Here is the list of major companies in Europe announcing bankruptcy in 2020 due to the coronavirus. This list will be updated as other companies join the group.
07 May, 2020 | AtoZ Markets – Europe begins to see a decrease in the number of infections. Many EU countries have decided to relax some of their precautionary measures, such as entry bans and travel restrictions. Those had been taken to stop the spread of the coronavirus pandemic (COVID-19).
Europe Facing Deep and Uneven Recession
The lockdowns measures imposed in most European countries are economically devastating. Because many businesses closed, and almost everyone is homebound, consumer spending has collapsed, and economic activity has dropped. Many companies are threatened with bankruptcy, unemployment is skyrocketing, and household incomes are collapsing.
The European Union expected the economy to contract by 7.4% this year. Investment is to collapse and unemployment rates, debts and deficits will soar in the brutal wake of the pandemic, said the European Commission. Unemployment expected to be rampant, averaging 9% across the bloc and reaching 19.9% in Greece, the European Commission said. RCA’s European Capital Trends shows that prices are falling in the retail sector, and further declines likely give the current tensions in this market. Leading retailers throughout the continent are entering bankruptcy proceedings.
In some cases, tenants and landlords locked into a battle for survival, with almost opposing forces at play. Tenants want to preserve their cash flow in the face of the unknown and landlords demand rents to fulfil their service obligations to their lenders and other stakeholders. Shopping malls in the UK, where prices have dropped 50% since 2014, are, particularly at risk. But, the prices for UK warehouses rose 25% over the same period. Here are the major companies in Europe announcing their bankruptcy in 2020 due to the coronavirus:
International airline Lufthansa engaged in close talks with the German government over the terms of a bailout deal. It fights to avoid bankruptcy while keeping state influence at bay. Europe’s largest airline group held its first virtual annual general meeting. It also revealed a loss of 1.2 billion euros for the first quarter. It painted a bleak picture of the outlook for the world aviation, which has been virtually paralyzed by the coronavirus pandemic. The Lufthansa Group had more than 135,000 employees worldwide before coronavirus pandemic.
Norwegian Air announced that four Swedish and Danish subsidiaries have filed for bankruptcy. It terminated employment contracts in Europe and the United States, putting some 4,700 jobs at risk. The airline is also looking to convert debt into capital, shareholder money, and Norwegian government guarantees to survive the coronavirus crisis. Norwegian Air had more than 11,000 employees before bankruptcy.
The British airline Flybe, one of the largest regional carriers in Europe, entered administration, a practice similar to declaring bankruptcy. It banned all flights on 5 March. The director of Flybe has warned that the potential loss of its operating license and the crisis in the sector threat the sale of the failed airline. Flybe had around 2000 employees before declaring bankruptcy.
Foodora is a food delivery app, Berlin-based subsidiary of Delivery Hero. It filed for bankruptcy in Canada on 27 April. It announced that it would cease operations in the country on 11 May. An 88-page bankruptcy filing lists the names of all creditors who owe at least $ 250, most of which are restaurants that have not been paid.
The Swedish fashion store chain MQ filed for insolvency on April 16, as sales fell on its premises while customers stayed at home due to the pandemic. Its decision is based on a significant sales drop in March and early April, and the long-term impact on the consumer market, even after the COVID-19 pandemic. Flybe had approximately 2,700 employees before the pandemic.
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