Australian businesses are bracing for a wave of insolvency when JobKeeper payments end in three months after changes to bankruptcy laws were initiated at the start of the year and border closures continue to impact employers, SkyNews.com reported. The federal government temporarily changed bankruptcy legislation at the peak of the coronanvirus outbreak to help employers make it through the pandemic. Creditors will be allowed to apply for a bankruptcy notice against a business when outstanding debts reach $10,000 since the safe rules have now ended.
As of January 1, eligible Australian businesses experiencing financial distress can access a new, simplified debt restructuring process that allows them to restructure their existing debts while remaining in control of their business, the government said in a statement, the Australian Times reported. The reforms are aimed at repositioning the country’s insolvency system to help more incorporated small businesses – with liabilities of less than $1-million – restructure and survive the economic impact of the Covid-19 recession.
Oil and gas explorer Far Ltd said on Thursday it received a A$209.6 million ($159.15 mln) all-cash takeover proposal from private investment firm Remus Horizons PCC Ltd, Reuters reported. The offer values Far at 2.1 Australian cents per share, representing a premium of 90.9% to the company’s shares last closing price of 1.1 Australian cents. Cash-strapped Far has struggled due to the coronavirus-induced downturn in the oil and gas industry, with the Africa-focused explorer defaulting in June on its contributions to the Sangomar oil project off Senegal’s shore.
Virgin Australia said on Wednesday it had restructured its order for Boeing Co 737 MAX planes, reducing the number on order to 25 from 48 and delaying the first deliveries by two years to mid-2023, Reuters reported. Australia’s second-biggest airline, now owned by U.S. private equity group Bain Capital, said in a statement it would take 25 of the largest variant, the 737 MAX 10, but not the 23 smaller 737 MAX 8s it had ordered previously. Bain’s purchase of Virgin closed last month, allowing the airline to exit from voluntary administration, Australia’s closest equivalent to U.S.
More than two-thirds of mortgage and personal loans that had principal and interest repayments deferred due to the impact of Covid-19 were now "back to normal", says the New Zealand Bankers' Association, the New Zealand Herald reported. At the same time, nearly 40 per cent of those loans that had reduced repayments were now back on track. In March, in consultation with the government, the Reserve Bank and credit reporting agencies, all New Zealand retail banks offered loan deferrals for up to six months and reduced loan repayments to customers financially impacted by the Covid-19 global pan
The massive Grocon building empire has collapsed. The company, which is one of the biggest property developers in Australia, went into administration on Friday, saying the construction side of the business was insolvent, Yahoo! News reported. Its chief executive, Daniel Grollo, says he's furious and blamed government agency Infrastructure NSW for its handling of the Central Barangaroo project. "It is unfortunate that INSW is forcing our hand to place the construction business into administration," he said.
Insolvency experts expect to be hit by a wave of company collapses from January 1 after temporary relief measures to help businesses through the COVID-19 economic crisis expire, The Australian Financial Review reported. Practitioners in the area have spent the quieter-than-normal period working on existing insolvency matters, catching up on training and helping out in other service lines, according to leaders at three firms in The Australian Financial Review Top 100 Accounting Firms list.
National Australia Bank on Thursday posted a 36.6% fall in annual profit, hurt by higher loan loss provisions for the COVID-19 pandemic, customer and payroll remediation, and higher wages, Reuters reported. Australia’s third largest lender also warned costs would keep rising in the next few years, and asset quality would deteriorate in the pandemic-stressed economy. NAB reported full-year cash earnings of A$3.71 billion ($2.66 billion), compared with a restated figure of A$5.85 billion last year. Analysts polled by Reuters on average expected cash earnings of A$3.82 billion.
Australia Post licensees say their business are now “worthless” after CEO Christine Holgate quit over the Cartier watch scandal, PerthNow reported. Executive director Angela Cramp, who heads the group of 2850 members, said there was “no way back from this” after Australia Post boss Christine Holgate resigned on Monday – just weeks after the Prime Minister bluntly told her if she didn’t wish to stand aside “she should go”. “Australia Post Australia and licensees are all the poorer from this,” Ms Cramp said.
The Australian Financial Security Authority has issued a warning around dodgy insolvency advisers ahead of an anticipated spike of bankruptcies, nestegg reported. The personal insolvency regulator has now launched a public campaign to raise awareness on the prevalence of dodgy insolvency advisers and telltale signs for the public to look out for. The Australian Financial Security Authority’s campaign comes as it is particularly concerned that those experiencing financial stress because of the economic impact of COVID-19 may be easy targets.