TCREUR_Public/100611.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, June 11, 2010, Vol. 11, No. 114



LE MONDE: Prisa Delays Bid; L'Espresso, Ringier Out of Race


ARCANDOR AG: Berggruen Must Update Karstadt Product Mix
GENERAL MOTORS: Germany Rejects Request for EUR1.1BB Opel Aid


* GREECE: Won't Return to Drachma or Restructure Debt, PM Says


* HUNGARY: IMF, EU May Junk Tax Cut Proposals, Commerzbank Says


BANK OF IRELAND: Raises EUR1.73 Billion in Share Sale
CARRICKMINES GREEN: Put Up for Sale by Anglo Irish Bank
CEDAR GROVE: Put Up for Sale by Receivers at Discounted Prices
CHESS CAPITAL: Moody's Cuts Ratings on Tier-1 Securities to 'Ca'
GREEN ISLAND: Moody's Cuts Rating on EUR125MM Securities to 'Ca'

* IRELAND: Banks Delay Sale of Distressed Properties
* IRELAND: Central Bank Failed to Foresee Bank Insolvency Threat


KAZPOST JSC: Moody's Downgrades Global Scale Rating to 'Ba2'


GETIN NOBLE: Fitch Affirms Issuer Default Rating at 'BB'
TOWARZYSTWO UBEZPIECZEN: Fitch Keeps BB Insurer Strength Rating


BANQUE ESPRITO: Fitch Downgrades Individual Rating to 'D/E'


AVICOLA IASI: Enters Insolvency Proceedings After Revenue Slump

* ROMANIA: Charcuterie Industry Hit by Insolvencies


INTERNATIONAL INDUSTRIAL: Fitch Gives Negative Watch on 'B' Rating
RUSSIAN AGRICULTURAL: CEO Change Won't Affect Fitch's Rating

* RUSSIA: S&P Corrects Errors on Ratings of Four Governments


CAJA ESPANA: Fitch Puts C/D Individual Rating on Evolving Watch

U N I T E D   K I N G D O M

BH FREIGHT: In Administration; Moore Stephens Appointed
BRITISH AIRWAYS: Cabin Crew Union to Ballot on Further Strikes
COLT GROUP: Moody's Changes Outlook on 'Ba3' Rating to Positive
CREDIT ISSUES: Enters Into CVA Deal as HMRC Seeks Liquidation
EUROPEAN PROPERTY: High Court Orders Liquidation Following Probe

NORTH WEST: Loss of Major Contract Prompts Administration
SELECT HOMES: Put Into Receivership Due to Outstanding Debts
TITAN EUROPE: S&P Cuts Ratings on Class G & H Notes to 'D'
TOUCHLINE LTD: In Administration; 24 Jobs Affected

* Smelters May Shut Down as Prices Slump, Oleg Deripaska Says


* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy



LE MONDE: Prisa Delays Bid; L'Espresso, Ringier Out of Race
Ben Hall at The Financial Times reports that Spanish media group
Prisa on Wednesday declared its intention to bid for Le Monde but
demanded a delay that may prove unacceptable for the cash-strapped

The FT relates the number of potential bidders for the newspaper
dwindled when Italian press group L'Espresso and Swiss media group
Ringier ruled themselves out of the running.  According to the FT,
there are now three potential bidders for Le Monde: Prisa; Le
Nouvel Observateur, the news magazine owned by Claude Perdriel;
and a consortium of Matthieu Pigasse, a Lazard banker, Pierre
Berge, the business partner of the late fashion designer Yves
Saint Laurent, and Xavier Niel, the telecoms billionaire.

The FT says potential bidders have until today, June 11, to
present a detailed offer.  Le Monde's supervisory board was due to
choose a buyer on Monday, June 14, but that decision now looks
likely to be delayed until later in the month, the FT notes.

As reported by the Troubled Company Reporter-Europe on June 7,
2010, the FT said that Le Monde is in a race against time to find
new investors and faces insolvency by the end of July if it fails
to recapitalize.

The FT disclosed Gilles Van Kote, head of Le Monde's journalists'
association, the main shareholder, said bidders would be expected
to invest between EUR60 million and EUR100 million in the
newspaper group and offer guarantees of editorial independence in
return for the takeover.  Le Monde also has debts of EUR100
million (US$121.9 million), the FT said.

As reported by the Troubled Company Reporter-Europe on June 4,
2010, Mr. Van Kote, as cited by The Times, said a takeover is
inevitable, with the daily losing EUR25 million (GBP21 million)
last year, the 10th year in a row it has been in the red amid a
deepening crisis for the whole of France's national press.

Le Monde is a French newspaper.


ARCANDOR AG: Berggruen Must Update Karstadt Product Mix
Holger Elfes at Bloomberg News reports that retail analysts said
German billionaire Nicolas Berggruen, who won the bidding for
Arcandor AG's insolvent department-store operator Karstadt, must
update the unit's product mix, overhaul its clothing range and
improve its image.

"Berggruen has to increase the share of clothing sales in
Karstadt's revenue by adding space to the textile departments and
selling more-stylish fashions," Bloomberg quoted Joerg Funder, a
retail expert at Worms University in the German town of the same
name, as saying.

"It will be difficult for Berggruen to keep all Karstadt outlets
open as the department-store format in small and mid- sized cities
is losing appeal," said Klaus Kraenzle, a consumer goods analyst
at GSC Research in Dusseldorf, according to Bloomberg.

                       Rent Negotiations

Bloomberg relates Mr. Berggruen has said the bid was conditional
on negotiating lower rents with the Highstreet partnership, which
owns most of Karstadt's real estate.  He said discussions on that
are ongoing, Bloomberg notes.

As reported by the Troubled Company Reporter-Europe on June 10,
2010, Reuters said Highstreet warned Mr. Berggruen that the
Karstadt could still be liquidated if he did not accept its deal
on rents.  Reuters disclosed rent negotiations are planned for
this week and Highstreet said it had an offer to cut rents.

"Highstreet is ready to reduce rents by another EUR230 million
(US$309 million) in the next five years in addition to the
contribution of EUR160 million over three years pledged in the
restructuring plan," Reuters quoted a spokesman for the Highstreet
consortium as saying on Tuesday.  Should this offer -- available
to all potential Karstadt buyers -- not be taken up, "the
probability of a Karstadt liquidation rises significantly," the
spokesman said, according to Reuters.  "An agreement with
Highstreet is a core component of rescuing Karstadt."

In an e-mail to Mr. Berggruen dated Monday and seen by Reuters,
lexander Dibelius, who heads Goldman's German operations,
suggested lowering the minimum fixed rent to EUR210 million from
EUR250 million for the rest of this year after the closing of the
deal.  Reuters noted the e-mail said the rent would go up to
EUR211 million for 2011 and 2012, and would then return to EUR250
million by 2018.

                        About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) --
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, that offers
online shopping, among others.

As reported by the Troubled Company Reporter-Europe, a local court
in Essen formally opened insolvency proceedings for Arcandor on
September 1, 2009.  The proceedings started for the Arcandor
holding company and for 14 units, including the Karstadt
department-store chain and Primondo mail-order division.

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.

GENERAL MOTORS: Germany Rejects Request for EUR1.1BB Opel Aid
Andreas Cremer and David Welch at Bloomberg News report that
Germany turned down General Motors Co.'s request for EUR1.1
billion (US$1.3 billion) in aid for its money-losing Opel
division, forcing the automaker to seek new ways to reorganize the

"I'm convinced GM has sufficient financial resources," Bloomberg
quoted Economy Minister Rainer Bruederle, a Free Democrat, as
saying in Berlin Thursday, in explaining why he rejected GM.  "The
state is not the better entrepreneur."

According to Bloomberg, Mr. Bruederle said GM has about
EUR10 billion in free liquidity after paying back credits from the
U.S. and Canadian governments.

GM has been seeking EUR1.92 billion in loan guarantees from
European countries to fund a restructuring that includes closing a
factory in Antwerp, Belgium, and eliminating 8,300 of Opel's
48,000 jobs, Bloomberg discloses.

Opel, based in Russelsheim, Germany, is seeking EUR333 million in
guarantees from the U.K., EUR437 million from Austria and Spain
combined and EUR50 million in project financing from Poland,
Bloomberg says, citing a PricewaterhouseCoopers report last month
commissioned by the German government, Bloomberg notes.

Bloomberg relates Nick Reilly, Opel's chief executive officer,
said on a conference call that GM is reviewing all options and
will continue to talk to other governments for possible backing.

According to Bloomberg, Eric Selle, an analyst at JPMorgan Chase &
Co. in New York, said Wednesday in a note to clients that GM may
now fund EUR3 billion of the restructuring plan, up from EUR1.9
billion it would have paid if it received the German aid.

                      About General Motors

With its global headquarters in Detroit, Michigan, General Motors
Company -- is one of the world's largest
automakers.  GM employs 207,000 people in every major region of
the world and does business in some 140 countries.  GM and its
strategic partners produce cars and trucks in 34 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Opel,
Vauxhall and Wuling. GM's largest national market is the United
States, followed by China, Brazil, Germany, the United Kingdom,
Canada, and Italy.  GM's OnStar subsidiary is the industry leader
in vehicle safety, security and information services.

GM acquired its operations from General Motors Company, n/k/a
Motors Liquidation Company, on July 10, 2009, pursuant to a sale
under Section 363 of the Bankruptcy Code.  Motors Liquidation or
Old GM is the subject of a pending Chapter 11 reorganization case
before the U.S. Bankruptcy Court for the Southern District of New

At March 31, 2010, GM had US$136.021 billion in total assets,
total liabilities of US$105.970 billion and preferred stock of
US$6.998 billion, and non-controlling interests of US$814 million,
resulting in total equity of US$23.053 billion.

                   About Motors Liquidation

General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026).  General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.

The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts.  Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company.  GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel.  Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors.  GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.

Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
( 215/945-7000)


* GREECE: Won't Return to Drachma or Restructure Debt, PM Says
Xinhua News Agency reports that Greek Finance Minister George
Papaconstantinou said on Wednesday that the country will not
return to drachma and will not restructure its national debt this
weekend.  Mr. Papaconstantinou strongly denied rumors that the
country is on the brink of default or exit from the Eurozone, the
report notes.

"These scenarios of an imminent catastrophe should stop.  They are
absurd," the report quoted Mr. Papaconstantinou as saying.

With the activation of a financial safety net by the European
Union and the International Monetary Fund this spring, Greece
avoided a bankruptcy, but doubts on the implementation of the
terms of the deal and the whole plan to exit the crisis remain,
the report says.

The report relates Mr. Papaconstantinou stressed that the
agreement between Athens and EU and IMF is properly implemented,
Greece is consistent to its pledges and the next installment of
financial aid will be given to Athens in September.

Greece has already received EUR20 billion (US$24.02 billion) out
of a total EUR110 billion (US$132.11 billion) secured over a three
year period, the report discloses.  The report says according to
the timetable of the deal, Greece will get another EUR9 billion
(US$10. 809 billion) this September, if everything runs smoothly.


* HUNGARY: IMF, EU May Junk Tax Cut Proposals, Commerzbank Says
Zoltan Simon at Bloomberg News reports that Commerzbank AG said
the International Monetary Fund and the European Union, which
bailed Hungary out in 2008, may reject tax cuts proposed by the
new cabinet, aimed at restoring investor confidence.

Bloomberg relates Prime Minister Viktor Orban said Tuesday he
plans to enact a new tax on banks, cut public spending, reduce
personal income taxes and lower taxes for small businesses.  He
also pledged to stick with a creditor-approved budget-deficit
target after government officials rattled world markets last week
with talk of a potential default, Bloomberg notes.

"We do not think it likely that such a plan will satisfy the EU,
the rating agencies or financing institutions such as the IMF, as
a credible fiscal consolidation package," Commerzbank AG said in a
note Wednesday, according to Bloomberg.  "A plan of tax cuts is
usually not an acceptable fiscal roadmap within an IMF program."

Separately, Bloomberg News' Mr. Simon and Edith Balazs report that
Goldman Sachs Group Inc., Fitch Ratings and Budapest Investment
said they need more details of the government's deficit-cutting
plan before committing funds to the country again.

"Orban's message is positive, but he didn't detail the painful
measures awaiting the public sector," Daniel Bebesy, who helps
manage US$1.5 billion, mostly in Hungarian government bonds at
Budapest Investment Management, said in a phone interview,
according to Bloomberg.  "We remain underweight, and are awaiting
policy measures that demonstrate how exactly the cabinet plans to
meet its deficit goal."

The budget plan, while "moderately encouraging," lacks details on
"costing, timing and credibility," Bloomberg quoted David Heslam,
a director at Fitch Ratings in London, as saying.  "With growing
pressure to accelerate deficit reduction in other EU member
states, there is unlikely to be much appetite to tolerate any
fiscal loosening in Hungary."


BANK OF IRELAND: Raises EUR1.73 Billion in Share Sale
Louisa Fahy at Bloomberg News reports that Bank of Ireland Plc
raised EUR1.73 billion (US$2.08 billion) in a share sale, boosting
capital after losses surged.

Bloomberg relates Bank of Ireland said it sold 2.97 billion new
shares, or about 95% of the securities on offer.  The bankers
managing the sale sold the remaining 168.6 million remaining
shares at 75 cents apiece, a premium of 20 cents to the rights
offer price of 55 cents, Bloomberg discloses.

The bank is raising a total of EUR3.4 billion after it sold toxic
real-estate loans at a discount to the country's so-called bad
bank, the National Asset Management Agency, Bloomberg notes.

According to Bloomberg, Bank of Ireland, which is 36%-owned by the
Irish government, said the new shares are expected to start
trading on June 14.

Bank of Ireland also placed shares with a group of institutional
investors, exchanged some of its Tier 1 and upper Tier 2 bonds to
raise capital and converted some of the government's preference
shares into equity, Bloomberg states.

Headquartered in Dublin, Bank of Ireland -- provides a range of banking and
other financial services.  These include checking and deposit
services, overdrafts, term loans, mortgages, business and
corporate lending, international asset financing, leasing,
installment credit, debt factoring, foreign exchange facilities,
interest and exchange rate hedging instruments, executor, trustee,
life assurance and pension and investment fund management, fund
administration and custodial services and financial advisory
services, including mergers and acquisitions and underwriting.
The Company organizes its businesses into Retail Republic of
Ireland, Bank of Ireland Life, Capital Markets, UK Financial
Services and Group Centre.  It has operations throughout Ireland,
the United Kingdom, Europe and the United States.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings affirmed the rating on Bank of Ireland's Tier
1 notes at 'CCC' (ISINs: XS0268599999, US055967AA11 and

At the same time, Moody's Investors Service placed Bank of
Ireland's D bank financial strength rating (BFSR -- mapping to a
baseline credit assessment of Ba2) on review for possible upgrade,
previously they had a developing outlook.

CARRICKMINES GREEN: Put Up for Sale by Anglo Irish Bank
Orna Mulcahy at The Irish Times reports that Carrickmines Green,
an apartment scheme in south County Dublin, was put up for sale by
Anglo Irish Bank on Thursday.

The report recalls Carrickmines Green hit the headlines last year
when early buyers lost their deposits after developer Laragan went
into examinership.

The remainder of the apartments and houses in the scheme beside
the M50 were being sold at discounted prices through HT Meagher
O'Reilly New Homes, the report notes.

Carrickmines Green is located at exit 15 of the M50, beside
Carrickmines Retail Park, and close to the Luas Green Line,
according to The Irish Times.

CEDAR GROVE: Put Up for Sale by Receivers at Discounted Prices
Orna Mulcahy at The Irish Times reports that Cedar Grove, an
apartment scheme completed in 2007 and unsold since, was put for
sale on Thursday.

The scheme was being offered at discounted prices by its
receivers, the report says.

Cedar Grove had been marketed through Lisney but Douglas Newman
Good New Homes took over sales, the report notes.

Located on Firhouse Road, Cedar Grove is a small scheme with just
18 units that have been completely finished and well maintained
through the receivership process, according to The Irish Times.

CHESS CAPITAL: Moody's Cuts Ratings on Tier-1 Securities to 'Ca'
Moody's Investors Service announced this rating action on notes
issued by CHESS Capital Securities plc.

  -- EUR125,000,000 Perpetual Tier-One Pass-Through Securities,
     Downgraded to Ca; previously on Apr 8, 2010 Downgraded to

The transaction is a pure pass-through of the rating of non-
cumulative Perpetual Capital Securities of EBS Capital No. 1 S.A.
The rating action follows the downgrade of these securities to Ca
from Caa1.

GREEN ISLAND: Moody's Cuts Rating on EUR125MM Securities to 'Ca'
Moody's Investors Service took this rating action on notes issued
by Green Island Capital Securities plc.

  -- EUR125,000,000 Perpetual Tier-One Pass-Through Securities,
     Downgraded to Ca; previously on April 8, 2010 Downgraded to

The transaction is a pure pass-through of the rating of non-
cumulative Perpetual Capital Securities of EBS Capital No. 1 S.A.
The rating action follows the downgrade of these securities to Ca
from Caa1.

* IRELAND: Banks Delay Sale of Distressed Properties
Orna Mulcahy at The Irish Times reports that David Browne, agent
specializing in new homes, said that there could be up to 2,500
apartments in south Dublin that will have to be sold at discounted
prices by banks who have foreclosed on the developers who built

According to the report, some of these have lain empty now for
over two years, but it could be several months, if not years, more
before they finally make it to the market.

The report relates Mr. Browne said the reason for the delay in
bringing similar schemes onto the market is the amount of work
involved to ready an apartment complex that has been repossessed
by the bank.

The report notes new homes mortgage specialist Frank Conway
suggests that the delay in disposing of distressed properties has
been caused by the banks being entirely taken up with transferring
loans to Nama, with all other business long-fingered.

The rental market has also become an option for empty properties,
the report discloses.

Mr. Conway also sees a general reluctance by the banks to simply
offload properly quickly, the report notes.

"The big banks are slow to act on their non-performing loans.
Most of the receiverships that I have seen to date are as a result
of non-Irish bank moves, who have been a lot more aggressive at
recoveries (on the developer end at least)," the report quoted Mr.
Conway as saying.

* IRELAND: Central Bank Failed to Foresee Bank Insolvency Threat
The report by Patrick Honohan, the new governor of Ireland's
Central Bank, has concluded that neither the Central Bank nor the
Financial Regulator believed that any financial institution faced
serious difficulties, let alone potential insolvency, in the run-
up to the financial crisis, Simon Carswell writes for The Irish

According to The Irish Times, Mr. Honohan said there had been
major failures in the regulation of the banks and the maintenance
of financial stability.  Mr. Honohan, as cited by The Irish Times,
said the potentially very large loan losses that would threaten
insolvency at several institutions were not foreseen in any of the
regulator's supervision documentation "even as far as late 2008".

Regulators failed to challenge in detail the security which was
backing the banks' large developer loans and "did not realize just
how vulnerable the lenders were to property price declines", The
Irish Times quoted Mr. Honohan as saying.


KAZPOST JSC: Moody's Downgrades Global Scale Rating to 'Ba2'
Moody's Investors Service has downgraded the global scale rating
of Kazpost JSC to Ba2 from Baa3.  As part of the transition from
investment grade to non-investment grade, Moody's has also
converted the former Baa3 issuer rating into a Ba2 corporate
family rating and probability-of-default rating for the state-
owned national postal operator in Kazakhstan.  At the same time,
Moody's has downgraded Kazpost's national scale rating to
from  The rating action concluded the review process that
was initiated on March 12, 2010.  The outlook on the ratings is

The rating action reflects Moody's view of the likelihood of
diminished support from the Kazakh government, as the state might
be more selective in allocating support to its corporate state-
owned enterprises in future, given the ongoing policy and
structural adjustments within the economy.  Kazpost's ratings are
assessed according to Moody's government-related issuer
methodology and, as a result, the Ba2 CFR reflects the combination
of these inputs:

* A baseline credit assessment of 15 (on a scale of 1 to 21,
  where 1 represents the lowest credit risk, with 15 being
  equivalent to a B2 rating).

* The Baa2 local currency rating of the government of Kazakhstan.

* Medium dependence.

* Medium level of support, which has been reduced.

Moody's remains comfortable with the underlying credit quality of
the company, as indicated by the current BCA of 15.  This is
despite Kazpost's operating performance during 2009 being below
expectations as a result of (i) the company's business being
affected by the general economic conditions in Kazakhstan and by
increasing competition and use of electronic communications; and
(ii) the postponement of Kazpost's modernization program, with the
government having reduced its direct financing support to the

Moody's recognizes that Kazpost received almost KZT7.8 billion
from the government between 2005 and 2008.  Among other things,
this money was spent on the modernization of the postal network
and the construction of rural postal offices.  However, government
financial support for the development of the postal system halted
in 2009, resulting in the company postponing part of its
investment program.  Moody's also recognizes that, following the
postponement of the program, Kazpost's indebtedness is also below
expectations, with the company's key credit metrics continuing to
support the existing BCA.  However, the rating agency would expect
the company's capex to increase again over the next few years,
resulting in an overall increase in financial debt.

"The lower support factored into the CFR partly reflects the
reduction in direct government support for Kazpost's investment
program, but also Moody's view that the government might be more
selective in its provision of extraordinary support going
forward," says Paolo Leschiutta, a Senior Vice President in
Moody's Corporate Finance Group and lead analyst for Kazpost.
Nonetheless, the medium support incorporated in the CFR reflects:
(i) the current full ownership of Kazpost, and the lack of
specific privatization plans expected in the short to medium term;
(ii) the potential modest needs of the company in the context of
national resources; (iii) the government's involvement in the
strategic and investment decisions of Kazpost; (iv) the company's
strategic role in the country, both for broader postal and
financial services; and (v) the company's capability to reach
rural areas, where alternative infrastructures are currently poor.

"The BCA assessment takes into account the relatively low business
risk profile of Kazpost, which is a result of (i) the stable
postal business; and (ii) the support provided by Kazpost's
financial service operations, which are currently run with limited
risk for the company and help bear the costs of the postal office
network," explained Mr. Leschiutta.  "However, the BCA also
reflects both the relatively small size of Kazpost and the
company's exposure to a single economy, as well as the execution
risks associated with the modernization program," Mr. Leschiutta
added.  The current rating assessment incorporates the successful
financing of the company's investment program and a satisfactory
liquidity profile going forward.

The last rating action on Kazpost was implemented on March 12,
2010, when Moody's placed the Baa3 and ratings under review
for possible downgrade.

Kazpost is Kazakhstan's national postal operator, which offers
traditional postal services as well as a wide range of financial
and other services, including express deliveries, logistics and
transportation services.  The company has around 22,000 employees
and 3,300 post offices around the Republic of Kazakhstan.  At FYE
December 2009, Kazpost reported revenues of approximately
KZT16.3 billion (EUR93 million).


GETIN NOBLE: Fitch Affirms Issuer Default Rating at 'BB'
Fitch Ratings has affirmed Poland-based Getin Noble Bank SA's
Long-term Issuer Default Rating at 'BB', Short-term IDR at 'B',
Individual Rating at 'D', Support Rating at '5' and National Long-
term rating at 'BBB(pol)'.  Fitch has simultaneously removed the
IDR, the National Long-term rating and the Individual Rating from
Rating Watch Evolving, and assigned Stable Outlooks to the two
Long-term ratings.

The affirmation of GNB's ratings reflects the successful expansion
of its franchise in a competitive market with the early 2010
merger of Getin and Noble helping to improve its scale.  The
ratings also reflect deteriorating asset quality trends, elevated
loan impairment charges, large, albeit falling, exposure to
foreign currency-denominated mortgages, reliance on the interbank
market to hedge structural currency mismatches and moderate
liquidity.  These factors are balanced by a stable funding source
based almost entirely on deposits and diversified income streams.

At end-Q110, the loan portfolio was comprised of 70% mortgages,
13% auto loans, 12% consumer loans and 5% business loans.
Impaired loans reached 8.7% on the back of a deterioration in
consumer lending and a new inflow of impaired mortgage loans.
LICs were 28% higher y-o-y, and absorbed 86% of pre-impairment
operating profit.  Pre-impairment financial performance improved
as the cost of funding subsided, new lending picked up and a
rebound in financial intermediary business strengthened fee-
related earnings.  Fitch expects that asset quality will continue
to weaken, as the loan book seasons following rapid credit growth
in recent years, and is likely to translate into further LICs,
which could start bottoming out only in late 2010, assuming no
economic stress.

At end-Q110, GNB's funding structure was adequate with deposits
representing 97% of all interest-bearing liabilities.  GNB was
successful in attracting long-term funding through structured
products and deposit term life insurance sold in cooperation with
insurer Europa (a subsidiary of Getin Holding).  Consequently, at
end-Q110, 41% of deposits had a maturity longer than twelve
months.  However, GNB's liquidity remains potentially vulnerable
to short-term squeezes in the event of a rapid depreciation of the
local currency leads to margin calls on swap contracts hedging FX-
denominated loans.

Based on end-Q110 data, GNB was the 10th-largest bank in Poland by
total assets with around a 6% market share in customer deposits.
The bank offers auto and consumer loans, mortgages and financial
advisory services.  Getin Holding, which is ultimately controlled
by Leszek Czarnecki, holds a 93.7% stake in GNB.  The bank is
listed on the Warsaw Stock Exchange.

TOWARZYSTWO UBEZPIECZEN: Fitch Keeps BB Insurer Strength Rating
Fitch Ratings has affirmed Towarzystwo Ubezpieczen EUROPA SA's and
Towarzystwo Ubezpieczen na Zycie EUROPA SA's Insurer Financial
Strength ratings at 'BB' and affirmed their National IFS ratings
at 'BBB(pol)'.  Both ratings have been removed from Rating Watch
Evolving and assigned Stable Outlooks.  Towarzystwo Ubezpieczen na
Zycie EUROPA SA is a wholly-owned subsidiary of Towarzystwo
Ubezpieczen EUROPA SA, and the two companies form the Poland-based

The Stable Outlook reflects Fitch's rating action earlier on Getin
Noble Bank, a related bank in which EUROPA continues to maintain a
significant proportion of its invested assets.  Fitch affirmed
GNB's Long-term Issuer Default Rating at 'BB', removed the rating
from RWE and assigned a Stable Outlook.

Fitch notes that EUROPA retains strong ties with GNB, particularly
through the high level of exposure of its investment portfolio to
GNB (over 70% of total invested assets), GNB's minority ownership
in EUROPA, and EUROPA's reliance on GNB for distribution of its
products.  EUROPA's ratings will remain strongly linked to GNB's
rating while the concentration of EUROPA's investment portfolio in
GNB assets remains at the current high levels.

EUROPA is 20% owned by GNB, with the majority of the remaining
stock owned by Getin Holding SA, a Polish financial group quoted
on the Warsaw Stock Exchange.  EUROPA specializes in insurance
products targeted at the Polish financial sector (bancassurance),
with a particular focus on credit-related insurance products and
investment products.


BANQUE ESPRITO: Fitch Downgrades Individual Rating to 'D/E'
Fitch Ratings has affirmed Banque Esprito Santo et de la Venetie's
Long-term Issuer Default Rating at 'BBB+', Short-term IDR at 'F2'
and Support Rating at '2.'  The Outlook on the Long-term IDR has
been revised to 'Negative' from 'Stable'

The change in Outlook reflects the similar Outlook on the Long-
term IDR of Banco Espirito Santo (rated 'A+'/Negative/ ST IDR
'F1') which controls 42.7% of BESV.  Espirito Santo Financial
Group ('A-'/Stable/ ST IDR 'F2') controls a further 44.8% and
Italy's Intesa Sanpaolo ('AA-'/Stable/ 'F1+') owns 12.5%.  BES is
Portugal's third-largest banking group.

At the same time, Fitch has downgraded BESV's Individual Rating to
'D/E' from 'D', reflecting the persistent difficulties faced by
the bank in funding itself independently.

Fitch has additionally affirmed the Short-term rating of BESV's
certificate of deposit program at 'F2' and assigned BESV's EUR350m
medium-term program ('Bons a Moyen Terme Negociables') a 'BBB+'

The affirmation of BESV's IDRs is based on the support Fitch
believes the bank could expect to receive from BES, if needed.
BESV is not a strategic holding for BES, but it shares the group
name and BES appoints the bank's senior management.  Fitch
believes there is a high probability that BES would provide
support to BESV, should this be required.

BESV has become increasingly reliant on a committed EUR350m
funding line from BES.  Given the poor operating environment, it
is unlikely that BESV will be in a position to fund itself
independently in the near future.  BES has also injected
additional capital (EUR26.8 million in H208, while a further
EUR14.7 million is committed but not yet disbursed) into BESV and
subscribed EUR9 million of undated subordinated debt in 2008 and
2009.  BES has approved a new business plan focusing on
diversification away from the real estate sector and into selected
niches where BESV can focus on developing certain fee businesses,
notably private banking.

Operating profit halved in 2009, as low interest rates failed to
offset improved fee income and loan impairment charges and
overheads rose, reflecting new hires and the replacement of
employees as they retire.  The loan book at end-2009 was split
between 38% real estate professionals, 33% SMEs and 24% LBOs, with
the rest spread among new niches, including film finance and debt
collection funding.  The bank's asset quality worsened
considerably in 2009 but BESV is conservative in its loan
classifications and makes provisions for "watch-list" loans even
though they rarely experience servicing problems.  Excluding
these, the impaired loan ratio was 4.4% (2008: 2%), reserved at

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.


AVICOLA IASI: Enters Insolvency Proceedings After Revenue Slump
Diana Tudor at Ziarul Financiar reports that Avicola Iasi has
entered insolvency proceedings in the wake of a decision by Iasi
Court of Law.

According to the report, the company in the first nine months of
2009 saw its revenues slump by one third, to RON47 million (almost
EUR11 million), from RON71 million (around EUR19 million) from the
same period of 2008.

Avicola Iasi is a poultry producer in Romania.  The company is
controlled by businessman George Becali, according to Ziarul

* ROMANIA: Charcuterie Industry Hit by Insolvencies
Diana Tudor at Ziarul Financiar reports that the charcuterie
industry has been hit by insolvencies, business reorganizations
and redundancies as producers saw their cash drain.

According to the report, insolvencies are also expected in the
poultry sector.

"The sector is hurting, lacking the subsidies that were granted
until last year.  Moreover, prices have not dropped, but on the
contrary, they have risen.  If we don't see more insolvencies in
this field, the turnovers of poultry producers will certainly be
hit by a liquidity shortage," the report quoted Grigore Horoi,
chairman of Agricola Bacau International, the second biggest
poultry producer domestically, as saying.


INTERNATIONAL INDUSTRIAL: Fitch Gives Negative Watch on 'B' Rating
Fitch Ratings has revised the rating watch on Russia-based
International Industrial Bank's ratings, including its Long-term
foreign currency Issuer Default Rating of 'B', to Rating Watch
Negative from Rating Watch Positive.  A full rating breakdown is
provided at the end of this comment.

The rating action reflects Fitch's heightened concerns regarding
the bank's current liquidity position, including its ability to
repay a EUR200 million Eurobond (RUB7.2 billion equivalent)
maturing on July 6, 2010, and the weaknesses in its funding
profile.  The bank's liquid assets (cash and net short-term
interbank position) comprised a small RUB3 billion, or just 3% of
liabilities, at end-May 2010.

IIB's management considers support from its main shareholder,
Sergey Pugachev, as the primary potential source of additional
liquidity to support repayment of the eurobond.  Fitch has been
informed that such liquidity might be raised through the sale, or
pledge, of assets of the shareholder's OPK group.  Without
shareholder support, the bank's access to liquidity seems to be
limited, given apparently low cash generation from the loan book,
reduced borrowing opportunities on capital markets and the already
full utilization of the bank's limit for unsecured lending from
the Central Bank of Russia.  The latter already comprised 33% of
total liabilities at end-May 2010, and at end-Q110 IIB's unsecured
borrowings from the CBR represented a large 56% of the sector

The bank continued to grow its loan book through the global
financial crisis, with the gross portfolio adding 10% in 2009, and
the net loans/assets ratio was a high 87% at end-May 2010.  The
reported level of non-performing loans (overdue by more than 90
days) has been historically low, making up less than 1% of the
loan book at end-2009, while reported rolled-over loans stood at
14% at end-Q110.  However, the significant build up of accrued
interest during 5M10 (at 6.5% of gross loan book or 30% of
statutory equity) suggests that loan performance may not be as
good as these numbers suggest.  Furthermore, Fitch notes that,
although contractually IIB's loan book is predominantly short-
term, the portfolio's flexibility (ie the ability of the bank to
deleverage and generate cash from amortization of the loan book)
has yet to be demonstrated.  The high proportion of unsecured
loans (87% of the book at end-2009) raises questions about loan
quality and the robustness of underwriting procedures.

IIB's regulatory capital ratio at 23.3% at end-May 2010 seems to
offer a solid cushion against potential credit losses.  The bank
could potentially increase its impairment reserves up to 37.6% of
loans from the actual 26% at end-May 2010 without breaching the
minimum regulatory capital requirement of 10%.  According to its
eurobond issue, the bank is covenanted to keep its Basel I total
capital adequacy ratio above 20%.  However, IIB's capitalization
should be viewed in the context of the potentially high loan
impairment level, material concentrations on both sides of the
balance sheet and the large proportion of unsecured lending.

Fitch will continue to review IIB's liquidity position and the
quality of its loan book over the coming weeks.  IIB's ratings
could be downgraded if the bank fails to elaborate a robust plan
to accumulate sufficient liquidity to repay the upcoming eurobond
and manage down the high level of CBR funding, or if concerns
about the performance of the loan book remain or increase.
However, if the bank accumulates sufficient cash for repayment of
the eurobond, gradually decreases its dependence on CBR funding
and demonstrates the cash-generating ability of the loan book, its
ratings could be affirmed at their current level.

At end-Q110, IIB was the 28th-largest bank in Russia by total
assets.  Mr. Pugachev, a member of the upper house of the Russian
Parliament, controls an 81% stake.  IIB's ratings were placed on
Rating Watch Positive on 5 March 2010, along with those ratings of
other privately-owned Russian banks, reflecting improvements in
the country's banking system infrastructure.

The rating actions are:

  -- Long-term foreign currency IDR: 'B'; rating watch revised to
     Negative from Positive

  -- Long-term local currency IDR: assigned at 'B'; placed on RWN

  -- Senior unsecured debt: 'B'; rating watch revised to Negative
     from Positive ; Recovery Rating 'RR4'

  -- Short-term foreign currency IDR: 'B'; placed on RWN

  -- Individual Rating: 'D'; placed on RWN

  -- Support Rating: affirmed at '5'

  -- Support Rating Floor: affirmed at 'No Floor'

  -- National Long-term Rating: 'BBB(rus)'; rating watch revised
     to Negative from Positive

RUSSIAN AGRICULTURAL: CEO Change Won't Affect Fitch's Rating
Fitch Ratings says that the recent change of Russian Agricultural
Bank's CEO is not expected to have any immediate impact on the
bank's ratings.  However, the agency remains concerned about the
bank's asset quality, and a significant deterioration in this
aspect of the bank's credit profile could put downward pressure on
its Individual Rating of 'D'.

Fitch presently rates RusAg: Long-term foreign and local currency
Issuer Default Ratings 'BBB', Short-term IDR 'F3', Support Rating
'2', Support Rating Floor 'BBB' and National Long-term rating
'AAA(rus)'.  The Long-term IDRs and National Long-term rating,
which all have Stable Outlooks, are driven by potential support
from the Russian authorities, given the bank's 100% state
ownership, important policy role, close government ties and the
state's strong track record of support.

RusAg announced on May 24 2010 that the bank's general shareholder
meeting had appointed Dmitri Patrushev as the new CEO of the bank,
replacing Yuri Trushin, who had served as CEO since the bank's
establishment in 2000.  First Deputy Prime Minister of the Russian
Federation Victor Zubkov was re-elected Chairman of the
Supervisory Board.

Following the management change, Fitch has received assurances
from the bank, including at a meeting with the new CEO at the end
of last week, that no major changes in strategy are expected, and
that the bank's primary focus will remain on providing services to
the agricultural sector.  Fitch has also been informed that the
change of CEO was not driven by the need to address any critical
problems which had arisen at the bank.  At the same time, the new
CEO has informed the agency that the bank will increase its focus
on cost efficiency and seek to broaden the range of services and
products offered to customers, while preservation of asset quality
will also remain a key goal.  In Fitch's view, the bank's close
ties with the Russian authorities are likely to be maintained
following the change of CEO, and there remains a high probability
that support will be forthcoming for the bank, should it be

At the same time, Fitch notes that RusAg's asset quality will
continue to be a key driver of its stand-alone financial strength
and the Individual Rating.  The reported level of NPLs (loans more
than 90 days overdue) was still a moderate 4.5% at end-April 2010
(4.3% at end-2009 according to audited IFRS accounts), while
restructured loans (7.3% at end-2009) were also not excessive.
NPLs were fully covered by loan impairment reserves (122% coverage
at end-April 2010 under statutory accounts; 136% coverage in end-
2009 IFRS), while the bank's capital ratios (22% regulatory ratio
at end-April 2010; 14.6% and 20.7% Basel I tier I and total
capital ratios at end-2009) offer significant loss absorption

However, RusAg's credit risk is elevated due to its high exposure
to a single sector, with more than 70% of loans extended to
agribusiness, and the large scale of long-term lending with
extended grace periods on principal repayment.  The principal
grace periods, combined with government interest rate subsidies
enjoyed by many borrowers, may make it relatively easy for the
bank's customers to service loans on an ongoing basis, but could
lead to considerable under-reporting of the potential level of
problems in the loan book.  In Fitch's view, an important
challenge for the new CEO will be to ensure the robustness of
credit procedures and collection mechanisms across the bank's
broad branch network, a task which may require close co-operation
with other government bodies in Russian regions.

RusAg is the fourth-largest bank in Russia in terms of assets,
with a 3.3% market share in system assets at end-Q110.  The bank
has an estimated 60% market share in agribusiness lending and a
leading presence in rural areas across Russia.  RusAg is fully
owned by the state, via the Federal Property Management Committee.

* RUSSIA: S&P Corrects Errors on Ratings of Four Governments
Standard & Poor's Ratings Services corrected an administrative
error relating to its global scale issue ratings on senior
unsecured debt of four local and regional governments: City of
Ivano-Frankivsk; Republic of Sakha (Yakutia); Samara Oblast; and
Tomsk Oblast.

The error occurred when Standard & Poor's assigned recovery
ratings to all the debt issues of these particular LRGs, but did
not assign global scale issue ratings to some of their debt

S&P is rectifying that error by assigning issue ratings to the
debt issues listed below.

                           Ratings List

                           New Ratings

                    Ivano-Frankivsk (City of)

       UAH5.5 mil. 12% bonds due Feb. 27, 2011           B-

                    Republic of Sakha (Yakutia)

       RUB2.5 bil. 7.95% notes due April 11, 2013        BB-

       RUB2.5 bil. 7.8% notes series 35002
       due April 17, 2014                                BB-

                           Samara Oblast

       RUB2 bil. 6.82% fixed/floating rate notes
       series RU25002SAM0 due Sept. 9, 2010              BB+

       RUB4.5 bil. 7.6% fixed-rate notes series
       RU25003SAM0 due Aug. 11, 2011                     BB+

                           Tomsk Oblast

       RUB1.4 bil. step down (including increase
       of RUB1 bil. to be placed March 12, 2008)
       bonds series RU34034TMS0 due Dec.  17, 2012        B


CAJA ESPANA: Fitch Puts C/D Individual Rating on Evolving Watch
Fitch Ratings has placed Caja Espana de Inversiones, Caja de
Ahorros y Monte de Piedad's Long- and Short-term Issuer Default
Ratings of 'BBB+' and 'F2', respectively, on Rating Watch
Negative.  The agency has simultaneously placed Caja Espana's
Individual Rating of 'C/D' on Rating Watch Evolving.

Fitch's rating action follows the approval of an integration plan
by the General Assemblies of Caja Espana and Caja de Ahorros de
Salamanca y Soria (Caja Duero, not rated by Fitch) on 5 June 2010.

The rating action reflects the agency's view that there is an
extremely high probability that the merger will take place in a
short timeframe.  The merger has already been approved by the Bank
of Spain, the Fund for Orderly Bank Restructuring (for further
information on the FROB, see the 3 July 2009 special report,
entitled 'Fund for Orderly Bank Restructuring', which is available
at, the European Commission and Spain's
Finance and Economy Ministry.

The planned integration will enable the resulting entity to access
FROB funds, of up to EUR525 million, which will help absorb
further anticipated write-downs on the loan portfolio and
foreclosed assets of the combined entity.  The new entity will
record restructuring costs through the profit and loss account and
should be able to generate cost synergies that should support cost

The merger process bears integration risks and the merged entity
will continue to face significant challenges given that economic
growth in Spain is expected to be muted over the next few years,
the unemployment rate is around 20% and that the Spanish property
sector is enduring a significant downturn.  A low interest rate
environment, reduced business volumes and property sector exposure
is expected to place significant pressure on the merged
institution's profitability and asset quality, while FROB funds
and the revaluation of assets will support equity.  In addition,
geographic diversification is not achieved.

The RWN and RWE will be resolved once Fitch obtains detailed
information regarding the merged entity, and once the merger is
completed in July 2010.

The merger process will involve the dissolution of the two cajas
and the creation of a new separate legal entity, into which the
assets and liabilities of both cajas will be transferred.  The
merged entity will have EUR47bn in assets and a market share for
deposits of 29% in Castilla-Leon.

Caja Espana and Caja Duero were Spain's 13th and 17th largest
savings banks by total assets, respectively, at end-2009.  Both
financial institutions focus on retail banking in the sparsely
populated region of Castilla-Leon.

The rating actions taken with respect to Caja Espana are:

  -- Long-term IDR: 'BBB+'; placed on RWN
  -- Short-term IDR: 'F2'; placed on RWN
  -- Individual rating: 'C/D'; placed on RWE
  -- Support Rating: affirmed at '3'
  -- Support Rating Floor: affirmed at 'BB+'
  -- State-guaranteed senior debt; affirmed at 'AA+'
  -- Senior unsecured debt; 'BBB+'; placed on RWN

U N I T E D   K I N G D O M

BH FREIGHT: In Administration; Moore Stephens Appointed
Dominic Perry at reports that BH Freight has
gone into administration.

The report relates Stephen Ramsbottom and David Rolph from
corporate recovery firm Moore Stephens were appointed to the
company on May 24.

According to the report, the last year saw serious losses at the
company and a warning in its last set of accounts that a "material
uncertainty exists casting doubt upon the company's ability to
continue as a going concern".

The accounts show that in the year to May 31, 2009 it made a
pre-tax loss of GBP50,061 on turnover that fell by GBP1.2 million
to GBP6.1 million, the report discloses.

The report notes the accounts state: "A major contract came to an
end . . . and the current economic conditions create uncertainty
over the replacement of this contract and therefore the ability of
the company to continue as a going concern."

The company's sister firm Select International Transport will take
on a large proportion of it work, the report says.

BH Freight is a Gloucestershire-based haulier.

BRITISH AIRWAYS: Cabin Crew Union to Ballot on Further Strikes
Steve Rothwell at Bloomberg News reports that British Airways
Plc's cabin-crew union said it will ballot members on further
strike action, with the timing of the vote the only issue to be

"Obviously we're going to be balloting," Bloomberg quoted Brian
Boyd, the Unite union's national officer for aviation, as saying
in an interview.  "We're just looking at the timeline."

Bloomberg relates Unite said Wednesday in a statement on its Web
site that preparations for a ballot are at an "advanced stage".

According to Bloomberg, Mr. Boyd said that in addition to contract
terms, the vote will concern the removal of travel perks for
striking workers and disciplinary action taken during the dispute.
The union, Bloomberg says, estimates the strike has cost the
carrier GBP7 million (US$10.2 million) a day.

Bloomberg notes Len McCluskey, Unite's assistant general
secretary, said Wednesday that the sides must compromise to end
the dispute and that BA chief executive Willie Walsh's "tough guy"
management strike was to blame for the lack of a resolution.

British Airways and Unite have yet to resume talks after
negotiations that were being held under the auspices of the
Advisory Conciliation and Arbitration Service, the U.K.'s state-
funded mediator, broke down on June 1, Bloomberg discloses.

                      About British Airways

Headquartered in Harmondsworth, England, British Airways Plc,
along with its subsidiaries, (LON:BAY) -- is
engaged in the operation of international and domestic scheduled
air services for the carriage of passengers, freight and mail and
the provision of ancillary services.  The Company's principal
place of business is Heathrow.  It also operates a worldwide air
cargo business, in conjunction with its scheduled passenger
services.  The Company operates international scheduled airline
route networks together with its codeshare and franchise partners,
and flies to more than 300 destinations worldwide.  During the
fiscal year ended March 31, 2009 (fiscal 2009), the Company
carried more than 33 million passengers.  It carried 777,000 tons
of cargo to destinations in Europe, the Americas and throughout
the world.  In July 2008, the Company's subsidiary, BA European
Limited (trading as OpenSkies), acquired the French airline,

                           *     *     *

As reported in the Troubled Company Reporter-Europe on March 19,
2010, Moody's Investors Service lowered to B1 from Ba3 the
Corporate Family and Probability of Default Ratings of British
Airways plc; and the senior unsecured and subordinate ratings to
B2 and B3, respectively.  Moody's said the outlook is stable.
This concludes the review that was initiated on November 10, 2009.
The rating action reflects Moody's view that credit metrics will
not be commensurate with the previous rating category in the
medium term.  Moody's expect furthermore that metrics will be
burdened in the foreseeable future by the company's significant
pension deficit, which was at GBP2.6 billion for the APS and NAPS
schemes combined as of September 2009 (under IAS).  Moody's
nevertheless understand that under the current agreement with the
trade unions, the cash contributions to these deficits will be
frozen at GBP330 million per year for three years, subject to
approval by the Pensions Regulator and the trustees

COLT GROUP: Moody's Changes Outlook on 'Ba3' Rating to Positive
Moody's Investors Service has changed the rating outlook for the
Ba3 corporate family and probability-of-default ratings of Colt
Group SA to positive from stable.

Moody's decision to change Colt's outlook to positive is based on:
(i) the consistent year-on-year growth in Colt's EBITDA margin;
(ii) its commitment and progress towards growing its high-margin
Data and Managed Services business; and (iii) its comfortable
liquidity profile.  The positive outlook further reflects Moody's
expectation that the company will maintain its leverage solidly
below 2.5x debt/EBITDA (as adjusted by Moody's) over the medium
term and remain focused on free cash flow generation as it
continues to invest in the Data and Managed Services segment and
related activities.

Although Colt's revenues declined by 3.2% during 2009 compared
with 2008 levels, Moody's notes that the company reported a 4.9%
increase in EBITDA.  This was driven by a growth in revenues from
its Data (by 0.5% from 2008) and Managed Services (by 24.6%)
business, despite difficult macroeconomic conditions.  The
reported EBITDA margin increased to 19.7% from 18.1% over the same
period, supported by an increasing proportion of higher-margin
revenue from the Data and Managed Services division and efficient
cost control.  In 2010, Moody's would expect Colt's revenues and
EBITDA generation to be helped by the gradual pick-up in order
bookings, the company's cost control measures and the growth in
its Data and Managed Services businesses, which now account for
approximately 59% of total revenues.

Colt's capex is expected to increase in 2010 compared with 2009
levels, thereby having a constraining effect on the company's FCF
generation for the year.  However, the rating agency takes comfort
from the company's cautious approach towards dividends in 2010.
In Moody's opinion, Colt's capex/revenue ratio is likely to remain
at the mid-teen level (up from 13.3% in 2009) over the medium
term, in order to support growth in revenues of the Data and
Managed Services business.  In this regard, the rating agency
would expect the company to remain focused on FCF generation (post
capex and dividends, as defined by Moody's) while maintaining a
prudent shareholder distribution policy in light of its increased
growth capex requirements.

At fiscal year-end 2009, Colt had no financial debt outstanding
and its gross debt/EBITDA ratio (as calculated by Moody's) of 1.8x
reflected Moody's adjustment for operating leases.  The ratings
and positive outlook assume that the company's capital structure
will incorporate some financial debt over time.

Upward rating pressure could develop if the company: (i) returns
to positive overall organic revenue growth from 2010 onwards and
continues to generate good EBITDA margins supported by its growing
Data and Managed Services business; (ii) exhibits a commitment to
maintain its gross leverage solidly below 2.5x (as adjusted by
Moody's) at the end of 2010 and beyond; and (iii) continues to
make investments in growing its Managed Services business in
particular, while remaining focused on FCF generation (as defined
by Moody's).  Further clarity on company's debt capital structure
and on its shareholder remuneration policy that support the
maintenance of leverage solidly below a 2.5x threshold (as
calculated by Moody's) over the medium term would be an additional
important consideration for upward rating pressure.

Colt had EUR293.7 million worth of cash and cash equivalents
(including deposits classified as current asset investments) as of
31 March 2010.  Moody's expects this, together with internally
generated cash flows, to provide the company with sufficient
capacity to meet its current operational needs.  Going forward,
the rating agency expects Colt to arrange for appropriate debt
funding based on its growth investment requirements (including
additional capex and/or add-on acquisitions).

The last rating action on Colt was implemented on October 13,
2009, when Moody's upgraded the company's CFR to Ba3, with a
stable outlook.

COLT Group S.A. is one of the leading alternative telecoms
providers in the UK and Europe, offering high-bandwidth data,
voice business communications and integrated IT managed solutions
to businesses and governmental organizations.  In 2009, the
company generated revenues of EUR1.6 billion and reported EBITDA
of EUR318.7 million.

CREDIT ISSUES: Enters Into CVA Deal as HMRC Seeks Liquidation
Debt Management Today reports that Credit Issues entered into a
Company Voluntary Arrangement last week after HM Revenue and
Customs sought to wind up the firm.

Citing, Debt Management Today says the
company's request to enter into a time to pay scheme was refused
by HMRC, forcing it to enter into a CVA.

Based in Manchester, Credit Issues is a claims management firm.
The company is part of the Guardian Financial Group.

EUROPEAN PROPERTY: High Court Orders Liquidation Following Probe
Merseyside-based company European Property Management Ltd., which
deliberately misled potential investors as to the benefits of
investing, to induce them to purchase shares has been wound up in
the High Court following an investigation by the Investigations
Directorate of the Insolvency Service.

The company was formed to secure and manage residential properties
in European Capitals of Culture as they were announced.

The investigation discovered that European Property Management
Ltd. used Corporate Business Angel Ltd. and at least ten other
entities, all of which were unauthorized by the Financial Services
Authority, to cold-call potential investors, making misleading and
exaggerated claims as to the benefits of investing in this way.
Shares were offered to investors in two distinct tranches; a
Private Placement Offer around March 2006 and an Entitlement Offer
early in 2007.

The Insolvency Service's investigation also led to the winding-up
in the High Court, of Corporate Business Angel Ltd, which was
based in the Derby area.

The companies' methods raised a total of GBP853,395 from private
investors in the UK.  From the sums raised, the company paid out
commissions of GBP529,945 to the unauthorized entities, which
amounted to 65% of funds raised, and as a consequence less than
30% of shareholders' funds was used for purposes set out in the
Company's Information Memorandum.

Investigators found that the companies targeted inappropriate
investors: one case involved an 86 year old man who had no
previous experience of purchasing shares.

Commenting on the case, investigator Scott Crighton said, "the
sale of the company's shares involved the use of high-pressure
telephone selling methods aimed at unsophisticated investors so
that those targeted did not have the option of getting independent
advice as to the truth of the claims being made.  Companies using
these methods are conducting serious misconduct which undermines
public confidence in business.

"The action we have taken sends a clear message; companies that
set out to mislead and defraud the public will be shut down.

"Everyone should be wary of get rich quick schemes and the old
adage applies: if it seems too good to be true, then it probably

European Property Management Ltd was incorporated on March 1,
2006, and has its current Registered Office at 48-52, Penny Lane,
Liverpool, L18 1DG. The company traded from Westpoint House, 6
Grammar School Lane, Wirral, Cheshire, CH48 8AY.

Corporate Business Angel Ltd. was incorporated on December 18,
2006, and has its current registered office at Lucre House, 106-
108 Ashbourne Road, Derby, DE22 3AG.

NORTH WEST: Loss of Major Contract Prompts Administration
Paul Flint and Brian Green from KPMG Restructuring were appointed
Joint Administrators of North West Precision Forms Ltd. on June 9,

Founded in 1972, the family-run business is a manufacturer and
supplier of metal parts, comprising mainly bolt, drills and
electric panel boarding to the aviation sector.  Based in
Birkenhead, the company employs 87 staff and has an annual
turnover of about GBP7 million.  There have been no redundancies
as a result of the administration.

Commenting on the appointment, joint administrator Paul Flint,
associate partner at KPMG, said, "The administration was prompted
by the loss of a major contract worth approximately GBP1.7
million, the delayed start of a new contract and a major recall of
an order for rectification.  The combination of these factors
resulted in pressure from creditors."

Mr. Flint added, "It is our intention to trade the business while
a buyer is sought, and so would urge any interested parties to
contact us as soon as possible."

Any interested parties should contact Chris Chapman at KPMG on

SELECT HOMES: Put Into Receivership Due to Outstanding Debts
Mike Farrell at The Press and Journal reports that Select Homes
has gone into receivership due to outstanding bank debts.

The report relates Iain Fraser, of RSM Tenon Recovery, based in
Aberdeen, has been appointed as one of the receivers.  The report
notes Mr. Fraser confirmed there had been no job cuts as a result
of the action, while it had no ongoing projects that would be
impacted upon either.

"I understand it was a property development company, which at one
time was quite busy and active in building houses throughout
Angus, the report quoted Mr. Fraser as saying.

"But it has effectively ceased a lot of its business over the past
few years and now it has entered into receivership because it
basically owed the bank a debt.

"There is no work currently being undertaken by Select Homes that
will be affected, while it does still own a few sites across
Angus, which we will look at throughout the receivership process."

Select Homes is a property firm based in Castle Street, Forfar.
It was incorporated in 1992.

TITAN EUROPE: S&P Cuts Ratings on Class G & H Notes to 'D'
Standard & Poor's Ratings Services lowered to 'D' from 'CCC-' its
credit ratings on Titan Europe 2006-1 PLC's class G and H notes.
At the same time, S&P affirmed its ratings on all other classes of
notes in the transaction.

In March 2010, S&P lowered its ratings on six classes of notes and
affirmed three classes.  This reflected the increased risk of
principal losses associated with two of the five loans in the
pool--the Mangusta and the KQ Warehouse loans -- both of which are
in special servicing.  At that time, the class G and H notes had
both incurred interest shortfalls on the January 2010 interest
payment date, resulting from increased special servicing fees and
the inability to draw on liquidity to cover these costs.  S&P
stated then that S&P was likely to lower its ratings on classes G
and H to 'D' if the interest shortfalls continued in the next

On the April 2010 IPD, the class H notes received no interest and
the class G notes continued to experience a shortfall of interest.

These shortfalls were linked primarily to the KQ Warehouse loan,
on which no debt service was received in April 2010 due to a
material drop in rental income from the properties securing the
loan.  The drop in income, by about EUR8.7 million, follows the
early termination of the Leipzig lease that was triggered by
tenant insolvency.  In addition, the special servicing fees and
expenses accruing on the loan are not covered by the liquidity
facility and were funded from loan receipts that would otherwise
have been available to the notes.

For the Mangusta loan, amounts due in April 2010 were partially
paid.  The whole-loan waterfall covered the special servicing fees
and expenses associated with this loan.

S&P notes that the three other loans in the pool are performing
and that the Steinberger Hotel Portfolio loan matures in October

Our ratings address timely payment of interest and S&P has
consequently lowered the ratings on the class G and H notes to

TOUCHLINE LTD: In Administration; 24 Jobs Affected
At the request of the directors, Paul Flint and Brian Green from
KPMG Restructuring have been appointed as joint administrators of
Touchline (UK) Limited.

The company, which is based in Warrington, is a leading supplier
of embroidered work wear and corporate uniforms, sports wear and
school wear.

The firm, which last year had a turnover of about GBP800,000,
employed 24 members of staff at its base in Warrington.  All have
been made redundant as a result of the administration.

Paul Flint, joint administrator and associate partner at KPMG
Restructuring, commented, "Touchline (UK) Limited had been
experiencing severe cash flow issues for a number of months, which
ultimately prompted the directors to appoint us as administrators.
The business has ceased to trade while we seek a buyer for the
business and its assets, and we would like to encourage any
interested parties to contact us as soon as possible."

Any interested parties should contact Alan Crowshaw at KPMG on

* Smelters May Shut Down as Prices Slump, Oleg Deripaska Says
Rishaad Salamat and Yuriy Humber at Bloomberg News report that
Oleg Deripaska, chief executive officer of United Co. Rusal, said
a slump in prices for the metal may prompt producers to shut
smelters, leading to a supply shortfall.

Between 2 million and 3 million metric tons of capacity may be
halted in the second and third quarters, potentially causing a
"deficit of physical supply," Bloomberg quoted Mr. Deripaska as
saying in an interview in Hong Kong.  Mr. Deripaska, as cited by
Bloomberg, said about 70% of smelters around the world are
unprofitable at current prices.

According to Bloomberg, aluminum prices have declined 20% over the
past two months in London on concern that the European debt crisis
and China's measures to curb its property market will hurt demand
and derail the global economic recovery.


* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy
Authors: Thomas J. Salerno; Craig D. Hansen; Jordan A. Kroop
Publisher: Beard Books
Hardcover: 728 pages
List Price: US$174.95

The newly revised edition of The Executive Guide To Corporate
Bankruptcy is perfectly timed.  As the global economy continues to
deteriorate, more and more companies are sinking into insolvency
with executives at their helm who need a crash course in
bankruptcy realities.  This excellent book will quickly get both
the seasoned executive and the uninitiated lawyer up to speed on
the bankruptcy process.

Salerno, Kroop and Hansen understand that the reorganization
process can be intimidating, puzzling, and generally unpleasant.
They penetrate the opaque gloom that some lawyers tend to
perpetuate.  Each chapter of this book addresses a different
aspect of the reorganization process, beginning with an overview
of the origins and purpose of US bankruptcy laws and ending with a
debunking of common myths about reorganization.  In between, they
discuss each chapter of the bankruptcy code; discussing the gamut
from liquidations through Chapter 11 sales and full-blown
reorganizations.  The authors' ability to distill the bankruptcy
code's complex language into comprehensible and manageable blocks
of information makes the book extremely readable.

The Executive Guide is full of pragmatic advice.  After laying out
the essential elements and key players in the restructuring
process, the authors get down to the nitty gritty of navigating a
distressed company through reorganization.  They realistically
assess the challenges that an executive should expect to face in
Chapter 11.  They discuss how to assuage and balance the concerns
of employees and key vendors, address the inevitable creditor
dissatisfaction with executive compensation, deal with members of
their professional team and work effectively as an executive whose
actions will be constantly scrutinized and second-guessed.  The
authors also provide the cautionary note that "executives
preparing to embark on a reorganization are usually too
preoccupied with business emergencies to think about the personal
toll that the process will exact."

One common flaw in books that try to be accessible while dealing
with technical topics is that they fall short in providing the
reader with a substantive understanding of the subject matter.
The Executive Guide to Corporate Bankruptcy avoids this pitfall.
The book's fourth and fifth chapters provide in-depth analysis of
the strategic decisions and steps that should be taken during the
restructuring process.  The authors explain the importance that
venue can have a case, the intricacies of first day motions and
how to prepare for confirmation.  There is a detailed discussion
of the sale of assets during the course of a Chapter 11
restructuring and the importance of making sure that major
constituencies are a part of the decision-making process.  They
also walk the reader through the specifics of a plan of a
reorganization, explaining the dynamics of the negotiation
process, especially how to understand and appreciate the needs of
your constituents and how to get a plan confirmed.

The icing on the cake for this book is the excellent appendix.
The final section of the book includes a user-friendly glossary of
commonly used bankruptcy terms and a reorganization timeline.  It
also includes sample documents such as debtor-in-possession (DIP)
financing agreements, operating reports, first day motions and
orders, management severance agreements, and more.  The summary of
management incentive stock plans implemented in recent
restructuring transactions is particularly informative.

This is a terrific book.  While geared to the non-lawyer
executive, it will also be a useful resource for any lawyer who
wants to gain practical familiarity with the bankruptcy process.
This should be a best seller in today's environment, though it may
need to be delivered to most executives in a brown paper wrapper.


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

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  Go to 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.  Joy A. Agravante, Valerie U. Pascual, Marites O.
Claro, Rousel Elaine T. Fernandez, Frauline S. Abangan and Peter
A. Chapman, Editors.

Copyright 2010.  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.

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