Switzerland

Policy makers are facing the most economically challenging part of the Covid-19 crisis in avoiding the creation of “zombie” companies, according to the Bank for International Settlements, Bloomberg News reported. Ultra-easy monetary and fiscal support is helping companies avoid a liquidity crunch after the pandemic closed down businesses and demand collapsed. But that stance bears risks longer-term, said Claudio Borio, head of the Basel-based institution’s Monetary and Economic Department.

Credit investors are unconvinced about the ability of the world’s weakest lenders to weather a coronavirus economic slowdown, according to Bank for International Settlements, Bloomberg News reported. The cost of insuring debt from lower-rated banks is yet to fully recover from a virus-fueled blowout, with spreads on credit default swaps tied to high-yield lenders an average of 127 basis points above pre-pandemic levels as of Aug. 21, BIS said in report published on Monday. CDS spreads for BBB tier banks were 30 basis points wider.

Financial investor KKR is injecting 125 million euros ($147 million) in additional capital into crisis-hit Swiss snack machine operator Selecta under a debt restructuring agreement, Reuters reported. In addition, outstanding bonds would be converted into securities that would not mature until 2026 in a move that will significantly reduce the company's high level of indebtedness, Selecta said (here) in a statement released late on Tuesday. Major shareholder KKR, creditor banks and a substantial portion of the bondholders had agreed to the recapitalisation.

Swissport is getting new owners in a debt-for-equity swap that includes a 500 million euros ($595.20 million) long-term debt facility and a 300 million euros interim facility to help keep it afloat, the airport services company said on Monday, Reuters reported. Senior secured creditors including SVP Global, Apollo Global Management, TowerBrook Capital Partners, Ares Management, Barclays Bank PLC, Cross Ocean Partners and King Street Capital Management will take ownership.

Travel agent STA Travel Group has gone into voluntary administration. It comes after the collapse of the travel group’s Swiss-based parent company STA Travel Holding AG, which filed for insolvency, Business Insider Australia reported. STA operates online travel agent services and 27 outlets in Australia, with Deloitte’s Jason Tracy and Timothy Norman appointed as administrators on August 21.

Swissport has secured hundreds of millions of euros of financial backing from creditors, gaining a vote of confidence in its future as the travel sector is hard hit by the COVID-19 crisis, Reuters reported. The Swiss-based airport ground services firm said a comprehensive restructuring with lenders included 300 million euros ($353 million) in interim support and a 500 million euro long-term debt facility that will replace that initial backing.

The Swiss parent company of STA Travel has filed for insolvency but says “day to day operations may continue” at subsidiaries including the UK business, Travel Weekly reported. STA Travel Holding AG is the holding company of the youth travel specialist which is owned by Diethelm Keller Holding (DKH). Administrators are due to be appointed to determine the “next steps” for the holding company, but the firm confirmed the process applies only to the Swiss business and not to STA Travel in the UK, which has 52 stores and an Atol licence to carry more than 34,000 passengers a year.

Offshore oil servicers are going bust at the fastest pace in three years as explorers spurn high-cost drilling to deal with a worldwide slump in commodity prices, Bloomberg News reported. The debacle, triggered by the pandemic-driven drop in oil prices, has already claimed some of the biggest companies that supply rigs, transportation and other support services to deep-water drillers. Noble Corp. and Diamond Offshore Drilling Inc. have filed for Chapter 11 since the start of the pandemic-driven oil downturn, while Valaris Plc filed for bankruptcy Wednesday. Firms including Transocean Ltd.

CNN Money Switzerland (CNNMS) will cease operations and file for bankruptcy after the coronavirus pandemic hit revenues, the Swiss business media company said on Monday, Reuters reported. While audience figures for the company’s audiovisual programmes rose sharply over the past six months, revenues contracted as business partners hit by the crisis cancelled or postponed contracts, CNNMS said in a statement.

Lenders to the world’s biggest airport baggage-handling group Swissport have offered a rescue package that would restructure its €2.1 billion of net debt and could transfer ownership to them from struggling Chinese conglomerate HNA Group, The Irish Times  reported. The owners of €1.4 billion of senior secured bonds issued by Swissport have promised to invest in the business to help it survive the pandemic, which has hit its operations hard with the grounding of flights.