FILE PHOTO – The Goldman Sachs company logo is seen in the company’s space on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 17, 2018. REUTERS/Brendan McDermid
April 24, 2019
By Ebru Tuncay and Birsen Altayli
ISTANBUL (Reuters) – Goldman Sachs is in talks with Turkish banks and companies to buy large distressed loans following a wave of corporate restructurings in the country last year, two sources close to the matter told Reuters.
The sources, who requested anonymity, did not specify the size of the restructured loans but said Goldman was looking at those valued in the range of $2 billion to $6 billion.
Turkish banks, grappling with fallout from a recession and a weak lira, could be interested in selling loans to bolster their stressed balance sheets and to gain access to liquidity, the sources said. One of the Turkish government’s priorities is to relieve banks of bad loans.
One of the sources said that non-performing loans specialists at Goldman Sachs Group Inc, as well as at certain large London-based banks, were in “intense talks right now” over restructured Turkish loans.
A representative for Goldman Sachs in Turkey declined to comment.
Since Turkey’s currency crisis last year, where the lira halved in value at one stage, companies constrained by the currency weakness have sought to restructure their debts.
The weaker lira, which has fallen another 10 percent this year, has made it difficult for Turkish companies to service foreign-currency debts.
“They (Goldman Sachs) are not interested in complicated situations. They are interested in good loans for which the bank could provide a relative hair cut,” or discount, a second source with direct knowledge of the matter said.
Some of the big corporate loans in Turkey that have been restructured or are being restructured include a $5.5 billion loan taken out by Yildiz Holding, which owns Godiva chocolates; a 2 billion euro ($2.2 billion) loan from restaurant group Dogus Holding; and a $4.75 billion loan for Turk Telekom’s previous shareholder OTAS.
Restructured loans make up more than 100 billion liras ($17 billion) of the loans in Turkey’s banking sector, which total 2.5 trillion lira, Finance Ministry data showed.
The non-performing loan ratio at banks rose to 4.2 percent in the wake of last year’s crisis and is expected to reach 6 percent by year-end, according to the ministry data.
The potential for big returns from distressed debt deals has already attracted attention in the financial markets.
Earlier this month, the European Bank for Reconstruction and Development said it was ready to help with Turkish banks’ non-performing loans. In March, sources told Reuters that Japan’s Orix and U.S.-based Bain Capital were in talks to buy problematic loans from Turkish banks.
“Investment banks can talk to (Turkish) banks and take over these loans with a hair cut,” a distressed asset trader in London said. “But what is important here is how much of a hair cut there will be. It may take some time to be agreed upon,” he said.
As part of a reform plan announced this month by Turkish Finance Minister Berat Albayrak, loans in the energy and construction sector would be taken off banks’ balance sheets.
The Treasury will also issue 5-year debt instruments worth a total of 3.7 billion euros to strengthen the capital of state banks, it said on Monday.
(Writing by Ali Kucukgocmen; Editing by Jonathan Spicer and Jane Merriman)
FILE PHOTO: A Hyundai Motor’s booth is seen near the Pyeongchang Olympic Plaza in Pyeongchang, South Korea, February 11, 2018. REUTERS/Kim Hong-Ji/File Photo
April 24, 2019
SEOUL (Reuters) – South Korea’s Hyundai Motor <005380.KS> posted a 24 percent rise in net profit for the January-to-March quarter on improving sales at home and the United States, although weak business in China reined in the pace of growth.
Hyundai Motor posted a first-quarter net profit of 829 billion won ($721.81 million), versus 668 billion won a year earlier. This was above an average estimate of 758 billion profit from 15 analysts, according to I/B/E/S Refinitiv data.
Its operating profit rose 21 percent to 825 billion won, while its revenue was up 7 percent to 23.99 trillion won.
(Reporting by Hyunjoo Jin; Editing by Himani Sarkar and Christopher Cushing)
FILE PHOTO: The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, March 23, 2018. REUTERS/Kim Hong-Ji
April 24, 2019
SEOUL (Reuters) – Samsung Electronics said on Wednesday that it would invest 11 trillion won ($9.57 billion) annually through 2030 in logic chip businesses, including its foundry business.
The investment until 2030, worth 133 trillion won in total, comes as the world’s top memory chip maker strengthens non-memory semiconductor businesses such as contract chip manufacturing, known as foundry, and mobile processors.
“The investment plan is expected to help the company to reach its goal of becoming the world leader in not only memory semiconductors but also logic chips by 2030,” Samsung said.
(Reporting by Ju-min Park and Heekyong Yang; Editing by Himani Sarkar)
FILE PHOTO: A Nissan logo is pictured during the media day for the Shanghai auto show, China, April 16, 2019. REUTERS/Aly Song
April 24, 2019
TOKYO (Reuters) – Nissan Motor Co Ltd will announce on Wednesday a large-scale cut to its earnings outlook for the fiscal year that ended in March, TV Tokyo reported, adding to the company’s woes as it grapples with the arrest of former Chairman Carlos Ghosn.
The Japanese automaker will slash its estimates because of weak sales in North America and China, TV Tokyo’s flagship programme World Business Satellite (WBS) reported late on Tuesday. Nissan’s board approved the move at a meeting on Tuesday, WBS said, citing unidentified sources.
A Nissan spokesman declined to comment when contacted by Reuters.
The maker of the Rogue sport utility vehicle and Altima sedan already cut its outlook just two months ago, predicting its lowest operating profit in six years.
The news adds to a growing list of unwelcome headlines for Nissan, with Ghosn a constant source of media attention since his initial arrest in November on suspicion of financial misconduct.
The jailed former boss of both Nissan and alliance partner Renault SA could learn as early as Wednesday whether he will be released on bail for a second time, after he was indicted for a fourth time this week.
Even before the onset of the Ghosn saga, Nissan had been dogged by revelations of improper vehicle inspections that led to the recall of more than 1 million vehicles in Japan since late 2017.
For the just-ended fiscal year, Nissan expects operating profit of 450 billion yen ($4 billion) on revenue of 11.6 trillion yen, according to its revised forecasts issued in February.
Nissan is scheduled to report financial results on May 14.
As of 0038 GMT Nissan shares were down 2.6 percent, versus a 0.2 percent gain in the broader Tokyo market.
(Reporting by Chris Gallagher; Additional reporting by Naomi Tajitsu and Takashi Umekawa; Editing by Richard Pullin and Christopher Cushing)
FILE PHOTO: Cho Eun-hye (R) and her one-and-a-half-year-old Korean Jindo dog Hari, both wearing masks, go for a walk on a poor air quality day in Incheon, South Korea, March 15, 2019. Picture taken on March 15, 2019. REUTERS/Hyun Young Yi
April 24, 2019
By Joori Roh and Cynthia Kim
SEJONG, South Korea (Reuters) – South Korea announced a proposed 6.7 trillion won ($5.87 billion) supplementary budget on Wednesday to tackle unprecedented air pollution levels and to boost exports bruised by weak external demand amid the Sino-U.S. trade war.
The planned stimulus package allocates 2.2 trillion won to battle air pollution, including subsidies for replacing old diesel-powered cars as well as for buying air purifiers and using renewable energy technologies, the finance ministry said.
Another 4.5 trillion won will be used to increase export credit financing and to create jobs.
“(The extra budget is) to resolve national predicament caused by fine dust and to support the public economy through pre-emptive economic measures,” the ministry said in a statement.
It sees the extra budget lifting Asia’s fourth-largest economy’s growth by 0.1 percentage point this year and adding at least 73,000 jobs, Finance Minister Hong Nam-ki told a briefing.
In March, parliament approved a bill designating the air pollution problem a “social disaster”, paving the way for President Moon Jae-in’s government to draft a fiscal stimulus program to combat it.
Also in March, exports contracted for a fourth month in a row.
Last week, the central bank cut its 2019 growth forecast to a seven-year low of 2.5 percent, underlining worries that weak external demand and trade frictions could stunt economic recovery.
A loss of jobs is also a worry.
South Korea’s unemployment rate jumped to a nine-year high in January, hurt by the government-led hikes in minimum wages and growth concerns among businesses.
Employment conditions improved slightly in March, but it is still in a difficult situation, according to the finance ministry.
To fund the proposed extra budget, the government plans to issue 3.6 trillion won of deficit-covering bonds, according to the ministry’s budget chief.
The remaining 3.1 trillion won will be financed from above-target tax revenue collected in 2018 and by funds that state-owned companies manage.
This year marks the fifth straight year for South Korea to propose an extra budget for stimulus, sparking sharp criticism that this no longer is an emergency measure.
When asked if the current economic situation warrants adjustments in fiscal spending, Finance Minister Hong said his team is making “pre-emptive responses” to boost growth, as is allowed South Korea’s economic stimulus law.
South Korea can draw up an extra budget when there is a war or large-scale disaster outbreaks, or when there are concerns over economic recessions and mass lay-offs, according to the national finance act.
Moon’s ruling Democratic Party likely faces a challenge winning parliamentary approval of the budget bill, as it only holds 43 percent of the National Assembly’s 300 seats. Moon will need to gain support from nearly 30 opposition lawmakers.
The ministry sees South Korea’s economy growing 2.6 percent this year if the extra budget bill is approved and executed in a timely manner. It plans to submit the bill on Thursday.
(Reporting by Joori Roh and Cynthia Kim; Editing by Richard Borsuk)
FILE PHOTO: U.S. House Speaker Nancy Pelosi (D-CA) speaks at her weekly news conference on Capitol Hill in Washington, U.S., April 4, 2019. REUTERS/Yuri Gripas/File Photo
April 23, 2019
WASHINGTON (Reuters) – U.S. House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer will meet with President Donald Trump on April 30 at the White House over the fate of proposals to boost U.S. infrastructure repairs by at least $1 trillion, according to a congressional aide and an administration official.
Pelosi said in New York on Tuesday the meeting will happen next week. Trump, who vowed in 2016 as a candidate to back $1 trillion of infrastructure spending over 10 years, has been vague about his plans in recent months. “Both parties should be able to unite for a great rebuilding of America’s crumbling infrastructure,” Trump said in February during his State of the Union address.
(Reporting by David Shepardson; Editing by Lisa Shumaker)
FILE PHOTO: U.S. President Donald Trump displays his signature after signing the $1.5 trillion tax overhaul plan along with a short-term government spending bill in the Oval Office of the White House in Washington, U.S., December 22, 2017. REUTERS/Jonathan Ernst/File Photo
April 23, 2019
WASHINGTON (Reuters) – A 2017 tax overhaul championed by President Donald Trump will cut household taxes more in Republican-leaning states than in states that lean Democratic, according to research published by the U.S. central bank on Tuesday.
The Tax Cut and Jobs Act, signed by Trump in December 2017, reduced tax rates for most Americans, boosting economic growth in 2018 while widening the federal budget deficit.
Trump has often cited the legislation one of his key achievements, although critics say the law mostly cuts taxes for high-income Americans and corporations. Many Americans are also getting smaller tax refunds or owed money than in the past.
The tax law’s long-term effects will include pushing after-tax incomes 1.6 percent higher in states that tend to vote for Trump’s Republican party, compared to a 1.3 percent gain in Democratic-leaning states, according to research published by the Federal Reserve Bank of Atlanta, one of 12 regional branches of the U.S. central bank.
Households in Democratic-leaning states get less help because the law makes it harder to deduct state and local tax bills from a household’s federal obligations. State and local taxes tend to be higher in states that lean Democratic.
The researchers, which included Atlanta Fed economist David Altig and University of California, Berkeley economist Alan Auerbach, considered states to be leaning Republican or Democratic if one party’s share of the vote averaged at least 5 percentage points higher than that of the other party in the last five presidential elections.
For their estimates, the researchers assumed the tax overhaul would be made permanent. Congress, which was Republican-controlled when the bill was passed, made many of the tax cuts expire after 10 years so that the legislation could pass without Democratic support.
(Reporting by Jason Lange; Editing by Bill Berkrot)