/raid1/www/Hosts/bankrupt/TCREUR_Public/081128.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, November 28, 2008, Vol. 9, No. 237
Headlines
A U S T R I A
A. U. R. TEXTILHANDEL: Claims Registration Period Ends Dec. 9
EMA EVENTMANAGEMENT: Claims Registration Period Ends December 9
WARNER MUSIC: Posts US$86MM Equity Deficit in Year Ended Sept. 30
B E L G I U M
PORTOLA PACKAGING: Emerges from Pre-Packaged Ch. 11 Restructuring
F R A N C E
ALCATEL-LUCENT: Appoints Paul Tufano as New CFO
G E R M A N Y
CMK TRANS: Claims Registration Period Ends December 19
ENERSERVICE GMBH: Claims Registration Period Ends December 23
HEWO FAHRZEUGBAU: Claims Registration Period Ends December 31
MEERANER IMMOBILIEN: Claims Registration Period Ends Dec. 30
PROBAUTEC PLANUNGSGESELLSCHAFT: Claims Registration Ends Dec. 16
SGS-TRANSPORTLOGISTIK GMBH: Claims Registration Ends Dec. 29
TCHIBO: May Exit UK Market on Weak Demand
I R E L A N D
DEPFA BANK: Moody's Junks Ratings on Two Credit Default Swaps
MASTERCHEFS: High Court Appoints KPMG Partner as Examiner
K A Z A K H S T A N
KAZAGROGARANT: S&P Assigns 'B' Short-Term Issuer Credit Rating
MBK CENTRE: Creditors' Claims Due on January 9
NT LLP: Creditors Must File Proofs of Claim by January 9
STROY COMPLECT: Creditors' Claims Deadline Slated for January 9
TEK TRADE: Creditors' Claims Filing Period Ends January 9
TRANSMERIDIAN EXPLORATION: Terminates Investment Deal with UEGL
TRANSMERIDIAN EXPLORATION: Won't Appeal NYSE-A's Delisting Action
TRANSMERIDIAN EXPLORATION: Sept. 30 Deficit Is US$73 Million
K Y R G Y Z S T A N
CAMO GST: Creditors Must File Claims by January 7
ENERGO COMPLECT: Creditors Must File Claims by January 2
LUCKY STAR: Creditors Must File Claims by January 7
L A T V I A
PAREX BANK: Deadline for Fulfilling Stake Sale Conditions Extended
PAREX BANKA: European Commission Approves State Aid
* LATVIA: Slips Into Recession; Economy Shrank 4.2% in 3Q2008
N E T H E R L A N D S
CARLSON WAGONLIT: Moody's Downgrades Corp. Family Rating to 'B1'
ELM BV: Poor Credit Quality Cues Moody's Junk Rating on 11 Classes
P O L A N D
TVN SA: Moody's Puts 'Ba2' CFRs on Review for Possible Downgrade
R U S S I A
ALROSA COMPANY: Moody's Maintains 'Ba2' Corporate Family Rating
BTA BANK: Moody's Keeps 'B1' Ratings and 'E+' BRSR
RUSAL: To Pay US$700 Mln Tranche to Norilsk Nickel On Time
* TOMSK OBLAST: S&P Puts 'B+' Rating on Proposed RUR2.5 Bln Bond
S W I T Z E R L A N D
GENERAL MOTORS: Needs to Restructure Debt to Get US$12Bil. Bailout
U K R A I N E
ANISO LLC: Creditors Must File Claims by December 9
INDUSTRIAL ASSEMBLY: Creditors Must File Claims by December 9
VELORES NIK: Creditors Must File Claims by December 9
VVS-POLTAVA LLC: Creditors Must File Claims by December 9
WOOD-METAL-INDUSTRIAL: Creditors Must File Claims by Dec. 9
ZHOVTNIVKA OJSC: Creditors Must File Claims by December 9
ZHYTOMIR BREAD: Creditors Must File Claims by December 9
* UKRAINE: President Says Refinancing Fails to Improve Liquidity
U N I T E D K I N G D O M
AMERICAN INT'L: Munich Re Eyes Asian Life Insurance Assets
ASCALADE COMMUNICATIONS: To Distribute Dividends to Creditors
BARCLAYS PLC: Shareholders Back GBP7Bln Capital Raising Plan
CENTRO PUB: Appoints Joint Administrators from Grant Thornton
ENERGY EXHAUSTS: Goes Into Administration; Begbies Appointed
FIRKINS: Goes Into Administration; 140 Jobs Affected
GLENCARSE HOTEL: Goes Into Liquidation; Begbies Traynor Appointed
INTERNATIONAL POWER: S&P Assigns 'BB-' Rating to Three Notes
KAUPTHING SINGER: Has 41% Property Exposure, Ernst & Young Says
LANGBAURGH PROPERTIES: Names Joint Liquidators from PwC
MFI RETAIL: Goes Into Administration; MCR Appointed
MICAP INGREDIENTS: Taps Joint Liquidators from PKF
MITCHELLS & BUTLERS: Scraps Dividend, To Focus on Cutting Debts
PIPE HOLDINGS: Moody's Keeps 'B3' Rating; Outlook Negative
POLARIS CONSULTING: Names Joint Administrators from Tenon
PREFERRED RESIDENTIAL: S&P Removes All Ratings From Negative Watch
ROYAL BANK: Pledges to Help Business Customers in Lending
TAYLOR WIMPEY: May Offer Stake to Lenders Under Refinancing Plan
TAYLOR WIMPEY: Selling Canadian Division Monarch
UBS AG: Three Former Officials Give Up US$27 Million Pay
WOOLWORTHS GROUP: Sale Talks Fail, Goes Into Administration
* UK Insolvency Practitioners Adopt New Ethical Code
* EU Commission Launches Major Recovery Plan for European Economy
* BOOK REVIEW: Financial Planning for High Net Worth Individual
*********
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A U S T R I A
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A. U. R. TEXTILHANDEL: Claims Registration Period Ends Dec. 9
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Creditors owed money by LLC A. u. R. Textilhandel (FN 224660h)
have until Dec. 9, 2008, to file written proofs of claim to the
court-appointed estate administrator:
Thomas Di Vora
Lendgasse 3
9020 Klagenfurt
Austria
Tel: 0463/50 28 20
Fax: 0463/502820-12
E-mail: rechtsanwalt.mag.divora@aon.at
Creditors and other interested parties are encouraged to attend
the creditors' meeting at 10:00 a.m. on Dec. 15, 2008, for the
examination of claims at:
Land Court of Klagenfurt
Room 225
Klagenfurt
Austria
Headquartered in Klagenfurt, Austria, the Debtor declared
bankruptcy on Nov. 3, 2008, (Bankr. Case No. 41 S 110/08m).
EMA EVENTMANAGEMENT: Claims Registration Period Ends December 9
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Creditors owed money by OG EMA Eventmanagement Agentur (FN
308410w) have until Dec. 9, 2008, to file written proofs of claim
to the court-appointed estate administrator:
Walter Dellacher
Dr. Franz Palla-Gasse 21
9020 Klagenfurt
Tel: 0463/599 399 512 889
Fax: 0463/599399-15
E-mail: office@hdp-law.com
Creditors and other interested parties are encouraged to attend
the creditors' meeting at 9:00 a.m. on Dec. 15, 2008, for the
examination of claims at:
Land Court of Klagenfurt
Room 225
Klagenfurt
Austria
Headquartered in Reifnitz, Austria, the Debtor declared bankruptcy
on Nov. 3, 2008, (Bankr. Case No. 41 S 109/08i).
WARNER MUSIC: Posts US$86MM Equity Deficit in Year Ended Sept. 30
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Warner Music Group Corp. released its fourth-quarter and full-year
financial results for the period ended Sept. 30, 2008. Warner
Music's balance sheet for the full-year ended Sept. 30, 2008,
showed total assets of US$4.4 billion and total liabilities of
US$4.5 billion, resulting in stockholders' deficit of roughly
US$86
million.
Fourth-Quarter Results
For the fourth quarter 2008, revenue declined 1.5% to
US$854 million from US$867 million in the prior-year quarter, and
was down 5.2% on a constant-currency basis. This performance
reflects the ongoing transition in the recorded music industry
characterized by a shift in consumption patterns from physical
sales to new forms of digital music, the continued impact of
digital piracy, and to a lesser extent, the company's proactive
efforts to manage retailer inventories. Domestic revenue declined
5.4%. International revenue grew 3.7%, but declined 4.1% on a
constant-currency basis. On a constant-currency basis, revenue
grew in Japan and parts of Europe.
Operating income from continuing operations fell 20.5% to
US$66 million from US$83 million in the prior-year quarter and
operating margin from continuing operations was down 1.8
percentage points to 7.7%. OIBDA from continuing operations
decreased 8.2% to US$134 million from US$146 million in the prior-
year quarter and OIBDA margin from continuing operations declined
1.1 percentage points to 15.7%. Operating income, operating
margin, OIBDA and OIBDA margin from continuing operations for the
fourth quarter of fiscal 2007 reflect the net benefit of
US$7 million from the Prior-Quarter Items, as well as lower annual
bonus compensation than in the current-year quarter.
Income from continuing operations was US$6 million, or US$0.04 per
diluted share, for the quarter, down from income from continuing
operations of US$17 million, or US$0.11 per diluted share, in the
prior-year quarter. The net benefit of US$7 million from the
Prior-Quarter Items amounted to US$0.04 per diluted share.
The company reported a cash balance of US$411 million as of
Sept. 30, 2008, a 23% increase from the September 30, 2007 balance
of US$333 million. As of Sept. 30, 2008, the company reported
total long-term debt of US$2.26 billion and net debt (total long-
term debt minus cash) of US$1.85 billion.
For the quarter, net cash provided by operating activities was
US$119 million compared to US$105 million in the prior-year
quarter. Free Cash Flow (defined as cash flow from operations
less capital expenditures and cash paid or received for
investments) was US$100 million, compared to negative Free Cash
Flow of US$48 million in the comparable fiscal 2007 quarter.
Unlevered After-Tax Cash Flow (defined as Free Cash Flow excluding
cash interest paid) was US$122 million, compared to negative
Unlevered After-Tax Cash Flow of US$33 million in the comparable
fiscal 2007 quarter.
Recorded Music
Revenue from the company's Recorded Music business declined 3.7%
from the prior-year quarter to US$707 million, and was down 6.9%
on a constant-currency basis. The decline in constant-currency
revenue primarily reflects strength in Japan, France and Italy,
offset by weakness in the U.S.
Recorded Music digital revenue of US$156 million grew 25.8% over
the prior-year quarter and represented 22.1% of total Recorded
Music revenue. Domestic Recorded Music digital revenue amounted
to US$99 million or 27.2% of total domestic Recorded Music
revenue. Strong digital revenue was primarily driven by growth in
global online downloads, and to a lesser extent growth in
international mobile.
Major sellers in the quarter included titles from Metallica, Kid
Rock, T.I. and Mariya Takeuchi. International Recorded Music
revenue was up 0.9% from the prior-year quarter to US$343 million,
but declined 6.0% on a constant-currency basis, while domestic
Recorded Music revenue declined 7.6% from the prior-year quarter
to US$364 million.
Year-over-year revenue differences in the global Recorded Music
business were due to the timing of releases and declines in the
physical business, which are not currently being offset by growth
in the digital business. In addition, the impact from the
company's more active retail inventory management as well as the
changing underlying demand for physical recorded music product is
evident in our results.
Quarterly Recorded Music operating income from continuing
operations fell 22.2% to US$56 million, resulting in an operating
margin from continuing operations of 7.9% compared to 9.8% in the
prior-year quarter. Recorded Music OIBDA from continuing
operations fell 13.8% to US$100 million for the quarter. Recorded
Music OIBDA margin from continuing operations contracted 1.7
percentage points to 14.1% from the prior-year quarter. Recorded
Music operating income, OIBDA, operating margin and OIBDA margin
from continuing operations for the fourth quarter of fiscal 2007
reflect a portion of the Prior-Quarter Items -- a US$12 million
benefit related to legal settlements and US$5 million in expenses
related to the company's fiscal 2007 realignment initiatives. The
margin contraction reflects higher third-party distribution costs
partially offset by lower product costs from a shift to higher-
margin digital products.
Music Publishing
Music Publishing revenue increased 13.9% from the prior-year
quarter to US$156 million, and was up 6.1% on a constant-
currency basis. Music Publishing revenue grew 12.0%
domestically and 14.9% internationally, and increased 3.3%
internationally on a constant-currency basis. Digital
revenue from Music Publishing grew 57.1% to US$11 million,
representing 7.1% of total Music Publishing revenue.
On a constant-currency basis, the decline in mechanical revenue of
5.6% was offset by a 31.0% increase in synchronization revenue, a
6.1% rise in performance revenue and the strong 57.1% increase in
digital revenue. The increase in synchronization revenue was due
in part to timing of receipts while mechanical revenue weakness
reflects the industry-wide decline in physical record sales
partially offset by a more stable performance by catalog
offerings.
Music Publishing operating income amounted to US$36 million, down
7.7% from US$39 million in the prior-year quarter, resulting in an
operating margin of 23.1%, down 5.4 percentage points from the
prior-year quarter. Music Publishing OIBDA was essentially flat
at US$54 million compared to US$55 million in the prior-year
quarter and OIBDA margin of 34.6% declined 5.5 percentage points
from the prior-year quarter. Music Publishing operating income,
OIBDA, operating margin and OIBDA margin for the fourth quarter of
fiscal 2007 reflects a portion of the Prior-Quarter Items -- a
US$3 million benefit related to a legal settlement and US$1
million in expenses related to the company's fiscal 2007
realignment initiatives, as well as modest severance costs.
Full-Year Results
For the full year 2008, revenue grew 3.2% to US$3,491 million from
US$3,383 million last year, and fell 2.2% on a constant-currency
basis. Total revenue in 2008 was split 46% domestic and 54%
international. Domestic revenue declined 3.9% over the prior year
while international revenue climbed 10.3%, but fell 0.5% on a
constant-currency basis. Total digital revenue rose 38.6% year
over year to US$639 million and was 65% domestic and 35%
international. Digital revenue represented 18.3% of total revenue
for the fiscal year compared to 13.6% in the prior fiscal year.
Operating income from continuing operations of US$207 million
decreased from US$228 million in the last fiscal year and
operating margin from continuing operations contracted 0.8
percentage points to 5.9%. OIBDA from continuing operations for
the fiscal year amounted to US$475 million, essentially flat
against US$474 million last year while OIBDA margin from
continuing operations contracted by 0.4 percentage points to
13.6%. Operating income, operating margin, OIBDA and OIBDA margin
from continuing operations for fiscal year 2007 reflect the net
expense of US$3 million from the Prior-Year Items, as well as
lower annual bonus compensation than in the current year.
Loss from continuing operations for fiscal year 2008 was
US$35 million, or US$0.24 per diluted share, compared to loss from
continuing operations of US$8 million, or US$0.05 per diluted
share, for the 2007 fiscal year.
This fiscal year, net cash provided by operating activities was
US$304 million compared to US$302 million in fiscal year 2007.
Free Cash Flow amounted to US$137 million compared to Free Cash
Flow of US$22 million in the prior year. Unlevered After-Tax Cash
Flow was US$286 million, compared to US$158 million in fiscal year
2007. Free Cash Flow and Unlevered After-Tax Cash Flow for fiscal
2008 include the previously disclosed investment in Frank Sinatra
Enterprises. Free Cash Flow and Unlevered After-Tax Cash Flow for
fiscal 2007 include previously disclosed investments in Front Line
Management and Roadrunner as well as US$63 million in
restructuring-related charges and US$110 million in cash received
from our settlement with Bertelsmann AG regarding Napster.
Recorded Music
Recorded Music revenue grew 2.1% to US$2,895 million, but declined
2.8% on a constant-currency basis over the prior year. Domestic
Recorded Music revenue declined 5.4% from the prior year to
US$1,380 million while international Recorded Music revenue was up
10.1%, but was flat on a constant-currency basis. Recorded Music
sales were challenged by the continued decline in physical sales
that is not currently being offset by growth in the digital
business. Recorded Music revenue was split 48% domestic and 52%
international. Digital Recorded Music revenue grew 38.0% over the
prior year to US$599 million and represented 20.7% of total
Recorded Music revenue for fiscal 2008, up from 15.3% in fiscal
2007. Domestic Recorded Music digital revenue amounted to
US$388 million, or 28.1% of total domestic Recorded Music revenue,
up from US$295 million or 20.2% of revenue in the prior year.
Major sellers for the year were Josh Groban, Madonna, Led
Zeppelin, Kobukuro and Michael Buble.
Recorded Music operating income from continuing operations dropped
6.4% to US$233 million for the year from US$249 million last year
and operating income margin from continuing operations contracted
0.7 percentage points to 8.0%. Recorded Music OIBDA from
continuing operations fell 1.2% to US$416 million for the year
from US$421 million last year and OIBDA margin from continuing
operations declined 0.5 percentage points to 14.4%. Recorded
Music operating income, OIBDA, operating margin and OIBDA margin
from continuing operations for fiscal year 2007 reflect a portion
of the Prior-Year Items -- a US$61 million benefit related to
legal settlements and US$53 million in expenses related to the
company's fiscal 2007 realignment initiatives.
Music Publishing
Music Publishing revenue increased 9.3% from the prior year to
US$623 million, and was up 1.3% on a constant-currency basis.
Domestic Music Publishing revenue rose 6.1% over the prior year to
US$225 million while international revenue grew 11.2%, and slipped
1.2% on a constant-currency basis. Music Publishing revenue was
split 36% domestic and 64% international.
Digital revenue from Music Publishing grew 48.1% over the prior
year to US$40 million and represented 6.4% of total Music
Publishing revenue in fiscal 2008, up from 4.7% in fiscal 2007.
On a constant-currency basis, a decline in mechanical revenue of
8.7% was offset by a 10.9% increase in synchronization revenue, a
4.5% rise in performance revenue and the strong 48.1% increase in
digital revenue.
Music Publishing operating income declined 7.1% over the prior
year to US$91 million, yielding an operating margin of 14.6%, down
2.6 percentage points year over year. Music Publishing OIBDA was
US$162 million, up 1.3% from US$160 million in the prior year,
while OIBDA margin declined 2.1 percentage points to 26.0% due
primarily to sales mix. Music Publishing operating income, OIBDA,
operating margin and OIBDA margin for fiscal year 2007 reflect a
portion of the Prior-Year Items -- a US$3 million benefit related
to legal settlements and US$2 million in expenses related to the
company's fiscal 2007 realignment initiatives.
"WMG had a strong year, outperforming the industry, and sustaining
revenue and OIBDA over the fiscal year, despite the challenging
global recorded music and broader financial environments," said
Edgar Bronfman, Jr., Warner Music Group's Chairman and CEO. "We
remain confident in our ability to execute on our long-term goals,
given that we continue to advance our strategy to lead the
industry transformation by pursuing innovative business models,
diversifying revenue streams and investing in A&R."
"The volatile global economy and timing of our release schedule
may result in back-end weighted fiscal 2009 results," Steve Macri,
Warner Music Group's Executive Vice President and CFO added.
"From a balance sheet perspective, we're gratified to see the
growth in our cash balance continue, further increasing our
financial flexibility."
Warner Music Group Corp.
Consolidated Balance Sheets
As of September 30, 2008 and September 30, 2007
(dollars in millions)
September 30 September 30 % Change
2008 2007
(audited) (audited)
Assets:
Current Assets
Cash & cash equivalents US$ 411 US$ 333 23%
Accounts receivable,
less allowances of
US$159 and US$192 538 555 (3)%
Inventories 57 58 (2)%
Royalty advances
(expected to be
recouped w/in 1 year) 174 176 (1)%
Deferred tax assets 30 40 (25)%
Other current assets 38 33 15%
Total Current Assets US$ 1,248 US$ 1,195 4%
Royalty advances
(expected to be recouped
after 1 year) 212 216 (2)%
Investments 155 146 6%
Property, plant &
equipment, net 117 133 (12)%
Goodwill 1,078 1,065 1%
Intangible assets subject
to amortization, net 1,496 1,632 (8)%
Intangible assets not
subject to amortization 100 100 -
Other assets 70 85 (18)%
Total Assets US$ 4,476 US$ 4,572 (2)%
Liabilities & Shareholders'
Deficit:
Current Liabilities
Accounts payable US$ 219 US$ 225 (3)%
Accrued royalties 1,189 1,226 (3)%
Taxes & other
withholdings 16 33 (52)%
Current portion of
long-term debt 17 17 0%
Dividend payable 1 23 (96)%
Deferred Revenue 117 56 -
Other current
liabilities 312 302 3%
Total current liabilities US$ 1,871 US$ 1,882 (1)%
Long-term debt 2,242 2,256 (1)%
Dividends payable - 1 -
Deferred tax liabilities,
net 237 244 (3)%
Other noncurrent liabilities 212 225 (6)%
Total Liabilities 4,562 US$ 4,608 (1)%
Common stock - - -
Additional paid-in capital 590 579 2%
Accumulated deficit (686) (614) 12%
Accumulated other
comprehensive income, net 10 (1) -
Total Shareholders' Deficit US$ (86) US$ (36) 139%
Total Liabilities &
Shareholders' Deficit US$ 4,476 US$ 4,572 (2)%
About Warner Music
Warner Music Group Corp. -- http://www.wmg.com/-- (NYSE: WMG)
is a publicly traded in the United States. With its broad
roster of new stars and legendary artists, Warner Music Group is
home to a collection of the best-known record labels in the
music industry including Asylum, Atlantic, Bad Boy, Cordless,
East West, Elektra, Lava, Nonesuch, Reprise, Rhino, Roadrunner,
Rykodisc, Sire, Warner Bros. and Word. Warner Music
International, a leading company in national and international
repertoire, operates through numerous international affiliates
and licensees in more than 50 countries. Warner Music Group
also includes Warner/Chappell Music, one of the world's leading
music publishers, with a catalog of more than one million
copyrights worldwide.
Outside the United States, the company has two subsidiaries in
Austria, one in Nova Scotia and another in Luxembourg. It has
Latin American operations in Argentina, Brazil and Chile.
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B E L G I U M
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PORTOLA PACKAGING: Emerges from Pre-Packaged Ch. 11 Restructuring
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Portola Packaging Inc. completed the process of de-leveraging its
balance sheet. The restructuring has significantly reduced
Portola's total outstanding indebtedness and associated interest
expense. During the pre-packaged chapter 11 reorganization,
Portola continued to operate without any disruption or effect on
suppliers and customers while it eliminated US$180MM of debt from
its balance sheet. In connection with the restructuring, Portola
converted all of the 8.25% senior notes into equity. Portola has
emerged from the re-structuring with strong financial sponsorship.
Funds managed by Wayzata Investment Partners are now Portola's
majority shareholder, and Wells Fargo Foothill, part of Wells
Fargo & Company, and its lending partners have provided a senior
loan facility for the company.
Brian Bauerbach, Portola's chief executive officer, said "Portola
is now one of the most financially sound suppliers in the market
and is positioned to move forward successfully and bring the best
products, quality, and service to our customers. I wish to thank
all of our customers, suppliers, and employees for their patience
and loyalty while we worked through this critical period."
About Portola Packaging
Portola Packaging Inc. -- http://www.portpack.com/-- designs,
manufactures, and markets a full line of tamper-evident plastic
closures, bottles, and equipment for the beverage and food
industries, as well as plastic closures and containers for the
cosmetics industry. The company and 6 of its debtor-affiliates
filed for Chapter 11 reorganization on Aug. 27, 2008 (Bankr. D.
Del. Lead Case No. 08-12001). Edmon L. Morton, Esq., Robert S.
Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway,
Stargatt & Taylor, represent the Debtors as counsel. When the
Debtors filed for protection from their creditors, they listed
assets of between US$50 million and US$100 million, and debts of
between US$100 million and US$500 million. The company has
locations in China, Mexico and Belgium.
As reported in the Troubled Company Reporter on Oct. 16, 2008, the
Bankruptcy Court has confirmed the Plan.
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F R A N C E
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ALCATEL-LUCENT: Appoints Paul Tufano as New CFO
-----------------------------------------------
Alcatel-Lucent in a press statement on Wednesday said that Hubert
de Pesquidoux, CFO and President of Enterprise business, has
decided to leave the company to pursue other opportunities. As of
December 1, 2008, Paul Tufano, a senior executive of 30 years of
experience in international finance, will join the company as
Executive Vice President, CFO. He will be a member of the
company's management committee and his office will be in the
company's headquarters in Paris, France.
"We are very sad to see Hubert leaving our company. He has
contributed to strengthening our financial position and developing
our Enterprise business worldwide. I wish him great success in
his new personal projects," said Ben Verwaayen, Alcatel-Lucent's
CEO. "We are welcoming Paul in our management committee. He is a
very well regarded executive in the financial community with a
broad knowledge of our industry. His professional experience
should help us further improving our profitability over the long
term."
"I am extremely delighted to be joining Alcatel-Lucent. Despite a
challenging environment, the company has great opportunities. I'm
very excited and committed to contribute to this success. I'm
looking forward joining this talented team of professionals," said
Mr. Tufano.
Mr. Tufano served as Executive Vice President and Chief Financial
Officer of Solectron Corporation from January 2006 to October 2007
and as Interim Chief Executive Officer from February 2007 to
October 2007. Prior to joining Solectron, Mr. Tufano was
President and Chief Executive Officer at Maxtor Corporation from
February 2003 to November 2004. Prior to that time, he served as
Executive Vice President and Chief Operating Officer from April
2001 and as Chief Financial Officer from July 1996 at Maxtor
Corporation. From 1979 until he joined Maxtor Corporation in
1996, Mr. Tufano held a variety of management positions in finance
and operations at IBM.
Mr. Tufano holds a Bachelor of Science in Economics from St.
John's University in New York and a Masters of Business
Administration, Finance, Accounting and International Business
from Columbia University in New York.
About Alcatel-Lucent
Headquartered in Paris, France, Alcatel-Lucent S.A. --
http://www.alcatel-lucent.com/-- provides solutions that enable
service providers, enterprises and governments worldwide to
deliver voice, data and video communication services to end
users.
Alcatel-Lucent maintains operations in 130 countries, including,
Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada,
United States, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and
Cambodia.
* * *
Alcatel Lucent continues to carry 'BB-/B' long- and short-term
corporate credit ratings from Standard & Poor's. The ratings were
affirmed and the outlook changed from stable to negative in August
2008.
The 'BB-/B-1' long and short-term corporate credit ratings on
subsidiary Lucent Technologies Inc., and all issue ratings on both
companies were also affirmed.
Alcatel-Lucent also carries Ba3 Corporate Family and Senior Debt
ratings, Not-Prime for short term debt, as well as B2 ratings for
subordinated debt with negative outlook from Moody's. The ratings
were affirmed in April 2008.
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G E R M A N Y
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CMK TRANS: Claims Registration Period Ends December 19
------------------------------------------------------
Creditors of CMK Trans GmbH have until Dec. 19, 2008, to register
their claims with court-appointed insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 9:10 a.m. on Jan. 26, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Arnsberg
Meeting Room 328
Eichholzstr. 4
59821 Arnsberg
Germany
Claims set out in the insolvency manager's report will be verified
by the court during this meeting. Creditors may also constitute a
creditors' committee or opt to appoint a new insolvency manager.
The insolvency manager can be reached at:
Dr. Axel Kampmann
Goethestrasse 24
59755 Arnsberg
Germany
The District Court opened bankruptcy proceedings against the
company on Nov. 17, 2008. Consequently, all pending proceedings
against the company have been automatically stayed.
The Debtor can be reached at:
CMK Trans GmbH
Am Schellhorn 3
59457 Werl
Germany
Attn: Christian Kampmann, Manager
Am Schellhorn 6
59457 Werl
Germany
ENERSERVICE GMBH: Claims Registration Period Ends December 23
-------------------------------------------------------------
Creditors of Enerservice GmbH have until Dec. 23, 2008, to
register their claims with court-appointed insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 9:00 a.m. on Feb. 4, 2009, at which time the
insolvency manager will present her first report.
The meeting of creditors will be held at:
The District Court of Dresden
Hall D131
Olbrichtplatz 1
01099 Dresden
Germany
Claims set out in the insolvency manager's report will be verified
by the court during this meeting. Creditors may also constitute a
creditors' committee or opt to appoint a new insolvency manager.
The insolvency manager can be reached at:
Alexandra Herrmanns
Unterer Kreuzweg 6
01097 Dresden
Germany
The District Court opened bankruptcy proceedings against the
company on Nov. 25, 2008. Consequently, all pending proceedings
against the company have been automatically stayed.
The Debtor can be reached at:
Enerservice GmbH
Lauchhammerstrasse 14
01591 Riesa
Germany
Attn: Sven Hockauf
Geboren 1970
Meissner Str. 25 E
01612 Nuenchritz
Germany
HEWO FAHRZEUGBAU: Claims Registration Period Ends December 31
-------------------------------------------------------------
Creditors of HeWo Fahrzeugbau GmbH have until Dec. 31, 2008, to
register their claims with court-appointed insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 8:20 a.m. on Jan. 21, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court Nordhorn
Hall 42
Seilerbahn 15
48529 Nordhorn
Germany
Claims set out in the insolvency manager's report will be verified
by the court during this meeting. Creditors may also constitute a
creditors' committee or opt to appoint a new insolvency manager.
The insolvency manager can be reached at:
Manfred Vellmer
Adalbertstrasse 8
48565 Steinfurt
Germany
Tel: 02552/638710
Fax: 02552/6387111
The District Court opened bankruptcy proceedings against the
company on Nov. 20, 2008. Consequently, all pending proceedings
against the company have been automatically stayed.
The Debtor can be reached at:
HeWo Fahrzeugbau GmbH
Am Bahndamm 1
48455 Bad Bentheim
Germany
Attn: Matthias Hericks, Manager
Zum Esch 51
48612 Horstmar
Germany
MEERANER IMMOBILIEN: Claims Registration Period Ends Dec. 30
------------------------------------------------------------
Creditors of M.I.W. Meeraner Immobilien und Wohnbau GmbH have
until Dec. 30, 2008, to register their claims with court-appointed
insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 9:30 a.m. on Feb. 10, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Chemnitz
Insolvency Tribunal
Gerichtsstr. 2
09112 Chemnitz
Germany
Claims set out in the insolvency manager's report will be verified
by the court during this meeting. Creditors may also constitute a
creditors' committee or opt to appoint a new insolvency manager.
The insolvency manager can be reached at:
Carsten Morgenstern
Michaelstrasse 71
09116 Chemnitz
Germany
Tel: (0371) 381770
Fax: (0371) 3817730
E-mail: chemnitz@hww-kanzlei.de
The District Court opened bankruptcy proceedings against the
company on Nov. 20, 2008. Consequently, all pending proceedings
against the company have been automatically stayed.
The Debtor can be reached at:
M.I.W. Meeraner Immobilien und Wohnbau GmbH
Attn: Thomas Stauder, Manager
Marienstrasse 5
08451 Crimmitschau
Germany
PROBAUTEC PLANUNGSGESELLSCHAFT: Claims Registration Ends Dec. 16
----------------------------------------------------------------
Creditors of Probautec Planungsgesellschaft mbH have until
Dec. 16, 2008, to register their claims with court-appointed
insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 10:30 a.m. on Jan. 28, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court of Dresden
Hall D132
Olbrichtplatz 1
01099 Dresden
Germany
Claims set out in the insolvency manager's report will be verified
by the court during this meeting. Creditors may also constitute a
creditors' committee or opt to appoint a new insolvency manager.
The insolvency manager can be reached at:
Helgi Heumann
Koenigsbruecker Str. 33
01099 Dresden
Germany
E-mail: www.raheumann.dec
The District Court opened bankruptcy proceedings against the
company on Nov. 24, 2008. Consequently, all pending proceedings
against the company have been automatically stayed.
The Debtor can be reached at:
Probautec Planungsgesellschaft mbH
Handwerk 5
02826 Goerlitz
Germany
Attn: Friedemann Wetterling, Manager
Geboren 1954
Dorfstr. 27
02829 Markersdorf
Germany
SGS-TRANSPORTLOGISTIK GMBH: Claims Registration Ends Dec. 29
------------------------------------------------------------
Creditors of SGS-Transportlogistik GmbH & Co. KG have until
Dec. 29, 2008, to register their claims with court-appointed
insolvency manager.
Creditors and other interested parties are encouraged to attend
the meeting at 9:00 a.m. on Feb. 10, 2009, at which time the
insolvency manager will present his first report.
The meeting of creditors will be held at:
The District Court Heilbronn
Hall 4
Rollwagstr. 10a
74072 Heilbronn
Germany
Claims set out in the insolvency manager's report will be verified
by the court during this meeting. Creditors may also constitute a
creditors' committee or opt to appoint a new insolvency manager.
The insolvency manager can be reached at:
Steffen Rauschenbusch
Fleiner Strasse 29
74072 Heilbronn
Germany
Tel: 07131 390 51 51
Fax: 07131/390 51 83
The District Court opened bankruptcy proceedings against the
company on Nov. 20, 2008. Consequently, all pending proceedings
against the company have been automatically stayed.
The Debtor can be reached at:
SGS-Transportlogistik GmbH & Co. KG
Attn: Guenther Schilling, Manager
Austrasse 22
74336 Brackenheim
Germany
TCHIBO: May Exit UK Market on Weak Demand
-----------------------------------------
Germany-based coffee shop and retail chain Tchibo is considering
exiting the British market amid sluggish demand and a recent drop
in British consumers' confidence, Reuters reports citing Financial
Times Deutschland (FTD).
Reuters relates a Tchibo spokesman told FTD the company had
decided to close more outlets in its largest foreign market than
initially planned while the remaining parts of its business were
being "assessed."
"The British retail market is experiencing turbulent times," the
spokesman was quoted by the report as saying.
Headquartered in Hamburg, Germany, Tchibo Holding AG --
http://www.tchibo-konzern.de/-- is the parent company of the
Tchibo Group, which is active in the production of coffee and
related products worldwide. The Company's main coffee products
are produced under the names Tchibo, Gala von Eduscho, TCM Nivea,
tesa and Hansaplast. The Company's coffee is available in
Germany, Austria, Central Europe, Great Britain, Switzerland and
the Commonwealth of Independent States. The Company also operates
coffee shops and sells its products online.
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I R E L A N D
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DEPFA BANK: Moody's Junks Ratings on Two Credit Default Swaps
-------------------------------------------------------------
Moody's Investors Service downgraded its ratings of two Credit
Default Swaps, Freshwater 2 and Wastewater 1, entered into by
Depfa Bank plc.
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on Sept. 15, 2008, Fannie Mae and
Freddie Mac, which were placed into the conservatorship of the
U.S. government on Sept. 8, 2008 and three Icelandic banks,
specifically Kaupthing Bank hf, Landsbanki Islands hf, and Glitnir
Banki hf.
Depfa Bank plc:
(1) Credit Default Swap (Freshwater 2)
-- Current Rating: Caa3
-- Prior Rating: Aa3
-- Prior Rating Action Date: April 2, 2007
(2) Credit Default Swap (Wastewater 1)
-- Current Rating: Caa3
-- Prior Rating: Aa3
-- Prior Rating Action Date: April 2, 2007
MASTERCHEFS: High Court Appoints KPMG Partner as Examiner
---------------------------------------------------------
Barry O'Halloran at the Irish Times reports that the High Court
has appointed KPMG partner Kieran Wallace as examiner to
Masterchefs.
John Coughlan, the managing director of Masterchefs, confirmed
Tuesday that the company opted to go into examinership voluntarily
after the loss of a key contract left it with
short-term cashflow difficulties, the report relates.
According to the report, Masterchefs recently lost the contract to
provide catering at Leopardstown racecourse.
The deal, the report says, was worth more than EUR3 million to
Masterchefs, whose assets net of liabilities stand at EUR253,000.
The examinership, which will run for an initial of 70 days, will
give the company High Court protection from its creditors, the
report notes.
Masterchefs provides corporate catering at high-profile sports and
other events. The company has been trading for more than 20
years. It employs up to 600 catering staff at bigger events.
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K A Z A K H S T A N
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KAZAGROGARANT: S&P Assigns 'B' Short-Term Issuer Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'BB' long-term and 'B' short-term issuer credit and 'kzA'
Kazakhstan national scale ratings to KazAgroGarant, a state-owned
niche market guarantee provider based in the Republic of
Kazakhstan (foreign currency BBB-/Negative/A-3; local currency
BBB/Negative/A-3; Kazakhstan national scale 'kzAAA'). The outlook
is negative.
"The ratings are constrained by KazAgroGarant's untested business
model; the exposure of its investments to the Kazakh banking
sector; and a high guarantee risk concentration, with the largest
guarantee being larger than the company's actual capital," said
Standard & Poor's credit analyst Boris Kopeykin.
The high likelihood of the Kazakh government providing timely
extraordinary support to its wholly-owned company in case of
financial distress supports the ratings. S&P base this opinion on
the track record of support to KazAgroGarant in the form of
recurring capital injections. These have enabled the company to
fulfill its public-policy mandate of providing warehouse receipt
guarantees on agricultural commodities without recourse to debt.
KazAgroGarant guarantees the availability and quality of
agricultural commodities at warehouses selected for its guarantee
system. Since its creation by the government in 2003, there have
been no calls on any of its guarantees.
As of Nov. 1, 2008, the company guaranteed liabilities for
approximately KZT9.5 billion (US$79 million). The liabilities-to-
capital ratio currently stands at 32% and is set to remain above
at least 5% in the medium term.
KazAgroGarant plans to start guaranteeing bank loans in the
agricultural sector, which increases S&P's concerns regarding
potential losses.
Due to its limited track record and high concentration risk, S&P
consider KazAgroGarant's stand-alone rating to be in the 'B'
category. However, based on S&P's criteria for rating government-
related entities, S&P apply a top-down approach, meaning that the
ratings on KazAgroGarant's are strongly tied to those on the
sovereign. This is because of the company's public mandate, its
strong and stable ownership, and the track record of government
support. The three-notch differential with the ratings on
Kazakhstan reflect the absence of an explicit government guarantee
on KazAgroGarant's obligations, the lack of financial agency
status, which would facilitate the government's internal process
to provide timely support, and the relatively smaller importance
of KazAgroGarant's public mandate compared with those of other
rated peers.
KazAgroGarant had more than KZT2 billion in cash as of Nov. 1,
2008, deposited with six local banks. The company also had
investments in local bonds amounting to KZT690 million.
The negative outlook on KazAgroGarant reflects that on the
Republic of Kazakhstan. S&P expects the government to continue to
expand KazAgroGarant's capital, although the exact amount of
injections for 2009-2011 might fluctuate. Furthermore, S&P do not
expect any changes in the policy and regulatory framework that
would weaken KazAgroGarant's public-policy role.
"A negative rating action on Kazakhstan, or a change in
KazAgroGarant's public-policy role accompanied by signs of
weakening government support, could pressure the ratings," said
Mr. Kopeykin. "Ratings upside could result only from a
strengthening of the sovereign's credit profile."
MBK CENTRE: Creditors' Claims Due on January 9
----------------------------------------------
The Specialized Inter-Regional Economic Court of Pavlodar has
declared LLP MBK Centre insolvent.
Creditors have until Jan. 9, 2009, to submit written proofs of
claims to:
The Specialized Inter-Regional
Economic Court of Pavlodar
Vostochny promyshlenny, 2
Pavlodar
Kazakhstan
NT LLP: Creditors Must File Proofs of Claim by January 9
--------------------------------------------------------
The Specialized Inter-Regional Economic Court of Aktube has
declared LLP NT insolvent.
Creditors have until Jan. 9, 2009, to submit written proofs of
claims to:
The Specialized Inter-Regional
Economic Court of Aktube
Altynsarin Str. 31
Aktobe
Aktube
Kazakhstan
Tel: 8 (3132) 21-30-32
STROY COMPLECT: Creditors' Claims Deadline Slated for January 9
---------------------------------------------------------------
The Specialized Inter-Regional Economic Court of Almaty has
declared LLP Construction Company Stroy Complect insolvent.
Creditors have until Jan. 9, 2009, to submit written proofs of
claims to:
The Specialized Inter-Regional
Economic Court of Almaty
Makataev Str. 196-36
Almaty
Kazakhstan
Tel: 8 (7272) 79-86-66
8 (7272) 79-86-76
8 701 795 30-25
TEK TRADE: Creditors' Claims Filing Period Ends January 9
---------------------------------------------------------
The Specialized Inter-Regional Economic Court of Almaty has
declared LLP Tek Trade Kz insolvent on Nov. 5, 2008.
Creditors have until Jan. 9, 2009, to submit written proofs of
claims to:
The Specialized Inter-Regional
Economic Court of Almaty
Makataev Str. 196-36
Almaty
Kazakhstan
Tel: 8 (7272) 79-86-66
8 (7272) 79-86-76
8 701 795 30-25
TRANSMERIDIAN EXPLORATION: Terminates Investment Deal with UEGL
---------------------------------------------------------------
Transmeridian Exploration Inc. and United Energy Group Limited
entered into a Termination Agreement, pursuant to which the
parties agreed to mutually terminate the Amended and Restated
Investment Agreement, pursuant to Section 10.01(a) thereof, and
the Amended and Restated Investor Rights Agreement.
The boards of directors for both United and the company authorized
the termination of the Amended and Restated Investment Agreement.
Even though the Amended and Restated Investor Rights Agreement
would not become effective until the Swap Closing, United and the
company agreed to terminate it by written agreement pursuant to
Section 4.02(a) of the Amended and Restated Investor Rights
Agreement.
On Nov. 14, 2008, United terminated the tender offer. Based on
the termination of the tender offer, United is not required to
accept for payment any Preferred Stock tendered pursuant to the
tender offer. No Preferred Stock was purchased in the tender
offer and all Preferred Stock previously tendered and not
withdrawn will be returned to the holders thereof as promptly as
practicable.
On Nov. 14, 2008, the company and the Senior Notes Issuer
disclosed the termination of the Exchange Offer. As a result of
the termination of the Exchange Offer, the Senior Notes Issuer is
not required to accept for exchange any of the Senior Notes, and
the Exchange Offer consideration will not be paid or become
payable to holders of the Senior Notes who validly tendered their
Senior Notes and delivered their consents in connection with the
Exchange Offer and related Consent Solicitation. All tendered
Senior Notes will be returned to the holders thereof as promptly
as practicable.
Additionally, the amendments to the indenture governing the Senior
Notes set forth in the third supplemental indenture dated as of
Oct. 24, 2008, will not become operative. Further, the amendments
contained in the new related security documents will not become
operative.
A full-text copy of the company's termination agreement is
available for free at http://ResearchArchives.com/t/s?3554
About Transmeridian Exploration
Based in Houston, Transmeridian Exploration Inc. (AMEX: TMY) --
http://www.tmei.com/-- is an independent energy company
established to acquire and develop oil reserves in the Caspian Sea
region of the former Soviet Union. The company's primary oil and
gas property is the South Alibek Field in the Republic of
Kazakhstan covered by License 1557 and the related exploration and
production contracts with the government of Kazakhstan.
Transmeridian Exploration's consolidated balance sheet at
March 31, 2008, showed $402.2 million in total assets,
$341.2 million in total liabilities, and $92.5 million in
redeemable convertible preferred stock, resulting in a
$31.5 million total stockholders' deficit.
Going Concern Doubt
UHY LLP in Houston raised substantial doubt on Transmeridian's
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Dec. 31, 2007, and 2006. The auditing firm pointed to the
company's negative working capital, stockholders' deficit, and
operating losses since its inception.
TRANSMERIDIAN EXPLORATION: Won't Appeal NYSE-A's Delisting Action
-----------------------------------------------------------------
Transmeridian Exploration Incorporated received a delisting notice
from the staff of the NYSE Alternext US indicating that the
company had failed to demonstrate its ability to regain compliance
with Sections 1003(a)(i), (ii), (iii) and (iv) of the Exchange's
company Guide, which states, in relevant part, that the Exchange
will normally consider suspending dealings in, or removing from
the list, securities of a company which (i) has stockholders'
equity of less than US$2 million if such company has sustained
losses from continuing operations and net losses in two of its
three most recent fiscal years; (ii) has stockholders' equity of
less than US$4 million if such company has sustained losses from
continuing operations and net losses in three of its four most
recent fiscal years; (iii) has stockholders' equity of less than
US$6 million if such company has sustained losses from continuing
operations and net losses in its five most recent fiscal years; or
(iv) has sustained losses that are so substantial in relation to
its overall operations or its existing financial resources, or its
financial condition has become so impaired, that it appears
questionable as to whether such company will be able to continue
its operations and meet its obligations as they mature. The
Exchange intends to strike the company's common stock from the
Exchange by filing a delisting application with the Securities and
Exchange Commission pursuant to Section 1009(d) of the company
Guide. The company does not intend to appeal the Exchange's
decision and the company expects the Exchange's decision to become
final on or before Nov. 24, 2008. The company provided no update
on this matter to this date.
The Staff notified the company on May 22, 2008, that the company
was not in compliance with Section 1003(a)(iv) of the company
Guide. The Staff offered the company the opportunity to submit a
plan of compliance advising the Exchange of action the company had
taken or would take to regain compliance with Section 1003(a)(iv)
of the company Guide. The company submitted the Plan on June 5,
2008; and on July 30, 2008, the Exchange notified the company that
it accepted the Plan and granted the company an extension until
Oct. 31, 2008, to regain compliance with Section 1003(a)(iv) of
the company Guide. Subsequently, by letter dated Sept. 23, 2008,
the company was advised that it did not meet Sections 1003(a)(i),
(ii) and (iii) of the company Guide.
The company was afforded the opportunity to supplement the Plan by
Oct. 7, 2008, to address how the company intended to regain
compliance with Section 1003(a)(iv) of the company Guide by
Oct. 31, 2008, and Sections 1003(a)(i), (ii) and (iii) of the
company Guide by March 23, 2010. The company submitted the Plan
Supplement on Oct. 7, 2008.
After a review of the Plan and the Plan Supplement, the Exchange
determined that the Plan and Plan Supplement do not address the
company's ability to regain compliance with the continued listing
standards of the company Guide based on (i) the company's Nov. 17,
2008 announcement of the termination of the Amended and Restated
Investment Agreement between United Energy Group Limited and the
company, dated as of June 11, 2008, and amended and restated as of
Sept. 22, 2008, which represented the company's sole initiative
for regaining compliance with the Exchange's continued listing
standards; (ii) the financial projections provided in the Plan
Supplement which showed that the company would not regain
compliance with the $6 million stockholders' equity requirement by
the March 23, 2010 deadline; and (iii) the absence of any viable
alternatives for the Staff to conclude that the company could
regain compliance with the Exchange's continued listing standards
by March 23, 2010.
In addition, the Notice indicates that the company is not in
compliance with Section 1003(f)(iv) of the company Guide due to an
outstanding balance payable to the Exchange in the amount of
$15,000 for listing fees. The Notice also indicates that, as a
result of its low selling price, the company's common stock may
not be suitable for auction market trading. Consequently,
pursuant to Section 1003(f)(v) of the company Guide, the Staff
believes that a reverse stock split is appropriate in view of the
fact that the company's common stock has been selling for a
substantial period of time at a low price per share. The Staff
has determined that this constitutes an additional deficiency and
that the company's continued listing should be predicated on the
company effecting a reverse stock split. The company does not
intend to effect a reverse stock split.
The company's common stock is subject to immediate delisting
proceedings. Upon delisting, there can be no assurance that a
trading market (whether on the Exchange or any other listing,
trading or quotation system) will ever resume.
About Transmeridian Exploration
Based in Houston, Transmeridian Exploration Inc. (AMEX: TMY) --
http://www.tmei.com/-- is an independent energy company
established to acquire and develop oil reserves in the Caspian Sea
region of the former Soviet Union. The company's primary oil and
gas property is the South Alibek Field in the Republic of
Kazakhstan covered by License 1557 and the related exploration and
production contracts with the government of Kazakhstan.
Transmeridian Exploration's consolidated balance sheet at
March 31, 2008, showed $402.2 million in total assets,
$341.2 million in total liabilities, and $92.5 million in
redeemable convertible preferred stock, resulting in a
$31.5 million total stockholders' deficit.
Going Concern Doubt
UHY LLP in Houston raised substantial doubt on Transmeridian's
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Dec. 31, 2007, and 2006. The auditing firm pointed to the
company's negative working capital, stockholders' deficit, and
operating losses since its inception.
TRANSMERIDIAN EXPLORATION: Sept. 30 Deficit Is US$73 Million
------------------------------------------------------------
Transmeridian Exploration Inc.'s balance sheet at Sept. 30, 2008,
showed total assets of US$377,902,000 and total liabilities of
US$451678,000, resulting in a stockholders' deficit of
US$73,776,000.
Net loss for three months ended Sept. 30, 2008 amounted to
US$16,610,000 compared to net loss of US$15,590,000 for the same
period in the previous year.
For the nine-month period, the company reported a net loss of
US$39,989,000 compared to a net loss of US$43,943,000 for the same
period in the previous year.
A full-text copy of the company's 10-Q filing is available for
free at http://ResearchArchives.com/t/s?3555
About Transmeridian Exploration
Based in Houston, Transmeridian Exploration Inc. (AMEX: TMY) --
http://www.tmei.com/-- is an independent energy company
established to acquire and develop oil reserves in the Caspian Sea
region of the former Soviet Union. The company's primary oil and
gas property is the South Alibek Field in the Republic of
Kazakhstan covered by License 1557 and the related exploration and
production contracts with the government of Kazakhstan.
Transmeridian Exploration's consolidated balance sheet at
March 31, 2008, showed US$402.2 million in total assets,
US$341.2 million in total liabilities, and US$92.5 million in
redeemable convertible preferred stock, resulting in a
US$31.5 million total stockholders' deficit.
Going Concern Doubt
UHY LLP in Houston raised substantial doubt on Transmeridian's
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Dec. 31, 2007, and 2006. The auditing firm pointed to the
company's negative working capital, stockholders' deficit, and
operating losses since its inception.
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K Y R G Y Z S T A N
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CAMO GST: Creditors Must File Claims by January 7
--------------------------------------------------
LLC Camo GST Training Group has declared insolvency. Creditors
have until Jan. 7, 2009, to submit written proofs of claims to:
LLC Camo GST Training Group
Tynystanov Str. 199-16
Bishkek
Kyrgyzstan
ENERGO COMPLECT: Creditors Must File Claims by January 2
---------------------------------------------------------
LLC Energo Complect has declared insolvency. Creditors have until
Jan. 2, 2009, to submit written proofs of claims to:
LLC Energo Complect
Fuchik Str. 18
Bishkek
Kyrgyzstan
Tel: (+996 312) 93-00-26
LUCKY STAR: Creditors Must File Claims by January 7
----------------------------------------------------
LLC LTD Lucky Star International Education and Travel Co. has
declared insolvency. Creditors have until Jan. 7, 2009, to submit
written proofs of claims:
The company can be reached at: (+996 312) 52-42-60
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L A T V I A
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PAREX BANK: Deadline for Fulfilling Stake Sale Conditions Extended
------------------------------------------------------------------
JSC Parex Banka in a press statement on Wednesday said that
November 24, 2008 had previously been set as the earliest
preferable date by which, in compliance with the Investment
Agreement, all the preconditions for the sale of 51% of Parex
Banka's shares should have been fulfilled. During this time,
approval for this State aid has been received from the European
Commission. The Latvian Competition Council has also given its
consent for a transfer of 51% of the Bank's shares to Mortgage and
Land Bank of Latvia, and a number of other arrangements provided
by the Agreement have also been exercised.
However, the company said as talks are still in progress with the
syndicated lenders, the Government has decided to extend the
deadline for fulfilling the conditions precedent under the
Agreement; thus, the Agreement will remain effective after the
previously appointed date. On Wednesday, the Minister of Finance
confirmed to the senior management of Parex Banka that it is in
the State's interest to implement the Agreement in order to
stabilize the country's financial system.
As reported in the TCR-Europe on Nov. 12, 2008, Parex Banka sold
51% of its shares to the Baltic nation's government, with existing
shareholders having the rights to buy out the stakes.
Parex confirmed in a press statement that within the frameworks of
the stabilization package, it received the state guarantees for
its liabilities enabling the bank to preserve the liquidity at a
sustainable level, and obviating possible doubts on its
capabilities of raising funds in the international debt markets.
Founded in May 1992, JSC Parex Banka --
http://www.parexgroup.com/-- is a commercial bank with assets
exceeding 4.46 billion. It offers its clients integrated
services in areas such as lending, payment cards, leasing, asset
management and securities trading. It has more than 70 branches,
customer service centers and settlement group, or nearly all
regions of Latvia and the major cities. Currently, bank branches
and customer service centers in Latvia employs more than 2,600
people.
* * *
As reported in the TCR-Europe on Nov. 13, 2008, Moody's Investors
Service downgraded the bank financial strength rating of Parex
Bank to E+ from D+, the local and foreign
currency long-term bank deposit and debt ratings to Ba1 from Baa3
and the short-term rating to Not Prime from Prime-3. The outlook
on the deposit and debt ratings is developing while the BFSR has a
stable outlook.
At the same time, Fitch Ratings downgraded Latvia-based Parex
Banka's Long-term Issuer Default Rating to 'BB' from 'BB+' and
Individual rating to 'F' from 'C/D'. In addition, Fitch placed
the Long-term IDR on Rating Watch Negative. The senior unsecured
ratings are also downgraded to 'BB' and put on Rating Watch
Negative. Fitch affirmed the bank's Short-term IDR at 'B',
Support rating at '3' and Support Rating Floor at 'BB'.
PAREX BANKA: European Commission Approves State Aid
---------------------------------------------------
The European Commission has approved, under EC Treaty state aid
rules, the emergency support intended to facilitate the financing
of JSC Parex Banka. The Commission found the aid to be in line
with its guidance Communication on state aid to overcome the
current financial crisis. The aid is necessary to avoid a serious
disturbance in the Latvian economy. The measures are limited in
time and scope to the minimum necessary to restore the financing,
require an adequate fee level and provide safeguards to minimize
distortions of competition. They are therefore compatible with
Article 87.3.b. of the EC Treaty.
Competition Commissioner Neelie Kroes said: "After intensive
exchanges with the Latvian authorities, the Commission approved
the urgently needed measures as the notified measures are
compliant with the State aid rules"
On November 10, 2008, the Latvian authorities notified a package
of measures aimed at tackling the liquidity problems and possible
shortcomings in capital of Parex Banka. The measures were
necessary, because of the drying up of the funding markets and due
to the distorted valuation of the financial instruments.
The package consists of a state guarantee covering certain
existing and new loans, of a state 1-year deposit to support the
bank's immediate liquidity needs and of subordinated loans to
strengthen its capital base. The maturity for new loans is
limited to three years and for subordinated loans to five years.
The package comprises elements of state aid but contains several
provisions aimed at ensuring its adequacy and proportionality
under the EU state aid rules, in accordance with the Commission's
guidance document.
In particular, the measures will be remunerated by significant
fees. Moreover, a series of behavioral commitments will be
imposed on Parex Banka. These include a limit on growth in
balance sheet, marketing restrictions relating to the state
support and limitation to acquire businesses or companies, while
it benefits from the aid.
The Commission decision covers a period of six months, following
which Latvia should terminate the public support to the bank or
renotify to the Commission for a new assessment. This will enable
the Commission to verify that the support measures are not
maintained if the financial crisis is over. The Commission
reserves the right to review its assessment, if the measures are
modified by the Latvian authorities.
As reported in the TCR-Europe on Nov. 12, 2008, Parex Banka sold
51% of its shares to the Baltic nation's government, with existing
shareholders having the rights to buy out the stakes.
Parex confirmed in a press statement that within the frameworks of
the stabilization package, it received the state guarantees for
its liabilities enabling the bank to preserve the liquidity at a
sustainable level, and obviating possible doubts on its
capabilities of raising funds in the international debt markets.
Founded in May 1992, JSC Parex Banka --
http://www.parexgroup.com/-- is a commercial bank with assets
exceeding 4.46 billion. It offers its clients integrated
services in areas such as lending, payment cards, leasing, asset
management and securities trading. It has more than 70 branches,
customer service centers and settlement group, or nearly all
regions of Latvia and the major cities. Currently, bank branches
and customer service centers in Latvia employs more than 2,600
people.
* * *
As reported in the TCR-Europe on Nov. 13, 2008, Moody's Investors
Service downgraded the bank financial strength rating of Parex
Bank to E+ from D+, the local and foreign
currency long-term bank deposit and debt ratings to Ba1 from Baa3
and the short-term rating to Not Prime from Prime-3. The outlook
on the deposit and debt ratings is developing while the BFSR has a
stable outlook.
At the same time, Fitch Ratings downgraded Latvia-based Parex
Banka's Long-term Issuer Default Rating to 'BB' from 'BB+' and
Individual rating to 'F' from 'C/D'. In addition, Fitch placed
the Long-term IDR on Rating Watch Negative. The senior unsecured
ratings are also downgraded to 'BB' and put on Rating Watch
Negative. Fitch affirmed the bank's Short-term IDR at 'B',
Support rating at '3' and Support Rating Floor at 'BB'.
* LATVIA: Slips Into Recession; Economy Shrank 4.2% in 3Q2008
-------------------------------------------------------------
BBC News reports Latvia has slipped into recession after its
economy, which grew by 50% between 2004 and 2007, shrank 4.2% in
the third quarter of this year. It is the sharpest economic
contraction in the European Union, BBC notes.
Mr. Dominique Strauss-Kahn, Managing Director of the International
Monetary Fund, in a Nov. 21 press statement said that the Latvian
authorities asked the fund, together with the EU, to provide
technical and financial support for the country.
Mr. Strauss-Kahn disclosed against the background of the global
financial crisis, Latvia is experiencing a sharp downturn in
output growth and external funding pressures.
She noted the IMF's Executive Board has initiated fast-track
procedures.
"I have informed the authorities that the IMF stands ready to
rapidly assist their efforts in the context of a comprehensive
economic program, and in close cooperation with the EU," Ms.
Strauss-Kahn said.
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CARLSON WAGONLIT: Moody's Downgrades Corp. Family Rating to 'B1'
----------------------------------------------------------------
Moody's Investors Service has downgraded to B1 from Ba3 the
corporate family rating of Carlson Wagonlit BV. At the same time,
the rating of the EUR285 million notes was downgraded to B3 from
B2 and the rating of the USD850 senior facilities was downgraded
to Ba3 from Ba2. The rating outlook is negative.
"The downgrade reflects Moody's expectation that the company's de-
leveraging will take more time than initially expected, with gross
debt to EBITDA likely to remain above 5x in 2009 -- significantly
above the 4.5x target set for a Ba3 rating," explains Marika
Makela, an Assistant Vice President -- Analyst in Moody's
Corporate Finance Group. Moody's further cautions that CWT's
operating performance softened in Q3 2008, with the EBITDA margin
falling to 9.5% from 11.3% in 2007 and transaction volumes
declining in its US Commercial activities.
"While part of the Q3 2008 profit decline was due to one-off
impacts from contract negotiations with airlines, the accelerating
slowdown in US Commercial transactions and the emerging softness
in EMEA transaction volumes reflect the challenging economic
environment in these markets and a potentially further weakening
trading outlook. Therefore, Moody's does not expect the pressure
on CWT's operating performance to ease in 2009," cautions Ms.
Makela.
Moody's recognises, however, that volumes have remained solid in
Latin America and in the US Government & Military business.
Furthermore, CWT's management is committed to delivering cost
savings and productivity improvements, and continuously improving
its market position through new sales. Moody's notes that with
over two-thirds of costs relating to personnel salaries, CWT
benefits from staffing flexibility and an ability to adjust its
costs in the event of a downturn.
The rating outlook is negative, reflecting Moody's concerns that,
due to the challenging market conditions, the company's credit
metrics could remain weakly positioned for the B1 rating category.
However, some profit improvements could be delivered in the next
financial year through cost savings measures by CWT. The outlook
on the B1 CFR could be stabilized if CWT's credit metrics
improved, with gross debt to EBITDA not exceeding 5x on a
sustainable basis and if cash flow from operations minus dividends
to net debt is maintained above 10%.
Moody's also notes that CWT's liquidity profile remains solid,
with cash balances of around US$212 million as of September 2008
and no significant debt maturities before 2014. However, a USD25
million portion of CWT's US$200 million revolving credit facility
was provided by Lehman Brothers and another smaller portion was
provided by Landsbanki; Moody's has excluded these portions from
its liquidity assessment. Furthermore, Moody's cautions that
while CWT is in compliance with its financial covenants, there is
a step-up in the covenant levels each quarter under the senior
facilities. Therefore, the leeway under the covenants may become
tighter if trading softens in the coming quarters.
Finally, the Ba3 ratings on the US$850 million senior secured bank
facilities and the B3 rating on the EUR285 million senior secured
floating rate notes issued by CWT reflect a probability of default
rating of B1, and a loss given default assessment of LGD-3 on the
senior secured bank debt and LGD-5 on the senior notes. The bank
facilities benefit from guarantees and security on all assets
provided by CWT's material subsidiaries. The senior notes are
contractually and effectively subordinated to the senior secured
bank debt, which represents more than 70% of CWT's consolidated
debt (including the revolving credit facility).
The notes are fully and unconditionally guaranteed on a senior
basis by Carlson Wagonlit Super Holding B.V., the parent company.
However, they are guaranteed only on an unsecured senior
subordinated basis by the cash-flow generative operating entities,
CWT Global B.V. and certain subsidiaries generating around 72% and
81% of the group's revenues and EBITDA, respectively, for the 12
months ending December 31, 2007. In addition, the notes and the
guarantee are structurally subordinated to the creditors of the
non-guarantor subsidiaries. The notes are also secured by a
first-ranking pledge over the shares of CWT, a first-ranking
pledge over a US$165 million inter-company funding loan to CWT
Global B.V. and a second-ranking pledge over the shares of CWT
Global B.V.
The last rating action was implemented on Sept. 23, 2008, when
Moody's changed the outlook on CWT's ratings to negative.
Headquartered in the Netherlands, CWT is a world-leading travel
management company, serving corporations of all sizes as well as
government institutions. It reported revenues of approximately
US$1.8 billion in 2007.
ELM BV: Poor Credit Quality Cues Moody's Junk Rating on 11 Classes
------------------------------------------------------------------
Moody's Investors Service has downgraded its ratings of 12 classes
of notes issued by ELM B.V.
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on Sept. 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on Sept. 25,
2008 and subsequently virtually all of its assets were sold to
JPMorgan Chase, Fannie Mae and Freddie Mac, which were placed into
the conservatorship of the U.S. government on Sept. 8, 2008 and
three Icelandic banks, specifically Kaupthing Bank hf, Landsbanki
Islands hf, and Glitnir Banki hf.
ELM B.V.:
(1) Series 13 US$25,000,000 Secured Variable Coupon Floating Rate
Notes due 2012
-- Current Rating: Ba3
-- Prior Rating: Aaa
-- Prior Rating Action Date: May 23, 2005
(2) Series 14 EUR135,000,000 Secured Variable Coupon Rate Notes
due 2012
-- Current Rating: Ca
-- Prior Rating: Aaa
-- Prior Rating Action Date: May 23, 2005
(3) Series 15 US$60,000,000 Secured Variable Coupon Floating Rate
Notes due 2012
-- Current Rating: Ca
-- Prior Rating: Aaa
-- Prior Rating Action Date: May 23, 2005
(4) Series 16 EUR36,500,000 Secured Variable Coupon Rate Notes due
2012
-- Current Rating: C
-- Prior Rating: Aa3
-- Prior Rating Action Date: May 23, 2005
(5) Series 17 US$5,000,000 Secured Variable Coupon Floating Rate
Notes due 2012
-- Current Rating: C
-- Prior Rating: Aa3
-- Prior Rating Action Date: May 23, 2005
(6) Series 18 EUR9,000,000Secured Variable Coupon Rate Notes due
2012
-- Current Rating: C
-- Prior Rating: A3
-- Prior Rating Action Date: May 23, 2005
(7) Series 19 EUR41,000,000 Secured Variable Coupon Notes due
2012
-- Current Rating: C
-- Prior Rating: Baa2
-- Prior Rating Action Date: May 23, 2005
(8) Series 20 EUR4,000,000 Secured Variable Coupon Rate Notes due
2012
-- Current Rating: C
-- Prior Rating: Ba2
-- Prior Rating Action Date: May 23, 2005
(9) Series 22 EUR10,000,000 Secured Variable Coupon Rate Notes due
2012-1
-- Current Rating: C
-- Prior Rating: Aa1
-- Prior Rating Action Date: May 23, 2005
(10) Series 25 EUR5,000,000 Secured Variable Coupon Floating Rate
Notes due 2012
-- Current Rating: C
-- Prior Rating: Baa2
-- Prior Rating Action Date: May 23, 2005
(11) Series 26 EUR25,000,000 Secured Variable Coupon Floating Rate
Notes due 2012
-- Current Rating: Ca
-- Prior Rating: Aaa
-- Prior Rating Action Date: May 23, 2005
(12) Series 27 EUR15,000,000 Secured Variable Coupon Floating Rate
Notes due 2012
-- Current Rating: C
-- Prior Rating: Aa1
-- Prior Rating Action Date: June 3, 2005
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TVN SA: Moody's Puts 'Ba2' CFRs on Review for Possible Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed the Ba2 Corporate Family
Ratings of TVN S.A. on review for possible downgrade. At the same
time, the Ba3 ratings on TVN Finance Corporation plc's
EUR235 million senior unsecured notes -- due 2013 -- were also
placed on review. Moody's notes that conclusion of the review
process could result in a downgrade or an affirmation of the
rating with a potential change in outlook.
The rating action reflects Moody's concerns that (i) the liquidity
profile of TVN's parent company ITI Group, may prove to be
inadequate in the short-to-medium term to meet the investments
required for the development of its start-up Pay-TV platform known
as "n" in the case of the platform's worse-than-anticipated
performance; and (ii) the Group is unlikely to be able to raise
additional debt in the currently challenging markets due to a
combination of its already weak leverage profile (as reflected by
Consolidated Debt/Last Twelve Months EBITDA, as reported by the
Group, standing at around 4.8x as of H1 2008) and its limited
operating cash generation capacity if one were to exclude the
flagship TVN and consider the still-developing nature of the
Group's other businesses, i.e. digital platform and entertainment.
"In light of the current uncertainty, Moody's is cautious that the
Group's weak financial risk profile may ultimately result in it
having to rely upon a greater proportion of TVN's debt capacity
and existing financial flexibility than had been originally
anticipated when the ratings were upgraded on Nov. 23, 2007," says
Ayse Kayral, a London-based Moody's Analyst - and lead analyst for
TVN S.A.
"Moody's acknowledges that circa PLN310 million in cash that the
Group will receive from TVN in relation to the company's PLN500
million buyback programme (which will start in Q4 2008 and
continue throughout 2009) should initially provide with some
flexibility at the Group level. However, Moody's does not rule
out the possibility that the proceeds could be applied in debt
reduction, particularly considering the obligations under its
senior bank facility," adds Ms. Kayral.
Moody's review will focus on the financial risk and liquidity
profile of ITI Group, and its potential impact on TVN's financial
strategy, credit metrics (i.e. Debt/EBITDA) and liquidity profile.
More positively, Moody's continues to factor in: (i) TVN's leading
position in the TV broadcasting market in Poland; (ii) its solid
and improving audience share levels, supported by its multi-
channel and multi-distribution strategy; (iii) its adequate
liquidity profile over the next 12 months to September 2009,
taking into account management's intention to suspend heavy capex
investments scheduled for the new studio facilities; and (iv)
Moody's expectation that leverage will remain substantially below
3.5x Debt/EBITDA (as adjusted by Moody's) at year-end 2008.
Moody's is nevertheless cautious that against the background of a
potential slowdown in fast-growing TV adverting revenues in
Poland, the extent of the challenges TVN will face in maintaining
double-digit EBITDA growth is likely to threaten the maintenance
of its robust operating cash flow generation capacity, the
potential impact of which will also be assessed as part of the
review. Moody's aims to conclude the review promptly.
Moody's notes that the rating on the EUR235 million senior
unsecured notes due 2013, which is currently one notch below the
corporate family rating, may benefit from the currently limited
amount of secured debt and trade creditors ranking ahead of the
senior unsecured notes, following the issuance of PLN500 million
senior unsecured notes.
Moody's last rating action on TVN S.A. was on Nov. 23, 2007 when
the rating agency upgraded the company's corporate family rating
to Ba2 from Ba3. At the same time, Moody's upgraded the rating on
TVN Finance Corporation plc's EUR235 million senior unsecured
notes due 2013 to Ba3 from B1.
Headquartered in Warsaw, TVN S.A. is one of the leading television
broadcasters in Poland. TVN and its subsidiaries own and operate
13 television channels -- TVN, TVN 7, TVN 24, TVN Meteo, TVN
Turbo, ITVN, TVN Style, TVN Lingua, TVN Med, Discovery Historia,
Telezakupy Mango 24, NTL Radomsko and TVN CNBC Biznes; and
Poland's leading internet portal, Onet.pl. As of Dec. 2007, the
company reported net revenues of approximately PLN1.555 billion
and EBITDA of PLN554 million. As of Nov. 19, 2008, TVN had a
market capitalisation of PLN 4.220 billion.
In Q2 2008, TVN acquired 25% of the share capital plus 1 share of
"n" together with a call option to increase its shareholding in
"n" to a 51% controlling stake exercisable following the third
anniversary of the investment. TVN purchased the 25% of the share
capital plus 1 share of "n", pro-rata shareholder loans of nominal
EUR35.3 million and the call option, for a total cash
consideration of EUR95 million (around PLN322 million).
Launched in October 2006, with a 9% market share, "n" is the
third-largest player in the Pay-TV Direct to Home (DTH) market in
Poland, and generated sales of EUR28 million and an EBITDA loss of
EUR49 million in 2007. As of October 2008, "n" had 400,000
subscribers, with a target of reaching 500,000 at year-end 2008.
The platform is expected to generate positive free cash flow
starting from 2010, and until then -- as per the agreement -- TVN
and ITI Group will contribute to the platform's financing needs in
proportion to their respective stakes.
TVN is majority owned by the ITI Group (around 62%). The ITI
Group is active in television broadcasting and television
production, and operates other businesses such as multiplex cinema
(Multikino) and the Pay-TV DTH operator "n". TVN is, by far, the
most important segment for the ITI Group, accounting for over 86%
of its total revenues and the majority of its EBITDA.
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ALROSA COMPANY: Moody's Maintains 'Ba2' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 corporate family
ratings of ALROSA Company Ltd and Ba2 senior unsecured
US$500 million 2014 notes raised by the group at ALROSA Finance SA
and guaranteed by ALROSA Company Ltd. The outlook is stable.
While Moody's affirmed the ratings, it has also revised the inputs
that support the Ba2 corporate family ratings.
The assessment of the Government Support input as Medium continues
to reflect the Government's majority ownership in the company and
active involvement in its management, as demonstrated by the
Government's recent mediation to stabilize the liquidity position
of the company, as well as extensive benefits related to the
recent changes in the ownership structure of the company.
Moody's has also revised downwards the baseline credit assessment
of the Company from 14 to 15 to reflect concerns over the
deteriorating operating trend in Alrosa's performance and concerns
over delays in the sale of several non-core assets that impede the
stand-alone financial profile and flexibility of the Company. The
assessment also took into account concerns over limited
transparency with regard to the group's financial policies and
disclosure.
ALROSA's operating performance in 2007 and the first half of 2008
remained broadly stable, as the company continued to benefit from
a relatively strong pricing environment in the first six months of
2008. The improvements in prices were however offset by the
reduction in volumes. Moody's notes that ALROSA's business is
highly susceptible to the fluctuation in diamond prices, so
revenues and profitability of the company in the medium term are
likely to be adversely affected by the current economic slowdown,
as well as any weakness in the domestic currency, at a time when
the company continues to make substantial investments that
underpin its gradual migration to underground mining operations.
On 1H 2008 LTM basis, Moody's expects that the leverage position
of the company will likely to deteriorate with Debt/EBITDA
exceeding three times, compared to Debt/EBITDA of 2.2 times
reported at the end of 2007.
The stable outlook on the Ba2 ratings is supported by the
expectation of continuous resolute support by the Government that
should help to stabilize the financial position in an increasingly
difficult operating environment.
ALROSA's liquidity position remains constrained as the Company
faces the need to refinance substantial amounts of debt maturing
throughout 2009, while the immediate pressure on the liquidity
position has been alleviated following the provision of funds to
refinance maturing debt in the 4th quarter by a state-owned bank.
The assessment of the liquidity position takes into account the
recent indirect intervention of the government as the main
shareholder to address Alrosa imminent refinancing needs as well
as the Government's role as mediator in the resolution of the
Company's involvement in the troubled KIT-Finance bank.
ALROSA is the world's second largest diamond mining company (group
of companies) based on diamond production (measured as a multiple
of average market prices) and is estimated to produce c.25% of
global rough diamond output in 2007. The company is majority
owned by the Government of the Russian Federation (50.9%
shareholding) and the Republic of Sakha Yakutia (combined 40%
shareholding). In 2007, ALROSA reported consolidated revenues of
RUR90.7 billion and had operating assets of RUR227.8 billion.
BTA BANK: Moody's Keeps 'B1' Ratings and 'E+' BRSR
--------------------------------------------------
Moody's Investors Service has affirmed the B1 long-term local and
foreign currency deposit ratings and B1 foreign currency senior
unsecured debt rating of BTA Bank. Its bank financial strength
rating of E+ and its Not-Prime short-term local and foreign
currency deposit ratings were also affirmed. Concurrently,
Moody's Interfax Rating Agency affirmed the A1.ru National Scale
Rating of BTA Bank (Russia). All of the bank's global scale
ratings have a stable outlook, while the National Scale Rating
carries no specific outlook. Moscow-based Moody's Interfax is
majority-owned by Moody's, a leading global rating agency.
According to Moody's, the rating action was prompted by a recent
increase of share capital of BTA Bank to RUR12.4 billion from
RUR5.2 billion, whereby the share of the direct ownership by BTA
Bank (Kazakhstan) -- the leading financial institution in
Kazakhstan rated Ba1(stable)/Not Prime/D- of the stake in BTA Bank
(Russia) has decreased to 22.26% from 52.84%.
According to the public announcement on Nov. 13, 2008 by BTA Bank
(Kazakhstan) and BTA Bank, the latter continues to operate as a
subsidiary of BTA Bank (Kazakhstan) and the parent institution
continues to exercise effective control over BTA Bank (Russia)
through the majority representation on the subsidiary's Board of
Directors and the right thereof to designate management and define
strategy of BTA Bank (Russia). Additionally, BTA Bank
(Kazakhstan) entered into an agreement with other shareholders of
BTA Bank (Russia) which provides the former with an irrevocable
option to purchase all or a fraction of the other shareholders'
stake in BTA Bank (Russia).
"In Moody's view, the close strategic and operational links
between the two institutions, as well as the fact that BTA Bank
(Russia) -- previously Slavinvestbank -- completed a full-scale
re-branding project in mid-2008 and now carries the name and logo
of its parent -- BTA Bank (Kazakhstan) -- provide sufficient
evidence of the Russian subsidiary being strategically important
for its Kazakh parent. These factors also support Moody's
assessment of moderate probability of parental support for BTA
Bank (Russia), in case of need, which justifies a one-notch uplift
of the B1 deposit rating of BTA Bank (Russia) from its Baseline
Credit Assessment of B2," says Olga Ulyanova, a Moody's Assistant
Vice-President/Analyst and lead analyst for BTA Bank (Russia).
"This assessment also stems from Moody's awareness that BTA Bank
(Kazakhstan) started to consolidate the financials of BTA Bank
(Russia) in its IFRS reports in 2008 and is going to continue to
do so for the future," adds Ms Ulyanova.
At the same time, Moody's notes that the ratings of BTA Bank
(Russia) are potentially affected by Moody's assumption that the
available financial capacity of BTA Bank (Kazakhstan) to provide
support to its subsidiaries and partner banks, including the
Russian subsidiary, has diminished slightly in the aftermath of
the global financial crisis. In recognition of this fact, on 2
July 2008 Moody's reversed the positive outlook deposit ratings of
BTA Bank (Russia) back to stable; this represented the agency's
most recent rating action.
In November 2007, Moody's took rating actions with regard to six
Kazakh banks, including BTA Bank (Kazakhstan), to reflect the
negative impact of the credit and liquidity crisis on these banks'
credit risk profiles. The outlook on the BFSR of D- of BTA Bank
(Kazakhstan) was changed to negative from stable, while its global
local currency deposit ratings were downgraded to Ba1/Not Prime
from Baa3/Prime-3; the foreign currency deposit ratings remained
unchanged at Ba1/Not Prime.
Headquartered in Moscow, BTA Bank (Russia) reported total IFRS
assets of US$1.8 billion and total shareholders' equity of US$307
million at mid-year 2008. Over the H1 2008, net profits amounted
to US$26 million.
RUSAL: To Pay US$700 Mln Tranche to Norilsk Nickel On Time
----------------------------------------------------------
United Company RusAl will be able to pay on time a deferred US$700
million tranche to billionaire Mikhail Prokhorov for the purchase
of his stake in Norilsk Nickel, Oleg Shchedrov of Reuters reported
Sunday.
"We found the money. The deal will be closed on time, there is no
problem," RUSAL co-owner Oleg Deripaska told reporters Saturday in
the Peruvian capital Lima where he accompanied President Dmitry
Medvedev at an Asian-Pacific Economic Cooperation (APEC) summit.
Citing Vedomosti newspaper, Reuters recalled RusAl had agreed with
Mr. Prokhorov to defer again the tranche originally due on
Oct. 24.
Reuters disclosed Vedomosti said, RusAl, which had already agreed
with Mr. Prokhorov to move the original deadline of the payment to
Nov.15, is to make the payment in two tranches, by Dec.1 and
Feb.1.
As reported in the TCR-Europe on Nov. 4, 2008, RusAl secured a
loan refinancing from state-owned Vnesheconombank.
RusAl borrowed US$4.5 billion from VEB to repay a US$4.5 billion
syndicated loan it took out from ABN Amro, BNP Paribas, Credit
Suisse, and Merrill Lynch to buy 25% of Norilsk Nickel from
Mr. Prokhorov in April. The shares were pledged as collateral for
the loan.
The financing is part of a US$50 billion bailout package provided
to VEB by the Central Bank to refinance the foreign debt of
domestic companies.
RusAl, which earlier failed to agree a US$1.9 billion club loan
with its relationship banks because of market turmoil, was facing
the threat of handing over the stake in Norilsk to creditors
unless it managed to refinance.
About RusAl
Headquartered in Moscow, Russia, Russky Alyuminiyum -
http://www.rusal.ru/en/-- is the world's largest producer of
aluminium and alumina, was established in March 2007 following the
merger of assets of three companies: RUSAL, previously the third
largest global aluminium company; SUAL, one of the world's top ten
players in the aluminium business; and the alumina assets of
Glencore (Switzerland).
* TOMSK OBLAST: S&P Puts 'B+' Rating on Proposed RUR2.5 Bln Bond
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'B+' and 'ruA+' Russia national scale senior unsecured debt
ratings to a proposed RUR2.5 billion (US$90 million) domestic bond
to be issued by Tomsk Oblast (B+/Watch Neg/--; Russia national
scale rating ruA+/Watch Neg/--). The ratings on the bond are on
CreditWatch with negative implications, because the ratings on the
oblast are on CreditWatch with negative implications.
The bond is amortizing, step-down, will carry a fixed coupon, and
will mature in 2013.
The issue will be placed on Nov. 27, 2008, with 20% of the
principal to be repaid annually in 2009-2013. The bond will be
issued to refinance existing debt and to fund capital
expenditures.
Standard & Poor's will closely monitor the oblast's liquidity, as
the bond contains a covenant: if the ratio of debt-to-revenues
without interbudgetary transfers rises above 50%, early repayment
within 30 days is triggered following a claim by bondholders.
Such a claim must be submitted within 15 days following the breach
of the covenant.
S&P considers a covenant breach as unlikely, because the ratio
currently stands at 34%, and the oblast plans to put a 49% cap in
its 2009 budget law and a 50% cap in its debt policy law. Both of
these changes are scheduled for approval in December.
However, the covenant creates the potential for significant
liquidity pressure on the oblast, as the size of the bond is just
slightly less than 10% of its budget revenues.
The ratings on the bond are equalized with the ratings on the
oblast.
The ratings on the oblast are on CreditWatch with negative
implications, reflecting the potentially higher risks posed by the
oblast's need to borrow before the end of 2008 to fund a capital
program and to refinance its debt obligations in Russia's
currently fragile debt market. S&P will likely resolve the
CreditWatch placement following the placement of the bonds.
The ratings on the oblast will continue to be constrained by the
oblast's exposure to a single taxpayer, oil company Tomskneft VNK
(not rated), which provides about 17% of revenues. Additional
constraints include the oblast's dependence on federal government
decisions, expenditure pressures, and relatively high debt
service, with more than RUR1.85 billion of bonds and bank loans
due in December 2008 and a further RUR2.5 billion of bank loans
due in March-May 2009.
The ratings are supported by S&P's expectation of about 3%-4%
economic growth in the oblast in 2008 and that the oblast will
have a relatively good financial performance, with an operating
surplus exceeding 4%-5% in 2008, due to faster revenue growth.
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S W I T Z E R L A N D
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GENERAL MOTORS: Needs to Restructure Debt to Get US$12Bil. Bailout
------------------------------------------------------------------
General Motors Corp. must restructure its debt, because the
government requires that any federal borrowing must be senior to
all other debt, Jeff Green at Bloomberg News reports, citing
Merrill Lynch & Co. analysts James Leda and Steven Landgraber.
Citing the analysts, Bloomberg relates that GM must pay off a
US$4.5 billion revolver and US$1.5 billion loan secured by
equipment and assets of the Saturn brand, and then the government
could support a bankruptcy restructuring. Other than the need to
cut debt and labor costs, GM may still need a government-backed
bankruptcy to remain viable, Bloomberg relates, citing Merrill
Lynch and JPMorgan Chase & Co. analysts. According to the report,
the analysts said that a US$12 billion government bailout would
allow GM to continue operations until a restructuring plan is
devised after President-elect Barack Obama takes office.
Bloomberg quoted Messrs. Leda and Landgraber as saying, "It is
increasingly apparent that GM's only hope for survival, which we
define broadly as avoidance of Chapter 7 liquidation, is a bailout
from the U.S. government."
Citing people familiar with the situation, Bloomberg relates that
GM is working on a plan to reduce debt and labor costs, and
reassess brands and dealers as sales drop.
JPMorgan analyst Himanshu Patel said that GM would have to cut
combined hourly worker pay and benefits to US$44 from US$60 now,
and interest payments would need to be reduced by 70%, which GM
may accomplish with debt-for-equity swaps, Bloomberg reports.
According to Bloomberg, Mr. Patel suggested that GM cancel its
US$7 billion cash contribution -- due in January 2010 -- to a
health-care trust fund for union retirees as the Obama
administration may expand access to health-care coverage.
Bloomberg relates that Messrs. Leda and Landgraber said that GM
must:
-- cut production by as much as two million units,
-- refinance US$6 billion in secured bank debt,
-- buy out employees, and
-- have enough money to operate.
According to Reuters, J.P. Morgan Securities widened its 2009 loss
estimates of US$25.25 a share for GM, compared to its prior loss
view of US$22 per share, on lower international earnings and
likely higher interest costs from government debt.
Reuters quoted Mr. Patel as saying, "We are deeply skeptical of
the commercial prospects for government-dictated product plans,"
and the U.S. government's "focus on forcing GM to make greener
cars is misguided."
State Street Stops Stock Purchase Plans
Reuters reports that GM said on Tuesday that State Street Bank and
Trust Co. has imposed restrictions that prevent GM from restarting
a program that lets workers purchase its common stock. According
to the report, the plan was suspended in September when GM
exhausted its authorized shares. The report says that GM wanted
to reinstate the program, but was told by State Street that it
wasn't appropriate to allow additional investments by workers due
to the company's financial problems.
GM said that its directors and executive officers would remain
under indefinite restrictions of trading in GM shares, Reuters
states. GM's directors and executives, according to the report,
won't be able to directly acquire, dispose of, or transfer any
equity securities of GM, and workers won't be able to sell GM
stock.
GM Can Keep Pension Plan Intact
Charles E. F. Millard -- the director of Pension Benefit Guaranty
Corporation, the federal agency that takes over failed plans --
believed that GM can afford to keep its pension plan intact,
despite the company's possible bankruptcy, Mary Williams Walsh at
The New York Times reports.
According to The Times, the cost of the possible restructuring of
GM could put a heavy burden on the company's pension fund, as it
would have to pay for employees at plants that are shut down or
who are forced to retire early. As GM's blue-collar work force is
still building up new benefits with every additional hour worked,
the pension fund will have to grow to keep up with those costs,
The Times states. If GM continues paying people to retire early,
the costs will increase, because the plan will have to pay
retirees for more years than it budgeted, says the report. GM
isn't contributing additional money to the pension plan, and the
company said that it won't add any money to the fund for the next
three or four years, the report states.
GM holds a credit balance -- a running tally of the contributions
made in past years that were larger than the law required, The
Times states. GM's credit balance was US$44 billion in 2006, and
the firm is using that balance to offset contributions it would
otherwise have to make, says the report.
The Times relates that GM said that it will be paying retirees
US$7 billion yearly for the next 10 years. The pension fund had
US$104 billion in assets last year, more than enough to cover its
obligations of US$85 billion, says the report. The value of the
assets has declined and the obligations have increased since then,
states the report. According to the report, Credit Suisse analyst
David Zion estimates that GM's pension assets have dropped by 15%
so far this year, compared with a 24% decline for the typical
pension fund at the 500 largest firms in the U.S.
The Times reports that 26% of GM's pension fund is invested in
stocks. GM Asset Management CEO Nancy C. Everett said that GM
didn't eliminate stocks from its pension fund completely,
according to The Times. The report quoted Ms. Everett as saying,
"There's two sides to this issue. One is making sure your pension
fund is adequately funded, and the other is that pension income
does come into play when you're looking at the company's income
statement."
GM, says The Times, appears to have sufficient money in the
pension fund to pay its more than 400,000 retirees their benefits
for many years.
The government, says The Times, might insist that GM keep the fund
and cover any shortfalls with its own money even if the company
files for bankruptcy.
GM Drops Tiger Woods Sponsorship
GM said on Monday that it would stop sponsoring golfer Tiger
Woods, a year ahead of schedule, as part of the company's effort
to cut costs, The Wall Street Journal reports. The company had
sponsored the golfer since 2000, says the report.
According to WSJ, Mark Steinberg, Mr. Woods's agent, said that he
offered an "amicable separation" and won't associate Mr. Woods
with another car maker anytime soon.
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.
As reported in the Troubled Company Reporter on Nov. 10,
2008, General Motors Corporation's balance sheet at
Sept. 30, 2008, showed total assets of US$110.425 billion, total
liabilities of US$170.3 billion, resulting in a stockholders'
deficit of US$59.9 billion.
* * *
As reported in the Troubled Company Reporter on Nov. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings, including
the corporate credit rating, on General Motors Corp. to 'CCC+'
from 'B-' and removed them from CreditWatch, where they had been
placed with negative implications on Oct. 9, 2008. S&P said that
the outlook is negative.
Fitch Ratings, as reported in the Troubled Company Reporter on
Nov. 11, 2008, placed the Issuer Default Rating of General Motors
on Rating Watch Negative as a result of the company's rapidly
diminishing liquidity position. Given the current liquidity level
ofUS$16.2 billion and the pace of negative cash flows, Fitch
expects that GM will require direct federal assistance over the
next quarter and the forbearance of trade creditors in order to
avoid default. With virtually no further access to external
capital and little potential for material asset sales, cash
holdings are expected to shortly reach minimum required operating
levels. Fitch placed these on Rating Watch Negative:
-- Senior secured at 'B/RR1';
-- Senior unsecured at 'CCC-/RR5'.
As reported in the Troubled Company Reporter on June 24, 2008,
DBRS has placed the ratings of General Motors Corp. and General
Motors of Canada Limited Under Review with Negative Implications.
The rating action reflects the structural deterioration of the
company's operations in North America brought on by high oil
prices and a slowing U.S. economy.
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U K R A I N E
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ANISO LLC: Creditors Must File Claims by December 9
---------------------------------------------------
Creditors of LLC Aniso (code EDRPOU 30439893) have until Dec. 9,
2008, to submit proofs of claim to:
The Economic Court of Kharkov
Derzhprom 8th Entrance
Svoboda Square 5
61022 Kharkov
Ukraine
The Arbitration Court of Kharkov commenced bankruptcy proceedings
against the company after finding it insolvent on Oct. 28, 2008.
The case is docketed as B-19/156-08.
INDUSTRIAL ASSEMBLY: Creditors Must File Claims by December 9
-------------------------------------------------------------
Creditors of LLC Industrial Assembly (code EDRPOU 31339997) have
until Dec. 9, 2008, to submit proofs of claim to:
Mr. V. Vakulenko
Liquidator
Ap. 5-A
Shakespeare Str. 12-A
61045 Kharkov
Ukraine
Tel: 773-01-30
The Arbitration Court of Kharkov commenced bankruptcy proceedings
against the company after finding it insolvent on Oct. 29, 2008.
The case is docketed as B-50/53-08.
The Economic Court of Kharkov
Derzhprom 8th Entrance
Svoboda Square 5
61022 Kharkov
Ukraine
The Debtor can be reached at:
LLC Industrial Assembly
Vorobyov Str. 4a
Kharkov
Ukraine
VELORES NIK: Creditors Must File Claims by December 9
-----------------------------------------------------
Creditors of LLC Velores Nik (code EDRPOU 34511124) have until
Dec. 9, 2008, to submit proofs of claim to:
Mr. O. Tomashevsky
Liquidator/Insolvency Manager
Rabochaya Str. 7
Nikolaev
Ukraine
Tel: (0512)44-72-27
The Arbitration Court of Nikolaev commenced bankruptcy proceedings
against the company after finding it insolvent on Nov. 4, 2008.
The case is docketed as 2/433/08.
The Economic Court of Nikolaev
Admiralskaya Str. 22a
54009 Nikolaev
Ukraine
The Debtor can be reached at:
LLC Velores Nik
Of. 26
Lenin Avenue, 120
Nikolaev
Ukraine
VVS-POLTAVA LLC: Creditors Must File Claims by December 9
---------------------------------------------------------
Creditors of LLC VVS-Poltava (code EDRPOU 34698762) have until
Dec. 9, 2008, to submit proofs of claim to:
Mr. Nikolay Kupriyenko
Temporary Insolvency Manager
Ap. 18
Independency Square, 1-B
36003 Poltava
Ukraine
The Economic Court of - commenced bankruptcy supervision procedure
on the company on DD. The case is docketed as #.
The Economic Court of Poltava
Zigin Str. 1
36000 Poltava
Ukraine
The Debtor can be reached at:
LLC VVS-Poltava
Ap. 15
Oktiabrskaya Str. 32
36020 Poltava
Ukraine
WOOD-METAL-INDUSTRIAL: Creditors Must File Claims by Dec. 9
-----------------------------------------------------------
Creditors of LLC Wood-Metal-Industrial-Investment (code EDRPOU
35497572) have until Dec. 9, 2008, to submit proofs of claim to:
Mr. Gliadchenko Vladimir
Temporary Insolvency Manager
Kirov Avenue, 96/13
49000 Dnipropetrovsk
Ukraine
The Economic Court of Dnipropetrovsk commenced bankruptcy
supervision procedure on the company on Nov. 3, 2008. The case is
docketed as B 26/223-08.
The Economic Court of Dnipropetrovsk
Kujbishev Str. 1a
49600 Dnipropetrovsk
Ukraine
The Debtor can be reached at:
LLC Wood-Metal-Industrial-Investment
Naberezhnaya Pobedy Str. 32
49000 Dnipropetrovsk
Ukraine
ZHOVTNIVKA OJSC: Creditors Must File Claims by December 9
---------------------------------------------------------
Creditors of OJSC Zhovtnivka (code EDRPOU 00413127) have until
Dec. 9, 2008, to submit proofs of claim to:
Mrs. Svetlana Safronova
Temporary Insolvency Manager
Ap. 1
Richelieu Str. 74
665012 Odessa
Ukraine
Tel: 345-280
The Arbitration Court of Odessa commenced bankruptcy proceedings
against the company after finding it insolvent on Oct. 23, 2008.
The case is docketed as 7/235-08-4029.
The Economic Court of Odessa
Shevchenko Avenue 4
65032 Odessa
Ukraine
The Debtor can be reached at:
OJSC Zhovtnivka
Dachnaya Str. 3
Zhovtnivka
Berezovsky
Odessa
Ukraine
ZHYTOMIR BREAD: Creditors Must File Claims by December 9
--------------------------------------------------------
Creditors of OJSC Zhytomir Bread (code EDRPOU 00378595) have until
Dec. 9, 2008, to submit proofs of claim to:
Mrs. Lizaveta Arkina
Liquidator/Insolvency Manager
Gorky Str. 10/14, Ap. 209
49038 Dniepropetrovsk
Ukraine
The Arbitration Court of Zhytomir commenced bankruptcy proceedings
against the company after finding it insolvent on Oct. 24, 2008.
The case is docketed as 4/41-b.
The Economic Court of Zhytomir
Putiatinskiy Square 3/65
10014 Zhytomir
Ukraine
The Debtor can be reached at:
OJSC Zhytomir Bread
Lesia Ukrainka Str. 33
10001 Zhytomir
Ukraine
* UKRAINE: President Says Refinancing Fails to Improve Liquidity
----------------------------------------------------------------
Reuters reports President Viktor Yuschenko criticized Ukraine's
central bank for its ineffective work in bolstering the banking
system in the country.
The central bank, the report recounts, had allocated UAH28.286
billion (about US$4.7 billion) for the refinancing of banks so far
in November, compared to UAH29.230 billion (about US$4.9 billion)
in October and UAH5.96 billion in September. Mr. Yushchenko, as
cited by the report, said refinancing measures had applied to 110
of 182 banks now operating in Ukraine.
The report relates that according to Mr. Yuschenko, the
refinancing of banks had failed to improve their liquidity. He
warned liquidity has now reached a critical level.
Citing figures released by the central bank, the report discloses
bank balances in their correspondent accounts at the central bank,
an indicator of their liquidity, fell on Thursday last week to
UAH10.334 billion, the lowest level recorded in 2008. The
previous low for the year was UAH11.784 billion on Oct. 31, the
report states.
The central bank, the report reveals, altered its policy Wednesday
last week by abandoning direct intervention and introducing
instead auctions to sell dollars.
Mr. Yushchenko however chided the central bank for using its
reserves ineffectively and failing to halt the slide in the
hryvnia, claiming bank's refinancing policies had been misguided
as it had failed to impose conditions that the money be used to
help the economy rather than purchase dollars, the report notes.
"We will never deal with demand for the dollar if we do not deal
with the supply of hryvnias," the president was quoted by Reuters
as saying. "One thing worries me about this figure -- if this
liquidity is pumped in by the central bank, we will never deal
with and will never win the sort of battle we are now observing on
the currency market."
The president, in a Kyiv Post report, said the National Bank of
Ukraine should apply a stricter policy in the question of
refinancing the country's banks.
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U N I T E D K I N G D O M
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AMERICAN INT'L: Munich Re Eyes Asian Life Insurance Assets
----------------------------------------------------------
The Wall Street Journal reported that Munich Re AG is eyeing parts
of American International Group Inc.'s Asian life insurance
assets.
Without specifying target companies, Munich Re said in a press
statement it sees opportunities in Asia from financial crisis with
growing significance of reinsurance as direct capital substitute.
According to Munich Re, the financial crisis has sent stock
markets plunging around the world and resulted in growing levels
of risk aversion making stringent risk management and transparency
increasingly important.
Munich Re noted that lower investment returns have placed pressure
on primary insurers' capital, and together with restricted
refinancing options on the capital markets, the significance of
reinsurance as a direct capital substitute is growing.
"We are certainly seeing a trend where insurance companies are
looking to shift risk away from their books as they simply don't
have the capital strength to support high risk exposure," said
Ludger Arnoldussen, member of the Munich Re Board of Management,
speaking in Hong Kong at the East Asian Insurance Congress. "This
is benefiting strong reinsurers like Munich Re, as primary
insurance companies attach increasing importance to a reinsurer's
financial strength, stability and risk management capabilities."
Mr. Arnoldussen added that while Munich Re cannot fully escape the
wider effects of the crisis, which includes falling equity markets
and the implications of a worldwide recession, the Group will
emerge stronger from the turmoil. It will benefit from rising
reinsurance prices, the expansion of profitable business and
opportunities for acquisitions, as well as its conservative
investment strategy and core skills in risk assessment.
Asia and Australasia accounted for around 10% of Munich Re's
reinsurance premium volume in 2007. The Group operates in all
major countries in the region.
"We view the current crisis as an opportunity for Munich Re in
Asia-Pacific and believe our strong capital base and risk
management skills will continue to prove a very attractive value
proposition. The demand for highly rated reinsurance will
increase as the greater risk environment produces a flight to
quality," said Mr. Arnoldussen.
Munich Re expects a significantly higher reinsurance price level
and differential terms for the upcoming renewals in January
throughout Asia. This projection is based on the increased cost
of capital, growing demand for reinsurance, shrinking capacity of
the reinsurance industry in general and the changed risk
environment.
Chinese Shows Interest
The Wall Street Journal relates Chinese companies have also been
vocal about their interest in AIG's assets. According to the
Journal, Industrial & Commercial Bank of China Ltd. is monitoring
AIG's plans to sell assets, and the lender won't rule out buying
them.
Also, as reported in the Troubled Company Reporter on Nov. 25,
2008, Reuters said China Life is interested in purchasing AIG's
Asian assets. According to Reuters, China Life's manager said in
an interview, "We want to buy parts of AIG's business, especially
those in areas of Asia such as Hong Kong, Singapore and South
Korea."
Additionally, a consortium led by China Investment Corporation and
including Chinese insurers was negotiating to purchase a 49% stake
in AIG unit Alico, in a deal that could be worth as much as
USUS$10.6 billion, Japanese business daily Nikkei reported.
According to the report, the talks carry a year-end deadline.
A China Investment Corp. official denied that the firm was
interested in buying a stake in AIG, Dow Jones Newswires stated.
About American International Group
Based in New York, American International Group, Inc. (AIG) is the
leading international insurance organization with operation in
more than 130 countries and jurisdictions. AIG companies serve
commercial, institutional and individual customers through the
most extensive worldwide property-casualty and life insurance
networks of any insurer. In addition, AIG companies are leading
providers of retirement services, financial services and asset
management around the world. AIG's common stock is listed on the
New York Stock Exchange, as well as the stock exchanges in Ireland
and Tokyo.
During the third quarter of 2008, requirements to post collateral
in connection with AIG Financial Products Corp.'s credit default
swap portfolio and other AIGFP transactions and to fund returns of
securities lending collateral placed stress on AIG's liquidity.
AIG's stock price declined from US$22.76 on Sept. 8, 2008, to
US$4.76 on Sept. 15, 2008. On that date, AIG's long-term debt
ratings were downgraded by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch
Ratings, which triggered additional requirements for liquidity.
These and other events severely limited AIG's access to debt and
equity markets.
On Sept. 22, 2008, AIG entered into an US$85 billion revolving
credit agreement with the Federal Reserve Bank of New York and,
pursuant to the Fed Credit Agreement, AIG agreed to issue 100,000
shares of Series C Perpetual, Convertible, Participating Preferred
Stock to a trust for the benefit of the United States Treasury.
At Sept. 30, 2008, amounts owed under the facility created
pursuant to the Fed Credit Agreement totaled US$63 billion,
including accrued fees and interest.
Since Sept. 30, AIG has borrowed additional amounts under the
Fed Facility and has announced plans to sell assets and businesses
to repay amounts owed in connection with the Fed Credit Agreement.
In addition, subsequent to Sept. 30, 2008, certain of AIG's
domestic life insurance subsidiaries entered into an agreement
with the NY Fed pursuant to which the NY Fed has borrowed, in
return for cash collateral, investment grade fixed maturity
securities from the insurance subsidiaries.
On Nov. 10, 2008, the U.S. Treasury agreed to purchase, through
its Troubled Asset Relief Program, US$40 billion of newly issued
AIG perpetual preferred shares and warrants to purchase a number
of shares of common stock of AIG equal to 2% of the issued and
outstanding shares as of the purchase date. All of the proceeds
will be used to pay down a portion of the Federal Reserve Bank of
New York credit facility. The perpetual preferred shares will
carry a 10% coupon with cumulative dividends.
AIG and the Fed also agreed to revise the existing FRBNY credit
facility. The loan terms were extended from two to five years to
give AIG time to complete its planned asset sales in an orderly
manner. The equity interest that taxpayers will hold in AIG,
coupled with the warrants, will total 79.9%.
At Sept. 30, 2008, AIG had US$1.022 trillion in total consolidated
assets and US$950.9 billion in total debts. Shareholders' equity
was US$71.18 billion, including the addition of US$23 billion of
consideration received for preferred stock not yet issued.
ASCALADE COMMUNICATIONS: To Distribute Dividends to Creditors
-------------------------------------------------------------
Ascalade Communications Inc. disclosed that in connection with the
on-going legal proceedings filed by Ascalade and Ascalade
Technologies Inc. in Canada under the companies' Creditors
Arrangement Act, the Monitor has issued its second report to
creditors, which notifies creditors that the Monitor will
distribute an interim dividend to proven Class 2 creditors in an
amount equal to 80% for each proven dollar. Any final
distribution will depend on the completion of the realization of
the remaining assets of the Ascalade group of companies.
Update on CCAA proceedings and the Scheme of Arrangement
The Supreme Court of British Columbia ordered a stay of
proceedings with respect to any actions which have or might be
brought against the companies and the stay of proceeds will remain
in effect until all of the assets of the companies are sold and
the net proceeds are distributed to the stakeholders of the
companies. The companies have focused their resources on an
orderly winding up of the Ascalade group of companies.
The Monitor's 2nd Creditors Report provides creditors with an
update on the companies' realization process. Included in this
report is an update on the Hong Kong Scheme of Arrangement
proceedings involving Ascalade Communications Limited. The
companies' claim of HK$377.2 million was filed and accepted under
the Scheme. It was initially estimated that the companies would
receive approximately 37cents for each dollar filed. This
estimate was subject to change and was dependent on ACL's ability
to realize upon its assets, including the factory, equipment and
inventory. The estimate was also dependent upon the number and
dollar amount of creditors claims filed and accepted under the
Scheme.
The majority of ACL's movable assets have been realized; however,
the factory has yet to be sold. The factory is the largest asset
of the Ascalade group of companies and accordingly the amount
ultimately realized from the sale of the factory will determine
the funds available for the various creditors of the Ascalade
group of companies. ACL has been in discussions with two parties
interested in the factory and one of those parties has executed a
non-binding letter of intent with respect to the purchase of the
factory.
The proposed purchase price set out in the letter of intent is
significantly lower than ACL and the Scheme Administrator had
anticipated, as a result of the economic downturn which is
occurring in the Peoples' Republic of China and world-wide.
Given that it is anticipated that the realization from the
factory will be significantly lower than anticipated, the
distribution from ACL to its creditors is not expected to be
37cents for each dollar filed. However, the companies anticipate
that the creditors of the companies will receive full payment of
the proven claims, which have been filed under the CCAA
proceedings. That being said, the amount available for future
payments to creditors is highly dependent on realization of ACL's
assets, including the sale of the factory.
Based upon the realizations to date, the Scheme Administrator
approved an interim distribution to Scheme creditors of 5.8% of
their proven claims. As a result, the companies received a
payment of approximately HK$22.5 million or approximately
C$3.4 million. The Monitor has been advised that an
additional distribution will be made to the proven creditors upon
ACL and the Scheme Administrator completing the realization of the
remaining assets of ACL. However, the timing and amount of this
distribution is unknown at this time and accordingly the timing
for any further distributions to creditors of the companies under
the CCAA proceedings is also unknown.
Any other recovery in the CCAA proceedings for creditors and any
recovery for other stakeholders of the Company, including
shareholders, is uncertain and is highly dependent upon a number
of factors, including the recovery from the sale of the factory,
equipment and inventory in the PRC and the outcome of the Scheme
in Hong Kong.
Application to Delist Shares from the TSX
The Court's order, dated June 24, 2008, authorized Ascalade, at
anytime after July 25, 2008, to apply to the Toronto Stock
Exchange to have the trading of the Common Shares of Ascalade
suspended from trading and delisted. Ascalade's board of
directors has determined to apply to the TSX for a voluntary
delisting of Ascalade's Common Shares and Ascalade plans to make
the delisting application on or about Dec. 1, 2008, and that
delisting will occur on or about Dec. 3, 2008.
About Ascalade Communications Inc.
Based in Richmond, British Columbia, Ascalade Communications Inc.
(TSE:ACG) -- http://www.ascalade.com/-- is an innovative product
company that designs, develops and manufactures digital wireless
and communication products. The company deliver products by
offering its partners and customers complete vertical integration,
from product design and development to final production. The
company's products include digital cordless phones, Voice over
Internet Protocol phones, digital wireless baby monitors and
digital wireless conference phones. Ascalade products have been
distributed in more than 35 countries and under 80 regional
brands. Ascalade also has facilities in Qingyuan, China, Hong
Kong and a sales office in Hertfordshire, United Kingdom.
As reported by the Troubled Company Reporter on March 4, 2008,
Ascalade announced its decision to seek protection from creditors
under the Companies' Creditors Arrangement Act with the British
Columbia Supreme Court.
On April 29, 2008, Jervis Rodrigues, senior vice-president of
Deloitte & Touche Inc., filed separate petitions for protection
under Chapter 15 of the U.S. Bankruptcy Code on behalf of Ascalade
Communications Inc. and its debtor-affiliate (Bankr. N.D. Ill.
Case Nos. 08-10612 and 08-10616). Jeffrey G. Close, Esq. at
Chapman and Cutler LLP represents the Petitioner in the Chapter 15
case. Ascalade's financial condition as of September 2007 showed
total assets of US$99,630,000 and total debts of US$40,410,000.
BARCLAYS PLC: Shareholders Back GBP7Bln Capital Raising Plan
------------------------------------------------------------
BBC News reports Barclays plc shareholders on Monday voted
overwhelmingly in favor of a plan to raise GBP7 billion, mainly
from investors in the Middle East, despite strong opposition.
According to the report, some 87% of shareholders approved the
GBP7 billion capital raising plan.
The bank's board, the report recounts, agreed to accept GBP5.3
billion from state investment fund Qatar Holding, and Sheikh
Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi's royal family.
The remaining GBP1.7 billion will come from institutional
investors, many of whom are UK-based, the report states.
Citing Barclays' chairman Marcus Agius, the report relates
the bank opted not to accept a rescue deal from the government
for three reasons.
Mr. Agius said Barclays could not accept the UK government's
demand that it couldn't pay a dividend to shareholders as it
believes the freedom to determine dividend policy is important to
shareholders, the report discloses.
The UK government, the report says, also would expect Barclays to
have put its domestic customers first, which would not have been
possible considering that Barclays was now such an international
bank.
He added the bank wanted to maintain "complete control" over its
future policies, the report reveals.
Critics say it would have been cheaper for Barclays to take a
bail-out deal from the UK government, the report notes.
About Barclays PLC
Headquartered in London, England, Barclays PLC is a global
financial services provider engaged in retail and commercial
banking, credit cards, investment banking, wealth management and
investment management services. The Company, along with its
subsidiaries, operates through six business segments: UK Banking,
Barclaycard, International Retail and Commercial Banking, Barclays
Capital, Barclays Global Investors and Barclays Wealth. In April
2008, Barclays Capital acquired the assets of PowerLytix LLC, a
provider of market data analysis. In July 2008, Barclays PLC
completed the acquisition of 100% of Expobank, a Russian retail
and commercial bank. Expobank became part of Barclays Global
Retail and Commercial Banking Emerging Markets business. In
August 2008, Barclays PLC started operations in Pakistan. On
September 22, 2008, Barclays PLC completed the acquisition of
Lehman Brothers North American investment banking and capital
markets operations and supporting infrastructure.
CENTRO PUB: Appoints Joint Administrators from Grant Thornton
-------------------------------------------------------------
Joseph Peter McLean and Keith Hinds of Grant Thornton UK LLP were
appointed joint administrators of Centro Pub Co. Ltd. on Nov. 12,
2008.
The company can be reached at:
Centro Pub Co. Ltd.
43-45 Bridge Street
Morpeth
Northumberland
NE61 1PE
England
ENERGY EXHAUSTS: Goes Into Administration; Begbies Appointed
------------------------------------------------------------
Energy Exhausts Ltd of Hixon, which employs 45 people, has been
hit by rising commodity and transport prices, leading to strong
pressure to cut prices. A recent sharp fall in demand for its
after-market products and the internal restructuring at major
customer JCB have also had a significant effect.
Facing serious working capital pressures, the directors concluded
that the company would not be able to trade through its
difficulties and invited the company's bankers to appoint Joint
Administrators John Kelly, John Lowe and Bob Young of corporate
recovery specialists Begbies Traynor.
John Kelly said: "We are presently assessing the future of the
business with a view to exploring the possibility of a sale as a
going concern."
The business was established in 1984 as Tuberex Ltd, a main
original equipment manufacturer of exhaust parts and equipment for
JCB and other blue chip tier 2 suppliers to the automotive
industry and after-market.
It was acquired in May 2005 from the administrators of Tuberex
Exhaust Systems Ltd when it changed its name to Energy Exhausts
Ltd.
Following the acquisition, over the next two years turnover
increased from GBP4.5 million to GBP10 million and created an
additional 60 jobs. This achievement led to the company becoming
a finalist in the Business Sentinel Awards.
About Begbies Traynor
Begbies Traynor -- http://www.begbies-traynor.com/-- is a UK
business rescue, recovery and restructuring specialist, providing
a partner-led service to stakeholders in troubled businesses.
FIRKINS: Goes Into Administration; 140 Jobs Affected
----------------------------------------------------
James Cartledge at Birmingham Mail reports that West Midlands-
based bakery Firkins has gone into administration, resulting to
the loss of 140 jobs and the closure of 21 shops.
Firkin however managed to secure 30 shops, the report notes.
According to the report, the company, which had 54 stores
throughout the West Midlands, faced fierce competition on the high
street from the likes of Starbucks, Subway and supermarkets,
making trading increasingly difficult.
"We have battled to keep the business afloat but when the
financial wheels came off the banking system over the last two
months the funding package could not be agreed," Ian Bolderston,
managing director of Firkins, was quoted by the report as saying.
"This meant that we have been searching for the funds required but
have finally come to the conclusion that in its current format the
business could not survive."
Mr. Bolderston took over the 138-year-old bakery in April 2006
when it was facing bankruptcy, the report recounts.
GLENCARSE HOTEL: Goes Into Liquidation; Begbies Traynor Appointed
------------------------------------------------------------
The popular Glencarse Hotel, between Dundee and Perth, has gone
into liquidation with Ken Pattullo and Scott McGregor, of business
rescue, recovery and restructuring specialists Begbies Traynor
appointed joint liquidators.
The Hotel, which has five en-suite letting bedrooms and a recently
refurbished restaurant which seats 65 people, was bought two years
ago by present owners Robb Ltd.
"The fact that the hotel has gone into liquidation is perhaps a
sign of the times but the business is carrying on trading and all
bookings will be honored," said Mr Pattullo. "We are hopeful of a
quick sale as it is a popular landmark hotel close to the A90 and
we have already had interest expressed in it."
The Hotel stands in spacious grounds and in addition to the
letting bedrooms there is self-contained accommodation for the
owners with four bedrooms.
Begbies Traynor -- http://www.begbies-traynor.com/-- is a UK
business rescue, recovery and restructuring specialist, providing
a partner-led service to stakeholders in troubled businesses.
INTERNATIONAL POWER: S&P Assigns 'BB-' Rating to Three Notes
------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB-'
long-term debt ratings to the three unsecured convertible note
issues guaranteed by U.K.-based global power developer
International Power PLC (IPR; BB-/Stable/--).
At the same time, S&P assigned recovery ratings of '4' to these
three issues, namely the EUR230 million 3.25% convertible bonds
due 2013 issued by International Power Finance (Jersey) Ltd., the
US$252.5 million 3.75% convertible bonds due 2023 issued by
International Power Finance (Jersey) II Ltd., and the EUR700
million 4.75% convertible bonds due 2015 issued by International
Power Finance (Jersey) III Ltd. The recovery ratings of '4'
indicate S&P's expectation of average (30%-50%) recovery in the
event of payment default. S&P notes that these ratings could be
volatile, subject to changes in the composition of the IPR group,
its capital structure, and other assumptions, given the very
substantial prior ranking, subsidiary-level obligations.
The recovery ratings reflect the valuation of IPR on a going
concern basis under S&P's hypothetical default scenario, owing to
its holding company structure and some preservation of group value
as a result of dividend distribution lock-ups at the operating
assets. This diminished ability to transfer cash to IPR in tandem
with operating stresses is the driver for an inability to
refinance maturing debt or raise sufficient additional debt under
S&P's default scenario. The stressed value of IPR at the
hypothetical point of default is estimated at about GBP6.0
billion. The recovery ratings also reflect the unsecured
noteholders' weak claim on operating assets and the relatively
modest documentary protections for bondholders.
The corporate credit rating on IPR reflects the parent company's
significant exposure to cash flows from speculative-grade
projects, significant exposure to merchant risk at the project
level, an aggressive financial risk profile, and the parent
company's appetite for debt-financed acquisitions. The rating is
supported by a diverse, geographically well spread project
portfolio and adequate liquidity headroom at the parent company
level.
Ratings List
New Ratings
International Power (Jersey) II Ltd.
Senior Unsecured
US$252.5 mil. 3.75% due 2023 BB-
Recovery Rating 4
International Power (Jersey) III Ltd.
Senior Unsecured
EUR700 mil. 4.75% due 2015 BB-
Recovery Rating 4
International Power (Jersey) Ltd.
Senior Unsecured
EUR230 mil. 3.25% due 2013 BB-
Recovery Rating 4
KAUPTHING SINGER: Has 41% Property Exposure, Ernst & Young Says
---------------------------------------------------------------
Nick Duxbury at Property Week reports that property accounts for
41% of total lending for Kaupthing Singer & Friedlander.
Citing a statement of administrator's proposal filed Nov. 14 at
Companies House, by Ernst & Young, the report discloses
property makes up GBP1.4 billion of the bank's GBP3 billion loan
book.
In its separate GBP937 million property loan book, large
commercial assets made up 35%, with 21% overseas and 15% exposure
to residential developments, over 250 customers, the report notes.
Ernst & Young has appointed King Sturge to value and manage the
bank's property assets, while law firms Freshfields Bruckhaus and
Deringer, and Denton Wilde and Sapte are advising the
administration process, the report relates.
The FSA, the report recounts, put Kaupthing Singer & Friedlander
in to administration on 8 October following a downgrade in its
credit rating.
About Kaupthing Singer & Friedlander
Kaupthing Singer & Friedlander is a UK-based banking subsidiary of
Iceland's Kaupthing Bank hf.
LANGBAURGH PROPERTIES: Names Joint Liquidators from PwC
-------------------------------------------------------
Tim Walsh and Richard Setchim of PricewaterhouseCoopers LLP were
appointed joint liquidators of Langbaurgh Properties on Nov. 11,
2008, for the creditors' voluntary winding-up proceeding.
The company can be reached at:
Langbaurgh Properties
89 Sandyford Road
Newcastle upon Tyne
NE1 8HW
England
MFI RETAIL: Goes Into Administration; MCR Appointed
---------------------------------------------------
MFI Retail Ltd has gone into administration, BBC News reports.
MCR have been appointed as administrators.
MFI, the report relates, blamed falling demand big ticket items,
cash-flow problems and the withdrawal of credit for its collapse.
According to the report, increased competition from newer rivals
such as Ikea hit MFI's sales.
Analysts on the other hand cited the downturn of the housing
market as a major contributor to the decline of MFI, the report
states.
MFI however noted some of its stores will continue to trade, but
26 will close, the report discloses. Existing orders will be
either met or refunded.
MFI's administrators meanwhile told the BBC they had received two
expressions of interest from potential buyers.
"While a decision has not been made as to an appropriate exit
route and the future of the company, the administrators will be
reviewing the possibility of a sale of some or all of the
company's stores," Phil Duffy, a partner at MCR, was quoted by BBC
as saying.
Mr. Duffy added all outstanding employee wages have been paid up
to date and ongoing wages for retained staff will continue to be
paid, the report recounts.
MICAP INGREDIENTS: Taps Joint Liquidators from PKF
--------------------------------------------------
Kerry Bailey and Jonathan D Newell of PKF (UK) LLP were appointed
joint liquidators of Micap Ingredients Ltd. on Nov. 13, 2008, for
the creditors' voluntary winding-up proceeding.
The company can be reached at:
Micap Ingredients Ltd.
Pemberton Business Centre
Enterprise House
Richmond Hill
Pemberton
England
MITCHELLS & BUTLERS: Scraps Dividend, To Focus on Cutting Debts
---------------------------------------------------------------
Mitchells & Butlers plc won't be paying dividend for the year and
probably until 2010 in a move to save GBP60 million each year,
Reuters reports.
The report says the pubs operator, which is grappling with a
GBP2.7 billion debt pile, will focus on reducing levels of its
unsecured medium-term debt and will suspend dividend payments
until debt on a three-year banking facility, which stands at
GBP475 million, falls below GBP300 million.
Reuters relates Mitchells & Butlers will also reduce its capital
expenditure by over GBP70 million this year by cutting back on
expansion and focusing on maintenance of the existing estate.
According to Reuters, Mitchells & Butlers reported a decline in
full-year profits
as the impending recession, a smoking ban, hikes in beer duty,
poor summer weather and cheap alcohol hit Britain's pubs. The
company's pretax profit for the year to September 27 fell by 13.5
percent to GBP179 million while like-for-like sales increased by 1
percent over the year, boosted by strong food sales which had
increased by 7.2 percent per pub.
Additionally, the report discloses the company is looking to
dispose of non-core assets including its German cafe business Alex
and Hollywood Bowl, the tenpin bowling and bar chain. The company
also abandoned plans to convert into a lower tax Real Estate
Investment Trust (REIT) after changes to legislation introduced in
this week's pre-budget report, Reuters says.
Headquartered in Birmingham, England, Mitchells & Butlers plc
(LON:MAB) -- http://www.mbplc.com/-- is an operator of managed
pubs and pub restaurants in the United Kingdom. The Company has
two main retail operating segments: Pubs & Bars, which focuses
primarily on drink and entertainment-led sites, and Restaurants,
which focuses on food and accommodation-led sites. Mitchells &
Butlers plc is also engaged in property development, which is
undertaken by Standard Commercial Property Developments Limited.
Mitchells & Butlers plc has an estate of 2003 sites as of
September 29, 2007, principally located in the United Kingdom, and
with 42 pub restaurants in Germany. The Company's subsidiaries
include Mitchells & Butlers Retail Ltd, Mitchells & Butlers Retail
(No 2) Ltd, Mitchells & Butlers (Property) Ltd, Mitchells &
Butlers Leisure Retail Ltd, Mitchells & Butlers Finance plc,
Mitchells&Butlers Germany GmbH and Standard Commercial Property
Developments Ltd.
PIPE HOLDINGS: Moody's Keeps 'B3' Rating; Outlook Negative
----------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating of Pipe Holdings 2 Limited, a holding company of Polypipe
Building Products Ltd. The probability of default rating has been
downgraded to Caa1 from B3. The B1 rating for the
GBP122 million senior secured notes due 2011 issued by Pipe
Holdings Plc and the Caa1 rating of the GBP66 million senior
unsecured notes due 2013 issued by Pipe Holdings Plc have been
affirmed. The outlook on all ratings has been changed to negative
from stable.
"The outlook change to negative is a reflection of an accelerated
erosion of the company's operating performance in Q3 2008,
combined with the expectation that Polypipe's operating
performance and cash flow generation ability is likely to weaken
further over the next few quarters, given the difficult trading
environment in the UK for building products which could result in
credit metrics that are below the requirements of the single-B
rating category," says Christian Hendker, lead analyst for
Polypipe at Moody's Frankfurt office. Despite these operational
challenges, the currently solid liquidity position combined with a
disciplined capital expenditure program provides a solid cushion
to adress upcoming debt service requirements within the next
quarters.
Moody's believes that Polypipe's top line revenue is likely to be
pressured by lower demand for building products, given the current
cyclical downturn of the UK housing market. Furthermore, revenue
could be affected by weakening demand from Repair, Maintenance and
Improvement activities. "Although Moody's recognizes that the
company will continue to implement cost reduction measures, the
negative outlook reflects the uncertainty surrounding the extent
to which these measures can offset the impact on profit
contribution from lower revenues," explains Mr. Hendker.
Operating Margins could to some extent benefit from lower raw
material and energy prices going forward, provided that Polypipe
can protect its pricing position.
Moody's understands that, as at Sept. 2008, the company had a
sufficient cash balance of GBP37 million, supported by continued
free cash flow generation over the last twelve months and proceeds
from asset disposals. Polypipe's liquidity profile also benefits
from access to a currently unused revolving credit facility, which
was recently extended to 2010 -- albeit at a lower face amount of
GBP17.5 million.
While the current liquidity cushion is viewed as solid, the
downgrade of the probability of default rating from B3 to Caa1
reflects an increasing probability of a default linked to the
heightened challenge of preserving an adequate liquidity cushion
in the intermediate term, as Moody's notes that the liquidity
position could erode, depending on (i) the severity and duration
of the current downturn of the UK housing market and the impact on
Polypipe's operating performance and free cash flow generation
ability, and (ii) whether any additional pressure is placed on the
company's liquidity position from the pending earnout obligation
to previous shareholders which could result in payouts of up to
GBP26.4 million, while Polypipe expects these to be limited to
GBP5 million.
Moody's has left the B3 corporate family rating unchanged, as this
reflects the agency's view on the company's recovery prospects
according to Moody's Loss-Given Default Rating Methodology. Based
on a going concern assumption of the company and considering only
debt at the level of the restricted group, Moody's assume a family
recovery rate above 50%. The B3 rating reflects: (i) Polypipe's
strong brand recognition in the UK building materials market; (ii)
the company's good position as the leading supplier of plastic
pipe systems to UK independent builders' merchants, with an
estimated market share of 50%; (iii) a track record of solid
profitability levels; and (iv) the company's solid liquidity
position, with GBP37 million on-balance sheet in cash and no
drawings under its credit facility as at the end of September
2008.
The ratings additionally reflect these challenges: (i) the
company's limited absolute scale, as evidenced by its revenue base
of GBP338 million and its exposure to the UK construction
industry; (ii) the volatility in raw material prices, principally
plastic polymers, which Polypipe may not be able to pass on to its
customers going forward; (iii) the competitive, concentrated
mature markets in which the company operates, particularly in its
core segments; (iv) the challenge of reducing financial leverage,
as reflected in total debt (excluding cash)/EBITDA of over 5.3x
for 2007, which is more in line with the requirements for the
lower end of the single-B rating category and which was further
leveraged up following a secondary buyout during 2007, thereby
adding additional debt outside the restricted group; and (v)
pending refinancing of acquisition debt of the 2007 secondary
buyout, which is however outside the restricted group.
Moody's could downgrade the ratings if Polypipe's cash position
erodes below GBP15 million or if credit metrics erode further,
evidenced by the EBITA-to-interest expense ratio remaining below
1.0x or the debt-to-EBITDA ratio rising above 6.0x.
Moody's believes the rating outlook could stabilize if the company
demonstrates a track record of positive free cash flows, begins to
reduce leverage within the restricted group and agrees on a
satisfactory resolution of the pending earnout obligation dispute.
Outlook Actions:
Issuer: Pipe Holdings 2 Ltd
-- Outlook, Changed to Negative from Stable
Outlook Actions:
Issuer: Pipe Holdings plc
-- Outlook, Changed to Negative from Stable
Downgrades:
Issuer: Pipe Holdings 2 Ltd
-- Probability of Default Rating, Downgraded to Caa1 from B3
LGD rates:
Issuer: Pipe Holdings plc
-- Senior Unecured Notes, Caa1 ratings affirmed. The LGD
assessment was changed to LGD 4, 51% from LGD 5, 75%
-- Senior Secured Notes, B1 ratings affirmed.
The LGD assessment was changed to LGD 2, 18% from LGD 3, 32%. The
affirmed B1 rating of the Senior Secured Notes is one notch below
the outcome of Moody's LGD rating model, as the revised group
probability of default rating does not impact the relative ranking
of the debt instruments in a default scenario.
The last rating action was implemented on Sept. 2, 2008, when
Moody's downgraded Polypipe's CFR to B3 from B2 and the outlook
was changed to stable from negative. The rating assigned reflects
the application of the global building material rating methodology
published in 2006.
Based in Doncaster, South Yorkshire, England, Polypipe
manufactures a wide range of plastic pipe systems, predominantly
for the UK construction market. 2007 revenues were
GBP338.6 million.
POLARIS CONSULTING: Names Joint Administrators from Tenon
---------------------------------------------------------
Duncan Beat and David Thorniley of Tenon Recovery were appointed
joint administrators of Polaris Consulting Services Ltd. on
Nov. 12, 2008.
The company can be reached through Tenon Recovery at:
Sherlock House
73 Baker Street
London
W1U 6RD
England
PREFERRED RESIDENTIAL: S&P Removes All Ratings From Negative Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services removed from CreditWatch
negative and affirmed its ratings on all notes issued by Preferred
Residential Securities 8 PLC (PRS 8) and the class A notes in
Preferred Residential Securities 06-1 PLC (PRS 06-1). The ratings
on PRS 06-1's junior notes remain on CreditWatch negative due to
pool performance.
S&P placed all the notes issued by PRS 8 and PRS 06-1 on
CreditWatch negative on Sept. 17 following rating actions on
Lehman Brothers Holdings. Lehman provided interest rate caps in
these two deals.
The interest rate cap Lehman provided for PRS 8 terminates in
December 2008 and no payment is due at that time. The termination
of this cap will have no effect on the ratings. Although arrears
in this deal are high, S&P believes that credit enhancement has
increased sufficiently for us to remove from CreditWatch negative
and affirm the current ratings.
The interest rate cap in PRS 06-1 is due to terminate on the March
interest payment date. The notional of the cap has reduced
substantially and S&P has concluded that any payments in December
and March will not have a material effect on the deal. Lehman's
insolvency and the non-replacement of the cap will not lead us to
lower the ratings on the notes in this deal.
However, PRS 06-1's pool performance means that the junior notes
remain on CreditWatch negative. In the September investor report,
90+ day arrears (including repossessions) were 23%. This is
higher than S&P's nonconforming index at a similar seasoning.
Repossessions were 7.8%, and with the reserve fund representing
1.2% of the transaction, S&P has concerns about the effect of
future potential losses on the deal.
S&P will carry out further analysis and expect to resolve PRS
06-1's outstanding CreditWatch placements after the next interest
payment date.
Ratings List
Ratings Removed From CreditWatch Negative and Affirmed
Preferred Residential Securities 8 PLC
EUR108.5 Million, GBP336.2 Million, And $100 Million
Mortgage-Backed Floating-Rate Notes
Class Rating
----- ------
To From
-- ----
A1a1 AAA AAA/Watch Neg
A1a2 AAA AAA/Watch Neg
A1b AAA AAA/Watch Neg
A1c AAA AAA/Watch Neg
B1a AA AA/Watch Neg
B1c AA AA/Watch Neg
C1a A A/Watch Neg
C1c A A/Watch Neg
D1a BBB+ BBB+/Watch Neg
D1c BBB+ BBB+/Watch Neg
E BB BB/Watch Neg
Preferred Residential Securities 06-1 PLC
GBP288.432 Million, EUR107.6 Million, and $145 Million
Mortgage-Backed Floating-Rate Notes
Class Rating
----- ------
To From
-- ----
A2a AAA AAA/Watch Neg
A2b AAA AAA/Watch Neg
A2c AAA AAA/Watch Neg
A2c DACs AAA AAA/Watch Neg
Ratings Remaining on CreditWatch Negative
Preferred Residential Securities 06-1 PLC
GBP288.432 Million, EUR107.6 Million, And $145 Million
Mortgage-Backed Floating-Rate Notes
Class Rating
----- ------
B1a AA/Watch Neg
B1c AA/Watch Neg
C1a A/Watch Neg
C1c A/Watch Neg
D1a BBB/Watch Neg
D1c BBB/Watch Neg
E1c BB/Watch Neg
ETc BB/Watch Neg
FTc B/Watch Neg
ROYAL BANK: Pledges to Help Business Customers in Lending
---------------------------------------------------------
The Royal of Bank of Scotland pledged to guarantee overdraft rates
and contracts for its 1.1 million business customers for at least
a year to help them survive the downturn, BBC News reported
Sunday.
Stephen Alambritis, of the Federation of Small Businesses (FSB),
called on other banks to follow suit, the report notes.
"Now is the time for them to wake up to the fact that they have
been rescued, so that in turn they can rescue small businesses,"
Mr. Alambritis was quoted by the report as saying. "Small
businesses are aggrieved at the way they have been unfairly
treated by the banks and they expect the government, which now has
a stake in the banks, to resurrect that balance."
Joe Lynam, a BBC business correspondent, meanwhile said the pledge
reflects how badly the credit crunch had impacted on normal
lending practices, the report relates.
As reported in the TCR-Europe on Nov. 26, 2008, 100Mortgages said
that that at a meeting on Thursday in Edinburgh, Royal Bank of
Scotland shareholders voted in favor of a GBP20 billion government
bail-out plan, putting 60% of the bank in public hands.
According to the TCR-Europe report, RBS, which had been hit by the
banking crisis, will be offering GBP15 million in new ordinary
shares to shore up its finances. The government, the report
added, will also buy GBP5 billion in preference shares.
Headquartered in Edinburgh, Scotland, The Royal Bank of Scotland
Group plc (RBS) -- http://www.rbs.com/-- is a holding company of
The Royal Bank of Scotland plc (Royal Bank) and National
Westminster Bank Plc (NatWest), which are United Kingdom-based
clearing banks. The Company's activities are organized in six
business divisions: Corporate Markets (comprising Global Banking
and Markets and United Kingdom Corporate Banking), Retail Markets
(comprising Retail and Wealth Management), Ulster Bank, Citizens,
RBS Insurance and Manufacturing. On Oct. 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO). In July 2008, the company disposed its entire
interest in Global Voice Group Ltd.
TAYLOR WIMPEY: May Offer Stake to Lenders Under Refinancing Plan
----------------------------------------------------------------
Taylor Wimpey plc may offer a stake of less than 10 percent to
lenders as part of a plan to refinance debt, Howard Mustoe of
Bloomberg News reports citing the Financial Times.
Bloomberg relates that the FT said banks and other lenders are
also likely to receive higher rates of interest on the
housebuilder's debts in exchange for removing conditions around
the borrowings.
About Taylor Wimpey
Headquartered in London, Taylor Wimpey plc --
http://www.taylorwimpey.com/-- builds homes in the U.K., North
America, Spain and Gibraltar. Taylor Wimpey also operates in the
Construction sector under the Taylor Woodrow brand.
* * *
As reported in the TCR-Europe, Fitch Ratings downgraded Taylor
Wimpey plc's Long-term Issuer Default rating and senior unsecured
ratings to 'CCC' from 'B' and Short-term IDR to 'C' from 'B'. All
ratings are being maintained on Rating Watch Negative. Fitch
simultaneously affirmed the 'RR4' Recovery Rating on TW's senior
unsecured debt instruments.
The rating downgrades reflect the heightened default risk facing
TW as its next covenant testing date approaches (now understood to
be January 1, 2009, rather than mid-February 2009). Due to the
ongoing weakness in the UK housing market, TW is likely to breach
interest coverage covenants when next tested. Although the
company continues to talk to its creditors in an effort to
renegotiate its covenant package, it has publicly stated that an
agreement is unlikely before the January test date.
TAYLOR WIMPEY: Selling Canadian Division Monarch
------------------------------------------------
Ben Harrington at the Daily Telegraph reported Thursday last week
that Taylor Wimpey plc put up its Canadian unit Monarch for sale
as it seeks cash to reduce a GBP1.7 billion debt pile.
However, the report noted it is not clear how far the sale process
has progressed or whether the housebuilder has received a firm
offer from a buyer.
Citing people familiar with the matter, the report disclosed the
board called in corporate finance advisers from Scotiabank to run
the sale of the unit, which focuses on residential development and
construction in the Ontario region of Canada.
According to the report, the housebuilder may get GBP100 million-
GBP150 million from the sale.
It is thought the disposal of Monarch if successful could lead to
further asset sales, the report added.
About Taylor Wimpey
Headquartered in London, Taylor Wimpey plc --
http://www.taylorwimpey.com/-- builds homes in the U.K., North
America, Spain and Gibraltar. Taylor Wimpey also operates in the
Construction sector under the Taylor Woodrow brand.
* * *
As reported in the TCR-Europe, Fitch Ratings downgraded Taylor
Wimpey plc's Long-term Issuer Default rating and senior unsecured
ratings to 'CCC' from 'B' and Short-term IDR to 'C' from 'B'. All
ratings are being maintained on Rating Watch Negative. Fitch
simultaneously affirmed the 'RR4' Recovery Rating on TW's senior
unsecured debt instruments.
The rating downgrades reflect the heightened default risk facing
TW as its next covenant testing date approaches (now understood to
be January 1, 2009, rather than mid-February 2009). Due to the
ongoing weakness in the UK housing market, TW is likely to breach
interest coverage covenants when next tested. Although the
company continues to talk to its creditors in an effort to
renegotiate its covenant package, it has publicly stated that an
agreement is unlikely before the January test date.
UBS AG: Three Former Officials Give Up US$27 Million Pay
--------------------------------------------------------
Three former officials of UBS AG who had been the focus of intense
public criticism said they would forgo more than US$27 million in
compensation after the bank reported nearly US$50 billion in
losses and received financial support from the Swiss government,
Jonathan D. Glater of The International Herald Tribune reports.
The three former UBS board members however noted that their
decision should not be considered an admission of guilt "in a
legal sense," the report says.
According to the IHT, Marcel Ospel, the former chairman of the
board at the Swiss bank, and Stephan Haeringer and Marco Suter,
two former directors, said they would give up pay promised them.
The same report discloses Mr. Ospel will contribute more than two-
thirds of the total and the balance will be paid by Messrs.
Haeringer and Suter.
UBS responded it welcomes the former officials' decision.
The three former UBS board members are not the first. Early this
month, the Associated Press reported former UBS AG chief executive
Peter Wuffli waived about 12 million francs or US$10 million in
payments he was to receive under his contract when the troubled
Swiss lender fired him as the subprime
crisis began.
"I have voluntarily renounced a total of 12 million francs that
was due me under my contract," AP cited Mr. Wuffli as saying.
"High payments cannot be justified for top people who leave an
enterprise suffering difficult circumstances."
The payments, AP noted, were not performance bonuses but part of
Mr. Wuffli's salary package. He was entitled to a full year's
salary under the contract in effect when he was fired July 6,
2007, AP said.
Last week, UBS said beginning in 2009, it will adopt a new
compensation model for the Board of Directors and the Group
Executive Board. UBS said its new compensation model will be
focused on the long-term and more closely aligned with the value
creation of the firm.
The fundamental changes are:
* The Chairman of the Board of Directors is no longer bound
to the same incentive system as the Group Executive Board
and will no longer receive variable compensation
components.
* Variable cash compensation for the Group Executive Board
is based on a bonus/malus system.
* A similar concept to the bonus/malus system is effective
for variable equity compensation
UBS noted the Chairman of the Board and the members of the Group
Executive Board will not receive any variable compensation for
2008. The size, composition and allocation of 2008 variable
compensation for other employees will be determined by the Board
of Directors once 2008 Group results are known and after
consultation with the Swiss Federal Banking Commission (SFBC).
About UBS AG
Based in Zurich, Switzerland, UBS AG -- http://www.ubs.com/--
is a global provider of financial services for wealthy clients.
UBS's financial businesses are organized on a worldwide basis
into three Business Groups and the Corporate Center. Global
Wealth Management & Business Banking consists of three segments:
Wealth Management International & Switzerland, Wealth Management
US and Business Banking Switzerland. The Business Groups
Investment Bank and Global Asset Management constitute one
segment each. The Industrial Holdings segment holds all
industrial operations controlled by the Group. Global Asset
Management provides investment products and services to
institutional investors and wholesale intermediaries around the
globe. The Investment Bank operates globally as a client-driven
investment banking and securities firm. The Industrial Holdings
segment comprises the non-financial businesses of UBS, including
the private equity business, which primarily invests UBS and
third-party funds in unlisted companies.
WOOLWORTHS GROUP: Sale Talks Fail, Goes Into Administration
-----------------------------------------------------------
Woolworths Group plc's discussions relating to the potential sale
of its retail business have ended, the company said in a
statement.
The company said that following, and as a consequence of the
termination of those discussions, the boards of Woolworths plc and
Entertainment UK Ltd have concluded that there is no longer any
prospect of those businesses being able to operate as a going
concern. Accordingly, the boards of both companies resolved to
file petitions for administration in the High Court.
The company however noted that Woolworths Group plc is not in
administration and remains in discussions with BBC Worldwide
relating to the possible sale of its 40% interest in 2 Entertain
Ltd.
Bloomberg News relates Neville Kahn, Nick Dargan and Dan Butters
of Deloitte were appointed administrators to Woolworths Plc and to
its wholesale business, Entertainment UK Ltd.
According to Bloomberg News, the stores will stay open past
Christmas and workers at the outlets will be paid.
About Woolworths Group plc
Headquartered in London, England, Woolworths Group plc (LON:WLW)
-- http://www.woolworthsgroupplc.com/-- is a general merchandise
retailer, and entertainment wholesaler and publisher. The
Company's business is divided into Retail, and Entertainment
Wholesale and Publishing segments. Woolworths, Streets Online
Limited, WMS Card Services Limited and Flogistics Limited are
included within the Retail segment, with Entertainment UK Limited,
Disc Distribution Limited and 2entertain Limited being the
constituents of Entertainment Wholesale and Publishing segment.
The stores comprise Woolworths outlets located in small towns and
city suburbs, targeted at meeting basic everyday shopping
requirements, as well as larger stores located on shopping streets
in regional shopping centers. The product offer covers toys,
children's clothing, events, confectionery, home and
entertainment, and larger stores include a range of home and
children's clothing.
* UK Insolvency Practitioners Adopt New Ethical Code
----------------------------------------------------
All the bodies that authorize and regulate insolvency
practitioners have agreed a new ethical code for their
practitioners which will come into force in January 2009.
The 'Insolvency Ethical Code' (the Code) published by The
Insolvency Service, has been designed to assist insolvency
practitioners and their staff to undertake their work to high
professional and ethical standards.
Based on the five fundamental principles of: integrity,
objectivity, professional competence and due care, confidentiality
and professional behavior the Code provides a framework which
applies to all aspects of an insolvency practitioner's
professional work relating to, or that may lead to, an insolvency
appointment. The Code also provides specific guidance regarding
pre-packaged administrations; the means of obtaining work; the use
of specialist agents; and referral fees. Most insolvency
practitioners are qualified accountants and the Code is aligned to
a model Ethical Code adopted by the International Federation of
Accountants.
Mike Chapman, Head of insolvency practitioner regulation at the
Insolvency Service said: "Integrity and objectivity have always
been fundamental principles which insolvency practitioners should
apply in all aspects of their work. The new Code will provide
practitioners with clear consistent guidance on what they can and
cannot do in their professional life and assist them to work to
high professional and ethical standards".
IPs will be expected to take reasonable steps to identify any
threats to compliance and with the fundamental principles.
Breaches of the Code of Ethics may be taken into account by an
IP's authorizing body when assessing the IP's conduct.
The Insolvency Service administers the insolvency regime
investigating all compulsory liquidations and individual
insolvencies (bankruptcies) through the Official Receiver to
establish why they became insolvent. The Service also authorizes
and regulates the insolvency profession, deals with
disqualification of directors in corporate failures, assesses and
pays statutory entitlement to redundancy payments when an employer
cannot or will not pay employees, provides banking and investment
services for bankruptcy and liquidation estate funds and advises
ministers and other government departments on insolvency law and
practice.
The Insolvency Code of Ethics has been approved by the Joint
Insolvency Committee and adopted by all of the bodies that
authorize and regulate insolvency practitioners. It provides a
unified code of ethics for all Insolvency Practitioners (IPs) to
which IPs, insolvents, creditors and others may refer.
Seven Professional Bodies have been recognized by the Secretary of
State to authorize their members to be insolvency practitioners.
They are:
-- Institute of Chartered Accountants in England & Wales,
-- Institute of Chartered Accountants of Scotland,
-- Institute of Chartered Accountants in Ireland,
-- Association of Chartered Certified Accountants,
-- Law Society of England & Wales,
-- Law Society of Scotland, and
-- The Insolvency Practitioners Association.
* EU Commission Launches Major Recovery Plan for European Economy
-----------------------------------------------------------
The European Commission, on Wednesday, Nov. 26, presented a
comprehensive plan to drive Europe's recovery from the current
economic crisis. The Recovery Plan is based on two mutually
reinforcing main elements. Firstly, short-term measures to boost
demand, save jobs and help restore confidence. Secondly, "smart
investment" to yield higher growth and sustainable prosperity in
the longer-term. The Plan calls for a timely, targeted and
temporary fiscal stimulus of around EUR200 billion or 1.5% of EU
GDP, within both national budgets (around EUR170 billion, 1.2% of
GDP) and EU and European Investment Bank budgets (around EUR30
billion, 0.3% of GDP). Every Member State is called upon to take
major measures good for its own citizens and good for the rest of
Europe. The Recovery Plan will reinforce and accelerate reforms
already underway under the Lisbon Growth and Jobs Strategy. It
includes extensive action at national and EU level to help
households and industry and concentrate support on the most
vulnerable. It puts forward concrete steps to promote
entrepreneurship, research and innovation, including in the car
and construction industries. The Recovery Plan aims to boost
efforts to tackle climate change while creating much-needed jobs
at the same time, through for example strategic investment in
energy efficient buildings and technologies.
Commission President Jose Manuel Barroso said: "Exceptional times
call for exceptional measures. The jobs and well-being of our
citizens are at stake. Europe needs to extend to the real economy
its unprecedented coordination over financial markets. This
Recovery Plan is big and bold, yet strategic and sustainable. It
builds on the Commission's proposals of 29 October that were the
first blueprint to reach beyond crisis support in the financial
sector and address the problems in the real economy. I am happy
to see that it was and is the inspiration for the action announced
since by the Member States."
The President added: "The Recovery Plan can keep millions in work
in the short-term. It can turn the crisis into an opportunity to
create clean growth and more and better jobs in the future. The
timely, targeted and temporary fiscal stimulus will help put our
economy back on track, within the Stability and Growth Pact.
Smart investments in tomorrow's skills and technologies will
accelerate Europe's drive under the Lisbon Growth and Jobs
Strategy to become a dynamic low-carbon economy for the 21st
century. If Europe acts decisively to implement this Recovery
Plan, we can get back on a path of sustainable growth and pay back
short-term government borrowing. If we do not act now, we risk a
vicious recessionary cycle of falling purchasing power and tax
revenues, rising unemployment and ever wider budget deficits."
A fiscal stimulus of 1.5% of GDP
All policy levers will be activated through the Recovery Plan. It
includes a co-ordinated fiscal stimulus of around EUR200 billion
or 1.5% of GDP, with around EUR170 billion (1.2% of GDP) at Member
State level, as action in their budgets, and around EUR30 billion
(0.3% of GDP) as EU level action within the EU budget and from the
European Investment Bank. The stimulus will stays within the
Stability and Growth Pact, while making use of the full
flexibility offered by the Pact. Member States who launch
stimulus packages will benefit in two ways: they will stimulate
demand in their own economies; and they will stimulate demand in
other Member States so giving a major boost to their own
exporters. Co-ordinated action will generate multiplier effects
and avoid the problems which can result from a piecemeal approach.
As part of the EU's contribution to this stimulus, the Plan
proposes accelerating payments of up to EUR 6.3 billion under the
structural and social funds. To improve energy interconnections
and broadband infrastructure, the Commission will mobilize a
further EUR 5 billion for the period 2009-10.
The European Investment Bank will increase its yearly
interventions in the EU by some EUR15 billion in 2009 with a
similar figure in 2010.
Protecting and creating jobs
The top priority is to protect Europe's citizens from the worst
effects of the financial crisis. They are the first to be hit
whether as workers, households, or as entrepreneurs.
The Commission is proposing to simplify criteria for European
Social Fund Support, re-program spending and step up advance
payments from early 2009, so that Member States have earlier
access to up to EUR1.8 billion in order to reinforce active labor
market policies, refocus support on the most vulnerable, step up
action to boost skills and where necessary opt for full Community
financing of projects during this period.
Up to EUR4.5 million of cohesion funding will also be brought
forward, alongside other measures to accelerate the implementation
of major investment projects and this too will contribute to
protecting and creating jobs.
The European Globalisation Adjustment Fund (EGAF) will be reviewed
to allow it to act quicker and its scope expanded so it can keep
people in jobs as well help people to find new ones. The EGAF
budget will also be reviewed.
To create demand for labor the Plan invites Member States to
consider reducing employers' social charges on lower incomes and
calls on the Council to adopt, before the 2009 Spring European
Council, the proposed Directive to make permanent reduced VAT
rates for labor-intensive services.
Smart investments
The Recovery Plan includes detailed proposals for partnerships
between the public sector =96- using Community, EIB and national
funding -- and private sectors to boost clean technologies through
support for innovation: these include a European green cars
initiative with combined funding of at least EUR5 billion, a
European energy-efficient buildings initiative worth EUR1 billion;
and a "factories of the future" initiative estimated at EUR1.2
billion.
The emphasis throughout the Recovery Plan is on "smart
investments". Investing more in education and (re-)training helps
people to retain their jobs and get back into the labor market,
whilst raising productivity. Investing in infrastructure and
energy-efficiency keeps people in the construction industry in
work, saves energy and improves efficiency. Investing in clean
cars helps protect the planet and will give Europe's companies a
leading edge in a highly competitive market.
The Recovery plan will build on the Small Business Act to provide
further help for all SMEs, including among other things removing
the requirement on micro-enterprises to prepare annual accounts,
easing access to public procurement and ensuring public
authorities pay invoices within one month.
The Plan also includes further initiatives to apply state aids
rules in a way that achieves maximum flexibility for tackling the
crisis while maintaining a level playing field. These new steps
include a simplification package to speed up decision-making, a
temporary increase in of the "safe harbor threshold" for risk
capital to EUR2.5 million and, also temporarily, further scope for
Member States to guarantee loans to businesses.
A balanced and differentiated approach
The proposal for a fiscal stimulus aims to ensure all Member
States take part while avoiding a one-size fits all approach which
could not work given Member States different starting points on
the Commission's autumn economic forecast). Those that have used
the good times to achieve stable public finances have most room
for maneuver.
The level of the stimulus is balanced. On the one hand it is
sufficient to be effective in limiting unemployment and pulling
millions of SMEs through the crisis. On the other hand it avoids
levels of lasting debt that could undermine Europe's economic base
in the long-term and lead to mass unemployment in future.
The stimulus is foreseen for a limited period after which Member
States should reverse the budgetary deterioration. They will be
asked to spell out how they intend to do this and ensure long-term
sustainability in updated Stability or Convergence Programmes to
be presented by the end of 2008.
Structural reforms
To speed up and strengthen recovery as well as to help prevent
future crises, the Commission's Recovery Plan also provides for
ambitious structural reforms tailored to the needs of individual
Member States. Some of these reforms will be complementary to the
fiscal stimulus in boosting demand, for example by supporting
consumer purchasing power through making markets work better. The
right structural reforms in synergy with smart investment will
help Member States, building on progress already made under the
Lisbon Strategy, to improve underlying competitiveness and get
themselves into a strong position to pay back borrowing and build
a platform for sustainable growth.
The Plan strengthens instruments to ensure that Member States meet
their commitments under the Lisbon Growth and Jobs Strategy. The
"country chapters" issued by the Commission on 16 December as part
of its annual Lisbon package will assess the situation in each
Member State and include additional proposals for country specific
recommendations which the Commission will invite the Spring
European Council to endorse. This will mean that EU leaders agree
collectively on what each Member State needs to do individually to
implement the Recovery Plan while at the same time ensuring
medium-term financial sustainability, notably through speeding up
Lisbon reforms to boost competitiveness.
Implementing the Plan
The Commission is asking Heads of State and Government at the
European Council on 11-12 December to endorse the Recovery Plan
and show their determination to act together in a closely
coordinated way. This can allow Europe to lead the way globally
in decisive action to support the real economy, just as its
leadership over financial markets led to agreement at the G20
Summit in Washington on November 15.
* BOOK REVIEW: Financial Planning for High Net Worth Individual
---------------------------------------------------------------
Authors: Richard H. Mayer and Donald R. Levy
Publisher: Beard Books
Paperback: 428 pages
List Price: US$59.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587982323/internetbankrupt
Financial Planning for High Net Worth Individuals by Richard H.
Mayer and Donald R. Levy is a comprehensive and authoritative
guide to the art and science of wealth management.
It is a source book that wealth management advisers can turn to
when looking for in-depth answers.
Collected here are the insights of expert advisers, presented in a
thoughtful and thorough manner on the vital aspects of financial
management.
This book is for high net worth individuals as well as for every
serious wealth management professional.
Richard H. Mayer, Chartered Life Underwriter, Registered
Investment Advisor. Mr. Mayer has more than 40 years of
experience in the insurance industry where he specializes in
advising high net worth individuals and in developing executive
compensation plans.
Donald R. Levy, JD, MBA, is an attorney and benefits consultant.
Mr. Levy has authored or edited a number of books including the
Research Institute of America Answer Book, Executive Compensation
Treatise, 403(b) Answer Book, Guide to Cash Balance Plans, Quick
Reference Guide to IRAs, and the State-by-State Guide to Managed
Care Law.
*********
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.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. 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. Pius Xerxes V. Tovilla, Valerie C. Udtuhan, Marites
O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante, Marie
Therese V. 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 * * *