How Sergio Marchionne saved Fiat and Chrysler 30 Jul 2018 The automakers’ former boss, who has died at 66, rescued both from the wrecker’s yard. His push for breakups and consolidation also helped produce better shareholder returns than his main rivals. A new selection of Breakingviews columns offers a taste of his 14-year tenure.
John Malone could still snag iHeartMedia 10 Jul 2018 Even though lenders to the bankrupt U.S. radio operator snubbed his last offer, the media tycoon has a chance thanks to the potential for a merger with his own Sirius XM. As iHeartMedia edges toward a $20 bln debt restructuring, there should be room for a harmonious deal.
ECB has big enough stick to repel bad-loan revolt 24 Apr 2018 A political backlash may force the European Central Bank to ditch plans for stricter provisioning of 760 bln euros of dud loans. The saga has weakened chief supervisor Daniele Nouy, and may delay reform of Europe’s banking union. But the ECB has other tools to cut the loan pile.
Lampert gives Sears something to grin and bear 23 Apr 2018 The hedge fund manager, also CEO and largest owner of the flailing retailer, wants to buy its assets. Sure, there’s a chance he is getting an opportunistic deal. But Toys R Us shows that for retailers, bankruptcy risk is real. Lampert’s last ditch may be the least bad outcome.
Cox: A beneficent billionaire should buy Remington 27 Mar 2018 The AR-15 maker filed bankruptcy papers a day after millions of Americans marched in favor of banning its products. Owners and creditors just want out in a hurry. But Bloomberg, Gates or Bezos could turn Remington into a force for sensible gun policies with mere pocket change.
Private equity goes back to dangerous superlatives 20 Mar 2018 Strong buyout returns have investors putting more money than ever into funds that acquire companies with loads of debt. But deal multiples are nearing record highs, too. As legacy LBOs like Toys R Us and Claire’s go bust, it’s a reminder of the industry’s tendency to overheat.
Who broke Toys R Us? Toys R Us did 15 Mar 2018 The retailer is liquidating over 700 U.S. stores. The woes were mainly self-inflicted: high costs, declining sales and onerous interest payments wiped out profit. Amazon played a role. Yet basic retail and financial risks sealed Geoffrey the Giraffe’s fate, as it may for others.
Malone co-investors have heard this tune before 27 Feb 2018 The media magnate will inject $1.2 bln for a 40 pct stake in troubled radio company iHeartMedia after it goes bankrupt. Creditors would take losses, but the price seems fair. Still, Malone’s past rescue of Sirius XM sounds a note of caution. His help rarely comes cheap.
Too-big-to-fail rules are too sound to scrap 21 Feb 2018 A long-awaited U.S. report on resolving big financial institutions recommends beefing up the bankruptcy code while keeping the door open to government intervention in emergencies. It’s possible to quibble with the details, but the big-picture proposals strike a sensible balance.
Gibson amping sound up to 11 – Chapter 11, that is 20 Feb 2018 The maker of six-stringed axes favored by Jimmy Page and Slash faces increasing distortion from changing tastes, cheap competition and an overpriced foray into electronics. It doesn’t help that quality guitars last a while. This rock'n'roller can expect a major haircut.
Breakdown: Why Steinhoff’s complexity may save it 24 Jan 2018 An accounting scandal has exposed the retailer’s warren-like structure. Creditors who are owed close to 11 billion euros face a fight for repayment. But the prospect of a messy restructuring may help keep Steinhoff afloat for now. Breakingviews offers a guide through the maze.
Elliott finds another target for its power play 23 Jan 2018 FirstEnergy shares spiked after a $2.5 bln capital injection from the activist hedge fund and others. Elliott is reprising a ploy that made NRG the best performer in the S&P 500 last year. That deal had hiccups though, and the latest one will too. Shareholders should buckle up.
Chancellor: Carillion’s flaws are common to many 22 Jan 2018 The collapsed UK construction firm’s problems may look idiosyncratic. But its problems with “onerous contracts” were exacerbated by a balance sheet stuffed with intangible assets and ultimately shaky assumptions. These issues are not peculiar to Carillion.
Carillion collapse exposes new bank folly 22 Jan 2018 The failed UK contractor used lenders to finance 412 mln pounds of payments to suppliers when cash was running low. The process, known as “reverse factoring”, seems a lucrative way for banks to provide short-term credit. But insolvency exposes the true extent of the risks.
UK poorly placed to fight Carillion domino effect 17 Jan 2018 Ministers are fretting about Interserve, after fellow contractor Carillion’s collapse. If this were the banking sector, the state could deploy familiar tools to contain contagion. But the government’s dual role as client and bailout-wary market promoter complicates matters.
Carillion pension hole is ominous for UK companies 16 Jan 2018 Before its collapse the construction firm estimated it owed 587 million pounds to retirees. Britain’s pension protection fund, however, reckons the shortfall is nearer 900 million pounds. That’s bad news for Carillion’s creditors – and for other groups with big liabilities.
Carillion collapse is UK outsourcing stress test 15 Jan 2018 The troubled construction firm has gone into liquidation after failing to secure fresh funds. The UK government was right not bail out one of its key suppliers. Nevertheless, a messy cleanup will raise questions about the risks in handing state work to private contractors.
ICO represents last-gasp hope for struggling Kodak 9 Jan 2018 The iconic company went bankrupt by fumbling the shift to digital images. Now it’s betting its future on an initial coin offering to help photographers sell their work. The crypto buzz more than doubled its stock, but is unlikely to revive falling sales and profit.
Ambani’s debt cure is no elixir for shareholders 28 Dec 2017 Anil Ambani says he has rescued his Reliance Communications with a $6 bln firesale. That’s a relief for lenders, assuming buyers turn up as promised. But it’s not the moral victory the tycoon claims. Even if creditors play ball, investors are left with a much diminished company.
Alitalia needs help to regain cruising altitude 1 Dec 2017 The insolvent airline has attracted bidders including Lufthansa and easyJet. Its 12,000 staff make it look bulky compared to budget carriers. Though the Italian government opposes drastic layoffs, further cost-cutting is necessary to return the carrier to financial health.