Top international headlines: Evergrande financials rock global markets, and more
Also in the spotlight: Trump CFO criminal probe continues and Lufthansa plans to raise R37 billion.
Big Tech spreads physical footprint in Manhattan while Trump CFO remains under the spotlight for tax fraud and grand larceny. Meanwhile Lufthansa makes plans to pay back the German government and the automotive industry continues to downgrade forecasts amidst the ongoing semiconductor shortage. China’s Evergrande is also negotiating with bondholders to calm fears of a debt default.
Lufthansa plans to raise R37 billion
Deutsche Lufthansa plans to raise $2.5 billion (R37 billion) to repay part of a German government bailout that helped the national carrier through the coronavirus pandemic.
The deal will be underwritten by 14 banks with support from funds controlled by Blackrock, the carrier said. The move will help Lufthansa remove the state from its shareholder list about 18 months after it took a stake, something CEO Carsten Spohr has been striving to do ahead of German elections, reports Bloomberg.
Trump CFO criminal probe continues
A lawyer representing the Trump Organisation's CFO Allen Weisselberg said that they have "strong reason to believe other indictments are coming" as part of the criminal probe into the company.
The Trump Organization and Weisselberg have been charged with 15 felony counts, accusing him of tax fraud and grand larceny.
Prosecutors said the alleged criminal conduct was carried out as part of a "sweeping and audacious payment scheme" and that Weisselberg personally did not pay taxes on $1.7 million (R25 million) of his income dating back to March 2005, reports the Business Insider.
Evergrande negotiates with bondholders
Evergrande has negotiated a deal with bondholders to settle interest payments on a domestic bond, which helped calm fears of an imminent default that could unleash global financial chaos, reports Reuters.
China's central bank also injected $14 billion (R207 billion) into the banking system, in a sign of support. Evergrande owes about $300 billion (R4,426 billion), mostly to onshore investors.
The heavily indebted Evergrande is intertwined with China's broader economy and has led to fears of contagion have kept global stock and bond markets on tenterhooks.
Chip shortage takes its toll on automotive industry
The ongoing semiconductor chip shortage is now expected to cost the global automotive industry an estimated $210 billion (R3,098 billion) in revenue in 2021, according to AlixPartners.
The consulting firm is now forecasting that 7.7 million units of production will be lost in 2021, up from 3.9 million in its May forecast.
Automakers across the globe, including Ford Motor and General Motors, had warned of massive earnings cuts this year due to the chip shortage, reports CNBC.
Big Tech takes Manhattan
Google’s $2.1 billion (R31 billion) deal to buy a Manhattan office building adds to the rapid growth of Silicon Alley, despite the increase in remote work and a decline in the New York office market, reports CNBC.
The price is the highest paid for a US office building since 2018, according to commercial realtors.
Google, Amazon and Facebook now have more than eight million square feet of space in Manhattan, according to real estate experts.