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.
RCom sets up trial run for Indian bankruptcy rules 14 Nov 2017 Anil Ambani’s struggling telecom operator has missed a payment on a $300 mln U.S. dollar bond. Offshore creditors could claim a default, testing the regime India established last year. A credible, reasonably speedy process would further boost the country’s booming bond market.
Venezuela’s Maduro enters alternate reality 3 Nov 2017 The OPEC member's socialist leader wants to restructure the ailing country's foreign debt, putting an alleged drug trafficker in charge of working out how. U.S. sanctions make any refinancing virtually impossible. But even default might not drive the hapless president from power.
Monarch suffers very British failure 2 Oct 2017 The airline’s past reliance on tourism to Egypt and Tunisia, now danger areas, started the rot. But the Brexit-induced slump in sterling worsened things, and a laissez-faire resistance to government intervention – unlike the German help handed to Air Berlin – finished the job.
Viewsroom: German election all about runners-up 21 Sep 2017 Chancellor Angela Merkel and her Christian Democrats should win more votes than rivals. But they’ll need coalition partners to form a government. Choosing among them promises to be a nail-biter. Also: the Toys R Us bankruptcy won’t be a total loss for its private-equity owners.
Toys R Us equity owners aren’t exactly wiped out 19 Sep 2017 KKR, Bain and Vornado privatized the retailer for $6.6 bln more than 12 years ago. Now their stock is worthless. Even without dividends, though, they’ve collected some $600 mln in fees, interest and other payments. It shows how buyout firms play the game in multiple ways.
Etihad’s airlines fail, but odd CDO remains aloft 17 Aug 2017 Air Berlin and Alitalia are insolvent. Their debt is probably worthless, except for an unusual collateralised debt obligation that part-owner Etihad used to fund them. It is trading at a price that suggests Etihad might bail it out. Fuzzy guarantees often end badly.
Buffett may have to turn on charm for Oncor encore 7 Jul 2017 Berkshire Hathaway is taking a second stab at Texas utility Energy Future, six years after a $2 bln investment led to big losses. Two other suitors failed to agree with regulators. Buffett's structure sounds smarter, but sealing the $18 bln deal could yet require some sweet talk.
Takata’s failure remodels auto-safety industry 26 Jun 2017 The airbag-maker filed for Chapter 11 with $10bln-plus of liabilities. Like Toshiba, this scandal reflects badly on Japan Inc’s governance and technical competence. This is a big opportunity for smaller Chinese-backed rival KSS, which gets most of the business for $1.6 bln.
India unsheathes new weapon in bad debt fight 5 May 2017 The government has granted the Reserve Bank of India new powers to force lenders to push errant borrowers into bankruptcy. That puts extra pressure on state banks to finally clean up their soured loans. Given the failure of more refined methods, the bludgeon is welcome.
Puerto Rico restructuring will be no day at beach 3 May 2017 Congress gave the U.S. territory access to a form of bankruptcy. Now the board overseeing its finances, encompassing $70 bln of debt, has pressed the button. Creditors will get their day in court, and tidy plans in spreadsheets could end up as warped as in Detroit – or worse.
Utilities to pay price of Westinghouse bankruptcy 28 Mar 2017 A Chapter 11 filing would jolt the company’s key clients, Scana and Southern. Continuing with their nuclear plants could leave the utilities exposed to further cost overruns, while pulling the plug won’t end liabilities. Either way, the firms’ earning power will be cut.
White House friends not much help to gun industry 13 Mar 2017 Trump's victory vanquished the prospect of new firearms rules. In the upside-down world of ironmongery, that's bad for business. Gander Mountain just filed for bankruptcy, Cabela's merger with Bass Pro is imperiled and gun shares have been crushed. The bust will continue.
Seoul’s wavering on shipping bodes ill for reform 10 Feb 2017 A court will declare Hanjin Shipping bankrupt next week. The container line sunk amid an industry slump. But while Seoul was merciless here, it kept Hanjin's closest rival afloat. The flip-flop shows policymakers are struggling to take tough but economically rational decisions.
Duped students teach a costly moral-hazard lesson 30 Jan 2017 Obama's crackdown on for-profit colleges raised standards and shut down bad actors. A $7.3 bln lawsuit filed by ex-students of bankrupt ITT seeks federal debt forgiveness too. It underscores the high price of doling out loans without first ensuring schools can make the grade.
Guest view: Trump giving bankruptcy a bad rap 17 Oct 2016 Amid other nastiness, the presidential campaign has led to a broad brush falsely equating bankruptcy with failure, argue two Morrison Foerster restructuring partners. In fact, the process often allows companies that fall on hard times to regroup, rise up and keep fighting.