Major International Business Headlines Brief::: 27 April 2020

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Major International Business Headlines Brief::: 27 April 2020

 


 

 


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ü  South Africa seeking $5 bln from multilateral lenders to fight virus -Treasury official

ü  RwandAir cuts salaries by 8-65% due to coronavirus -internal memo

ü  S.African govt extends deadline for SAA severance deal to May 1

ü  Egypt state banks collect over $6 bln from high-yield certificates

ü  Algeria trade deficit widens sharply on energy revenue collapse

ü  Moody's sees South Africa GDP shrinking 6.5% in fiscal 2020

ü  IMF approves $309 mln in emergency financing to Mozambique to address coronavirus hit

ü  Angola's Sonangol begins selling assets in firms

ü  Glencore denies union claim S. Africa smelter workers had fake permits

ü  South Africa says over $4 bln available from IMF, W.Bank to fight COVID-19

ü  Airbus boss warns company is 'bleeding cash'

ü  Air France-KLM secures billions in government aid

ü  Dyson Covid-19 ventilators are 'no longer required'

ü  Debenhams threatens to keep Welsh stores shut

ü  Branson’s Virgin Atlantic in virus bailout talks

 

 

 


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South Africa seeking $5 bln from multilateral lenders to fight virus -Treasury official

JOHANNESBURG (Reuters) - South Africa is seeking 95 billion rand ($4.99 billion) from multilateral lenders to help it fight the COVID-19 pandemic, a senior Treasury official said on Sunday.

 

Africa’s most advanced economy is talking to the International Monetary Fund (IMF), World Bank, New Development Bank of the BRICS and African Development Bank to source funding to contribute to a 500 billion rand rescue package aimed at cushioning the impact of the new coronavirus on businesses and poor households.

 

The IMF has said South Africa is entitled to apply for up to $4.2 billion in response to the crisis, and Finance Minister Tito Mboweni said on Friday the government could negotiate for a facility of “maybe between $55 and $60 million” at the World Bank.

 

Dondo Mogajane, director general of the National Treasury, said in an interview with eNCA television on Sunday that South Africa “will certainly go” for the IMF funding.

 

“The World Bank has said ...South Africa can access a loan of about $50 million, the New Development Bank did say long ago that they have set aside a billion dollars that we can access and again we will be accessing that,” Mogajane said.

 

“All in all, all of these interventions, currently we are looking at 95 billion rand coming from these institutions only for COVID-related interventions.”

 

Mogajane said the government has to do everything at its disposal to make sure the coronavirus is contained, including reprioritising money from projects that are not a priority for now and looking for new cheap money.

 

“I am emphasising new money that is cheap because currently the discussions obviously should centre around what the term rates are going to be. That is where we are currently, we are discussing with them (lenders),” he said.

 

“The IMF has said upfront that it is 1% interest that is available so we will certainly go for it because it is cheap.”

 

Mboweni on Friday played down worries in some governing party circles and within the influential trade union movement that the money would come with onerous conditions.

 

An IMF official told Reuters that the emergency funds on offer came with no requirement for a structural adjustment programme.

 

The economy was in recession when the virus outbreak hit South Africa and public finances were already strained as the government bailed out struggling state firms.

 

South Africa had recorded 4,361 cases, including 86 deaths, with 161,004 people tested for the virus as of Saturday.

 

($1 = 19.0213 rand)

 

 

 

 


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RwandAir cuts salaries by 8-65% due to coronavirus -internal memo

KIGALI (Reuters) - Rwanda’s RwandAir will cut the salaries of its lowest paid employees by 8% and by 65% for its top earners as it seeks to survive the coronavirus crisis, an internal memo seen by Reuters on Sunday showed.

 

The carrier, which flies a fleet of 12 Boeing and Airbus planes to 29 destinations across three continents, has been one of the rising stars in Africa.

 

In February, Qatar Airways said it was in talks to buy a 49% stake in the airline.

 

“We considered several other alternatives and the choice we made is the best option at this time,” RwandAir’s management wrote in the memo, which two employees told Reuters they have received.

 

The management of the young airline, which is owned by the government and has not yet made a profit, could not be reached immediately for comment.

 

Airlines around the world have been forced to ground their planes after governments imposed travel restrictions and closed borders to slow the spread of the COVID-19 pandemic.

 

Air Mauritius said this week that it has entered voluntary administration due to the crisis, joining Virgin Australia and South Africa Airways who have called in administrators.

 

 

 

S.African govt extends deadline for SAA severance deal to May 1

JOHANNESBURG (Reuters) - South Africa’s government and specialists appointed to try to save the state-owned airline have agreed to extend a deadline for trade unions to agree staff severance terms, a letter from the public enterprises department showed on Saturday.

 

South African Airways (SAA) entered a form of bankruptcy protection in December and its fortunes deteriorated further when the coronavirus pandemic forced it to suspend all commercial flights.

 

The airline offered severance packages to its roughly 5,000-strong workforce after the government said it would not provide more funds for rescue efforts.

 

The proposal was put to union leaders, with the business rescue team advising that a deal should be reached by Saturday. However, that deadline has been extended until May 1.

 

“We advise that the department agreed with Business Rescue Practitioners on a moratorium on the signing of the retrenchment (layoffs) agreements until Friday 1 May 2020,” said the letter signed by Public Enterprises Minister Pravin Gordhan, which was addressed to unions at the airline.

 

“As a result, the employees are not obliged to sign the collective agreement for the retrenchments for the period of the moratorium,” the letter added.

 

The department later said in a statement that it also agreed that business rescue specialists Les Matuson and Siviwe Dongwana would not consider making an application for liquidation.

 

The business rescue team had said on Thursday that SAA faced a wind-down or liquidation as it had run out of funds.

 

“The leadership recognise the enormity of the challenge but are unequivocally committed to saving SAA,” the statement said.

 

A spokeswoman for the rescue specialists had no immediate comment.

 

SAA has not been profitable since 2011 and has received more than 20 billion rand ($1.1 billion) in bailouts in the past three years, a drain on public resources at a time of weak economic growth.

 

($1 = 19.0213 rand)

 

 

Egypt state banks collect over $6 bln from high-yield certificates

CAIRO (Reuters) - Egypt’s two biggest state banks have collected almost 100 billion Egyptian pounds ($6.37 billion) from a new high-yield savings certificate they introduced last month, officials from the two banks were quoted on Sunday as saying.

 

The one-year certificates, launched on March 22, carry a 15% yield.

 

The National Bank of Egypt had collected 66 billion pounds, its vice chairman said, and Banque Misr 30.6 billion pounds, its chairman said, according to the state Middle East News Agency.

 

The certificates appear designed to bolster incomes while reducing inflation pressure and dollarisation following the coronavirus outbreak, analysts say.

 

($1 = 15.7000 Egyptian pounds)

 

 

 

Algeria trade deficit widens sharply on energy revenue collapse

ALGIERS (Reuters) - OPEC member Algeria’s energy earnings fell 28.17% in the first two months of 2020, causing the trade deficit to rise by nearly 80% from the same period a year earlier, the government said on Sunday.

 

Algeria has been trying to cut its imports bill after a sharp fall in energy revenues caused by a slide in global crude oil prices and domestic output volumes.

 

The value of oil and gas exports, which accounted for 93.08% of Algeria’s total sales abroad, stood at $4.56 billion, down from $6.35 billion during January-February 2019, according to customs figures.

 

That caused the trade deficit to rise to $1.23 billion from $686.51 million in the first two months of last year.

 

Overall exports reached $4.9 billion in January-February 2020, against $6.795 billion in the same period a year earlier, while imports fell 18.07% to $6.129 billion in the first two months of this year.

 

 

 

Moody's sees South Africa GDP shrinking 6.5% in fiscal 2020

JOHANNESBURG (Reuters) - Ratings agency Moody’s cut its forecast for South Africa’s economy to a 6.5% contraction in fiscal 2020, saying the country’s 500 billion rand ($26.29 billion) rescue package will weaken its public finances and constrain government’s ability to provide support to state-owned firms.

 

Moody’s, which predicted on April 14 that South Africa’s GDP in the year ending March 31, 2021, would contract 2.5%, also said in a research report on Friday economic growth will recover by 4.5% in 2021.

 

President Cyril Ramaphosa announced the rescue package, equivalent to 10% of the GDP of Africa’s most industrialised nation, on Tuesday to try to cushion the economic blow of the coronavirus pandemic.

 

Ramaphosa said South Africa had approached global financial institutions like the World Bank, International Monetary Fund, the BRICS New Development Bank and the African Development Bank, primarily to fund healthcare interventions.

 

The rest of the package would be financed by a mix of 130 billion rand of reprioritised spending and other local sources.

 

“The package is key to helping the country’s weakest households and enterprises to weather a period of lower revenue inflows amid the domestic lockdown and slowdown in global trade,” Moody’s said.

 

“However, the support measures are unlikely to prevent a sharp economic contraction this year.”

 

With the impact of the weak economy on revenue, the ratings agency now expects the government to record a budget deficit of 13.5% of GDP in fiscal year 2020, up from an estimated 8.5% last Tuesday.

 

The sharp widening in deficit will push the country’s debt burden up 15 percentage points, to 84% of GDP by the end of fiscal 2020, it said.

 

“The fiscal pressures associated with the economic downturn and support package reduce the space the government has available to provide further support to SOEs. While the initial fiscal impact for the government is neutral, the scheme will increase the government’s contingent liability risks,” it said.

 

Several state-owned firms, like power utility Eskom and South African Airways, are facing financial difficulties and piling pressure on Ramaphosa’s cash-strapped government.

 

($1 = 19.0213 rand)

 

 

 

IMF approves $309 mln in emergency financing to Mozambique to address coronavirus hit

JOHANNESBURG (Reuters) - The International Monetary Fund (IMF) said on Friday it has approved a disbursement of $309 million to help Mozambique meet urgent balance of payment and fiscal needs stemming from the coronavirus pandemic.

 

African nations including Mozambique have become heavily indebted in the past decade and are seeking support from the IMF, World Bank and European Union for wide-ranging debt relief.

 

Last Thursday Mozambique lowered its forecast for economic growth this year to 2.2% from a previous forecast of 4% because of the impact of the virus, which has infected 65 people.

 

Its budget showed the southern African country, which was struck by two devastating cyclones last year, expects to record a deficit of more than 10% of gross domestic product in 2020.

 

“Mozambique is expected to be significantly affected by the COVID-19 pandemic, dashing prospects of a nascent economic recovery following two powerful tropical cyclones that struck in 2019,” IMF Deputy Managing Director and Chair Tao Zhang said in a statement.

 

“Given Mozambique’s limited fiscal space and high public debt, additional external support, preferably in the form of grants and highly concessional loans, is also urgently required to meet the country’s elevated financing needs and ease the financial burden of the pandemic.”

 

The IMF’s emergency financial support is under the Rapid Credit Facility.

 

The Fund said significant disruptions are emerging in services, transport, agriculture, manufacturing and communications coupled with a much worse external environment affecting export-oriented sectors, such as mining.

 

To mitigate the impact of the pandemic and preserve macro-economic stability, the government has taken several steps to increase health spending, strengthen social protection to the most vulnerable and support micro-businesses and small and medium-sized enterprises, it added.

 

 

 

 

Angola's Sonangol begins selling assets in firms

JOHANNESBURG (Reuters) - Angolan state oil company Sonangol said on Friday it has opened a public tender to sell its stakes in some private firms as part of a government bid to privatise key state assets including parts of Sonangol itself by 2022.

 

Describing Sonangol as an “octopus,” the country’s minister of Mineral Resources and Petroleum, Diamantino Azevedo, has said it would need to shed stakes in everything from hotels to aviation around the world before a 30% share sale in 2022.

 

Sonangol is divesting 30% of its capital in oil and gas contractor Petromar, Sonadiets Ltd and Sonadiets Services SA, 51% in Sonatide Marine Ltd and Sonatide Marine Angola Ltd and 40% in Sonamet Industrial SA and Sonacergy Services and Construction Petroleum Ltd, it said in a statement.

 

The list also includes a 33.3% stake in SBM Shipyard, a joint venture with Dutch-based SBM Offshore NV that provides floating production solutions to the offshore energy industry and 10% in Paenal, whose activities include building and engineering a fabrication yard.

 

The Angolan state will exit full or part ownership of 81 companies this year via public tender, including six by auction and three in IPOs, with 12 set to be privatized in 2021 and four in 2022, according to state news agency Angop.

 

Among the last will be Sonangol, along with state-owned diamond company Endiama.

 

Sonangol said interested parties must submit their applications by May 30, with applications for Sonatide Marine Ltd, Sonatide Marine Angola Ltd, Sonadiets Ltd and Sonadiets Services SA due on May 15.

 

 

 

 

Glencore denies union claim S. Africa smelter workers had fake permits

JOHANNESBURG (Reuters) - Glencore on Friday refuted statements from one of South Africa’s biggest mining unions alleging that the company had given out inadequate work permits, which led to the arrest of employees during a nationwide coronavirus lockdown.

 

The National Union of Metalworkers of South Africa (NUMSA)had earlier said in a Friday press statement that police took workers at the Lion ferrochrome smelter in Steelpoort into custody because “fake” permits, issued by the mining giant, lacked a company stamp.

 

Glencore said the workers were escorted to a local police station, but that all their work permits were valid. The company said it “deplores” NUMSA’s allegations.

 

“The South African Police Services (SAPS) allowed the employees to return home as there were no legal grounds to detain or arrest them,” Glencore said in a statement.

 

“The Company and its employees did not contravene COVID-19 regulations and furthermore confirms that the permits of the aforementioned employees are valid in accordance with the travel protocol.”

 

South Africa has been under a strict lockdown to prevent the spread of COVID-19, the illness caused by the novel coronavirus, since March 27. Only essential workers such as healthcare professionals, and those involved in growing, transporting or selling food, are allowed to travel.

 

The disagreement is illustrative of wider concerns over the mining sector, which President Cyril Ramaphosa last week allowed to start operating at up to 50% capacity despite an ongoing lockdown on all but essential services.

 

“As NUMSA we have been on record questioning why our government rushed to allow the mining sector to begin resuming operations early,” the union said.

 

The police could not immediately be reached for comment.

 

 

 

South Africa says over $4 bln available from IMF, W.Bank to fight COVID-19

JOHANNESBURG (Reuters) - South Africa’s finance minister said on Friday more than $4 billion was available from the International Monetary Fund and World Bank for the country to help it fight COVID-19, playing down worries that the money would come with onerous conditions.

 

Africa’s most industrialised economy has approached international financial institutions to contribute to a 500 billion rand ($26.4 billion) rescue package aimed at cushioning the blow from the new coronavirus on businesses and poor households.

 

The approach comes despite deep suspicion in some governing party circles and within the influential trade union movement because of the conditions the IMF and World Bank might impose.

 

The minister, Tito Mboweni, said those opposed to the government borrowing from the IMF and World Bank were making “a mountain out of an anthill”. An IMF official told Reuters last week that the emergency funds on offer came with no requirement for a structural adjustment programme.

 

“The critical thing about the IMF facility that we would approach them for is that it is specific to the crisis. This is not the usual budget support or policy intervention or technical assistance and conditionalities. ... I think we need to understand that,” Mboweni said.

 

“The IMF has indicated themselves that South Africa is entitled to apply for up to $4.2 billion in response to this crisis,” Mboweni told a news conference.

 

He added that South Africa could negotiate for a facility of “maybe between $55 and $60 million” at the World Bank.

 

South Africa is also talking to the African Development Bank and New Development Bank of the BRICS countries to try to source funding. The rest of the money for the rescue package is expected to come from cutting previously planned spending and domestic borrowing.

 

Separately, National Treasury said in a statement that the 200 billion rand loan guarantee scheme that also forms part of the package would be rolled out over the next few weeks.

 

The first phase will be for 100 billion rand, with COVID-19 loans available from commercial banks for firms with an annual turnover of less than 300 million rand.

 

($1 = 18.9153 rand)

 

 

 

 

Airbus boss warns company is 'bleeding cash'

The chief executive of Airbus has reportedly issued a stark assessment of the impact of the coronavirus pandemic on the plane maker.

 

In a letter to workers, seen by news outlets, Guillaume Faury is said to have warned the company was "bleeding cash at an unprecedented speed".

 

This month the firm announced it was cutting aircraft production by a third.

 

It comes as the aviation industry is expected to shrink significantly in the wake of the Covid-19 outbreak.

 

Mr Faury also told Airbus' 135,000 staff to brace for potentially deep job cuts and warned that its survival was at stake without immediate action, according to the Reuters news agency.

 

Airbus is this week due to deliver financial results for the first quarter of the year. Those figures will be overshadowed by the pandemic that has left global airlines struggling to survive and almost completely halted plane deliveries since lockdowns started in March.

 

Greg Waldron, from the aviation industry news website Flight Global, highlighted the huge impact of coronavirus on Airbus and the sector as a whole, saying: "Every assumption we had about the industry has been totally upended."

 

"The outlook for Airbus has gone from very positive to very negative. There's simply no demand for new aircraft at the moment."

 

In response to the pandemic Airbus had already begun implementing government-assisted furlough schemes starting with 3,000 workers in France and said it would lower output of its narrow-body jets to 40 a month.

 

Airbus has around 13,500 workers in the UK, with most of them making wings at its two major sites in Broughton, north Wales, and Filton, Bristol.

 

Despite the major blow the coronavirus has dealt to Airbus, Mr Waldron thinks it will survive this crisis but not without significant layoffs.

 

"Airbus is a crucially important industrial programme for Europe, I think Europe will be committed to keeping Airbus going," he said.

 

"However, there's going to be a great deal of pain to go through. If they cut production rates quite significantly you're going to see large numbers of layoffs. I would expect in a few years years you'll see a smaller leaner Airbus than what we have now."

 

Mr Faury's letter to Airbus staff was reported by Reuters, the Financial Times and Bloomberg.

 

Airbus did not immediately reply to a request for comment from the BBC.

 

Meanwhile, Airbus' main rival Boeing is also battling another major crisis due to the year-long grounding of its 737 Max passenger jet, which had been its best selling plane.

 

On Saturday, the US aviation giant scrapped a $4.2bn (£3.4bn) tie-up with Brazil's Embraer. Some industry analysts saw the move as being triggered by the crises, although the company cited contractual reasons for the decision.--BBC

 

 

 

Air France-KLM secures billions in government aid

Air France-KLM has secured at least €9bn (£7.9bn; $9.7bn) in government aid, as the Franco-Dutch airline group struggles to stay afloat because of the coronavirus outbreak.

 

The French authorities said Air France would get €3bn in loans and another €4bn in state-guaranteed funds.

 

Meanwhile, the Dutch government said it was preparing between €2bn and €4bn in aid to KLM.

 

Major world airlines all but halted passenger traffic around the world.

 

But they still have to pay to park and maintain planes that have been grounded.

 

Earlier this year, Air France-KLM estimated the outbreak would cost the group between €150m and €200m in February-April.

 

Company Chief Executive Ben Smith warned on Friday that the government aid was "not a blank cheque" and would require tough action on costs and performance, Reuters news agency reports.

 

"This financing will give us the opportunity to rebuild. Faced with the upheaval the world is going through, we are going to have to rethink our model immediately," he added.

 

The group is the result of a merger between Air France and KLM in 2004.

 

With a fleet of 550 aircraft, it covers 312 destinations in 116 countries around the world. In 2018, Air France-KLM's passenger traffic exceeded 100 million.--BBC

 

 

 

 

Dyson Covid-19 ventilators are 'no longer required'

Dyson has said the medical ventilator it developed to help treat patients with Covid-19 is no longer required.

 

It began developing a device in response to a government appeal for firms to take part in a national effort to increase the number of ventilators.

 

But in a note to staff, founder Sir James Dyson said that demand for ventilators had been less than first envisaged.

 

The Cabinet Office said that tests on ventilators are still ongoing.

 

Dyson's ventilator has been undergoing clinical tests in recent days and the government had previously said it intended to order 10,000 machines.

 

But Sir James told his staff that only a quarter of those available were currently being used.

 

As a result, he said, the government did not need to acquire as many of them.

 

The company has so far spent around £20 million on the project, which Mr Dyson said he would fund himself, without asking for public funds.

 

The Cabinet office, which has been coordinating the effort to boost ventilator production, insisted that a number of devices were currently undergoing testing and no decisions had been made regarding their use.

 

What is a ventilator?

A ventilator is a machine that helps a person breathe by getting oxygen into the lungs and removing carbon dioxide

Ventilators can be used to help a person breathe if they have lung disease or another condition that makes breathing difficult. They can also be used during and post-surgery

A tube, connected to a ventilator machine, is placed in a person's mouth, nose or through a small cut in the throat (called a tracheostomy)

Dyson was one of many large manufacturers which responded to the call from the UK government to reconfigure their design teams and factory lines to produce much-needed ventilators.

 

Another consortium of medical, military and civil engineering companies - including Airbus, Meggitt, GKN and others - instead worked to ramp up the production of an existing design.

 

The UK government last week gave regulatory approval to that ventilator design to be made by the consortium and put in an order for 15,000 of them as part of efforts to combat the coronavirus.

 

Just over a month ago, it looked as though the country was facing an acute shortage of ventilators during the Covid-19 epidemic.

 

The government appealed to businesses to help out. Dyson came forward with plans to produce a brand new design.

 

Getting approval for a new design inevitably takes time - and while that process has been going on, it seems the outlook has changed and the shortage risks becoming a glut.

 

According to Sir James Dyson, his devices simply aren't needed any more. But is it true - or has the company encountered other problems?

 

The NHS currently has access to nearly 11,000 ventilators, and production is being ramped up.

 

Last week, the government ordered 15,000 machines from VentilatorChallengeUK - a group which already has the regulatory approvals it needs

 

At the same time, the total number required has clearly fallen - as doctors have found less intrusive treatments can be effective in keeping patients alive.

 

The Health Secretary, Matt Hancock recently suggested that 18,000 will be needed in total - around half the figure that was being suggested just a few weeks ago.

 

So it's fair to say the 10,000 units Dyson was expected to make don't seem to be required - in the UK at least. But the company is still hoping other countries are able to make use of them.

 

Meanwhile its design is still undergoing clinical trials. The company insists as far as it is concerned, those trials have been going well - and that the project itself will continue.--BBC

 

 

 

Debenhams threatens to keep Welsh stores shut

Debenhams has warned the Welsh finance minister it will be forced to shut its major shops in Wales unless the government reverses a decision on business rates relief.

 

Chancellor Rishi Sunak has granted a rates holiday to all retail, leisure and hospitality firms for a year.

 

Wales initially said it would match these plans but then changed the threshold for those eligible.

 

It said the change means business rates will be used for grants to small firms.

 

In a letter seen by the BBC, Debenhams' chairman writes that the move threatens the viability of its biggest stores in Wales in Cardiff, Swansea, Newport, Wrexham and Llandudno.

 

Wales decided not to extend relief to properties with a rateable value of £500,000 and above.

 

Debenhams' chairman Mark Gifford tells Welsh Finance Minister Rebecca Evans: "It is deeply regrettable that, by electing to take a different approach to that taken elsewhere in the UK, you have made it economically unviable for us to continue trading the majority of our Welsh business.

 

"You have failed to understand the situation, where Debenhams Retail Limited is in administration and will cease to pay business rates unless it chooses to reopen its stores in Wales.

 

"It will be unable to reopen its stores unless you reverse your decision."

 

A Welsh Government spokesperson said: "We decided to limit the Non-Domestic Rates (NDR) Relief for the hospitality, retail and leisure sector announced to exclude the small proportion of properties with a rateable value of over £500,000.

 

"This affects fewer than 200 properties across Wales but releases more than £100 million towards our Economic Resilience Fund - enough to support more than 2,000 businesses with grants of £50,000.

 

According to real estate services firm Altus Group, Debenhams has business rates liabilities in Wales of £2.35m for the current financial year.

 

The biggest bill is for its Cardiff store at more than £1.1m.

 

Meanwhile, it has emerged that four more Debenhams stores will not reopen post-lockdown, after the business failed to agree deals with landlords.

 

The shops are in Southampton, Swindon, Kidderminster and Borehamwood. They are in addition to seven outlets Debenhams already said will remain closed.--BBC

 

 

 

Branson’s Virgin Atlantic in virus bailout talks

Virgin Atlantic says it is still in talks with the UK government about a coronavirus-related bailout.

 

It follows reports in the Sunday Telegraph that billionaire Virgin Group boss Sir Richard Branson is seeking a buyer for the airline.

 

Virgin Atlantic said talks were "ongoing and constructive", but added that it is also looking at raising cash from the private sector.

 

Many airlines have been struggling as revenues have dropped amid travel bans.

 

However, sources at the airline told the BBC that the firm had not set an end of May deadline for finding a buyer.

 

Coronavirus crisis

They added: "Because of significant costs to our business caused by unprecedented market conditions which the Covid-19 crisis has brought with it, we are exploring all available options to obtain additional external funding."

 

Sir Richard Branson said in an open letter to staff on Tuesday that he was asking the government for a commercial loan, believed to be £500m.

 

In the blog post, he said: "We will do everything we can to keep the airline going - but we will need government support to achieve that".

 

He added that his luxury island resort Necker Island could be used as collateral to help secure state aid for Virgin Atlantic.

 

The Department for Transport said: "The aviation sector is important to the UK economy, and firms can draw upon the unprecedented package of measures announced by the chancellor, including schemes to raise capital, flexibilities with tax bills, and financial support for employees."

 

A spokesperson added that they were willing to consider individual firms' situations, after all alternatives had been explored, "including raising capital from existing investors".

 

In March, Chancellor Rishi Sunak wrote to airlines and airports urging them to find other forms of funding, and that the government would only step in as "a last resort" during the coronavirus crisis.

 

Cash injection

Sir Richard offered to inject £250m into the group last month, with most of that going to Virgin Atlantic.

 

Sir Richard's Virgin Group currently owns 51% of Virgin Atlantic, while the US airline Delta owns the other 49%.

 

The investment bank Houlihan Lokey has now been hired by the airline to help it find additional private investment.

 

The move came after the group's airline in Australia entered administration.

 

The country's second-largest carrier was already struggling with a long-term A$5bn (£2.55bn; $3.17bn) debt prior to lockdown measures coming in.

 

Virgin Australia is seeking new buyers and investors, after failing to get a loan from Australia's government.--BBC

 

 

 

 


 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


Bindura Nickel Corporation

 

 

 


Padenga Holdings

 

 

 


Delta Corporation

 

 

 


Meikles Limited

 

 

 


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Skype:         Bulls.Bears 



 

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