The costs of the receivership for Treasury Holdings' main Spencer Dock firm now total over €15.5m, Independent.ie reported. That is according to the latest receivers' extract lodged with the Companies Office for the former Johnny Ronan company. The figures show that the costs of the receivership, made up of professional, management and receiver fees concerning the six year long receivership of the Treasury Holdings's firm, now total €15.5m. This follows professional, management and receiver fees totalling €230,910 in the latest six month period of the receivership from July to January of this year. David Hughes and Luke Charleton of EY were appointed as receivers to various retail units, undeveloped sites and part-developed sites owned by Spencer Dock Development on January 25, 2012 by Nama. The breakdown for the latest six-month period show that €114,335 has been paid out in property management fees; professional fees of €99,548 and receiver fees of €17,024. The big winners in the most recent period were the Revenue Commissioners, which received €9.98m. Read more.
Lazard Freres SAS is wrapping up talks with the Mozambican government for a planned meeting with creditors, said the bank that’s advising authorities on debt restructuring, Bloomberg News reported. The nation’s Eurobonds gained. “We are finalizing our discussions with the authorities and should be able to inform all creditors very shortly,” Michele Lamarche, managing director at Lazard in Paris, said in reply to emailed questions Thursday. Mozambique’s government plans to meet holders of about $2 billion of its commercial debt to discuss restructuring next month in London, Portuguese news agency Lusa reported earlier, citing Finance Minister Adriano Maleiane. A spokesman for the ministry didn’t respond to calls and an email seeking comment. The government in 2016 admitted to $1.4 billion of previously undisclosed loans, prompting the International Monetary Fund to withdraw financing, while foreign donors withdrew direct budget support. Mozambique said in October that year it couldn’t afford to service its commercial debt and wanted to restructure it. Read more.
The UK’s oldest peer-to-peer service is warning investors that defaults on its recent loans will be running at a higher rate than during the financial crisis, the Financial Times reported. Peer-to-peer investing offers a trade off to investors: if they lend money directly to riskier borrowers, they can get a high rate of return on their cash. But Zopa, the dominant peer-to-peer lender in the UK consumer market with £3bn of lending, is anticipating falling investor returns despite increasing its volume of high-risk loans. When the company was launched in 2005, it matched lenders with low-risk borrowers and offered a safety net in the form of a provision fund which paid out to investors in the event of a loan defaulting. But in 2016, Zopa began lending to higher-risk borrowers to generate higher levels of return to customers who were willing to take on more risk. It replaced its two lending products, protected by its safeguard fund, with two new products that were outside its protection: Zopa Core and Zopa Plus. Zopa Plus included loans to borrowers with limited credit history, categorised as risk markets “D” and “E” by Zopa. Read more. (Subscription required.)
The Pensions Regulator is considering pursuing individuals connected with Carillion as it weighs using its powers to recover cash for the collapsed outsourcing group’s indebted pension schemes, the Financial Times reported. The regulator began an investigation into Carillion on January 18, three days after the group was placed into compulsory liquidation with an estimated £900m funding shortfall in its pension scheme. Appearing before a joint select committee inquiry into Carillion’s collapse, the Pensions Regulator said its “anti-avoidance” probe was looking at whether there was a case for using its powers to recover cash for the group’s pension schemes. The committee asked what could be retrieved for the pension schemes, now in the hands of the industry lifeboat fund, given Carillion had collapsed with about £29m in cash in the company. Nicola Parish, executive director of front-line regulation with the regulator, said its powers could go beyond seeking recoveries from companies. Read more. (Subscription required.)
Euro zone government bond yields dipped on Thursday after a survey showed German business confidence fell in February, offsetting an earlier rise in yields after the minutes of the last Federal Reserve meeting revived fears of inflation. German business confidence fell more than expected in February but remained high, a survey showed on Thursday, suggesting that Europe’s biggest economy is set for solid growth in the first quarter of this year, Reuters reported. Euro zone government bond yields, which had risen in early trade, fell 1-2 basis points across the board after the release. “The euro area economy has been picking up for awhile now and it’s got to a point where expectations are for solid growth; but perhaps there aren’t as many surprises in the data anymore,” said Investec economist Victoria Clarke. Most bond yields in the bloc remained lower after minutes of the European Central Bank’s January meeting showed policymakers rejected even a token change in the bank’s policy message, arguing that it was premature to signal policy normalisation given weak inflation. Read more.
A Latvian bank threatened with U.S. sanctions for allegedly conducting a global money-laundering scheme, including for companies connected to North Korea’s missile program, is seeking more than a half billion dollars in government bailout money in an effort to stay afloat, The Wall Street Journal reported. The accusations against ABLV Bank by the U.S. Treasury Department have ignited one of Europe’s biggest money-laundering scandals in years and shined a spotlight on Washington’s efforts to go after Eastern European banks it says have ties to Russian money laundering. The case has also sparked criticism of the European Central Bank, which has supervised the largest banks in the eurozone since 2014. The ECB defended its oversight on Thursday, saying it isn’t granted the investigative powers to uncover illegal activities. ABLV says it isn’t guilty of money laundering, but conceded at a news conference that it suffered compliance issues big enough to merit disciplinary actions in the past. Read more. (Subscription required.)
British lawmakers on Tuesday published in full a confidential report detailing Royal Bank of Scotland's mistreatment of struggling businesses during and after the financial crisis, the International New York Times reported on a Reuters story. "The findings in the report are disgraceful," Nicky Morgan, chair of the cross-party Treasury Select Committee, said. The TSC said in a statement it had agreed to publish immediately the final, unredacted report, which contains the findings of an inquiry into RBS's then-restructuring unit GRG. "The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high interest rates, and the acquisition of equity and property," Morgan said. RBS denies the most serious allegations from customers - namely that it purposely pushed firms into bankruptcy to pick up their assets on the cheap. But it has accepted some wrongdoing and set aside 400 million pounds to compensate firms as it seeks to rebuild its image a decade on from the crisis. The lawmakers' decision follows a protracted dispute with the Financial Conduct Authority (FCA), which commissioned the report but has refused to publish it in full. Read more. (Subscription required.)
Chad signed a deal with Glencore Plc to restructure more than $1 billion in debt in an agreement that will help the African nation to avoid a financial crunch, Bloomberg News reported. The review was signed on Wednesday and is a “good outcome” for Chad, Guillaume Foucault, a spokesman for the country’s national oil company, said by phone from Paris. Under the terms of the agreement, the loan’s maturity is extended to 12 years while Chad will receive a grace period of two years, said Foucault. The rate on the loan is also reduced to the benchmark Libor interest rate plus 2 percent, from Libor plus 7.5 percent, while Glencore will guarantee the supply of oil for Chad’s domestic refining requirements for the duration of the contract, he said. Glencore and its banks agreed in late 2015 to restructure two oil-for-cash loans with Chad, dating from 2013 and 2014, extending the repayment to seven years from an initial four years. Glencore initially lent the African country $600 million in 2013 through a so-called pre-payment export deal, in which a nation receives an advance on its oil sales and repays the debt by allocating crude cargoes to its creditors. Read more.
French President Emmanuel Macron and German Chancellor Angela Merkel say they want to make the common currency area more resilient and adaptable, but their two countries have traditionally disagreed over how that should be achieved, Bloomberg News reported. Can crack economists from the relevant countries solve the problem for them? They are giving it a shot -- but building a European consensus will be hard. A month ago, a group of 14 French and German economists co-authored a detailed proposal to bridge the policy differences between the two countries. Their main argument is that the euro area needs a combination of market discipline and risk sharing to reduce its vulnerability to financial shocks. Last week, in a sign of how contentious the policy debate will be, a group of Italian economists issued a robust rebuttal. The Italian riposte argues that, far from fostering stability in the euro zone, the Franco-German proposal heightens the risk of financial chaos by asking too much from weaker euro-zone states. Read more.
South Korea’s household debt rose to a new record in 2017, even as the government tightened lending terms to cool the property market. Household debt including credit purchases rose to 1,450.9 trillion won ($1.3 trillion) at the end of December, up 8.1 percent from the previous year, according to a statement from the Bank of Korea. While the pace of increase remained fast, it was the slowest in three years, Bloomberg News reported. President Moon Jae-in’s administration has released a series of measures since taking office in May to slow debt growth and prevent overheating in the property market. The government is concerned that the high level of debt, combined with higher interest rates, could cause vulnerable households to default. BOK’s Governor Lee Ju-yeol said this week that efforts should continue to push the rise in household debt below that of incomes, and that a “soft landing” is preferable to a rapid slowdown. Household debt rose 2.2 percent in the fourth quarter. Read more.
The Netherlands is demanding that private investors face mandatory debt writedowns in future eurozone bailouts, a position that will fuel arguments as countries spar over the next phase of integration in the single currency bloc. Wopke Hoekstra, the Dutch finance minister, said imposing haircuts on private creditors was “essential” to protect eurozone taxpayers from paying to rescue bankrupt governments and introduce greater market discipline on high debt economies, the Financial Times reported. “It is essential if things go wrong. You are asking the individuals or the companies that own a country's bonds to pay part of the bill,” Mr Hoekstra told the Financial Times. “That is absolutely fair if you are asking the citizens of countries to do burden-sharing.” Greece is the only eurozone member state to be forced into a private sector haircut, undergoing the biggest debt restructuring in history in 2012. Plans for a “sovereign debt restructuring mechanism” in the eurozone have gathered momentum after being set out by outgoing German finance minister Wolfgang Schäuble last September. Read more. (Subscription required.)
HNA Group, the heavily leveraged Chinese conglomerate, has turned to private equity company Pacific Alliance Group for finance amid pressure to raise cash and cut its debt, the Financial Times reported. Hainan-based HNA, which started as an airline company before expanding into finance, announced on Wednesday that it had pledged about 1.4bn of shares — amounting to HK$3.1bn ($396m) — from one of its subsidiaries, to borrow from privately owned PAG Holdings. HNA said in an exchange filing that PAG Holdings, which is domiciled in the Cayman Islands, would have the option to buy up to 82 per cent of its stock, if the value of its pledged shares relative to the loan size falls below a certain threshold. One banker said the move is a sign that HNA Group might be finding it difficult to access mainstream markets as large international banks have either pulled back or have ruled out advising or financing the company. “Basically the taps have been turned off so they are looking at any way to raise financing,” the banker said. “There’s a good chance we will see debt restructuring this year.” Read more. (Subscription required.)
Congo Republic is set to become the latest African country to start debt relief talks with trading houses after borrowing $2 billion (1.43 billion pounds) from merchants such as Trafigura and Glencore but now finding its debt levels unsustainable, sources familiar with the matter said. Trading houses regularly lend money to resource-rich clients in financial distress - be it countries such as Congo, Chad, Morocco or Iraq's Kurdistan region - when other lenders walk away. But traders often charge heavy interest on loans and require access to resources, the International New York Times reported on a Reuters story. Congo has recently appointed investment bank Lazard as an advisor to help it renegotiate debts with the traders, three banking and oil industry sources said. Lazard declined to comment. The move is similar to Chad which has appointed Rothschild as an advisor in talks with Glencore and four bank lenders. The development in Congo is similar to the situation in Chad, which borrowed $1.45 billion from Glencore guaranteed by crude cargoes at a time of high oil prices. Read more. (Subscription required.)
A massive annual loss estimate by commodities trader Noble Group makes it more likely that creditors will back its $3.4 billion (2.4 billion pounds) debt-for-equity restructuring to ensure the company's survival, analysts said. Noble, which flagged an annual loss of up to $5 billion on Monday, announced an initial deal with creditors last month to halve its senior debt and give them 70 percent of the company, with existing equity holders diluted to 10 percent, the International New York Times reported on a Reuters story. "The losses were expected to clean the old Noble balance sheet once and for all. In doing so, the management makes endorsing the restructuring the only viable alternative for creditors," said Jean-Francois Lambert, a consultant and former global head of commodity trade finance at HSBC. Over the last three years, Noble - once a global commodity trader with ambitions to rival the likes of Glencore and Vitol - has cut hundreds of jobs, sold billions of dollars of assets, taken hefty writedowns and changed its CEOs and chairman. Read more. (Subscription required.)
ArcelorMittal and Russia’s state-controlled VTB Group have hit a fresh snag in their pursuit of Essar Steel India Ltd., an insolvent producer that could fetch at least $6 billion, Bloomberg News reported. Advisers evaluating the offers for Essar Steel are recommending that all the bids be disqualified, according to people with knowledge of the matter. A committee of Essar Steel lenders will meet later this week to discuss the eligibility of the proposals, the people said, asking not to be identified because the information is private. Legal and accounting advisers expressed concerns to the interim resolution professional overseeing the sale about the eligibility of the offers from both ArcelorMittal and a rival VTB-led consortium, the people said. The advisers’ opinion is meant as a guide, and there’s no certainty the bids will be blocked, according to the people. Any final decision will involve the lenders’ committee and India’s National Company Law Tribunal, the people said. Read more.
India’s central bank is reviewing its process for allowing companies to raise money overseas due to concern that any increase in rupee volatility may hurt borrowers’ ability to repay debt, a person familiar with the matter said. The Reserve Bank of India is spending more time scrutinizing companies’ hedging practices, vetting borrowers more closely to prepare for any financial-market fallout from an increase in U.S. interest rates, the person said, asking not to be named as the matter is private, Bloomberg News reported. The new process is resulting in slower approvals in recent weeks for offshore debt sales, said other people with knowledge of the matter, who also asked not to be identified. The RBI hasn’t issued loan registration numbers to some borrowers recently, they said. Companies need to obtain LRNs for raising debt overseas under the country’s external commercial borrowing guidelines. “RBI’s prime concern is to avoid any defaults by companies offshore, ”said Raj Kothari, head of trading at Jay Capital Ltd. in London. “Such scrutiny will further improve the trust of international investors in Indian issuers." Read more.
HSBC has warned that it could pay at least $1.5bn in penalties over alleged tax evasion and money laundering at its Swiss private bank, casting a shadow over Stuart Gulliver’s final day as chief executive, the Financial Times reported. The estimate underlines how the outgoing HSBC boss has struggled to get to grips with the string of scandals thrown up by a number of ill-judged acquisitions dating back to before he took over in 2011. Mr Gulliver was due to hand control of the bank at midnight on Tuesday UK time to John Flint, HSBC’s former global head of retail banking. Mark Tucker, former chief executive at Asian insurer AIA, took over as HSBC chairman from Douglas Flint, no relation to John Flint, in October. The departing chief signed off with mixed results for 2017, having hit most of his long-term targets but also dipping below analysts’ expectations on profits in the fourth quarter. Analysts said Europe’s biggest bank by assets benefited from strong loan growth, particularly in Asia but was not gaining as much from rising US interest rates as hoped, prompting HSBC shares to fall 3.2 per cent by late afternoon in London. Read more. (Subscription required.)
The head of India’s Tata conglomerate has promised to offload weaker companies among its 110 operating businesses, in an effort to tackle widespread underperformance within the sprawling group, the Financial Times reported. In a Financial Times interview one year on from his arrival as chairman of holding company Tata Sons, Natarajan Chandrasekaran said that he was determined to build a clearer structure within a group whose operations range from table salt to armoured vehicles and artificial intelligence. “There are a lot of marginal businesses we are in,” Mr Chandrasekaran said. “If we cannot scale and we cannot consolidate them, then we have to look at maybe there is a better place where that business can flourish . . . sell them, because they may have a better future somewhere else.” Mr Chandrasekaran took charge after a period of tumult at India’s largest business group with annual revenue exceeding $100bn, which triggered a damaging public dispute when it abruptly dismissed his predecessor Cyrus Mistry in October 2016. Read more. (Subscription required.)
Noble Group Ltd., the commodity trader battling to survive, warned that it’ll report another vast loss including from the operations meant to sustain a revamped business, and while it signaled progress in debt-restructuring talks, hurdles to a deal remain, Bloomberg News reported. The Hong Kong-based company will report a net loss of $1.73 billion to $1.93 billion for the final quarter of last year, potentially bringing losses for 2017 to almost $5 billion, it said in a statement early on Monday. That meant it had a negative net-asset position of $650 million to $850 million at Dec. 31. Noble Group announced an initial deal to restructure $3.5 billion in debt last month, fending off bankruptcy after a three-year crisis marked by losses, writedowns and controversial accounting. Since that debt-for-equity plan was unveiled, the proposal has drawn fire from a top shareholder as well as some bondholders. With the company now entering a critical phase of negotiations with creditors to nail down the rescue, it said talks are productive and signaled that more than half its senior creditors may be willing to endorse the deal. Read more.
Greece’s finance minister has said his country will not need to be subject to tight monitoring once its bailout programme ends in August, insisting the concerns of EU partners are misplaced as it can be trusted to manage its finances safely, the Financial Times reported. Euclid Tsakalotos says that Greece’s new economic growth plan, to be unveiled in April, will assuage fears in Brussels and Washington that the leftwing Syriza government will roll back unpopular economic reforms as soon as bailout constraints are lifted. “We want as ‘clean’ an exit as possible [from the bailout],” Mr Tsakalotos said in an interview with the Financial Times, using Syriza’s term for drawing a line under eight years of austerity that has seen Greece’s output shrink by about one-quarter and an exodus of some 450,000 young skilled workers to other EU countries. After emerging from recession last year, the economy is projected to grow by about 2.5 per cent this year and next. With the opposition Conservatives enjoying a ten point lead in the polls, Syriza, whose popularity has been battered by years of austerity, is keen to regain control of the economy before an election due next year. Read more. (Subscription required.)