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A Saudi court has rejected two applications from conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) to have its decade-long dispute with creditors resolved under the kingdom’s new bankruptcy law, AHAB said yesterday, according to a Reuters report. The case was seen as a key test of the kingdom’s new regime for handling insolvency disputes. Creditors have been pursuing AHAB and Saad Group, another Saudi conglomerate, since they defaulted on about $22 billion in combined debt in 2009. The company applied for a “protective settlement procedure” under Saudi Arabia’s new bankruptcy law earlier this year. After that was rejected, it applied for a financial restructuring procedure, another part of the country’s bankruptcy framework. That application has now also been rejected, Simon Charlton, chief restructuring officer at AHAB, told Reuters. “We understand it is a new law that is untried and untested and that everyone is learning, but ... to be denied access to either process is damaging to the business, the employees who depend on it and importantly the creditors,” he said. Saudi Arabia’s bankruptcy law, which came into effect in August, is an important step towards making the kingdom more investor-friendly. Before the introduction of the law, modern bankruptcy legislation did not exist in Saudi Arabia, meaning the main options for defaults were liquidation or cash injections.

Italy’s Supreme Court has rejected an appeal by Parmalat against a lower court ruling that it pay $431 million in damages to Citibank in a case stemming from the dairy group’s bankruptcy more than 15 years ago, Reuters reported. Parmalat, now owned by France’s Lactalis, collapsed in 2003 after the discovery of a 14 billion euro ($15.8 billion) hole in its accounts. In 2008 the Superior Court of New Jersey ordered Parmalat to pay the damages to Citibank, rejecting its claim that Citibank played a part in thefts that had helped to bankrupt it. In 2014, a court in Bologna upheld the ruling by the U.S. court that Parmalat pay the amount to Citi. “Citi looks forward to Parmalat now voluntarily complying with the Supreme Court’s decision and issuing and allotting to Citi the shares in Parmalat to which it is now entitled,” the U.S. bank said.

Struggling Brazilian airline Avianca Brasil had told regulators that it was permanently cancelling several routes as of yesterday despite continuing to sell tickets for them on its website, according to a letter seen by Reuters. The airline, which has been fighting aircraft lessors in bankruptcy court, told civil aviation regulator ANAC in the letter sent on Friday that it was ending 48 flight frequencies — around a quarter of its capacity — due to a shrinking fleet. The changes were due to take effect yesterday, according to the letter, but Avianca Brasil’s website showed it was still selling tickets for several of the routes that it had told ANAC it would discontinue. A representative for Avianca Brasil told Reuters the letter to ANAC was just a preliminary plan and that it was working hard to adjust its flights to affect the fewest passengers possible.

ArcelorMittal’s plan to buy a bankrupt Indian steel company for $6 billion was halted temporarily by the nation’s top court, further delaying tycoon Lakshmi Mittal’s efforts to enter the world’s second-biggest market, Bloomberg News reported. The Indian Supreme Court ruled that Essar Steel India Ltd.’s current status has to be maintained, pending a review by a bankruptcy tribunal hearing appeals related to the sale. The company is currently being managed by a court-appointed administrator. Friday’s ruling was in response to petitions by banks, including Standard Chartered Plc, which are fighting over how money that’ll be received from the company’s sale should be distributed. A lower court had last month approved Arcelor and its partner Nippon Steel Corp.’s offer to pay $6 billion upfront to lenders and invest another $1.1 billion in the Indian steel company. Friday’s court decision disappointed foreign exchange traders, who were expecting an inflow of dollars into India due to the transaction. The rupee extended its drop to as much as 0.6 percent after the court ruling. Shares of State Bank of India —  the biggest lender to Essar Steel — declined as much as 1.2 percent in Mumbai, while Arcelor’s stock fell as much as 1.8 percent in Amsterdam. Both stocks later erased the losses.

Delays in the sale of assets under India’s bankruptcy law are becoming a key challenge for bidders who “cannot wait indefinitely” because of funding constraints, according to JSW Steel Ltd, Bloomberg News reported. The Sajjan Jindal-run mill, which has bid for many companies under the insolvency law since sales of distressed firms began in 2017, is among bidders who have faced repeated delays in their attempts to buy indebted assets. A bidder has to tie up the capital for investing in an asset when submitting a resolution plan and “it is not possible for any company, big or small, to keep the funding ready forever,” said Seshagiri Rao, joint managing director of the steel mill. Since the Insolvency and Bankruptcy Code was passed in the Indian parliament in 2016, the resolution process has been slowed as courts are inundated with appeals from founders, administrators, lenders and bidders. Lenders to the first 12 companies brought to the insolvency court have lost out on 40 billion rupees ($580 million) in additional income due to delays in the resolution process beyond the time mandated by law, according to rating company ICRA.

China’s state planner wants to eliminate bitcoin mining in the country, according to a draft list of industrial activities the agency is seeking to stop in a sign of growing government pressure on the cryptocurrency sector, Reuters reported. China is the world’s largest market for computer hardware designed to mine bitcoin and other cryptocurrencies, even though such activities previously fell under a regulatory grey area. The National Development and Reform Commission (NDRC) said on Monday that it was seeking public opinions on a revised list of industries it wants to encourage, restrict or eliminate. The list was first published in 2011. The draft for a revised list added cryptocurrency mining, including that of bitcoin, to more than 450 activities the NDRC said should be phased out as they did not adhere to relevant laws and regulations, were unsafe, wasted resources or polluted the environment. It did not stipulate a target date or plan for how to eliminate bitcoin mining, meaning that such activities should be phased out immediately, the document said. The public has until May 7 to comment on the draft.

Creditors led by hedge fund Elliott Management approved on Friday a restructuring plan for bankrupt airline Avianca Brasil, hours after the country’s antitrust regulator announced preemptively that the plan could run afoul of competition laws, Reuters reported. The regulator, known as CADE, said on Friday morning that it could block the plan, which Avianca Brasil hopes could raise some $210 million. The carrier filed for bankruptcy protection in December. CADE’s warning means the creditor approval may not bring short term relief to Avianca Brasil given that the regulator itself said that its review of the deal could last some eight months. During that time, the cash-strapped carrier would have to operate with its own funds, or take on additional debt. The plan was modified on Friday during a creditors’ meeting, although the new details were not immediately available. Under Avianca Brasil’s plan filed this week, Gol Linhas Aereas Inteligentes SA and LATAM Airlines Group would buy Avianca Brasil’s airport rights, known as slots, in three high-traffic terminals. Gol and LATAM already control over two-thirds of the slots in each of those three airports, two of which are in Sao Paulo and one in Rio de Janeiro.

A collection of valuable Asian sculptures is being claimed by the estate of a bankrupt U.S. jewelry company once owned by the Indian billionaire Nirav Modi, who allegedly defrauded an Indian bank of $2 billion, despite his wife’s attempts to gain possession of the sculptures, according to a court filing, Bloomberg News reported. Modi’s wife tried at least twice to claim the 23 statues, which were purchased for well over $100,000 in multiple Christie’s auctions over the past decade. Ami Modi went to the Manhattan offices of Firestar Diamond Inc. last year and demanded the sculptures displayed in an executive office be turned over to her. Mark Samson, the turnaround expert appointed to restructure the company, refused unless she could prove she owned them, according to the court filing. The fight over the sculptures, which included a terracotta bust of Buddha, is a telling footnote in the bankruptcy case of Modi’s Firestar, which filed for bankruptcy in February 2018 after Indian authorities accused Modi and others of the biggest bank fraud in Indian history. Modi, who dressed stars including Kate Winslet and Priyanka Chopra, has denied any wrongdoing.

A series of bankruptcy filings by major private-sector bond issuers in China’s third-wealthiest province is shining a spotlight on aggressive efforts by local governments to manage unsustainable debt loads, Bloomberg News reported. Four debtors have entered bankruptcy procedures since the start of November in Dongying, a city of 2 million in the eastern province of Shandong that once thrived with a booming tire-making industry. While China sees thousands of bankruptcies each year, instances of court-led restructuring of publicly issued bonds have been rare. Authorities in other cases have encouraged workouts with creditors, raising questions about the Dongying examples. “The recent slew of bankruptcies sent shock waves through the bond market,” said Chen Su, a bond portfolio manager at Shandong’s Qingdao Rural Commercial Bank Co. “For bondholders, they can only expect to get a low repayment ratio through the bankruptcy reorganization — besides which it’s quite a time-consuming process.” Creditors would prefer direct talks with the company, Chen said. But authorities might have other ideas. Driving their potential concern: the pattern of private-sector companies guaranteeing each others’ debt. The maneuver helped encourage lenders to extend credit, but is now threatening systemic risks as one borrower gets in trouble, infecting others.