and the banks picked FTI Consulting Inc. as their adviser.

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As the code red lockdown continues past the holiday season, the pulse of Winnipeg small business is growing weak despite injections of government survival cash. Jonathan Alward, director of provincial affairs for the Manitoba branch of the Canadian Federation of Independent Business (CFIB) told the Winnipeg Sun on Tuesday that many Winnipeg small businesses are considering bankruptcy.

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DesRosiers Automotive Consultants Inc. says that 1.54 million cars and trucks were sold in Canada in 2020, falling 19.7 per cent from 2019 to the lowest level since 2009, the Canadian Press reported. The consultancy says auto sales fell 2.6 per cent in December 2020 from the same month in 2019, leaving dealers in the midst of the steepest annual decline since 1982. But it also says that it could have been worse, given sales plummeted 75 per cent for the month of April at the onset of the COVID-19 pandemic.
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Even before Covid-19, the World Bank had lowered its projections for global growth in the 10 years that began in 2020. The pandemic is exacerbating that trend, raising the prospect of a “lost decade” ahead, the World Bank said Tuesday, as it also cut its forecasts for the coming year, the Wall Street Journal reported. The bank’s semiannual Global Economic Prospects report attributes the long-term downgrade to lower trade and investment caused by uncertainty over the pandemic, along with disruptions in education that will hamper gains in labor productivity.
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While many have celebrated the start of the New Year filled with hope, one expert believes that 2021 will be difficult for directors, officers, and their advisers due to a projected increase in insolvency claims against them, Insurance Business Magazine reported. “The view from specialists across our network is that while legislative measures… have offered some protection to directors of companies facing financial difficulties, insolvency claims will be a strong driver of D&O risk in 2021,” said Simon Konsta, partner at Clyde & Co. London.

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The Canada Pension Plan Investment Board (CPPIB) was the unlucky recent buyer of a 5 percent stake in SolarWinds, the Texas-based business software maker that was compromised by a far-reaching Russian espionage attack discovered this month, the Washington Post reported. The largest shareholders in SolarWinds agreed to sell CPPIB the stake for $315 million on Dec. 7, just days before tech company’s public disclosure of the hack crushed its stock price more than 20 percent.

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Grupo Aeromexico has wound up discussions with two labor unions but remains in talks with two more, it said yesterday in an update on negotiations that are a requirement for the airline to receive a second tranche of bankruptcy financing, Reuters reported. Aeromexico filed for chapter 11 protection in a U.S. court in June, after the coronavirus pandemic slammed the global travel industry. The carrier was approved for up to $1 billion in debtor-in-possession (DIP) financing, and received an initial $100 million payment in September.

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Mexico will likely approve a bill making the central bank the nation’s dollar buyer of last resort following changes that will ease concerns it could force the institution to take illicit funds, a top senator said, Bloomberg News reported. Lawmakers will hammer out details with central bank and finance ministry officials in January, clearing the way for the lower house to approve the proposal in February, Senator Alejandro Armenta said. If the bill is modified, the senate would have to hold a final vote before it becomes law.

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Latin America’s luck will change. Pandemic lockdowns caused more regional corporations to default between early May and June. But yield-starved investors will ignore some of these risks, Reuters reported. There’s a lot of bad news to ignore. The International Monetary Fund expects Latin American and Caribbean economies to contract by more than 8% in 2020, the most of any region, with only a 3.6% improvement in 2021. And non-financial companies with foreign debt have seen revenue dented by a combined $200 billion due to the pandemic, Fitch Ratings estimates.

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Canada on Thursday temporarily waived a C$844 million ($664 million) debt payment for the construction of Newfoundland and Labrador’s Muskrat Falls hydroelectric power plant, bailing out a troubled project in a province already laden with debt, Reuters. Since the announcement of the project in 2010, Canada has guaranteed a total of C$7.9 billion in debt for the project, which has faced major cost over-runs and now represents a large portion of the remote and sparsely-populated Atlantic province’s overall debt.

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