GLOBAL RESTRUCTURING TRENDS - #ACTNOWTORECOVER #ACTNOWTOGROW #VALUECREATION NOVEMBER 2021 - PWC
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Global Restructuring Trends #ActNowToRecover #ActNowToGrow #ValueCreation November 2021
As economies begin to emerge from the turmoil of the COVID-19 pandemic, our report explores the challenges facing businesses and the road ahead in 46 markets worldwide.
Contents Restructuring Trends: A Global View Italy 47 Executive Summary 1 Japan 48 One: Brakes on restructuring coming off 2 Kenya 49 Two: Uneven road to recovery 5 Malaysia 51 Three: Supply chain disruption and inflationary pressures 7 Mauritius 53 Four: Transformation gathers pace 9 Mexico 55 Five: Expanding restructuring toolkit 10 Middle East 57 Debt capital markets update 13 New Zealand 59 Themes by countries and regions Nigeria 61 Australia 19 Norway 62 Austria 20 Philippines 63 Belgium 21 Portugal 64 Brazil 22 Romania 65 Canada 23 Russia 66 Cayman Islands and British Virgin Islands 25 Serbia 67 China 27 Singapore 68 Croatia 28 South Africa 69 Czech Republic 29 South Korea 71 Denmark 31 Spain 73 Finland 32 Taiwan 74 France 33 Thailand 75 Germany 35 The Netherlands 77 Ghana 37 Turkey 79 Gibraltar 38 UK 81 Greece 39 USA 82 Hong Kong 41 Vietnam 83 India 43 Appendix Indonesia 44 Data references 85 Ireland 45 Contacts 89 This document includes data derived from data provided under license by Dealogic. Dealogic retains and reserves all rights in such licensed data.
Executive summary
Foreword
Welcome to Restructuring Trends 2021 Gearing up for transformation
– a global view.
As the focus shifts to recovery and growth,
As economies begin to emerge from the turmoil businesses are looking at how to create value
of the COVID-19 pandemic, our report explores in markets being reshaped by the acceleration
the challenges facing businesses and the in digital transformation and growing
road ahead in 46 markets worldwide. We also stakeholder focus on environmental, social and
look at developments in insolvency legislation governance (ESG) issues. Heather Swanston
and their implications for restructuring Global Business
professionals, businesses and lenders. As disruption and change gather pace, the Restructuring
central challenge for businesses is how to Services leader
During the most acute phase of the pandemic, optimise their portfolio in the medium-to- PwC Japan
many businesses were forced into survival long term rather than just short-term survival.
mode, with revenues drying up and liquidity The extent of lender and other stakeholder
under pressure. The lifeline of government support hinges on whether the business can
relief, credit moratoria and huge availability generate long-term value in these evolving
of capital at low interest rates helped many market conditions. The availability of finance
companies weather the crisis. Restructuring will also be increasingly linked to strategy
and insolvency activities were generally and performance on ESG and diversity and
subdued as a result. inclusion, as outlined in our latest Act Now:
From Recovery to Growth report.
More recently, vaccine roll-outs have led to
the lifting of restrictions and improvements It’s therefore important for all parties to
in consumer and business confidence within understand how this medium-to-long-term
many economies. But with opening up comes value will be generated. In line with our latest
the scaling back of government support and Act Now research, four key priorities stand out:
the need for businesses to tackle the debt
burden accumulated during the pandemic. 1 Realigning operations
Further challenges include the need to ramp 2 Bolstering liquidity and working capital
up output in the face of continued strains
on liquidity, rising raw material prices and
mounting supply chain disruption. In turn, 3 Stepping up progress on corporate
deleveraging
progress on vaccination varies, leaving
countries with low immunisation rates
vulnerable to fresh surges in infection and 4 Optimising the business portfolio
resulting lockdowns.
The coming pages offer insights into
Businesses around the globe have to navigate businesses’ ability to meet the immediate
an asymmetrical recovery whilst looking ahead challenges and gear up for the transformational
to the future and recovery from the pandemic. market developments ahead.
During the most acute phase of the pandemic, many
businesses were forced into survival mode, with
revenues drying up and liquidity under pressure.
1 Global Restructuring Trends – November 2021
One: Brakes on
restructuring coming off
While the impact of the COVID-19 pandemic is receding, the coming
year presents a fresh set of challenges as businesses deal with
the withdrawal of government support and shift from stabilise and
survival mode to longer term recovery and growth.
Insolvency and restructuring have been subdued, but are expected to pick up as
we move into 2022 and beyond
Government relief and credit moratoria, support from banks and other lenders,
and the huge availability of capital at low interest rates have largely held back
insolvency and restructuring activity throughout the pandemic.
Figure 1:
Private PrivateDry
Markets Markets Dry(USD
Powder Powder
'bn) (USD ‘bn)
2000 332
2001 417
2002 457
2003 459
2004 472
2005 643
2006 909
2007 1,136
2008 1,229
2009 1,235
2010 1,149
2011 1,153
2012 1,117
2013 1,387
2014 1,380
2015 1,507
2016 1,681
2017 2,016
2018 2,356
2019 2,553
2020 2,841
Jun-21 3,297
0 500 1000 1500 2000 2500 3000 3500
Source: Preqin
Insolvency and restructuring have been
subdued, but are expected to pick up as we
move into 2022 and beyond.
Data sources are available on page 85 2
This combination of state support and Further risks include the high level of
readily-available capital has made fiscal debt after many governments Priorities ahead
amend-and-extend or refinancing the borrowed money to help support • Companies need to re-appraise and
clear and preferred solutions in many businesses during the crisis. The shore up their liquidity and working
situations to date. The abundance of debt burden means that the scope capital requirements to address the
capital and pressure to put it to work for further state aid in the event of unwinding of government support
mean that a lot of these refinancing fresh surges in infection could be and debts accrued during the
agreements have been covenant-lite. limited. The risk is especially marked in pandemic, while at the same time
Where there has been insolvency or countries where government debt was meeting renewed customer demand
more comprehensive restructuring already high going into the crisis. This and delivering delayed investment.
activity, it has tended to be either includes a number of major economies
sector (e.g. those most affected by the such as France and Japan. • The likely limited availability of
pandemic such as retail, hospitality further government support in some
and travel or ESG-related such as in Some economies are already seeing economies will increase reliance on
mining and energy) or situation specific a resulting uptick in insolvency existing lenders, shareholders and
(e.g. fraud or businesses suffering from activity, particularly in the mid-market. access to the capital markets, which
volatile commodity price and supply Activity could accelerate even faster may be less forthcoming in sectors
chain issues). in less developed markets where there where the prospects for recovery
is less resilience and low COVID-19 and long-term growth are less clear.
However, the extent of government immunisation rates could hamper
relief has varied. Some countries, recovery and heighten the dangers
such as Mexico, have held back on of a renewed wave of infections.
government stimulus amid continuing However, in most markets there will
austerity. Others may have wanted to be a lag, though we would expect
inject more support, but have been to see a step-up through the course
constrained by elevated levels of of 2022. At the other end of the
sovereign debt going into the crisis. spectrum, exceptionally rapid recovery The abundance of
In turn, even with government relief, and plentiful capital for refinancing
some economies such as Turkey and may prevent any significant surge in capital and pressure
Hong Kong have seen high levels of
insolvency even during the pandemic.
insolvencies in some markets such as
the US. to put it to work
As government support measures Businesses at the centre of the
mean that a lot of
start to be withdrawn and temporary restructuring radar include those in these refinancing
loans come due for repayment, the sectors most severely affected by
brakes on insolvency and restructuring lockdowns and travel restrictions agreements have
activity will begin to come off. Over- including tourism, airlines, hospitality
leveraged capital structures will need and bricks-and-mortar retail. Other been covenant-lite.
to be addressed and maintaining focus areas include sectors already
lender forbearance and support feeling the impact of the move to Net
could also become more challenging, Zero such as mining and energy as well
particularly in sectors where the as those experiencing growth pains as
prospects for recovery and long-term they emerge from the pandemic (spikes
growth are less clear. in demand, supply chain issues, labour
shortages, commodity price volatility
Some countries, such as Malaysia and and inflation).
Greece, are expecting an offloading
of non-performing loans by banks to
special situation funds which in turn
may drive a more aggressive approach
to recovery. In addition some markets
are seeing an influx in non-bank
lenders for the first time, such as
New Zealand.
3 Global Restructuring Trends – November 2021
Figure 2: Government support as a % of 2020 Real GDP
24% 12% 37% 16% 8%
France Germany Italy UK China
23% 31% 5% 36% 12%
Canada USA Russia Japan Hong Kong
As government support measures start to be
withdrawn and temporary loans come due
for repayment, the brakes on insolvency and
restructuring activity will begin to come off.
Data sources are available on page 85 4
Two: Uneven road
to recovery
Focus is shifting from survival In addition, whilst consolidation in
and stabilise to recovery and some sectors has been seen to date, Priorities ahead
growth. more is expected through further M&A • In this uncertain and potentially
activity as players start to capitalise on stop-start pathway to recovery and
While the momentum for global growth opportunities. growth, it’s essential to monitor
economic recovery is gathering overall, cash and develop realistic forecasts
the pace looks set to vary between In economies where the rebound is which take account of potential
countries and sectors. furthest forward, the business focus varying recovery scenarios.
is moving from short-term survival
One key factor is progress on to recovery and growth, bringing • The immediate demands don’t just
vaccination. While rates tend to be with it challenges in managing the include day-to-day expenses, but
lower in poorer countries, a number of associated demands on liquidity and also funding for future growth and
advanced economies are also lagging. working capital. to adapt to the trends reshaping
marketplaces and economies.
The speed of recovery within and The speed of the rebound in some
between sectors also differs quite economies and resulting surges
markedly. Airlines and tourism will in demand could further stretch
take time to get back to pre-pandemic resources. And as digital disruption
levels, particularly in economies where and expectations on ESG threaten
there are continuing travel restrictions to turn whole sectors on their head,
affecting tourism businesses such as companies face the challenge of
Australia, Japan and New Zealand. adapting business models, securing
the funding needed to finance the
necessary transformation and,
Other sectors such as hospitality and
ultimately, boost value over the
retail may come back more quickly as
medium-to-long term.
restrictions ease – for example in the
US, many such service enterprises
are already bouncing back and even
exceeding pre-pandemic levels in
some cases.
Airlines and tourism will take time to get
back to pre-pandemic levels, particularly in
economies where there are continuing travel
restrictions affecting tourism businesses
such as Australia, Japan and New Zealand.
5 Global Restructuring Trends – November 2021
Real 3:GDP
Figure Real growth / decline
GDP growth / decline 2020
2020 – –Annual
Annual percent
percent changechange
no data
Less than
-3%
-3% – 0
0 – 3%
3% – 6%
6%
or more
Real
Figure GDP
4: Realgrowth / decline
GDP growth / decline2021
2021 ––Annual
Annual percent
percent change
change
no data
Less than
-3%
-3% – 0
0 – 3%
3% – 6%
6%
or more
Data sources are available on page 85 6
Three: Supply chain
disruption and
inflationary pressures
Supply chain disruption could Supply chain issues put further
hold up recovery and jeopardise pressure on working capital and Priorities ahead
some businesses. emphasise the need for resilient supply • New COVID-19 variants remain a
chain management. For economies as threat to the pace and extent of
From steel to semiconductors, supplies a whole, the pincer of impaired output economic recovery, both through
of raw materials and finished goods, and rising inflation could slow or even the risk of further lockdown and
along with the capacity to transport derail recovery. in heightening the potential for
them, are under pressure or seeing a supply chain disruption for many
significant rise in prices. Alongside supply chain bottlenecks, businesses. Supply chain resilience
resurgent demand is adding to is therefore essential, especially in
Severely affected sectors include shortages of key skills. We’ve already the most affected sectors such as
construction, where disruption is seen how travel restrictions have construction and automotive.
causing project delays and pressure on curtailed the movement of seasonal
costs and cash flows. In turn, a number staff – from crop pickers to hospitality • Dealing with talent shortages
of automotive manufacturers have had workers. We’ve also seen how many requires long-term planning as well
to curtail or temporarily shut down workers in shutdown sectors such as short-term plugs. Pay, conditions
production altogether because of the as hospitality have taken up jobs in and prospects may all need to
shortage of semiconductors. other industries and seem unlikely to be improved. Action to improve
return. Longer term issues include diversity could in turn enlarge talent
the shortage of commercial drivers pools and help to attract higher
In addition the recent increase in
worldwide, with often poor conditions, quality recruits.
wholesale gas prices in Europe has had
lack of diversity and an ageing
an adverse impact on the energy retail
workforce continuing to diminish an
sector and is likely to lead to further
already shrunken talent pool and
supply chain pressures.
making it hard to attract new recruits.
Rising raw material prices are also
Some of the talent shortages
heightening inflationary pressures,
may be temporary, especially as
which may translate into interest
restrictions on movement are eased.
rate rises in due course. Among
But pay rates may also need to rise
the prominent markets where rising
quite markedly to attract scarce talent,
inflation may be met with an increase in
which could in turn add a further spur
base rates is the UK, where there is still
to rising inflation.
the possibility that rates may rise later
this year rather than next year.
From steel to semiconductors, supplies of
raw materials and finished goods, along
with the capacity to transport them, are
under pressure or seeing a significant rise
in prices.
7 Global Restructuring Trends – November 20218
Four: Transformation
gathers pace
Need to keep pace with digital Further considerations for businesses
transformation and expectations in all sectors include how their strategy Priorities ahead
on ESG and diversity and and performance will rate from an ESG • The big question for companies
perspective. Our UK Act Now report as they look to future-proof their
inclusion.
highlights the growing importance strategy and capabilities is where
of ESG in credit and investment to direct often limited financial
The acceleration in digital
decisions. Businesses with no viable resources when there is so much
transformation in many sectors as
ESG strategy could find it increasingly pressure to change on so many
a result of the pandemic opens up
difficult to secure financing. fronts. Operational modernisation,
increased opportunities for innovation
and growth on the one side, while ESG and diversity and inclusion
Even in economies that are currently are all likely to require significant
making some operations and even
dependent on oil and gas, the focus on investment. Companies will
whole companies unviable on the other.
decarbonisation and the development need to factor in the impact of
of alternative opportunities is clear. implementing such changes
Operational restructuring is needed to
The Gulf states, for example, face into their consideration of the
modernise capabilities and streamline
pressure to play their part in tackling appropriate capital structure and
operations, as some sectors have seen
climate change. There is also domestic funding requirements.
wholesale structural change in recent
pressure for change as a result of
years with this only set to continue.
the volatility in fossil fuel markets in • Careful planning and prioritisation
recent years and resulting economic are essential now that ESG
Divestment of noncore and
instability. In line with these trends, and diversity and inclusion are
underperforming operations is enabling
the Saudi Tadawul and Qatar Stock weighing ever more heavily on
businesses to refocus resources on
Exchange (QSE) are racing to launch credit decisions. This presents
recovery, transformation and growth.
ESG indices in 2021, following Dubai opportunities as well as challenges.
Financial Market’s early lead with the For example, we’re seeing a growing
ESG’s move to the centre of the
2020 launch of the S&P/Hawkamah number of financing arrangements
strategic agenda presents comparable
ESG UAE Index. linked to ESG targets, KPIs and
challenges and opportunities. This is
a chance for businesses to regenerate information and monitoring
Just like ESG, diversity and inclusion requirements.
the environment, create fairer societies
are having a growing impact on
and build greater trust with customers,
stakeholder perceptions and financing
employees and policymakers. But
decisions. Our latest Act Now research
perhaps more importantly this is a
has found that nearly 60% of UK
huge commercial opportunity. In
investors are more likely to extend
automotive, for example, the potential
financing in a company with a diversity
is highlighted by the take-off in electric
and hybrid vehicle sales in 2020 and
and inclusion policy. Again this is Even in economies
more than a tick-box exercise. For
2021, following a decade of steady but
example, sectors suffering some of that are currently
unremarkable growth. The challenges
include how quickly carmakers can
the severest talent shortages such
as technology, construction and
dependent on oil
accelerate the transition away from
petrol and diesel vehicles, not just in
logistics are also among the least and gas, the focus
diverse. More women and others from
production, but by making electric
models sufficiently affordable within
under-represented groups within the on decarbonisation
workforce would help to bridge these
the mass market.
talent gaps. It would also help these and the development
sectors to better understand changing
consumer demands.
of alternative
opportunities is clear.
9 Global Restructuring Trends – November 2021Five: Expanding
restructuring toolkit
Legislation and innovation are One of the key considerations for
improving the speed, choice lenders where legislation is more Priorities ahead
and flexibility of restructuring debtor-friendly, such as the new UK • It’s important for companies to
Restructuring Plan, which includes determine which tools best serve
options / solutions.
the ability to cram down dissenting their purposes, and consider
creditors across classes, is how to whether they can access more
The expected uptick in restructuring
be on the front foot in challenging favourable options outside those
is coinciding with the introduction of
such proceedings. What has become available in their local territories.
useful new options and the removal of
clear from recent cases, is that it
many of the barriers that have held up
will be key for lenders to have an • Businesses may look to use
proceedings in the past.
implementable alternative plan and as legislation to help tackle some of
such early engagement with the debtor the issues emerging from the crisis,
An extensive list of recent developments
and access to information will be including to potentially restructure
includes the new UK Restructuring Plan
increasingly important. excessive fiscal debt arising from
and Dutch ‘scheme’ (WHOA), as well as
new legislation in Germany, Belgium, COVID-19 related support. Lenders
Ireland, Greece, Brazil, India, the UAE will need to be on the front foot
and KSA. We’ve also seen Hong Kong in challenging such proceedings,
benefiting from greater cooperation particularly where these are more
with courts in Mainland China and debtor-friendly.
the Cayman Islands are awaiting the
implementation of a formal restructuring
regime for the first time.
10Global vaccination progress as of 20 October.
Fully vaccinated % Partly vaccinated %
Australia 58 14
3
Austria 61
1
Belgium 73
Brazil 50 23
7
British Virgin Islands 51
5
Canada 73
0
Cayman Islands 84
5
China 71
3
Croatia 43
1
Czech Republic 56
1
Denmark 76
8
Finland 67
8
France 67
3
Germany 65
3 2
Ghana
0
Gibraltar 100
2
Greece 61
3
Hong Kong 57
India 21 30
Indonesia 23 16
1
Ireland 75
6
Italy 70
8
Japan 69
2 4
Kenya
11 Global Restructuring Trends – November 2021Fully vaccinated % Partly vaccinated %
6
Malaysia 71
4
Mauritius 65
Mexico 40 14
New Zealand 59 15
1 1
Nigeria
9
Norway 68
9
Philippines 19
2
Portugal 87
5
Romania 30
3
Russia 32
2
Serbia 42
1
Singapore 79
6
Saudi Arabia 59
5
South Africa 18
2
South Korea 67
2
Spain 79
Taiwan 24 40
17
Thailand 36
10
The Netherlands 68
9
Turkey 59
9
UAE 86
6
UK 67
9
USA 56
Vietnam 19 29
Data sources are available on page 85 12Debt capital markets update Debt capital market trends 13 Global Restructuring Trends – November 2021
The debt capital markets have Borrowers have been able to
in general rebounded strongly take advantage of the favourable
from COVID-19. The favourable environment to refinance existing
financing environment, coupled
loans and bonds at lower cost with
extended maturities. Refinancing
Borrowers have
with various government
support measures, have allowed
and repricing deals in loan markets been able to
accounted for over 60% of overall loan
companies to survive the issuances in the run up to September take advantage
pandemic. Looking forward, the 2021, while refinancing represented
favourable conditions are now over 70% of overall activity in the high of the favourable
poised to help recovery and yield bond market.
environment to
growth ahead.
The leveraged finance markets were refinance existing
strong in the first quarter of 2021,
We however see exceptions in APAC,
particularly China, where the default
primarily driven by the refinancing and loans and bonds
repricing deals mentioned earlier. The
of Evergrande and a number of other
market pace cooled slightly in Q2 and at lower cost with
property developers have substantially
dampened the mood of the market.
Q3, as the market started to shift from
refinancing and repricing to new money
extended maturities.
Whether there will be wider economic
deals. Along with this slight market
repercussions remains to be seen.
cooling, lenders and investors were
able to firm up pricing where margins
In addition the ability of businesses to
ticked back up slightly from the lows
access this financing will be dependent
of Q1.
on a number of factors, such as the
future prospects of the sector they
Looking forward, the leveraged
operate in and the impact of ESG
financing markets in America look
considerations.
on track for a strong H2 2021. The
fundamentals point to robust lender
Americas
and investor appetite supporting solid
The leveraged loan (LL) and high yield
demand as the economy continues to
bond (HYB) markets in Americas have
open up, albeit subject to deal specific
rebounded from the pandemic-driven
considerations and challenges such
lows of Q1 and Q2 2020.
as overall sector prospects.
Leveraged loan issuances for the
period ending September 2021 climbed
to $1,291 billion, up 32% from $976
billion over the entire of 2020 while high
yield bond issuances reached 93% of
the total issuance last year.
America
Figure 5: Americas – High Yield Bonds and Leveraged Loan Issuance (USD ‘bn)
High Yield Bonds and Leveraged Loan Issuance (USD 'bn)
2015 254 1,038 1,293
2016 301 1,259 1,561
2017 355 1,723 2,077
2018 189 1,592 1,781
2019 285 1,236 1,521
2020 449 976 1,425
2021 419 1,291 1,710
Q3 YTD
0 500 1000 1500 2000 2500
USD ('bn)
High Yield Bonds Leveraged Loans
Copyright © 2021, Dealogic Limited. All rights reserved.
Data sources are available on page 85 14EMEA
Figure 6: EMEA – High Yield Bonds and Leveraged Loan Issuance (USD ‘bn)
EMEA High Yield Bonds and Leveraged Loan Issuance (USD 'bn)
2015 131 376 507
2016 125 373 498
2017 181 503 685
2018 113 425 538
2019 151 377 528
2020 148 377 525
2021 170 357 527
Q3 YTD
0 100 200 300 400 500 600 700
USD ('bn)
High Yield Bonds Leveraged Loans
Copyright © 2021, Dealogic Limited. All rights reserved.
EMEA HYB Issuance this year has shifted
Both the leveraged loan and high from double-Bs to single-Bs, providing
yield bond markets in EMEA have evidence that investors are willing to
rebounded strongly from the initial
impact of COVID-19. Issuance in
support credits that despite being
financially weaker, have a clear
The clear
the first three quarters stands at pathway to recovery. TUI, Douglas recovery has been
$527 billion, which is higher than the and Golden Goose are examples of
entirety of 2020 issuance. disrupted businesses able to obtain driven largely by
liquidity from the HYB market and
The clear recovery has been driven attract strong investor interest. M&A activity, usually
largely by M&A activity, usually an
indicator of bullish markets. This Meanwhile sustainability linked
an indicator of
accounts for around 50% of activity loans and bonds have surged bullish markets.
this year so far. Notable deals include: in popularity this year with both
borrowers and investors.
• €1.115 billion raised by EQT to
facilitate to public-to-private deal of Following Public Power Corporation’s
Sweden’s Recipharm inaugural sustainability-linked HYB
• €600m & $547 million dual- issuance, we saw the first HYB buyout
tranche term loans for the Bain-led deal which included sustainability
consortium for the acquisition of linked language. Lonza Speciality
Ahistrom-Muksjo; and Ingredients, a Swiss provider of
• €660 million term loan to specialty chemicals for microbial
support Apax Partners’ buyout control solutions, issued a some €290
of Rodenstock million 7NC3 tranche and a some €380
million 8NC3 tranche priced at 4.75%
and 5.25% respectively, backing its
carve-out by Bain and Cinven. The
sustainability-linked bond will include
a 25bps step-up per annum, starting
on 25 May, unless certain sustainability
performance targets are met.
15 Global Restructuring Trends – November 202116
Asia
Figure 7: Asia – High Yield Bonds and Leveraged Loan Issuance (USD ‘bn)
High Yield Bonds and Leveraged Loan Issuance (USD 'bn)
2015 57 303 360
2016 90 334 424
2017 117 348 465
2018 91 272 363
2019 149 280 429
2020 127 241 368
2021 84 205 289
Q3 YTD
0 100 200 300 400 500
USD ('bn)
High Yield Bonds Leveraged Loans
Copyright © 2021, Dealogic Limited. All rights reserved.
Asia Meanwhile, in the Southeast Asia Furthermore, issuers with debt
Compared with its counterparts in and South Asia markets, the US maturing in the immediate short-term
the Americas and EMEA, markets in Dollar denominated high yield and LL are likely to take advantage of the
Asia have been relatively quiet this issuances have recovered to a healthy liquidity rich environment to refinance
year. HYB issuance only amounted level, with strong traction shown in the their liabilities, sooner rather than
to $84 billion, representing 66% of first three quarters of 2021. later, to benefit from the low interest
the 2020 total. This is mainly due to rates. However, the Delta variant and
the muted activity by Chinese real Majority issuance contributions in low vaccination rates continue to
estate developers, who historically the region came from the Philippines, pose a recovery obstacle and hence
dominated the USD HYB market. Indonesia and Singapore. Some of the investors are expected to be naturally
Indeed, according to Debtwire data, largest deals includes Singaporean real more selective.
the volume of HYB issuance is now at estate logistics provider GLP, which
its historic low. raised $850 million priced at 4.5%, Finally, the themes of impact investing
Golden Energy & Resources Ltd, which and ESG are becoming an increasing
The default by Tahoe Group, a Chinese raised $285 million priced at 8.5% and focus due to an accelerating
developer, in January 2021, started ABM Investama Tbk PT which raised awareness of the institutional investors.
heightening investor concerns. There $200 million priced at 9.5%. More future debt issuances with such
have been subsequent defaults by a themes are to be expected.
number of other high-profile names in For the South Asia region, high yield
the market – China Fortune Land, PK bond issuances in India are a large There has been an increasing trend in
Founder and TUS, Sichuan Languang, driver. Most of these issuances have the Asian markets for private debt. The
and even Evergrande, the largest been green and sustainable bonds. Preqin 2021 Private Debt Global Report
developer in China. Notable issuers included Indian noted that 44 private debt funds (up
hydropower producer JSW Hydro from 38 in 2020), comprising an AUM
Nonetheless, the market has not Energy, which raised $707 million of about $11 billion, are now focused
completely frozen, with a couple of priced at 4.12% and Shriram Transport on Asia. Notable funds include the
issuances by smaller developers albeit Finance Co Ltd, which priced a $500 PAG Loan Fund IV ($1.5 billion) and
at relatively high prices. These include million MTN priced at 4.4%. Edelweiss Special Opportunities Fund
Fujian Yango’s $250 million 12.5% III ($900 million), which are both direct
due 2024s, and China Aoyuan’s $200 In both these markets, one lending funds.
million 8.25% 3NC2. noticeable trend is that the issuers
are mostly familiar names that have Developed markets, such as North
issued debt frequently over the years. America and Europe, are becoming
Investors are well-versed with these increasingly saturated, with risk-
frequent issuers and their transparency return profiles that do not correspond
has increased the chances of a with what investors desire. Hence,
successful debt issuance. more institutional attention is turning
towards Asia.
17 Global Restructuring Trends – November 2021Themes by
countries and
regions
18Australia
Insolvencies are at record lows, Repayment pressure
though this could change once From mid-2021, there were signs that
economic normality returns and some key creditors (including the
government support recedes. Australian tax office and landlords) were 2020 Real
looking to take steps to recover long GDP (USD bn)
Australia has bounced back from its overdue debts. However, the return of
lockdown is likely to be met with renewed
$1,543
first recession in nearly 30 years, which
occurred as a result of COVID-19 in concessions and/or a halt to proactive
2020. Unemployment and interest rates recovery actions until 2022. Major
are trending toward all-time lows and lenders continue to provide significant
consumer and business confidence accommodation to distressed companies
is high. in the form of covenant waivers and
principal and interest deferrals.
Insolvency activity has remained at
Real GDP Total unemployment
historic lows. This reflects the ongoing Restructuring climbs back in 2022
growth/(decline) growth/(decline)
short – to medium-term support from We expect restructuring and insolvency
both the public and private sectors, activity to pick-up in 2022. Vaccination GDP YoY 2009 2009
1.7%
rates will have hit targeted levels. This
21.9%
which has propped up balance sheets.
will start the move toward some form of
However, a rise in COVID-19 Delta variant economic normality, and resulting scaling
infections has recently led to a fresh back of government support. GDP YoY 2020 2020
(2.4%) 30.3%
round of lockdowns in most major cities.
Government support is also less certain Major creditors are likely to focus on
or abundant compared to last year. recoveries, while spending patterns of
Australians will likely change materially as GDP YoY 2021 2021
The ability of businesses to withstand
the latest challenges will likely become
evident in early 2022.
international borders open and consumer
dollars are spent further afield. This will
create winners and losers.
4.2% (10.3%)
2022
Stabilising balance sheets
Many listed companies affected by the
pandemic moved quickly to raise fresh
So far, the bulk of restructuring activity
has been in sectors going through (13.3%)
equity in mid-2020, which has generally structural or regulatory change (e.g.
given them the necessary buffer to Aged Care) and businesses impacted
withstand new lockdowns. by ESG developments (including
mining and energy) or those most
Further support has come from the impacted by the pandemic (e.g. tourism,
CPI Average
‘JobKeeper’ programme, which has hospitality, events) Several of the largest lending rate
enabled many businesses in various restructurings in the past 12 months have
industries (including retail) to accumulate not been directly linked to COVID-19, but 2020 2020
0.9% 3.7%
material cash reserves. However, rather have been situational (e.g. fraud) or
these will be tested during the current sectoral (e.g. ESG).
lockdowns, which are expected to
continue until the back end of 2021. 2021 2021
2.7% 3.7%
Australia
Government support as a % of 2020 Real GDP Vaccination progress as
Status of COVID-19 at 20 of October*
vaccinations: 2022 2022
3.0% 3.6%
Australia 19% 14%
58%
No. of insolvencies
5,000 Share of total population fully vaccinated against
Fully vaccinated
COVID-19 Partly vaccinated
No. of insolvencies
Share of total population only partly vaccinated
4,000 against COVID-19
3,000 *Country data may have been provided
on a different date.
2,000
PwC Local contact
1,000
Stephen Longley
0 T: +61 414 921 241
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 E: stephen.longley@pwc.com
19 Global Restructuring Trends – November 2021Austria
Insolvencies are set to rise as Restructuring gathers pace
government relief recedes, but there We expect an increase in restructuring
will be no surge. Pressure is not just as state support decreases. A number of
coming from rising debt, but also the companies in the sectors hit most from 2020 Real
need to finance growing demands on the pandemic, such as entertainment, GDP (USD bn)
digital transformation and ESG. travel and store retail, will find it hard
$419.2
to service debt (including deferred
Since the start of the pandemic, tax), necessitating both financial and
insolvencies have decreased to operational restructuring.
historically low levels. As of Q2 2021, the
number of cases has picked up slightly, Pressure may increase if the recovery
but is still more than 50% below pre- stalls. Risks include infection rates
pandemic levels. higher than last year as we move into the
winter months.
Real GDP Total unemployment
However, some of the relief measures growth/(decline) growth/(decline)
that have held back insolvencies are now The specific trends that are likely to
coming to an end. Monthly tax and social trigger restructuring include: GDP YoY 2009 2009
(3.8%) 29.6%
security payments can still be deferred
for periods prior to 30 June 2021, but no • Repayment of deferred tax and social
longer for new tax liabilities and social security contributions
security contributions. At least 40% of • Need to build up working capital to GDP YoY 2020 2020
the deferred liabilities have to be repaid
within 15 months. These repayments are
likely to trigger a number of insolvencies.
reboot operations
• Capital expenditure backlog from
2020 (while there are state incentives
(6.6%) 42.8%
GDP YoY 2021 2021
A big wave is, however, not expected. of up to 14% of total expenditure,
Business focus
Businesses have focused on cost
underperforming businesses may still
find it hard to invEst)
• Acceleration in digital transformation
3.0% (20.3%)
2022
reduction and cash management (e.g. by well-performing businesses
reduction of working capital and initial
delay of capital expenditure). Even more
put additional stress on
distressed companies
(6.1%)
important has been securing government • Increasing impact of ESG on credit
support, such as deferred payment of decisions by banks. Underperforming
tax and social security contributions businesses are likely to require
and support for short time work. Due to external funds to pay deferred tax,
cash incentives for capital expenditure bolster working capital and increase CPI Average
(up to 14% for environmentally-friendly capital investment. But if they have yet lending rate
investments and digitisation), we’ve seen to develop a viable strategy for ESG
a lot of investment since the end of 2020. and digital transformation, lenders 2020 2020
may be reluctant to supply credit.
1.4% No data
available
Austria 2021 2021
Government support as a % of 2020 Real GDP Vaccination
Status ofprogress
COVID-19asvaccinations:
at 20 of October* 1.7% No data
available
2022 2022
2.0% No data
available
Austria 16% 3%
61%
No. of insolvencies
2,000 Share of total population fully vaccinated against
Fully vaccinated
COVID-19 Partly vaccinated
No. of insolvencies
Share of total population only partly vaccinated
1,500 against COVID-19
1,000
*Country data may have been provided
on a different date.
500
PwC Local contact
0
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Manfred Kvasnicka
T: +43 676 8337 72937
E: manfred.kvasnicka@pwc.com
Data sources are available on page 85 20Belgium
While restructuring activity is low For many businesses, the focus
now, it’s set to gradually increase remains on liquidity either due to pre-
in the next six to 18 months as the existing problems or as a result of the
effects of government support economic impact of the pandemic. 2020 Real
wear off. As the economy rebounds, additional GDP (USD bn)
liquidity is also being sought to sustain
$551.4
The economy is rebounding strongly recovery and growth.
(projected 4.7% growth in 2021), but
could begin to soften in 2023. Another challenge that will occur for
many companies is solvency. According
Bankruptcies decreased by 32% in to the National bank of Belgium, 85%
2020, mainly as a result of government of non-financial corporations rated as
measures. These include a moratorium solvent before the crisis and this is now
on bankruptcies filed by third-parties and less than 75%. Real GDP Total unemployment
two guarantee schemes for new credit growth/(decline) growth/(decline)
lines provided by lenders. However, with Furthermore, recently we have seen
government support ending and working an increased impact of the global GDP YoY 2009 2009
(2.0%) 13.8%
capital demands rising again, we expect semiconductor shortage and other
that restructuring activity will start to supply chain issues in a variety
increase in 2022. of sectors, leading to significant
business disruptions. GDP YoY 2020 2020
Business challenges
The main challenge since the beginning
of the pandemic has been a shortfall
Restructuring flexibility
In March 2021, the government enacted
(6.3%) 3.8%
GDP YoY 2021 2021
in liquidity. This applies to 23% of all a revision of the Procedure of Judicial
businesses in Belgium and up to 45% of
those in the hardest-hit sectors.
Reorganisation (PJR). This aims to
provide more flexibility in the necessary 4.7% 16.1%
documentation and the timing when 2022
applying for PJR. The new legislation also
(3.2%)
Non-performing loan rates confirm that
the three sectors that have suffered introduces the possibility for mediation
most are hospitality, whole and retail before entering a public procedure that
trade and construction. bears the risk of losing partners’ trust.
Belgium
CPI Average
Government support as a % of 2020 Real GDP Vaccination progress
Status of as 20
COVID-19 of October*
vaccinations: lending rate
2020 2020
0.4% No data
available
Belgium 15% 1%
73% 2021
2.1%
2021
No data
available
No. of insolvencies 2022 2022
5,000
No. of insolvencies
4,000
Share of total population fully vaccinated against
FullyCOVID-19
vaccinated Partly vaccinated
Share of total population only partly vaccinated
2.6% No data
available
against COVID-19
3,000
2,000
1,000
0
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
*Country data may have been provided
on a different date.
PwC Local contact
Thomas Deryckere
T: +32 474 78 04 59
E: thomas.deryckere@pwc.com
21 Global Restructuring Trends – November 2021Brazil
Insolvency action is set to increase as An increase in the number of
the enduring impact of the pandemic insolvency proceedings is expected
becomes clear and companies take due to the pandemic, but as of June,
stock of their position and prospects. there were fewer bankruptcy filings 2020 Real
in 2020/2021. The expectation is that GDP (USD bn)
COVID-19 hit as Brazil was still recovering insolvency cases will increase next year.
$2,268.5
from its 2014-16 recession. Economic The government has already begun to
recovery remained weak. Fiscal policy wind down support measures. By 2022,
options have also been limited since the the economic effects of the pandemic
peak of the recession in 2015-2016, with will be better understood by companies.
GDP growth below 2% in the following As a result, they may decide that filing
years. While recovery is broad-based for bankruptcy or other insolvency
globally and across economic sectors, proceedings will help their businesses.
serious challenges stand out. For Brazil, Real GDP Total unemployment
the most important right now is the Improved mechanisms growth/(decline) growth/(decline)
uneven struggle to control the pandemic. New insolvency legislation came into
force in January 2021. This improves GDP YoY 2009 2009
(0.1%) 18.5%
However plans to ensure that all of the mechanisms available to debtors
the population receives at least one in court-approved restructurings
vaccination dose by the end of 2021 and liquidations, including debtor-in-
are now well underway. If immunisation possession lending and bankruptcy sale GDP YoY 2020 2020
proceeds at this accelerated rate, a
broader reopening of the economy in
H2 2021 and a ‘normalisation’ toward the
of assets.
The bulk of restructuring activity has
(4.1%) 11.8%
GDP YoY 2021 2021
end of the year could be possible. been in sectors suffering from the
Taking stock
pandemic, especially the service sector.
Also in the frame are sectors affected 4.7% 2.2%
Restructuring activity was limited in the by ESG developments, including mining 2022
first months of the pandemic. To contain and energy.
the pandemic, Brazil implemented
social measures to slow the spread of
(2.8%)
the virus and contain its impact on the
health system, which is uneven across
the country.
CPI Average
lending rate
Brazil 2020 2020
Government support as a % of 2020 Real GDP Vaccination
Status ofprogress
COVID-19as vaccinations:
at 20 of October* 3.2% 27.9%
2021 2021
7.9% 36.5%
18% 23%
50% 2022
6.9%
2022
52.6%
Share of total population fully vaccinated against
Fully vaccinated
COVID-19 Partly vaccinated
No. of insolvencies – No data available
Share of total population only partly vaccinated
against COVID-19
*Country data may have been provided
on a different date.
PwC Local contact
Tatiana Guerra
T: +55 11 3674 2480
E: tatiana.guerra@pwc.com
Data sources are available on page 85 22Canada
The prospects for the economy Business insolvency activity also
remain strong overall and insolvencies remains low. In the 12 months to June 30,
are still at low levels, but recent 2021, business bankruptcy and proposal
experience points to bumps in the proceedings were 22.2% below the prior 2020 Real
road ahead. 12-month period. GDP (USD bn)
$1,849.4
GDP is projected by most analysts to This reduced activity is primarily
grow by around 5.9% in 2021. Business attributable to stimulus measures,
confidence in August 2021 reached its forbearance by lenders and abundant
highest level since 2006, with plans for capital. We’ve seen a willingness among
capital spending starting to increase. lenders to provide covenant relief and
waivers to borrowers, and generally defer
However, GDP actually fell 0.3% in taking actions that would require more
Q2 2021, affected in part by supply drastic restructuring measures. Five of
Real GDP Total unemployment
chain disruptions, a drop in exports, the six largest Canadian banks partially
growth/(decline) growth/(decline)
and softening residential investment. reduced their loan loss provisions in the
Consumer confidence and business most recent quarter, reversing amounts GDP YoY 2009 2009
(2.9%) 36.9%
prospects will be strongly affected by the recorded earlier in the pandemic as a
extent of the fourth wave’s impact and result of their growing optimism on the
the measures taken to limit its spread, economic recovery. In turn, liquidity is
though the country’s high vaccination readily available for bankable businesses GDP YoY 2020 2020
(5.3%) 68.3%
rate gives it a strong level of protection. where needed, and even troubled loans
are being refinanced.
Our conversations with banks and
GDP YoY 2021 2021
business leaders indicate that while Prospects hard to call
the overall economic outlook remains
optimistic, concerns around rising
inflation rates have become a reality.
Restructuring and insolvency activity
has grown in the oil and gas, mining
and manufacturing sectors. We expect
5.9% (19.8%)
2022
Businesses have also commented on the to see further activity in the hospitality
shortage of qualified staff and the rising
cost of capital goods as factors affecting
and leisure sector as stimulus measures
expire, as well as in sectors affected by (15.1%)
their investment plans. supply chain considerations such as the
automotive sector. All of this activity will
Many companies continue to face depend heavily on fiscal policy measures
challenges anticipating post-pandemic taken by the federal government
levels of demand, and dealing with the following the September 2021 election,
CPI Average
challenges to their supply chains that including interest rate movements and lending rate
the pandemic brought on, which will possible further stimulus measures, as
take time to resolve. Given the K-shaped well as the response to the fourth wave of 2020 2020
0.7% 2.7%
recovery seen in Canada, some sectors the pandemic.
(such as hospitality and leisure) have
fared worse than others and will take Looking ahead, domestic insolvency and
restructuring activity is hard to predict at 2021 2021
more time to get back on track.
Restructuring activity still low
Restructuring activity has remained
present. Most recent cases have arisen
due to idiosyncratic events affecting
borrowers. We are monitoring a number
2.5% 2.0%
2022 2022
relatively low following an early flurry of of potential cases in the oil and gas,
filings as the pandemic first took hold. manufacturing and automotive sectors,
particularly given ongoing supply chain
challenges, but the Canadian economy
2.1% 2.0%
For the six month period to June
30, 2021, there were a total of 17 remains robust overall and has seen
restructuring proceedings commenced significant M&A activity through the
under the Companies’ Creditors pandemic. We anticipate that an increase
Arrangement Act (CCAA), compared to in restructuring activity is likely in 2022,
46 in the same period in 2020. Most of as inflationary pressures continue to
these cases arose from idiosyncratic affect demand, and as existing stimulus
events, though the bulk of the filings programs start to wind down.
occurred in the manufacturing and
mining/oil and gas sectors. Privately-held
companies made up all but one of the
CCAA filings in the period.
23 Global Restructuring Trends – November 2021Canada
Government support as a % of 2020 Real GDP Vaccination progress
Status of as at
COVID-19 20 of October*
vaccinations:
5%
Canada 23% 73%
No. of insolvencies
2,000 Share of total population fully vaccinated against
FullyCOVID-19
vaccinated Partly vaccinated
No. of insolvencies
Share of total population only partly vaccinated
1,500 against COVID-19
*Country data may have been provided
on a different date.
1,000
PwC Local contact
500
Greg Prince
0
T: +1 416 814 5752
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 E: gregory.n.prince@pwc.com
Data sources are available on page 85 24Cayman Islands and
British Virgin Islands
While formal restructuring has been Informal activity Cayman Islands
subdued, refinancing has continued The highly globalised nature of the
outside these structures and we work in the jurisdictions has meant
expect more formal and informal that the offshore insolvency market
activity over the coming year. has generally followed the direction of
major global financial centres, such 2020 Real
as London, New York, Dubai and GDP (USD bn)
With the Cayman Islands and British
Virgin Islands (BVI) being two of the Hong Kong.
$4.6
world’s most prominent offshore
financial centres, the focus of the Formal restructuring has been
restructuring and insolvency industries subdued. However, we are aware
are almost exclusively cross border. that the majority of refinancing and
The main focus is hedge funds, rescheduling of debt agreements for
holding companies, private equity and entities registered in the jurisdictions
structured finance vehicles in major are currently being undertaken outside
capital markets. the scope of formal processes. Real GDP Total unemployment
growth/(decline) growth/(decline)
There is limited domestic insolvency Restructuring demand builds
As global markets continue to open GDP YoY 2009 2009
activity, albeit there have been a
number of notable failures in the
tourism and hospitality sector over the
course of the last year. The continued
up, we expect to see a corresponding
increase in restructuring and
particularly as moratoriums on
(6.3%) 53.3%
GDP YoY 2020 2020
border closures and absence of enforcement proceedings, state-
tourists have led to ongoing strains
on revenues in retail, leisure and
backed credit schemes and furlough
schemes are withdrawn over the (8.2%) No data
available
hospitality. While local resident coming months. GDP YoY 2021 2021
3.3%
business has been able to sustain
No data
some income in these sectors, albeit We are already starting to see an available
on a limited capacity basis, if there increasing number of enquiries from
is no opening of borders and return markets such as Hong Kong and 2022
of substantial tourist numbers in Mainland China, especially in relation No data
the near future, we anticipate that to management of Chinese property available
there will be a significant increase in and credit. Given the substantial
domestic insolvency. volume of maturities in property debt
falling due there in Q3 2021 and the
popularity of Cayman and BVI in
corporate structuring for Chinese
companies, we expect that market to CPI Average
be a potential source of activity for the lending rate
foreseeable future.
2020 2020
1.0% 4.5%
2021 2021
1.3% 4.6%
2022 2022
2.3% 4.5%
PwC Local contact
Simon Conway
T: +1 345 938 8685
E: simon.r.conway@pwc.com
25 Global Restructuring Trends – November 2021In addition, global monetary policies Legislative opening British Virgin Islands
have helped to spur considerable From a legislative perspective, Cayman
inflows of investment into Cayman is awaiting the implementation of
and BVI offshore-based private equity amendments to its Companies Act,
funds and special purpose acquisition which will see the inclusion of a
companies (SPACs). Some of the more formal restructuring regime for the 2020 Real
speculative investments that have first time, outside the format of a GDP (USD bn)
been made by those vehicles could be liquidation. Such legislation will see the
$1.0
derailed by a higher cost of capital, in appointment of a restructuring officer,
the event of interest rate increases. In in conjunction with a moratorium, and
this regard, we note that the tightening is expected to broaden the range of
of US policy (and to a lesser extent tools available in the jurisdiction’s
that of other OECD economies) could rescue regime. It is understood that
lead to a substantial increase in formal such legislation will be enacted by the
restructuring and insolvency over the end of 2021.
coming 12–18 months. Real GDP Total unemployment
growth/(decline) growth/(decline)
GDP YoY 2009 2009
Cayman Islands
British Virgin Islands
4.0% No data
available
Government support as a % of 2020 Real GDP Vaccination
Status ofprogress
COVID-19as vaccinations:
at 20 of October* GDP YoY 2020 2020
(12.6%) No data
available
GDP YoY 2021 2021
No data
available 51% 2.5% No data
available
7% 2022
No data
available
Share of total population fully vaccinated against
Fully vaccinated
COVID-19 Partly vaccinated
No. of insolvencies – No data available
Share of total population only partly vaccinated
against COVID-19
British Virgin Islands CPI Average
British Virgin Islands lending rate
Government support as a % of 2020 Real GDP Vaccination
Status ofprogress
COVID-19as vaccinations:
at 20 of October* 2020 2020
1.8% No data
available
2021 2021
No data
available 51% 1.7% No data
available
7% 2022 2022
Share of total population fully vaccinated against
1.6% No data
available
Fully vaccinated
COVID-19 Partly vaccinated
No. of insolvencies – No data available
Share of total population only partly vaccinated
against COVID-19
*Country data may have been provided
on a different date.
PwC Local contact
Alexander Lower
T: +1 284 494 4100
E: alexander.lower@pwc.com
Data sources are available on page 85 26China
Many companies are looking at While some larger companies were able
restructuring options, diversifying to source sufficient finance to survive,
their businesses and stepping up the many SMEs faced severe challenges.
pace of digital transformation. Meanwhile, sectors including retail 2020 Real
and real estate have seen multiple GDP (USD bn)
Following record GDP growth in Q1 2021, restructuring and insolvency cases. The
$11,650.4
the momentum was checked in Q2 by real estate sector in particular has been
a slowdown in factory activity, higher hit by the “three-red-lines” policies and
raw material costs, and new COVID-19 slowing sales, which have restricted their
outbreaks in some regions. Nonetheless, ability to refinance. New government
the economy looks to be on track to meet regulation of the education sector in July
the annual growth target of at least 6%. may also bring potential restructuring
Potential headwinds that could derail and insolvency.
growth include new variants and further
Real GDP Total unemployment
supply chain disruption. Accelerating transformation growth/(decline) growth/(decline)
With cash positions tight, many
As part of the Government support to companies have accelerated digital GDP YoY 2009 2009
9.4% 13.5%
relieve the burden of the pandemic, transformation and sought new routes
the Administration of Taxation has to market. For example, many fitness
targeted incentives at the most impacted and education businesses moved their
industries and small businesses. While classes online and developed digital GDP YoY 2020 2020
most of these incentives have now been
wound up, a few have been extended
to the end of 2021. This includes VAT
apps for support. We see these trends
continuing as more companies adopt
the double-channel strategy to provide
2.3% No data
available
GDP YoY 2021 2021
waivers for individual business and small- services online and offline, despite the
scale taxpayers, income tax exemption
for public health workers, and deductions
on COVID-19 donation expenses.
gradual recovery from pandemic.
Simplifying proceedings
7.8% No data
available
2022
The government continues to optimise
No data
Cash positions under pressure the business environment for bankruptcy. available
Suspension of business operations at the As of May 2021, there are 14 courts and
start of 2020 hit many businesses hard, nearly 100 trial courts for liquidation and
especially within transport, entertainment bankruptcy nationwide. The national
and manufacturing. These pressures enterprise bankruptcy information
were reflected in a soaring number of disclosure platform provided by the
insolvencies in manufacturing in H1 Supreme Court has made the trial CPI Average
2020, although cases are expected to process more open and credible to the lending rate
fall in 2021 as growth and confidence public. Jurisdictional courts are also
moves upwards. helping to make bankruptcy trials simpler 2020 2020
to adopt. Meanwhile, we saw many mega
cases in the market. 2.5% 4.0%
2021 2021
1.0% 4.0%
China
Government support as a % of 2020 Real GDP Vaccination
Status ofprogress
COVID-19as at 20 of October*
vaccinations:
2022 2022
2.2% 4.0%
8%
5%
71%
Share of total population fully vaccinated against
Fully vaccinated
COVID-19 Partly vaccinated
No. of insolvencies – No data available
Share of total population only partly vaccinated
against COVID-19
*Country data may have been provided
on a different date.
PwC Local contact
Victor YK Jong
T: +852 2289 5010
E: victor.yk.jong@hk.pwc.com
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