Company news in brief

19 March 2020 | Business

Marriott starts furloughing employees

The world's biggest hotel operator Marriott International Inc is starting to furlough what it expects will be tens of thousands of employees, amid hotel closings globally due to the virus outbreak, the Wall Street Journal reported on Tuesday.

While on furlough, Marriott will not pay salaries to its employees at some of its managed properties which it started shutting down last week, according to the report.

The company is also trimming staff through furloughs at properties that are still operating, the WSJ said.

Marriott had about 174 000 employees at the end of 2019.

The staff reductions will include everyone from general managers to housekeepers, as layoffs or furloughs at the corporate level are still under discussion, according to the report.

Several of Marriott's peers including Hilton Worldwide Holdings Inc have been forced to abandon their full-year financial outlooks due to a rise in cancellations of room bookings.

Although Marriott has not yet withdrawn its outlook, the company has warned the outbreak could significantly hurt its annual results and it was unable to estimate the full financial impact. – Nampa/Reuters

Boeing seeks massive loan guarantees

Boeing Co is seeking "tens of billions of dollars" in US government loan guarantees and other assistance as faces it a looming liquidity crunch from the massive coronavirus economic disruption impacting the entire aviation sector, two people briefed on the matter told Reuters.

The US planemaker has told lawmakers it needs significant government support to meet liquidity needs and it cannot raise that in current market conditions, the people said.

The amount of aid Boeing needs remains in flux based on market conditions and how long the crisis lasts. Congressional officials are reviewing Boeing's cash needs as Congress considers a stimulus and rescue package that could top US$1 trillion.

Boeing's stock has been plummeting. After falling 24% on Monday, it fell another 4.4% Tuesday to close at US$123.92. Boeing is down more than 60% over the last month as the coronavirus pandemic slashed travel demand worldwide.

S&P Global downgraded Boeing's credit rating and lowered its free cash flow expectations for the company. - Nampa/Reuters

CureVac denies any US bid

CureVac, the German biotech firm at the centre of a row over alleged US attempts to gain access to an experimental coronavirus vaccine it is developing, denied on Tuesday it had received US offers for the company or its assets.

European Union leaders on Tuesday discussed via videoconference how to prevent hostile US takeovers of EU-based research firms at the forefront of developing drugs and vaccines against the coronavirus, officials said.

Media reports that Washington had tried to gain access to the vaccine stirred a political backlash in Germany, with economy minister Peter Altmaier and interior minister Horst Seehofer voicing support for keeping CureVac German.

If successful in clinical trials, the group would be ready to produce up to 10 million doses in one production cycle that typically lasts several weeks. More than one dose may be required to immunise a person.

Output could rise to a billion dosages in a single production cycle, said CureVac's chief production officer Florian von der Muelbe, at a new manufacturing site that the company is planning to build with financial support from the EU. – Nampa/Reuters

McDonald's considers deferring rent

McDonald's Corp is considering rent deferral and other measures to ensure liquidity at its franchisees around the world, amid curbs on dine-in restaurants to contain the spread of the coronavirus, a regulatory filing showed on Tuesday.

Bars, food-joints and other places that draw crowds have been shut down in major cities around the world as part of efforts to promote social distancing.

McDonald's, Starbucks Corp and a string of other restaurant chains have now shifted to take-away and delivery services in the United States.

The world's biggest fast food chain is facing criticism for not providing paid sick leave to hourly workers, even as health authorities encourage people to stay home and self-isolate if they are feeling ill.

About 93% of McDonald's 38 695 restaurants around the world were franchised at the end of 2019. – Nampa/Reuters

Retailer Laura Ashley collapses

Long-struggling clothing and household goods retailer Laura Ashley Holdings collapsed into near bankruptcy Tuesday as refinancing talks failed on coronavirus turmoil, risking 2 700 jobs.

The British company said "increased uncertainty" arising from the Covid-19 outbreak meant it was unable to secure necessary funds from stakeholders.

In a statement, Laura Ashley said it had hired advisers from financial services firm PwC to oversee administration - the process whereby a troubled company calls in outside expertise to try and minimise job losses.

Despite some recent poor trading, the retailer said it had experienced rising sales in recent weeks.

"The Covid-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation," said the company, whose shares have been suspended. – Nampa/AFP

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