We in the NTI newsroom are not going to lead with the inflation numbers in the UK today (Thursday 18 August), as we did that yesterday and last month (and the month before). It's not really news that Ford made a car, and Waitrose stock quails' eggs.
This is especially as there is some fruity insolvency and restructuring news buzzing around the newswires and this bulletin is, of course, focused on what is happening in the world from the perspective of our glorious profession. The first is about Germany's utilities supplier, Uniper, which reported a €12.3 billion first-half year loss, saying it has been pushed to the “brink of insolvency” by a huge drop in Russian gas deliveries. The number is staggering, but then again the company is huge.
Uniper chief executive, Klaus-Dieter Maubach, warned that Europe faced a grim energy outlook this winter, saying the gas supply crisis made it “almost impossible” to predict the group’s performance in the second half of the year. We think Klaus should consider his next job (which he surely will be fairly soon) as Governor of the Bank of England. Imagine his relief when he doesn't have to make an accurate prediction of future performance and no-one really blames him if he and his new team gets everything very, very wrong.
Uniper is majority-owned by Finnish utility Fortum and last month received a €15 billion bailout from the German Government, which will take a 30 per cent stake and also provide loans to prevent a collapse. A real sign of our times.
The other story that you may have missed is that involving Cineworld. They are griping about the lack of 'blockbuster movies' this year, as its shareholders face being largely wiped out after the London-listed cinemas group warned that it was planning a restructuring deal to tackle its $4.8 billion debt mountain.
If you manage a small business and want a tip about how to deal with losing 40 per cent of your value in a single day you could do worse than to look into the avenues the second biggest cinema operator in the world are exploring. As well as taking steps to manage costs and boost liquidity, the cinema group said it was evaluating various strategic options to potentially restructure its balance sheet through “a comprehensive deleveraging transaction”. It sounds intriguing, but it's basically issuing loads and loads of new shares, massively diluting the holdings of those who have stuck by their investment during the recent pandemic.
Now there's a blockbuster story that would look good on the wide screen.
Another such headline is brewing in China. Country Garden, a big deal property developer in China, estimated that first-half profits fell as much as 70 per cent in the first half of the year, as the country’s largest real estate group by sales was drawn into a crisis that has raged through the heavily indebted sector. Beijing is seeking to revive the sector with refinancing loans, but there are signs that confidence in Country Garden is receding. Will the Government step in? We will have to see.
