/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/080801.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, August 1, 2008, Vol. 9, No. 152 Headlines A U S T R I A BAUMEL IMMOBILIEN: Claims Registration Period Ends August 12 DATARIUS TECHNOLOGIES: Claims Registration Period Ends August 14 IMB MONTAGEN: Claims Registration Period Ends August 14 G E R M A N Y BUXTEHUDER TROCKENBAU: Claims Registration Period Ends Aug. 11 DRILLING TOOLS: Claims Registration Period Ends August 11 FROEHLING BESITZGESELLSCHAFT: Claims Period Ends August 11 GE-WE GRUNDSTUECKS: Claims Registration Period Ends August 10 GIGAVISION MEDIA: Claims Registration Period Ends August 10 KLINGBEIL STADTSANIERUNG: Creditors Meeting Slated for Aug. 11 KNABL GMBH: Claims Registration Period Ends August 10 MERLIN MEDICAL: Claims Registration Period Ends August 10 OJJO TRANSPORT: Claims Registration Period Ends August 8 P.A.Z.-BRANDENBURG: Claims Registration Period Ends August 8 PERSONAL PERFORMANCE: Claims Registration Period Ends Aug. 11 PRAXISCONCEPT GMBH: Claims Registration Period Ends August 10 PROCREDIT BANK: Fitch Affirms BB+ LT Foreign Currency ID Rating SERVICE ZENTRALE 24: Claims Registration Period Ends August 8 SCHUSTER DACHBAU: Claims Registration Period Ends August 8 SUXXEL GMBH: Claims Registration Period Ends August 9 VERWALTUNG GMBH: Claims Registration Period Ends August 8 WEINBERGER DEUTSCHLAND: Claims Registration Ends August 8 I T A L Y ALITALIA SPA: To Suffer Liquidity Hit in 2009, Says Citigroup FABBRICA ITALIANA: Financial Woes Spur Liquidation Proceedings PARMALAT SPA: High Cost, Low Demand Cut H1 EBITDA to EUR146.3MM I R E L A N D * S&P Expects Downturn in U.K., Spanish & Irish Housing Markets K A Z A K H S T A N AIR KAZAKHSTAN: Creditors Must File Claims by September 17 AL-FARABI LLP: Claims Deadline Slated for September 17 ALLIANCE BANK: Moody's Affirms E+ Financial Strength Rating ANAR JSC: Claims Filing Period Ends September 17 JIHAZ OJSC: Creditors' Claims Due on September 17 KAZ AGROS: Claims Registration Ends September 17 KOKSHE TRANS: Creditors Must File Claims by September 17 TEMIR DOS: Claims Deadline Slated for September 17 * S&P Puts Low-B Rating to Russia, Ukraine & Kazakhstan Issuers K Y R G Y Z S T A N MEGA KYMBAT: Creditors Must File Claims by September 4 L I T H U A N I A UAB BITE: Fitch Changes B- Rated IDR's Outlook to Negative N E T H E R L A N D S X5 RETAIL: Repurchases Global Depositary Receipts for Treasury X5 RETAIL: To Register Two Ruble Bond Issues Worth RUR16 Billion R U S S I A HOME CREDIT: Moody's Assigns Ba3 LT Foreign Currency Rating NOVATEK OAO: Hikes Production Outputs for First Half 2008 NOVATEK OAO: Shareholders Okay Increase in Number of Directors STRONG LLC: Court Names V. Anchukov as Insolvency Manager STROY-PROFIL LLC: Krasnodar Bankruptcy Hearing Set September 8 SVETOZARNOE OJSC: Creditors Must File Claims by August 28 TATNEFT OAO: Board Reviews Work Progress on Nizhnekamsk Factory TATNEFT OAO: To Start Viscous Oil Drilling in 4Q of 2008 VEKOS LLC: Creditors Must File Claims by August 21 VERTICAL LLC: Rostov Bankruptcy Hearing Slated for October 7 VOSKRESENSKIY MIXED: Creditors Must File Claims by August 28 TAEZHNOE CJSC: Creditors Must File Claims by August 28 X5 RETAIL: Repurchases Global Depositary Receipts for Treasury X5 RETAIL: To Register Two Ruble Bond Issues Worth RUR16 Billion * S&P Puts Low-B Rating to Russia, Ukraine & Kazakhstan Issuers S P A I N CAIXA PENEDES: Fitch Puts BB Rating on EUR41.6MM Series C Notes FTA SANTANDER: Fitch Assigns 'CCC' Rating on Class E Notes * S&P Expects Downturn in U.K., Spanish & Irish Housing Markets S W I T Z E R L A N D ABUS SIEBDRUCK: Aug. 13 Set as Deadline to File Proofs of Claim ATEWEKO LLC: Creditors Have Until Aug. 13 to File Claims AVANTIUM TRADING: Creditors Must File Claims by August 13 EDELWEISS JSC: Deadline to File Proofs of Claim Set Aug. 13 GENERAL MOTORS: Settles Case vs. RSA Insurance GUNKEL JSC: Proofs of Claim Filing Deadline is Aug. 13 IAC JSC: Creditors' Proofs of Claim Due by August 14 MP DILCAN LLC: Creditors Must File Proofs of Claim by Aug. 13 PAUHANA JSC: Aug. 14 Set as Deadline to File Proofs of Claim TECHNEON JSC: Deadline to File Proofs of Claim Set August 13 TEXTACROBAT LLC: Proofs of Claim Filing Deadline is August 11 U K R A I N E ANTHRACITE COAL: Creditors Must File Proofs of Claim by Aug. 14 BARS LLC: Creditors Must File Proofs of Claim by August 14 EAST-EXPO LLC: Creditors Must File Proofs of Claim by August 14 KORVO-TRADE: Creditors Must File Proofs of Claim by August 14 SLOBODA LLC: Proofs of Claim Deadline Set August 10 SOMERS LLC: Creditors Must File Proofs of Claim by August 14 STROY SI: Proofs of Claim Deadline Set August 14 TOWN-BUILDING LLC: Creditors Must File Claims by August 14 VLAD LLC: Creditors Must File Proofs of Claim by August 14 * S&P Puts Low-B Rating to Russia, Ukraine & Kazakhstan Issuers U N I T E D K I N G D O M BEANSCENE LIMITED: Calls in Administrators After Funding Failure BEDS DIRECT: Management Buys Company's Remaining Assets BRITISH ENERGY: EDF Fails to Please Board with Offer; Pulls Out CHRYSLER LLC: Arm Halts Lease Operations; To Cut 1,000 Employees CHRYSLER LLC: Fitch Junks Rating on Retail Financing Restriction CLEAR CHANNEL: Moody's Assigns B2 Corporate Family Rating CONGREGRATIONAL & GENERAL: S&P Cuts Counterparty Credit to BB+ DAWNAY DAY: Peter Klimt Quits Posts at Three Property Funds DAWNAY DAY: Carpathian Enters Into New Management Agreement ESSAY PRINT: Collective UK Buys Firm Out of Administration FREESCALE SEMICONDUCTOR: Posts US$184 Mln Net Loss in Q2 2008 LAWTEC LTD: Appoints Mark Granville Firmin as Liquidator LBV LTD: Names Philip Michael Lyon Liquidator MALTINGS RETAIL: Howard Smith leads Liquidation Procedure MERCIA PRINT: Taps Niel Price to Liquidate Assets PACIFIC AND GENERAL: Scheme Creditors Must File Claims by Jan. 9 PAL REALISATIONS: Brings in Liquidator from KPMG PDC ASSETS: Calls in Liquidator from KPMG PDC CONSTRUCTION: Hires Liquidator from KPMG MCNULTY OFFSHORE: Appoints Liquidator from KPMG RAVINE LIFESTYLE: Brings in Joint Administrators from Deloitte RE-COOL LTD: Brings in Liquidators from Mazars UJIMA HOUSING: Bad Mg't. Responsible for Collapse, Inquiry Says WASTE POINT: Taps Liquidator from KPMG WRAPIT: In Talks with Banks and Advisers to Avert Administration * European Project Finance Portfolio Remains Robust, S&P Reports * S&P Says U.K. Mortgage Borrowers Face Likely Negative Equity * S&P Expects Downturn in U.K., Spanish & Irish Housing Markets * Insolvencies in the U.K. Up 17.5% in 1H 2008, Experian Says BOOK REVIEW: Working Together ********* ============= A U S T R I A ============= BAUMEL IMMOBILIEN: Claims Registration Period Ends August 12 ------------------------------------------------------------ Creditors owed money by LLC Baumel Immobilien Verwaltung have until Aug. 12, 2008, to file written proofs of claim to the court-appointed estate administrator: Dr. Hans-Joerg Haftner Wiener Strasse 12 3100 St. Poelten Austria Tel.: 02742/35 42 34 Fax: 02742/35 14 48 E-mail: office@plusjus.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:30 a.m. on Sept. 2, 2008, for the examination of claims at: The Land Court of St. Poelten Room 216 2nd Floor (Old Building) St. Poelten Austria Headquartered in St. Poelten–Harland, Austria, the Debtor declared bankruptcy on June 30, 2008, (Bankr. Case No. 14 S 102/08b). DATARIUS TECHNOLOGIES: Claims Registration Period Ends August 14 ---------------------------------------------------------------- Creditors owed money by LLC DaTARIUS Technologies have until Aug. 14, 2008, to file written proofs of claim to the court- appointed estate administrator: Dr. Gunther Nagele Suedtiroler Platz 8 6020 Innsbruck Austria Tel: 0512/58 74 81 Fax: 0512/58 08 97 E-mail: office@nagele-pesl.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:00 a.m. on Aug. 29, 2008, for the examination of claims at: The Land Court of Innsbruck Maximilianstrasse 4 A-6020 Innsbruck Austria Headquartered in Reutte, Austria, the Debtor declared bankruptcy on July 1, 2008,(Bankr. Case No. 9 S 13/08y). IMB MONTAGEN: Claims Registration Period Ends August 14 ------------------------------------------------------- Creditors owed money by IMB Montagen Ltd. & CO KEG have until Aug. 14, 2008, to file written proofs of claim to the court- appointed estate administrator: Dr. Gisela Possnig Lederergasse 10/2 8160 Weiz Austria Tel: 03172/2442 Fax: 03172/2442-14 E-mail: office@ra-wpm.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:30 a.m. on Aug. 21, 2008, for the examination of claims at: The Land Court of Graz Room 222 2nd Floor Graz Austria Headquartered in St. Ruprecht an der Raab, Austria, the Debtor declared bankruptcy on June 30, 2008, (Bankr. Case No.26 S 75/08m). ============= G E R M A N Y ============= BUXTEHUDER TROCKENBAU: Claims Registration Period Ends Aug. 11 -------------------------------------------------------------- Creditors of BTB Buxtehuder Trockenbau GmbH have until Aug. 11, 2008, to register their claims with court-appointed insolvency manager Michael Foehlisch. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Sept. 11, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Tostedt Meeting Room I Area CE.02 Linden 23 21255 Tostedt Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Michael Foehlisch Hamburger Str. 208 22083 Hamburg Germany Tel: 040/27148116 Fax: 040/27148136 The District Court of Tostedt opened bankruptcy proceedings against BTB Buxtehuder Trockenbau GmbH on July 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: BTB Buxtehuder Trockenbau GmbH Heimbrucher Str. 98 21614 Buxtehude Germany Attn: Marco Ott Am Estedeich 2 a 21614 Buxtehude Germany DRILLING TOOLS: Claims Registration Period Ends August 11 --------------------------------------------------------- Creditors of Drilling Tools Logistic & Service GmbH have until Aug. 11, 2008, to register their claims with court-appointed insolvency manager Karl-Heinz Blaha. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Aug. 25, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Celle Nebenstelle Hall 014 Ground Floor Branch Mill Road 4 29221 Celle Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Karl-Heinz Blaha Bahnhofstr. 30 A 29221 Celle Germany Tel: 05141/28011 Fax: 05141/24722 E-mail: Rae_valentiner_blaha_buchholz@gmx.de The District Court of Celle Nebenstelle opened bankruptcy proceedings against Drilling Tools Logistic & Service GmbH on July 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Drilling Tools Logistic & Service GmbH Attn: Rosemarie Meyer, Manager Karl-Schiller-Str. 8 29225 Celle Germany FROEHLING BESITZGESELLSCHAFT: Claims Period Ends August 11 ---------------------------------------------------------- Creditors of Froehling Besitzgesellschaft mbH & Co. KG have until Aug. 11, 2008, to register their claims with court- appointed insolvency manager Werner Schneider. Creditors and other interested parties are encouraged to attend the meeting at 8:00 a.m. on Aug. 20, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Neu-Ulm Room 211 Heiner-Metzger-Platz 1 89231 Neu-Ulm Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Werner Schneider Bahnhofstr. 41 89231 Neu-Ulm Germany Tel: 0731/970 18-0 Fax: -65 The District Court of Neu-Ulm opened bankruptcy proceedings against Froehling Besitzgesellschaft mbH & Co. KG on June 25, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Froehling Besitzgesellschaft mbH & Co. KG Thalfinger Str. 140 in 89233 Neu-Ulm Germany GE-WE GRUNDSTUECKS: Claims Registration Period Ends August 10 ------------------------------------------------------------- Creditors of GE-WE Grundstuecksgesellschaft mbH & Co. Juelicher Strasse KG have until Aug. 10, 2008, to register their claims with court-appointed insolvency manager Hartwig Albers. The District Court of Charlottenburg will verify the claims set out in the insolvency manager's report at 9:15 a.m. on Sept. 18, 2008, at: The District Court of Charlottenburg Hall 218 Second Floor Amtsgerichtsplatz 1 14057 Berlin Germany Creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Hartwig Albers Luetzowstr. 100 10785 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against GE-WE Grundstuecksgesellschaft mbH & Co. Juelicher Strasse KG on May 31, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: GE-WE Grundstuecksgesellschaft mbH & Co. Juelicher Strasse KG Uhlandstr. 7-8 10623 Berlin Germany GIGAVISION MEDIA: Claims Registration Period Ends August 10 ----------------------------------------------------------- Creditors of GIGAVISION Mediagesellschaft mbH have until Aug. 10, 2008, to register their claims with court-appointed insolvency manager Anika Leffler. The District Court of Charlottenburg will verify the claims set out in the insolvency manager's report at 9:55 a.m. on Sept. 11, 2008, at: The District Court of Charlottenburg Hall 218 Second Floor Amtsgerichtsplatz 1 14057 Berlin Germany Creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Anika Leffler Gross-Berliner Damm 73c 12487 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against GIGAVISION Mediagesellschaft mbH on May 27, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: GIGAVISION Mediagesellschaft mbH Gross Berliner Damm 71 12487 Berlin Germany KLINGBEIL STADTSANIERUNG: Creditors Meeting Slated for Aug. 11 -------------------------------------------------------------- The court-appointed insolvency manager for Klingbeil Stadtsanierung GmbH & Co, Dr. Christoph Schulte-Kaubruegger, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 9:45 a.m. on Aug. 11, 2008. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg Second Stock Hall 218 Amtsgerichtsplatz 1 14057 Berlin Germany The Court will also verify the claims set out in the insolvency manager's report at 9:00 a.m. on Dec. 1, 2008, at the same venue. Creditors have until Oct. 2, 2008, to register their claims with the court-appointed insolvency manager. The insolvency manager can be reached at: Dr. Christoph Schulte-Kaubruegger Genthiner Str. 48 10785 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against Klingbeil Stadtsanierung GmbH & Co on July 3, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Klingbeil Stadtsanierung GmbH & Co Yorckbruecken KG Kleiststrasse 3-6 10787 Berlin Germany KNABL GMBH: Claims Registration Period Ends August 10 ----------------------------------------------------- Creditors of Knabl GmbH have until Aug. 10, 2008, to register their claims with court-appointed insolvency manager Hans-Joerg Derra. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Aug. 20, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Neu-Ulm Hall 211/II Heiner-Metzger-Platz 1 89231 Neu-Ulm Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Hans-Joerg Derra Frauenstrasse 14 89073 Ulm Germany Tel: 0731/922880 Fax: 0731/9228888 The District Court of Neu-Ulm opened bankruptcy proceedings against Knabl GmbH on July 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Knabl GmbH Thalfinger Str. 140 89233 Neu-Ulm Germany MERLIN MEDICAL: Claims Registration Period Ends August 10 --------------------------------------------------------- Creditors of Merlin Medical GmbH have until Aug. 10, 2008, to register their claims with court-appointed insolvency manager Markus Neumann. Creditors and other interested parties are encouraged to attend the meeting at 7:00 p.m. on Sept. 9, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Detmold Meeting Room 213 Heinrich-Drake-Str. 3 32756 Detmold Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Markus Neumann Gerichtsstr. 12 32791 Lage Germany The District Court of Detmold opened bankruptcy proceedings against Merlin Medical GmbH on July 2, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Merlin Medical GmbH Lagesche Str. 15 32657 Lemgo Germany Attn: Gerald Adolf, Manager Saarstr. 24 32657 Lemgo Germany OJJO TRANSPORT: Claims Registration Period Ends August 8 -------------------------------------------------------- Creditors of OJJO Transport GmbH have until Aug. 8, 2008, to register their claims with court-appointed insolvency manager Dr. jur. Stefan N. Frielinghaus. Creditors and other interested parties are encouraged to attend the meeting at 8:30 a.m. on Sept. 15, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Schwerin Hall 7 Demmlerplatz 14 19053 Schwerin Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. jur. Stefan N. Frielinghaus Alexandrinenstr. 17 19055 Schwerin Germany The District Court of Schwerin opened bankruptcy proceedings against OJJO Transport GmbH on June 19, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: OJJO Transport GmbH Attn: Jens Grunwald, Manager Am Kreuzsee 20 19412 Bruel Germany P.A.Z.-BRANDENBURG: Claims Registration Period Ends August 8 ------------------------------------------------------------ Creditors of P.A.Z.-Brandenburg Verwaltungs GmbH have until Aug. 8, 2008, to register their claims with court-appointed insolvency manager Dr. Ulrich Wenzel. Creditors and other interested parties are encouraged to attend the meeting at 9:10 a.m. on Sept. 10, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Potsdam Hall 301 Third Floor Nebenstelle Lindenstrasse 6 14467 Potsdam Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Ulrich Wenzel Grossbeerenstrasse 231 14480 Potsdam Germany The District Court of Potsdam opened bankruptcy proceedings against P.A.Z.-Brandenburg Verwaltungs GmbH on June 18, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: P.A.Z.-Brandenburg Verwaltungs GmbH August-Sonntag-Strasse 6 14470 Brandenburg Germany Attn: Bodo Kastner, Manager Vereinsstrasse 43 14770 Brandenburg Germany PERSONAL PERFORMANCE: Claims Registration Period Ends Aug. 11 ------------------------------------------------------------- Creditors of P & P Personal Performance GmbH have until Aug. 11, 2008, to register their claims with court-appointed insolvency manager Gerret Hoeher. Creditors and other interested parties are encouraged to attend the meeting at 9:50 a.m. on Sept. 1, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Offenbach am Main Hall 162N Kaiserstrasse 16-18 63065 Offenbach am Main Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Gerret Hoeher Zeilweg 42 60439 Frankfurt Germany Tel: 069/963 761 730 Fax: 069/963 761 145 The District Court of Offenbach am Main opened bankruptcy proceedings against P & P Personal Performance GmbH on July 7, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: P & P Personal Performance GmbH Erbsengasse 27 63303 Dreieich Germany PRAXISCONCEPT GMBH: Claims Registration Period Ends August 10 ------------------------------------------------------------- Creditors of Praxisconcept GmbH have until Aug. 10, 2008, to register their claims with court-appointed insolvency manager Ulrich N. Bildl. Creditors and other interested parties are encouraged to attend the meeting at 8:30 a.m. on Aug. 26, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Wuerzburg Room 14 Second Stock Tiepolostr. 6 Wuerzburg Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Ulrich N. Bildl Steinbachtal 2 b 97082 Wuerzburg Germany Tel: 0931/991 560 The District Court of Wuerzburg opened bankruptcy proceedings against Praxisconcept GmbH on June 18, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Praxisconcept GmbH Attn: Herrn Joerg Kral, Manage Am Hoffeld 12 97265 Hettstadt Germany PROCREDIT BANK: Fitch Affirms BB+ LT Foreign Currency ID Rating --------------------------------------------------------------- Fitch Ratings has affirmed ProCredit Bank at Long-term foreign currency Issuer Default rating 'BB+' with Stable Outlook; Short- term foreign currency IDR 'B', Long-term local currency IDR 'BB+' with Stable Outlook; Short-term local currency IDR 'B'; Individual 'D' and Support '3'. PCB's IDRs and Support rating are based on the likelihood of support from its 80% owner, ProCredit Holding AG ('BBB-'/Stable Outlook). The Individual rating reflects the bank's small size, limited franchise, tight capitalization, and the credit and operational risks linked to fast growth. It also reflects good asset quality to date, adequate profitability and acceptable liquidity position. Operating profitability is adequate, supported by the traditionally wide net interest margins earned on its micro and small business lending, which are nonetheless tightening under competition pressures and increasing funding costs, in line with the domestic market trends. PCB's cost to income ratio remains high and is deteriorating as the bank continues to invest in branch expansion and new hires. Credit risk represents the bank's largest source of risk, although PCB has a good record of maintaining adequate asset quality ratios (at end-2007, impaired loans represented a low 0.76% of total gross loans) and ample loan impairment allowances. Operational risk stems from rapid expansion of staff, branches and intermediated volumes. The bank's appetite for market risk is low. Internal capital generation is insufficient to fund growth and capitalization is tightening on the back of strong lending growth, but is supported by regular Tier 1 and Tier 2 capital injections by PCH. PCB is part of a global network of 22 banks (as at April 2008) operating as development-oriented full service banks, which specialize in lending to micro and small and medium enterprises in emerging economies. In late 2007 and April 2008, PCH exercised a call option to acquire an additional 21.2% in PCB, bringing its stake in PCB to 80.29%. Commerzbank owns the remaining 19.71% in the bank. SERVICE ZENTRALE 24: Claims Registration Period Ends August 8 ------------------------------------------------------------- Creditors of Service Zentrale 24 h Abschleppdienst und Unfallmanagement GmbH have until Aug. 8, 2008, to register their claims with court-appointed insolvency manager Matthias Bott. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Aug. 25, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Ravensburg Hall 3 Herrenstr. 42 88212 Ravensburg Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Matthias Bott Bodnegger Str. 19 88287 Gruenkraut Germany The District Court of Ravensburg opened bankruptcy proceedings against Service Zentrale 24 h Abschleppdienst und Unfallmanagement GmbH on June 23, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Service Zentrale 24 h Abschleppdienst und Unfallmanagement GmbH Schwanenstr. 6 88214 Ravensburg Germany SCHUSTER DACHBAU: Claims Registration Period Ends August 8 ---------------------------------------------------------- Creditors of Schuster Dachbau GmbH have until Aug. 8, 2008, to register their claims with court-appointed insolvency manager Torben Herbold. Creditors and other interested parties are encouraged to attend the meeting at 1:10 p.m. on Sept. 8, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Neubrandenburg Hall 1 Fr.-Engels-Ring 15-18 Neubrandenburg Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Torben Herbold Gerstenstrasse 9 17034 Neubrandenburg Germany The District Court of Neubrandenburg opened bankruptcy proceedings against Schuster Dachbau GmbH on June 19, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Schuster Dachbau GmbH An der Schleife 13 17153 Stavenhagen Germany SUXXEL GMBH: Claims Registration Period Ends August 9 ----------------------------------------------------- Creditors of Suxxel GmbH have until Aug. 9, 2008, to register their claims with court-appointed insolvency manager Dr. Petra Hilgers. The District Court of Charlottenburg will verify the claims set out in the insolvency manager's report at 9:00 a.m. on Oct. 8, 2008, at: The District Court of Charlottenburg Hall 218 Second Floor Amtsgerichtsplatz 1 14057 Berlin Germany Creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Petra Hilgers Goethestr. 85 10623 Berlin Germany The District Court of Charlottenburg opened bankruptcy proceedings against Suxxel GmbH on May 28, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Suxxel GmbH Oranienburger Str. 173/175 13437 Berlin Germany VERWALTUNG GMBH: Claims Registration Period Ends August 8 --------------------------------------------------------- Creditors of Verwaltung GmbH have until Aug. 8, 2008, to register their claims with court-appointed insolvency manager Dr. Stephan Thiemann. Creditors and other interested parties are encouraged to attend the meeting at 8:30 a.m. on Aug. 29, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court Muenster Meeting Hall 13 B Gerichtsstr. 2-6 48149 Muenster Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Stephan Thiemann Ludgeristr. 54 48143 Muenster Germany Tel: 0251/16283-0 Fax: +492511628311 The District Court of Muenster opened bankruptcy proceedings against Verwaltung GmbH on June 12, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Verwaltung GmbH Sentmaringer Weg 71 48151 Muenster Germany WEINBERGER DEUTSCHLAND: Claims Registration Ends August 8 --------------------------------------------------------- Creditors of Weinberger Deutschland GmbH have until Aug. 8, 2008, to register their claims with court-appointed insolvency manager Volker Boehm. Creditors and other interested parties are encouraged to attend the meeting at 1:45 p.m. on Sept. 4, 2008, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Fuerth Hall 3 Ground Floor Baumenstrasse 32 Fuerth Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Volker Boehm Rothenburger Str. 241 90439 Nuremberg Germany Tel: 0911/600010 Fax: 0911/6000170 The District Court of Fuerth opened bankruptcy proceedings against Weinberger Deutschland GmbH on July 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Weinberger Deutschland GmbH Am Weichselgarten 3 91058 Erlangen Germany ========= I T A L Y ========= ALITALIA SPA: To Suffer Liquidity Hit in 2009, Says Citigroup ------------------------------------------------------------- Alitalia S.p.A. may not be liquid enough to finance its operations in 2009, since the national carrier only has enough cash until end 2008, Reuters reports citing Citigroup analysts. According to Reuters, Citigroup said Alitalia was to run out of cash by third quarter 2008, but a EUR300 million emergency financing provided by the Italian government should "help Alitalia to survive until the end of 2008." "The government loan . . . could be insufficient from 2009 onwards," Citigroup said in research note cited by Reuters. The bank expects Alitalia to post EUR720 million in net losses and a 20% drop in revenues for 2008. The bank also expects significant markdowns of the fleet in service. Citigroup said a merger with smaller Italian carrier Air One appeared to be the only "meaningful solution" now, combined with a grounding of obsolete planes that would halve capacity. It estimated a EUR1 billion equity injection is needed. About Alitalia Based in Rome, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes, including United States, Canada, Japan and Argentina. The Italian government owns 49.9% of Alitalia. * * * Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, EUR625.6 million in 2006, and EUR494.64 million in 2007. FABBRICA ITALIANA: Financial Woes Spur Liquidation Proceedings -------------------------------------------------------------- Fabbrica Italiana Biciclette SpA has gone into liquidation after running into serious financial difficulties, Bike Europe reports. According to the report, the liquidation is being handled by the company's founder Matteo Nuzzi. Data at kompass.com show FIB had turnover of US$5 to US$10 million and employs 21 to 50 people. Founded in 1997, Fabbrica Italiana Biciclette SpA -- http://www.nuzzisportracing.com/-- manufactures a range of bikes, including roadrace, MTB, Trekking, City Kids and Freeride. PARMALAT SPA: High Cost, Low Demand Cut H1 EBITDA to EUR146.3MM --------------------------------------------------------------- Parmalat S.p.A. released its preliminary results for the for half ended June 30, 2008. The Parmalat Group posted EUR146.3 million in EBITDA on EUR1.9 billion in net revenues for the first half 2008, compared with EUR163.2 million in EBITDA on EUR1.81 billion in net revenues for the same period in 2007. The company attributed the lower EBITDA compared with 2007 to: * increase in the cost of milk raw material; * the negative impact of lower unit sales caused by shrinking consumer demand and strong competitive pressure from private labels; * an increase in manufacturing overheads and marketing costs attributable almost exclusively to strong inflationary pressure in South Africa and Central and South America. At June 30, 2008, the Group's net financial position showed an improvement of EUR45.2 million, with net financial assets increasing from EUR855.8 million at Dec. 31, 2007 to EUR901 million at June 30, 2008. The main reasons for this positive change are: * cash flow from operating activities, which totaled about EUR15 million, net of changes in operating working capital and investments; * flows from non recurring activities, which amounted to EUR36.7 million principally reflecting the deconsolidation of EUR35.1 million in net borrowings of Newlat S.p.A., sold in May 2008; * inflows from litigation, which reflected proceeds of EUR437.9 million from settlement agreements executed during the first half of 2008 and expenses of EUR28.8 million to pursue legal actions; * tax-related flows, which totaled about EUR172.6 million, including EUR83 million for operating activities and EUR89.6 million for litigation settlements; * dividend payments of EUR262.1 million; * a change in net indebtedness for the period, with liquidity increasing by more than EUR45 million, due in part to a positive currency translation effect (appreciation of the euro versus the currencies of consolidated companies) of more than EUR27 million. Parmalat S.p.A. Meanwhile, Parmalat S.p.A. posted EUR24.9 million in EBITDA on EUR458.3 million on net revenues for first half 2008, compared with EUR34.9 million in EBITDA on EUR426.9 million in net revenues for the same period in 2007. Net profit of the period is inclusive of the settlements for a total amount of EUR437.9 million beyond the adjustment of the intangible assets due to the impairment test for an amount of about EUR60 million. Net financial assets grew from around EUR1.23 billion at Dec. 31, 2007, to around EUR1.32 billion at June 30, 2008. The improvement is the result of a positive cash flow from operations and reflects the contribution of the nonrecurring transactions. Business Outlook The worsening of the economic and financial crisis has affected the economic trend of Parmalat Australia and Parmalat South Africa. To this situation a major decline of the Italian market must be added. Damages suffered by the above mentioned markets have been only partially compensated by the positive trend of other subsidiaries and by the operational actions already implemented and in course of implementation. In consideration of the results and in absence of extraordinary events, it is confirmed the "guidance" for the Group that presents an increase in revenues of 3% respect to 2007, while it is expected that EBITDA of the Group, for this period, could be around EUR350 million. Parmalat expects between EUR445 million to EUR450 million in net profit for first half 2008, compared with EUR198.2 million in net profit for the same period in 2007. Parmalat Group expects between EUR425 million to EUR430 million in consolidated net profit for first half 2008, compared with EUR244.3 million in consolidated net profit for the same period in 2007. About Parmalat Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. ============= I R E L A N D ============= * S&P Expects Downturn in U.K., Spanish & Irish Housing Markets --------------------------------------------------------------- The risks posed by high levels of household indebtedness among European economies are thrown into sharp relief by the collapse in the U.K., Spanish, and Irish housing markets, says a research report titled "European Economic Forecast: Boom Turns To Bust In Exposed Housing Markets," published by Standard & Poor's Ratings Services. "Europe's housing markets have enjoyed a spectacular boom in the past eight years, at levels closely comparable with that in the U.S.," said S&P's chief economist for Europe, Jean-Michel Six. "Yet, levels of household indebtedness vary considerably across European economies. On the one hand, there are countries with outstanding mortgage debt exceeding 50% of GDP such as Denmark, The Netherlands, the U.K., Spain, and Ireland. On the other hand, Norway, Sweden, France, and Italy have relatively low levels of debt in spite of the recent rise in their housing markets." As the report points out, the U.K. housing market is confronted with two evils at the same time: Affordability and availability. Since its peak in August 2007, the U.K. housing market has been declining more rapidly than after the previous peak in May 1989, when prices from peak to trough were down 13% in nominal terms. This time, by contrast, prices are already down 9.6% over the period from August 2007 to June 2008, suggesting that the overall decline is likely to be far more dramatic. A 25% fall from the August 2007 peak would simply bring the affordability ratio back to 4.4x earnings -- close to where it was on average in 2000, when the current cycle started to gather pace. Such a drop is reasonable to allow market fundamentals such as affordability to return to their long-term averages. This implies that prices are facing another 17% decline from their June 2008 level, with a trough occurring around April or May of 2009. According to S&P's calculations, a 25% peak to trough decline in house prices would place about 14% of borrowers (around 1.7 million) into negative equity. Compared with the previous downturn in the late 1980s, this correction is therefore likely to be much shorter, and more severe. In Spain, a combination of higher interest rates, oversupply, and a deteriorating economic climate all point to a prolonged decline in house prices. Unemployment in the construction sector rose 70% in the 12 months to May 2008, while permits for residential homes dropped 60% year-on-year in the first quarter of 2008. In contrast with S&P's projections for the U.K., Spain could experience a longer correction, albeit leading to a similar decline in house prices (about 25% peak to trough). In Ireland, real residential construction spending fell by around 25% in the first three months of 2008, but this was outstripped by a decline of 55% in the number of housing starts, suggesting that the slump is still gathering pace. And house prices? They fell 10% in the 12 months to May 2008, and are down 12% from the peak reached in January 2007. Here, S&P expects a peak-to-trough decline, from January 2007 to December 2008, of slightly more than 20%. The downturn in the U.K., Irish, and Spanish housing markets is no surprise, but other European markets are also presenting signs of easing. This is particularly true of France. One of the three fastest-growing markets in Western Europe between 2000 and 2008, the French housing market is likely set for a period of stabilization or modest price declines. Factors at work here include a surge in inflation (1.6% over the first half of this year), which, combined with lower growth in disposable incomes (1.9%, compared with 2.5% in the second half of last year) will slow purchasing power growth to a mere 0.3%. Equally unhelpful, the recent weakening of the sterling against the euro, and the weak dollar, will weigh on demand from nonresidents. =================== K A Z A K H S T A N =================== AIR KAZAKHSTAN: Creditors Must File Claims by September 17 ---------------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty has declared LLP Air Kazakhstan Express insolvent on June 20, 2008. Creditors have until Sept. 17, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Almaty P.O. Box 72 Main Post Office 050000, Almaty Kazakhstan AL-FARABI LLP: Claims Deadline Slated for September 17 ------------------------------------------------------ The Specialized Inter-Regional Economic Court of Kostanai has declared LLP Al-Farabi insolvent. Creditors have until Sept. 17, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Kostanai Rabochaya Str. 55-2 Borovskoi Mendykarinsky Kostanai Kazakhstan ALLIANCE BANK: Moody's Affirms E+ Financial Strength Rating ----------------------------------------------------------- Moody's Investors Service has placed the Ba2 long-term bank deposit and Ba2/Ba3 senior and subordinated debt ratings of Alliance Bank on review for possible downgrade. The bank's E+ bank financial strength rating and Not Prime short-term ratings are not affected by the review and have been affirmed. At the same time, Moody's has placed the Ba3 long-term foreign and local currency issuer ratings of Seimar Alliance Financial Corporation, a holding company of the bank, on review for possible downgrade. Moody's rating action has been prompted by a weakening of Alliance Bank's BFSR within the E+ category, with the BFSR now mapping to a Baseline Credit Assessment of B2 compared to B1 previously. This weakening is a result of the deteriorating quality of the bank's loan portfolio, liquidity concerns arising from the outflow of customer deposits from the bank and significant refinancing issues related to its ongoing high reliance on wholesale sources of funding along with its continuing limited access to the market for refinancing. Moody's said that the rating review will focus on: (i) developments with regard to Alliance Bank's customer deposit base, which, along with the high reliance on wholesale funding, raises material concerns about the bank's funding and liquidity profile, (ii) the bank's ability to generate sufficient operating income in the longer term, and (iii) the impact on capital and profitability of possible future write-downs and impairment charges associated with the declining trend in the bank's loan portfolio. Moody's review will also reassess the systemic support assumptions incorporated in the bank's debt and deposit ratings given its declining market share, particularly in deposit- taking. Moody's previous rating action on Alliance Bank and SAFC was in November 2007, when it changed the outlook on all of the bank's and holding company's deposit and debt ratings to negative from stable to reflect the negative impact of the continued credit and liquidity crisis on the bank's credit risk. Alliance Bank, which is headquartered in Almaty, Kazakhstan, had assets of KZT1,137 billion (US$9.4 billion) at end-March 2008. Alliance Bank is the principal operating subsidiary of SAFC in terms of balance sheet size and profitability, accounting for 96% of SAFC's assets. Based in Almaty, Kazakhstan, SAFC is a holding company that includes a banking segment (represented largely by Alliance Bank), as well as non-banking lending, life and non-life insurance, financial brokerage and business support segments. ANAR JSC: Claims Filing Period Ends September 17 ------------------------------------------------ The Specialized Inter-Regional Economic Court of Almaty has declared JSC Industrial-Investment Company Anar insolvent. Creditors have until Sept. 17, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Almaty P.O. Box 72 Main Post Office 050000, Almaty Kazakhstan JIHAZ OJSC: Creditors' Claims Due on September 17 ------------------------------------------------- OJSC Jihaz has declared insolvency. Creditors have until Sept. 18, 2008, to submit written proofs of claims to: OJSC Jihaz Tashtract Str.55 Shymkent South Kazakhstan Kazakhstan KAZ AGROS: Claims Registration Ends September 17 ------------------------------------------------ The Specialized Inter-Regional Economic Court of Kostanai has declared LLP Kaz Agros Avia insolvent. Creditors have until Sept. 17, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Kostanai Rabochaya Str. 55-2 Borovskoi Mendykarinsky Kostanai Kazakhstan KOKSHE TRANS: Creditors Must File Claims by September 17 -------------------------------------------------------- The Specialized Inter-Regional Economic Court of Akmola has declared LLP Firm Kokshe Trans insolvent. Creditors have until Sept. 17, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Akmola Room 228 Auelbekov Str. 139a Kokshetau Akmola Kazakhstan Tel: 8 (7162) 25-79-32 TEMIR DOS: Claims Deadline Slated for September 17 -------------------------------------------------- The Specialized Inter-Regional Economic Court of Akmola has declared LLP Temir Dos Stroy insolvent. Creditors have until Sept. 17, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Akmola Room 228 Auelbekov Str. 139a Kokshetau Akmola Kazakhstan Tel: 8 (7162) 25-79-32 * S&P Puts Low-B Rating to Russia, Ukraine & Kazakhstan Issuers --------------------------------------------------------------- Standard & Poor's Ratings Services has assigned its recovery ratings to 44 unsecured debt issues of 21 corporate issuers in Russia, Ukraine, and Kazakhstan. "Standard & Poor's has changed its issue rating methodology for unsecured debt of issuers rated 'BB+' and below," said S&P's credit analyst Elena Anankina. "New issue ratings are now based on our assessment of recovery prospects in the event of a payment default and on the issuer credit rating, rather than on any balance sheet metrics such as the ratio of priority debt to net assets." Recovery ratings reflect S&P's estimate of recovery prospects should a payment default occur. The roll-out of recovery ratings in Russia, Ukraine, and Kazakhstan follows three earlier related initiatives: (1) the release of S&P's general recovery rating methodology for speculative-grade issuers in June 2007. (2) S&P's assessment of insolvency regimes in Russia, Ukraine, and Kazakhstan. ("Debt Recovery For Creditors And The Law Of Insolvency In Kazakhstan," published Feb. 19, 2008, "Debt Recovery For Creditors And The Law Of Insolvency In Ukraine," published April 29, 2008, and "Debt Recovery For Creditors And The Law Of Insolvency In Russia," published May 7, 2007, on RatingsDirect). (3) the recent roll-out of recovery ratings in North America and Europe ("Standard & Poor's Extends Recovery Ratings To Unsecured Speculative-Grade Corporate Issues", published March 21, 2008, on RatingsDirect). Although S&P applies its general recovery methodology universally to all countries, greater uncertainty and weaker legal regimes in Russia, Ukraine, and Kazakhstan raise a number of specific analytical issues. For example, due to numerous qualitative risks related to the companies' operations in a more uncertain environment, S&P does not notch issue ratings up from the company's credit rating. At the same time, for the purpose of S&P's unsecured debt analysis, the risk of security or structural priority being enforced cannot be ignored. Therefore, unsecured debt of companies with substantial priority-ranking debt can be notched down. These and other issues are discussed in S&P's Credit FAQ, also published on RatingsDirect, titled "Recovery Rating Methodology in Russia, Ukraine, and Kazakhstan." Under the new methodology, most issue ratings involved in this roll-out remain unchanged. Out of 44 issue ratings, only two (those on notes issued by Colgrade Ltd. [part of Delance Ltd.; BB-/Stable/--], and Interpipe Ltd. [B+/Negative/--]) were lowered based on S&P's assessment of low recovery. Because of weak legal regimes in the region, issue ratings are capped at the company's corporate credit rating level and no issue ratings were raised. "In the current market environment, recovery analysis plays an increasingly important role for lenders," added Ms. Anankina. "Looking ahead, the new methodology will bring greater focus on companies' capital structures, and will result in more differentiation between recovery rating levels." S&P's recovery ratings utilize a numerical scale, with '1+' and '1' -- the two highest ratings -- denoting different levels of likelihood that an issue will fully recover principal, plus prepetition interest, in the event of default. Ratings below that level -- between '2' and '6' -- denote varying levels of expected prospects for principal recovery, from just less than 100% to negligible recovery levels. Standard & Poor's Global Recovery Rating Scale: S&P's Recovery Rating Recovery Range --------------------- -------------- 1+ High expectation, full recovery 100% 1 Very high recovery 90%-100% 2 Substantial recovery 70%-90% 3 Meaningful recovery 50%-70% 4 Average recovery 30%-50% 5 Modest recovery 10%-30% 6 Negligible recovery 0%-10% Ratings List: A list of new recovery ratings and issue ratings is presented below. For the parent company of each issuing entity there is a separate recovery report with more details. Issuing Entity Recovery/Debt Issue Rating -------------- ------------- ------------ ALROSA Finance S.A. 4 BB Azovstal Capital B.V. 4 B- EuroChem Finance PLC 3 BB C.R.R. B.V. 3 B- Colgrade Ltd. 5 B+ Evraz Group S.A. 4 BB- Evraz Securities S.A. 4 BB- Gallery Capital 3 B- Golden Ring Finance S.A. 4 B Intergas Finance B.V. 4 BB Interpipe Ltd. 5 B Kazakhstan Temir Zholy Finance B.V. 4 BB+ Kazanorgsintez S.A. 4 B-/Watch Neg MegaFon S.A. 3 BB+ MMK Finance S.A. 3 BB Mobile Telesystems Finance S.A. 3 BB- Novorossiysk Port Capital S.A. 3 BB+ Nutritek International Corp. 3 B OAO Severstal 3 BB TMK Capital S.A. 4 BB- TNK-BP Finance S.A. 3 BB+ UBS (Luxembourg) S.A. (an entity of Vimpel-Communications [JSC]) 3 BB+ Vimpel-Communications (JSC) 3 BB+ =================== K Y R G Y Z S T A N =================== MEGA KYMBAT: Creditors Must File Claims by September 4 ------------------------------------------------------ LLC Mega Kymbat has declared insolvency. Creditors have until Sept. 4, 2008, to submit written proofs of claim to: LLC Mega Kymbat Mahatma Gandi Str. 171/13 Bishkek Kyrgyzstan ================= L I T H U A N I A ================= UAB BITE: Fitch Changes B- Rated IDR's Outlook to Negative ---------------------------------------------------------- Fitch Ratings has changed Lithuania-based UAB Bite Lietuva's Outlook for its Long-term Issuer Default rating of 'B-' to Negative from Stable. Fitch has also affirmed the instrument rating of SIA EECF Bella FinCo's EUR30 million senior secured revolving credit facility at 'B'/'RR3' and Bite Finance International BV's EUR190 million senior secured notes at 'B'/'RR3'. Bite Finance International BV's EUR110 million senior subordinated notes are affirmed at 'CCC+'/'RR5'. "Fitch's ratings were predicated on an expectation of continued growth in Lithuania that would offset the greater degree of negative EBITDA in the company's Latvian operations. The Negative Outlook reflects, in part, Bite's recent EBITDA performance in Lithuania, and the resulting more challenging outlook for continued growth in EBITDA, given the inflationary cost environment and highly competitive, mature markets in which Bite operates," says Michelle De Angelis, Senior Director in Fitch's Leveraged Finance team in London. "Given the high financial leverage and negative free cashflow, even short-term cost increases are at risk of tightening further the already limited headroom that the company has in liquidity terms. These factors together signal heightened downside risk, which is what drives the Negative Outlook." The agency does not expect to resolve the Outlook immediately; rather, it will be resolved once a trend is established after several quarters of results. The Outlook could be resolved through a stabilization of the ratings at the current levels if the company demonstrates a sustained reversal in the trend in Lithuania EBITDA combined with careful management of liquidity sources such as capital expenditure scalability and/or extended payment terms and working capital management. Should performance deteriorate, and sources of liquidity be utilized at a faster than expected rate, the Long-term IDR could be downgraded by up to one notch. The agency notes that revenues in both markets continue to grow, which is a positive factor for the business as a whole. Latvia performance is reasonable, as subscriber numbers and revenues are growing and EBITDA appears to be stabilizing and is currently on track to meet Fitch's target for 2008. In Lithuania, revenue growth has slowed in 2008 and EBITDA levels have been static at around EUR12 million for the last three quarters, exhibiting no real improvement. Cost pressures stem partly from inflationary effects on wages, which the company is trying to address through a cost optimization program, but which may not bear much fruit until 2009. Furthermore, in Q208 the company added more than 26,000 gross new postpaid subscribers, and experienced an increase in subscriber acquisition costs as a result. While the maintenance or increase of the postpaid subscriber base is positive in the medium-term, it has a cash cost in the immediate short-term. To a certain extent, the company can choose to slow its acquisition of new subscribers. However, when it is faced with a competitor aggressively targeting its subscriber base, it must act to defend its market position; therefore, higher SACs are inevitably incurred. The agency believes that such instances of heightened competition are likely to recur in such a highly penetrated market. Therefore, the possibility of additional periods of increased churn or accelerated subscriber acquisition activity cannot be ruled out, particularly where competitors have greater financial flexibility to undertake aggressive subscriber campaigns. ===================== N E T H E R L A N D S ===================== X5 RETAIL: Repurchases Global Depositary Receipts for Treasury -------------------------------------------------------------- X5 Retail Group N.V. disclosed that during the period of time from July 11, 2008, through July 29, 2008, its wholly owned subsidiary Perekrestok Holdings Limited purchased the aggregate amount of 267,482 Global Depositary Receipts representing shares in the capital of its parent company X5, at an average market price of US$29.35 per GDR in order to hedge the Company’s obligations under its Employee Stock Option Plan. Following these transactions as of July 30, 2008, X5 owns 267,482 GDRs as Treasury Stock. About X5 Retail Headquartered in Amsterdam, Netherlands, X5 Retail Group N.V. (LSE: FIVE) -- http://www.x5.ru/en/-- acts as a holding firm for the group of companies that operate retail grocery stores. The main activity of the company is the development and operation of grocery retail stores. The company operated Pyaterochka and Perekrestok retail chains in Russia, including Moscow, St. Petersburg, Nizhniy Novgorod, Krasnodar, Kazan, Samara, Ekaterinburg and Kiev, Ukraine. * * * X5 Retail Group N.V. continues to carry a B1 Corporate Family Rating from Moody's Investors Service with positive outlook. X5 Retail and its subsidiaries also carries a 'BB-' long-term corporate credit rating from Standard & Poor's Ratings Services. S&P said the outlook is stable. X5 RETAIL: To Register Two Ruble Bond Issues Worth RUR16 Billion ---------------------------------------------------------------- X5 Retail Group N.V. has disclosed that its wholly owned subsidiary X5 Finance LLC has approved a bond prospectus with respect to two tranches of corporate ruble bonds series 4 and 5 and plans to submit to the Russian Federal Financial Markets Service a set of documents for registration of the tranches. In accordance with the Prospectus, the bonds will have maturity of seven years. Notional amount of each tranche will total RUR8 billion (8 million bonds at a par value of RUR1,000). The bonds are non-convertible, interest bearing, documentary. The form of placement will be open subscription. Chief Financial Officer Evgeny Kornilov commented: "X5 continues to grow, and ruble bond market offers interesting fund raising opportunities. Therefore, we are making steps to prepare for a potential placement. Final decision on the issue, including timing, size and interest rate will depend on the development of the situation in the debt markets and X5’s financing needs." About X5 Retail Headquartered in Amsterdam, Netherlands, X5 Retail Group N.V. (LSE: FIVE) -- http://www.x5.ru/en/-- acts as a holding firm for the group of companies that operate retail grocery stores. The main activity of the company is the development and operation of grocery retail stores. The company operated Pyaterochka and Perekrestok retail chains in Russia, including Moscow, St. Petersburg, Nizhniy Novgorod, Krasnodar, Kazan, Samara, Ekaterinburg and Kiev, Ukraine. * * * X5 Retail Group N.V. continues to carry a B1 Corporate Family Rating from Moody's Investors Service with positive outlook. X5 Retail and its subsidiaries also carries a 'BB-' long-term corporate credit rating from Standard & Poor's Ratings Services. S&P said the outlook is stable. =========== R U S S I A =========== HOME CREDIT: Moody's Assigns Ba3 LT Foreign Currency Rating ----------------------------------------------------------- Moody's Investors Service has assigned a Ba3 long-term foreign currency rating to the senior unsecured Loan Participation Notes expected to be issued on a limited-recourse basis by Eurasia Capital S.A., a Luxembourg-based special purpose vehicle, for the sole purpose of funding loans to Home Credit and Finance Bank Limited Liability Company. The planned amount of the issue will be not less than US$250 million with a three-year maturity due in 2011. The outlook on the rating is stable. The Ba3 rating is based primarily on the fundamental ability of HCFB (rated Ba3/NP/D-/Aa3.ru), the ultimate borrower in respect of payments under the LPNs, to make timely payments of interest and ultimate payment of principal on the loan. As the ultimate borrower, HCFB must comply with a number of covenants such as negative pledge, limitations on mergers, disposals and certain transactions with affiliates. A financial covenant stipulates that the bank must maintain a minimum 15% BIS Capital Adequacy Ratio at the current rating level. HCFB's BIS CAR stood at 19.8% as per March 31, 2008, providing a substantial buffer in respect of CAR deterioration before the LPNs become due and payable. According to the terms of the issue, the noteholders have been awarded a put option subject to which they sell the notes back to the bank 24 months after issuance. Moody's notes that, if the noteholders were to exercise the put option, this could result in HCFB needing to repay a sizable obligation, thus placing a burden on the bank's financial resources. Out of the planned minimum issuance amount of US$250 million, the existing LPN holders of US$200 million with a coupon of 9.5% due 2010 (rated Ba3 by Moody's on 20 March 2007) were granted an offer to exchange their outstanding existing notes for new LPNs due 2011. Initial guidance on the coupon of the new LPNs has been set at approximately 11.75%. Headquartered in Moscow, Russian Federation, HCFB reported under IFRS total consolidated assets of US$3.505 billion and equity of US$666 million as of 31 March 2008. NOVATEK OAO: Hikes Production Outputs for First Half 2008 --------------------------------------------------------- OAO Novatek disclosed its preliminary production data for the second quarter and first half 2008. Gross production for the second quarter totaled 7.5 billion cubic meters of natural gas and 603,000 tons of liquids (gas condensate and crude oil). Gross natural gas production increased by 210 million cubic meters, or by 2.9%, and gross liquids production increased by 10,000 tons, or by 1.7%, as compared with the corresponding gross production in the second quarter 2007. In the first half 2008, gross production for Novatek totaled 15.19 billion cubic meters of natural gas and 1.24 million tons of liquids. Natural gas production increased by 290 million cubic meters, or by 1.9%, whereas gross liquids production increased by 29,000 tons, or by 2.4% as compared with the corresponding gross production in the first half 2007. In the second quarter and first half 2008, Novatek processed 515 and 1,066,000 tons of unstable gas condensate at the Purovsky Gas Condensate Processing Plant (Purovsky Plant). About Novatek Headquartered in Tarko-Sale, Russia, OAO Novatek -- http://www.novatek.ru/-- engages in the exploration, production and processing of natural gas and liquid hydrocarbons. The company's upstream activities are concentrated in the prolific Yamal-Nenets Region in Western Siberia. * * * As reported in the TCR-Europe on July 16, 2008, Standard & Poor's Ratings Services has raised its long-term corporate credit rating on OAO Novatek, Russia's largest independent natural gas producer, to 'BB+' from 'BB'. The outlook is stable. OAO Novatek currently carries Ba2 Corporate Family rating from Moody's Investors Service, which said the outlook is stable. NOVATEK OAO: Shareholders Okay Increase in Number of Directors -------------------------------------------------------------- The Extraordinary General Meeting of Shareholders of OAO Novatek resolved to introduce amendments to the Company's Charter and General Policy of the Board of Directors due to the increase in number of members of the Board of Directors to nine (9) members. This decision will establish conditions for increasing the number of independent directors working on the Company's Board, and is consistent with the Company's ongoing efforts to adopt corporate governance best practices. About Novatek Headquartered in Tarko-Sale, Russia, OAO Novatek -- http://www.novatek.ru/-- engages in the exploration, production and processing of natural gas and liquid hydrocarbons. The company's upstream activities are concentrated in the prolific Yamal-Nenets Region in Western Siberia. * * * As reported in the TCR-Europe on July 16, 2008, Standard & Poor's Ratings Services has raised its long-term corporate credit rating on OAO Novatek, Russia's largest independent natural gas producer, to 'BB+' from 'BB'. The outlook is stable. OAO Novatek currently carries Ba2 Corporate Family rating from Moody's Investors Service, which said the outlook is stable. STRONG LLC: Court Names V. Anchukov as Insolvency Manager --------------------------------------------------------- The Arbitration Court of Vologda appointed V. Anchukov as Insolvency Manager for LLC Strong. He can be reached at: V. Anchukov Office 44 Lunacharskogo Pr. 43 Cherepovets 162614 Vologda Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A13-1309/2008 The Court is located at: The Arbitration Court of Vologda Hall 4 Gertsena Str. 1a Vologda Russia The Debtor can be reached at: LLC Strong Apt. 11 Gorkogo Str. 86 Vologda Russia STROY-PROFIL LLC: Krasnodar Bankruptcy Hearing Set September 8 -------------------------------------------------------------- The Arbitration Court of Krasnodar will convene on Sept. 8, 2008, to hear the bankruptcy supervision procedure on LLC Stroy- Profil. The case is docketed under Case No. A32-4076/08-1/101B. The Temporary Insolvency Manager is: A. Savelyev Severnaya Str. 309 Krasnodar Russia The Court is located at: The Arbitration Court of Krasnodar Krasnaya Str. 6 Krasnodar Russia The Debtor can be reached at: LLC Stroy-Profil Promzona Voskresenskiy Anapa Russia SVETOZARNOE OJSC: Creditors Must File Claims by August 28 --------------------------------------------------------- Creditors of OJSC Svetozarnoe (OGRN 1058602135460, TIN 8602067254, KPP 860201001) have until Aug. 28, 2008, to submit proofs of claim to: V. Kuzmina Insolvency Manager 2nd Floor Roznina Str. 146/2 Khanty-Mansiysk Tyumen 628011 Yamalo-Nenetskiy Russia The Arbitration Court of Yamalo-Nenetskiy commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A81-3673/2007. The Court is located at: The Arbitration Court of Yamalo-Nenetskiy Chubynina Str. 37A Salekhard Yamalo-Nenetskiy Russia The Debtor can be reached at: OJSC Svetozarnoe Promzona Gubkinskiy 629830 Yamalo-Nenetskiy Russia TATNEFT OAO: Board Reviews Work Progress on Nizhnekamsk Factory --------------------------------------------------------------- The OAO Tatneft Board of Directors, on July 29, 2008, held a regular meeting with chairman R.N. Minnikhanov, Prime Minister of the Republic of Tatarstan. The Board of Directors reviewed the information on the progress of Construction of the Complex of Petrochemical and Refining Factories in Nizhnekamsk. The works on preparation of the design documentation as well as for financing of the construction for submitting to the State expertise are performed in accordance with the schedule. Starting from the beginning of the construction, RUR20.9 billion have been spent from the RUR32.1 billion capital expenditures budget. The Government of Tatarstan has adopted an appropriate resolution to provide for staffing of the future complex with personnel: the agreements have been concluded with a number of refining and petrochemical entities on the corporate partnership to arrange for practicing, advanced training and leasing of personnel and labor migration. Construction of the first housing township for the builders and attracted personnel has been completed with total area of 46 thousand sq. meters and the plans provide for additional construction of 160 thousand sq. meters of housing. About Tatneft Headquartered in Tatarstan, Russia, OAO Tatneft -- http://www.tatneft.ru/eng/-- explores, produces, refines and markets crude oil. The company operates a chain of retain gasoline filling stations and exports some of its petrochemical products to former Soviet Union countries and Europe. * * * OAO Tatneft continues to carry Fitch Ratings' B+ Issuer Default rating. Its Short-Term rating stands at B. Fitch said the outlook is positive. TATNEFT OAO: To Start Viscous Oil Drilling in 4Q of 2008 -------------------------------------------------------- The OAO Tatneft Board of Directors, on July 29, 2008, held a regular meeting with chairman Mr. R.N. Minnikhanov, Prime Minister of the Republic of Tatarstan. The Board discussed the progress of fulfilling the program of developing extra viscous oil fields. As of June 1, 2008 the balance of Tatneft includes the reserves of 21 extra viscous oil fields containing 118 million tons of oil in place and 41.5 million tons recoverable reserves. A program has been prepared for drilling with application of the slanted drilling rig and the plans provide for the start of drilling operations in the fourth quarter of 2008. Appraising positively the results achieved, the Board of Directors, assigned the Executive Directorate of the Company to proceed working in accordance with the program approved. The Board also reviewed the results of Tatneft budget execution for the first half of the year and approved the budget for the August 2008. About Tatneft Headquartered in Tatartan, Russia, OAO Tatneft - http://www.tatneft.ru/eng/-- explores for, produces, refines and markets crude oil. The company operates a chain of retain gasoline filling stations and exports some of its petrochemical products to former Soviet Union countries and Europe. * * * OAO Tatneft continues to carry Fitch Ratings' B+ Issuer Default rating. Its Short-Term rating stands at B. Fitch said the outlook is positive. VEKOS LLC: Creditors Must File Claims by August 21 -------------------------------------------------- Creditors of LLC Energy-Building Company Vekos (TIN 6672183846) have until Aug. 21, 2008, to submit proofs of claim to: D. Mityushev Insolvency Manager Post User Box 16 620041 Ekaterinburg Russia The Arbitration Court of Sverdlovsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A60-26401/2007-S11. The Court is located at: The Arbitration Court of Sverdlovsk Lenina Pr. 34 620151 Ekaterinburg Russia The Debtor can be reached at: LLC Energy-Building Company Vekos Sazhinskaya Str. 6 620085 Ekaterinburg Russia VERTICAL LLC: Rostov Bankruptcy Hearing Slated for October 7 ------------------------------------------------------------ The Arbitration Court of Rostov will convene at 10:30 a.m. on Oct. 7, 2008, to hear the bankruptcy supervision procedure on LLC Vertical (TIN 6147005520). The case is docketed under Case No. A53-8780/2008-S1-33. The Temporary Insolvency Manager is: S. Novoshitskiy Post User Box 139 Aksay 346720 Rostov Russia The Court is located at: The Arbitration Court of Rostov Stanislavskogo Str. 8a 344008 Rostov-na-Donu Russia The Debtor can be reached at: LLC Vertical Voroshilova Str. 143/3 Kamensk-Shakhtinskiy 347800 Rostov Russia VOSKRESENSKIY MIXED: Creditors Must File Claims by August 28 ------------------------------------------------------------ Creditors of OJSC Voskresenskiy Mixed Trade have until Aug. 28, 2008, to submit proofs of claim to: O. Kraskovskaya Insolvency Manager Post User Box 281 107078 Moscow Russia The Arbitration Court of Moscow commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A41-K2-7171/07. The Court is located at: The Arbitration Court of Moscow Novaya Basmannaya Str. 10 Moscow Russia The Debtor can be reached at: OJSC Voskresenskiy Mixed Trade Engelsa Str. 1/2 Voskresensk Voskresenskiy 140200 Moscow Russia TAEZHNOE CJSC: Creditors Must File Claims by August 28 ------------------------------------------------------ Creditors of CJSC Taezhnoe have until Aug. 28, 2008, to submit proofs of claim to: N. Zubenko Insolvency Manager 662501 Sosnovoborsk Post User Box 2 Russia The Arbitration Court of Krasnoyarsk commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A33-3496/2008. The Court is located at: The Arbitration Court of Krasnoyarsk Lenina Str. 143 660021 Krasnoyarsk Russia The Debtor can be reached at: CJSC Taezhnoe Tsentralnaya Str. 60 Veseloe Taseevskiy 663792 Krasnoyarsk Russia X5 RETAIL: Repurchases Global Depositary Receipts for Treasury -------------------------------------------------------------- X5 Retail Group N.V. disclosed that during the period of time from July 11, 2008, through July 29, 2008, its wholly owned subsidiary Perekrestok Holdings Limited purchased the aggregate amount of 267,482 Global Depositary Receipts representing shares in the capital of its parent company X5, at an average market price of US$29.35 per GDR in order to hedge the Company's obligations under its Employee Stock Option Plan. Following these transactions as of July 30, 2008, X5 owns 267,482 GDRs as Treasury Stock. About X5 Retail Headquartered in Amsterdam, Netherlands, X5 Retail Group N.V. (LSE: FIVE) -- http://www.x5.ru/en/-- acts as a holding firm for the group of companies that operate retail grocery stores. The main activity of the company is the development and operation of grocery retail stores. The company operated Pyaterochka and Perekrestok retail chains in Russia, including Moscow, St. Petersburg, Nizhniy Novgorod, Krasnodar, Kazan, Samara, Ekaterinburg and Kiev, Ukraine. * * * X5 Retail Group N.V. continues to carry a B1 Corporate Family Rating from Moody's Investors Service with positive outlook. X5 Retail and its subsidiaries also carries a 'BB-' long-term corporate credit rating from Standard & Poor's Ratings Services. S&P said the outlook is stable. X5 RETAIL: To Register Two Ruble Bond Issues Worth RUR16 Billion ---------------------------------------------------------------- X5 Retail Group N.V. has disclosed that its wholly owned subsidiary X5 Finance LLC has approved a bond prospectus with respect to two tranches of corporate ruble bonds series 4 and 5 and plans to submit to the Russian Federal Financial Markets Service a set of documents for registration of the tranches. In accordance with the Prospectus, the bonds will have maturity of seven years. Notional amount of each tranche will total RUR8 billion (8 million bonds at a par value of RUR1,000). The bonds are non-convertible, interest bearing, documentary. The form of placement will be open subscription. Chief Financial Officer Evgeny Kornilov commented: "X5 continues to grow, and ruble bond market offers interesting fund raising opportunities. Therefore, we are making steps to prepare for a potential placement. Final decision on the issue, including timing, size and interest rate will depend on the development of the situation in the debt markets and X5’s financing needs." About X5 Retail Headquartered in Amsterdam, Netherlands, X5 Retail Group N.V. (LSE: FIVE) -- http://www.x5.ru/en/-- acts as a holding firm for the group of companies that operate retail grocery stores. The main activity of the company is the development and operation of grocery retail stores. The company operated Pyaterochka and Perekrestok retail chains in Russia, including Moscow, St. Petersburg, Nizhniy Novgorod, Krasnodar, Kazan, Samara, Ekaterinburg and Kiev, Ukraine. * * * X5 Retail Group N.V. continues to carry a B1 Corporate Family Rating from Moody's Investors Service with positive outlook. X5 Retail and its subsidiaries also carries a 'BB-' long-term corporate credit rating from Standard & Poor's Ratings Services. S&P said the outlook is stable. * S&P Puts Low-B Rating to Russia, Ukraine & Kazakhstan Issuers --------------------------------------------------------------- Standard & Poor's Ratings Services has assigned its recovery ratings to 44 unsecured debt issues of 21 corporate issuers in Russia, Ukraine, and Kazakhstan. "Standard & Poor's has changed its issue rating methodology for unsecured debt of issuers rated 'BB+' and below," said S&P's credit analyst Elena Anankina. "New issue ratings are now based on our assessment of recovery prospects in the event of a payment default and on the issuer credit rating, rather than on any balance sheet metrics such as the ratio of priority debt to net assets." Recovery ratings reflect S&P's estimate of recovery prospects should a payment default occur. The roll-out of recovery ratings in Russia, Ukraine, and Kazakhstan follows three earlier related initiatives: (1) the release of S&P's general recovery rating methodology for speculative-grade issuers in June 2007. (2) S&P's assessment of insolvency regimes in Russia, Ukraine, and Kazakhstan. ("Debt Recovery For Creditors And The Law Of Insolvency In Kazakhstan," published Feb. 19, 2008, "Debt Recovery For Creditors And The Law Of Insolvency In Ukraine," published April 29, 2008, and "Debt Recovery For Creditors And The Law Of Insolvency In Russia," published May 7, 2007, on RatingsDirect). (3) the recent roll-out of recovery ratings in North America and Europe ("Standard & Poor's Extends Recovery Ratings To Unsecured Speculative-Grade Corporate Issues", published March 21, 2008, on RatingsDirect). Although S&P applies its general recovery methodology universally to all countries, greater uncertainty and weaker legal regimes in Russia, Ukraine, and Kazakhstan raise a number of specific analytical issues. For example, due to numerous qualitative risks related to the companies' operations in a more uncertain environment, S&P does not notch issue ratings up from the company's credit rating. At the same time, for the purpose of S&P's unsecured debt analysis, the risk of security or structural priority being enforced cannot be ignored. Therefore, unsecured debt of companies with substantial priority-ranking debt can be notched down. These and other issues are discussed in S&P's Credit FAQ, also published on RatingsDirect, titled "Recovery Rating Methodology in Russia, Ukraine, and Kazakhstan." Under the new methodology, most issue ratings involved in this roll-out remain unchanged. Out of 44 issue ratings, only two (those on notes issued by Colgrade Ltd. [part of Delance Ltd.; BB-/Stable/--], and Interpipe Ltd. [B+/Negative/--]) were lowered based on S&P's assessment of low recovery. Because of weak legal regimes in the region, issue ratings are capped at the company's corporate credit rating level and no issue ratings were raised. "In the current market environment, recovery analysis plays an increasingly important role for lenders," added Ms. Anankina. "Looking ahead, the new methodology will bring greater focus on companies' capital structures, and will result in more differentiation between recovery rating levels." S&P's recovery ratings utilize a numerical scale, with '1+' and '1' -- the two highest ratings -- denoting different levels of likelihood that an issue will fully recover principal, plus prepetition interest, in the event of default. Ratings below that level -- between '2' and '6' -- denote varying levels of expected prospects for principal recovery, from just less than 100% to negligible recovery levels. Standard & Poor's Global Recovery Rating Scale: S&P's Recovery Rating Recovery Range --------------------- -------------- 1+ High expectation, full recovery 100% 1 Very high recovery 90%-100% 2 Substantial recovery 70%-90% 3 Meaningful recovery 50%-70% 4 Average recovery 30%-50% 5 Modest recovery 10%-30% 6 Negligible recovery 0%-10% Ratings List: A list of new recovery ratings and issue ratings is presented below. For the parent company of each issuing entity there is a separate recovery report with more details. Issuing Entity Recovery/Debt Issue Ratings -------------- ------------- ------------- ALROSA Finance S.A. 4 BB Azovstal Capital B.V. 4 B- EuroChem Finance PLC 3 BB C.R.R. B.V. 3 B- Colgrade Ltd. 5 B+ Evraz Group S.A. 4 BB- Evraz Securities S.A. 4 BB- Gallery Capital 3 B- Golden Ring Finance S.A. 4 B Intergas Finance B.V. 4 BB Interpipe Ltd. 5 B Kazakhstan Temir Zholy Finance B.V. 4 BB+ Kazanorgsintez S.A. 4 B-/Watch Neg MegaFon S.A. 3 BB+ MMK Finance S.A. 3 BB Mobile Telesystems Finance S.A. 3 BB- Novorossiysk Port Capital S.A. 3 BB+ Nutritek International Corp. 3 B OAO Severstal 3 BB TMK Capital S.A. 4 BB- TNK-BP Finance S.A. 3 BB+ UBS (Luxembourg) S.A. (an entity of Vimpel-Communications [JSC]) 3 BB+ Vimpel-Communications (JSC) 3 BB+ ========= S P A I N ========= CAIXA PENEDES: Fitch Puts BB Rating on EUR41.6MM Series C Notes --------------------------------------------------------------- Fitch Ratings has assigned Caixa Penedes FTGenCat 1 TDA FTA notes, totalling EUR570 million, due in November 2049 expected ratings as listed below. This transaction is a cash flow securitization of a EUR570 million static pool of secured and unsecured loans. -- EUR206.4 million Series A1: 'AAA' -- EUR229.1 million Series A2(CA): 'AAA' -- EUR92.9 million Series B: 'A-' -- EUR41.6 million Series C: 'BB' The final ratings are contingent on the receipt of final documents conforming materially to the information already received. The expected ratings are based on the quality of the collateral, the underwriting and servicing of the loans, available credit enhancement, the integrity of the transaction's legal and financial structure and Titulizacion de Activos SGFT, SA's administrative capabilities. The ratings address the payment of interest on the notes according to the terms and conditions of the documentation, subject to a deferral trigger for the Class B, and Class C notes, as well as the repayment of principal by legal maturity in November 2049. The loans are granted by Caixa d'Estalvis del Penedes (Caixa Penedes, rated 'A'/ 'F1'/Outlook Stable), a Spanish savings bank, to small- and medium-sized Spanish enterprises and self- employed individuals. The pool consists of loans granted to SMEs and SEIs in the region of Catalonia, the bank's home region, and with the purpose of financing business activity. Caixa Penedes FTGenCat 1 TDA is the second single-seller SME securitisation transaction originated by Caixa Penedes. The issuer is legally represented and managed by Titulizacion de Activos SGFT, SA, a special-purpose management company with limited liability incorporated under the laws of Spain. As announced in Fitch's Rating Action Commentary titled "Fitch Clarifies Position on New Issue CDO Ratings" published on 6 November 2007, Fitch is reviewing its rating methodology and model assumptions for all new issue SME CDO ratings. Investors should be aware that Fitch is reassessing its analytic views which could impact existing ratings, including the expected ratings assigned to the securities in this announcement. FTA SANTANDER: Fitch Assigns 'CCC' Rating on Class E Notes ---------------------------------------------------------- Fitch Ratings has assigned FTA SANTANDER CONSUMER SPAIN 08-1's notes totalling EUR510 million due in July 2021 final ratings, as: -- EUR443 million Class A: 'AAA'; Outlook Stable -- EUR35 million Class B: 'A'; Outlook Stable -- EUR10 million Class C: 'BBB'; Outlook Stable -- EUR12 million Class D: 'BB'; Outlook Stable -- EUR10 million Class E: 'CCC'; Outlook Stable This transaction is a cash-flow securitisation of a EUR500m static pool of consumer and auto loans granted by Santander Consumer E.F.C.,S.A., a wholly-owned and fully integrated subsidiary of Santander Consumer Finance('AA' /'F1'/ Outlook Stable) to individuals and SMEs in Spain. The final ratings are based on the quality of the collateral, underwriting and servicing of the underlying loans, available credit enhancement, integrity of the transaction's legal and financial structure, and Santander de Titulizacion S.G.F.T, S.A's administrative capabilities. Initial CE for the Class A to C notes is provided by subordination and a reserve fund. The Class E notes are an uncollateralised class issued at closing to finance the reserve fund. The final ratings address the payment of interest on the notes according to the terms and conditions of the documentation, subject to a deferral trigger on the Class B, C and D notes, and the repayment of principal by legal final maturity. Should the deferral trigger on the Class B, C and D notes be hit, interest on these notes will be deferred in the priority of payments. In this instance, interest payments might not be received for a period of time, but will be received by legal final maturity. The underlying collateral refers to consumer and auto loans granted to individuals resident in Spain for different personal purposes. All the loans have been originated following Santander Consumer E.F.C.,S.A. guidelines in the course of its normal business. The fund will be regulated by Spanish Securitization Law 19/1992 and Royal Decree 926/1998. Its sole purpose is to convert consumer and auto loans from the seller into fixed-income securities. The fund will be legally represented and managed by Santander de Titulizacion S.G.F.T, S.A, a limited liability company incorporated under Spanish law, whose activities are limited to the management of securitization funds. * S&P Expects Downturn in U.K., Spanish & Irish Housing Markets --------------------------------------------------------------- The risks posed by high levels of household indebtedness among European economies are thrown into sharp relief by the collapse in the U.K., Spanish, and Irish housing markets, says a research report titled "European Economic Forecast: Boom Turns To Bust In Exposed Housing Markets," published by Standard & Poor's Ratings Services. "Europe's housing markets have enjoyed a spectacular boom in the past eight years, at levels closely comparable with that in the U.S.," said S&P's chief economist for Europe, Jean-Michel Six. "Yet, levels of household indebtedness vary considerably across European economies. On the one hand, there are countries with outstanding mortgage debt exceeding 50% of GDP such as Denmark, The Netherlands, the U.K., Spain, and Ireland. On the other hand, Norway, Sweden, France, and Italy have relatively low levels of debt in spite of the recent rise in their housing markets." As the report points out, the U.K. housing market is confronted with two evils at the same time: Affordability and availability. Since its peak in August 2007, the U.K. housing market has been declining more rapidly than after the previous peak in May 1989, when prices from peak to trough were down 13% in nominal terms. This time, by contrast, prices are already down 9.6% over the period from August 2007 to June 2008, suggesting that the overall decline is likely to be far more dramatic. A 25% fall from the August 2007 peak would simply bring the affordability ratio back to 4.4x earnings -- close to where it was on average in 2000, when the current cycle started to gather pace. Such a drop is reasonable to allow market fundamentals such as affordability to return to their long-term averages. This implies that prices are facing another 17% decline from their June 2008 level, with a trough occurring around April or May of 2009. According to S&P's calculations, a 25% peak to trough decline in house prices would place about 14% of borrowers (around 1.7 million) into negative equity. Compared with the previous downturn in the late 1980s, this correction is therefore likely to be much shorter, and more severe. In Spain, a combination of higher interest rates, oversupply, and a deteriorating economic climate all point to a prolonged decline in house prices. Unemployment in the construction sector rose 70% in the 12 months to May 2008, while permits for residential homes dropped 60% year-on-year in the first quarter of 2008. In contrast with S&P's projections for the U.K., Spain could experience a longer correction, albeit leading to a similar decline in house prices (about 25% peak to trough). In Ireland, real residential construction spending fell by around 25% in the first three months of 2008, but this was outstripped by a decline of 55% in the number of housing starts, suggesting that the slump is still gathering pace. And house prices? They fell 10% in the 12 months to May 2008, and are down 12% from the peak reached in January 2007. Here, S&P expects a peak-to-trough decline, from January 2007 to December 2008, of slightly more than 20%. The downturn in the U.K., Irish, and Spanish housing markets is no surprise, but other European markets are also presenting signs of easing. This is particularly true of France. One of the three fastest-growing markets in Western Europe between 2000 and 2008, the French housing market is likely set for a period of stabilization or modest price declines. Factors at work here include a surge in inflation (1.6% over the first half of this year), which, combined with lower growth in disposable incomes (1.9%, compared with 2.5% in the second half of last year) will slow purchasing power growth to a mere 0.3%. Equally unhelpful, the recent weakening of the sterling against the euro, and the weak dollar, will weigh on demand from nonresidents. ===================== S W I T Z E R L A N D ===================== ABUS SIEBDRUCK: Aug. 13 Set as Deadline to File Proofs of Claim --------------------------------------------------------------- Creditors owed money by JSC Abus Siebdruck are requested to file their proofs of claim by Aug. 13, 2008, to: Lukas Vogt Trust Company JSC Addetto Treuhand Lowenschschanz 3 Mail Box 1025 8280 Kreuzlingen Switzerland The company is currently undergoing liquidation in Winterthur. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 6, 2008. ATEWEKO LLC: Creditors Have Until Aug. 13 to File Claims -------------------------------------------------------- Creditors owed money by LLC Ateweko are requested to file their proofs of claim by Aug. 13, 2008, to: Roland Meier Liquidator JSC COLL-Control Claragraben 54 4058 Basel Switzerland The company is currently undergoing liquidation in Therwil. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 26, 2008. AVANTIUM TRADING: Creditors Must File Claims by August 13 --------------------------------------------------------- Creditors owed money by LLC Avantium Trading & Consulting are requested to file their proofs of claim by Aug. 13, 2008, to: JSC Veco Trust Liquidator Via Lavizzari 4 6900 Lugano Switzerland The company is currently undergoing liquidation in Baar. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 10, 2008. EDELWEISS JSC: Deadline to File Proofs of Claim Set Aug. 13 ----------------------------------------------------------- Creditors owed money by JSC Edelweiss are requested to file their proofs of claim by Aug. 11, 2008, to: BDO Visura Barbara Eggenberger Fabrikstrasse 50 8031 Zurich Switzerland The company is currently undergoing liquidation in Lausanne. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 19, 2008. GENERAL MOTORS: Settles Case vs. RSA Insurance ---------------------------------------------- RSA Insurance Group plc disclosed that the litigation between General Motors Corp. and current and former members of the RSA Group has been settled on terms which are confidential. The settlement will have no effect on RSA's earnings. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At March 31, 2008, GM's balance sheet showed total assets of US$145,741,000,000 and total debts of US$186,784,000,000, resulting in a stockholders' deficit of US$41,043,000,000. Deficit, at Dec. 31, 2007, and March 31, 2007, was US$37,094,000,000 and US$4,558,000,000, respectively. * * * As reported in the Troubled Company Reporter on June 27, 2008, Fitch has downgraded the Issuer Default Rating of General Motors Corporation to 'B-' from 'B', and assigned a Rating Outlook Negative. TCR also reported on June 24, 2008, that DBRS has placed the ratings of General Motors and General Motors of Canada Limited Under Review with Negative Implications. At the same time, Standard & Poor's Ratings Services has placed its corporate credit ratings on the three U.S. automakers, General Motors Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with negative implications. GM and its senior unsecured notes continues to carry S&P's B corporate credit ratings. GUNKEL JSC: Proofs of Claim Filing Deadline is Aug. 13 ------------------------------------------------------ Creditors owed money by JSC Gunkel are requested to file their proofs of claim by Aug. 13, 2008, to: JSC Nussbaumer & Partner Wiesenstrasse 10 8032 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on March 18, 2008. IAC JSC: Creditors' Proofs of Claim Due by August 14 ---------------------------------------------------- Creditors owed money by JSC IAC are requested to file their proofs of claim by Aug. 14, 2008, to: Dr. Andreas Kaser Liquidator Arnold Wehinger Kaelin & Ferrari Riesbachstr. 52 8008 Zurich Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 19, 2008. MP DILCAN LLC: Creditors Must File Proofs of Claim by Aug. 13 ------------------------------------------------------------- Creditors owed money by LLC MP Dilcan are requested to file their proofs of claim by Aug. 11, 2008, to: Koray Dogan Ozturk Gartenstrasse 77 4052 Basel Switzerland The company is currently undergoing liquidation in Basel. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 19, 2008. PAUHANA JSC: Aug. 14 Set as Deadline to File Proofs of Claim ------------------------------------------------------------ Creditors owed money by JSC Pauhana are requested to file their proofs of claim by Aug. 14, 2008, to: Markus Joos Marktplatz 4 9004 St.Gallen Switzerland The company is currently undergoing liquidation in St. Gallen. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 13, 200. TECHNEON JSC: Deadline to File Proofs of Claim Set August 13 ------------------------------------------------------------ Creditors owed money by JSC Techneon are requested to file their proofs of claim by Aug. 13, 2008, to: Roger Deutsch Liquidator JSC Bruker BioSpin Industriestrasse 26 8117 Fallanden Switzerland The company is currently undergoing liquidation in Fallanden. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on June 23, 2008. TEXTACROBAT LLC: Proofs of Claim Filing Deadline is August 11 ------------------------------------------------------------- Creditors owed money by LLC Textacrobat are requested to file their proofs of claim by Aug. 11, 2008, to: Dr. Regula A. Merz Moranenstrasse 4 8038 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Nov. 23, 2007. ============= U K R A I N E ============= ANTHRACITE COAL: Creditors Must File Proofs of Claim by Aug. 14 --------------------------------------------------------------- Creditors of State Enterprise Anthracite Coal Resources (code EDRPOU 23477354) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Lugansk Geroiv VVV Square 3a 91000 Lugansk Ukraine The Economic Court of Lugansk commenced bankruptcy proceedings against the company after finding it insolvent on May 5, 2008. The case is docketed as 12/39b. The Debtor can be reached at: State Enterprise Anthracite Coal Resources Petrovsky Str. 15/16 Anthracite 94611 Lugansk Ukraine BARS LLC: Creditors Must File Proofs of Claim by August 14 ---------------------------------------------------------- Creditors of LLC Bars (code EDRPOU 31688374) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Donetsk Artema Str. 157 83048 Donetsk Ukraine The Economic Court of Donetsk commenced bankruptcy proceedings against the company after finding it insolvent on July 24, 2008. The case is docketed as 45/115b. The Debtor can be reached at: LLC Bars Sovetskaya Square 2 Makeyevka 86157 Donetsk Ukraine EAST-EXPO LLC: Creditors Must File Proofs of Claim by August 14 --------------------------------------------------------------- Creditors of LLC East-Expo (code EDRPOU 30501327) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Kharkov Derzhprom 8th Entrance Svoboda Square 5 61022 Kharkov Ukraine The Economic Court of Kharkov commenced bankruptcy proceedings against the company after finding it insolvent on July 3, 2008. The case is docketed as B-24/118-08. The Debtor can be reached at: LLC East-Expo Gen. Shumilov Str. 127 Babai Kharkov Ukraine KORVO-TRADE: Creditors Must File Proofs of Claim by August 14 ------------------------------------------------------------- Creditors of LLC Ukrainian-Italian Firm Korvo-Trade (code EDRPOU 22681029) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Kharkov Derzhprom 8th Entrance Svoboda Square 5 61022 Kharkov Ukraine The Economic Court of Kharkov commenced bankruptcy proceedings against the company after finding it insolvent on May 27, 2008. The case is docketed as B-19/70-08. The Debtor can be reached at: LLC Ukrainian-Italian Firm Korvo-Trade Pushkinskaya Str. 56 Kharkov Ukraine SLOBODA LLC: Proofs of Claim Deadline Set August 10 --------------------------------------------------- Creditors of LLC Sloboda (code EDRPOU 32635040) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Odessa Shevchenko Avenue 4 65032 Odessa Ukraine The Economic Court of Odessa commenced bankruptcy supervision procedure on the company on July 1, 2008. The case is docketed as 21/70-08-2727. The Debtor can be reached at: LLC Sloboda Verteletsky Str. 1B Ovidiopol Odessa Ukraine SOMERS LLC: Creditors Must File Proofs of Claim by August 14 ------------------------------------------------------------ Creditors of LLC Somers (code EDRPOU 32494150) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Economic Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on June 4, 2008. The case is docketed as 23/493-b. The Debtor can be reached at: LLC Somers Dmitrevskaya Str. 18/24 01054 Kiev Ukraine STROY SI: Proofs of Claim Deadline Set August 14 ------------------------------------------------ Creditors of LLC Stroy SI (code EDRPOU 32986635) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Odessa Shevchenko Avenue 4 65032 Odessa Ukraine The Economic Court of Odessa commenced bankruptcy supervision procedure on the company on June 20, 2008. The case is docketed as 2/123-08-2571. The Debtor can be reached at: LLC Stroy SI Verteletsky Str. 1B Ovidiopol Odessa Ukraine TOWN-BUILDING LLC: Creditors Must File Claims by August 14 ---------------------------------------------------------- Creditors of LLC Town-Building (code EDRPOU 35768704) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Odessa Shevchenko Avenue 4 65032 Odessa Ukraine The Economic Court of Odessa commenced bankruptcy proceedings against the company after finding it insolvent on June 25, 2008. The case is docketed as 2/108-08-2342. The Debtor can be reached at: LLC Town-Building Arnautskaya Str. 2A Bolshaya Odessa Ukraine VLAD LLC: Creditors Must File Proofs of Claim by August 14 ---------------------------------------------------------- Creditors of LLC Vlad (code EDRPOU 23464950) have until Aug. 14, 2008, to submit proofs of claim to: The Economic Court of Kharkov Derzhprom 8th Entrance Svoboda Square 5 61022 Kharkov Ukraine The Economic Court of Kharkov commenced bankruptcy proceedings against the company after finding it insolvent on June 2, 2008. The case is docketed as B-39/17-08. The Debtor can be reached at: LLC Vlad Ac. Pavlov Str. 309 Kharkov Ukraine * S&P Puts Low-B Rating to Russia, Ukraine & Kazakhstan Issuers --------------------------------------------------------------- Standard & Poor's Ratings Services has assigned its recovery ratings to 44 unsecured debt issues of 21 corporate issuers in Russia, Ukraine, and Kazakhstan. "Standard & Poor's has changed its issue rating methodology for unsecured debt of issuers rated 'BB+' and below," said S&P's credit analyst Elena Anankina. "New issue ratings are now based on our assessment of recovery prospects in the event of a payment default and on the issuer credit rating, rather than on any balance sheet metrics such as the ratio of priority debt to net assets." Recovery ratings reflect S&P's estimate of recovery prospects should a payment default occur. The roll-out of recovery ratings in Russia, Ukraine, and Kazakhstan follows three earlier related initiatives: (1) the release of S&P's general recovery rating methodology for speculative-grade issuers in June 2007. (2) S&P's assessment of insolvency regimes in Russia, Ukraine, and Kazakhstan. ("Debt Recovery For Creditors And The Law Of Insolvency In Kazakhstan," published Feb. 19, 2008, "Debt Recovery For Creditors And The Law Of Insolvency In Ukraine," published April 29, 2008, and "Debt Recovery For Creditors And The Law Of Insolvency In Russia," published May 7, 2007, on RatingsDirect). (3) the recent roll-out of recovery ratings in North America and Europe ("Standard & Poor's Extends Recovery Ratings To Unsecured Speculative-Grade Corporate Issues", published March 21, 2008, on RatingsDirect). Although S&P applies its general recovery methodology universally to all countries, greater uncertainty and weaker legal regimes in Russia, Ukraine, and Kazakhstan raise a number of specific analytical issues. For example, due to numerous qualitative risks related to the companies' operations in a more uncertain environment, S&P does not notch issue ratings up from the company's credit rating. At the same time, for the purpose of S&P's unsecured debt analysis, the risk of security or structural priority being enforced cannot be ignored. Therefore, unsecured debt of companies with substantial priority-ranking debt can be notched down. These and other issues are discussed in S&P's Credit FAQ, also published on RatingsDirect, titled "Recovery Rating Methodology in Russia, Ukraine, and Kazakhstan." Under the new methodology, most issue ratings involved in this roll-out remain unchanged. Out of 44 issue ratings, only two (those on notes issued by Colgrade Ltd. [part of Delance Ltd.; BB-/Stable/--], and Interpipe Ltd. [B+/Negative/--]) were lowered based on S&P's assessment of low recovery. Because of weak legal regimes in the region, issue ratings are capped at the company's corporate credit rating level and no issue ratings were raised. "In the current market environment, recovery analysis plays an increasingly important role for lenders," added Ms. Anankina. "Looking ahead, the new methodology will bring greater focus on companies' capital structures, and will result in more differentiation between recovery rating levels." S&P's recovery ratings utilize a numerical scale, with '1+' and '1' -- the two highest ratings -- denoting different levels of likelihood that an issue will fully recover principal, plus prepetition interest, in the event of default. Ratings below that level -- between '2' and '6' -- denote varying levels of expected prospects for principal recovery, from just less than 100% to negligible recovery levels. Standard & Poor's Global Recovery Rating Scale: S&P's Recovery Rating Recovery Range --------------------- -------------- 1+ High expectation, full recovery 100% 1 Very high recovery 90%-100% 2 Substantial recovery 70%-90% 3 Meaningful recovery 50%-70% 4 Average recovery 30%-50% 5 Modest recovery 10%-30% 6 Negligible recovery 0%-10% Ratings List: A list of new recovery ratings and issue ratings is presented below. For the parent company of each issuing entity there is a separate recovery report with more details. Issuing Entity Recovery/Debt Issue Ratings -------------- ------------- ------------- ALROSA Finance S.A. 4 BB Azovstal Capital B.V. 4 B- EuroChem Finance PLC 3 BB C.R.R. B.V. 3 B- Colgrade Ltd. 5 B+ Evraz Group S.A. 4 BB- Evraz Securities S.A. 4 BB- Gallery Capital 3 B- Golden Ring Finance S.A. 4 B Intergas Finance B.V. 4 BB Interpipe Ltd. 5 B Kazakhstan Temir Zholy Finance B.V. 4 BB+ Kazanorgsintez S.A. 4 B-/Watch Neg MegaFon S.A. 3 BB+ MMK Finance S.A. 3 BB Mobile Telesystems Finance S.A. 3 BB- Novorossiysk Port Capital S.A. 3 BB+ Nutritek International Corp. 3 B OAO Severstal 3 BB TMK Capital S.A. 4 BB- TNK-BP Finance S.A. 3 BB+ UBS (Luxembourg) S.A. (an entity of Vimpel-Communications [JSC]) 3 BB+ Vimpel-Communications (JSC) 3 BB+ =========================== U N I T E D K I N G D O M =========================== BEANSCENE LIMITED: Calls in Administrators After Funding Failure ---------------------------------------------------------------- Beanscene Ltd. has called in Blair Nimmo and Tony Friar of KPMG LLP as joint administrators after the company's new owners failed to proceed with an additional investment funding, BBC News reports. Following the transfer of Beanscene's business to its new owners in April 2008, a significant injection of funds was made. However, Beanscene said that with an unexpected change in circumstances, the new owners were unable to make further planned cash injections. The company added that its GBP4 million revenue from its 14 shops was not enough to sustain its overhead base. "Add to this the costs of five leases which had been entered into for premises that were not fitted out or trading and the result were bottom line losses, which have continued into the current year," Beanscene said. Messrs. Nimmo and Friar are currently looking for buyers for the coffee shop chain's businesses and assets. Headquartered in Glasgow, Scotland, Beanscene Ltd. -- http://www.beanscene.com/-- is a small chain of local coffee houses, established to provide a laid back alternative to the tidal wave of brash city center coffee chains. BEDS DIRECT: Management Buys Company's Remaining Assets ------------------------------------------------------- Beds Direct Ltd.'s management has acquired the company's remaining assets under a "pre-pack" arrangement funded by HSBC, The Telegraph reports. According to the report, Beds Direct, which also trades as Helibeds UK, fell into administration after being hit by the consumer downturn and its over-ambitious expansion. Ross Connock, director at administrator PricewaterhouseCoopers, told the Telegraph that the company had 20 outlets and expanded to around 40 and launched a Web site. Ms. Connock also told the Telegraph that they received bids for Beds Direct's business and assets, but chose IM GH Ltd. -- the management team's newly formed firm -- since it made the best offer. Creditors, however, may not recover their investments due to the pre-pack arrangement, Mr. Connock told the Telegraph. HSBC meanwhile could take any of the proceeds from the administration. The report says IM GH will continue to trade from 20 sites and on the Internet. About Beds Direct Headquartered in Mid Glamorgan, Wales, Beds Direct Limited -- http://www.helibeds.co.uk/-- is an established bed retailer with over 19 years experience in selling beds. BRITISH ENERGY: EDF Fails to Please Board with Offer; Pulls Out --------------------------------------------------------------- Electricite de France S.A. has pulled out from its planned takeover of British Energy Ltd., hours before it was to announce a done deal, The Financial Times reports. According to FT, EDF submitted a GBP12 billion takeover offer to BE's board yesterday, July 31, 2008. The board, following some deliberations, rejected EDF's proposal. Dow Jones cites a source privy to the matter as saying that two major BE shareholders -- both U.K. pension funds -- requested that EDF raise its offer, but the French group refused. Another source told FT that EDF presented two options: * 765p per BE share in cash; or * 700p per share in cash plus "contingent-value rights component" that would pay out if BE performs in line with its targets. Following the rejection of the offer, EDF said: "After in-depth discussions, EDF considers that the conditions for a major development in Great Britain are not met to date." About British Energy Headquartered in Livingston, Scotland, British Energy Limited -- http://www.british-energy.com/-- is the U.K.'s largest producer of electricity. With a workforce of about 6,000, it produces around one-sixth of the nation's electricity. * * * British Energy Ltd. continues to carry a Ba2 long-term corporate family rating from Moody's with a stable outlook. Standard & Poor's affirmed its BB long-term corporate credit ratings on U.K.-based nuclear generator British Energy Group PLC and its subsidiary British Energy Holdings PLC, with negative outlook. The company still carries a BB+ long-term issuer default rating from Fitch with a stable outlook. CHRYSLER LLC: Arm Halts Lease Operations; To Cut 1,000 Employees -------------------------------------------------------------- Chrysler LLC's financial arm, Chrysler Financial, will cease offering vehicle lease alternatives in the U.S. to focus more on financing vehicle purchases, various reports say. According to the reports, the unit will stop offering leases starting August 1. Chrysler's decision stems from trouble taunting its unit's lease business, particularly in the borrowing and selling end, WSJ adds. WSJ relates that Chrysler Financial has been trying to persuade more than 20 banks to renew a $30 billion credit facility but was unable to do so because of the jittery state of potential lenders and Chrysler's own uncertain financial situation. WSJ relates that for years, auto makers have offered leases as a way of enticing consumers into getting new vehicles. Monthly payments for leasing customers is lower than taking out loans to buy cars outright, WSJ adds. Leases, according to WSJ, poses a big risk for finance units such as Chrysler Financial. These operations need to borrow billions of dollars, because they buy and own the vehicles to be leased, WSJ indicates. Job Cut WSJ, citing a memo sent to employees, states that Chrysler LLC is planning to reduce 1,000 salaried jobs by September 30 in an effort to cut costs amid a deep slump in U.S. auto sales. HR head Nancy Rae, WSJ says, an incremental manpower reduction will be required to deal with the current market conditions. The slash in jobs is an addition to the disclosed reductions and will be accomplished through a combination of attrition, buyouts, early retirements and involuntary layoffs, WSJ points out. According to the memo, WSJ adds, Chrysler's liquidity position in the first half remained unchanged compared with December as a result of previous production cuts, asset sales and cost-cutting efforts. About Chrysler LLC Based in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter June 24, 2008, Moody's Investors Service affirmed the B3 Corporate Family Rating and Probability of Default Rating of Chrysler LLC, but changed the outlook to negative from stable. The change in outlook reflects the increasingly challenging environment faced by Chrysler as the outlook for U.S. vehicle demand falls, and as high fuel costs drive US. consumers away from light trucks and SUVs, and toward more fuel efficient vehicles. Standard & Poor's Ratings Services is placing its corporate credit ratings on the three U.S. automakers, General Motors Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with negative implications, citing the need to evaluate the financial damage being inflicted by deteriorating U.S. industry conditions -- largely as a result of high gasoline prices. Included in the CreditWatch placement are the finance units Ford Motor Credit Co. and DaimlerChrysler Financial Services Americas LLC, as well as GM's 49%-owned finance affiliate GMAC LLC. As reported in the Troubled Company Reporter on May 9, 2008, Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'B' from 'B+', with a Negative Rating Outlook. Fitch has also downgraded the senior secured bank facilities, including senior secured first-lien bank loan to 'BB/RR1' from 'BB+/RR1'; and senior secured second-lien bank loan to 'CCC+/RR6' from 'BB+/RR1'. The recovery rating on the second lien was also downgraded from 'BB+/RR1' to 'CCC+/RR6' based on lower asset value assumptions and associated recoveries in the event of a stress scenario. CHRYSLER LLC: Fitch Junks Rating on Retail Financing Restriction ---------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital markets. Chrysler Financial is currently in the midst of renewing its financing facilities. The higher costs associated with any renewal will make it more challenging to provide competitive and economic financing of retail sales. Given the challenges in the bank, auto and capital markets, it is unlikely that third-party financing will step in to fully replace lost volumes. Higher sales incentives are also unlikely to close this gap, resulting in lower production volumes at Chrysler. Fitch expects that Chrysler's liquidity will remain adequate for the next 12 months, and the company has moved aggressively to reduce its fixed cost structure. However, the rapid decline in industry sales volumes, coupled with the continuing steep rise in commodity prices, will continue to result in negative cash flow at least through 2009. In the event that 2009 industry volumes remain flat or deteriorate versus 2008, Fitch expects that Chrysler could reach minimum required levels to finance ongoing operations in the second half of 2009. This could be accelerated in the event that suppliers or retail customers become concerned with Chrysler's financial condition and restrict trade credit or reduce retail purchases. Liquidity was recently boosted by a US$2 billion term loan, but further financing is unlikely and any asset divestitures are limited. Chrysler's sales volumes have plummeted in 2008, reflecting weak economic conditions, a product lineup that remains misaligned with market demand, and strategic efforts to reduce inventories and daily rental volumes. New products, including a refreshed minivan lineup and the Dodge Journey, have been insufficient to offset industry conditions. Chrysler should benefit from the re-introduction of the Dodge Ram in late 2008, but recessionary conditions in the housing market and high gas prices will limit the benefits of this re-launch until the housing market recovers. Chrysler continues to experience strong growth in exports. Chrysler's pipeline over the near term is relatively modest, and the company's product lineup will lag the industry's shift to smaller, fuel efficient vehicles. Chrysler's limited financial resources represent a distinct competitive disadvantage over the near term as the industry experiences a period of rapid product migration and technological change. Alliances are expected to remain a key strategic effort as Chrysler seeks to leverage its tangible and intangible assets, and reduce capital investment. Fitch has downgraded Chrysler as: -- IDR to 'CCC' from 'B-'; -- Senior secured first-lien bank loan to 'B/RR1' from 'BB-/RR1'; -- Senior secured second-lien bank loan to 'CC/RR6' from 'CCC/RR6'. CLEAR CHANNEL: Moody's Assigns B2 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and B2 Probability of Default Rating to Clear Channel Communications, Inc. In addition, Moody's assigned a B1 rating to Clear Channel's new US$15.77 billion senior secured credit facilities and a Caa1 rating to its proposed US$2.31 billion guaranteed senior unsecured notes. Moody's also downgraded the company's legacy senior unsecured notes to Caa1 from Baa3 and affirmed the SGL2 speculative grade liquidity rating. The rating outlook is stable. This concludes Moody's review of Clear Channel's ratings, which was initiated on October 26, 2006 in connection with the company's announcement that its Board of Directors was evaluating various strategic alternatives to enhance shareholder value. Moody's has taken the following rating actions: Issuer: Clear Channel Communications, Inc. * Corporate Family Rating -- Assigned B2 * Probability of Default Rating -- Assigned B2 * US$2.0 Billion 6-year Senior Secured Revolving Facility -- Assigned B1 (LGD 3, 33%) * US$1.115 Billion 6-year Senior Secured Tranche A Term Loan Facility -- Assigned B1 (LGD 3, 33%) * US$10.7 Billion 7.5-year Senior Secured Tranche B Term Loan Facility -- Assigned B1 (LGD 3, 33%) * US$705.638 Million 7.5-year Senior Secured Tranche C Term Loan Facility -- Assigned B1 (LGD 3, 33%) * US$750 Million 7.5-year Senior Secured Delayed Draw Term Loan 1 Facility -- Assigned B1 (LGD 3, 33%) * US$500 Million 7.5-year Senior Secured Delayed Draw Term Loan 2 Facility -- Assigned B1 (LGD 3, 33%) * US$980 Million Senior Cash Pay Notes due 2016 -- Assigned Caa1 (LGD 5, 79%) * US$1.330 Billion Senior Toggle Notes due 2016 -- Assigned Caa1 (LGD 5, 79%) * Existing Senior Unsecured Bonds -- Downgraded to Caa1 (LGD 6, 91%) from Baa3 * Multiple Seniority Shelf -- Rating Withdrawn * Outlook -- To Stable from Ratings Under Review * Speculative Grade Liquidity Rating -- Affirmed SGL2 Issuer: Chancellor Media Corporation of Los Angeles * Senior Unsecured -- Rating Withdrawn Issuer: CCCI Capital Trust I * Preferred Stock Shelf -- Rating Withdrawn Issuer: CCCI Capital Trust II * Preferred Stock Shelf -- Rating Withdrawn Issuer: CCCI Capital Trust III * Preferred Stock Shelf -- Rating Withdrawn Clear Channel's B2 Corporate Family Rating reflects the company's high debt-to-EBITDA leverage (8.2x pro forma for the trailing twelve months ended March 31, 2008 and incorporating Moody's standard adjustments) and the substantial interest burden resulting from the US$24.5 billion leveraged buyout of the company by private equity sponsors. Moreover, the rating incorporates the company's very modest free cash flow-to-debt metric pro-forma for the completion of the buyout. Somewhat mitigating these high financial risks, however, are the dominant scale of the company, its strong and leading market position in the radio and outdoor advertising businesses within the U.S., good operating margins and substantial geographic diversity in its domestic and international businesses. Additionally, Moody's believes that the financing structure -- including the option to PIK interest on the US$1.33 billion senior unsecured toggle notes, a US$2 billion revolving credit facility which is expected to remain largely undrawn, US$1.25 billion of committed delayed draw term loan facilities available to support the 2009 bond maturity and the 7.65% notes due 2010, and minimal required term loan amortization until 2010 -- offers some noteworthy flexibility to manage cash flows should earnings not meet expectations. The B2 rating also incorporates the weak prospects for the radio industry, which Moody's believes is mature, faces strategic threats from alternative media and is under secular and cyclical pressures. The outdoor advertising sector has had favorable growth trends and is relatively more resilient but not completely immune to the impact of the current economic environment. Notably, neither the ratings nor the rating outlook incorporate the potential for a precipitous fall-off in advertising and the company's revenue base stemming from a severe economic downturn. Moody's expects Clear Channel will generate positive (albeit modest) free cash flow (assuming cash payment of interest on the PIK toggle notes) over the intermediate term and utilize it to moderately reduce debt. Moody's also expects the company to use proceeds from asset sales to pay down debt. The Caa1 rating of Clear Channel's legacy senior notes that remain outstanding reflects their subordination to the material amount of the company's new senior secured credit facilities and the new senior notes as the collateral package will be structured so as to not trigger the equal and ratable clause under the indentures governing the existing senior notes. About Clear Channel Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. As of Dec. 31, 2007, it owned 717 core radio stations, 288 non-core radio stations which are being marketed for sale and a leading national radio network operating in the United States. CONGREGRATIONAL & GENERAL: S&P Cuts Counterparty Credit to BB+ -------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its counterparty credit and insurer financial strength ratings on Congregational & General Insurance PLC to 'BB+' from 'BBB-'. At the same time, S&P placed its 'BB+' rating on the company on CreditWatch with negative implications. "The downgrade primarily reflects poorer-than-expected underwriting and investment performance, further deterioration of the capital base, and management's high financial risk tolerance. The CreditWatch placement reflects uncertainty regarding implementation of the stated company strategy," said S&P's credit analyst Tatiana Grineva. The ratings are constrained by Congregational & General's marginal operating performance, marginal capital adequacy, and marginal competitive position. The ratings remain underpinned by robust competitive position within its core, but very small and diminishing, niche commercial property market. Despite improvement, its underwriting performance to date, in the current financial year, remains unprofitable and investment returns were hampered by weak and volatile equity markets. This has led us to have serious doubts about the company's ability to organically rebuild its capital. The marginal capital adequacy of the company and its limited financial flexibility present a real threat for the company to survive further material operational losses. The management's high financial risk tolerance, as evidenced by a high level of investment leverage, is viewed as having an overall negative impact on the rating. S&P views the competitive position of the company as marginal. This reflects S&P's view of the personal property account, which is Congregational & General's largest book of business. Nevertheless, it has a robust competitive position within its core, but very small and diminishing, niche market of insuring nonconformist Protestant churches in England and Wales. The Company has, in the context of its agreed strategic direction, identified major strategic alliances, which could support its desire to grow and prosper, by way of a coinsurance arrangement. The management is in final discussion with potential strategic allies. "Standard & Poor's aims to resolve the CreditWatch placement before the end of October 2008, after meeting with management and receiving more in-depth information," added Ms. Grineva. S&P will discuss with management, in detail, the future strategy as well as plans for operating and capital improvements. S&P could affirm the ratings if Congregational & General can demonstrate a sustainable strategy to deliver good operating performance over the medium term and ability to successfully rebuild its capital. In contrast, S&P could lower the ratings by up to two notches if the company does not deliver a sustainable strategy. DAWNAY DAY: Peter Klimt Quits Posts at Three Property Funds ----------------------------------------------------------- Peter Klimt quit his posts at Dawnay, Day Treveria Plc, Dawnay, Day Carpathian Plc, and Dawnay Shore Hotels plc. Dawnay, Day Treveria The Board of Dawnay, Day Treveria, on July 25, 2008, accepted the resignation of Mr. Klimt as a non-executive Director of the Company with immediate effect. Dawnay, Day Carpathian Mr. Klimt resigned as director Dawnay, Day Carpathian Plc, the retail property investment company established to invest in Central and Eastern Europe, on July 23, 2008. Dawnay, Day Hotels At a meeting of the directors of Dawnay Shore Hotels plc held on Tuesday, July 22, 2008, Mr. Klimt and Guy Naggar tendered their resignations as directors of the Company with immediate effect. These resignations were accepted by the board. The Company, on July 24, 2008, terminated the engagement of Dawnay, Day Hotels Limited under the Portfolio Management Agreement and has engaged Shore Capital Limited to provide the services previously supplied by DDHL to the Company on the same terms. This appointment will take effect immediately. Howard Shore has been appointed chairman of the Company and Jonathan Paisner has been appointed to join the board as a director, both appointments effective as of Tuesday, July 22, 2008. The board of directors will propose a change of name of the Company and a notice is being sent to shareholders to convene a general meeting of the Company to approve the name change to Puma Hotels plc. Receivership As reported in the TCR-Europe on July 21, 2008, creditors of Dawnay Day, Group have appointed Shay Bannon, Toby Underwood and Mark Shaw of BDO Stoy Hayward as joint administrative receivers for Starlight Investment and Insureprofit, two of its property companies. Creditors opted to call in receivers after they resolved they could no longer support the company-led restructuring under Ernst & Young. A property source said "the market for property assets has been affected by the global credit crunch and Dawnay has been hit hard." Headquartered in London, Dawnay, Day is a diversified international financial and property group. Since 2004 Dawnay, Day has four property funds, Puma (U.K. commercial property), Dawnay Shore Hotels (U.K. hotels), Dawnay, Day Carpathian (Eastern Europe) and Dawnay, Day Treveria (German) . According to the Times, the group has interests in more than 250 companies, through hundreds of subsidiaries and holding companies, and owns and manages more than US$10 billion (GBP5 billion) worth of assets. DAWNAY DAY: Carpathian Enters Into New Management Agreement ----------------------------------------------------------- Dawnay, Day Carpathian Plc, the retail property investment company established to invest in Central and Eastern Europe, on July 28, 2008, confirmed, it has finalized the contractual documentation giving effect to the formation of a new property manager and has entered into a new management agreement. The finalization of the contractual documentation ensures the continuity of the management team and severs the final links with the Dawnay, Day Group. The Company is intending to change its name to Carpathian plc, and a circular will be sent to shareholders shortly to approve this. The newly-incorporated management company, Carpathian Asset Management Limited is now formed. Carpathian will now own 50 per cent of the share capital of CAM, higher than the original 9.9 per cent mentioned in the announcement of July 14, 2008. This enlarged shareholding enables Carpathian to benefit from a corresponding share of future profits or surpluses. The remaining 50 per cent will be owned by a newly-incorporated company, which is owned by the two of the principals of Dawnay, Day PanTerra, Carpathian's former property investment adviser, namely Paul Rogers and Massimo Marcovecchio. In addition, the Company has been successful in securing the acquisition of the management assets formerly owned by DDPT from the administrators of certain members of DDG for GBP250,000. CAM is being funded as to GBP100,000 by the Principals and as to the remainder by the Company. These acquired assets include computers, servers, files and two 75 per cent holdings in Atrium companies. These are development companies funded and set up in Hungary and Romania by DDPT with whom Carpathian had a development agreement. Additionally, CAM will acquire 100 per cent of DDPT's Polish subsidiary Vidius Investments Sp. z o.o., which operates DDPT's Warsaw office and Central and Eastern European asset management operations. In addition the employees of DDG engaged in managing the Company's portfolio are transferring to CAM. Carpathian has also signed a new portfolio management agreement and a new development management agreement with CAM. Under the new contracts Carpathian will pay for all the ongoing running costs of CAM, the Atrium companies and Vidius so far as they relate to the management of the Carpathian portfolio. These new contracts replace the previous portfolio management and development management agreements which were terminated on 14 July 2008. Under the previous portfolio management agreement Carpathian paid 0.4% of the gross asset value of the portfolio per annum to the manager. Under the previous development management agreement Carpathian agreed to pay the manager at a rate of up to 5% of the construction costs of each development project. Most of the development projects were sub-contracted to Atrium. As originally disclosed in the admission document, dated July 20, 2005, the performance fee structure sits outside of the management agreement and was not terminated on 14 July 2008. The Principals, who own 40% of the Promote, have agreed to allocate at least 10% of their interest for the benefit of CAM employees engaged on Carpathian activities. Negotiations with a view to acquiring the balance of the Promote not held by the Principals are expected to commence although finalization of these negotiations could take many weeks. Commenting on the acquisition, Rupert Cottrell, Chairman of Dawnay, Day Carpathian PLC said: "We are delighted with the deal set out in the announcement which we feel is structured to give, in our view, the best value to our shareholders. This new portfolio management agreement is very positive indeed and we look forward to continue working with our existing team headed by Paul Rogers and Massimo Marcovecchio. "The employees of Carpathian Asset Management have a track record of being one of the leading property teams focused in the CEE region with their ability to deliver in a marketplace that presents significant opportunities and I am confident that the team will continue to add value for the shareholders of Carpathian. It is business as usual for the Company." Receivership As reported in the TCR-Europe on July 21, 2008, creditors of Dawnay Day, Group have appointed Shay Bannon, Toby Underwood and Mark Shaw of BDO Stoy Hayward as joint administrative receivers for Starlight Investment and Insureprofit, two of its property companies. Creditors opted to call in receivers after they resolved they could no longer support the company-led restructuring under Ernst & Young. A property source said "the market for property assets has been affected by the global credit crunch and Dawnay has been hit hard." Headquartered in London, Dawnay, Day is a diversified international financial and property group. Since 2004 Dawnay, Day has four property funds, Puma (U.K. commercial property), Dawnay Shore Hotels (U.K. hotels), Dawnay, Day Carpathian (Eastern Europe) and Dawnay, Day Treveria (German) . According to the Times, the group has interests in more than 250 companies, through hundreds of subsidiaries and holding companies, and owns and manages more than US$10 billion (GBP5 billion) worth of assets. ESSAY PRINT: Collective UK Buys Firm Out of Administration ---------------------------------------------------------- Essay Print has exited administration after being bought by Collective UK for GBP4 million, Adam Hooker writes for printweek.com. According to the report, the company went into administration on July 9, 2008. Geoffrey Martin and Co were appointed as the insolvency practitioner. The report adds that Collective UK has taken Essay Print's Inca Columbia flatbed large-format digital press business. "What the new business does is lead us into large-format digital printing – we would hope to hold on to the majority of Essay's customer base. We currently have around a GBP3.3 million turnover and we will be geared to reaching GBP4 million in the next 18 months," Tony Sidebottom, managing director was quoted by printweek.com as saying. All 20 staff of the company were absorbed by Collective UK, the report said. Based in Leeds, London, Essay Print is a printing press that runs a Roland B2 five-colour with coater, a B2 Komori five- colour, an SRA2 Lithrone four-colour, a Konica Minolta 6500 and the Inca. It also has a host of finishing equipment. FREESCALE SEMICONDUCTOR: Posts US$184 Mln Net Loss in Q2 2008 ------------------------------------------------------------- Freescale Semiconductor Inc. reported US$184.0 million in net loss for the second quarter ended June 27, 2008, compared with US$288.0 million in net loss in the corresponding period in 2007. Net sales for the second quarter of 2008 were US$1.5 billion, compared to US$1.4 billion in the second quarter of 2007. Higher net sales were driven by a 41% increase in Cellular Product net sales and 19% in Networking and Multimedia net sales, partially offset by lower sales related to decreasing production in the U.S. automotive industry. The company reported an operating loss of US$137.0 million for the second quarter of 2008, compared to an operating loss of US$268 million during the second quarter of 2007. Excluding reorganization of business charges and non-cash purchase accounting expenses of US$371.0 million in the second quarter of 2008, and US$427.0 million in the second quarter of 2007 related to the company's acquisition by a private equity consortium in December 2006, operating earnings were US$234.0 million during the second quarter of 2008, compared to operating earnings of US$159.0 million during the second quarter of 2007. Six Months Results Net sales were US$2.9 billion in the first half of 2008 compared to US$2.7 billion in the first half of 2007. Higher net sales were driven primarily by a 29% increase in Cellular Product net sales, and 8% in Networking and Multimedia net sales partially offset by lower sales related to decreasing production in the U.S. automotive industry. The company had a net loss of US$429.0 million in the first half of 2008 compared to a net loss of US$827.0 million in the first half of 2007. Liquidity and Capital Resources Cash, cash equivalents and short-term investments were US$1.2 billion at June 27, 2008, compared to US$751.0 million at Dec. 31, 2007. Of the US$1.2 billion of cash and cash equivalents and short-term investments held at June 27, 2008, US$173.0 million was held by the company's U.S. subsidiaries and approximately US$1.0 billion was held by the company's foreign subsidiaries. Capital expenditures were US$159.0 million for the first six months of 2008, compared with US$164.0 million in the same period of 2007. Net cash used for financing activities was US$95.0 million and US$22.0 million for the first half of 2008 and 2007, respectively. During the first half of 2008, the company utilized US$67.0 million to repurchase a portion of its outstanding Senior Subordinated Notes, Fixed Rate Notes and Floating Rate Notes, and US$28.0 million to make additional long-term debt and capital lease payments. Cash used for financing activities during the first quarter of 2007 primarily consisted of long- term debt and capital lease payments. At June 27, 2008, the company had a senior secured credit facility that included (i) a US$3.5 billion term loan, including letters of credit and swing line loan sub-facilities, and (ii) a revolving credit facility with a committed capacity of US$750.0 million. The Term Loan will mature on Dec. 1, 2013. The Revolver will be available through Dec. 1, 2012, at which time all outstanding principal amounts under the Revolver will be due and payable. At June 27, 2008, approximately US$3.4 billion was outstanding under the Term Loan, and there were no borrowings outstanding under the Revolver. The company had US$18.0 million in letters of credit outstanding under the Revolver at June 27, 2008. The company had an aggregate principal amount of approximately US$5.8 billion in senior notes outstanding at June 27, 2008, consisting of (i) US$492.0 million of floating rate notes maturing in 2014, (ii) US$1.5 billion of 9.125% / 9.875% PIK- election notes maturing in 2014 ("Toggle Notes"), (iii) approximately US$2.3 billion of 8.875% notes maturing in 2014, and (iv) approximately US$1.5 billion of 10.125% senior subordinated notes maturing in 2016. Balance Sheet At June 27, 2008, the company's consolidated balance sheet showed US$14.7 billion in total assets, US$11.9 billion in total liabilities, and US$2.8 billion in total stockholders' equity. The company's consolidated balance sheet at June 27, 2008, also showed strained liquidity with US$3.1 billion in total current assets available to pay US$9.3 billion in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended June 27, 2008, are available for free at http://researcharchives.com/t/s?302d About Freescale Semiconductor Headquartered in Austin, Texas, Freescale Semiconductor Inc. (NYSE: FSL) -- http://www.freescale.com/-- designs and manufactures embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The company has design, research and development, manufacturing or sales operations in more than 30 countries. In Europe, the company has operations in Czech Republic, France, Germany, Ireland, Italy, Romania, Turkey and the United Kingdom. In Latin America, the company has operations in Argentina, Brazil and Mexico. Freescale is one of the world's largest semiconductor companies with 2007 sales of US$5.7 billion. * * * As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings revised the rating outlook on Freescale Semiconductor Inc. to negative from stable and affirmed these ratings: (i) issuer default rating at 'B+'; (ii) senior secured bank revolving credit facility at 'BB+/RR1'; (iii) senior secured term loan at 'BB+/RR1'; (iv) senior unsecured notes at 'B/RR5'; and (v) senior subordinated notes at 'CCC+/RR6'. LAWTEC LTD: Appoints Mark Granville Firmin as Liquidator -------------------------------------------------------- Mark Granville Firmin of KPMG LLP was appointed liquidator of Lawtec Ltd. (formerly LAWTEC (Development) Ltd.) on July 4, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: Lawtec Ltd. c/o KPMG LLP Quayside House 110 Quayside Newcastle upon Tyne NE1 3DX England LBV LTD: Names Philip Michael Lyon Liquidator --------------------------------------------- Philip Michael Lyon of Mazars LLP was appointed liquidator of LBV (Hereford) Ltd. (formerly Dish It Up Restaurant Ltd.) on July 9, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: LBV (Hereford) Ltd. c/o Mazars LLP Cartwright House Tottle Road Nottingham NG2 1RT England MALTINGS RETAIL: Howard Smith leads Liquidation Procedure --------------------------------------------------------- Howard Smith of KPMG LLP was appointed liquidator of Maltings Retail Ltd. (formerly UNS Properties Ltd., United News Shops Ltd., Post News Shops Ltd.) on July 4, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: Maltings Retail Ltd. c/o KPMG LLP 1 The Embankment Neville Street Leeds LS1 4DW England MERCIA PRINT: Taps Niel Price to Liquidate Assets ------------------------------------------------- Nigel Price and Colin Prescott of Moore Stephens LLP were appointed joint liquidators of Mercia Print & Packaging Ltd. on July 7, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached at: Mercia Print & Packaging Ltd. c/o Moore Stephens LLP Beaufort House 94-96 Newhall Street Birmingham B3 1PB England PACIFIC AND GENERAL: Scheme Creditors Must File Claims by Jan. 9 ---------------------------------------------------------------- In the Matter of Pacific & General Insurance Company Limited (in Liquidation) and in the matter of the companies Act 2006 Notice is hereby given that, by an Order dated June 26, 2008, made in the High Court of Justice of England and Wales in the matter of Pacific & General Insurance Company Limited (in Liquidation) and in the matter of the Companies Act 2006 the scheme of arrangement proposed to be made between the Company and its Scheme Creditors pursuant to Part 26 of the Companies Act 2006 which was approved by the Scheme Creditors at the Meeting of Creditors held on June 9, 2008, was sanctioned. A copy of the Order was delivered to the Registrar of Companies in England and Wales for registration on July 7, 2008, and the Scheme became effective on that date. Scheme Creditors that wish to claim in the Scheme must complete and return their completed Claim Forms (together with supporting information) in accordance with the instructions accompanying the Claim Forms so as to be received by the Liquidators before 11:59 p.m. (Greenwich Mean Time) on Jan. 9, 2009. Scheme Creditors do not need to complete and return their Claim Form (unless they wish to assert Projected Claims) if they ticked the relevant box on the Vote Registration and Proxy Form indicating that they wanted the same value submitted for voting purposes to be also submitted as a Scheme Claim. Scheme Creditors wishing to assert Projected Claims must submit a Claim Form with supporting information by the Bar Date. If a Claim Form is not received by the Liquidators by the Bar Date then, (except in relation to Scheme Claims which have been agreed by the Company and fallen due for payment on or before the Effective Date, which have been included on a Claim Form prepared by the Liquidators, but not returned by the Scheme Creditors and received by the Liquidators before the Bar Date), the Scheme Creditor shall not be entitled to assert, or receive payment in respect of a claim against the Company. Any person believing himself to be a Scheme Creditor who is unclear about or has any queries regarding the Scheme, the completion of the Claim Form this Notice, or the action they are required to take, should contact: LCL Insurance Services Limited Attn: Michael Tolhurst Cornhill House 32 Cornhill London EC3V 3SG England Tel: +44 (0) 20 7398 5600 Fax: +44 (0) 20 7623 4352 E-mail: pacific.general@lcl-group.com Copies of the Scheme and the explanatory statement required to be provided to creditors pursuant to Section 897 of the Companies Act 2006 and of this notice can be obtained from http://www.gt-pandg.com/. Alternatively, upon request, these documents may be obtained on CD or in hard copy from Michael Tolhurst of LCL. PAL REALISATIONS: Brings in Liquidator from KPMG ------------------------------------------------ Richard Dixon Fleming of KPMG LLP was appointed liquidator of PAL (2112) Realisations Ltd. (formerly Pendle Aerofoam Ltd.) on July 4, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: PAL (2112) Realisations Ltd. c/o KPMG LLP 1 The Embankment Neville Street Leeds LS1 4DW England PDC ASSETS: Calls in Liquidator from KPMG ----------------------------------------- Howard Smith of KPMG LLP was appointed liquidator of PDC Assets Ltd. (formerly PDC Engineering Ltd.) on July 4, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: PDC Assets Ltd. c/o KPMG LLP 1 The Embankment Neville Street Leeds LS1 4DW England PDC CONSTRUCTION: Hires Liquidator from KPMG -------------------------------------------- Howard Smith of KPMG LLP was appointed liquidator of PDC Construction Ltd. (formerly Power Distribution & Civil Engineering Construction Ltd., Power Distribution Contractors Ltd.) on July 4, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: PDC Construction Ltd. c/o KPMG LLP 1 The Embankment Neville Street Leeds LS1 4DW England MCNULTY OFFSHORE: Appoints Liquidator from KPMG ----------------------------------------------- Mark Granville Firmin of KPMG LLP was appointed liquidator of McNulty Offshore Contractors Ltd. (formerly Petalprint Ltd.) on July 4, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: McNulty Offshore Contractors Ltd. c/o KPMG LLP Quayside House 110 Quayside Newcastle upon Tyne NE1 3DX England RAVINE LIFESTYLE: Brings in Joint Administrators from Deloitte -------------------------------------------------------------- Lee Manning and Nick Edwards of Deloitte, the business advisory firm, have been appointed joint administrators to Ravine Lifestyle Limited. The company entered administration on July 24, 2008. Ravine Lifestyle employs seven people and is the holding company for seven separate special purpose vehicles each financing the development of either two or three bedroom flats in the Camford Cliffs and Lilliput area of Poole in Dorset. Currently only two developments are complete and on the market. Lee Manning, Partner in Deloitte's Reorganisation Services practice and joint administrator, said: "We are continuing to trade the business as a going concern with a view to completing the developments and marketing the flats individually to members of the public." RE-COOL LTD: Brings in Liquidators from Mazars ---------------------------------------------- Tim Alan Askham and Robert David Adamson of Mazars LLP were appointed joint liquidators of Re-Cool Ltd. on July 16, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached at: Re-Cool Ltd. Mazars LLP Merchant Exchange Whitworth Street West Manchester M1 5WG England UJIMA HOUSING: Bad Mg't. Responsible for Collapse, Inquiry Says --------------------------------------------------------------- The Housing Corporation, on July 28, 2008, published the report of the independent Inquiry into the circumstances surrounding the collapse of Ujima Housing Association. Peter Dixon, Chairman of the Housing Corporation said, "The Housing Corporation Board is determined that we should properly understand the circumstances surrounding Ujima's insolvency. We -– and the sector more widely –- should learn lessons from what occurred. This report reinforces the importance of strong governance and effective financial management within housing associations. And it provides a firm basis for ensuring that the future regulation of the housing association sector is as robust and effective as possible. "We note from the conclusion of the report that the primary responsibility for Ujima's collapse was its own bad management and ineffective Board, but that it is possible that Ujima might have been able to avoid insolvency, or at least have had more time in which to exercise choice and consult with its tenants and stakeholders in reaching a solution to its problems, had the Corporation intervened at an earlier stage. "We welcome the report's recognition of the Corporation's success in acting swiftly to ensure that –- when Ujima went into insolvency -– no tenants lost their homes, no tax payers' money was lost and lenders were successfully protected." The report highlights areas where the Housing Corporation could have acted differently in the way it dealt with Ujima, in particular in relation to the speed with which it took regulatory action in late 2006 and early 2007, and –- more generally -– in relation to the handling of allegations and the Corporation's approach to dealing with an unco-operative RSL. It also highlights the new, more graduated, regulatory powers that will be exercised by the Tenant Services Authority, which might have provided a wider range of possible interventions, had they been available to the Housing Corporation at the time. Steven Douglas, Chief Executive of the Housing Corporation, who ordered the review, has already put in place a number of changes since Ujima to address these issues, which have been endorsed by the report. "We are determined to learn the lessons from this independent Inquiry, and welcome the Inquiry report's endorsement of the changes we have made to our systems and processes in the light of our experience handling Ujima," said Mr. Douglas. According to Mr. Douglas, the fundamental changes to the way the Housing Corporation will regulate going forward fall into five main areas: 1. We have strengthened the management of regulation and introduced a new Regulation Leadership team to oversee all our regulatory activity, which meets monthly. This will help ensure going forward that we deliver effective and cross-regional peer challenge; 2. We have changed the management arrangements for supervision so that, working with regional teams, there is icebergs oversight, and built-in quality assurance, of any decision to change an HCA traffic light from green to amber or red; 3. We have conducted a review of every association owning over 1,000 homes to confirm that our regulatory strategy remains appropriate and that our risk classification is correct; 4. For our next round of annual viability reviews we will be instituting external review of outcomes to ensure that our judgments are robust, accurate and consistent; and 5. We have reviewed our approach to whistle blowing to ensure that when allegations come in, they are routed through a central point to enable them to be dealt with effectively and consistently, and the result of investigations followed through. Mr. Douglas further added, since the report was commissioned, we have instituted regular monitoring of the impact of the current credit crunch on associations businesses, the results of which we are publishing regularly. A detailed list of the 17 changes the Housing Corporation is making to processes and structures is appended to this statement. "As a result of these reforms, we have fundamentally strengthened our regulatory systems and processes and our regulation of the industry will be stronger as a result. Most importantly, the social housing sector will be even stronger, with lenders receiving greater levels of reassurance, which is much needed in these difficult economic times," said Mr. Douglas. "We are determined to learn from the experience of Ujima. We will study the report in detail, as will those working to establish the new Tenant Services Authority. Where there are further lessons to learn, our aim will be to ensure they are embedded in future approaches to housing regulation." Background Ujima was placed under Housing Corporation regulatory supervision in October 2007 because of concerns about its governance. Following this move it became clear that Ujima were in very severe financial difficulties and the Board of Ujima subsequently agreed that its financial difficulties were such that it could not sustain an independent future. The Housing Corporation worked closely with the Board of Ujima to identify a solution which would address these problems which involved transferring the stock of Ujima to a large London-based association with sufficient financial capacity to manage this situation and a good track record of high quality services to tenants. This proposal was unanimously supported by Ujima's Board but was not supported by the required 75% majority of Ujima's shareholders at a meeting on Dec. 17, 2007. Following the rejection of the Board's proposal, Ujima sought a winding up Petition from the Court on Dec. 20. About The Housing Corporation The Housing Corporation -- http://www.housingcorp.gov.uk/-- is responsible for regulating housing associations, which provide some two million homes across England. The Housing Corporation is the Government's national affordable homes agency, responsible for investing in new affordable homes and regulating nearly 2,000 housing associations across England. About Ujima Housing Ujima Housing Association -- http://www.ujimagroup.org.uk/-- managed around 4,600 homes, mainly in London. Ujima was founded in 1977 to tackle the housing problems facing young, black single men and women in London. WASTE POINT: Taps Liquidator from KPMG -------------------------------------- Richard Dixon Fleming of KPMG LLP was appointed liquidator of Waste Point Ltd. on July 4, 2008, for the creditors' voluntary winding-up procedure. The company can be reached at: Waste Point Ltd. c/o Tenon Recovery Clive House Clive Street Bolton BL1 1ET England WRAPIT: In Talks with Banks and Advisers to Avert Administration ---------------------------------------------------------------- Wrapit is in talks with banks and advisors in an attempt to save the company from going into administration, Stuart Arnold of the Northern Echo reports. "We do not want to go into administration and want to come to a solution to secure the business and then we can fulfill our customers with their gifts," Wrapit marketing head Sarah Fawkner was quoted by the Northern Echo as saying. Ms. Fawkner, however, is optimistic that there was "a realistic chance" it could still fulfill outstanding orders, the report notes. The report relates Wrapit's previous deals with investors collapsed at the last minute. According to the report, Wrapit, which handles about 2,500 to 3,500 wedding lists a year, ran into financial difficulties after being hit by the credit crunch and the downturn in the retail market. A Wrapit spokesman told yourcanterbury.co.uk "our bankers HSBC have held GBP1 million of our money which would otherwise have been devoted to fulfilling our orders," adding "we are working with our advisors, KPMG, to resolve this situation and will make further announcements in due course." Meanwhile, the report says, Wrapit disclosed there will be delays in delivering items to customers. Wrapit is a wedding gift list provider. The company employs about 100 full-time and part-time staff. It has 15 showrooms across the U.K. and a central warehouse in Acton, west London. * European Project Finance Portfolio Remains Robust, S&P Reports ---------------------------------------------------------------- The stable performance typical of project finance assets is continuing to hold up in spite of ongoing turmoil in the credit markets, the economic downturn, and negative rating actions taken on the monoline bond insurers, says a research report published July 28, 2008, by Standard & Poor's Ratings Services. Titled "Credit Quality Of European Infrastructure Projects Remains Healthy Despite Market Volatility," the report reveals that about 92% of S&P's European and Middle Eastern project finance portfolio was rated at investment-grade level as of June 16, 2008. "Most project finance rating actions in 2008 to date relate to rating actions on the monolines and have not directly affected Standard & Poor's underlying ratings (SPURs), which reflect our opinion on projects' stand-alone creditworthiness," said S&P's credit analyst Beata Sperling-Tyler. "In most cases, the insured debt rating remains higher than the SPUR. However, the downgrade of Financial Guaranty Insurance Co. and FGIC UK Ltd. to 'BB/Watch Neg' and XL Capital Assurance (U.K.) Ltd. to 'BBB-/Watch Neg' means that for the first time, the SPURs on eight projects are higher than the related insured rating." As the report points out, S&P does not expect significant changes to the underlying ratings on most projects, as reflected in the stable outlooks on about 83% of SPURs. Of those SPURs with a negative outlook, the main reasons for any subsequent downgrade are likely to be further delays to construction, declining operational and/or financial performance, or a deterioration in the relationship between the project and its public sector counterparty. The report covers project finance assets in U.K. public-private partnerships and private finance initiatives, as well as the energy, oil and gas, and wind sectors. * S&P Says U.K. Mortgage Borrowers Face Likely Negative Equity -------------------------------------------------------------- With U.K. house prices continuing to fall, a significant number of U.K. mortgage borrowers could fall into negative equity, about 1.7 million by its estimation, according to a report published by Standard & Poor's Ratings Services. "The downward trend in U.K. house prices now seems well established, and we expect prices to continue falling in the near term," said S&P's credit analyst Andrew South. "In a separate article published today, our economists forecast a further drop of around 17% before prices flatten off in 2009." S&P has researched the risk of negative equity under various house price scenarios, and estimate that: -- The average U.K. mortgage has a loan-to-value (LTV) ratio of only around 54%. -- Nevertheless, around 70,000 or 0.6% of U.K. borrowers are currently in negative equity. -- A further house price decline of 17% would raise this number to around 1.7 million (14%). -- Borrowers in the buy-to-let and nonconforming sectors are more exposed to negative equity under this house price decline assumption. S&P's research is based on a cross-sectional sample of over two million outstanding mortgage loans from the pools backing residential mortgage-backed securities (RMBS) and covered bond transactions that S&P rates. "House price declines and rising LTV ratios generally are an indicator of rising mortgage credit risk, and are therefore an important factor in our rating analysis for RMBS notes," Mr. South said. "Ratings on both junior and senior notes could therefore be sensitive to house price deflation, which we have explored further in our recently published scenario analyses." * S&P Expects Downturn in U.K., Spanish & Irish Housing Markets --------------------------------------------------------------- The risks posed by high levels of household indebtedness among European economies are thrown into sharp relief by the collapse in the U.K., Spanish, and Irish housing markets, says a research report titled "European Economic Forecast: Boom Turns To Bust In Exposed Housing Markets," published by Standard & Poor's Ratings Services. "Europe's housing markets have enjoyed a spectacular boom in the past eight years, at levels closely comparable with that in the U.S.," said S&P's chief economist for Europe, Jean-Michel Six. "Yet, levels of household indebtedness vary considerably across European economies. On the one hand, there are countries with outstanding mortgage debt exceeding 50% of GDP such as Denmark, The Netherlands, the U.K., Spain, and Ireland. On the other hand, Norway, Sweden, France, and Italy have relatively low levels of debt in spite of the recent rise in their housing markets." As the report points out, the U.K. housing market is confronted with two evils at the same time: Affordability and availability. Since its peak in August 2007, the U.K. housing market has been declining more rapidly than after the previous peak in May 1989, when prices from peak to trough were down 13% in nominal terms. This time, by contrast, prices are already down 9.6% over the period from August 2007 to June 2008, suggesting that the overall decline is likely to be far more dramatic. A 25% fall from the August 2007 peak would simply bring the affordability ratio back to 4.4x earnings -- close to where it was on average in 2000, when the current cycle started to gather pace. Such a drop is reasonable to allow market fundamentals such as affordability to return to their long-term averages. This implies that prices are facing another 17% decline from their June 2008 level, with a trough occurring around April or May of 2009. According to S&P's calculations, a 25% peak to trough decline in house prices would place about 14% of borrowers (around 1.7 million) into negative equity. Compared with the previous downturn in the late 1980s, this correction is therefore likely to be much shorter, and more severe. In Spain, a combination of higher interest rates, oversupply, and a deteriorating economic climate all point to a prolonged decline in house prices. Unemployment in the construction sector rose 70% in the 12 months to May 2008, while permits for residential homes dropped 60% year-on-year in the first quarter of 2008. In contrast with S&P's projections for the U.K., Spain could experience a longer correction, albeit leading to a similar decline in house prices (about 25% peak to trough). In Ireland, real residential construction spending fell by around 25% in the first three months of 2008, but this was outstripped by a decline of 55% in the number of housing starts, suggesting that the slump is still gathering pace. And house prices? They fell 10% in the 12 months to May 2008, and are down 12% from the peak reached in January 2007. Here, S&P expects a peak-to-trough decline, from January 2007 to December 2008, of slightly more than 20%. The downturn in the U.K., Irish, and Spanish housing markets is no surprise, but other European markets are also presenting signs of easing. This is particularly true of France. One of the three fastest-growing markets in Western Europe between 2000 and 2008, the French housing market is likely set for a period of stabilization or modest price declines. Factors at work here include a surge in inflation (1.6% over the first half of this year), which, combined with lower growth in disposable incomes (1.9%, compared with 2.5% in the second half of last year) will slow purchasing power growth to a mere 0.3%. Equally unhelpful, the recent weakening of the sterling against the euro, and the weak dollar, will weigh on demand from nonresidents. * Insolvencies in the U.K. Up 17.5% in 1H 2008, Experian Says ------------------------------------------------------------- Experian, the global information services company, revealed that 10,512 U.K. businesses failed in the first half of the year, a 17.5% increase compared to the same period in 2007. According to Experian's Insolvency Report and Distress Index, over half of these were recorded in quarter two. Between April 1 and June 30, 5,413 businesses went under, a 19.7% increase compared to quarter two 2007, which saw 4,521 failures. Twenty one of the 34 sectors Experian monitors saw increases in business failures over the year to date compared to the same period in 2007. Key sectors impacted are Property (up 80.6%), Banking and Financial Services (up 57.7%), Post and Telecommunications (up 45.7%) and Agriculture (up 36.4%). In terms of absolute numbers, the Business Services sector has seen the largest number of failures in the year to date at 2,235, an increase of 15.1% on the first six months of 2007. Meanwhile, the Building and Construction sector saw over 1,000 businesses fail compared to 867 in the same period last year. Tony Pullen, Managing Director of Experian's Business Information division, comments: "Insolvencies are currently running at their highest level since the final quarter of 2006 and the indications are that the credit squeeze is taking hold across more industry sectors. On top of this, it is also the second quarter-on-quarter increase in failures we have seen. All these factors drive home the need for businesses to look to minimize their exposure to risk and, therefore, the risk of failure themselves." Economic Impact Matthew Sherwood, senior global economist with Experian, comments: "The numbers for financial and banking services are not surprising given that the credit crunch has plagued the economy for the last year. The bursting of the property bubble is also having the expected impact. However, given the major fault lines in the consumer sector, we would expect failures in wholesaling and non-food retailing, currently running at increases of 18% and 8.5% respectively, to accelerate significantly. Things are going to get worse before they get better." Companies Failing in Q2 2008 High profile business failures over the last quarter have included Silverjet, which went into administration with the loss of 420 jobs. Silverjet is the third business airline to go bust in recent months after MaxiJet and Eos, underscoring the challenges facing business carriers who are losing out to budget airlines as organizations increasingly watch their travel costs. Other failures, including Lancashire-based Sleep Depot, and MKOne, highlight the pressure that already exists on the retailing sector, which has seen 535 insolvencies so far this year, as consumer confidence continues to slide and both high street retailers and out of town shopping centers see a decline in footfall. Regional Overview All but two of the 14 regions monitored by Experian saw an increase in insolvencies to date in 2008 compared to the first half of 2007. Northern Ireland (up 74.8%), North East (up 46.7%) and the East Midlands (up 41%) are the three regions bearing the brunt of the increased number of failures. Only the South West (down 2.1%) and Scotland (down 16.7%) have seen a decrease in failures in the year to date. Outside of the South East and London, business failures in volume terms are running at their highest in the North West and Yorkshire and the Humber. Failures in the North West increased by over a third to 1,451, while in Yorkshire and the Humber failures rose by a fifth to 1,033. The outlook: Experian's Commercial Delphi Distress Index Analysing key industry sectors using the Commercial Delphi Distress Index further highlights sectors on the critical list. Commercial Delphi is a risk assessment tool that uses a blend of integrated consumer and business data and sophisticated scoring technology to derive a single score that predicts the likelihood of business failure within the subsequent 12-month period. According to the Index, twelve sectors are showing clear signs of distress, displaying average industry Commercial Delphi scores of between 25 and 50 indicating an above average risk of failure for businesses in these sectors as a whole in the next 12 months. Sectors feeling the stress include Post and Telecommunications, Hotels and Leisure and Retail Trade – all areas that would be impacted by any further decrease in consumer confidence. BOOK REVIEW: Working Together ----------------------------- Title: Working Together: 12 Principles for Achieving Excellence in Managing Projects, Teams, and Organizations Author: James P. Lewis Publisher: Beard Books Paperback: 208 pages List Price: US$34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/158798279X/internetbankru pt Henry Berry of Turnarounds & Workouts said in December 2006: Working Together is about the passionate implementation of a set of management principles that were instrumental in the development of new airplanes at the Boeing Company and, in particular, the groundbreaking Boeing 777 aircraft. The chief engineer of the Boeing 777 program when it was undertaken in the early 1980s was Alan Mulally. He was soon promoted to general manager of the project and, in 1986, was named president of Commercial Airplanes. Mr. Mulally remained with Boeing for 37 years, eventually leading Boeing Commercial Airplanes to a turnaround that began in 1996. And if the name sounds more than familiar, it should: in September 2006, Ford Motor Company named Mr. Mulally as its new President and CEO, citing his record of success during his long tenure at Boeing. Through all of those years, Mr. Mulally made the "working together" principles and practices his gospel. He has been a vocal advocate of both the principles and this book by James Lewis even during his highly visible transition to Ford. Working Together chronicles the application of Mulally's leadership principles during his years at Boeing, especially during the execution of the 777 project. The 12 principles espoused in "working together" comprise a management philosophy that enabled Boeing "to dramatically increase production on all of our airplanes, improve our entire production system, and develop a number of new airplanes all simultaneously," as Mr. Mulally notes in the Foreword to the book. The value and effectiveness of working together is conveyed in a dramatic way by the author. Mr. Lewis introduces the high stakes that Boeing faced in developing the 777. At first, the company bit off more than it could chew. Fired by the enthusiasms and passions of employees exemplified by Mr. Mulally, Boeing pursued an ideal that exceeded its capacity to meet. At one point, Boeing had to "stop global production for lack of parts." Boeing was losing money, risking its future, and disappointing its customers, investors, and employees. But the roots of its problems were basically a lack of proper preparedness and organization. With Mr. Mulally in charge, operations were revised according to the model of working together. Work processes were reinforced, reinvigorated, and closely monitored. Practices such as focused agendas for meetings, clear assignments, communication among disparate employee segments, solicitation of input, and keeping a project on track, were implemented. Boeing underwent a transformation from a company in danger of permanently damaging its reputation and competence, to a company that reaffirmed its preeminence in the field of airplane design and production. As he took over the reins at Ford, Mr. Mulally observed that many of the challenges he addressed in commercial airline manufacturing are analogous to the issues he will now face at the car manufacturing giant. He stated, "I'm looking forward to working closely with Bill [Ford] in the ongoing turnaround of this great company. I'm also eager to begin engagement with the leadership team. I believe strongly in teamwork and I fully expect that our efforts will be a productive collaboration." James P. Lewis is President of Lewis Institute, Inc., a training and consulting company specializing in project management, which he founded in 1981. He also teaches seminars on the subject in the United States, England, and Asia. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. 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Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Zora Jayda Zerrudo Sala, Pius Xerxes Tovilla, Joy Agravante, Julybien Atadero, Marie Therese Profetana and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *