/raid1/www/Hosts/bankrupt/TCREUR_Public/090828.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, August 28, 2009, Vol. 10, No. 170
Headlines
A U S T R I A
BBB CONSULTING: Creditors Must File Claims by September 2
CREATIV CONTACT: Claims Filing Deadline is September 2
GOTTFRIED KAISER: Creditors Must File Claims by September 2
KABEL AUSTRIA: Claims Filing Deadline is September 2
SCHMIDBAUER MASCHINENPUTZ: Creditors Must File Claims by Sept. 2
E S T O N I A
GILD FUND: Elgrande Files Bankruptcy Petition Over Insolvency
THULEMA AS: Files for Bankruptcy Protection, Paeevaleht Says
F R A N C E
ALCATEL-LUCENT: Could Be Bought by Chinese Rivals, Reuters Says
IN-FUSION: Goes Into Liquidation
MECACHROME INT'L: 92.7% of Creditors Accept Recapitalization Plan
NATIXIS SA: BPCE to Guarantee EUR35 Bil. of Risky Assets
THOMSON SA: Dealers Tear Up US$16 Bil. of Ofsetting Default Swaps
G E O R G I A
* GEORGIA: Fitch Affirms Issuer Default Ratings at 'B+'
G E R M A N Y
ARCANDOR AG: Denies Firing Employees; CEO May Step Down on Sept. 1
CONTINENTAL AG: Repays EUR800 Million Debt on Schedule
COREALCREDIT BANK: Fitch Affirms Individual Rating at 'D'
IKB DEUTSCHE: Special Auditor to Probe Into Board's Role in Crisis
PFLEIDERER AG: Fitch Junks EUR275MM Undated Sub. Securities
PROMISE-I MOBILITY: Amendment Won't Affect Moody's Note Ratings
PROMISE-I MOBILITY: Fitch Maintains 'BB+' Rating on Class E Notes
ROCCATUNE: Files for Insolvency After Financing Efforts Failed
* GERMANY: Finance Minister Draws Up Rival German Bank Bill
G R E E C E
ANTENNA TV: Moody's Downgrades Corporate Family Rating to 'B2'
H U N G A R Y
* HUNGARY: Construction Sector Liquidations Steady, MTI Says
I R E L A N D
INDEPENDENT NEWS: Selling South African Outdoor Ad Business
IRISH LIFE: Posts EUR220 Mil. Pre-Tax Loss in First Half 2009
STARTS PLC: S&P Downgrades Ratings on Two Tranches to 'CCC-'
I T A L Y
ATLANTE FINANCE: Fitch Cuts Rating on Class C Notes to 'B'
SESTANTE FINANCE: S&P Cuts Rating on Cl. C2 Series 4 Notes to BB-
K A Z A K H S T A N
BTA BANK: May Sell Retail Unit Temirbank to Majority Shareholder
GLOBAL INTER: Creditors Must File Claims by September 5
KAZ MOBILE: Creditors Must File Claims by September 5
KITAISKO KAZAKHSKAYA: Creditors Must File Claims by September 5
KONTAL SECURITY: Creditors Must File Claims by September 5
MERKI ATA: Creditors Must File Claims by September 5
MOLCHANOV I COMPANIYA: Creditors Must File Claims by September 5
ORBITA OJSC: Creditors Must File Claims by September 5
VAGON SERVICE: Creditors Must File Claims by September 5
K Y R G Y Z S T A N
INTER ASIA: Creditors Must File Claims by September 17
L U X E M B O U R G
MELCHIOR CDO: S&P Junks Ratings on Three Classes of Notes
N E T H E R L A N D S
FORD MOTOR: Fitch Revises Credit Outlook from Neg. to Stable
ING GROEP: Seeks to Raise US$1.5 Billion From Asset Disposals
R U S S I A
KRAS-PROM-LES: Creditors Must File Claims by September 3
LES-PROM LLC: Creditors Must File Claims by September 3
NOVOSIBIRSKIY COLD: Creditors Must File Claims by September 3
SAMARA-STROY LLC: Creditors Must File Claims by September 3
STERLITAMAKSKIY BRICK: Creditors Must File Claims by September 7
STROY-PROEKT LLC: Creditors Must File Claims by September 3
VESTER GROUP: Sberbank May Take Over Retail Assets
YADRINSKIY MASH: Creditors Must File Claims by September 7
S P A I N
BBVA 1: Fitch Upgrades Rating on Class E Notes From 'BB'
SOL MELIA: Moody's Downgrades Corporate Family Rating to 'Ba3'
S W E D E N
CONCORDIA BUS: Moody's Upgrades Corporate Family Rating to 'B2'
S W I T Z E R L A N D
BWV HOLDING: Claims Filing Deadline is September 4
BUERGIN + ROESTI: Claims Filing Deadline is September 7
FUNNYLAND: Claims Filing Deadline is September 7
IDEAL GMBH: Claims Filing Deadline is September 3
LOLLYPOP WORLD: Claims Filing Deadline is September 4
LUFRA BETEILIGUNGS-HOLDING: Claims Filing Deadline is September 4
MAX SCHLUEP: Claims Filing Deadline is September 2
PINGITORE & HENNE: Claims Filing Deadline is September 4
PRACTIZE: Claims Filing Deadline is September 7
PUBLEX WERBUNG: Claims Filing Deadline is September 4
SIKTA CONSULTING: Claims Filing Deadline is September 7
SWISS OFFSET: Claims Filing Deadline is September 4
U K R A I N E
DOBROYE POLE: Court Starts Bankruptcy Supervision Procedure
INTERPROJECT LLC: Court Starts Bankruptcy Supervision Procedure
JOINT LOAD: Court Starts Bankruptcy Supervision Procedure
LUTSK CARTON: Court Starts Bankruptcy Supervision Procedure
PODOLSKY SUGAR: Court Starts Bankruptcy Supervision Procedure
U N I T E D K I N G D O M
AEOLUS CDO: S&P Junks Rating on Class D Notes From 'BBB-'
BRIXTON PLC: Fitch Upgrades Senior Unsecured Ratings From 'BB+'
CANARGO ENERGY: Reaches Deal with Persistency on Non-Conversion
CLERICAL MEDICAL: Fitch Cuts Subordinated Debt Ratings to 'B+'
FUJITSU LIMITED: To Cut Up to 1,200 Jobs in the U.K.
LLOYDS BANKING: May Sell Clerical Unit; Mulls Scottish Widows IPO
LUDGATE FUNDING: S&P Affirms 'CCC-' Ratings on 2 Classes of Notes
NATIONAL EXPRESS: Shareholders Reject Revised Cosmen Takeover Bid
* BOOK REVIEW: Dangerous Pursuits - Mergers and Acquisitions in
*********
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A U S T R I A
=============
BBB CONSULTING: Creditors Must File Claims by September 2
---------------------------------------------------------
Creditors of BBB Consulting GmbH have until September 2, 2009, to
file their proofs of claim.
A court hearing for examination of the claims has been scheduled
for September 16, 2009 at 9:50 a.m.
For further information, contact the company's administrator:
Mag. Stefan Jahns
Gonzagagasse 15
1010 Wien
Austria
Tel: 532 17 11
Fax: DW 11
E-mail: kanzlei@jahns.co.at
CREATIV CONTACT: Claims Filing Deadline is September 2
------------------------------------------------------
Creditors of c=c creativ contact GmbH have until September 2,
2009, to file their proofs of claim.
A court hearing for examination of the claims has been scheduled
for September 16, 2009 at 10:10 a.m.
For further information, contact the company's administrator:
Dr. Karl Schirl
Krugerstrasse 17/3
1010 Wien
Austria
Tel: 513 22 31
Fax: DW 1
E-mail: dr.karl.schirl@der-rechtsanwalt.at
GOTTFRIED KAISER: Creditors Must File Claims by September 2
-----------------------------------------------------------
Creditors of Gottfried KAISER GmbH have until September 2, 2009,
to file their proofs of claim.
A court hearing for examination of the claims has been scheduled
for September 16, 2009 at 9:30 a.m.
For further information, contact the company's administrator:
Dr. Walter Kainz
Gusshausstrasse 23
1040 Wien
Austria
Tel: 505 88 31
Fax: 505 94 64
E-mail: kanzlei@kainz-wexberg.at
KABEL AUSTRIA: Claims Filing Deadline is September 2
----------------------------------------------------
Creditors of kabel austria marketing GmbH have until September 2,
2009, to file their proofs of claim.
A court hearing for examination of the claims has been scheduled
for September 16, 2009 at 9:45 a.m.
For further information, contact the company's administrator:
Mag. Stefan Jahns
Gonzagagasse 15
1010 Wien
Austria
Tel: 533 28 55
Fax: 533 26 55-28
E-mail: kanzlei@jahns.co.at
SCHMIDBAUER MASCHINENPUTZ: Creditors Must File Claims by Sept. 2
----------------------------------------------------------------
Creditors of Schmidbauer Maschinenputz GmbH have until
September 2, 2009, to file their proofs of claim.
A court hearing for examination of the claims has been scheduled
for September 9, 2009 at 11:10 a.m. at:
Land Court of Ried im Innkreis
Hall 101
First Floor
Ried im Innkreis
Austria
For further information, contact the company's administrator:
Dr. Karl Wagner
Unterer Stadtplatz 4
4780 Scharding/Inn
Austria
Tel: 07712/77 07
Fax: 07712/7707-20
E-mail: office@wagner.at
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E S T O N I A
=============
GILD FUND: Elgrande Files Bankruptcy Petition Over Insolvency
-------------------------------------------------------------
Marge Tubalkain-Trell at aripaev.ee reports that OU Elgrande on
Wednesday filed a bankruptcy petition against AS GILD Fund
Management at the Harju county court.
"Although it's not a big loan issuer then GILD Fund Management
hasn't been able to repay the loan despite repeatedly given
deadlines. Elgrande is on opinion that . . . GILD Fund Management
is insolvent, it's not temporary kind and there's a base to file a
bankruptcy application," the report quoted Ain Kalme, attorney at
law who represents Elgrande, as saying.
According to the report, Elgrande's claim against GILD is
currently about EEK1.2 million.
The report relates Tonno Vahk, fund manager of GILD Arbitrage,
said the bankruptcy application is legally baseless and harming
interests of creditors, including Elgrande.
THULEMA AS: Files for Bankruptcy Protection, Paeevaleht Says
------------------------------------------------------------
Ott Ummelas at Bloomberg News, citing Eesti Paeevaleht, reports
that Estonian furniture maker AS Thulema has filed for bankruptcy
protection.
Bloomberg relates the newspaper said Thulema's debts total EEK40
million (US$3.7 million), and the expected price of its assets is
EEK25 to EEK30 million, according to the reorganization plan.
According to Bloomberg, the newspaper, citing company adviser Mart
Jesse, said the furniture maker's managers are in talks with
Finnish investors.
===========
F R A N C E
===========
ALCATEL-LUCENT: Could Be Bought by Chinese Rivals, Reuters Says
---------------------------------------------------------------
Leila Abboud and Anupreeta Das at Reuters report that
Alcatel-Lucent could be bought by a rival Chinese manufacturer of
telecommunications gear.
Reuters relates Chinese companies ZTE Corp and Huawei Technologies
have been expanding their operations aggressively in overseas
markets, but analysts said it is not clear if either has plans for
acquisitions.
According to Reuters, any deal for Alcatel-Lucent, which has a
market value of about EUR6.3 billion (US$8.9 billion), would mark
a major acquisition.
Reuters says Alcatel-Lucent has been struggling to turn a profit
since its 2006 merger, which was supposed to help it cut costs and
better compete with the new generation of Chinese gear makers
including Huawei and ZTE.
"Chinese firms including ZTE are very strong competitors, and have
their own substantial R&D operations," Reuters quoted Ren Wenjie,
a telecoms analyst with First Capital in Shenzhen, as saying.
"They probably wouldn't be looking at buying the whole of Alcatel-
Lucent, but rather at specific business units that would fit into
their long-term strategy."
Reuters notes spokespeople for ZTE and Huawei said they had not
heard of any bid for Alcatel-Lucent.
About Alcatel Lucent
France-based Alcatel-Lucent (Euronext Paris and NYSE: ALU) --
http://www.alcatel-lucent.com/-- provides product offerings that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. In the field of fixed, mobile and converged broadband
networking, Internet protocol (IP) technologies, applications and
services, the company offers the end-to-end product offerings that
enable communications services for residential, business customers
and customers. It has operations in more than 130 countries. It
has three segments: Carrier, Enterprise and Services. The Carrier
segment is organized into seven business divisions: IP, fixed
access, optics, multicore, applications, code division multiple
access networks and mobile access. Its Enterprise business
segment provides software, hardware and services that interconnect
networks, people, processes and knowledge. Its Services business
segment integrates clients' networks. In October 2008, the
company completed the acquisition of Motive, Inc.
* * *
As reported in the Troubled Company Reporter-Europe on March 5,
2009, Standard & Poor's Ratings Services lowered to 'B+' from
'BB-' its long-term corporate credit ratings and senior unsecured
ratings on France-based telecom equipment and services supplier
Alcatel Lucent and its subsidiary Alcatel-Lucent USA Inc.
(formerly Lucent Technologies Inc.). The 'B' short-term rating on
Alcatel Lucent was affirmed. S&P said the outlook is negative.
IN-FUSION: Goes Into Liquidation
--------------------------------
Stuart Dredge at Mobile Entertainment, citing French BODACC
(Bulletin officiel des annonces civiles et commerciales), reports
that French mobile games publisher In-Fusio has gone into
liquidation.
According to the report, Bordeaux firm Malmezat-Prat has been
appointed to handle the process of disposing of the company's
assets.
The company went into administration last year.
MECACHROME INT'L: 92.7% of Creditors Accept Recapitalization Plan
-----------------------------------------------------------------
Mecachrome International Inc. announced August 27 that, at
the creditors' meeting held August 26 in Montreal (Canada), its
creditors overwhelmingly approved the Company's proposed debt and
capital restructuring plan pursuant to the Companies' Creditors
Arrangement Act and the Canada Business Corporations Act filed on
August 5, 2009. At the creditors' meeting, 92.7% of all voting
creditors, and 99.5% of the total amount voted by all creditors,
voted to accept the Plan. On September 1, 2009, the Company will
ask the Superior Court of Quebec to sanction the Plan.
"We are pleased that the Plan received such a strong endorsement
from our creditors," said Julio De Sousa, President and Chief
Executive Officer of Mecachrome. "We believe that the Plan
represents a fair and equitable outcome for all the creditors
involved. I want to especially acknowledge our employees
for their hard work, and our customers and suppliers for their
continued support and loyalty throughout this process."
The Plan remains subject to certain conditions. If these
conditions are not satisfied there can be no assurances that they
will be waived or that alternate financing will be available on
acceptable terms. The Plan provides that the Company's existing
shares (multiple voting shares and subordinated voting shares)
will be cancelled for no consideration. The Company will advise
as to the progress of its French subsidiaries under the safeguard
procedure (procedure de sauvegarde) in France in due course.
About Mecachrome International Inc.
Mecachrome is a leader in the design, engineering, manufacture and
assembly of complex precision-engineered components for aircraft
and automotive applications, including aerostructural and aircraft
engine components, high-end automobile engine components and motor
racing engines. Since 1937, Mecachrome has established a
significant presence and global reputation in certain high-
precision sectors of the aerospace, automotive and industrial
equipment industries, providing services primarily to original
equipment manufacturers.
Mecachrome is currently subject to Court protection under the
Companies' Creditors Arrangement Act in Canada and under similar
protection from the Courts for its French subsidiaries under the
safeguard procedure (procedure de sauvegarde) in France.
Mecachrome also initiated ancillary proceedings before
the United States Bankruptcy Court for the Central District of
California to obtain the enforcement and recognition of the
Canadian proceedings. The U.S. Court granted Mecachrome's
Petition for recognition of foreign proceedings on August 19,
2009.
Mecachrome International Inc., et al filed for Chapter 15 with the
U.S. Bankruptcy Court for the Central District of California in
Los Angeles on June 5, 2009 (Case No. 09-24076). The Hon. Richard
M. Neiter presides over the case. Daniel H. Slate, Esq., at
Buchatler Nemer, reprepresents the Chapter 15 Debtors as counsel.
In its petition, the Debtors listed between US$100 million and
US$500 million in assets, and between US$500 million and US$1
billion in debts.
The documentation related the Canadian, French and U.S. court
filings is available on Ernst & Young Inc.'s Web site at:
http://documentcentre.eycan.com/Pages/Main.aspx?SID=91
NATIXIS SA: BPCE to Guarantee EUR35 Bil. of Risky Assets
--------------------------------------------------------
Fabio Benedetti-Valentini at Bloomberg News reports that Natixia
SA received a guarantee from its parent covering about
EUR35 billion (US$50 billion) of risky assets.
Bloomberg relates Natixis Chief Executive Officer Laurent Mignon
said BPCE, the Paris-based lender that controls 72% of Natixis,
agreed to absorb most of the losses that might stem from its
structured credit holdings in exchange for a premium that will
cost Natixis about EUR48 million a year.
Mr. Mignon, as cited by Bloomberg, said Natixis may return to
profit in the current quarter following five straight losses.
Loss
According to Bloomberg, Natixis said in a statement the bank had
an EUR883-million loss in the second quarter of 2009, compared
with a EUR1.02-billion loss a year earlier. Natixis, Bloomberg
discloses, wrote down risky assets by EUR866 million and set aside
EUR748 million at the investment bank to reinforce "the coverage
of risks in a number of business sectors," including real estate
and leveraged buyouts.
No Threat
Bloomberg notes Francois Perol, Natixis's chairman, said BPCE
received EUR7 billion from the state, more than any other French
bank, and may start to reimburse the government at the end of
2010. According to Bloomberg, Mr. Perol said BPCE has no need for
additional funds from the government. Mr. Perol, as cited by
Bloomberg, said potential losses on the Natixis holdings that BPCE
has agreed to guarantee don't threaten the bank.
About Natixis SA
Headquartered in Paris, France, Natixis SA (EPA:KN) --
http://www.natixis.com/-- is a France-based bank offering various
services and engaged in different activities. Its main activities
comprise corporate and investment banking, asset management,
receivables management, private equity and private banking, retail
banking and other services. The Bank is active in a number of
countries in Europe, the Americas, Africa, Asia and Oceania. As
of December 31, 2008, Natixis SA had a number of subsidiaries,
including Ixis Corporate & Investment Bank, Ixis Asset Management
Group, Coface and Natixis Asset Management, among others.
* * *
As reported in the Troubled Company Reporter-Europe on July 8,
2009, Moody's Investors Service downgraded the bank financial
strength rating of Natixis to D from D+. The outlook on the BFSR
is negative.
THOMSON SA: Dealers Tear Up US$16 Bil. of Ofsetting Default Swaps
-----------------------------------------------------------------
Abigail Moses at Bloomberg News, citing derivatives service
provider TriOptima AB, reports credit-default swaps dealers
canceled 6,850 contracts linked to Thomson SA, eliminating
duplicate trades worth US$16 billion.
According to Bloomberg, banks hold redundant contracts because
they both buy and sell default protection on the same company with
different customers. Bloomberg says tearing up offsetting swaps
will make it easier to settle remaining contracts that may be
triggered after Thomson, is trying to reorganize EUR2.8 billion
(US$4 billion) of debt to avert bankruptcy, deferred payments on
private notes.
Bloomberg recalls traders ruled Aug. 12 that Thomson's deferral of
a US$72.5 million repayment on its 6.05% privately placed notes
was a so-called restructuring credit event.
As reported in the Troubled Company Reporter-Europe on Aug. 14,
2009, Bloomberg News said the credit event ruling may trigger
about US$4.6 billion of Thomson's credit-default swaps.
About Thomson SA
France-based Thomson SA -- http://www.thomson.net/-- provides
technology, services, and systems to Media & Entertainment (M&E)
clients, including content creators, content distributors and
broadcasters. It has three principal operating divisions:
Services, Systems (previously Systems & Equipment) and Technology.
The remaining activities are regrouped in two additional segments:
Other and Corporate. The Services Division offers end-to-end
management of video-related services for its customers in the M&E
industries. Systems division plays a role in supplying hardware
and software technology for the M&E industries in the areas of
production, delivery, management, transmission, and access.
Technology division includes activities, such as corporate
research; Silicon Solutions: Integrated Circuit design and tuners,
and Software & Technology Solutions: video and audio security
solutions, and other technologies. In December 2008, the Company
sold its digital film equipment product line.
* * *
On Aug. 3, 2009, the Troubled Company Reporter-Europe reported
that Standard & Poor's Ratings Services said that its ratings on
French technology group Thomson S.A. (SD/--/SD) are not
immediately affected by the company's announcement on July 24,
2009, that it signed an agreement with a majority of its senior
lenders to restructure its balance sheet. The agreement,
involving primarily a debt-for-equity swap, is conditional on a
number of requirements. Upon implementation of a restructuring
agreement or the filing, if any, of legal proceedings -- whichever
occurs first -- S&P will revise all of S&P's ratings on Thomson to
'D' (default), in accordance with S&P's criteria.
As reported in the Troubled Company Reporter-Europe on
May 21, 2009, Moody's Investors Service changed to Ca/LD from Ca
the Probability of Default Rating for Thomson S.A. on the
company's failure to repay US$92.5 million private placements due
on May 18, 2009 which the rating agency view constitutes a payment
default.
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G E O R G I A
=============
* GEORGIA: Fitch Affirms Issuer Default Ratings at 'B+'
-------------------------------------------------------
Fitch Ratings has affirmed Georgia's Long-term foreign and local
currency Issuer Default Ratings at 'B+'. At the same time, Fitch
has affirmed Georgia's Short-term foreign currency IDR at 'B' and
upgraded its Country Ceiling to 'BB-' from 'B+'. The ratings have
been removed from Rating Watch Negative, and the Outlooks on the
Long-term IDRs are now Stable.
"The inflow of massive international financial assistance is
supporting Georgia's economy and creditworthiness following the
war with Russia in August 2008 and the global financial crisis,
while the risk of a third shock of major domestic political
instability has receded as mass opposition demonstrations have
dissipated," says Edward Parker, Head of Emerging Europe in
Fitch's Sovereigns team.
Negative shocks to confidence, workers remittances, metal prices,
foreign direct investment and other private sector capital inflows
have had a severe impact on the Georgian economy, which was left
exposed by its large current account deficit and booming banking
sector. However, a US$1.2 billion IMF programme and a
US$4.5 billion international aid package, mainly covering 2008-
2011, (equivalent to 50% of 2009 GDP) are financing the budget and
CAD in the near term, bolstering foreign exchange reserves,
underpinning the financial sector and limiting the scale of the
recession. Fitch forecasts GDP will contract by 4% in 2009, less
than in many regional peers, before growing 2% in 2010.
However, Georgia faces significant challenges. The government has
revised its budget deficit target to 9.4% of GDP this year and
will need to enact painful fiscal consolidation over the medium
term to restore public finances to a sustainable path. Fitch
forecasts that net government debt will rise to 38% of GDP at end-
2011 from 22% at end-2008. Nevertheless, this would still leave
it below the 10-year 'B' range median, and much of Georgia's debt
is concessional, with long maturities and low interest rates.
Fitch forecasts a sizeable CAD of 16% of GDP this year, albeit
down from 23% of GDP in 2008, leaving the country dependent on
external financing. Gross and net external debt ratios are well
above 'B' range medians. The tradeable sector is narrow and
exposed to shocks. Georgia needs to rebalance its economy,
correct the twin deficits and secure a resumption of private
capital inflows before international aid tapers off and debt
repayments step up sharply in 2012-14.
The banking sector has a high loan-to-deposit ratio, saw a fall in
deposits during the crisis and is suffering a deterioration in
asset quality, but capitalization is high. The system's high
dollarisation renders macro-economic and financial stability
vulnerable to shocks and impairs the effectiveness of monetary
policy. Encouragingly, the National Bank of Georgia has curtailed
its FX interventions, though FX pressures could re-emerge at some
point in the future.
Political risk is relatively high and a material constraint on the
ratings. Fitch does not anticipate renewed military conflict with
Russia or a major increase in domestic political instability, but
risks remain. In that event, economic policy slippage or a
political setback could threaten disbursements from the IMF or key
international donors, and lead to a rating downgrade.
Georgia's ratings are supported by its GDP per capita and level of
human development, which is well above the 'B' range median, its
strong GDP growth record prior to the crisis, a favorable business
climate -- underscored by its ranking of 15th in the World Bank's
Doing Business Survey for 2009 -- and strong support from the
international community.
The upgrade of the Country Ceiling reflects Georgia's integration
into the global economy and financial system, its commitment to
creating a favorable business climate and attracting FDI, and its
membership of the WTO and engagement with the international
financial institutions, which reduce the likelihood the Georgian
authorities would impose exchange controls.
=============
G E R M A N Y
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ARCANDOR AG: Denies Firing Employees; CEO May Step Down on Sept. 1
------------------------------------------------------------------
Holger Elfes at Bloomberg News reports that Klaus Hubert Goerg,
Arcandor AG's insolvency administrator denied that most of the
holding company's employees were fired.
"None of the holding's 94 employees has received a severance
letter yet," Bloomberg quoted Thomas Schulz, a spokesman for
court-appointed insolvency administrator as saying.
According to Bloomberg, Mr. Georg has said he wants to keep "some"
of the employees for the future handling of the insolvency process
and the bidding procedures for the Primondo mail-order and the
Karstadt department store units. Bloomberg notes the insolvency
administrator has said he plans to find investors for the German
retailer's Quelle mail-order business and the Karstadt department-
store chain. During a restructuring process, about a third of the
Quelle staff will be fired and as many as 19 Karstadt stores will
close, Bloomberg states.
Bloomberg relates Arcandor spokesman Gerd Koslowski, in an
interview earlier yesterday, said about two-thirds of the
employees at the Essen, Germany-based holding were notified they
were fired and would depart by the end of September.
Mr. Koslowski, as cited by Bloomberg, said some accountants and
lawyers will stay as the company won't be immediately delisted.
CEO to Quit
Separately, Bloomberg News, citing Frankfurter Allgemeine Zeitung,
reports Karl-Gerhard Eick, Arcandor's chief executive officer,
will probably step down Sept. 1, when the retailer's formal
insolvency proceedings are likely to begin. Mr. Koslowski, as
cited by Bloomberg, said Mr. Eick is in talks with the insolvency
administrator and Friedrich Carl Janssen, head of Arcandor's
supervisory board. According to Bloomberg, Mr. Eick, who joined
Arcandor in March, will get as much as EUR15 million (US$21
million) for the five-year contract he had signed. Mr. Eick will
receive the money directly from Arcandor's main shareholder,
private bank Sal. Oppenheim Jr. & Cie, Bloomberg says.
Citing people close to the retailer, Gerrit Wiesmann at The
Financial Times reports Sal. Oppenheim bank, who hold 24.9% of
Arcandor stock, guaranteed Mr. Eick's full compensation in order
to lure him from a multi-year contract as chief financial officer
of Deutsche Telekom.
Insolvency Proceedings
While Arcandor and Sal. Oppenheim declined to comment, people
briefed on the matter told the FT that all involved were getting
ready for the opening of full insolvency proceedings as early as
Tuesday. According to the FT, these people said insolvency
administrator was expected to be empowered by the insolvency court
to begin the process of selling assets in order to compensate
creditors, suppliers and landlords.
About Arcandor AG
Germany-based Arcandor AG (FRA:ARO) -- http://www.arcandor.com/--
formerly KarstadtQuelle AG, is a tourism and retail group. Its
three core business areas are tourism, mail order services and
department store retail. The Company's business areas are covered
by its three operating segments: Thomas Cook, Primondo and
Karstadt. Thomas Cook Group plc is a tour operator with
operations in Europe and North America, set up as a result of a
merger between MyTravel and Thomas Cook AG. It also operates the
e-commerce platform, Thomas Cook, supporting travel services.
Primondo has a portfolio of European universal and specialty mail
order companies, including the core brand Quelle. Karstadt
operates a range of department stores, such as cosmopolitan
stores, including KaDeWe (Kaufhaus des Westens), Karstadt
Oberpollinger and Alsterhaus; Karstadt brand department stores;
Karstadt sports department stores, offering sports goods in a
variety of retail outlets, and a portal, karstadt.de that offers
online shopping, among others.
As reported in the Troubled Company Reporter-Europe, on June 9,
2009, Arcandor filed for bankruptcy protection after the German
government turned down its request for loan guarantees. On
June 8, 2009, the government rejected two applications for help by
the company, which employs 43,000 people. The retailer sought
loan guarantees of EUR650 million (US$904 million) from Germany's
Economy Fund program. It also sought a further EUR437 million
from a state-owned bank.
CONTINENTAL AG: Repays EUR800 Million Debt on Schedule
------------------------------------------------------
Cornelius Rahn at Bloomberg News reports that Continental AG said
it made a EUR800-million (US$1.14 billion) debt repayment on time.
According to Bloomberg, Antje Lewe, a spokeswoman for the Hanover,
Germany-based company, said Continental met its obligations on
Aug. 20 and still faces a EUR3.5-billion debt repayment in August
2010.
About Continental AG
Hanover, Germany-based Continental AG (OTC:CTTAY) --
http://www.conti-online.com/-- is an automotive industry
supplier. The Company focuses its activities on the development,
production and distribution of products that improve driving
safety, driving dynamics and ride comfort. It operates in six
divisions. Chassis and Safety provides active and passive driving
safety, safety and chassis sensor systems, as well as chassis
components. Powertrain focuses on engine systems, hybrid electric
drives, injection technology, and sensors and actuators, among
others. Interior manufactures information management modules and
wireless mobile devices. Passenger and Light Truck Tires provides
tires for passenger cars, motorcycles and bicycles. Commercial
Vehicle Tires offers tires for trucks, as well as industrial and
off-the-road vehicles. ContiTech specializes in the rubber and
plastics technology, offering parts, components and systems for
the automotive industry and other sectors. In January 2009,
Schaeffler KG acquired 49.9% interest in the Company.
* * *
On Aug. 20, 2009, the Troubled Company Reporter-Europe reported
Fitch Ratings downgraded Continental AG's Long-term Issuer
Default Rating and senior unsecured ratings to 'B+' from 'BB',
respectively. Fitch simultaneously maintained the IDR and
senior unsecured ratings on Rating Watch Negative. The agency
affirmed Continental's Short-term IDR at 'B'. Fitch said the
rating action reflects the considerable refinancing risk faced by
Continental for its EUR3.5 billion tranche, related to its Siemens
VDO acquisition facility, maturing in August 2010, and the
increased risk of a breach in covenants. Fitch is concerned about
tightened financial covenant headroom due to Continental's
weakened operating performance amid the severe global auto
downturn. While Continental has stated that it will be able to
comply with financial covenants as of end-H109, Fitch believes
that ongoing compliance will remain challenging if no agreement is
reached with its banks.
As reported in the Troubled Company Reporter-Europe on Aug. 18,
2009, Moody's Investors Service downgraded Continental AG's
Corporate Family Rating to B1 from Ba3. Moody's said the rating
outlook remains negative.
COREALCREDIT BANK: Fitch Affirms Individual Rating at 'D'
---------------------------------------------------------
Fitch Ratings has affirmed Germany-based Corealcredit Bank AG's
ratings at Long-term Issuer Default 'BBB-' with a Stable Outlook
and Short-term IDR 'F3'.
The Long- and Short-term IDRs of Corealcredit reflect Fitch's
opinion that the probability of external support remains high,
should it be required. In case of financial difficulty, Fitch
believes that support would ultimately be forthcoming from the
German government, taking into account Corealcredit's position as
issuer of Pfandbriefe (covered bonds) and willingness from the
public authorities and from Pfandbrief issuers and investors to
safeguard the standing of Pfandbriefe as an asset class.
Current Pfandbrief legislation includes provisions on how to
handle an insolvent issuer of Pfandbriefe to protect the
creditworthiness of these instruments. However, examples of bail-
outs of such banks have led Fitch to believe that there is
currently limited appetite among the public authorities to test
the practical effectiveness of the legislation. This could have
negative implications for the stability of Germany's financial
system. Fitch therefore believes that the public authorities
would arrange timely support for the bank as a whole, protecting
all senior unsecured obligations alongside Pfandbriefe. Fitch
would expect Germany's public authorities to arrange such support
through German private sector banks or their association where
possible, as they did for the former Allgemeine HypothekenBank
Rheinboden AG (renamed Corealcredit) in 2005 and, more recently
for another German Pfandbrief issuer, Duesseldorfer Hypothekenbank
AG, in April 2008.
Corealcredit's Individual rating of 'D' reflects a still elevated
level of non-performing loans, the reliance on wholesale funding,
some loan concentration and a business model that is very focused
on commercial real estate lending, which faces challenges in the
current operating environment. This is balanced by adequate
capital levels and a lean organisation. Corealcredit has recently
successfully applied to Germany's Financial Stability Fund to
receive a state guarantee for up to EUR500 million of debt
issuance in the medium term. This, together with some
collateralised lending facilities at the European Central Bank,
should ease some of the pressure in accessing unsecured funding in
the interbank market. At end-June 2009, the bank reported an
unconsolidated Tier 1 capital ratio of 12.8%.
In Fitch's rating criteria, a bank's standalone risk is reflected
in Fitch's Individual ratings and the prospect of external support
is reflected in Fitch's Support ratings. Collectively these
ratings drive Fitch's Long- and Short-term IDRs.
Corealcredit
-- Long-term IDR affirmed at 'BBB-', Stable Outlook
-- Short-term IDR affirmed at F3
-- Individual Rating affirmed at 'D'
-- Support Rating affirmed at '2'
-- Support Rating Floor affirmed at 'BBB-'
-- Subordinated obligations affirmed at 'BB'
-- Profit participation rights (Genussscheine) affirmed at
'CC'/'RR5'
IKB DEUTSCHE: Special Auditor to Probe Into Board's Role in Crisis
------------------------------------------------------------------
James Wilson at The Financial Times reports that a court on
Wednesday ordered the appointment of special auditor to examine
whether members of IKB Deutsche Industriebank AG's executive or
supervisory boards were involved in violations of duty in
connection with the crisis at the bank.
The decision in effect overturns a decision by IKB to halt a
previous inquiry, by the same auditor, before he reached a
conclusion about the events at the bank, which had to be rescued
by the government after an off-balance sheet conduit ran into
liquidity problems. the FT says. IKB, as cited by the FT, said it
was considering an appeal against the judgment.
According to the FT, the DSW, a German shareholder action group,
said the court decision to reinstate the special auditor was
positive. "We hope the auditor can continue to work under the
same conditions," the FT quoted the German shareholder action
group as saying.
The FT recalls minority shareholders were angry that the inquiry
was stopped after IKB's sale last year to Lone Star, the US
investment fund, which owns more than 90% of the shares.
State Guarantee
On Aug. 19, 2009, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported the European Commission approved IKB's
EUR7-billion (US$9.9 billion) guarantee from the German state.
Bloomberg disclosed the commission sai the guarantee, which must
be accompanied by a new restructuring plan for the lender, was
necessary to "protect IKB's liquidity and financial stability in
Germany". IKB became Germany's first casualty of the U.S.
subprime-mortgage crisis in 2007 after investments in asset-backed
securities soured, requiring a government-led bailout. Bloomberg
said the lender sought an additional EUR7 billion in debt
guarantees from Germany's bank-rescue fund Soffin because it was
struggling to raise financing on capital markets.
About IKB Deutsche Industriebank
IKB Deutsche Industriebank AG -- http://www.ikb.de/-- is a
Germany-based banking company, which specializes in the field of
long-term financing. It offers a range of financial products and
services directed at medium-sized domestic as well as
international companies and project partners. The Company's
focuses on the two segments Corporate Customers, including
domestic corporate financing, especially lending, but also product
leasing and private equity; and Real Estate Customers, which
provides customized financing solutions as well as related
services for industrial real estate. As of March 31, 2009, it
operated through direct and indirect subsidiaries, including the
wholly owned IKB Capital Corporation and IKB Equity Finance GmbH,
among others; its two majority owned subsidiaries; as well as two
affiliated companies. The Company's subsidiaries are located in
Germany, the United States, the Netherlands, Luxembourg, Austria,
the Czech Republic, France, Hungary, Poland, Russia, Slovakia and
Romania.
PFLEIDERER AG: Fitch Junks EUR275MM Undated Sub. Securities
-----------------------------------------------------------
Fitch Ratings has downgraded Pfleiderer AG's Long-term Issuer
Default Rating to 'B' from 'BB-'. The agency has also downgraded
Pfleiderer's EUR275 million undated subordinated fixed- to
floating-rate capital securities to 'CCC' from 'B'. The Recovery
Rating on the capital securities is RR6. Both ratings remain on
Rating Watch Negative. The company's Short-term IDR is affirmed
at 'B'.
The downgrade reflects a further deterioration in Pfleiderer's
operational performance during Q209 and continued uncertainty over
demand for its products. As a result, Fitch has revised downwards
its financial forecasts for Pfleiderer and expects the issuer's
financial profile to deteriorate further within the next 12-18
months. Fitch anticipates that the company's net lease adjusted
debt (including 75% equity credit on the hybrid bond)/EBITDAR will
potentially exceed 6.0x during this period, compared to 3.5x for
FYE08. The agency expects depressed demand from Pfleiderer's
major end-markets and pricing pressure to persist during the
remainder of 2009 and 2010. These factors will likely be
exacerbated by structural overcapacity in the engineered wood
industry. While Pfleiderer expects slightly improving market
conditions in North America, rising competitive pressure in
eastern Europe and sluggish demand in western Europe are putting
pressure on volumes and prices.
Pfleiderer's industry environment worsened in Q209 compared to
Q109 and Q208. Its Q209 EBITDA margin was 7.9%, compared with a
reported EBITDA margin of 14.7% in Q109 and 13.2% in Q208. At the
same time, reported net financial debt (unadjusted for off-balance
sheet debt and excluding the hybrid bond) increased to
EUR797.5 million at end-June 2009 from EUR715.8 million at FYE08.
As a result, Pfleiderer was in breach of financial covenants
(calculated as net debt/LTM EBITDA less than 3.5x) under its
EUR452 million syndicated loan, the EUR165 million promissory note
(Schuldscheindarlehen) and a EUR46 million bilateral facility at
the test date at end-June 2009. It has so far obtained waivers
for financial liabilities amounting to EUR513 million. In
addition Pfleiderer highlighted a potential breach of financial
covenants for credit facilities amounting to EUR172 million at
eastern European subsidiaries going forward. Pfleiderer is
negotiating with its banks and lenders as it seeks to achieve a
viable restructuring of existing debt. Management is also
considering potential government support in the form of a loan
from the state-owned Kreditanstalt fuer Wiederaufbau. Fitch
expects that any restructuring will result in materially higher
interest costs, which would put additional pressure on cash
generation and limit the company's ability to start significant
deleveraging any time soon.
The RWN reflects Fitch's concerns regarding the outcome of ongoing
negotiations on major parts of Pfleiderer's financing structure
with the group's banks and lenders of the promissory note. The
agency expects to resolve the RWN following the closing of the
restructuring package presently under discussion, and following an
assessment of its terms and conditions. The company is expecting
to conclude restructuring negotiations by end-Q309/beginning Q409.
In addition, Fitch will also look at the measures Pfleiderer will
undertake in the more challenging economic environment to sustain
operating performance and mitigate the expected deterioration in
credit metrics. Material delays in the restructuring process or
increased negative pressure on operations performance could place
further negative pressure on its ratings.
Fitch considers the issuer's current liquidity to be weak. At
end-Q209, Pfleiderer reported EUR62.39 million in cash and undrawn
committed facilities in excess of EUR100 million. This compares
to short-term financial liabilities of EUR672.7 million, of which
EUR359 million have been classified as current as a result of the
covenant breaches.
Pfleiderer's ratings continue to be supported, however, by its
business profile as a leading producer of engineered wood, with
growing shares in its key markets. They also reflect its sound
geographical diversification, with strong positions in its core
markets in western and eastern Europe and North America, and its
broad, integrated product range. The ratings are constrained by
the industry's capital intensity and vulnerability to cyclical
supply-demand imbalances, resulting in price pressure, and by the
company's challenged ability to pass on raw material price
increases to customers.
Pfleiderer is a leading supplier of engineered wood, surface-
finished products and laminate flooring. With some 5,700
employees and production sites in western and eastern Europe and
North America, the group reported sales of EUR1.7 billion in FY08
and EBITDA of EUR223.7 million.
PROMISE-I MOBILITY: Amendment Won't Affect Moody's Note Ratings
---------------------------------------------------------------
Moody's Investors Service stated that the amendment of the
replenishment conditions on 25 August 2009 pursuant to the
replacement of the existing IKB internal rating system by a new
internal rating system will not, in and of itself, result in a
reduction or withdrawal of its ratings on the notes issued by
Promise-I Mobility 2006-1 GmbH or the super senior swap associated
with the transaction.
Promise-I Mobility 2006-1 GmbH requested that Moody's provide its
opinion to them as to whether the ratings on the Moody's-rated
securities issued by the affected transactions would be downgraded
or withdrawn as a result of the amendment of the replenishment
conditions. Moody's believes, as of this date, that the amendment
to the replenishment conditions does not have an adverse effect on
the ratings of the rated securities. However, Moody's did not
express an opinion as to whether these actions have, or could
have, other effects that investors may or may not view positively.
The transaction is a synthetic balance-sheet CDO referencing a
pool of EUR denominated corporate loans to German SME borrowers.
PROMISE-I MOBILITY: Fitch Maintains 'BB+' Rating on Class E Notes
-----------------------------------------------------------------
Fitch Ratings has maintained Promise-I Mobility 2006-1's notes on
Rating Watch Negative following changes to the transaction's
replenishment conditions.
Fitch has reviewed the ratings of the outstanding notes with
respect to the amendments and concluded that the amendments do not
affect the current ratings. The amendments relate to the
replenishment conditions that reference the internal ratings of
the originator, IKB Deutsche Industriebank AG (rated
'BBB-'/'F3'/Negative). IKB has recently revised its internal
rating system and introduced a new rating scale.
The notes issued by Promise-I Mobility 2006-1 synthetically
reference a portfolio that can replenish until 31 December 2010.
Fitch placed the notes' ratings on RWN on 6 August 2009 following
the release of the agency's revised European SME CLO criteria.
Promise-I Mobility 2006-1's ratings are:
-- Class A+ floating rate notes: 'AAA'; RWN
-- Class A floating rate notes: 'AAA'; RWN
-- Class B floating rate notes: 'AA'; RWN
-- Class C floating rate notes: 'A'; RWN
-- Class D floating rate notes: 'BBB'; RWN
-- Class E floating rate notes: 'BB+'; RWN
ROCCATUNE: Files for Insolvency After Financing Efforts Failed
--------------------------------------------------------------
Markus Goebel at TechCrunch reports that German free music
streaming service Roccatune has officially filed for insolvency.
According to the report, Roccatune CEO Constantin Thyssen blamed
the company's insolvency on a failed round of financing.
* GERMANY: Finance Minister Draws Up Rival German Bank Bill
-----------------------------------------------------------
Brian Parkin at Bloomberg News reports that Germany Finance
Minister Peer Steinbrueck unveiled a plan to help distressed
banks.
According to Bloomberg, Mr. Steinbrueck and his fellow Social
Democrat, Justice Minister Brigitte Zypries, outlined a draft bill
in Berlin yesterday to place banks in a modified receivership that
would avoid seizing them from their owners.
Bloomberg relates the bill comes less than three weeks after a
separate draft was announced by Economy Minister Karl-Theodor zu
Guttenberg, a member of the Christian Social Union, Bavarian
allies of Chancellor Angela Merkel's Christian Democrats.
Mr. Guttenberg, as cited by Bloomberg, said he "welcomed" the
Social Democratic Party plans and hoped that "the two concepts can
be combined to find the best solution" for banks teetering on
insolvency.
Bloomberg recalls Mr. Guttenberg presented plans on Aug. 6 this
month to modify German insolvency law as a vehicle for allowing
management to restructure their bank while preserving their
owners' rights. In his draft, Mr. Guttenberg envisages keeping
the government's role in saving banks put into receivership "at a
necessary minimum," empowering the BaFin regulator to oversee
restructuring, Bloomberg notes.
According to Bloombeg, Mr. Steinbrueck and Ms. Zypries said their
draft was "superior" by empowering BaFin to react more quickly to
oversee the rescue of distressed banks if their owners and
management are unable to draw up and implement adequate
restructuring plans.
===========
G R E E C E
===========
ANTENNA TV: Moody's Downgrades Corporate Family Rating to 'B2'
--------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of Antenna TV S.A. to B2 from B1. At the same time, Moody's
downgraded the rating of the company's EUR120 million senior
unsecured notes due 2015 to B2 from B1. The outlook is stable.
Moody's said it intends to withdraw the rating of the notes
following the redemption of the remaining 3% of the notes at par
(the "Asset Sale Offer" as per the indenture) by 11 September
2009. Antenna recently pre-paid approximately 97% of the
aggregate principal amounts of the notes at a discount.
Moody's downgrade of Antenna's CFR reflects the magnitude of the
downturn in the TV advertising market in Greece (down 26.4% year-
on-year in H1 2009), together with the decline in the company's
total and prime-time audience shares in recent years (despite some
improvement since Q4 2008). Together, these factors have been
significantly undermining the company's top-line and cash-
generation capacity such that in H1 2009 its negative free cash
flow expanded to around EUR59 million versus EUR22 million in H1
2008.
Moody's acknowledges that this weakness has been to a significant
extent mitigated by Antenna's strong net cash position, which
stood at EUR379 million as of 30 June 2009 (thanks to the disposal
of Nova Bulgaria in October 2008). However, the rating agency
understands that the company has been considering various
investment opportunities in the media sector and, therefore, the
current financial flexibility is unlikely to be sustainable.
While there is currently uncertainty as to the nature, extent or
timing of any such potential investments and the capital structure
post-acquisition, the B2 rating cautiously factors in the
difficult operating environment for Antenna's core TV activities
in Greece, and management's track record in recent years of
maintaining a relatively weak financial risk profile compared to
its rated peers within the region. Nevertheless, a market
recovery combined with an elimination of cash burn and a
restoration of credit metrics (such as Debt/EBITDA not exceeding
5.0x) on a sustainable basis could lead to an upgrade.
The last rating action on Antenna was implemented on January 30,
2007, when Moody's changed the outlook to negative from stable.
Antenna TV S.A. is one of the leading media groups in Greece, with
a portfolio of assets including TV (Antenna Television) and radio
broadcasting and programming, and magazine publishing (Daphne).
As at December 2008, the group reported revenues of
EUR157.5 million and negative EBITD of EUR37.2 million (as defined
by the company). The group is owned by members of the Kyriakou
family.
=============
H U N G A R Y
=============
* HUNGARY: Construction Sector Liquidations Steady, MTI Says
------------------------------------------------------------
MTI-ECONEWS reports, citing company information service provider
Opten, reports that although Hungary's Central statistics Office
show that construction-industry output rose 16% yr/yr in June, the
number of companies that went under liquidation decreased only
slightly in July compared to the spring of this year.
According to MTI, Opten said construction industry output likely
grew as a result of a few major public investments that did not
affect the entire sector.
MTI relates Opten strategic director Hajnalka Csorbai said the
number of companies placed under liquidation rose 22% in the first
half of 2009 and rose 36% yr/yr in July. The number of winding-up
procedures showed a similar trend, rising 52% in H1 2009 and 68%
yr/yr in July, MTI notes.
=============
I R E L A N D
=============
INDEPENDENT NEWS: Selling South African Outdoor Ad Business
-----------------------------------------------------------
Ben Fenton, Salamander Davoudi, Anousha Sakoui and Michael Bleby
at The Financial Times report that Independent News & Media plc is
to sell its South African outdoor advertising business to London-
based pan-African private equity group Helios Investment Partners
for more than R1.1 billion (US$141 million).
Citing a person familiar with the discussions, the FT discloses
the Dublin-based company was likely to net about EUR97 million
(US$139 million) from the deal, which is subject to the approval
of bondholders, banks and shareholders.
The FT recalls in July, Denis O'Brien, the Irish businessman who
has a 26% stake in INM and three seats on its board, told a Dublin
newspaper that he would oppose any sale of INM Outdoor because it
was too good a business to let go.
Standstill
INM said that the financial standstill entered into with their
principal banks and bondholders for the period to August 27, 2009,
has been extended. The financial standstill period will now run
until September 25, 2009, (or any earlier date of termination
under the standstill agreement or later date if agreed to by the
required parties).
The extension of the standstill period will facilitate the
continuation of ongoing and constructive discussions between all
key stakeholders in relation to the group's financial
restructuring. The group has sufficient funding in place to meet
all working capital requirements during the standstill period.
Implementation of the standstill required agreement from all of
INM's principal banks and in excess of 75% of INM's bondholders by
value, with 81.13% of the bondholders by value now agreed.
As previously advised, INM will issue its interim results in
respect of the six months ended June 30, 2009 on today, August 28,
2009.
About Independent News & Media
Headquartered in Dublin, Ireland, Independent News & Media PLC
(ISE:IPD) -- http://www.inmplc.com/-- is engaged in printing and
publishing of metropolitan, national, provincial and regional
newspapers in Australia, India, Ireland, New Zealand, South Africa
and the United Kingdom. It also has radio operations in Australia
and New Zealand, and outdoor advertising operations in Australia,
New Zealand, South-East Asia and across Africa. The Company also
has online operations across each of its principal markets. The
Company has three business segments: printing, publishing, online
and distribution of newspapers and magazines and commercial
printing; radio, and outdoor advertising. INM publishes over 200
newspaper and magazine titles, delivering a combined weekly
circulation of over 32 million copies with a weekly audience of
over 100 million consumers. In March 2008, it acquired The Sligo
Champion. During the year ended December 31, 2007, the Company
acquired the remaining 50% interest in Toowoomba Newspapers Pty
Ltd.
IRISH LIFE: Posts EUR220 Mil. Pre-Tax Loss in First Half 2009
-------------------------------------------------------------
Geoff Percival at Irish Examiner.com reports that Irish Life &
Permanent plc has posted a pre-tax loss of EUR220 million for the
first half of 2009, compared with a profit of EUR62 million for
the same period last year.
According to the report, rising funding costs and impairment
charges to cover loan arrears also transformed last year's
first-half operating profit of EUR300 million into an operating
loss of EUR51 million for the first six months of this year.
The group, the report discloses, raised its total impairment
charge to EUR189 million for the first half of this year; it stood
at EUR82 million for the whole of 2008. Of that, EUR98 million
covered mortgage arrears in the Irish market, the report notes.
Headquartered in Dublin, Irish Life & Permanent plc --
http://www.irishlifepermanent.ie/-- is a provider of personal
financial services to the Irish market. Its business segments
include banking, which provides retail banking services; insurance
and investment, which includes individual and group life assurance
and investment contracts, pensions and annuity business written in
Irish Life Assurance plc and Irish Life International, and the
investment management business written in Irish Life Investment
Managers Limited; general insurance, which includes property and
casualty insurance carried out through its associate, Allianz-
Irish Life Holdings plc, and other, which includes a number of
small business units. On June 30, 2008, it acquired the rest of
the 50% interest in Joint Mortgage Holdings No. 1 Limited (the
parent of Springboard Mortgages Limited), resulting in Springboard
Mortgages becoming a wholly owned subsidiary. On December 23,
2008, it acquired an additional 23% of Cornmarket Group Financial
Services Ltd, bringing its interest to 98%.
* * *
As reported in the Troubled Company Reporter-Europe on July 9,
2009, Moody's Investors Service downgraded Irish Life &
Permanent's undated subordinated debt to Ba1 from Baa3. Moody's
said the outlook is negative. The outlook on the undated
subordinated debt rating of Irish Life & Permanent is negative.
This is in line with the outlook on its D BFSR.
STARTS PLC: S&P Downgrades Ratings on Two Tranches to 'CCC-'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
four collateralized debt obligation tranches issued by STARTS
(Ireland) PLC.
The downgrades of the four tranches follow receipt of an updated
reference portfolio, which includes obligors that have suffered
credit events that S&P had not previously included in its
analysis.
Following S&P's assessment of the deterioration in the credit
quality of obligors in the current portfolio, S&P has lowered the
ratings to a level where the credit enhancement (or attachment
point) is commensurate with the stressed scenario loss rate.
Ratings List
Ratings Lowered
STARTS (Ireland) PLC
EUR15 Million Floating-Rate Secured Credit-Linked Notes
Series 2004-3 (Amber)
Rating SROC Projected
To From scenario 90 day+(%) SROC(%)
-- ---- -------- ---------- ---------
B/Watch Neg AAA AAA 97.9898 98.7620
AA+ 98.1167 98.8509
AA 98.4762 99.2770
AA- 98.5316 99.3108
A+ 98.5870 99.3446
A 98.6425 99.3784
A- 98.6979 99.4122
BBB+ 98.8596 99.5630
BBB 99.1598 99.6760
BBB- 99.2039 99.8533
BB+ 99.5812 100.0006
BB 99.7137 100.1232
BB- 99.8698 100.2332
B+ 99.9657 100.2445
B 99.9881 100.2559
B- 100.0947 100.2672
STARTS (Ireland) PLC
EUR11.5 Million Floating-Rate Secured Credit-Linked Notes
Series 2004-4 (Amber)
Rating SROC Projected
To From scenario 90 day+(%) SROC(%)
-- ---- -------- ---------- ---------
CCC- A A 98.1468 98.8790
A- 98.2020 98.9127
BBB+ 98.3629 99.0626
BBB 98.6615 99.1751
BBB- 98.7054 99.3515
BB+ 99.0808 99.4980
BB 99.2126 99.6201
BB- 99.3679 99.7295
B+ 99.4633 99.7408
B 99.4857 99.7521
B- 99.5917 99.7633
CCC+ 99.6946 99.9424
CCC 99.7859 100.0224
CCC- 99.9497 100.0224
STARTS (Ireland) PLC
US$25 Million Floating-Rate Secured Credit-Linked Notes
Series 2004-8 (Amber)
Rating SROC Projected
To From scenario 90 day+(%) SROC(%)
-- ---- -------- ---------- ---------
B-/Watch Neg AAA AAA 97.7429 98.5139
AA+ 97.8695 98.6020
AA 98.2281 99.0270
AA- 98.2834 99.0607
A+ 98.3387 99.0944
A 98.3940 99.1281
A- 98.4493 99.1618
BBB+ 98.6106 99.3122
BBB 98.9100 99.4249
BBB- 98.9540 99.6018
BB+ 99.3304 99.7487
BB 99.4625 99.8710
BB- 99.6182 99.9807
B+ 99.7139 99.9920
B 99.7363 100.0033
B- 99.9457 100.0146
CCC+ 100.0372 100.1942
STARTS (Ireland) PLC
US$10 Million Floating-Rate Secured Credit-Linked Notes
Series 2004-9 (Amber)
Rating SROC Projected
To From scenario 90 day+(%) SROC(%)
-- ---- -------- ---------- ---------
BBB+/Watch Neg AAA AAA 98.9897 99.7705
AA+ 99.1179 99.8596
AA 99.4810 100.2900
AA- 99.5370 100.3242
A+ 99.5930 100.3583
A 99.6490 100.3925
A- 99.7051 100.4266
BBB+ 99.8684 100.5789
BBB 100.1716 100.6930
=========
I T A L Y
=========
ATLANTE FINANCE: Fitch Cuts Rating on Class C Notes to 'B'
----------------------------------------------------------
Fitch Ratings has downgraded Atlante Finance S.r.l.'s class C
notes and placed all the transaction's notes on Rating Watch
Negative:
-- Class A notes (IT0004069032): 'AAA'; placed on RWN
-- Class B notes (IT0004069040): 'A'; placed on RWN
-- Class C notes (IT0004069057) downgraded to 'B' from 'BBB-';
placed on RWN
The downgrade of the class C notes reflects the significant
deterioration of the portfolio's credit quality. As of the July
2009 payment date, total delinquencies -- loans in arrears for
more than 30 days -- stood at 20% of the outstanding portfolio
balance. At the same time, cumulative defaults since closing --
loans in arrears for more than 180 days -- have reached 3.15% of
the initial portfolio balance.
Defaulted and delinquent loans are debited to the Principal
Deficiency Ledger. The balance of the PDL is written down by
diverting excess spread from the portfolio to accelerate the pay
down of the class A notes. This effectively increases available
credit enhancement to all classes of notes. Over the several past
payment dates the amount debited to the PDL has increased
significantly. As a result, in the near-term the PDL balance is
unlikely to be entirely cleared. In addition, the increasing
delinquency trend will likely result in continued debits to the
PDL. This trend is being compounded because the amount of excess
spread available to clear the PDL is being compressed as more
loans fail to perform.
The notes were also placed on RWN to reflect the re-evaluation of
the deal under Fitch's revised criteria for rating CLOs of
granular pools of smaller corporate loans, which was published on
July 23, 2009 and is currently being implemented.
Atlante Finance S.r.l. is a securitization of a mixed portfolio
comprised of loans to Italian companies and individual
entrepreneurs backed by real estate mortgages, residential
mortgage loans and unsecured loans to Italian local public
entities.
The ratings address the likelihood of investors receiving timely
payments of interest in accordance with the legal documentation,
and repayment of principal on all classes of notes by legal final
maturity in July 2047.
SESTANTE FINANCE: S&P Cuts Rating on Cl. C2 Series 4 Notes to BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on the class C1 and C2
notes series 3 and class B, C1, and C2 series 4 issued by Sestante
Finance S.r.l. following further collateral performance
deterioration.
At the same time, S&P affirmed and removed from CreditWatch
negative its credit ratings on the class C1 notes series 2 and
class B notes series 3. S&P also affirmed all the other classes
of notes in Sestante's series 2, 3, and 4.
On May 20, S&P placed certain Sestante ratings on CreditWatch
negative due to deterioration in the collateral performance and
connected draws under the respective cash reserves.
The rating actions follow a cash flow analysis taking into account
updated credit numbers and the structural mechanisms providing
enhancement in the transactions. S&P based the updated credit
analysis on S&P's assessment of the characteristics of the
residual collateral portfolios and factored in the transactions'
performance, including a substantial increase in arrears and
defaults over the past few quarters.
As of the end of the latest collection period, mortgage loans in
arrears for more than 90 days, cumulative gross defaults, and
average quarterly default rates for the three transactions are:
* Series 2: 5.54%, 3.18%, and 0.54%;
* Series 3: 4.73%, 2.98%, and 0.67%; and
* Series 4: 7.31%, 3.96%, and 0.86%.
As a result of the relatively high level of arrears and connected
steady transitions to defaults, the series 3 and 4 reserve funds
have been fully depleted and the series 2 reserve fund is at 38%
of its target balance. All the Sestante transactions feature a
structural mechanism requiring the use of excess spread and
eventually reserve funds to cover the full balance of defaulted
mortgage loans. S&P's cash flow model analysis factors recoveries
coming from defaulted assets that have already been cured through
excess spread.
Due to the lack of available funds, series 4 had an unpaid
principal deficiency ledger of around EUR2.6 million at the last
interest payment date. The series 2 and 3 PDLs are not currently
registering any shortfalls.
Reserve fund depletions in series 3 and 4 are also affecting the
repayment speed of the class C2 excess spread-backed notes. Given
that the issuer repays principal on these notes before it
replenishes the reserve fund, a reserve fund depletion implies a
lower level of available funds to redeem those notes. The series
4 outstanding unpaid PDL is likely to further slow the redemption
of the class C2 notes since the issuer applies available funds in
the waterfall to cure the unpaid PDL before redeeming the class C2
notes.
Interest payments on series 3 and 4's class B, C1, and C2 notes
can be deferred if the cumulative gross default ratio rises above
certain levels, the lowest being 12%. Given the current
cumulative default ratios and the outstanding level of
delinquencies, S&P does not think it likely that any of these
triggers will be breached over the short term.
In its cash flow analysis, S&P addressed the effect of reserve
fund draws and unpaid PDLs on the redemption profile of the class
C2 notes and the likelihood of the deferral triggers being hit.
Meliorbanca SpA, the originator and servicer of the Sestante
transactions, has informed us that it may transfer the servicing
of Sestante series 1 to 5 to a third party. S&P's current review
does not take into account the operating implications of such a
transfer.
Pools of residential mortgage loans secured over properties in
Italy back these three Sestante transactions. During the first 18
months of the transactions, the portfolios were revolving, subject
to replenishment criteria.
Ratings List
Ratings Lowered and Removed From Creditwatch Negative
Sestante Finance S.r.l.
EUR890.9 Million Asset-Backed Floating-Rate Notes Series 3
Rating
------
Class To From
----- -- ----
C1 BBB- A-/Watch Neg
C2 BB BBB/Watch Neg
Sestante Finance S.r.l.
EUR647.9 Million Asset-Backed Floating-Rate Notes Series 4
Rating
------
Class To From
----- -- ----
B A A+/Watch Neg
C1 BBB- BBB/Watch Neg
C2 BB- BB/Watch Neg
Ratings Affirmed and Removed From Creditwatch Negative
Sestante Finance S.r.l.
EUR647.2 Million Asset-Backed Floating-Rate Notes Series 2
Rating
------
Class To From
----- -- ----
C1 BBB BBB/Watch Neg
Sestante Finance S.r.l.
EUR890.9 Million Asset-Backed Floating-Rate Notes Series 3
Rating
------
Class To From
----- -- ----
B AA- AA-/Watch Neg
Ratings Affirmed
Sestante Finance S.r.l.
EUR647.2 Million Asset-Backed Floating-Rate Notes Series 2
Class Rating
----- ------
A AAA
B A+
C2 BBB
Sestante Finance S.r.l.
EUR890.9 Million Asset-Backed Floating-Rate Notes Series 3
Class Rating
----- ------
A AAA
Sestante Finance S.r.l.
EUR647.9 Million Asset-Backed Floating-Rate Notes Series 4
Class Rating
----- ------
A1 AAA
A2 AAA
===================
K A Z A K H S T A N
===================
BTA BANK: May Sell Retail Unit Temirbank to Majority Shareholder
----------------------------------------------------------------
Laura Cochrane at Bloomberg News reports that BTA Bank may sell
assets including retail unit Temirbank to majority shareholder
Samruk-Kazyna as part of its debt restructuring.
"We have had talks with Samruk-Kazyna on Temirbank and these
discussions are ongoing," Bloomberg quoted Anvar Saidenov, chief
executive officer, as saying in a phone interview.
Bloomberg relates Mr. Saidenov said in an interview from Almaty
Tuesday "Temirbank is a retail franchise with a considerable share
of the market in Kazakhstan, but on the other hand BTA has its own
retail portfolio and there is a certain overlapping in that
sense".
Bloomberg recalls government-owned National Wellbeing Fund Samruk-
Kazyna bought a controlling 75.1% stake in BTA in February. The
lender stopped making principal payments on its debt in April
after creditors demanded immediate repayment and ceased paying
interest last month. It has proposed offering US$1 billion to buy
back debt as part of its options to bondholders. Mr. Saidenov, as
cited by Bloomberg, said BTA will deliver restructuring options to
bondholders from Sept. 2 to 4, a plan that is 80% to 90%
completed.
On Aug. 25, 2009, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported BTA said it will shut branches and cut
staff as it restructures more than US$12 billion in debt.
Bloomberg disclosed an investor presentation, dated Aug. 18, on
BTA's Web site, said the bank aims to cut costs and may consider
"disposing" of "non-core assets" such as retail unit Temirbank.
The presentation said net liabilities at BTA were more than KZT890
billion (US$5.9 billion) as of June 30, from net assets of almost
KZT417 billion at the end of last year.
BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO --
http://bta.kz/-- is a Kazakhstan-based financial institution,
which is involved in the provision of banking and financial
products for private and corporate clients. The Bank has in its
offer personal banking services, comprised of current accounts,
savings accounts, term deposits, safety deposit boxes, money
transfer services, credit facilities, and corporate banking
services, including business accounts, credit facilities, treasury
services, letters of guarantee, letters of credit, foreign
exchange services, remittances and other solutions, as well as
debt and credit cards, card services and electronic banking
services. The Bank has 14 subsidiaries and six affiliated
companies. It offers its services through a network of numerous
regional branches, cash settlement centers throughout Kazakhstan
and international representative offices located in Ukraine,
Russia, China and the United Arab Emirates.
GLOBAL INTER: Creditors Must File Claims by September 5
-------------------------------------------------------
Creditors of LLP Global Inter Tour have until September 5, 2009,
to submit proofs of claim to:
Makataev Str. 196-36
Almaty
Kazakhstan
The Specialized Inter-Regional Economic Court of Almaty commenced
bankruptcy proceedings against the company on May 12, 2009, after
finding it insolvent.
The Court is located at:
The Specialized Inter-Regional
Economic Court of Almaty
Baizakov Str. 273b
Almaty
Kazakhstan
KAZ MOBILE: Creditors Must File Claims by September 5
-----------------------------------------------------
Creditors of LLP Kaz Mobile Trans Ltd. have until September 5,
2009, to submit proofs of claim .
For further information, contact 8 701 321 43-31, 8 777 226 20-31.
The Specialized Inter-Regional Economic Court of Almaty commenced
bankruptcy proceedings against the company on May 28, 2009, after
finding it insolvent.
The Court is located at:
The Specialized Inter-Regional
Economic Court of Almaty
Tauelsyzdyk Str. 53
Taldykorgan
Almaty
Kazakhstan
KITAISKO KAZAKHSKAYA: Creditors Must File Claims by September 5
---------------------------------------------------------------
Creditors of LLP Chinese Kazakh Alakol Iliy Agricultural Trade
Industrial Company Kitaisko Kazakhskaya Alakol Ilyiskaya Selskaya
Torgovo Promyshlennaya Companiya have until September 5, 2009, to
submit proofs of claim.
For further information, contact 8 701 321 43-31, 8 777 226 20-31.
The Specialized Inter-Regional Economic Court of Almaty commenced
bankruptcy proceedings against the company on May 28, 2009, after
finding it insolvent.
The Court is located at:
The Specialized Inter-Regional
Economic Court of Almaty
Tauelsyzdyk Str. 53
Taldykorgan
Almaty
Kazakhstan
KONTAL SECURITY: Creditors Must File Claims by September 5
----------------------------------------------------------
Creditors of LLP Kontal Security have until September 5, 2009, to
submit proofs of claim to:
The Specialized Inter-Regional
Economic Court of South Kazakhstan
Tynybaev Str. 42
Shymkent
South Kazakhstan
Kazakhstan
The court commenced bankruptcy proceedings against the company on
June 8, 2009.
MERKI ATA: Creditors Must File Claims by September 5
----------------------------------------------------
LLP Merki Ata Gas is currently undergoing liquidation. Creditors
have until September 5, 2009, to submit proofs of claim to:
Askarov Str. 2
Merke
Merkensky
Jambyl
Kazakhstan
MOLCHANOV I COMPANIYA: Creditors Must File Claims by September 5
----------------------------------------------------------------
Creditors of JSC Molchanov I Companiya have until September 5,
2009, to submit proofs of claim to:
The Specialized Inter-Regional
Economic Court of South Kazakhstan
Tynybaev Str. 42
Shymkent
South Kazakhstan
Kazakhstan
The court commenced bankruptcy proceedings against the company on
June 8, 2009.
ORBITA OJSC: Creditors Must File Claims by September 5
------------------------------------------------------
Creditors of OJSC Orbita have until September 5, 2009, to submit
proofs of claim to:
The Specialized Inter-Regional
Economic Court of North Kazakhstan
Brusilovsky Str. 60
Petropavlovsk
North Kazakhstan
Kazakhstan
The court commenced bankruptcy proceedings against the company on
June 8, 2009.
VAGON SERVICE: Creditors Must File Claims by September 5
--------------------------------------------------------
The Karaganda and Kyzylorda branches of JSC Vagon Service are
currently undergoing liquidation.
Creditors have until September 5, 2009, to submit proofs of claim.
Creditors of JSC Vagon Service's Karaganda branch may submit
proofts of claim to:
Novoselov Str. 347a
Karaganda
Kazakhstan
Creditors of JSC Vagon Service's Kyzylorda branch may submit
proofts of claim to:
Egizbaev Str. 1
Kyzylorda
Kazakhstan
===================
K Y R G Y Z S T A N
===================
INTER ASIA: Creditors Must File Claims by September 17
------------------------------------------------------
LLC Inter Asia Textile is currently undergoing liquidation.
Creditors have until September 17, 2009, to submit proofs of claim
to:
FEZ Bishkek
Ak-Chyi
Bishkek
Kyrgyzstan
===================
L U X E M B O U R G
===================
MELCHIOR CDO: S&P Junks Ratings on Three Classes of Notes
---------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on the class B-1, B-2, C-
1, C-2, and D notes issued by Melchior CDO I S.A. At the same
time, S&P affirmed the rating on the class A-1 notes.
The rating actions reflect S&P's assessment of the effect of
negative rating migration and defaults in the transaction's
underlying portfolio on its cash flows. In S&P's opinion, these
recent developments have increased the risk that cash flows from
the portfolio may not be sufficient to repay all junior
noteholders in full.
The transaction has been structured to include interest coverage
and collateral coverage tests. While the class A OC, class B OC,
class A IC, class B IC, and class C IC ratios exceed their
respective triggers, the OC ratios for classes C and D and the IC
ratio for class D are failing, with the OC ratio for class D being
substantially below 100%.
Taking these factors into account, S&P's analysis indicates that
the credit enhancement available to classes B-1, B-2, C-1, C-2,
and D no longer supports their previous ratings. As such, S&P
lowered its ratings on these classes to levels that, in its view,
reflect the current likelihood of principal and interest repayment
to noteholders.
The most recent rating action on Melchior CDO I took place on May
20, when S&P placed the class B-1, B-2, C-1, C-2, and D notes on
CreditWatch negative.
Melchior CDO I, which is managed by Henderson Global Investors
Ltd., is a cash flow collateralized debt obligation of loans,
high-yield bonds, and structured finance securities. The
transaction closed in July 2001 and is currently in its amortizing
period.
Ratings List
Melchior CDO I S.A.
EUR404 Million Fixed- And Floating-Rate Notes, Subordinated,
and Combination Notes
Ratings Lowered and Removed From CreditWatch Negative
Rating
------
Class To From
----- -- ----
B-1 BBB- AA/Watch Neg
B-2 BBB- AA/Watch Neg
C-1 CCC- BB-/Watch Neg
C-2 CCC- BB-/Watch Neg
D CCC- B-/Watch Neg
Rating Affirmed
Class Rating
----- ------
A-1 AAA
=====================
N E T H E R L A N D S
=====================
FORD MOTOR: Fitch Revises Credit Outlook from Neg. to Stable
------------------------------------------------------------
Fitch Ratings announced via Business Wire on August 26 that it has
revised the Rating Outlook on Ford Motor Company (Ford) and Ford
and Ford Motor Credit Company to Stable from Negative. In
addition, the Issuer Default Rating of Ford is affirmed at 'CCC'.
The change in the Outlook is based on the solid execution of
Ford's restructuring program, a competitive product lineup with a
healthy level of new and refreshed product introductions over the
next several years, realignment of the company's manufacturing
footprint, and diminished liquidity concerns. A return to
positive cash flow is not expected over the next 12 months, but is
probable upon the industry reaching more normalized sales levels
above 12 million light vehicles. Although Fitch projects a slow
rebound in industry sales (consistent with a weak economic
recovery), signs of stabilization in the economy, coupled with
replacement demand, indicate that industry sales should reach this
level of annualized demand in late 2010 or 2011. Improvement in
the company's Outlook and rating will be driven by the pace and
mix of the rebound in industry sales, steady execution of the
company's product introductions, continued discipline in the
company's production/inventory strategy, further margin
improvement and competitive access to capital at Ford Credit.
These trends are largely pointing in the right direction, but have
been overwhelmed by general economic and industry conditions. The
behavior of competitors in production and pricing could also
influence the timing of any improvement in the outlook or rating.
Ford's product lineup continues to perform well, and the company
is positioned to maintain or increase retail share over the next
several years with new products and an aggressive refreshening
program. Ford has achieved relatively broad competitiveness
across market segments, including smaller product segments where
industry sales have been trending. Ford's Focus and Escape were
two of the top eight vehicles in the Cash for Clunkers program,
while the refreshed Fusion continues to perform well in the
competitive mid-size sedan market.
Two new product introductions should lead to incremental share
gains: the Fiesta in the sub-compact market where Ford has not
recently had a U.S. product, and the new Taurus in the large sedan
category, where Ford has not been competitive for some time.
Ford's quality improvement has been well-documented and together
with Ford's ability to avoid taking government aid, may benefit
Ford's near-term retail share. Although Fitch is not projecting a
rapid rebound in industry sales in 2010 (particularly with the
pull-forward from the Cash for Clunkers program), a stronger-than-
expected rebound in industry sales to above the 12 million light-
vehicle sales level and improvement in housing construction could
lead Ford to operate at a cash- flow breakeven point in the second
half of 2010. Weak employment, high foreclosure rates, higher
savings, shaky consumer confidence and the impact of the Cash for
Clunkers program, however, all point to a modest recovery in
industry sales over the near term.
A Fitch upgrade of Ford would be driven by a combination of the
following:
--Industry sales rebound to an annual 12 million sales level more
quickly than currently forecast;
--Ford's products continue to hold or gain share;
--Inventory management at Ford and the industry allows Ford to
hold or improve product prices;
--A clear path to positive free cash flow is projected;
--Liabilities continue to be managed or addressed, including the
maturity of the company's bank agreement;
--Independent access to capital by Ford Credit improves.
A downgrade could result from some combination of the following
factors:
--U.S. industry sales revert to further declines in the event of a
double-dip recession;
--A market disruption in oil prices which sends gas prices sharply
higher and drives consumers away from vehicle purchases;
--A breakdown in the supply chain resulting from further supplier
bankruptcies and lack of access to capital, or from dislocations
caused by the dissolution of a major competitor;
--Inability of Ford Credit to obtain financing on competitive
terms.
Ford has made significant reductions in its fixed cost structure,
although step-changes to its headcount, wages and benefits have
largely been completed. Realization of recent actions should
continue through year-end, with a full run-rate of savings
expected in 2010. Future cost savings will be achieved largely
through more standard (but challenging) efficiency and
productivity gains, including materials savings. Upon completion
of the conversion of several truck plants, Ford's manufacturing
footprint will be well-aligned with near-term product plans,
supporting an expected improvement in efficiency and capacity
utilization. New product introductions and higher volumes through
existing assembly plants, plus increased platform sharing, should
provide material improvement in operating margins, also aided by
the ability to add lower-tier hourly wage earners. Ford's ability
to navigate recent events -- the plummet in industry sales,
consumer migration to smaller vehicles, multiple plant closures, a
dramatic reduction in its workforce, the bankruptcy of Chrysler
and GM, diminished retail financing capacity and distress in the
supply base -- while still introducing competitive, improved-
quality products and accelerating its product cadence, has been
impressive.
A primary driver of operating performance over the near term will
be the high-margin large pickup segment, which constituted 10.4%
of U.S. light-vehicle unit sales through August 2009, and 24% of
Ford's non-Volvo unit deliveries. This market has suffered a
decline of more than 50% in production from 2006 levels, and sales
volumes remain mired below replacement demand. Demand is expected
to recover slowly due to lingering weakness in the housing market,
but the potential trough of the housing market should signal
improved demand and consolidated margin performance as a result.
From a competitive standpoint, Ford and GM could be poised to gain
pickup share from Nissan (weak market presence) and Chrysler (the
impact of its bankruptcy on sales and capital investment
capacity). Over the longer term, it remains to be seen what
Toyota's plans in the full-size pickup segment will be. Although
a withdrawal from the pickup truck market is not expected, Ford
and GM's comparative strengths in brand and pickup truck quality,
the lack of global platform scale, and the vast market share
advantage of the Detroit 3 call into question Toyota's ability to
earn an adequate return on the capital investment in this platform
over the long term.
Ford's plant consolidation, cost reductions, product introductions
and operating strategy have aided a disciplined
production/inventory balance in 2009, and allowed Ford to achieve
pricing gains that have benefited operating results. This
discipline will lead to production boosts in the third and fourth
quarter of 2009 from levels that were below demand for much of the
year, although it remains to be seen whether the industry's
history of over-production and price discounting will allow Ford
to consistently adhere to this strategy.
Ford has also committed substantial resources to the support of
its supply chain, a cost that is unlikely to abate in 2010.
Access to capital remains limited or non-existent for a large part
of the supply base, and further bankruptcies will be a certainty.
It has been noteworthy that through the bankruptcy of numerous
Tier 1 and lower-tiered suppliers, as well as the bankruptcy of
Chrysler and General Motors, the production process has been
surprisingly well-managed with very few disruptions (although
aided by the substantial injection of funds by the Federal
government). As the supplier industry consolidates and business
migrates to financially viable suppliers, the reduction in support
costs for Ford could be material in the outer years. However, the
industry has been supported by multiple layers of Federal
government support, including direct capital injections into
General Motors and Chrysler (as well as their finance arms),
supplier aid, the TALF program and more. The reduction or
termination of these actions will place additional burdens on the
industry, as self-sufficiency remains uncertain.
Liquidity remains sufficient to finance reduced operating losses
over the near term, even if a slow recovery pushes out the timing
of the company's cash-flow breakeven point. As of June 30, 2009,
Ford had cash of approximately US$21 billion, with a reduced rate
of outflow projected for the second half due to increased
production and working capital inflows. Fitch estimates that if
U.S. industry sales rebound only to 11 million light vehicles in
2010, that Ford's cash drain from operations would be US$5 billion
or less, depending on mix. Primary risks to this forecast include
a U.S. relapse in economic conditions, a sharp escalation in gas
prices, the collapse of the supply base, or a lack of retail
financing capacity. In addition to cash on hand, sources include
future funding from the government for energy programs, modest
asset sales, potential securities issuance, and dividends from
Ford Credit. These sources are deemed sufficient to fund cash
drains from operations even if a recovery in industry sales is
deferred.
Shrinking U.S. production has also modestly lowered the cash level
needed to operate the business to below US$10 billion. Liquidity
in 2009 and into 2010 is expected to benefit from working capital
inflows associated with higher production volumes, and modest
asset sales. In addition, liquidity will benefit from an expected
US$5.9 billion in federal government loans under an energy-
efficiency program.
Ford's maturity schedule is centered on the December 2011 maturity
of its US$10.7 billion bank agreement. Given current market
conditions in the leveraged finance market, the company's recent
performance and the state of Ford's collateral, it is probable
that the company could "amend and extend" this facility in the
existing amount (although at higher pricing). This would mitigate
refinancing risk and address the liquidity risks associated with a
double-dip recession and the resulting step-down in industry
sales. Ford executed a voluntary debt exchange in 2009, removing
US$9.9 billion in debt (US$7.7 billion in unsecured debt and
US$2.2 billion in secured debt) and $500 million in interest
costs. This debt reduction, however, was effectively replaced by
the drawdown of its revolving credit facility.
Over the past several years, Ford has also completed several
equity-for-debt swaps and a straight equity issuance, thereby
managing the growth in its liabilities and somewhat moderating the
damage caused by severe cash drains. Ford's willingness to use
equity is likely to continue. The interests of equity and
bondholders have recently been very much aligned, as both sides
have benefited from the issuance of equity and the boost in
liquidity, although it remains to be seen how long this will last.
Fitch expects that Ford will continue to issue equity over the
next 12 months as market conditions permit, and will likely issue
equity to finance its VEBA obligations to the full US$6.5 billion
permitted. However, even with periodic equity issuances, any
balance sheet improvement over the near term is expected to be
modest.
Although General Motors and Chrysler have realized substantial
access to capital from various government actions, Fitch does not
believe that this represents a competitive disadvantage to Ford
from a balance sheet perspective. To the contrary, Fitch views
Ford and Ford Credit's periodic access to equity and the debt
markets as a distinct competitive advantage. Over the longer
term, balance sheet strength or deterioration will be driven by
operating results, and Fitch views Ford as better-positioned in
this respect than its Detroit-based competitors. The retention of
Ford Credit remains a positive.
Ford's underfunded U.S. pension plan will require incremental
contributions over the next several years, although there are no
contributions required in 2010. Deferral of these contributions,
however, will result in larger funding gaps in outer years, and
will remain a material claim on cash flows. The VEBA agreement
with the UAW, changes to wage and benefit levels, and reduced
employment levels have materially reduced the long-term risks and
costs associated with legacy obligations.
Ford has shown steady improvement in market share in Europe, but
operating results will remain challenging through 2010 due to weak
economic conditions and a sharp 2010 payback resulting from
various aggressive 2009 Cash for Clunkers programs throughout
Europe. Results from Latin America and Asia are not expected to
be material users or generators of free cash flow over the next
several years.
Over the longer term, tighter regulations around the globe
addressing fuel-efficiency, emission standards, other
environmental, safety and urban planning are all likely to
pressure profitability by limiting or skewing demand, as well as
escalating capital investment requirements. These factors, along
with changing lifestyles indicate that global overcapacity is
likely to be a fundamental characteristic of the industry over the
long term, pressuring margins and leading to regular failures
among competitors. As technologies and regulatory requirements
multiply, Ford may continue to be capital constrained versus a
number of transplant competitors.
The ability of Ford Credit to finance itself and its customers,
independent of government sponsored programs and at economically
competitive rates will be a factor in future upgrades. Fitch has
revised Ford Credit's senior debt ratings following changes in
Fitch's rating definitions published in March 2009, which suggests
a baseline rating of 'B' for a 'CCC' IDR with an 'RR2' Recovery
Rating (RR). Fitch continues to believe potential recoveries are
at the lower end of the 71%-90% recovery range.
In the event of a bankruptcy, unsecured bond recoveries at Ford
are expected to be negligible. The senior secured loans are
currently rated 'RR1' (90%-100% recovery), based on a
restructured, going-concern North American enterprise value plus
certain international operations and joint ventures (particularly
those in Latin America and China). According to Fitch
methodology, an RR of 'RR1' would typically translate to a rating
of 'B+'. However, in the event of a stress scenario, recent
industry events suggest that the corresponding plunge in asset
values would result in less than full recovery, even though Ford's
secured borrowings are subject to a borrowing base.
Fitch has affirmed the following ratings:
Ford Motor Co.
--Long-term IDR at 'CCC';
--Senior secured credit facility at 'B/RR1';
--Senior secured term loan at 'B/RR1';
--Senior unsecured at 'CC/RR6'.
Ford Motor Co. Capital Trust II
--Trust preferred stock at 'C/RR6'.
Ford Holdings, Inc.
--Long-term IDR at 'CCC' ';
--Senior unsecured at 'CC/RR6'.
Ford Motor Co. of Australia
--Long-term IDR at 'CCC';
--Senior unsecured at 'CC/RR6'.
Ford Motor Credit Company LLC
--Long-term IDR at 'CCC';
--Short-term IDR at 'C';
--Commercial paper at 'C'.
FCE Bank Plc
--Long-term IDR at 'CCC';
--Short-term IDR at 'C';
--Commercial paper at 'C';
--Short-term deposits at 'C'.
Ford Capital B.V.
--Long-term IDR at 'CCC';
Ford Credit Canada Ltd.
--Long-term IDR at 'CCC';
--Short-term IDR at 'C';
--Commercial paper at 'B'.
Ford Credit Australia Ltd.
--Long-term IDR at 'CCC';
--Short-term IDR at 'C';
--Commercial paper at 'B'.
Ford Credit de Mexico, S.A. de C.V.
--Long-term IDR at 'CCC'.
Ford Credit Co S.A. de CV
--Long-term IDR at 'CCC'
Ford Motor Credit Co. of New Zealand
--Long-term IDR at 'CCC';
--Short-term IDR at 'C';
--Commercial paper at 'C'.
Ford Motor Credit Co. of Puerto Rico, Inc.
--Short-term IDR at 'C'.
The following ratings have been revised:
Ford Motor Credit Company LLC
FCE Bank Plc
Ford Capital B.V.
Ford Credit Canada Ltd
Ford Credit Co S.A. de CV
Ford Motor Credit Co. of New Zealand
--Senior unsecured to 'B/RR2' from 'B-/RR2'.
Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, 'www.fitchratings.com'.
Published ratings, criteria and methodologies are available from
this site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code
of Conduct' section of this site.
ING GROEP: Seeks to Raise US$1.5 Billion From Asset Disposals
-------------------------------------------------------------
ING Groep NV, the banking and insurance group which turned to the
Dutch government for a EUR10 billion (US$14.2 billion) cash
injection last October, is seeking to raise at least US$1.5
billion with the imminent sale of its Asian and Swiss private
banking operations, Sundeep Tucker at The Financial Times reports,
citing people familiar with the matter.
According to the FT, potential buyers of the private banking
operations, which were put up for sale earlier this year, are
expected to submit final bids next week. The FT relates people
familiar with the situation said the sale process had attracted
strong interest, with Julius Baer, the Swiss private bank, tipped
as a leading contender. Other parties interested in the assets
include Standard Chartered, HSBC, Barclays and DBS Bank of
Singapore. the FT discloses.
The FT recalls ING was forced to seek government support last year
due to concerns over the quality of US mortgage-backed securities
that it holds, which have since been placed under a state
guarantee by the Dutch government in addition to the capital
injection.
Headquartered in Amsterdam, the Netherlands, ING Groep N.V. --
http://www.ing.com/-- is a global financial institution offering
banking, investments, life insurance and retirement services. The
Company serves more than 85 million private, corporate and
institutional customers in Europe, North and Latin America, Asia
and Australia. ING has six business lines: Insurance Europe,
Insurance Americas, Insurance Asia/Pacific, Wholesale Banking,
Retail Banking and ING Direct. In July 2008, the Company
completed the acquisition of CitiStreet LLC, a retirement plan and
benefit service and administration company in United States. In
November 2008, ING Groep N.V. increased its stake in joint venture
Billington Holdings PLC from 50% to 100%. In February 2009, the
Company announced that it closed the sale of its Taiwanese life
insurance business to Fubon Financial Holding Co. Ltd. In April
2009, the Company sold its non-state pension fund business and its
holding company in Russia to Aviva plc.
===========
R U S S I A
===========
KRAS-PROM-LES: Creditors Must File Claims by September 3
--------------------------------------------------------
Creditors of LLC Kras-Prom-Les (TIN 2330028569, PSRN
1022303616720) (Forestry) have until Sep.3, 2009 to submit proofs
of claims to:
Ye.Bocharov
Insolvency Manager
Post User Box 2897
350004 Krasnodar
Russia
The Arbitration Court of Krasnodarskiy will convene at 2:30 p.m.
on December 8, 2009, to hear bankruptcy proceedings on the
company. The case is docketed under Case No. ?-32–18805/2008–
27/1226B.
The Debtor can be reached at:
LLC Kras-Prom-Les
Zheleznodorozhnaya Street
Vasyurinskaya
353203 Krasnodarskiy
Russia
LES-PROM LLC: Creditors Must File Claims by September 3
-------------------------------------------------------
Creditors of LLC Les-Prom (TIN 6670042455, PSRN 1036603543459)
(Forestry) have until September 3, 2009, to submit proofs of
claims to:
E. Chu
Insolvency Manager
Posadskaya Str. 21-312
620086 Yekaterinburg
Russia
Tel: 233-75-61, 233-75-79
The Arbitration Court of Sverdlovskaya commenced bankruptcy
proceedings against the company after finding it insolvent. The
case is docketed under Case No. ?60-35101/08-S11.
The Debtor can be reached at:
LLC Les-Prom
Malysheva Str. 101-402
620095 Yekaterinburg
Russia
NOVOSIBIRSKIY COLD: Creditors Must File Claims by September 3
-------------------------------------------------------------
Creditors of OJSC Novosibirskiy Cold Storage Facility (TIN
5403101650, PSRN 1025401303113) have until September 3, 2009, to
submit proofs of claims to:
Yu. Erdikov
Insolvency Manager
Sibiryakov-Gvardeytsev Str. 54
630088 Novosibirsk
Russia
The Arbitration Court of Novosibirskaya commenced bankruptcy
proceedings against the company after finding it insolvent. The
case is docketed under Case No. ?45–808/2009.
The Debtor can be reached at:
OJSC Novosibirskiy Cold Storage Facility
Sibiryakov-Gvardeytsev Str. 54
630088 Novosibirsk
Russia
SAMARA-STROY LLC: Creditors Must File Claims by September 3
-----------------------------------------------------------
Creditors of LLC Samara-Stroy-Servis (TIN 6367042824)
(Construction) have until September 3, 2009, to submit proofs of
claims to:
V. Makov
Insolvency Manager
Apt. 40
Molodezhnaya Str. 8
Samara
443031 Samarskaya
Russia
The Arbitration Court of Samarskaya commenced bankruptcy
proceedings against the company after finding it insolvent. The
case is docketed under Case No.?55-5931/2009.
STERLITAMAKSKIY BRICK: Creditors Must File Claims by September 7
----------------------------------------------------------------
Creditors of LLC Sterlitamakskiy Brick have until October 7, 2009,
to submit proofs of claims to:
I. Dobrynina
Insolvency Manager
Post User Box 139
450059 Ufa
Russia
The Arbitration Court of Bashkortostan commenced bankruptcy
proceedings against the company after finding it insolvent. The
case is docketed under Case No. ?07-124/08-G-GRA.
STROY-PROEKT LLC: Creditors Must File Claims by September 3
-----------------------------------------------------------
Creditors of LLC Stroy-Proekt-Aktiv (TIN 6163072394, PSRN
1056163000409) (Construction) have until September 3, 2009, to
submit proofs of claims to:
A. Martirosyan
Insolvency Manager
Sholokhova prospect 8a
344019 Rostov-on-Don
Russia
The Arbitration Court of Rostovskaya commenced bankruptcy
proceedings against the company after finding it insolvent. The
case is docketed under Case No. ?53–25296/2008.
The Debtor can be reached at:
LLC Stroy-Proekt-Aktiv
Krasnoarmeyskaya Str. 262
344022 Rostov-on-Don
Russia
VESTER GROUP: Sberbank May Take Over Retail Assets
--------------------------------------------------
Maria Ermakova at Bloomberg News, citing Kommersant, reports that
OAO Sberbank may gain control of Vester Group's retail assets
because it can't pay its debt to the Russian lender.
Bloomberg relates the newspaper said the Kaliningrad-based food
retailer's total debt is RUR6 billion (US$190 million), including
RUR1.8 billion owed to Sberbank.
YADRINSKIY MASH: Creditors Must File Claims by September 7
----------------------------------------------------------
Creditors of CJSC Yadrinskiy Mash-Zavod(TIN 2119901831, PSRN
1072136000045) have until September 7, 2009, to submit proofs of
claims to:
N. Markelov
Temporary Insolvency Manager
Post User Box 4
Kanash
429336 Chuvashia
Russia
The Arbitration Court of Chuvashia will convene on October 21,
2009, to hear bankruptcy supervision procedure on the company.
The case is docketed under Case No. ?79–6342/2009.
The Debtor can be reached at:
CJSC Yadrinskiy Mash-Zavod
30 let Pobedy Str. 6
Yadrin
429060 Chuvashia
Russia
=========
S P A I N
=========
BBVA 1: Fitch Upgrades Rating on Class E Notes From 'BB'
--------------------------------------------------------
Fitch Ratings has upgraded Fondo De Titulizacion De Activos BBVA-
1's class C, D and E notes:
-- EUR25,934,052 class C (ISIN: ES0338619028): upgraded to
'AAA' from 'A'; Outlook Stable; assigned LS-1
-- EUR22,000,000 class D (ISIN: ES0338619036): upgraded to 'A-'
from 'BBB'; Outlook Stable; assigned LS-2
-- EUR28,000,000 class E (ISIN: ES0338619044): upgraded to 'A-'
from 'BB'; Outlook Stable; assigned LS-4
The transaction's senior tranches, class A and B, have been paid
in full.
The upgrades reflect the benefit of increased over
collateralization due the high level of amortization since the
transaction closed. The portfolio, which now consists of only
three assets (EUR75.9 million), in addition to the reserve fund
balance (EUR30.6 million), covers the remaining balance of the
class C notes four times over. In the event of an asset being
declared defaulted, the reserve funds would be released into the
payment waterfall to meet both interest and principal payments.
However, although the reserve fund can be reduced to fund missed
interest payments, the current funds are sufficiently in excess of
the class C notional to result in very limited reliance on the
performance of the portfolio. Even if all three assets defaulted,
only minimal recoveries of less than 5% would likely be needed to
fully repay the class C notes.
By contrast, the Class D and Class E notes are highly dependent on
the performance of the portfolio. Specifically, one asset in the
portfolio, a Spanish utility company, accounts for over 90% of the
portfolio, thus the performance of these tranches is strongly
associated with the creditworthiness of this particular asset. If
this one asset repays in full, the class D would be fully repaid,
whilst the remaining class E note would be left fully covered by
the reserve fund. This asset is currently rated by Fitch at
'A-'/'F2'/Outlook Stable.
Under a scenario where all the assets default, including the
Spanish utility company, the class D would be paid in full if
recoveries were in the mid-to-late-twenties, whilst the class E
notes would require a recovery rate in the mid-sixties to be fully
repaid. The Loss Severity Ratings were used to reflect these
different risk characteristics, by assigning the class D notes
with an LS-2 and the class E notes with LS-4.
SOL MELIA: Moody's Downgrades Corporate Family Rating to 'Ba3'
--------------------------------------------------------------
Moody's Investors Service has downgraded Sol Melia's corporate
family rating and probability of default rating to Ba3 from Ba2.
The rating outlook is negative.
The rating action reflects Sol Melia's weak operating performance,
with the decline in Revenue Per Available Room steepening from
-14% in Q1 2009 to -17.7% at end-H1 2009. Moody's notes that as a
result, Sol Melia's EBITDA fell 31% despite the EUR36 million of
cost savings achieved in H1 2009. Moody's further cautions that
while Q3 2009 booking levels for Sol Melia's Spanish resorts have
held up reasonably well, the overall trading outlook appears
challenging and any material improvements in performance are very
unlikely in the intermediate term.
The negative outlook reflects Moody's expectation that -- due to
the weak business outlook -- any substantial improvement in the
company's debt protection metrics may take some time.
Furthermore, the rating agency cautions that Sol Melia was in
breach of its leverage covenant at the June 2009 testing date.
However, Moody's notes that the company's relationships with its
banks have been solid in the past, therefore the rating action is
premised on the rating agency's assumption that Sol Melia should
be able to secure a waiver.
Moreover, despite the company's financial profile that is not
expected to be in line with a Ba rating in FYE2009 purely based on
credit metrics, Moody's continues to view Sol Melia's business
model as sustainable and therefore -- considering the cyclicality
and operating leverage inherent to Sol Melia's business -- Moody's
would expect improvements in debt protection metrics to
materialise once the market conditions improve.
The last rating action was implemented on June 3, 2009, when
Moody's downgraded Sol Melia's CFR and PDR to Ba2, and maintained
the ratings under review for possible further downgrade.
Headquartered in Palma, Mallorca, Sol Melia is the world's 15th
largest hotel operator in terms of number of rooms, and is
represented across the luxury, upscale and mid-scale segments of
the hotel market. Sol Melia operates both city hotels and
resorts, and has been developing its timeshare business through
its Sol Melia Vacation Club brand. Sol Melia generated revenues
of EUR1.3 billion at FYE2008.
===========
S W E D E N
===========
CONCORDIA BUS: Moody's Upgrades Corporate Family Rating to 'B2'
---------------------------------------------------------------
Moody's Investors Service has upgraded the corporate family rating
of Concordia Bus AB to B2 from B3. At the same time, Moody's
affirmed the company's B2 probability of default rating. Moody's
changed the rating outlook to stable from developing.
"The upgrade to B2 reflects the gradual improvements in Concordia
Bus's credit profile implemented over the past few years, as a
result of a sustained turnaround of profitability levels driving
positive free cash flows, which, together with several capital
structure adjustments, supported improvements in financial
leverage," said Christian Hendker, Moody's Lead Analyst for
Concordia Bus. "Furthermore, the rating action positively
reflects improvements in the company's liquidity profile and the
elimination of pending refinancing risk by a recent successful
placement of a new EUR122 million bond."
Concordia Bus's operating performance has been gradually improving
over the past few years, illustrated by a turnaround of the
adjusted EBIT margin to above 5% in the last twelve months ending
May 2009, supporting continued positive free cash flows of around
SEK165 million in the same period. The gradual operating
performance improvements were supported by a reduction of loss-
making contracts, improved planning efficiency, disciplined cost
structure management, as well as a continued favorable tender
renewal rate, despite a growing cost base for fleet purchases and
funding conditions. The current diversified contract portfolio
for public bus transportation provides a high degree of revenue
visibility over the next few years. In addition, the company's
earnings volatility has been gradually reduced as a result of a
more adequate and timely passed-on costs for indexed contracts
than in the past, which also increases the predictability of
operating cash flows going forward.
Concordia Bus's financial leverage is still relatively high for
the B2 rating category, but has improved, as reflected in RCF to
Net debt of up to 10.4% in LTM ending May 2009 from only 7.7% in
2007, while net debt to EBITDA was restored to 5.5x from 7.4x in
the same period. Moody's expects gradual improvements in
financial leverage based on management's focus on cash
containment. However, Moody's also considers limitations in
leverage improvements in Concordia Bus's business model, as a
significant proportion of adjusted debt is linked to fleet leasing
liabilities that closely correlate to the size of a company's
contract portfolio and are easily reduced in case of a contract
loss. The relatively low business risk of Concordia Bus's
business model due to the significant proportion of business with
local Scandinavian communities, with high revenue visibility and
predictability due to limited transportation volume exposure,
somewhat increases Moody's tolerance for relatively higher
leverage metrics for the B2 rating category.
The stable rating outlook is based on the expectation that recent
improvements in profitability and leverage will continue.
Furthermore, the outlook is based on the expectation that the
company preserves a solid liquidity cushion, as evidenced by its
cash position of around SEK500 million following the recent
refinancing.
The rating could come under downward rating pressure if the
company's free cash flow generation turns negative, net Debt to
EBITDA falls below 6.0x or EBITDA-Capex to interest expense does
not stay materially above 1x.
Upward rating pressure could require longer-term improvements in
the company's credit profile, reflected in EBITDA-Capex to
interest expense towards 2.0x and net Debt to EBITDA trends
towards 4.5x. Longer term rating improvements also require that
the company's liquidity profile will be further strengthened by
set up of a alternative back-up liquidity facility. Furthermore,
longer-term improvements in the company's business profile, such
as a more balanced geographic diversification and segmental
diversification, could result in an upgrade.
Concordia Bus's ratings were assigned by evaluating factors
Moody's believe are relevant to the credit profile of the issuer,
such as (i) the business risk and competitive position of the
company versus others within its industry, (ii) the capital
structure and financial risk of the company, (iii) the projected
performance of the company over the near to intermediate term, and
(iv) management's track record and tolerance for risk. These
attributes were compared against other issuers both within and
outside Concordia Bus's core industry and Concordia Bus's ratings
are believed to be comparable to those of issuers of similar
credit risk.
Upgrades:
Issuer: Concordia Bus AB
-- Corporate Family Rating, Upgraded to B2 from B3
Outlook Actions:
Issuer: Concordia Bus AB
-- Outlook, Changed To Stable From Developing
The last rating action was implemented on January 14, 2009, when
Moody's changed the rating outlook to developing from positive,
which was prompted by announced capital structure adjustments.
Headquartered in Stockholm, Sweden, Concordia Bus is the largest
Nordic bus transportation group, operating in Sweden, Norway,
Finland and Denmark. Its revenues for the year ended February
2009 totaled SEK6.1 billion (EUR537 million) and were mostly
generated from public bus services.
=====================
S W I T Z E R L A N D
=====================
BWV HOLDING: Claims Filing Deadline is September 4
--------------------------------------------------
Creditors of bwv Holding AG are requested to file their proofs of
claim by September 4, 2009, to:
Daniel Wolfisberg
Liquidator
Sonnenbergstrasse 15
6052 Hergiswil
Switzerland
The company is currently undergoing liquidation in St. Gallen.
The decision about liquidation was accepted at an extraordinary
general meeting held on July 13, 2009.
BUERGIN + ROESTI: Claims Filing Deadline is September 7
-------------------------------------------------------
Creditors of Buergin + Roesti Reklamegrafik AG are requested to
file their proofs of claim by September 7, 2009, to:
Roesti Reklamegrafik Thun
Meisenweg 13a
3604 Thun
Switzerland
The company is currently undergoing liquidation in Thun. The
decision about liquidation was accepted at an extraordinary
general meeting held on May 13, 2009.
FUNNYLAND: Claims Filing Deadline is September 7
------------------------------------------------
Creditors of funnyland GmbH are requested to file their proofs of
claim by September 7, 2009, to:
Peter Saner
Liquidator
Poststrasse 17
9443 Widnau
Switzerland
The company is currently undergoing liquidation in St. Margrethen.
The decision about liquidation was accepted at a shareholders'
meeting held on June 11, 2009.
IDEAL GMBH: Claims Filing Deadline is September 3
-------------------------------------------------
Creditors of IDEAL GmbH are requested to file their proofs of
claim by September 3, 2009, to:
IDEAL GMBH
Im Zentrum 7
8604 Volektswil
Switzerland
The company is currently undergoing liquidation in Volketswil.
The decision about liquidation was accepted at a shareholders'
meeting held on March 24, 2009.
LOLLYPOP WORLD: Claims Filing Deadline is September 4
-----------------------------------------------------
Creditors of Lollypop The World of Music AG are requested to file
their proofs of claim by September 4, 2009, to:
Metro Boutiques AG
Gottstattstrasse 6
2504 Biel/Bienne
Switzerland
The company is currently undergoing liquidation in Biel/Bienne.
The decision about liquidation was accepted at a general meeting
held on July 7, 2009.
LUFRA BETEILIGUNGS-HOLDING: Claims Filing Deadline is September 4
-----------------------------------------------------------------
Creditors of LUFRA Beteiligungs-Holding AG are requested to file
their proofs of claim by September 4, 2009, to:
INTRUST AG
Badenerstrasse 15
Mail Box:3075
8021 Zurich
Switzerland
The company is currently undergoing liquidation in Zurich. The
decision about liquidation was accepted at an extraordinary
general meeting held on June 29, 2009.
MAX SCHLUEP: Claims Filing Deadline is September 2
--------------------------------------------------
Creditors of Max Schluep + Sohn AG are requested to file their
proofs of claim by September 2, 2009, to:
Max Schluep + Sohn AG
Blauenstrasse 8
4142 Muenchenstein
Switzerland
The company is currently undergoing liquidation in Muenchenstein.
The decision about liquidation was accepted at a regular general
meeting held on February 18, 2009.
PINGITORE & HENNE: Claims Filing Deadline is September 4
--------------------------------------------------------
Creditors of Pingitore & Henne GmbH are requested to file their
proofs of claim by September 4, 2009, to:
Pingitore & Henne GmbH
Sonnenstrasse 435
8262 Ramsen
Switzerland
The company is currently undergoing liquidation in Ramsen. The
decision about liquidation was accepted at an extraordinary
shareholders' meeting held on March 17, 2009.
PRACTIZE: Claims Filing Deadline is September 7
-----------------------------------------------
Creditors of Practize GmbH are requested to file their proofs of
claim by September 7, 2009, to:
Dr. iur. Odilo Guntern
Bahnhofstrasse 10
3900 Brig
Switzerland
The company is currently undergoing liquidation in Taesch. The
decision about liquidation was accepted at an extraordinary
shareholders' meeting held on June 19, 2009.
PUBLEX WERBUNG: Claims Filing Deadline is September 4
-----------------------------------------------------
Creditors of Publex Werbung fuer den Export AG are requested to
file their proofs of claim by September 4, 2009, to:
Peter Combaz
Bellariarain 2
8038 Zurich
Switzerland
The company is currently undergoing liquidation in Zurich. The
decision about liquidation was accepted at a general meeting held
on June 2, 2009.
SIKTA CONSULTING: Claims Filing Deadline is September 7
-------------------------------------------------------
Creditors of SIKTA Consulting GmbH are requested to file their
proofs of claim by September 7, 2009, to:
Dr. iur. Peter R. Walti
Lindenstrasse 26
8008 Zurich
Switzerland
The company is currently undergoing liquidation in Zurich. The
decision about liquidation was accepted at a shareholders' meeting
held on July 3, 2009.
SWISS OFFSET: Claims Filing Deadline is September 4
---------------------------------------------------
Creditors of Swiss Offset Support GmbH are requested to file their
proofs of claim by September 4, 2009, to:
Swiss Offset Support GmbH
Felsenstrasse 1
4616 Kappel
Switzerland
The company is currently undergoing liquidation in Kappel SO. The
decision about liquidation was accepted at an extraordinary
shareholders' meeting held on July 17, 2009.
=============
U K R A I N E
=============
DOBROYE POLE: Court Starts Bankruptcy Supervision Procedure
-----------------------------------------------------------
The Economic Court of Donetsk commenced bankruptcy supervision
procedure on Agricultural LLC Dobroye Pole (code EDRPOU 31449279).
The Insolvency Manager is:
A. Shumara
Reminny Str. 15/55
Dobropolye
85000 Donetsk
Ukraine
The Court is located at:
The Economic Court of Donetsk
Artem Str. 157
Donetsk
Ukraine
The Debtor can be reached at:
Agricultural LLC Dobroye Pole
Pushkin Str. 8a
Belozersk
85013 Donetsk
Ukraine
INTERPROJECT LLC: Court Starts Bankruptcy Supervision Procedure
---------------------------------------------------------------
The Economic Court of Kiev commenced bankruptcy supervision
procedure on LLC Ukrainian and Canadian Joint Enterprise
Interproject (code EDRPOU 14275893).
The Insolvency Manager is:
I. Gusar
Post Office Box 29
01030 Kiev
Ukraine
The Court is located at:
The Economic Court of Kiev
B. Hmelnitskiy Str. 44-b
01030 Kiev
Ukraine
The Debtor can be reached at:
LLC Ukrainian and Canadian Joint Enterprise Interproject
L. Ukrainka Blvd. 26
01133 Kiev
Ukraine
JOINT LOAD: Court Starts Bankruptcy Supervision Procedure
---------------------------------------------------------
The Economic Court of Donetsk commenced bankruptcy supervision
procedure on LLC Joint Load and Transport Company (code EDRPOU
32287238).
The Insolvency Manager is:
M. Borisova
L. Ukrainka 16/3
Yenakiyevo
86408 Donetsk
Ukraine
The Court is located at:
The Economic Court of Donetsk
Artem str. 157
Donetsk
Ukraine
The Debtor can be reached at:
LLC Joint Load and Transport Company
Marat Str. 1
Yenakiyevo
86406 Donetsk
Ukraine
LUTSK CARTON: Court Starts Bankruptcy Supervision Procedure
-----------------------------------------------------------
The Economic Court of Volin commenced bankruptcy supervision
procedure on OJSC Lutsk Carton and Ruberoid Enterprise (code
EDRPOU 00292652).
The Insolvency Manager is:
O. Scherban
Post Office Box 157
01030 Kiev
Ukraine
The Court is located at:
The Economic Court of Volin
Volia Ave. 54-A
43010 Lutsk
Ukraine
The Debtor can be reached at:
OJSC Lutsk Carton and Ruberoid Enterprise
Karbishev Str. 3
Lutsk
43023 Volin
Ukraine
PODOLSKY SUGAR: Court Starts Bankruptcy Supervision Procedure
-------------------------------------------------------------
The Economic Court of Vinnitsa commenced bankruptcy supervision
procedure on CJSC Podolsky Sugar (code EDRPOU 31576304).
The Insolvency Manager is:
A. Milovanov
Office 805
Zhovtneva Square 1
21001 Vinnitsa
Ukraine
The Court is located at:
The Economic Court of Vinnitsa
Hmelnitsky Highway 7
21100 Vinnitsa
Ukraine
The Debtor can be reached at:
CJSC Podolsky Sugar
Zukrozavodskaya str. 1
Voronovitsa
23257 Vinnitsa
Ukraine
===========================
U N I T E D K I N G D O M
===========================
AEOLUS CDO: S&P Junks Rating on Class D Notes From 'BBB-'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
the series 2005-3 notes issued by Aeolus CDO Ltd., a European
synthetic collateralized debt obligation of commercial mortgage-
backed securities transaction.
Relying on data from the last trustee report available to us,
S&P's analysis indicates that the transaction has experienced a
significant negative trend in the ratings on the underlying
securities, and the class D coverage tests and the interest
diversion test are currently failing.
The rating actions reflect S&P's view on deterioration in the
credit quality of the underlying portfolio, mainly due to its
exposure to European structured finance securities. The rating
migration has, in S&P's opinion, been significant and has led to a
pronounced increase in the scenario default rates that current
credit enhancement may not support. As a result, S&P believes the
current credit enhancement cannot support the rise in scenario
default rates at existing ratings levels and have lowered S&P's
ratings accordingly.
S&P will continue to monitor the transaction's performance and
expect to resolve the outstanding CreditWatch placements in due
course.
Ratings List
Aeolus CDO Ltd.
EUR84 Million Secured Credit-Linked Notes Series 2005-3
Ratings Lowered
Rating
------
Class To From
----- -- ----
A A+ AAA
B BBB AA
C BB A
D CCC BBB-
BRIXTON PLC: Fitch Upgrades Senior Unsecured Ratings From 'BB+'
---------------------------------------------------------------
Fitch Ratings has upgraded Brixton Plc's senior unsecured ratings
to 'A-' from 'BB+' and upgraded its Long-term Issuer Default
Rating to 'BBB+' from 'BB'. The Short-term IDR has been upgraded
to 'F2' from 'B'. All the ratings have simultaneously been
removed from Rating Watch Positive and the Outlook for the Long-
term IDR is now Stable. The agency has simultaneously withdrawn
the Long- and Short-term IDRs.
The rating action reflects the completion yesterday of the
acquisition of Brixton Plc by SEGRO and the de-listing of
Brixton's shares.
The agency is maintaining coverage of Brixton's senior unsecured
ratings as most of these debt instruments will remain in issue.
SEGRO has nevertheless tendered for all Brixton's GBP 275 million
2010 bonds (and to date repurchased GBP257 million or 93% of the
total amount) and made a partial tender offer of up to
GBP50 million for Brixton's 2015 and 2019 bonds.
The combined group of Brixton and SEGRO has property assets of
over GBP5.0 billion (at YE08) and net rental income of
GBP310 million per annum, creating the UK's largest industrial
space landlord with a market share of 25% in some of its main
markets. The successful GBP250 million recapitalisation of
Brixton and proposed cost savings of up to GBP12 million per annum
is positive for Brixton bondholders. Close to GBP480m of combined
asset disposals by SEGRO and Brixton are also expected by the end
of 2010, of which GBP254 million have already taken place or are
under offer.
Fitch has aligned Brixton's bond ratings with SEGRO's senior
unsecured rating, its new parent, based on the application of the
agency's Parent and Subsidiary Rating Linkage methodology. Fitch
has concluded that a strong relationship will exist between SEGRO
and Brixton at completion, which will be supported not only by
Brixton's existing bond covenants (including a 175% maximum
gearing covenant), but also by the cross default and inner limit
provisions in SEGRO's bond and bank debt.
CANARGO ENERGY: Reaches Deal with Persistency on Non-Conversion
---------------------------------------------------------------
CanArgo Energy Corporation on March 3, 2006, finalized a private
placement with a limited group of investors arranged by Ingalls &
Snyder LLC of New York City of a US$13,000,000 issue of Senior
Subordinated Convertible Guaranteed Notes due September 1, 2009
and warrants to purchase an aggregate of 13,000,000 shares of our
common stock, par value US$0.10 per share.
On June 28, 2006, the Company entered into a US$10,000,0000
private placement with Persistency, a Cayman Islands company with
limited liability, of a 12% Subordinated Convertible Guaranteed
Note due June 28, 2010 and warrants to purchase an aggregate of
12,500,000 shares of CanArgo common stock, at an exercise price of
US$1.00 per share, subject to adjustment.
On June 28, 2006, CanArgo Energy Corporation entered into a Note
and Warrant Purchase Agreement with Persistency, a Cayman Islands
company with limited liability, relating to the purchase of
CanArgo's 12% Subordinated Convertible Guaranteed Notes, due
June 28, 2010.
On August 21, 2009, CanArgo entered into a further agreement with
Persistency whereby Persistency agrees and covenants that prior to
November 15, 2009, absent the Company's consent, or the
Subordinated Notes becoming immediately due and payable, or a
Change of Control as defined in the Purchase Agreement (other than
as a result of a transaction with Persistency or its affiliate),
it will not convert or exchange, or seek to convert or exchange,
any or all of the Subordinated Notes into shares of common stock
of CanArgo, or into any other security convertible or exchangeable
into shares of common stock of CanArgo, pursuant to Section 11.7
of the Purchase agreement. A full-text copy of the Agreement is
available for free at http://researcharchives.com/t/s?4347
The Company said in mid-August that it is currently in default in
making interest payments under its outstanding Senior Subordinated
Convertible Guaranteed Notes, due September 1, 2009 and its 12%
Subordinated Convertible Guaranteed Notes, due June 28, 2010. The
Company is also currently in default under the terms of its
Settlement Agreement with WEUS Holding Inc., a subsidiary of
Weatherford International Ltd, as reported previously. The
Company is continuing its negotiations with its Note holders and
WEUS among other creditors in respect of its defaulted obligations
with a view to arriving at a restructuring plan which, under
current expectations, will involve a possible debtor in possession
restructuring in Chapter 11 of the United States Bankruptcy Code.
About CanArgo Energy
Based in Guernsey, British Isles, CanArgo Energy Corporation
(OSLO: CNR) (PINK SHEETS: CANR) -- http://www.canargo.com-- is an
independent oil and gas exploration and production company with
its oil and gas operations currently located in Georgia.
As of June 30, 2009, the Company had US$2,649,189 in total assets;
US$19,833,265 in total liabilities and US$2,119,530 in temporary
equity. As of June 30, 2009, the Company had an accumulated
deficit of US$289,204,482 and stockholders' deficit of
US$19,303,606.
CanArgo Energy reported a net loss of US$1,808,395 for the three
months ended June 30, 2009, from a net loss of US$970,934 for the
same period last year. For the six months ended June 30, 2009,
CanArgo posted net income of US$98,744 from a US$2,175,815 net
loss for the same half-year period in 2008.
CLERICAL MEDICAL: Fitch Cuts Subordinated Debt Ratings to 'B+'
--------------------------------------------------------------
Fitch Ratings has downgraded Clerical Medical Investment Group
Ltd's and Clerical Medical Finance PLC's hybrid subordinated debt
ratings to 'B+' from 'A-'. Fitch has simultaneously downgraded
Scottish Widows plc's hybrid subordinated debt rating to 'B+' from
'A'. All three entities' debt ratings have been placed on Rating
Watch Negative.
The rating actions reflect the increased risk of deferral of
interest payments on these deferrable, cumulative instruments
after recent clarification from the European Commission on the
application of the concept of 'burden sharing' for state-aided
financial institutions. Lloyds Banking Group plc, the ultimate
parent of CMIG, CMF and SW, received substantial state aid under
the UK government's bank recapitalization scheme in October 2008.
The Commission's recent statements confirm Fitch's view that
government support for banks may not extend to holders of
subordinated bank capital. In light of the statements, Fitch is
applying additional guidelines in its ratings of hybrid capital
instruments issued by EU financial institutions, as outlined in
its August 20, 2009 report entitled "Burden Sharing and Bank
Hybrid Capital within the EU".
The rating action on the hybrid subordinated debt of CMIG, CMF and
SW is consistent with rating actions taken on the hybrid
securities of several financial institutions that have received
government support.
FUJITSU LIMITED: To Cut Up to 1,200 Jobs in the U.K.
----------------------------------------------------
Fujitsu Limited proposed a rationalization program across its
workforce in the UK, with a reduction of up to 1,200 jobs due to
lower than anticipated revenues.
Fujitsu, which currently employs 12,500 staff in the UK, said that
the action is necessary to ensure that the company remains
competitive in the current difficult global economic climate and
is in a solid position for future growth when the economy starts
to recover.
To date, the company said it has taken a number of prudent
measures to keep its cost base down and avoid job losses,
including a company wide pay freeze, a reduction in the number of
contractors and temporary workers, a re-training program and tight
control of recruitment. In addition, strict controls have been
applied to operational and capital expenditure.
The proposed reductions are expected to be complete by the end of
2009. All affected employees will be offered guidance and
support. A process of consultation with elected employee
representatives is being established.
About Fujitsu Limited
Fujitsu Limited -- http://jp.fujitsu.com/-- is a Japan-based
company engaged in the information technology (IT) business. The
Company has three business segments. The Technology Solution
segment manufactures and sells products such as main frame
servers, UNIX servers, storage systems, various types of software,
network management systems and optical transport systems, as well
as the provision of system integrations services, network services
and system support services. The Ubiquitous Product Solution
segment offers products such as personal computers, mobile phones,
compact hard disk drives (HDDs), as well as optical transmitter
and receiver modules. The Device Solution segment manufactures
and sells large scale integrations (LSIs), semiconductor packages,
relays and connectors, among others.
* * *
As of August 27, 2009, Fujitsu Limited continues to carry these
low ratings from Mikuni Credit Rating:
-- "BB" Mortgage Debt
-- "BB" Senior Debt
LLOYDS BANKING: May Sell Clerical Unit; Mulls Scottish Widows IPO
-----------------------------------------------------------------
Lloyds Banking Group Plc may sell part of its fund management
business, including a possible initial public offering of Scottish
Widows, to raise cash after its bailout, Ambereen Choudhury at
Bloomberg News reports, citing two people familiar with the talks.
According to Bloomberg, the people, who declined to be identified
because the talks are private, said Lloyds is in the early stages
of assessing options for Scottish Widows, its 194 year-old money
management and insurance division. Bloomberg relates Marcus
Barnard, a banking analyst at Oriel Securities Ltd., said Scottish
Widows may be worth about GBP4 billion. Citing the people
familiar with the talks, Bloomberg discloses the bank, which has
yet to decide on the IPO, would keep a stake following any
transaction.
Bloomberg notes the people said the bank may also sell Clerical
Medical, a provider of investment products and pensions.
Bloomberg recalls Lloyds acquired 185-year-old Clerical Medical
when it purchased HBOS. According to Bloomberg, the people said
the unit is valued at GBP3 billion, and may draw an offer from
Resolution Ltd., Clive Cowdery's investment firm.
As reported in the Troubled Company Reporter-Europe, Lloyds sought
a GBP17-billion bailout from taxpayers after it agreed to buy HBOS
in September in a government- brokered deal to prevent the
collapse of Britain's biggest mortgage lender. The U.K. owns 43%
of Lloyds.
About Lloyds Banking Group PLC
Lloyds Banking Group PLC, formerly Lloyds TSB Group plc,
(LON:LLOY) -- http://www.lloydsbankinggroup.com/-- is a United
Kingdom-based financial services group providing a range of
banking and financial services, primarily in the United Kingdom,
to personal and corporate customers. The Company operates in
three divisions: UK Retail Banking, Insurance and Investments, and
Wholesale and International Banking. Its main business activities
are retail, commercial and corporate banking, general insurance,
and life, pensions and investment provision. The Company also
operates an international banking business with a global footprint
in 40 countries. Services are offered through a number of brands,
including Lloyds TSB, Halifax, Bank of Scotland, Scottish Widows,
Clerical Medical and Cheltenham & Gloucester. On January 16,
2009, Lloyds Banking Group plc acquired HBOS plc.
LUDGATE FUNDING: S&P Affirms 'CCC-' Ratings on 2 Classes of Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on the class Ba, Bb, C,
and D series 2006-FF1 notes issued by Ludgate Funding PLC. At the
same time, S&P placed the class A2a and A2b notes on CreditWatch
negative and affirmed the class E and S notes and the MERCs.
The downgrades on the mezzanine and subordinate classes are due to
S&P's view of weakening credit enhancement resulting from the
fully depleted reserve fund, drawings on the liquidity facility,
and an increase in losses on the portfolio.
The reserve fund has been fully drawn and the liquidity facility
has been required to meet interest payments for the past three
quarters. There is an outstanding drawing on the liquidity
facility of GBP633,623. This is primarily driven by the unhedged
mismatch between the Bank of England base rate received from the
loans and three-month LIBOR due on the notes.
The uncleared principal deficiency ledger for the class E notes is
GBP822,058 (37% of the class E note balance). S&P expects
liquidity to be required in the coming quarter. However,
according to the transaction documents, the class E notes cannot
use the liquidity facility to meet interest payments if the PDL
balance is equal to or greater than 50% of the outstanding note
balance. If performance does not improve compared with previous
quarters, S&P would expect levels of losses to cause interest
shortfalls on the class E notes over the next two quarters.
S&P expects to resolve the CreditWatch placements on the class A2a
and A2b notes after the September interest payment date.
Ludgate Funding series 2006-FF1 is a U.K. nonconforming
residential mortgage-backed securities transaction backed by a
pool of first-ranking mortgages secured over freehold and
leasehold, owner-occupied, and buy-to-let properties in the U.K.
originated by Wave Lending (formerly Freedom Funding).
Ratings List
Ludgate Funding PLC
GBP271.8 Million and EUR156.4 Million Mortgage-Backed
Floating-Rate Notes Series 2006-FF1
Ratings Lowered and Removed From CreditWatch Negative
Rating
------
Class To From
----- -- ----
Ba A A+/Watch Neg
Bb A A+/Watch Neg
C BBB- BBB/Watch Neg
D B BB/Watch Neg
Ratings Placed on CreditWatch Negative
Rating
------
Class To From
----- -- ----
A2a AAA/Watch Neg AAA
A2b AAA/Watch Neg AAA
Ratings Affirmed
Class Rating
----- ------
MERCs AAA
E CCC-
S CCC-
NATIONAL EXPRESS: Shareholders Reject Revised Cosmen Takeover Bid
-----------------------------------------------------------------
Adam Jones at The Financial Times reports that main shareholders
in National Express Group plc have indicated they will not back a
revised all-cash 450p takeover offer from the Cosmen family, the
company's largest investor, and will continue to back the
management's alternative plans for a rights issue.
According to the FT, the Cosmen family, which holds 18.5% of
Nat-Express, and CVC, a private equity group, tabled a bid valuing
the group at about GBP600 million yesterday. The board of
Nat-Express, chaired by John Devaney, is set to meet next week to
evaluate the new offer, which represents a 63% premium to the
share price before the company became a target, the FT discloses.
The FT relates several large shareholders claimed the bid was too
low and had too many conditions attached.
Equity Raising
In a report on Aug. 26, the FT said Nat-Express is considering
launching a GBP350 million rights issue to help pay down its
GBP977 million debt. According to the FT, investor support for a
rights issue will increase pressure on the bidding consortium to
raise its offer.
Loss
On Aug. 4, 2009, the Troubled Company Reporter-Europe, citing
Telegraph.co.uk, said National Express made a pre-tax loss of
GBP48.1 million in the first six months of 2009, down from a
profit of GBP52.4 million last year, after taking a GBP54.7
million hit from its forced exit from the East Coast mainline
franchise, which is being taken back into government hands.
According Telegraph.co.uk, the accounts declared that while the
directors are confident of renegotiating covenant obligations with
lenders, "covenant compliance remains dependent on actions which
are yet to be delivered". In light of this the accounts warned
that "underlying implementation risks represent a material
uncertainty that may cast significant doubt upon the group's
ability to continue as a going concern".
National Express Group PLC -- http://www.nationalexpressgroup.com/
-- is the holding company of the National Express Group of
companies. Its subsidiary companies provide mass passenger
transport services in the United Kingdom and overseas. The
Company's segments comprise: UK Bus; UK Coach; UK Trains; North
American Bus; European Coach and Bus, and Central functions. Its
subsidiaries include Tayside Public Transport Co Limited, Durham
School Services LP, Stock Transportation Limited, Dabliu
Consulting SLU, Tury Express SA, General Tecnica Industrial SLU
and Continental Auto SLU. In June 2009, the Company announced the
completion of the sale of Travel London, its London bus business,
to NedRailways Limited, a subsidiary of NS Dutch Railways.
* BOOK REVIEW: Dangerous Pursuits - Mergers and Acquisitions in
the Age of Wall Street
----------------------------------------------------------------
Authors: Walter Adams and James W. Brock
Publisher: Beard Books
Softcover: 222 pages
List Price: US$34.95
First published in 1989, Dangerous Pursuits - Mergers and
Acquisitions in the Age of Wall Street analyzes central concerns
raised by the flurry of mergers, acquisitions, takeovers, and
buyouts as the twentieth century drew to a close. This was a
period of great economic vitality that challenged conventional
theories and practices. Economists battled over the best way
forward. It was a period of time when "coalition capitalism" was
offered as an alternative to "cowboy capitalism" -- that is, the
belief in economic laissez-faire. As set forth by the authors,
"Coalition capitalism, grounded in 'industrial policy,' is the
neoliberal Left's riposte to the cowboy capitalism of the Right."
Coalition capitalism takes the approach that "planning can be used
to improve [a country's] market performance."
The authors strive to present a balanced portrayal of the
engineers of this economic growth -- those individuals behind the
mergers and acquisitions. To some, they were "predators,
piranhas, greenmailers." Others, however, see T. Boone Pickens,
Carl Icahn, Ivan Boesky, and others as "necessary catalysts for
shaking up stodgy managements and for restoring giant corporations
to their owners, the shareholders." Even the term "greed" is
subject to debate. As a motivation for mergers, "greed is good" -
- as notably voiced by the character Gordon Gekko in the movie
Wall Street -- was an opinion apparently shared by Ivan Boesky,
who told a college graduating class that "greed is all right." On
the other hand, Henry Kravis, a top Wall Street leveraged-buyout
strategist is quoted as saying, "Greed really turns me off."
In discussing the many opinions regarding mergers and
acquisitions, Dangerous Pursuits gives the reader a complete
picture of a time when the American economy, workplace, and
society were transformed. But the authors make no secret that
they are concerned that mergers are weakening American business
and society. Their position is substantiated in chapters on the
effects of mergers from a macro and micro perspective. In a
chapter entitled "The Macro Record," Adams and Brock step back
from viewing mergers in terms of the parochial interest of the
players and look at the "merger game" through the lens of the
national interest. Shorn of media hype, the authors find that the
"merger game" undermines advances in productivity, obstructs
technological development, and weakens competitiveness. What the
"game" does do is earn outsized, quick profits for the
specialists, lawyers, financiers, and bankers who engage in it.
In the chapter "The Micro Record," the authors look at how mergers
have affected particular airlines, steel companies, and
conglomerates. From this micro perspective, they find that the
benefits touted by those with "parochial interests" do not
materialize.
At best, the mergers, acquisitions, takeovers, and buyouts are
seen as impeding the economy from moving ahead. At worst, Taylor
and Brock see an "addiction to mergeritis." No one argues that
mergers did not produce large profits for some. The authors warn,
however, that such success is a "slow and secret poison" to the
U.S. economy.
One-time President of Michigan State University where he also
taught, Walter Adams also taught at European universities,
appeared as an expert on economics before Congressional
committees, and published other books. James W. Brock has been a
member of the economics department faculty at Miami University in
Ohio for more than 20 years, and is the coauthor with Walter Adams
on several books.
*********
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. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine
C. Tumanda, Joy A. Agravante and Peter A. Chapman, Editors.
Copyright 2009. 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 * * *