Sat, Jun 27, 2020 page10

• World Business Quick Take

  • Agencies
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  AIRLINES

  Lufthansa bailout approved

  Deutsche Lufthansa AG shareholders on Thursday backed a 9 billion euro (US$10.1 billion) government bailout, securing the future of Germany’s flagship airline after it was brought to the brink of collapse by the COVID-19 pandemic. The plan, backed by 98 percent of the shareholder capital that cast a vote at the online meeting, would see Berlin take a 20 percent stake in Lufthansa and two board seats. Lufthansa shares closed 7.1 percent higher after top shareholder Heinz Hermann Thiele dropped objections to the deal. Also on Thursday, EU regulators approved Lufthansa’s 6 billion euro recapitalization, part of the bailout deal, subject to a ban on dividends, share buybacks and some acquisitions until state support is repaid. German Minister for Economic Affairs and Energy Peter Altmaier said it was clear that with the state holding a minority stake, Lufthansa would remain an independent company, but the deal made it possible to prevent a hostile takeover.

  RETAIL

  H&M posts US$700m loss

  Hennes & Mauritz AB (H&M) posted its first quarterly loss in more than a decade as the COVID-19 pandemic forced the Swedish clothing retailer to close of many of its stores. The pretax loss amounted to 6.48 billion kronor (US$700 million) in the three months through May. Analysts had expected a loss of 6.1 billion kronor. H&M gave a mixed bag of positive and negative news. The sales decline moderated to 25 percent so far this month from 50 percent in the past quarter. H&M added that it would close more shops, targeting a net decrease in its store count this year of 40. However, its long-term issue of holding too much inventory is still haunting the company. H&M is laying the groundwork for a debut issue of bonds and it said it set up an extra commercial paper program to be able to borrow in currencies other than Swedish kronor.

  MEXICO

  Central bank cuts rate

  Mexico cut its benchmark interest rate to the lowest in almost four years to counter its worst economic crisis since the 1930s. Banco de Mexico, or Banxico, lowered its policy rate by half a percentage point to 5 percent in a unanimous decision, as forecast by all 21 economists in a Bloomberg survey. The decision is the fourth such cut since the COVID-19 pandemic hit the country. The Mexican economy would shrink 10.5 percent this year, more than peers such as Brazil, Russia, South Africa and India, according to the IMF. Despite that, swaps traders are betting that Banxico would not lower the rate below 4.25 percent, as the inflation outlook worsens.

  FINANCE

  Visa may cut Wirecard

  Visa Inc and Mastercard Inc are considering revoking Wirecard AG’s ability to process payments on their networks in a move that would cause further pain for the firm after it started insolvency proceedings. The world’s largest payment networks have begun reaching out to some Wirecard clients to prepare them for the possibility, said people familiar with the matter, who asked not to be named because the information is not public. Wirecard helps businesses around the world accept electronic payments from customers, so its relationships with Visa and Mastercard — and being able to process payments with the companies — are critical to its business. Wirecard filed for insolvency on Thursday, citing over-indebtedness and inability to assure it can continue as a going concern.
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