TCREUR_Public/100819.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, August 19, 2010, Vol. 11, No. 163



FRANCE TELECOM: EU Commission Appeals State Aid Ruling


REGENCY ENTERTAINMENT: In Restructuring Talks with Lenders


ALLIED IRISH: M&T Restarts Merger Talks with Santander


AEGON NV: Gets European Union Approval for State Aid


KOKS OAO: S&P Assigns 'B' Long-Term Corporate Credit Rating
SEVERSTAL OAO: Sale of U.S. Assets May Face Delay, Uralsib Says


AYT COLATERALES: Fitch Affirms 'Bsf' Rating on Class D Notes


MED11 AG: Zug Initiates Bankruptcy Proceedings
SES SOLAR: Reports Net Income of US$218,000 in Q2 Ended June 30

U N I T E D   K I N G D O M

BREEDON HOLDINGS: Marwyn Materials Has Deal to Buy Share Capital
CONFETTI: In Administration; Aug. 23 Deadline Set for Bids
CSDM: Owed GBP1.4 Million to Creditors at Time of Administration
EMI GROUP: To Fall Short of Banking Covenants, Maltby Says
FLIGHT OPTIONS: In Administration; Ceases Trading

OPTIMAL WEALTH: In Administration; Assets Up for Sale
PHOENIX PRINT: Faces Liquidation; 20 Jobs Affected
REALTIME WORLDS: In Administration; Going Concern Buyer Sought
ROYAL BANK: Sells EUR1.4 Billion Corporate Loan Portfolio
VEDANTA RESOURCES: Moody's Reviews 'Ba1' Corporate Family Rating

VEDANTA RESOURCES: Fitch Downgrades Issuer Default Rating to BB+
VEDANTA RESOURCES: S&P Puts 'BB' Rating on CreditWatch Negative

* UK: Corporate Insolvency Rate Down 30% in July, Experian Says


* Firms Fear Loan Covenant Breaches Under New Accounting Rules
* EUROPE: Nikolaus to Raise US$50MM to Invest in Distressed Debt
* Fitch: European Insurers Pass Sovereign-Debt Default Test

* Upcoming Meetings, Conferences and Seminars



FRANCE TELECOM: EU Commission Appeals State Aid Ruling
Peppi Kiviniemi at Dow Jones Newswires reports that The European
Commission Tuesday said it has taken an appeal from a European
General Court decision that a EUR9-billion credit line offered to
France Telecom SA in 2002 by the French government can't be
considered illegal state aid.

The ruling annulled an earlier commission decision that it did
amount to illegal state aid, Dow Jones notes.

Dow Jones relates that in the wake of huge losses for France
Telecom, the government promised at the end of 2002 to give the
company a EUR9 billion loan.

According to Dow Jones, the commission argued that although the
offer was never accepted by France Telecom, the proposal alone had
affected the thinking of ratings agencies, and other financial
market players on France Telecoms' financial viability.  However,
the court said that given there was never a real transfer of state
resources, it couldn't be considered state aid, Dow Jones

David Whitehouse at Bloomberg News reports that La Tribune said
the appeal procedure could last for months or years.  Bouygues SA
is also appealing the court ruling, Bloomberg notes.

France Telecom SA -- is a France-
based telecommunication operator. It offers services covering
fixed and mobile communications, data transmission, the Internet
and multimedia, and other added-value services for individuals,
businesses and other telecommunications and operators.  It
operates in three segments: the Personal Communication Services
(PCS), the Home Communication Services (HCS) and the Enterprise
Communication Service (ECS).  The PCS segment consists of the
mobile telecommunication services in Central and Eastern Europe,
Africa, the Middle East, the Carribean and Asia; the HCS segment
includes the fixed-line telecommunication activities (fixed-line
telephony, Internet services, operator services), as well as the
distribution and support functions provided to the other segments
of the France Telecom group, and the ECS segment provides
communication solutions to large and small businesses worldwide.
The Company operates a number of subsidiaries, notably under the
brand name Orange.


REGENCY ENTERTAINMENT: In Restructuring Talks with Lenders
Regency Entertainment SA is starting talks with lenders on
reorganizing its EUR600 million (US$714 million) of loans,
Bloomberg News reported, citing three people familiar with the
private talks.  According to Bloomberg, lenders have tapped
financial advisory firm Lazard Ltd. as consultant.  Regency has
tapped Houlihan Lokey Howard & Zukin for advice.

Athens, Greece-based Regency is a casino operator.  BC Partners
acquired Regency in 2006 using a EUR680 million (US$876 million)
leveraged-buyout loan arranged by Deutsche Bank AG, according to
data compiled by Bloomberg.


ALLIED IRISH: M&T Restarts Merger Talks with Santander
The Financial Times reports that M&T, the US bank in which AIB is
selling a 22.5% stake, restarted discussions about combining with
Banco Santander.

The FT relates that talks about combining Santander's US unit,
known as Sovereign, with M&T had collapsed in May, within weeks of
a planned announcement.  Discussions faltered over which bank
would control the enlarged business, the FT discloses.

However, the two banks had again started exploring a deal over the
summer and had sounded out regulators, including the Federal
Reserve, on their views of a possible transaction, the FT says,
citing people familiar with the matter.  The FT notes the people
added banks and their advisers had yet to resolve the question of
who would control the combined business.  It remains uncertain
whether the pair will reach an agreement, the FT states.

Geoff Percival at Irish Examiner reports that Santander has made
no secret of its plans to expand its presence in the US and
Europe.  This led to speculation that it might become a single
buyer of the AIB's overseas assets, being put on the market for it
to meet its EUR7.4 billion recapitalization targets, Irish
Examiner notes.

Allied Irish Banks, p.l.c., together with its subsidiaries -- conducts retail and commercial banking
business in Ireland.  It also provides corporate lending and
capital markets activities from its head office at Bankcentre and
from Dublin's International Financial Services Centre.  The Group
also has overseas branches in the United States, Germany, France
and Australia, among other locations.  The business of AIB Group
is conducted through four operating divisions: AIB Bank Republic
of Ireland division, Capital Markets division, AIB Bank UK
division, and Central & Eastern Europe division.  In February
2008, the Group acquired the AmCredit mortgage business in the
Baltic states of Latvia, Lithuania and Estonia.  In September
2008, the Group also acquired a 49.99% shareholding in BACB.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on July 23,
2010, Moody's Investors Service affirmed AIB's long-term bank
deposit and debt ratings.  These are A1 for long-term bank
deposits and senior debt, A2 for dated subordinated debt, Ba3 for
undated subordinated debt, B1 for cumulative tier 1 securities and
Caa1 for non-cumulative tier 1 securities.  Moody's said the
outlook on these ratings is stable.  AIB's bank financial strength
rating of D, which maps to Ba2 on the long term rating scale, with
a positive outlook was unaffected by the rating action.


AEGON NV: Gets European Union Approval for State Aid
Michael Steen at The Financial Times reports that Aegon agreed to
a series of commercial controls, including a pledge not to offer
the three most competitive interest rates, in return for final
approval from Brussels of the EUR3-billion bailout it received
from the Dutch government during the financial crisis.

The group has already repaid EUR1 billion and will repay a further
EUR500 million to the state this month, the FT notes.  It will pay
back the balance of EUR1.5 billion by June 2011, the FT says.
Under the deal, the premium it is paying on top of the remaining
EUR2 billion of aid has fallen to 40%, from 50% previously, the FT
discloses.  The group said in February it would take no further
steps to repay the state aid until it received a final ruling on
the legality of the aid from the European Commission, the FT

In return for European Union approval of the state aid, which was
also announced on Tuesday, Aegon has agreed not to pursue any
acquisitions other than limited investments in existing
partnerships in Spain, the FT states.  According to the FT, it
also said it would not pursue a "top-three price leadership"
position for Dutch residential mortgages and internet savings.
The group must also drop a financial strength rating used by its
life insurance business to eliminate a perceived competitive
advantage in its home market, the FT relates.

                           About AEGON

As an international life insurance, pension and investment company
based in The Hague, AEGON has businesses in more than 20 markets
in the Americas, Europe and Asia.  AEGON companies employ roughly
29,000 people and have more than 40 million customers across the

                           *     *     *

As reported by the Troubled Company Reporter-Europe on July 28,
2010, Fitch maintained the Rating Watch Negative on AEGON's
perpetual capital securities to reflect the risk of coupon
deferral under the concept of "burden sharing" for state-aided
financial institutions such as AEGON.

Eleven AEGON N.V. perpetual capital securities have been rated
'BB': US$500m 6.5%, callable 12/2010 (NL0000062420); US$250m
floating rate, callable 12/2010 (NL0000062438); NLG450m 7.125%,
callable 03/2011 (NL0000120889); EUR200m 6%, callable 07/2011
(NL0000168466); US$550m 6.875%, callable 09/2011 (NL0000686368);
US$1,050m 7.25%, callable 12/2012 (NL0006056814); EUR950m floating
rate, callable 07/2014 (NL0000116150); US$500m floating rate,
callable 07/2014 (NL0000116168); NLG250m 4.156%, callable 06/2015
(NL0000120004); US$1,000m 6.375%, callable 06/2015 (NL0000021541);
and NLG300m 5.185%, callable 10/2018 (NL0000121416).


KOKS OAO: S&P Assigns 'B' Long-Term Corporate Credit Rating
Standard & Poor's Ratings Services said that it had assigned its
'B' long-term corporate credit rating to OAO Koks, a Russian
vertically integrated producer of coking coal, coke, iron ore, and
pig iron.  The outlook is stable.

"The rating on Koks is constrained by exposure to cyclical
commodity markets, by large capital-expenditure needs to modernize
its pig iron facility and ensure 100% self-sufficiency in coking
coal and iron ore (up from 60% now), and by an evolving governance
system in this essentially family-controlled business," said
Standard & Poor's credit analyst Elena Anankina.  "These
constraints are partly offset by the benefits of vertical
integration and a track record of stable performance through the
2008-2009 crisis."

"The stable outlook reflects S&P's expectation that Koks will
benefit from higher raw material prices and its credit metrics
will rebound in 2010, compared with the depressed 2009 level,"
said Ms. Anankina.

S&P expects Koks to keep a relatively favorable cost position and
refrain from any substantial dividends and acquisitions before the
capital-expenditure program is complete.

Ratings upside is currently limited.  In the medium to long term,
it could result from further improvement in the company's key
markets.  A higher rating would also require positive FOCF and at
least adequate liquidity, with the ratio of liquid sources to
liquidity needs of more than 1.2x.

Ratings downside could result from depressed conditions in the
company's key markets, which would lead to deteriorating credit
metrics, or from substantially weakened liquidity.

SEVERSTAL OAO: Sale of U.S. Assets May Face Delay, Uralsib Says
Ilya Khrennikov at Bloomberg News reports that Uralsib Financial
Corp. said OAO Severstal is unlikely to complete "any time soon" a
sale of U.S. assets that have lost as much as three-quarters of
their value.

Severstal offered three of its five U.S. units for sale, Bloomberg
says, citing an Aug. 10 American Metal Market report.  According
to Bloomberg, AMM said on Aug. 12 that the steelmaker is close to
a deal to sell them to an alliance of Los Angeles-based hedge fund
Aurora Capital Group and New York-based Renco Group.

"We do not expect the transaction to be complete any time soon,"
Dmitry Smolin, an analyst at UralSib in Moscow, wrote in a note on
Tuesday, according to Bloomberg.  Bloomberg relates Mr. Smolin
wrote due diligence will probably take at least 1 to 2 months and
Severstal may retain its U.S. assets unless the company gets an
acceptable price.

Mr. Smolin, as cited by Bloomberg, said the assets are now worth
about US$500 million to US$1 billion.

Headquartered in Cherepovets, Russia, Severstal OAO, through its
subsidiaries -- operates in seven
segments.  The mining segment comprises iron ore and coal mining
complexes and gold mining assets.  The Russian Steel segment
comprises the Company's steel production and automotive
galvanizing facilities.  The Lucchini segment comprises plants and
service centers, including Piombino and Ascometal business units.
The North America segment consists of two integrated iron and
steel mills.  Izhora Pipe Mill operates a large-diameter pipe mill
in Northwest Russia.  The Metalware segment comprises plants
containing wire drawing equipment that takes long products from
the Russian Steel and Lucchini segments and external suppliers and
turns them into products with a higher value for the Russian and
International markets.  The Financing segment, until November
2007, operated a retail bank.  In December 2008, the Company
acquired ZAO Trade House Severstal-Invest.  In January 2008, it
acquired baracom Limited.

                           *     *     *

Severstal continues to carry a 'B+' long-term foreign and local
currency issuer default ratings from Fitch Ratings with negative
outlooks.  The ratings were affirmed by Fitch in January 2010.  As
reported by the Troubled Company Reporter-Europe on Jan. 22, 2010,
Fitch said the Negative Outlook reflected Severstal's high
dependence on the speed of recovery in demand and prices for steel
products in various markets, high expected leverage in FY09 above
'B+'-rated peers, uncertainties on finalizing restructuring plans
for North American and European operations, and the risks in
executing these restructuring plans.


AYT COLATERALES: Fitch Affirms 'Bsf' Rating on Class D Notes
Fitch Ratings has affirmed AyT Colaterales Global Empresas, FTA,
Serie Caja Granada I's notes and revised the rating Outlooks on
the junior notes:

  -- EUR106.9m class A notes: affirmed at 'AAAsf'; Outlook Stable;
     assigned Loss Severity Rating of 'LS-1'

  -- EUR18.4m class B notes: affirmed at 'Asf'; Outlook Stable;
     assigned 'LS-3'

  -- EUR10.5m class C notes: affirmed at 'BBB-sf'; Outlook revised
     to Negative from Stable; assigned 'LS-4'

  -- EUR10.5m class D notes: affirmed at 'Bsf'; Outlook revised to
     Negative from Stable; assigned 'LS-4'

Fitch has revised the Outlooks on the class C and D notes due to a
significant deterioration in the transaction's performance, and
both note classes face the increased risk of a downgrade over the
next year.  While both note classes have benefited from increasing
credit enhancement due to the sequential de-leveraging of the
transaction, Fitch expects continued volatility in portfolio
arrears to cause significant reserve fund draws over the next 12

Since the transaction closing date in February 2009, delinquencies
over 90 days have increased to 6.3% of the current portfolio
balance, according to the most recent semi-annual investor report
(March 2010).  Delinquent loans over 180 days represent 4.7% of
the portfolio.  As a result of this performance strain, the
transaction has made a draw on its reserve fund which has lowered
the fund to approximately EUR17.49 million relative to a required
balance of EUR17.85 million.

The rapid performance decline is coupled with a highly
concentrated portfolio both in terms of regions and obligors.  The
Andalucia region, combined with the rest of the south of Spain,
totals almost 90% of the collateral, and the top ten obligors
represent 16% of the current portfolio balance.

In Fitch's opinion, the performance strain is likely to continue,
causing further draws on the reserve fund due to default
provisioning and a reduction in the CE levels of the junior note
classes.  While the current credit enhancement levels of 19%
(class C) and 12% (class D), still support the original ratings,
Fitch views the tranches at increased risk of a downgrade if the
portfolio performance continues to decline over the next year.
The Outlooks for the class A and B notes remain Stable as both
classes benefit from robust levels of credit support (39% and 26%

Fitch has assigned the issuer an Issuer Report Grade of One Star,
which equates to a "Poor" scoring.  Fitch considers the level of
information provided by the investor reports to be poor.  The
agency would expect investor reports to at least be published on a
quarterly basis regardless of the payment frequency of the
transaction (semi-annual).  In addition, the reports provide basic
details which are substantial enough to analyze the transaction,
but Fitch did not assign a higher score due to the semi-annual
reporting nature, combined with the consideration that the reports
do not include relevant information regarding the counterparties.

The transaction is a cash flow securitization of a static EUR175
million pool of secured and unsecured loans (the collateral)
granted by Caja General de Ahorros de Granada (the originator,
rated 'BBB+'/Outlook Stable/'F2') to small- and medium-sized
enterprises in Spain.  The issuer is legally represented and
managed by Ahorro y Titulizacion S.G.F.T., S.A. (the sociedad
gestora), a limited liability company incorporated under Spanish
law, the activities of which are limited to the management of
securitization funds.

AyT Colaterales Empresas is a securitization fund incorporated in
December 2007 to issue a number of independent series of notes
collateralized by SME loans by up to 37 different Spanish
financial institutions.  The maximum overall value of notes issued
by AyT Colaterales Empresas is limited to EUR3 billion.


MED11 AG: Zug Initiates Bankruptcy Proceedings
The Zug Bankruptcy Office has initiated bankruptcy proceedings
against Med11 AG.  The bankruptcy petition was filed by the
auditing agency of Med11 AG, Treureva AG, Zurich, after they
determined a total insolvency situation as part of the annual
financial statement audit.

After the Board of Directors of Med11 was informed about the
existing total insolvency by Treureva, the Board of Directors
tried to rectify the financial insolvency through various
measures.  For example, subordination was agreed with the main
creditors of the company.  However, despite these attempts by the
Board of Directors, it was not possible to supply the company with
the fresh capital required to reverse the insolvency.  Discussions
with the main shareholder of Med11 were also unsuccessful.
Despite countless attempts, the Board of Directors did not manage
to bring new business activities into Med11 to enable the
continuation of the company.

For this reason, the Board of Directors has accepted the opening
of bankruptcy proceedings against Med11 and is now handling the
liquidation of the company.

Creditors of Med11 can either make their claims in writing to
Med11 AG or directly to the Zug Bankruptcy Office, PO Box, 6310

MED-11 AG is medical service company with a wide range of patented
medical products in different market segments.  These include
Cancer Screening Tests, Cancer Preventive Dietary Supplements;
Personal Care Products; and prepackaged Modular Medical Clinics.

SES SOLAR: Reports Net Income of US$218,000 in Q2 Ended June 30
SES Solar Inc. filed its quarterly report on Form 10-Q, reporting
net income of US$217,989 on US$1.4 million of revenue for the
three months ended June 30, 2010, compared with a net loss of
US$16,387 on US$238,854 of revenue for the same period of 2009.
The change to net income is largely attributable to a larger
margin on sold projects together with a reduction in operating
expenses of US$70,281.

The Company's balance sheet as of June 30, 2010, showed
US$19.9 million in total assets, US$18.1 million in total
liabilities, and a stockholders' equity of US$1.8 million.

As reported in the Troubled Company Reporter on April 21, 2010,
BDO Ltd., in Zurich, Switzerland, expressed substantial doubt
about the Company's ability to continue as a going concern,
following its 2009 results.  The independent auditors noted that
the Company has suffered recurring losses from operations.

The Company acknowledges in its latest 10-Q that it anticipates
incurring losses in the near future.  The Company incurred a net
loss of US$239,681, generated a positive cash flow from operations
of US$2.3 million, and had a working capital deficiency of
US$16.1 million as of June 30, 2010.

A full-text copy of the Form 10-Q is available for free at:


Based in Geneva, Switzerland, SES Solar Inc. is a Delaware
corporation engaged in the business of designing, engineering,
producing and installing solar panels or modules and solar tiles
for generating electricity.  The Company conducts its operations
through two wholly owned subsidiaries, SES Prod. S.A. and SES
Societe d'Energie Solaire S.A.  The Company's shares are quoted
on the OTC Bulletin Board under the symbol "SESI.OB".

U N I T E D   K I N G D O M

BREEDON HOLDINGS: Marwyn Materials Has Deal to Buy Share Capital
Marwyn Materials Limited on Tuesday entered into a conditional
sale and purchase agreement to acquire the entire issued share
capital of Breedon Holdings Limited.  Breedon Holdings Limited is
a fully integrated aggregates producer with 29 quarries, 19
asphalt plants and 27 concrete plants in England and Scotland.
The directors of Marwyn Materials believe it will provide Marwyn
Materials with a robust platform for accelerated growth through
consolidation of the UK heavyside building materials sector.

In connection with the acquisition, Marwyn Materials has
conditionally raised GBP50 million (before expenses) through the
issue of additional equity, in relation to which an investment of
approximately GBP12 million will be made by the company, taking
its interest in the ordinary share capital of Marwyn Materials to
approximately 27%.

The investment policy of the company, as approved by shareholders
in connection with its restructuring last year, is to manage its
portfolio of investments with a view to maximizing returns to
shareholders by realizing investments and making distributions as
realizations are made.  In addition, follow-on investments may be
made in existing portfolio companies where the board of directors
believes this will maximize the long term returns to shareholders,
in part through the delivery of earnings enhancing acquisitions.

The board of directors of the company has also been informed that,
effective immediately, Marwyn Investment Management LLP, the
investment manager, will seek to acquire ordinary shares in the
Company in the open market for the benefit of the master fund,
Marwyn Value Investors L.P., as and when it considers them to
represent good value.

Breedon Holdings Ltd. was known as Ennstone Plc, a U.K.-based
gravel company, before going into administration last year.

As reported by the Troubled Company Reporter-Europe on March 12,
2009, Times Online said Ennstone Plc went into administration
after attempts to secure new funding failed.  Times Online
disclosed Ennstone sold its UK and Polish businesses to Breedon
Holdings Ltd., securing more than 1,000 jobs.

On March 9, 2009, Nick Dargan and Matthew Cowlishaw of Deloitte
LLP were appointed as joint administrators of Ennstone.  On
March 10, 2009, the group made an application to the UKLA and
London Stock Exchange to cancel its listing on the London Stock
Exchange with immediate effect.

As reported in the Troubled Company Reporter on Feb. 27, 2009,
Ennstone Inc., a U.S. subsidiary of the United Kingdom-based
Ennstone Plc, filed a Chapter 11 petition before the U.S.
Bankruptcy Court for the Eastern District of Virginia, listing
assets of less than US$50 million on debts exceeding US$50

CONFETTI: In Administration; Aug. 23 Deadline Set for Bids
The UK's leading retail and online wedding and celebrations
supplies business, Confetti, has been placed in administration.

The Manchester-based business was founded in 1999 and expanded
across the UK with five high street stores, a mail order division
and the launch of the market-leading Web site Confetti provides an extensive range
of essential supplies for weddings and celebrations, ranging from
invitations and wedding dresses through to venue hire, gifts and

The Web site receives nearly 8 million hits a month and won the
"Best Wedding Website" category in the BT Online Excellence
Awards.  With a turnover of around GBP5.7 million, the company
employed 94 staff.

The administrators, RSM Tenon, announced an urgent search for a
buyer and that an early closing date for offers has been set for
5:00 p.m. on Monday, August 23.  RSM Tenon has moved quickly to
close the five stores in order to focus on the established online

Joint administrator Kenny Craig, Director with RSM Tenon in
Glasgow, said: "Confetti is a very high profile market leading
online brand and enjoys a large customer base.  The business has
great potential for further development and the administration
presents an outstanding opportunity for a retail business or
entrepreneur to acquire an immediate presence in the wedding and
celebrations market.  We would urge interested parties to make
contact in the next day or two to ensure they have a chance to bid
for the business."

A total of 36 jobs are being retained to support the online
business and provide key administrative services.

Interested parties should contact the Recovery Team within the
Edinburgh office of RSM Tenon on 0131 221 8820.

Confetti was a subsidiary of CWIO, which was owned by Metro
Holdings Ltd.  The company operated stores in Glasgow, Leeds,
Birmingham, Reading, London.

CSDM: Owed GBP1.4 Million to Creditors at Time of Administration
Adam Hooker at PrintWeek reports that CSDM went into
administration owing almost GBP1.4 million to creditors.

PrintWeek relates CSDM went into administration with Nickolas
Rimes and Adam Jordan, of insolvency practitioner Rimes & Co, on
June 15, before assets were sold to CSDM Fundraising Directors.
At the time, director Chris Stoddard, as well as Rimes & Co.'s
Kate Stokes, claimed creditors would be paid in full, t PrintWeek

According to PrintWeek, based on the creditors' report, circulated
in advance of a meeting this Friday, August 20, there is no
floating charge holder, so any funds the administrator accrues
should go straight to the unsecured creditors.

It has emerged in the report that the reasons behind CSDM's
administration, which the company put down to a "series of recent
events", were the earthquake in Haiti, which diverted attentions
towards one charity, affecting its donation level, and the postal
strike, PrintWeek discloses.  It also lost a legal case against a
supplier in 2009, which led to costs of GBP60,000 being paid and
HM Revenue and Customs levied an assessment of GBP85,079 in
respect of a long-standing tax dispute, PrintWeek states.

CSDM's assets were GBP80,000 worth of contracts, which CSDM
Fundraising Directors is paying for over a six-month period,
PrintWeek notes.

CSDM is a Herefordshire-based charity donation management company.

EMI GROUP: To Fall Short of Banking Covenants, Maltby Says
Andrew Edgecliffe-Johnson at The Financial Times reports that an
assessment by Maltby Capital, EMI's private equity owner, shows
that EMI will fall short of its banking covenants until 2015 and
will need a far larger injection of fresh equity next year than
the GBP87.5 million (US$136 million) it received in 2010.

Maltby Capital, the holding company through which Guy Hands' Terra
Firma group made its GBP4.2 billion leveraged buy-out of EMI in
2007, outlines strong operational improvements in the business in
its annual report.  However, the gains remain insufficient to
satisfy tightening banking covenants, raising the pressure for a
renegotiation with Citigroup, its sole lender, to avoid breaching
the terms of the GBP3.04 billion debt due between 2014 and 2017,
the FT notes.

According to the FT, the report reiterates the view auditors from
KPMG voiced a year ago that there was "material uncertainty that
may cast significant doubt upon the ability of the group to
continue as a going concern".

The FT notes the report also discloses that EMI's pension scheme
may face a deficit of between GBP115 million and GBP217 million.

The FT says Maltby expects "continued shortfalls" against its
covenants, which monitor the multiple of debt to earnings,
requiring further "equity cures".

The FT notes that although it has a provisional commitment from
Terra Firma funds to provide the GBP26.9 million it expects to
need for the periods ending June 30, September 30 and December 31
this year, it expects "a further significant shortfall" when the
covenant is tested at the end of March 2011.  Then, the report
says, it could require "substantially in excess" of the GBP87.5
million in equity cures injected in 2010, the FT discloses.
Further smaller sums may also be required for the remaining three
covenant tests in 2011, the FT states.

EMI Group Ltd. -- is the fourth
largest record company in terms of market share (behind Universal
Music Group, Sony Music Entertainment, and Warner Music Group).
It houses recorded music segment EMI Music and EMI Music
Publishing.  EMI Music distributes CDs, videos, and other formats
primarily through imprints and divisions such as Capitol Records
and Virgin, and sports a roster of artists such as The Beastie
Boys, Norah Jones, and Lenny Kravitz.  EMI Music Publishing, the
world's largest music publisher, handles the rights to more than a
million songs.  EMI Music operates through regional divisions (EMI
Music North America, International, and UK & Ireland).  Private
equity firm Terra Firma owns EMI.

FLIGHT OPTIONS: In Administration; Ceases Trading
Daily Express reports that Flight Options has gone into
administration. The report relates the company ceased trading at
5:00 p.m. on Tuesday, August 17.

According to the report, the Civil Aviation Authority said 13,000
clients currently abroad are unlikely to be stranded, but a
further 60,000 people due to travel with the firm face disruption.

Flight Options is a budget travel firm based in London.  It is the
parent company of Kiss Flights and Holiday Options.

OPTIMAL WEALTH: In Administration; Assets Up for Sale
Nicholas Paler at reports that Optimal Wealth
Management has been placed in administration just six months after
being acquired by Conforto Financial Management.  The report
relates the firm is now in the hands of accountants UHY Hacker
Young LLP, after being placed into administration last Friday,
August 13.

According to the report, Hacker Young partner Peter Kubik said the
business was loss-making and had therefore been put into
administration.  "Its overheads were bigger than its income and it
was loss-making," the report quoted Mr. Kubik as saying.

The report notes Mr. Kubik added that the business was now being
assessed by the administrators.  "The client base and all other
assets are up for sale.  It's too early to say whether we will get
a sale completed but we are confident we will be able to sell it,"
Mr. Kubik said, according to the report.

Optimal Wealth Management specializes in providing advice to
professional sportspeople.

PHOENIX PRINT: Faces Liquidation; 20 Jobs Affected
Adam Hooker at PrintWeek reports that Phoenix Print Finishing has
ceased trading and will go into liquidation next month.  PrintWeek
relates the company's 20 staff were made redundant last Friday,
August 6.  According to the report, a meeting of creditors will
take place on September 6, 2010, at which insolvency practitioner
Elwell, Watchorn and Saxton is expected to be appointed as

PrintWeek notes managing director Graham Masters said that Phoenix
had suffered from a shortfall in sales in 2010, leading to its
closure.  After a positive start to the year, work dropped off
"significantly" in March and failed to return, PrintWeek

Masters will be helping the liquidator over the next few weeks in
advance of an expected auction of the company's machinery,
PrintWeek states.

Phoenix Print Finishing is a Nottingham-based finishing house.

REALTIME WORLDS: In Administration; Going Concern Buyer Sought
Tim Bradshaw at The Financial Times reports that Realtime Worlds
has gone into administration after disappointing sales of its
latest title.  The FT relates Begbies Traynor has been appointed
as administrator.

"Our intention is to continue trading the company while we attempt
to find a going concern buyer which will safeguard the future of
the business," the FT quoted Paul Dounis of Begbies Traynor as

In June, Realtime Worlds released APB: All Points Bulletin, a
multiplayer online action game for the PC, to lukewarm reviews,
the FT discloses.  According to the FT, Begbies Traynor said
"lackluster demand" for the game, which was several years in the
making, contributed to its demise.

Dundee-based Realtime Worlds is a software technology company
specializing in the entertainment sector.  The company which also
had offices in Colorado, was founded in 2002 by Dave Jones, who
had previously created Lemmings and Grand Theft Auto.  It employed
200 staff in Scotland and 42 in Boulder, Colorado, according to
the FT.

ROYAL BANK: Sells EUR1.4 Billion Corporate Loan Portfolio
Anousha Sakoui and Sharlene Goff at The Financial Times report
that Royal Bank of Scotland has for the first time sold a
portfolio of corporate loans, worth more than a EUR1 billion.

The FT relates the bank on Tuesday said it had sold a EUR1.4
billion portfolio of European loans -- 10% of its leveraged loan
portfolio -- to the FTSE 250 investment firm Intermediate Capital
Group, freeing the bank of any liabilities linked to the loans.

According to the FT, the bank said the move was in line with its
strategy to reduce its funded balance sheet and exposure to its
existing leveraged loan book.  The portfolio was repackaged into a
collateralized loan obligation or CLO -- a form of securitization
that helped banks generate hundreds of billions of leveraged loans
at the height of the market before the financial crises that
helped fuel a buy-out boom, the FT discloses.

The price for the ICG CLO was not disclosed but it is expected to
have reflected the discount to face value at which many of these
loans trade in the secondary market, the FT notes.

                            About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) -- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed of its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 29,
2010, Standard & Poor's Ratings Services said that it lowered its
ratings on "may pay" Tier 1 securities issued or guaranteed by The
Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'.
At the same time, the rating on the RBSG-related security issued
by Argon Capital PLC was similarly lowered to 'C' from 'CC'.  The
counterparty credit ratings and stand-alone credit profiles of
RBSG and subsidiaries, and the ratings on other debt securities
issued by these entities, were unaffected.

VEDANTA RESOURCES: Moody's Reviews 'Ba1' Corporate Family Rating
Moody's Investors Service has placed the Ba1 corporate family and
Ba2 long-term senior unsecured ratings of Vedanta Resources plc on
review for possible downgrade.

This rating review follows the company's announcement of an offer
to acquire a majority 51%- 60% interest in Cairn India Ltd at an
estimated cost of over US$8.5 billion.

Vedanta's operations are currently focused on extractive
industries in India; this deal, if consummated, will represent the
company's first foray into oil and gas exploration and production.

"The rating review reflects Moody's concern that this bold
acquisition, in what will be a new business for the group and
likely be majority debt-funded, will weaken Vedanta's overall
credit profile," said Alan Greene, a Moody's VP/Senior Credit
Officer and lead analyst for the company.

"Although Vedanta's current rating has accommodated bolt-on
acquisitions and capex programs that offer reasonably swift
payback within a framework of base metal price volatility, the
tolerance set for the rating will struggle to absorb this debt-
financed acquisition and the assumed debt of Cairn India," added
Mr. Greene.

Moody's notes that the acquisition is being split between Vedanta
and its 57.5%-owned subsidiary, Sesa Goa.  Moody's remains
concerned about the complexity of the Group structure and the
inherent structural subordination risk for bondholders at the
holding company level.

Although Vedanta held consolidated cash and equivalents of some
US$7.2 billion on its balance sheet as of March 31, 2010, Moody's
understood that this was primarily held in order to pre-fund its
substantial capital expenditure initiatives as well as modest
purchases such as the zinc assets recently acquired from Anglo
American plc for US$1.4 billion.  Vedanta will therefore fund this
investment largely with debt.  Sesa Goa will take a 20% holding in
Cairn India (worth some US$3.0 billion), funded largely by its
cash holdings.

Moody's review will address 1) Vedanta's final funding strategy
for the acquisition and consequent impact on its financial
leverage and debt coverage metrics, and 2) the execution risk
related to the announced projects, the timing and availability of
oil revenues, and the suitability of the company's altered
financial profile for future oil and gas investment.

The review will also take into account Vedanta's expansive growth
strategy and the impact of any potentially reduced funding
availability to the existing arms of the business, as well as
other strategic initiatives that could emerge over the medium

The transaction requires approvals from the shareholders of all
parties concerned in addition to customary approvals from
government and financial bodies in India.  It will also require
that a number of other conditions related to Cairn India's
operations be met.

Moody's last press release with regard to Vedanta was published on
May 11, 2010, when Moody's stated that Vedanta's acquisition of
the zinc-producing assets from Anglo American plc for US$ 1,338
million had no immediate impact on Vedanta's ratings or outlook.

Headquartered in London, UK, Vedanta Resources plc is a metals and
mining company focusing on integrated zinc, aluminum, copper, iron
ore mining and commercial power generation.  Its operations are
predominantly located in India.  It is listed on the London Stock
Exchange and is 59.67% owned by Volcan Investments Ltd.

VEDANTA RESOURCES: Fitch Downgrades Issuer Default Rating to BB+
Fitch Ratings has downgraded Vedanta Resources Plc's Long-term
Issuer Default Rating to 'BB+' from 'BBB-', and simultaneously
placed it on Rating Watch Negative.  These rating actions follow
the company's plan to acquire a majority stake (between 51%-60%)
in Cairn India Ltd for a total consideration of between US$8.5
billion and US$9.6 billion.  The agency has also downgraded
Vedanta's US$500 million bond (due January 2014) and its US$750
million bond (due July 2018) to 'BB' from 'BB+', and
simultaneously placed the bonds on RWN.  The bond ratings continue
to be notched down from the IDR to reflect the company's
fragmented holding structure and the presence of material minority
interest at key subsidiaries.

The downgrades reflect the substantial size of the CIL
acquisition, in relation to Vedanta's existing cash flows and debt
levels, as well as the added risk of the latter's lack of track
record in the oil and gas sector.  With the acquisition likely to
be financed primarily through fresh debt and existing cash
balances with Vedanta and its subsidiary, Sesa Goa Ltd, over the
near term, Fitch notes that Vedanta's leverage levels (net
adjusted debt/op. EBITDAR) are likely to be higher than
anticipated at the time of the last review in July 2010 (2x) on a
sustained basis.  The transaction awaits regulatory and other
approvals, although Fitch has assumed that the transaction would
be completed during FY11.  However, if the deal does not conclude
and the transaction is reversed, there could be a positive impact
on the ratings, assuming that Vedanta's earlier business plan and
strategy remain unchanged.

Although CIL will be EBITDA accretive from FY11, which partly
offsets the acquisition risks, the extent of earnings and cash
flow it generates would depend on the pace of ramp-up of
production, which should be visible from H2FY11.

The RWN reflects the uncertainty with regards to CIL's earnings
and cash flows, and any delay in ramp-up, and achieving the
targeted output from the newly operational Rajasthan fields could
put pressure on Vedanta's consolidated leverage metrics.  The RWN
would be resolved following a detailed analysis of CIL's
operations and cash flows.

Post-acquisition, FY11 will be a critical year for the
consolidated entity, with CIL in the ramp-up phase, and Vedanta in
the process of completing a substantial part of its capex
programs.  Management expects that the combined entity will turn
free cash flow positive from FY12, once the target output levels
are achieved for the new capacities in both companies.  However,
any execution delays, or difficulties in achieving target
production and/or cost levels would put pressure on cash flows
during the near term.  At a consolidated level, Vedanta's gross
debt levels would increase substantially after completion of the
acquisition, and de-leveraging would be only through an EBITDA
increase, rather than through debt pay downs.

In FY10, Vedanta's revenues grew 20.5% to US$7,931m, while EBITDA
grew 42% to US$2,296 million with an EBITDA margin of 29%,
primarily due to higher volumes and an improvement in base metal
prices.  Its net debt levels rose marginally during the year,
although offset by the higher earnings.  Vedanta reported a net
debt/EBITDA of 0.5x in FY10 (FY09: 0.3x).

CIL is an exploration and production company, with a portfolio of
oil and gas assets primarily in India.  The company has three
major producing assets where it is the operator, and eight blocks
currently under exploration.  CIL expects the majority of its
earnings growth over FY11 and FY12 to come from its Rajasthan
asset, which is in the process of ramping up.  Part of the growth
is demonstrated in CIL's Q1FY11, where its gross production
increased to 94,950 barrels of oil equivalent produced per day in
Q1FY11 from 59,461 bpoed in Q1FY10.  In FY10, CIL achieved gross
production of 69,059 bpoed, with revenues of around US$350
million, and an EBITDA of around US$163 million, and a net debt of
around US$540 million.

VEDANTA RESOURCES: S&P Puts 'BB' Rating on CreditWatch Negative
Standard & Poor's Ratings Services said that it had placed its
'BB' long-term corporate credit rating on London-based metals and
mining company Vedanta Resources PLC and the rating on all of the
company's issues on CreditWatch with negative implications.

The CreditWatch action follows Vedanta's announcement that it will
acquire a controlling stake in India-based oil and gas company
Cairn India Ltd. (not rated).  The CreditWatch placement reflects
S&P's view that the proposed acquisition could significantly
increase Vedanta's debt and weaken its financial risk profile to
levels below its expectation for the current rating.  Vedanta and
its Indian subsidiary Sesa Goa Ltd. will acquire about 40% and 20%
interest in Cairn, respectively, from the company's U.K.-based
parent Cairn Energy PLC (not rated).

S&P expects Vedanta to finance its direct share (US$5.2 billion-
US$6.7 billion) of the proposed acquisition largely through debt.
Vedanta depends on dividends from its subsidiaries to service its
debt.  The Cairn acquisition will provide Vedanta with a foot-hold
in the Indian oil and gas sector.  Nevertheless, the company may
not immediately benefit from business diversification as Cairn is
currently increasing its production capacity.  Vedanta already has
a significant portfolio of metals and mining operations and power

"Vedanta has successfully integrated all of its acquisitions to
date.  Cairn, however, is its largest acquisition and marks
Vedanta's entry into a new business--oil and gas," said Standard &
Poor's credit analyst Craig Parker.  "As a consequence, Vedanta
would heavily rely on Cairn's existing management team to ramp up
oil and gas production and make a meaningful contribution to
Vedanta's earnings."

Vedanta intends to complete the proposed transaction by the first
quarter of 2011.  The proposed transaction is subject to approval
from the regulators and government agencies.

Vedanta's consolidated liquidity position is adequate, in S&P's
opinion.  The company mitigates its exposure to volatile metal
prices by maintaining sizable cash and liquid investments, which
totaled about US$7.2 billion as at March 31, 2010.  It also uses
undrawn, non-recourse project-finance commitments as a source of
ready liquidity, if needed.  S&P believes that Vedanta's financial
flexibility could be strained by its plans to avail a bridge loan
to fund the proposed acquisition.

S&P aims to resolve the CreditWatch action following its
discussion with Vedanta on the final funding structure for the
acquisition and its effect on the company's financial risk
profile.  In addition, S&P will assess the potential effects on
Vedanta's business risk profile from petroleum-based earnings and
the cost structure at Cairn.  S&P will also review Cairn's
forecast performance and the final capital structure at Vedanta.

* UK: Corporate Insolvency Rate Down 30% in July, Experian Says
Rahul Odedra at IFAonline, citing Experian, reports that the rate
of insolvencies among UK businesses fell by 30% last month year-

According to the report, a total of 1,542 British firms failed in
July, an insolvency rate of 0.08% of the business population.
This compared to 2,312 in July 2009 with a 0.12% rate, the report

Other findings suggest every region of the UK saw year-on-year
falls in insolvency rates with Scotland recording the lowest rate
at 0.05% and Yorkshire experiencing the highest, of 0.13%, the
report states.

The only segment of businesses that saw a rise in insolvencies was
those with more than 500 workers, while those employing between
101 and 500 people showed the most improvement, the report says.


* Firms Fear Loan Covenant Breaches Under New Accounting Rules
Adam Jones and Rachel Sanderson at The Financial Times report that
retailers, airlines and ship operators can expect to assume
billions of dollars more liabilities on their balance sheets as
the result of a radical overhaul of lease accounting proposed by
the International Accounting Standards Board and the US Financial
Accounting Standards Board.

According to the FT, some companies fear they may breach bank loan
covenants as a result.

Under the rules, the liabilities of many companies would increase
as they are forced to move rented assets such as aircraft, ships,
shops and even photocopiers on to their balance sheets, the FT
discloses.  On average, the changes will increase a company's
reported debt load by 58%, the FT says, citing PwC and Erasmus

Senior accountants say few companies and investors are prepared
for the volatility the new rules will bring to corporate
reporting, the FT notes

The proposed changes, which would apply to companies using IFRS
and US GAAP, will be the subject of further consultation before
the release of a final standard in 2011, the FT states.

* EUROPE: Nikolaus to Raise US$50MM to Invest in Distressed Debt
Nikolaus & Co. LLP, a restructuring specialist established in
Germany in 2001, is raising as much as US$50 million to invest in
distressed debt as it bets a slowing recovery will lead to
"unprecedented" defaults.

Nikolaus's Alloro Global Special Situations Fund will be based in
London and marks the firm's first expansion into hedge-fund
management, Bloomberg discloses.

According to Bloomberg, Chief Investment Officer Stefan Benedetti
said the fund will focus on Europe, the former Soviet Union and
Latin America and will target debt sold by telecoms, manufacturing
and financial companies.

"The recent financial environment has created the perfect hunting
ground," Bloomberg quoted Mr. Benedetti as saying.  There will be
"a default and restructuring cycle on an unprecedented scale."

Nikolaus plans to eventually increase the size of the distressed
debt fund to US$300 million, Bloomberg notes.

* Fitch: European Insurers Pass Sovereign-Debt Default Test
Fitch Ratings said it has collected a large amount of data on its
insurance portfolio and considered the impact of its euro-zone
sovereign stress test on insurers' financial strength of a
hypothetical Greek bond default scenario, including the knock-on
effects this could have on other euro-zone sovereigns.

Based on Fitch's analysis, rated insurers would prove resilient to
a severe euro-zone sovereign stress scenario, and therefore no
rating actions have been taken as a result of this stress test

Fitch will hold a teleconference to discuss the implications for
its insurance portfolio of its stress test on Thursday, August 19
at 15:00 UK time / 16:00 Continental European time / 10:00 a.m.
Eastern US time.

* Upcoming Meetings, Conferences and Seminars

Oct. 6-8, 2010
    TMA Annual Convention
       JW Marriott Grande Lakes, Orlando, Florida

Dec. 2-4, 2010
    22nd Annual Winter Leadership Conference
       Camelback Inn, Scottsdale, Arizona
          Contact: 1-703-739-0800;

Mar. 31-Apr. 3, 2011
    Annual Spring Meeting
       Gaylord National Resort & Convention Center, Maryland
          Contact: 1-703-739-0800;

June 9-12, 2011
    Central States Bankruptcy Workshop
       Grand Traverse Resort and Spa
          Traverse City, Michigan

October 25-27, 2011
    Hilton San Diego Bayfront, San Diego, CA

Dec. 1-3, 2011
    23rd Annual Winter Leadership Conference
       La Quinta Resort & Spa, La Quinta, California
          Contact: 1-703-739-0800;


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
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Information contained herein is obtained from sources believed to
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                 * * * End of Transmission * * *