President Xi Jinping wearing a mask visits hospital in Wuhan Photograph:( AFP )
There is one more new owner. Ireland's Aercap was another lender. Their debt was converted into shares too.
For China, money is not a problem. The only question is: where should it be spent? China is spending a lot of money right now. But, not on the poor. Chinese cash is going towards acquisition. It is buying stressed companies globally.
A perfect case is China's latest acquisition of Norwegian Air. It is Norway's largest airline and is now partly owned by China.
Technically, it is an indirect acquisition. Norwegian air was struggling and was about to run out of cash. The company said that by mid-May it will be out of money. Norwegian Air wanted a government aid package of $271 million.
Now, the question that arises is where does China come in? The Dragon managed to sneak in through a complex web of transactions.
Boc Aviation an aircraft leasing company based in Singapore used to lease aircraft to Norwegian air. Norwegian Air had also borrowed money from Boc Aviation. The debt was converted into equity giving Boc aviation a 12.7 per cent stake in Norwegian air. Boc aviation is owned by the Bank of China which is owned by the Chinese government.
There is one more new owner. Ireland's Aercap was another lender. Their debt was converted into shares too. Aercap is now the other new owner of Norwegian Air with a 15.9 per cent stake.
With these tweaks to the book of accounts, Norwegian Air has now unlocked financing from the government of Norway. They have been given a $300 million loan guarantee which will help the airline stay afloat.
Alongside Chinese ownership, airlines are in a fragile state with the future of flying looking uncertain right now. With most of the planes grounded, the losses for the airlines are mounting.
German airline Lufthansa could go out of business too. It is now in advanced talks with the German government for a bailout and once it goes through Germany could end up owning Lufthansa. The German government could end up owning as much as 25 per cent of the airline something that would give it the power to block hostile takeover attempts.
German Chancellor Angela Merkel was asked about the Lufthansa deal but she didn't say much. The details are still being worked out but Merkel did say that world leaders should help poorer countries.
The German chancellor identified debt serving as the biggest problem right now. Something that smaller Belt and Road countries are complaining as they are unable to repay China right now.
Merkel said that Germany is ready to invest in development aid overseas. Germany has been vigilant. It was one of the first countries to tweak its laws to protect German companies from hostile takeovers and now its using money power to keep Lufthansa in German hands.
There is blood in the water. The coronavirus crisis has made businesses vulnerable. Governments around the world must do more to keep the sharks from China away.