The Hazer Group Ltd (ASX: HZR) share price is deep in the red during early afternoon trade on Friday. This comes after the hydrogen producer provided an update on its Commercial Demonstration Project (CDP).

Hazer is building its CDP at Water Corporation’s Woodman Point Water Recovery Facility in Western Australia. The company aims to convert natural gas and similar methane feedstocks into hydrogen and high-quality graphite, using iron ore as a process catalyst.

At the time of writing, Hazer shares are down 11.84% to $1.08. This is in stark contrast to last month when the Hazer share price traded as high as $1.765.

What’s dragging the Hazer share price down?

ASX investors are heading for the hills and selling Hazer shares following the company’s shock announcement.

In today’s statement, Hazer advised there has been a delay in completing the fabrication of the reactor for the CDP. This has evidently pushed back the commissioning of the new plant post the company’s current target date of Q1 2022.

Hazer revealed that it identified a manufacturing flaw in the reactor vessel currently waiting for heat treatment in China. In response, quality assurance and non-destructive testing activities were carried out over the past 2 days, confirming the fault.

Furthermore, the company also found other areas within the reactor were a cause for concern.

As such, the reactor shell has been deemed unsuitable and will require remedial manufacturing repairs before being certified and dispatched.

Hazer noted that its project team are working with suppliers and independent experts and carrying out further investigations to rectify the defect.

In addition, Hazer stated that the impact on the project’s costs and schedule cannot be exactly determined. However, it will look to see if any remedies can be made under the contract terms and insurance policy.

The delay is expected to be about 8 to 12 weeks. Hazer will update shareholders on any revisions to the schedule or budget when more information comes to light.

What did the head of Hazer say?

Hazer CEO, Geoff Ward, commented:

The occurrence of this issue so far into our construction schedule is deeply disappointing.

We will carefully work through the causes of this issue and what we can do to rectify the defect identified in the reactor and implement any actions available to mitigate the impact on the project budget and schedule.

The identified manufacturing flaw does not impact the planned operation of the reactor or our intended program of operations at the CDP. All other project activities are progressing as scheduled.

We will continue with all of these planned activities to allow us to undertake cold commissioning and testing of the plant, including catalyst handling, fluidisation and control systems, prior to the delivery and installation of the reactor.

Hazer share price snapshot

Despite today’s heavy fall, the Hazer share price has accelerated by 40% over the past 12 months.

Interest in novel graphite and hydrogen production technology has picked up considerably in recent times. This has prompted ASX investors to buy.

Hazer presides a market capitalisation of $175.1 million and has approximately 160.65 million shares on its books.

The post Here’s why the Hazer (ASX:HZR) share price is plummeting 11% today appeared first on The Motley Fool Australia.

More reading

• Why is the Hazer (ASX:HZR) share price getting tasered today?
• Why are ASX hydrogen shares tumbling today?
• The Hazer (ASX:HZR) share price is having a bad day but it’s still up 50% in a month

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Afterpay Ltd (ASX: APT) first began trading on the ASX on 29 June 2017.

The following day, shares in the then nascent buy now, pay later (BNPL) company closed at $2.90.

You may not have heard of the company back then. Few investors had.

But over the following years, as the Afterpay share price continued to push higher and the BNPL space grew more popular, the company began to make regular financial headlines and was added to ever more portfolios.

Just before the onset of the pandemic driven market selloff, on 21 February 2020, Afterpay was trading for $38.44 per share. That was up a phenomenal 1,225% since its second day of listing.

In the following month, like most every ASX share, the Afterpay share price crumbled. On 20 March 2020 it bottomed out at $12.44 per share, a loss of 68%.

But Afterpay wasn’t down and out. Far from out.

Over the next 11 months the buy now, pay later company’s share price soared 1,121%, peaking out at $151.92 on 19 February this year. Meaning investors who hadn’t heard of the company before then, almost certainly did during its incredible march higher.

Which also means that ASX investors keeping a keen eye open for ‘the next Afterpay’, hoping to get in early.

Could this ASX share really be the next Afterpay?

Dean Fergie is the director of Cyan Investment Management. And Afterpay is one of the shares that counts as an early win for the fund.

Speaking to Livewire, when Fergie was asked what his “next Afterpay” was, he “fired back with Raiz Invest Ltd (ASX: RZI)”. If you’re not familiar with Raiz, Livewire explains, the company was “the name behind the retail-investing-platform-formerly-known-as-ACORNS.”

Here’s how the micro-investing platform has been performing.

How has Raiz Invest been performing?

Raiz listed on the ASX on 21 June 2018.

Since closing at $1.39 per share on its second day of trading, the Raiz share price has gained 22%.

The past 12 months has seen that performance pick up, with Raiz shares gaining 77% since this time last year.

Raiz got a good boost from some strong figures in its full 2021 financial year report.

Revenue grew 37% year-on-year to $13.4 million and the company ended the year with $19.4 million cash on hand, as at 30 June.

So is Raiz the next Afterpay?

We’ll leave those prognostications to the expert analysts, like Dean Fergie.

The post Could this ASX share really be the next Afterpay (ASX:APT)? appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: Fortescue CEO steps down, Westpac buyback update
• More pain for ASX buy now, pay later shares in 2022: expert
• How to snare a multi-bagger ASX share: expert
• Here’s why ASX BNPL shares are in the spotlight today
• Why did the Afterpay (ASX:APT) share price go backwards in November?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Apollo Tourism & Leisure Ltd (ASX: ATL) share price is taking off on news it is planning to merge with its New Zealand-based peer.

Apollo is looking to merge with fellow campervan and RV rental, sales, and manufacturing company Tourism Holdings Ltd (NZE: THL).

At the time of writing, the market has bid the Apollo share price up to 69 cents. That’s 23.42% higher than its previous close. Simultaneously, the Tourism Holdings share price is surging 5.6% higher on the New Zealand exchange.

Let’s take a closer look at the proposed merger and what the resulting company might look like.

Apollo share price soars on merger news

The Apollo share price is surging due to its plan to exit the pandemic stronger by merging with a peer.

The merger will be all-scrip. Apollo shareholders will receive 1 Tourism Holdings share for every 3.68 (approximately) Apollo shares they own.

That implies a 32.6% premium on each company’s shares as of market close on 9 December. It also represents an 18.9% premium on the 1-month volume-weighted average price for each company’s stock for the same date.

The merger will leave Apollo shareholders with a 25% ownership of Tourism Holdings.

According to the company, combining the two will create a leading diversified travel company serving Australia, New Zealand, North America, the United Kingdom, and Europe.

Apollo anticipates cost synergies will bring an earnings before interest and tax boost of between approximately $16.2 million and $18.1 million annually.

About 69% of those synergies are fixed costs relating to the duplication of corporate costs or properties.

Additionally, a fleet rationalisation of about 1,250 vehicles should bring a net debt benefit of more than $38 million. There also could be another one-off debt reduction worth about $28.5 million, subject to operational efficiency improvements.

It also expects to face one-off implementation costs of between $3.8 million and $6.7 million.

The merger is subject to Tourism Holdings being able to list on the ASX. It’s also conditional on the approval of the Australian Competition and Consumer Commission and the New Zealand Commerce Commission.

They’ll also need the okay from the Australian Foreign Investment Review Board, the Supreme Court of Queensland, and Apollo shareholders.

Apollo expects to complete the merger by the end of this financial year.

Major shareholder to vote in favour

About 53% of Apollo’s shares are held by its founders, the Trouchet family.

The Trouchets are planning to vote in favour of the merger. They have also volunteered to put 90% of the Tourism Holdings shares they receive in escrow for at least a year.

What did management say?

Apollo Managing Director, Luke Trouchet, commented on the merger:

The two businesses have similar operations and like-minded cultures, and we both strongly believe in the potential of the global RV market. The proposed merger would give us a better platform to meet the ongoing impacts of COVID-19, continue to offer our guests the best combination of products, services and prices possible, and better leverage the re-opening of global travel.

With a more diverse portfolio of brands, strong presences in the key RV travel markets and a more robust balance sheet, the combined business will be better able to capitalise on near-term growth opportunities as borders re-open and cross-border tourism begins to return to pre-pandemic levels.

Still no FY22 guidance

In news that could weigh on the Apollo share price today, the company once again refused to provide guidance. It stated:

While earnings to date in [financial year 2022] gives the Apollo board confidence that Apollo will achieve improved results when compared with [financial year 2021], an underlying loss is still anticipated.

Apollo said it won’t provide earnings guidance due to the uncertainty of the trading environment. However, its board noted the merger will place it in a better position to restart its dividend payments.

The post Apollo Tourism & Leisure (ASX:ATL) share price roars 23% higher. Here’s why appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Fortescue CEO steps down, Westpac buyback update
• Here’s why the EBOS (ASX:EBO) share price is climbing today
• Fortescue (ASX:FMG) share price falls following surprise CEO exit
• Expert warns Zip (ASX:Z1P) and cohorts may need to raise more capital in 2022
• Why this cryptocurrency soared nearly 30% today with the overall crypto market down

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end a positive week on a disappointing note. The benchmark index is currently down 0.45% to 7,351.2 points.

Here’s what is happening on the ASX 200 today:

Fortescue CEO steps down

The Fortescue Metals Group Limited (ASX: FMG) share price is trading lower today after announcing the surprise exit of its CEO, Elizabeth Gaines. Once a replacement is found, Ms Gaines will transition to a Non-Executive Director role. Global management consulting and executive search firm Egon Zehnder has been tasked with identifying a CEO and other leaders with exceptional skills and global experience across heavy industry, manufacturing, and renewable energy.

Westpac $3.5bn buyback update

The Westpac Banking Corp (ASX: WBC) share price is edging lower today despite sweetening the terms of its $3.5 billion share buyback. One amendment is the discount range of the buyback to a more generous 0% to 10% discount from 8% to 14% previously. Management notes this will improve the potential return of the buyback for shareholders. The Westpac Board made the move in response to an 18% decline in the Westpac share price since the buyback was announced.

Rio Tinto shares upgraded

The Rio Tinto Limited (ASX: RIO) share price is pushing higher today after being upgraded by the team at Morgan Stanley. This morning the broker upgraded the mining giant’s shares to an overweight rating with an improved price target of $110.50. Morgan Stanley likes Rio Tinto partly due to its exposure to aluminium.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Iluka Resources Limited (ASX: ILU) share price with a 5% gain. This morning Macquarie retained its outperform rating and lifted its price target on the mineral sands company’s shares to $12.00. The worst performer has been the Afterpay Ltd (ASX: APT) share price with a 4.5% decline. This follows another poor night of trade for the Square share price, which devalues its takeover offer for Afterpay even further.

The post ASX 200 (ASX:XJO) midday update: Fortescue CEO steps down, Westpac buyback update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The EBOS Group Ltd (ASX: EBO) share price is edging higher today after the company provided an update on its equity raise.

At the time of writing, the pharmaceutical wholesaler and distributor’s shares are swapping hands for $36.17, up 4.24%.

What did EBOS announce?

Investors are buying up the EBOS share price after coming out of a trading halt this morning.

According to the release, EBOS advised that it has successfully completed a fully underwritten placement. The offer received significant interest in which both new and existing investors across Australia and overseas, raising NZ$674 million (A$642 million).

EBOS will issue around 19.5 million ordinary shares under the placement, which represents about 11.9% of its entire issued capital. The issue price of NZ$34.50 per share reflected a 5.5% discount to the last closing price of NZ$36.50.

The newly created shares are expected to settle on Tuesday 14 December, with allotment on the following day.

In addition, EBOS will launch a non-underwritten retail offer to eligible shareholders, raising a further NZ$105 million (A$100 million). Detail of the retail offer will be released in a retail offer booklet on 15 December.

The closing date for application in the offer will be on Monday 17 January.

The proceeds raised from the placement will be used to partly fund the acquisition of LifeHealthcare. EBOS will use a combination of equity, debt and existing capital reserves.

Founded in 2006, LifeHealthcare is one of the largest distributors of third-party medical devices in Australia and New Zealand. The company has a broad portfolio of products in various channels that include spine, orthopaedics, robotics, plastics & reconstructive surgery, and interventional neuro-vascular surgery.

What did management say?

EBOS CEO, John Cullity commented:

We are very encouraged by the strong support from investors for the Placement and in particular, the level of support from our existing shareholders. We are also pleased to have the opportunity to welcome new high-quality investors to the register.

The acquisition of LifeHealthcare accelerates EBOS’ medical devices strategy and creates a platform for EBOS to capitalise on additional future growth opportunities. We look forward to completion and the integration of LifeHealthcare into our existing institutional healthcare division.

About the EBOS share price

Adding to today’s gains, the EBOS share price has accelerated 51% in the past 12 months. It’s worth noting that the company’s shares are hovering about 3% off its all-time high of $37 reached in mid-September.

Based on valuation grounds, EBOS presides a market capitalisation of $5.93 billion, with roughly 164.18 million shares outstanding.

The post Here’s why the EBOS (ASX:EBO) share price is climbing today appeared first on The Motley Fool Australia.

More reading

• EBOS (ASX:EBO) share price on watch amid cap raise and $1 billion acquisition

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price is trading lower on Friday.

In morning trade, the mining giant’s shares were down almost 2.5% to $17.83.

Why is the Fortescue share price tumbling lower today?

Investors have been selling down the Fortescue share price on Friday following the surprise announcement of the exit of its Chief Executive Officer, Elizabeth Gaines.

According to the release, after four years in the top job, Ms Gaines is stepping down and will transition to the role of Non-Executive Director.

What’s next?

Fortescue is now embarking on an extensive global search for a replacement with the appointment of global management consulting and executive search firm Egon Zehnder.

Egon Zehnder will be tasked with identifying a CEO and other leaders with exceptional skills and global experience across heavy industry, manufacturing, and renewable energy.

Fortescue also highlights that its new CEO and leaders will be expected to have a strong track record of delivering transformation, innovation and enhanced value for stakeholders. Furthermore, the successful candidates will share Fortescue’s culture and values to assist the company as it delivers on its vision of moving from a pure play iron ore producer to a diversified renewable energy and resources major.

“An enormous opportunity”

Fortescue’s Chairman, Dr Andrew Forrest, has commented on the search for a replacement.

He said: “The search with Elizabeth, for a CEO and an even deeper management bench, is an enormous opportunity for a talented and visionary executive team, to continue the successful leadership of Fortescue, as we deliver on our strategy to diversify Fortescue to a renewable energy and resources company.”

“Fortescue Future Industries (FFI) is making enormous progress and will support the decarbonisation of Fortescue through the innovation and technological development of a green fleet and the supply of green energy. We are undergoing a significant transition, and I am delighted that with Elizabeth, the board is united in its vision and enthusiasm for the opportunity this presents,” Dr Forrest added.

The Fortescue share price is down 28% in 2021 amid falling iron ore prices and FFI uncertainty. Ms Gaines exit today certainly adds to the latter.

The post Fortescue (ASX:FMG) share price falls following surprise CEO exit appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX buy now, pay later (BNPL) shares, such as Zip Co Ltd (ASX: Z1P), might find themselves short of funds in the new year, according to Grant Halverson, the founder and CEO of payments consultancy McLean Roche.

In response, ASX BNPL giants may need to turn to investors to garner the cash.

Will 2022 dampen ASX BNPL shares?

Halverson believes rising interest rates may force BNPL companies to borrow at fixed margins above interbank lending rates to maintain their own loan books.

Additionally, the companies may be engaging in a ‘race to the bottom’ to get into the United States market. That will likely put their operations at a higher risk of bad debts and lessen their chances of receiving cheap loans.

That could leave ASX BNPL companies like Zip Co turning to the market to raise cash.

Let’s test Halverson’s theory and take a look at Zip’s balance sheet, latest fundraising activities, and growth plans.

Zip is expanding worldwide

It hasn’t been long since Zip last underwent a capital raise. In April 2021, the Zip share price temporarily dipped on news it was undergoing a $400 million notes offering to fund its international expansion plans.

And expand it has done. The company acquired European BNPL provider, Twisto Payments last month.

It also recently rebranded US BNPL company QuadPay, which Zip Co purchased in 2020.

Zip is also gearing up to finalise its acquisition of South African BNPL provider, Payflex early next year. Zip has also made moves to break into the Middle East, Philippines, and Indian markets.

The company hasn’t flagged if it’s still looking for new acquisitions in 2022.

Zip’s financial position and share price

At the end of FY2021, Zip Co had about $330 million in cash or cash equivalents to its name. Its assets totalled approximately $1.1 billion. It reported $143.5 million in gross profits over the period.

For comparison, the biggest BNPL player on the ASX, Afterpay Ltd (ASX: APT), recorded a gross profit of about $675 million for FY2021. It ended the period with approximately $1.1 billion in cash and cash equivalents and approximately $2.6 billion in total assets.

In FY2021, the Zip Co share price experienced a wild ride. It soared to an all-time high of $14.53 on 16 February after trading at a 52-week low of $4.96 in December 2020. Overall, Zip shares increased in value by 42% from $5.30 on July 1 2020 to $7.57 on June 30 this year.

What’s next for the Zip share price?

Whether ASX investors will be kind to Zip Co in 2022 is impossible to know. But according to reporting by the Australian Financial Review, Halverson says ASX BNPL shares could see higher bad debts in 2022. He says this may lead to lower credit ratings and higher funding costs.

Interested market watchers might want to keep an eye on interest rates and their effect on ASX players like Zip.  

In early morning trade on Friday, Zip shares are fetching $4.92, down 2.96%. Afterpay is also trading lower at $96.58, down 3.68%.

The post Expert warns Zip (ASX:Z1P) and cohorts may need to raise more capital in 2022 appeared first on The Motley Fool Australia.

More reading

• More pain for ASX buy now, pay later shares in 2022: expert
• Here are the top 10 ASX shares today
• Why is the Zip (ASX:Z1P) share price zooming 9% higher today?
• Why Life360, Oil Search, Telix, and Zip shares are storming higher
• Here’s why ASX BNPL shares are in the spotlight today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Today, there’s a small cryptocurrency that’s making a big move. Earlier this morning, Celo (CRYPTO: CELO) surged to as high as $4.72 per token, representing an increase of nearly 30% since yesterday’s close. This rapid move has been quickly corrected, though Celo does remain 5.2% higher over the past 24 hours, as of 12:30 p.m. ET. This move comes amid more downside momentum in the crypto world today, with the overall market down 3.4% at the same time.

Yesterday’s announcement that crowdfunding platform Kickstarter would be migrating to a platform based on the Celo blockchain has provided a key catalyst for this cryptocurrency. It appears investors primarily in Asia jumped on this catalyst, with Celo’s outsize move happening during trading hours there.

So what

Celo is a top 100 cryptocurrency, but one many investors may not have heard of. With a market capitalization of “only” $1.4 billion, it’s a relatively emerging player in the crypto scene.

What makes Celo special is this blockchain ecosystem’s focus on increasing crypto adoption among smartphone users. For platforms like Kickstarter looking for more market share among mobile users, as well as those without banking access, Celo’s platform is enticing. 

Additionally, it has been pointed to as an excellent blockchain network from an environmental standpoint. This network’s proof-of-stake network has allowed Celo to become carbon negative, something Kickstarter executives like. Given the attention that’s now being paid to energy usage in the crypto world, Celo’s environmental positioning is something worth considering. At least, Kickstarter executives think so.

Now what

The world of cryptocurrencies is a vast, fast-moving space. It’s impossible to keep tabs on every one. Indeed, Celo is a blockchain network that may not have gotten the attention it rightfully deserves.

This announcement could pave the way for further partnerships and adoption of the Celo blockchain. Accordingly, the sharp spike we’ve seen with Celo of late appears to be warranted.

It should be noted that Celo tokens remain approximately 65% below their 52-week highs. Thus, this is a small-cap token many investors may want to take a flier on right now. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why this cryptocurrency soared nearly 30% today with the overall crypto market down appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price falls following surprise CEO exit
• Expert warns Zip (ASX:Z1P) and cohorts may need to raise more capital in 2022
• Evergrande officially defaults, downgraded by Fitch. What next?
• Here’s why the Telix (ASX:TLX) share price is falling today
• Why is the AVZ (ASX:AVZ) share price crashing 15% today?

Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The giant Chinese real estate developer Evergrande has officially defaulted, according to reports. In response to that, the ratings agency Fitch has downgraded it.

Evergrande defaults

Reporting by Bloomberg said that Evergrande bondholders are going to face “deep haircuts” through a restructuring that may take months or even years to resolve.

Chinese officials have reportedly made it clear that Evergrande is not going to be bailed out. People’s Bank of China Governor Yi Gang said in a video message that the situation is a “market event that should be dealt in a market-orientated way”.

Evergrande has been struggling with over $300 billion of debts that it has been missing just the interest repayments on.

At the end of last week, Evergrande told the market in an announcement that it had received a demand to perform its obligations under a guarantee for an amount of around US$260 million. If Evergrande was unable to meet its guarantee obligations or certain other financial obligations, it could lead to creditors demanding an acceleration of repayment.

Evergrande admitted there was no guarantee that the group will have sufficient funds to continue to perform its obligations. It said it was going to work on a viable restructuring plan.

However, in anticipation of potential problems, authorities have reduced lender reserve requirements, eased real estate rules and introduced measures to make sure that higher-rated developers can still get funding. Authorities may decide to prioritise “social stability” when deciding who gets their money back.

Fitch weighs in on Evergrande

The ratings agency Fitch has downgraded Evergrande to “restricted default” after failing to make two interest payments by the end of the grace period this week.

This reportedly may mean that it activates cross defaults across $19.2 billion of debt.

Fitch said it was unable to get confirmation that this week’s payments were made, so it assumed they were not paid after bondholders reported not receiving their money.

Some of the bond investors that Bloomberg spoke to expect that they will be at the back of the queue in getting their money back, if at all. Some of the world’s biggest investment groups may have been trapped in this, including Blackrock, UBS and Allianz.

Other Chinese developers problems

Evergrande isn’t the only one that seems to have officially defaulted. Kaisa Group reportedly missed repaying a $400 million bond that matured earlier this week.

Fitch has also cut the rating of Kaisa Group to “restricted default”.

Bloomberg reported that those two companies alone account for around 15% of outstanding dollar bonds sold by Chinese developers.

What next?

It was speculated by Brock Silvers, chief investment officer at Kaiyuan Capital, that due to the fact that the company is in China, the default won’t lead to an immediate collapse or even a big impact because the Chinese government is in charge of the situation, not the bondholders.

He Jun, a researcher at independent strategic group Anbound Consulting, said to Bloomberg that one potential roadmap could be seen with HNA Group. With HNA, the local government took over running of the business and then 12 months later went into a court-led restructuring.

The S&P/ASX 200 Index (ASX: XJO) is down 0.4% at the time of writing. Only today’s transacting investors know how much they are taking the Evergrande news into account with this decline.

Looking at the ASX’s two biggest miners, BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), they are down 0.6% and up 0.4% respectively.

The post Evergrande officially defaults, downgraded by Fitch. What next? appeared first on The Motley Fool Australia.

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• Morgans names 2 high yield ASX dividend shares to buy now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Melbourne-based oncology company Telix Pharmaceuticals Ltd (ASX: TLX) are currently down 2% in the red today, trading at $7.35 apiece.

Investors aren’t responding enthusiastically to a company announcement early on during Friday’s session concerning regulatory approval of its Illuccis label.

Following the update, Illuccix has successfully progressed to the final stage of regulatory assessment in Europe. Here are the details.

What did Telix announce?

Telix advised that its marketing authorisation application (MAA) submission in Europe for the registration of its lead product Illuccix has successfully progressed to the final stage of regulatory assessment.

Illuccix is indicated for use in prostate cancer imaging, and has already been approved by the Australian Therapeutic Goods Administration (TGA), and accepted for filing by the U.S. Food and Drug Administration (FDA).

Hence approval in the European, Middle East and Africa (EMEA) zones is a high watermark that would round out Telix’s Illuccix offering on a global scale, considering its approval in Australia and potentially the US.

The release notes that after a comprehensive review process, an ”approval decision notification” of the product’s registration status in Europe is expected to be provided no later than 23 March 2022.

According to Telix, the evaluation of Illuccix has been led by The Danish Medicines Agency (DKMA) in its capacity as a Reference Member State (RMS). It is doing so on behalf of 13 European countries and the United Kingdom.

These are the initial territories that were selected by Telix for MAA submission. The DKMA has confirmed that Telix has “fully responded to all information requests that have been issued to the company on behalf of the member states”, and that it will issue an approval decision notification within 90 days.

Following the DKMA’s decision, national stage approvals for the individual 14 member countries are expected to commence within 30-60 days of the notification.

Today’s update also follows on from an announcement on Wednesday advising that the company had entered into an exclusive commercial agreement with Nucliber, a Spanish based company, to distribute Illuccix into the Spanish market.

Speaking on the announcement, Telix EMEA President Mr Richard Valeix said:

We thank the DKMA for the collaborative interactions throughout the review process. We are pleased to have confirmation that the so-called “clock-stop” period has concluded, putting us on track for decision in early 2022. PSMA-PET imaging is arguably one of the most important developments in prostate cancer in recent years, we look forward to bringing this next-generation diagnostic tool to patients across Europe, once approved.

Telix Pharmaceuticals share price summary

In the last 12 months, the Telix share price has gained 122% after rallying a further 94% this year to date.

In the past month, it is up 4% whereas it has climbed another 14% in the past week on the back of its most recent updates.

The post Here’s why the Telix (ASX:TLX) share price is falling today appeared first on The Motley Fool Australia.

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The author has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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