Corona Capital: GE cash burn, Macy’s lifeline 28 May 2020 Concise views on the pandemic’s corporate and financial fallout: General Electric’s cash flow will be more negative than expected as Covid-19 damages its aviation and power businesses; and U.S. department-store chain Macy’s borrows more, buying time but not much else.
Hertz is a study in financial comorbidities 26 May 2020 The car-hire company’s heavy debts crushed it when Covid-19 curtailed travel. Other businesses with overengineered balance sheets have similarly come unstuck. It’s not that Hertz could have seen this coming – but the system has quickly switched to favoring flexibility over risk.
Stanley Ho made sure his house kept winning 26 May 2020 The Macau gambling doyen, who has died aged 98, once provided half the former colony’s tax revenue. His SJM empire weathered the handover of the territory to China, its emergence as a competitive Las Vegas-beating hub, and family feuds. Punters have proved resiliently profitable.
Corona Capital: Texas bank merger 26 May 2020 Concise views on the pandemic’s corporate and financial fallout: Texas Capital and Independent Bank ditched their almost $3 bln deal as Covid-19 played havoc with oil-and-gas loans. It is, at least, a mutual decision.
Viewsroom: Reopening after the pandemic 21 May 2020 Major economies like Italy and Switzerland are attempting to return to normal, but with notable differences, as columnists in both countries discuss. And Sharon Lam in Hong Kong talks about the future of leisure and business travel with Global Editor Rob Cox.
Lufthansa rescue gives taxpayers first-class seats 21 May 2020 The German flag carrier will get a 9 bln euro bailout, including new shares and non-voting stock. The government gets a 25% stake on the cheap, and a more generous payout than other investors. Shareholders can at least be grateful that politicians are staying out of the cockpit.
Corona Capital: Natural gas, Disney, Brazil 19 May 2020 Concise views on the pandemic’s corporate and financial fallout: Investors are too optimistic about natural gas; theme-park veterans take key roles at Disney; and Sao Paulo’s idea of bringing forward holidays to improve social distancing proves confusing.
It’s a long jump back onto the travel bandwagon 19 May 2020 Despite the whopping 30% fall in globetrotting expected this year, tourists will pack their bags again just as they have after past crises. Health precautions will add costs, however, while empty middle seats hurt revenue. The relevance of corporate flyers also is bound to wane.
Las Vegas Sands exit indicts Japan’s gaming plan 14 May 2020 Sheldon Adelson's firm is scrapping a $10 bln project to open a casino in the country. Short licensing periods, tough government requirements, high costs and reluctant banks are deterring the best operators. It’s a bad omen for Tokyo’s gambling tourism ambitions.
Saving the summer holiday will require creativity 13 May 2020 Quarantines and travel curbs will constrain holidaymakers. To prop up the $1.6 trln tourism industry, destinations with fewer Covid-19 cases may open borders to less-affected nations. For harder-hit places like Italy, subsidies can induce locals to vacation in their home country.
Hotels can ride out a cleaner, more vacant future 12 May 2020 The U.S. lodging industry is bleeding $1.4 bln a week in sales. The lockdown wind-down will offer some respite, but new hygiene measures like deep cleans and 24-hour delays between guests will slash occupancy. Big brands like Hilton and Accor have a leg-up in the post-Covid era.
Corona Capital: Tequila sales, U.S. healthcare 11 May 2020 Concise views on the pandemic’s corporate and financial fallout. Sales of Mexico’s famous liquor soared in April – though not enough to take more than an edge off as the country’s economy falters. And the Amazon-Berkshire Hathaway-JPMorgan healthcare venture may need a new boss.
Cards played well in three-handed casino deal 29 Apr 2020 Blackstone is buying 10% of Australia’s Crown Resorts from Lawrence Ho’s Melco. The buyout shop antes up at a discount while the Macau operator sensibly folds a busted bet. And amid a crisis, Crown gets staked by a shrewd backer. It may take time, though, for the pot to grow.
EasyJet files turbulent post-virus flight plan 16 Apr 2020 The budget carrier hopes face masks and empty middle seats will speed up a return to the skies. Such measures will reduce profit as well as infection risks but lower taxes and fuel prices could help. The bigger question is how soon punters will feel safe enough to travel again.
Corona Capital: Saudi/Carnival, PG&E 6 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Today, Saudi Arabia’s Public Investment Fund takes an 8% stake in beleaguered cruise outfit Carnival, and the coronavirus may dislodge one of the moving parts in California utility PG&E’s plan to exit bankruptcy.
Amadeus ups the bar for travel-sector crisis prep 3 Apr 2020 The $20 bln Spanish IT group is raising $1.6 bln in debt and equity to bolster its balance sheet. The financial terms are fairly beneficial for Amadeus, implying that it’s not exactly desperate for cash. Still, with steep declines in air traffic it’s wise to plan for the worst.
Bond market throws Carnival a costly lifeline 1 Apr 2020 The virus-stricken cruise operator is finalising a $4 bln bond issue, secured against its ships, at an eye-watering 12% yield. That reflects fears the industry may be permanently submerged. Still, it shows that even the most troubled companies still have access to emergency cash.
Singapore Airlines secures business-class bailout 27 Mar 2020 State investor Temasek is supporting a whopping $13 bln funding package. Deeply discounted equity and a zero-coupon convertible bond provide other shareholders a chance to bet on a post-crisis recovery. The hard-to-copy playbook could even give the carrier a longer-term edge.
Korean Air drama risks ending in corporate tragedy 25 Mar 2020 Feuding siblings, white knight Delta Air Lines, and a pushy activist are all battling over the country’s top carrier. Change is overdue, but debt worth 862% of equity has left Korean Air more vulnerable than peers to a pandemic. Any victory from the proxy battle will be pyrrhic.
New Zealand airline rescue puts taxpayers in first 24 Mar 2020 The national carrier has received a $514 mln state lifeline that ensures its survival. A high interest rate should ensure any loan is repaid quickly, while shareholders share the pain through suspended dividends. It’s a model for other countries considering bailouts to follow.