/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/100729.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 Thursday, July 29, 2010, Vol. 11, No. 148 Headlines B U L G A R I A KREMIKOVTZI AD: Asset Auction Scheduled for September 13 D E N M A R K AMAGERBANKEN AS: Moody's Changes Mapping on 'E+' Bank Rating G E R M A N Y ARCANDOR AG: Highstreet Won't Meet Karstadt Sale Deadline ARCANDOR AG: Borletti May Bid for Karstadt, Valovis Says DEUTSCHE PFANDBRIEFBANK: S&P Withdraws Ratings on Amortizing Notes KABEL DEUTSCHLAND: S&P Raises Corporate Credit Rating to 'BB-' TELE COLUMBUS: Kabel Deutschland Ends Takeover Talks G R E E C E SPRIDER STORES: Hasn't Filed for Creditor Protection H U N G A R Y IKR: Mulls Bankruptcy Protection; Incurs HUF2.7BB Loss in 2009 I C E L A N D ICESAVE: Resolution of UK-Netherlands Dispute Still Uncertain I R E L A N D ANGLO IRISH: Appointment of McEnery as Receiver Challenged EBS BUILDING: August 9 Deadline Set for Takeover Bids QUINN INSURANCE: Anglo to Present Takeover Plans Within Weeks R U S S I A TINKOFF CREDIT: Fitch Assigns 'B-' Issuer Default Rating S P A I N BARCELONA: Incurred EUR77.1MM Loss, New Deloitte Audit Shows U N I T E D K I N G D O M BEALE & COLE: In Administration; 118 Jobs Affected DECO SERIES: Fitch Downgrades Rating on Class D Notes to 'CC' EUROSAIL-UK 2007-2NP: S&P Affirms CCC Rating on Class FTc Notes FORMPRO MAIL: Unsecured Creditors Won't Recover Claims MAD O'ROURKE'S: In Administration; Blames Recession WHITE TOWER: Fitch Upgrades Rating on Class E Notes to 'CCC' * UK: 1,491 Distressed Deals Completed in 1H2010, R3 Says * UK: Premier League Defends Football Creditor Rule X X X X X X X X * EUROPE: Soccer Clubs Face Bankruptcy Threat, Study Shows * Upcoming Meetings, Conferences and Seminars ********* =============== B U L G A R I A =============== KREMIKOVTZI AD: Asset Auction Scheduled for September 13 -------------------------------------------------------- Elizabeth Konstantinova at Bloomberg News reports that Kremikovtzi AD will auction its assets on Sept. 13. Bloomberg relates receiver Tsvetan Bankov told reporters in Sofia on Tuesday the starting price for the steel mill's Soviet-era plant is set at BGN565.52 million (US$375 million). Assets total BGN840 million, while debt was estimated at BGN1.9 billion, Bloomberg says, citing a report from the receiver. Bloomberg says sealed bids, along with 10% deposits, are invited. Bloomberg recalls the Sofia City Court declared Kremikovtzi bankrupt May 31. The Sofia-based plant was placed in receivership in 2008 after failing to pay suppliers and investors holding BGN325 million (US$422 million) of bonds, Bloomberg discloses. Creditors rejected a restructuring plan in October 2009, opting to be repaid under insolvency laws, Bloomberg recounts. According to Bloomberg, of the total liabilities, 42% are owed to state-run power and gas utilities, the state railways and tax authorities. On July 19, 2010, the Troubled Company Reporter-Europe, citing Sofia News Agency, reported that Traicho Traikov, Bulgaria's minister of economics, announced that he invited ArcelorMittal to participate in the liquidation auction for Kremikovtzi. Sofia News Agency recalled ArcelorMittal had expressed earlier interest in Kremikovtzi in 2008. Currently the majority shares of the plant are held by Global Steel Holdings Limited, owned by Pramod Mittal, brother of ArcelorMittal owner Lakshmi Mittal, Sofia News Agency disclosed. About Kremikovtzi Kremikovtzi AD Sofia -- http://www.kremikovtzi.com/-- is a Bulgaria-based company principally engaged in the steel industry. Its production capacity includes a complete steel production cycle, from ore mining to finished products, such as hot rolled and cold rolled products (coils, slabs, plates, blooms and billets), different thickness wire rods and tubes. The Company's product range also includes coke and chemical products, flat products, ferro-alloys and metallurgical lime, and other products. The Company operates through a number of subsidiaries, including Ferosplaven zavod EOOD, NLA 2000 EOOD, Kremikovtzi Rudodobiv AD, Metalresource OOD and others. The Company is 71%-owned by Finmetals Holding AD. ============= D E N M A R K ============= AMAGERBANKEN AS: Moody's Changes Mapping on 'E+' Bank Rating ------------------------------------------------------------ Moody's Investors Service said that it changes the mapping of Amagerbanken A/S's E+ standalone bank financial strength rating to a B2 baseline credit assessment, down from B1. The rating agency maintains the review for possible downgrade for Amagerbanken A/S's Baa3 long-term bank deposit ratings and P-3 short term deposit ratings. The change in the BCA was prompted by the continued uncertainty regarding the future of Amagerbanken combined with substantial unexpected losses being booked in the second quarter of 2010. The announcement does not affect the standalone bank financial strength rating of Amagerbanken (E+ negative) which currently carries a negative outlook. Given the expiration of the general Danish government guarantee as per the end of September 2010, Amagerbanken's deteriorated liquidity position makes the bank increasingly reliant on obtaining individual government guaranteed funding. On June 28, the bank entered into an agreement with the Financial Stability Company regarding the issue of a DKK13.5 billion individual government guarantee. The agreement is subject to two conditions to be fulfilled by September 15, 2010: 1) the bank's capital base and solvency must be strengthened by DKK750 million in the form of base capital (equity or subordinated loan capital), and 2) that the board of the bank will include two members as proposed by the Financial Stability Company. The bank is currently in the process of obtaining the additional capital and has set an extraordinary general meeting for August 17 at which shareholders will be asked to authorize issuance of up to DKK898.4 million of new equity, whilst at the same time writing down the nominal value of already issued capital. However, Moody's note that there remains some uncertainty over the outcome of this proposed capital raise. In addition, the bank reported a substantial net loss over the first half of 2010 equal to DKK263 million, reflecting loan impairment charges related to the banks' customers' capital finance in foreign exchange to an amount of DKK394 million. The lowered BCA reflects these concerns. With respect to the bank's long-term and short-term deposit ratings, Moody's initiated the review for possible downgrade on June 2, 2010, primarily prompted by the phasing-out of the general government guarantee for Danish banks' deposit and senior unsecured debt. Additionally, the review reflects the numerous further reforms proposed in new legislation to amend the Law on financial stability, the Financial Business Act, the Act on a guarantee fund for depositors and investors and the Law on the allocation of income to the state (approved by the Danish parliament on June 1, 2010). Moody's believes that the Danish government's systemic support to the banking sector will subside over time. Since the introduction of the Danish government guarantee mechanism in 2008, and following the downgrades of Amagerbanken's standalone BFSR, the banks' deposit and senior unsecured ratings have benefited from extraordinarily high uplift, reflecting the strong systemic support provided to depositors and senior creditors. Reflecting this, Amagerbanken received government support in 2009 in the form of hybrid Tier 1 capital. The ratings review will continue to focus on the ability and willingness of the Danish government to continue to support the banking sector. The rating agency will assess the potential impact of the new legislation, as well as any further guidelines provided by the Danish regulatory authorities. Moody's review will in particular focus on the extent to which the new legislation will make it possible for the government to impose burden-sharing of a bank's losses on stakeholders, including senior creditors in a going concern scenario. Moody's last rating action on Amagerbanken was implemented on June 2, 2010, when the bank's Baa3 long term deposit rating and P-3 short term deposit ratings were placed on review for possible downgrade. Amagerbanken, headquartered in Copenhagen, Denmark, reported total assets of DKK30.3 billion (EUR4.1 billion) at the end of June 2010. ============= G E R M A N Y ============= ARCANDOR AG: Highstreet Won't Meet Karstadt Sale Deadline --------------------------------------------------------- Holger Elfes at Bloomberg News reports that the Goldman Sachs- controlled Highstreet partnership, a landlord for insolvent Karstadt, won't meet a deadline to complete the German department store chain's sale to investor Nicolas Berggruen and may seek a new postponement. According to Bloomberg, a spokesman for Highstreet said Highstreet will only be able to get approval for the deal from all of its creditors 21 days or more. The creditors have to approve lower rental terms for Karstadt's stores, which was a condition for Mr. Berggruen's acquisition of chain, Bloomberg states. Bloomberg relates a local court in Essen, Germany, where Karstadt and its insolvent parent Arcandor AG are based, has set an Aug. 10 deadline for the completion of the sale. Deadlines have been postponed several times before, Bloomberg notes. 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 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. ARCANDOR AG: Borletti May Bid for Karstadt, Valovis Says -------------------------------------------------------- Holger Elfes at Bloomberg News reports that Valovis Bank AG, a creditor to the landlords of Karstadt, said it has "indications" that Italian entrepreneur Maurizio Borletti will make a competing bid against Nicolas Berggruen for Arcandor AG's German department- store chain. Bloomberg relates Carl Graf von Hohenthal, a Valovis spokesman, said in an e-mailed statement Tuesday the offer will be worth EUR100 million (US$130 million). As reported by the Troubled Company Reporter-Europe on July 28, 2010, Bloomberg News said Valovis hasn't reached agreement yet on loan conditions with Mr. Berggruen. "Valovis hasn't received any concessions yet from Berggruen," Bloomberg quoted Nadine Buetow, spokeswoman for the Essen, Germany-based lender, as saying. Bloomberg disclosed Valovis said previously that it wants an early repayment of a loan worth EUR850 million (US$1.1 billion) from Karstadt's main landlord, the Goldman Sachs-controlled Highstreet partnership, as lower rents would cause liability and legal risks under Mr. Berggruen's demands. 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 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. DEUTSCHE PFANDBRIEFBANK: S&P Withdraws Ratings on Amortizing Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services has withdrawn its credit ratings on Deutsche Pfandbriefbank AG's EUR286.25 million floating-rate amortizing credit-linked notes (ESTATE Pan-Europe 5), due to the redemption of these notes. The transaction closed in December 2007. It was a fully funded synthetic commercial mortgage-backed securities transaction, in which loss allocation to the noteholders was synthetically linked to the performance of a reference pool of initially 25 commercial mortgage loans. The loans were secured on properties in France, Germany, and The Netherlands. The issuer has informed us that the notes fully redeemed on July 26, 2010. Ratings List Deutsche Pfandbriefbank AG EUR286.25 Million Floating-Rate Amortizing Credit-Linked Notes (ESTATE Pan-Europe 5) Ratings Withdrawn Rating ------ Class To From ----- -- ---- A1+ NR BBB A2 NR BBB B NR BBB C NR BBB D NR BBB E NR BBB/Watch Neg F NR BB/Watch Neg NR -- Not rated. KABEL DEUTSCHLAND: S&P Raises Corporate Credit Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its long- term corporate credit rating on German cable operator Kabel Deutschland GmbH to 'BB-' from 'B+'. The outlook is stable. In addition, S&P raised the issue ratings on the $610 million and EUR250 million senior unsecured notes due July 2014 issued by KDG to 'BB-' from 'B+'. "The upgrade primarily reflects KDG's solid operating performance over the past 12 months and S&P's expectation that KDG's credit measures are likely to improve significantly over the next 12 months," said Standard & Poor's credit analyst Matthias Raab. The continued strong growth of high-speed Internet and telephony services (together with digital TV services called "triple play"), as well as resilient free cash flow generation from existing cable-TV subscribers are likely to result in continued EBITDA growth and solid free cash flow generation. KDG's ratio of gross debt to EBITDA, as adjusted by Standard & Poor's, was 5.9x (5.6x on a Standard & Poor's adjusted net-debt basis) as of March 31, 2010. S&P expects this leverage ratio to improve to about 5.5x (5.1x) by the end of KDG's current fiscal year, which ends on March 31, 2011 (fiscal 2011). In fiscal 2010, KDG reported solid year-on-year revenue and EBITDA growth (excluding special items and share-based compensation) of 10% and 15%, respectively, primarily owing to strong HSI and telephony subscriber growth. As of March 31, 2010, the number of subscribers taking HSI and telephony services increased by 36% year on year to 1.1 million, more than offsetting the moderate 7.3% decline in monthly average revenues per subscriber to EUR28. For fiscal 2011, KDG has targeted an EBITDA increase (excluding special items and share-based compensation) to EUR715 million- EUR725 million, from EUR659 million in fiscal 2010, which S&P believes is achievable. In S&P's opinion, the ratings on KDG are constrained by the company's still-high financial leverage and aggressive financial policy. Furthermore, cable-TV operators face meaningful competition from various technology platforms such as satellite TV, digital-terrestrial TV, and Internet-based TV. In addition, although the expected growth of triple-play subscribers provides potential for moderate EBITDA growth, S&P believes it may constrain KDG's free cash flow over the short term because of significant subscriber acquisition costs. "The stable outlook reflects S&P's expectation that KDG is likely to continue to generate meaningful free cash flow from its cable- TV business and post moderate EBITDA growth from the uptake of triple-play services," said Mr. Raab, "which could lead to an improvement in its still-high financial leverage." TELE COLUMBUS: Kabel Deutschland Ends Takeover Talks ---------------------------------------------------- Kabel Deutschland GmBH ended takeover talks with Tele Columbus GmBH, the German cable company seeking to restructure US$1.2 billion of debt, Kate Haywood and Patricia Kuo at Bloomberg News report, citing two people familiar with the situation. According to Bloomberg, one of the people, who declined to be identified because discussions are private, said KDG abandoned the acquisition of its smaller rival after deciding it wasn't worth the EUR600 million its owners sought to raise. Bloomberg relates the person said Tele Columbus has offered lenders equity in exchange for writing down debt to EUR623 million from EUR947 million. Bloomberg recalls Tele Columbus's creditors led by York Capital Management LLC, Bank of Ireland Plc and GoldenTree Asset Management LP agreed to freeze loan payments earlier this year. Nikolaus & Co., a restructuring specialist in Dusseldorf, Germany, took control of Hannover-based Tele Columbus in January and started talks with lenders to reduce its debt to make it more attractive to bidders, Bloomberg recounts. Tele Columbus -- http://www.telecolumbus.de/-- is a cable TV, Internet, and phone service provider. With more than 2 million subscribers, Tele Columbus is among Germany's top cable providers (behind Kabel Deutschland and Unitymedia). It offers analog and digital cable, high-speed Internet, and cable telephone service. Both Tele Columbus and PrimaCom are owned by holding company Orion Cable; Tele Columbus has a presence across northern and western Germany, while PrimaCom's customers are focused in the eastern part of the country. Orion Cable is owned by a holding company controlled by investment banking firm Nikolaus & Co. Tele Columbus was founded in 1985. =========== G R E E C E =========== SPRIDER STORES: Hasn't Filed for Creditor Protection ---------------------------------------------------- Natalie Weeks at Bloomberg News reports that Sprider Stores SA said it hasn't filed for protection from creditors. The company "confirms that there is absolutely no reason nor has there ever been for the company to apply for Rule 99," Bloomberg says, citing a July 22 Athens bourse filing. Bloomberg notes Sprider had said it is working on cost optimizing and streamlining as consumer demand falls in the Greek economy's first recession since 1993. Sprider Stores SA is a retailer of sportswear and casual clothing based in Greece. ============= H U N G A R Y ============= IKR: Mulls Bankruptcy Protection; Incurs HUF2.7BB Loss in 2009 -------------------------------------------------------------- MTI-Econews reports that IKR was expected to decide on whether to file for bankruptcy protection yesterday. The report relates IKR CEO Attila Szaxon on Tuesday said the company incurred a HUF2.7 billion loss on revenue of HUF94 billion in 2009. He said in 2008, the company booked a profit of HUF71 million on record revenue of HUF120 billion, the report notes. According to the report, Mr. Szaxon said IKR had targeted profit of HUF503 million on revenue of HUF77 billion for 2010, but an agreement with the company's creditors has been delayed, so it is likely to break even on revenue of HUF50 billion-HUF60 billion in a best-case scenario. IKR is one of Hungary's biggest agribusinesses. ============= I C E L A N D ============= ICESAVE: Resolution of UK-Netherlands Dispute Still Uncertain ------------------------------------------------------------- James G. Neuger at Bloomberg News reports that Icelandic Foreign Minister Ossur Skarphedinsson declined to predict how long it will take to resolve the Icesave dispute with Britain and the Netherlands. "I couldn't for my life tell you when the Icesave conflict will be at its end," Mr. Skarphedinsson told reporters in Brussels after Iceland started talks to join the European Union, according to Bloomberg. "It is a bleeding nuisance in our exchanges with the outer world." As reported by the Troubled Company Reporter-Europe on July 7, 2010, BBC News reports officials from Iceland, the Netherlands and the UK held two days of talks in Iceland's capital Reykjavik over the settlement of a GBP2.3 billion banking dispute. BBC disclosed the money was lost in Iceland's banking crash in 2008, when British and Dutch depositors were affected after the Icesave bank collapsed. Iceland said it would honor its commitments, but the nation's voters rejected an agreement at a referendum in March, according to BBC. About Icesave Icesave was an online savings account brand owned and operated by Landsbanki from 2006-2008 that offered savings accounts. It operated in two countries -- the United Kingdom (since October 2006) and the Netherlands (since May 2008). ============= I R E L A N D ============= ANGLO IRISH: Appointment of McEnery as Receiver Challenged ---------------------------------------------------------- The Irish Times reports that a High Court challenge has been brought to the decision of Anglo Irish Bank to appoint Brian McEnery, a member of the National Asset Management Agency's board of directors, as receiver to a number of properties in Co Clare. The report relates leave to have the appointment judicially reviewed was sought by businessmen John Flanagan, Ballyvara House, Doolin, Co Clare, and Gerard Lillis, Alva Cree, Kilrush, Co Clare, and two companies -- Atlantis Development Ltd and Liscannor Properties. According to the report, the two businessmen have alleged Mr. McEnery has a conflict of interest arising from his being both the receiver over their properties and being on the Nama board. The report recalls Mr. McEnery was appointed last April as receiver arising out of some EUR15 million unpaid loans obtained from Anglo which, the businessmen allege, are "bound for Nama". The appointment raises issues of public law, the challengers claimed, the report notes. Mr. Justice Michael Peart on Monday granted leave to bring the proceedings against Mr. McEnery and Anglo, with Nama as a notice party. The case was adjourned to October, the report discloses. The report says the plaintiffs were concerned, due to Mr. McEnery's presence on the board of Nama, that the loans may be acquired by Nama at a cheaper price. Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury and private banking. The Bank's non-retail business is made up of more than 11,000 commercial depositors spanning commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. The Company's retail deposits comprise demand, notice and fixed term deposit accounts from personal savers with maturities of up to two years. Non-retail deposits are sourced from commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. In addition, at September 30, 2008, its non-retail deposits included deposits from Irish Life Assurance plc. The Private Bank offers tailored products and solutions for high net worth clients and operates the Bank's lending business in Ireland and the United Kingdom. * * * As reported by the Troubled Company Reporter-Europe on July 23, 2010, the A3/P-1 bank deposit and senior debt ratings as well as the Ba1 dated subordinated debt rating and the Caa2 undated subordinated debt rating of Anglo Irish Bank have been maintained under review for possible downgrade as the key rating driver in Moody's view remains the bank's restructuring plan that is currently waiting EU approval. Moody's said the outlook on the bank's E BFSR, mapping to a Caa1 on the long-term scale, is stable. EBS BUILDING: August 9 Deadline Set for Takeover Bids ----------------------------------------------------- EBS Building Society set an August 9 deadline for a second round of takeover bids, Joe Brennan at Irish Examiner reports, citing two people with direct knowledge of the situation. The report relates four companies submitted initial offers as EBS seeks to raise about EUR785 million to meet capital standards set by the country's financial regulator. According to the report, one person, who declined to comment because the process hasn't yet been completed, said the company may choose a buyer by the end of August. JC Flowers & Co, the US leveraged buyout firm; Doughty Hanson & Co, a British rival; Irish Life & Permanent Plc; and Cardinal Asset Management are the four parties involved in the first round of bidding, the report discloses. The report notes that while the Irish government has already injected EUR350 million into the company, that may be repaid by the successful bidder. The report recalls the regulator said in March that EBS needed additional capital of EUR875 million. According to the report, Gerry O'Sullivan, a spokesman for the company, said the lender raised EUR90 million through a debt buyback deal. EBS Building Society is Ireland's largest building society. Servicing more than 400,000 members, it distributes its products through a branch and franchised agency network as well as handling direct business both over the telephone and via the Internet. EBS Building Society provides mortgage lending, savings, investments, and insurance products in Ireland. * * * EBS Building Society continues to carry a standalone Bank Financial Strength Rating of D from Moody's Investors Service. EBS's tier 1 debt is rated at Ca by Moody's. QUINN INSURANCE: Anglo to Present Takeover Plans Within Weeks ------------------------------------------------------------- Belfast Telegraph reports that Anglo Irish Bank is within weeks of presenting the Financial Regulator with firm plans for its takeover of Quinn Insurance. According to the report, the plan will reveal whether Anglo will make a play for Quinn on its own or with a partner and will also detail Anglo's exit strategy, as well as its proposed management line-up. Anglo, which is owed GBP2.4 billion by the wider Quinn Group, has been mulling over its options to recover the massive debt since the Cavan insurer went into administration in late March, the report notes. The state-owned bank has been exploring mounting a bid for Quinn Insurance on its own, or linking up with an established insurance player for a joint bid, the report says. Talks on both options are ongoing, and a decision on what approach to take is due to be taken imminently, allowing full and firm plans for the potential takeover to be drawn up, the report discloses. Those plans will be submitted to the Financial Regulator by "mid- to late-August", before being sent forward to the Department of Finance and the insurer's administrators the report states. As reported by the Troubled Company Reporter-Europe on April 19, 2010, The Financial Times said Quinn Insurance was put into administration on April 15 after Sean Quinn abandoned attempts to keep control of the family-owned company. Quinn Insurance is owned by Sean Quinn, Ireland's richest man, and his family. The company has just more than 20% of the motor and health insurance market in Ireland. It has more than one million customers in the country. Employing almost 2,800 people in Britain and Ireland, it was founded in 1996 and entered the UK market in 2004. =========== R U S S I A =========== TINKOFF CREDIT: Fitch Assigns 'B-' Issuer Default Rating -------------------------------------------------------- Fitch Ratings has assigned Tinkoff Credit Systems a Long-term local currency Issuer Default Rating of 'B-' and a National Long- term Rating of 'BB-(rus)', both with Stable Outlooks. Simultaneously, Fitch has assigned the bank's RUB1.4 billion senior unsecured three-year bonds a Long-term rating of 'B-', a National Long-term rating of 'BB-(rus)' and a Recovery Rating of 'RR4'. TCS Bank's other ratings are Long-term foreign currency IDR 'B- '/Stable Outlook, Short-term IDR 'B', Individual 'D/E', Support '5' and Support Rating Floor 'No Floor'. TCS Bank's obligations under the notes rank equally with the claims of other senior unsecured creditors, save the claims of retail depositors, which under Russian law rank above those of other senior unsecured creditors. Retail deposits accounted for 27% of TCS Bank's total liabilities at end-H110, according to local GAAP accounts. TCS Bank is the core operating entity of the first and only credit card monoline company in Russia, established in 2007 by Russian businessman Oleg Tinkov. A 29% stake was subsequently sold to Goldman Sachs and Scandinavian private equity fund Vostok-Nafta. ========= S P A I N ========= BARCELONA: Incurred EUR77.1MM Loss, New Deloitte Audit Shows ------------------------------------------------------------ Futbol Club Barcelona's money problems are worse than expected, Cable News Network reports, citing the club's financial vice- president Javier Faus. CNN relates Mr. Faus said in a statement on the Barca Web site on Tuesday that a new audit by accounting firm Deloitte revealed that the club actually made a loss of EUR77.1 million (US$100 million) for the 2009-10 season. The previous board had announced the club was EUR11 million (US$14 million) in profit up to the end of last month, when president Joan Laporta stepped down to be replaced by Sandro Rosell, CNN states. "The accounts submitted on June 30 do not reflect the true picture of the club," CNN quoted Mr. Faus as saying. According to CCN, Deloitte's audit showed that income had been overstated by US$47 million and expenses understated by US$61 million. With an US$89 million operating loss, Deloitte also found US$14 million in further financial expenses to be countered by US$3.9 million after-tax profits, CNN notes. Net debt has risen to US$573 million from US$427 million a year ago, while gross debt is now US$716 million, CNN discloses. CNN recalls Barcelona had to take a loan of US$200 million after struggling to pay player wages last month. Futbol Club Barcelona, also known simply as Barcelona and familiarly as Barca, is a football club based in Barcelona, Catalonia, Spain. =========================== U N I T E D K I N G D O M =========================== BEALE & COLE: In Administration; 118 Jobs Affected -------------------------------------------------- BBC News reports that Beale & Cole has gone into administration. The report relates administrative receiver BDO confirmed 118 people have been made redundant with immediate effect. The firm's service and maintenance arm has been sold to Integral UK Holdings as a "going concern" -- saving 22 jobs, the report says. According to the report, Mark Roach, BDO business restructuring director, said: "Unfortunately the economic climate and difficult trading conditions have significantly affected the industry." Beale & Cole is a Devon-based building firm. DECO SERIES: Fitch Downgrades Rating on Class D Notes to 'CC' ------------------------------------------------------------- Fitch Ratings has downgraded DECO Series 2005 - UK Conduit 1 plc's class C and D notes and affirmed the other tranches. The agency has also revised the Recovery Rating of the class D notes to 'RR4' from 'RR3'. The rating actions are: -- GBP29.5 million class A due July 2017 XS0222802364 affirmed at 'AAA'; Outlook Stable -- GBP14.5 million class B due July 2017 XS0222803099 affirmed at 'AA'; Outlook Stable -- GBP12.2 million class C due July 2017 XS0222803842 downgraded to 'BB' from 'BBB'; Outlook Negative -- GBP10.5 million class D due July 2017 XS0222806514 downgraded to 'CC' from 'CCC'; Recovery Rating revised to 'RR4' from 'RR3' -- GBP2.8 million class E due July 2017 XS0222830811 affirmed at 'C'; Recovery Rating is 'RR6' The downgrades of the class C and D notes and the low Recovery Rating of the class E notes reflect the increased risk of default on the loans due to mature this year, which account for approximately half the remaining pool balance. This is due to the continued lack of demand for secondary and tertiary quality assets in the UK. The class E rating also reflects the agency's loss expectations on the loans currently in workout. The affirmation of the class A and B notes is driven by the significant increase in their credit enhancement given cumulative pay-down of 71% of the loan pool since closing and the allocation of principal in a sequential manner. Two loans have already reached their scheduled maturity dates. The first, the Sandfile loan (6% of the pool), failed to repay in January 2010, was restructured and has remained in primary servicing. The key terms of the restructuring include an extension until April 2012, a GBP500,000 equity injection and the commencement of full cash sweep. The second, the Holaw loan (10% of the pool), has matured this month. The likelihood of full repayment is dependent on the outcome of attempts by the main tenant, the Atomic Weapons Establishment, to exercise a lease break option. Should this be successful, in which case Fitch estimates an LTV of 118%, there is a low chance of redemption. The CPI Retail Active Management loan is scheduled to mature in October 2010. As the loan contributes nearly half of the total pool balance, the outcome at maturity will significantly affect the performance of the CMBS. The security comprises high street retail assets in three small towns which in aggregate accommodates a total of 85 tenants such as Wilkinson, Waitrose, Lloyds Bank, Superdrug and Poundland. Collateral performance is roughly unchanged from a year ago, with the interest coverage ratio stable at around 1.5x. However, the high A-note and whole loan Fitch LTVs of 126% and 136%, respectively, suggest that repayment at loan maturity is unlikely. Three specially-serviced loans - Kashani Investment, Metropolitan Property & Finance and Mondeal - account for 4% of the pool balance. In addition to a further two (which have since prepaid), these loans were affected by the September 2006 voluntary administration of the sole tenant in each case, the Swallow Group. Five assets have already been sold (but failed to fetch their allocated loan amounts), with the remaining properties being marketed for sale. The high LTVs and accrued unpaid interest imply losses for class E bondholders. EUROSAIL-UK 2007-2NP: S&P Affirms CCC Rating on Class FTc Notes --------------------------------------------------------------- Standard & Poor's Ratings Services placed on CreditWatch negative its ratings on Eurosail-UK 2007-2NP PLC's class M1a, M1c, B1a, B1c, C1a, D1a, D1c, E1c, and ETc notes. At the same time, S&P has affirmed all notes in Eurosail-UK 2007-1NC PLC except classes E1c and ETc, which are unaffected. In Eurosail 2007-1NC, collateral performance is stable, in S&P's opinion, and S&P has affirmed the current ratings. Repossessions have fallen to 2.0%, from 4.7% in March 2009. 90+ day delinquencies (excluding repossessions) are high, in S&P's opinion, but have remained relatively constant for five quarters, at approximately 30%. In addition, the class A3c DAC notes expired in March 2010, reducing the cash flow stress in the transaction. This stress, along with high losses, caused the class E1c and ETc notes to miss interest payments in March and June. Without this stress, S&P believes the class D principal deficiency ledger will continue to reduce and the class E1c and ETc noteholders may receive some of their unpaid interest in September and December 2010. However, with 87.5% of the pool paying a rate of interest linked to three-month sterling LIBOR, if this rate continues to increase (currently 0.74%), S&P would expect some borrowers to experience problems meeting their monthly commitments. S&P believes this could cause a further wave of repossessions from the severe delinquency buckets. S&P downgraded Eurosail 2007-2NP in December 2008. Since then, 90+ day delinquencies (excluding repossessions) have increased to 15.1%, from 7.7% in September 2008, which has increased S&P's weighted-average foreclosure frequency. At the same time, falls in house prices since the peak in late 2007 have increased S&P's weighted-average loss severity, leading to the CreditWatch placements. Excess spread is currently 1.3% and collection rates are robust, so S&P will factor these metrics into S&P's analysis and any future rating action. However, any increases in three-month sterling LIBOR may also affect borrowers in this transaction, as 85.3% of the pool pays a rate of interest linked to this rate. S&P expects to resolve the CreditWatch placements with information from the September investor report and corresponding loan-level data to perform S&P's credit and cash flow analysis. S&P will pay particular attention to movements in arrears, changes in three- month sterling LIBOR, and collection rates. Eurosail 2007-1NC is a U.K. nonconforming residential mortgage- backed securities transaction that closed in February 2007. It securitizes mortgages originated by Southern Pacific Mortgage Ltd., Southern Pacific Personal Loans Ltd., Preferred Mortgages Ltd., London Mortgage Company Ltd., and London Personal Loans Ltd. Eurosail 2007-2NP is a U.K. nonconforming RMBS transaction that closed in March 2007. It securitizes mortgages originated by Southern Pacific Mortgage, Preferred Mortgages, London Mortgage Company, and GMAC-RFC Ltd. Ratings List Eurosail-UK 2007-2NP PLC EUR480.7 Million, GBP267.575 Million Mortgage-Backed Floating- Rate Notes And An Overissuance Excess Spread Backed Floating-Rate Notes Ratings Placed On CreditWatch Negative Rating ------ Class To From ----- -- ---- M1a AAA/Watch Neg AAA M1c AAA/Watch Neg AAA B1a AA/Watch Neg AA B1c AA/Watch Neg AA C1a A/Watch Neg A D1a BB+/Watch Neg BB+ D1c BB+/Watch Neg BB+ E1c BB-/Watch Neg BB- ETc BB-/Watch Neg BB- Eurosail-UK 2007-1NC PLC EUR552.15 Million, GBP357.3 Million Mortgage-Backed Floating-Rate Notes, Excess-Spread-Backed Floating-Rate Notes Ratings Affirmed Class Rating ----- ------ A2a AAA A2c AAA A3a AA A3c AA B1a BBB B1c BBB C1a BB D1a B D1c B DTc B FTc CCC Ratings Unaffected Class Rating ----- ------ E1c D ETc D FORMPRO MAIL: Unsecured Creditors Won't Recover Claims ------------------------------------------------------ Adam Hooker at PrintWeek reports that all of the creditors of Formpro Mail Marketing have been left out of pocket by the company's administration with only the secured creditors seeing any return on their debt. Citing the administrator's progress report for the period December 21, 2009 to June 20, 2010, PrintWeek says there will be no funds to distribute among either unsecured or preferential creditors, which include claims relating to wage arrears and holiday pay totaling GBP78,000. According to PrintWeek, the secured creditors including Barclays Sales Finance, the company's bank and invoice discounting provider, will suffer a "significant shortfall" in their indebtedness, which totaled in excess of GBP2 million. PrintWeek recalls Formpro went into administration with KPMG in December 2009, with the key assets sold in a pre-pack deal to shareholder Michael Hughes. As reported by Troubled Company Reporter-Europe, Richard Hill and Joff Pope of KPMG LLP were appointed as administrators of the company on December 21, 2009. Formpro Mail Marketing Limited is a Bristol-based printing and mail marketing company. MAD O'ROURKE'S: In Administration; Blames Recession --------------------------------------------------- Express & Star reports that the original Mad O'Rourke's Pie Factory in Tipton has gone into administration. The report relates administrators PKF have been appointed to run the Mad O'Rourke's Pie Factory in Hurst Lane, Tipton, while a separate firm, Leonard Curtis, has taken over the affairs of Mad O'Rourke's Ltd., which was responsible for the whole chain. According to the report, the decision was made on Friday and administrators on Tuesday confirmed the pub would continue to trade while efforts were made to sell it. "The pub is continuing to trade with us as administrators, with the aim of selling it as a going concern," the report quoted PKF spokeswoman Jane Murray as saying. "The pub closed due to difficulties recovering from the recession and the current economic conditions." The Mad O'Rourke's Pie Factory employs 15 people, according to Express & Star. WHITE TOWER: Fitch Upgrades Rating on Class E Notes to 'CCC' ------------------------------------------------------------ Fitch Ratings has upgraded three tranches of White Tower 2006-3 plc's CMBS note classes, due 2012: -- GBP69.9m class B (XS0275771649) upgraded to 'AAA' from 'BB'; off Rating Watch Positive (RWP); Outlook Stable -- GBP116m class C (XS0275772704) upgraded to 'A' from 'CCC'; off RWP; Outlook Stable -- GBP116m class D (XS0275773181) upgraded to 'CCC' from 'C'; assigned Recovery Rating 'RR2' -- GBP68m class E (XS0275774072) affirmed at 'C'; assigned Recovery Rating 'RR6' The upgrades reflect the successful sale of eight of the underlying nine properties, resulting in a full pay-down of the class A notes and partial redemption of the class B. Total net sale proceeds distributed at the July 2010 interest payment date were GBP740.6 million and a further GBP60m, relating to the sale of the Leadenhall property that did not complete in time for the July IPD, will be allocated at the October IPD. The latter pay- down may be subject to reserve amounts held back by the special servicer to cover potential liabilities arising from the uncertainty surrounding the borrowers' group. Given the sequential pay-down, the senior outstanding note classes have benefited from the sale prices being in excess of the current values and have seen a decrease in their advance rates (defined as debt outstanding over asset value). However, because the aggregate sale price is GBP82m lower than the total securitized allocated loan amounts for the properties, this will increase the advance rates of the junior tranches, creating a significant differential in the credit quality of the senior and junior notes. This also increases the likelihood of a loss being allocated to the junior note classes, unless the remaining property, Aviva Tower, is sold at a price significantly in excess of its June 2009 value. While interest rates remain low the transaction and, in particular, the most senior tranche will continue to benefit from the excess rental income that is being generated from Aviva Tower, which is applied sequentially to amortize the notes. The remaining property is fully let to Aviva Plc (rated 'A'/Negative) until 2024. * UK: 1,491 Distressed Deals Completed in 1H2010, R3 Says --------------------------------------------------------- Caroline Clayfield at Business Sale Report reports that during the first half of 2010 almost one in ten (9.4%) of UK mergers and acquisitions involved distressed businesses. Of the 1,491 deals completed in the UK, 141 involved companies acquired out of administration or other formal insolvency procedure, the report says, citing research by Experian Corpfin on behalf of insolvency trade body R3. According to the report, the total value of all distressed deals in the first six months of the year amounted to close to GBP519 million (GBP518.505 million). * UK: Premier League Defends Football Creditor Rule --------------------------------------------------- Rachael Singh at Accountancy Age reports that the Premier League defended its preferential payments rule in an insolvency at a Business Finance and Accountancy (BFA) parliament group meeting. The report relates Bill Bush, director of communications and public policy at the Premier League, defended the football creditor rule at the briefing Tuesday, claiming smaller clubs would suffer if it was taken away. The football creditor rule enables football creditors, such as players and other clubs, to receive payment in full ahead of preferential and unsecured creditors in the event of a club entering insolvency, the report discloses. According to the report, one attendee at Tuesday's briefing labeled the rule "disgraceful", while another claimed no other business would be able to "get away" with such a rule. The BFA group concluded if football wants to "justify" its preferential rules it must give back to society, the report notes. =============== X X X X X X X X =============== * EUROPE: Soccer Clubs Face Bankruptcy Threat, Study Shows ---------------------------------------------------------- Soccer clubs in Europe may be facing bankruptcy unless changes including stricter financial controls are put in place, Richard Weiss at Bloomberg News reports, citing an A.T. Kearney study that looked at teams in England, Spain, Germany, France and Italy. The study ranks the five largest European leagues according to sports results, economic, social, and environmental performance, Bloomberg discloses. "Running as normal companies, the leagues in Spain, England, and Italy would be bankrupt within two years," Kearney's Munich-based vice president Juergen Rothenbuecher and colleagues wrote in a report called Football Sustainability Study, according to Bloomberg. Bloomberg notes the consultants wrote some clubs, even bigger ones, may disappear through bankruptcy in the next few years. The management consultant company, as cited by Bloomberg, said financial statistics in some leagues are "shocking" because of players' "enormous salaries," the key reason for the situation. The clubs in the five leagues also spend more on players than they take in from selling others, Bloomberg states. Bloomberg relates the authors wrote the current economic system "encourages overinvestment and extreme risk-taking" in order to win games, "far beyond economic sense." According to Bloomberg, the consultants wrote Leagues need to adopt common financial control measures at national and European levels, while some leagues must upgrade stadiums, create academies for young talent and get more media-rights revenue to avoid failure of a league that could result in a systemic crisis. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ October 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ ********* 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. 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. * * * End of Transmission * * *