/raid1/www/Hosts/bankrupt/TCREUR_Public/110401.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, April 1, 2011, Vol. 12, No. 65
Headlines
A U S T R I A
ERSTE GROUP: Moody's Corrects Ratings on Two Junior Securities
HYPO ALPE: Austrian Court Clears Ex-Chief of Breach of Trust
B E L A R U S
* Moody's Downgrades Bond Rating on Belarus Government to 'B2'
F R A N C E
RHODIA SA: Fitch Upgrades Long-Term Issuer Default Rating to 'BB'
TECHNICOLOR SA: S&P Raises Long-Term Corp. Credit Rating to 'B-'
G E R M A N Y
HEIDELBERGER DRUCKMASCHINEN: Moody's Puts 'B2' Corp. Family Rating
HEIDELBERGER DRUCKMASCHINEN: S&P Assigns 'B+' Corp. Credit Rating
G R E E C E
* S&P Downgrades Greece's Long-Term Sovereign Rating to 'BB-'
I R E L A N D
ANGLO IRISH: Incurs EUR17.7 Billion Loss in 2010
BANK OF IRELAND: Makes Last Attempt to Avert Nationalization
EBS BUILDING: Main Offer Insufficient, Department of Finance Says
EIRLES FOUR: Moody's Lowers Rating on Series 86 Notes to 'C (sf)'
G SQUARE: S&P Cuts Ratings on Three Classes of Notes to 'D'
I T A L Y
ARES FINANCE: S&P Cuts Ratings on Two Classes of Notes to 'D'
PARMALAT SPA: Italian Court Refuses to Fast-Track Tanzi's Trial
PARMALAT SPA: Settles Disputes With PPL Partecipacoes
PARMALAT SPA: Creditors Convert Warrants for 2,539,389 Shares
L U X E M B O U R G
BOZEL SA: Seeks to Employ Rolim Godoi as Brazilian Counsel
BOZEL SA: Wants Until Aug. 1 to File U.S. Debt Repayment Plan
BOZEL SA: Amends Schedules of Assets and Liabilities
BOZEL SA: Creditors Have Until May 6 to File Claims in U.S.
S P A I N
FTA SANTANDER: Moody's Assigns '(P)Caa1' Rating to Series B Notes
FTA SANTANDER: Fitch Cuts Ratings on Two Classes of Notes to 'C'
U N I T E D K I N G D O M
COVENTRY CITY: SISU Injects Funding; Averts Administration
DUNDEE FOOTBALL: Tayside Police Writes Off GBP30,000 Bill
HURST TRANSPORT: Administrator Reveals More Insolvency Details
JARVIS PLC: York MP Urges Network Rail to Employ Sacked Workers
LEED PETROLEUM: Faces Liquidation after Talks with Creditors Fail
MISSOURI TOPCO: Moody's Downgrades Corp. Family Rating to 'Ba3'
NORWICH & PETERBOROUGH: Moody's Cuts Bank Strength Rating to 'D-'
NOVAE GROUP: Fitch Downgrades Rating on Subordinated Debt to 'BB'
RADAMANTIS PLC: Fitch Downgrades Rating on Class G Notes to 'Bsf'
STEPHENSON BELL: GBP500,000 Bad Debt Prompts Restructuring
THOMAS COOK: S&P Assigns 'BB-' Long-Term Corporate Credit Rating
THOMAS COOK: Fitch Assigns 'BB-' Long-Term Issuer Default Rating
TOM WOOD: Consortium Buys Brewery, Restarts Production
VEDANTA RESOURCES: Fitch Affirms 'BB+' LT Issuer Default Rating
WASHINGTON DISPLAY: Bought Out of Administration; 62 Jobs Saved
WOODHEAD BAKERY: Goes Into Administration
X X X X X X X X
* S&P Takes Various Rating Actions on 15 European CDO Tranches
* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy
*********
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A U S T R I A
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ERSTE GROUP: Moody's Corrects Ratings on Two Junior Securities
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Moody's Investors Service has corrected the ratings of two junior
subordinated securities issued by Erste Group Bank AG by
downgrading them to Ba3 (hyb) from Ba2 (hyb). Both ratings carry
a negative outlook.
Moody's previously notched the ratings on these securities three
notches below Erste's Adjusted baseline credit assessment based on
the rating agency's understanding that the securities contained
cumulative deferral features (the Adjusted BCA for Erste is
currently Baa2). However, because these instruments were not
issued under Erste's EUR30 billion Debt Issuance Programme, they
are non-cumulative and contain a net loss trigger. As a result,
these instruments should be rated four notches below Erste's
Adjusted BCA, which is Ba3 (hyb).
Rating History and Moody's Methodologies
Moody's most recent rating action on Erste Group Bank was on
Feb. 25, 2010, when the rating agency downgraded the bank's hybrid
securities ratings.
Headquartered in Vienna, Austria, Erste Group Bank reported total
assets of EUR206 billion as at year end 2010 and a pre-tax profit
for 2010 of EUR1.5 billion.
HYPO ALPE: Austrian Court Clears Ex-Chief of Breach of Trust
------------------------------------------------------------
Michael Shields at Reuters reports that an Austrian court cleared
the former chief executive of Hypo Alpe Adria of breach of trust
on Tuesday, ruling prosecutors had not made their case.
Wolfgang Kulterer and two former colleagues had faced 10 years in
jail for their role in the bank's awarding millions in ill-fated
loans that had to be written off completely, Reuters relates.
According to Reuters, prosecutors had argued the bank politicians
rubber-stamped loans at the request of local politicians. Mr.
Kulturer had denied any wrongdoing.
A three-member panel led by Judge Norbert Jenny held for the
defendants, Reuters says, citing the Austria Press Agency.
At issue is money the bank lost by lending EUR2 million (US$2.8
million) to now-defunct Styrian Spirit airlines and EUR150,000 to
a private detective, Reuters states. Neither of the borrowers
repaid the loans, Reuters notes.
Hypo, then controlled by German bank BayernLB, was nationalized in
December 2009 to avoid a collapse that supervisors feared could
have sent ripples throughout central and eastern Europe, Reuters
recounts.
Hypo Alpe-Adria International AG is a subsidiary of BayernLB. It
is active in banking and leasing with a balance sheet of EUR43
billion. In banking, HGAA serves both corporate and retail
customers and offers services ranging from traditional lending
through savings and deposits to complex investment products and
asset management services.
* * *
As reported by the Troubled Company Reporter-Europe on Aug. 5,
2010, Moody's Investors Service downgraded to Baa3 from Baa2 the
long-term debt and deposit ratings of Hypo Alpe-Adria-Bank
International AG and its ratings for subordinated liabilities to
Ba1 from Baa3. Concurrently, the bank's short-term rating was
downgraded to P-3. Hypo Alpe Adria's E Bank financial strength
rating, mapping to a stand-alone Baseline Credit Assessment of
Caa2, was affirmed with a stable outlook. The multi-notch uplift
for the bank's deposit and debt ratings reflects Moody's
assessment of a very high probability of ongoing systemic support.
The outlook on the debt and deposit ratings is negative.
Moody's decision to downgrade Hypo Alpe Adria's long-term debt
ratings by only one notch follows the recent completion of another
EUR450 million capital injection by the Republic of Austria and
EUR150 million by the State of Carinthia, as announced in December
2009. Moody's said the E BFSR reflects Moody's view that, the
recent capital injections notwithstanding, Hypo Alpe Adria is
likely to continue to face substantial challenges in its efforts
to rebuild some of its previous financial strength.
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B E L A R U S
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* Moody's Downgrades Bond Rating on Belarus Government to 'B2'
--------------------------------------------------------------
Moody's Investors Service has downgraded the government of
Belarus' foreign and local currency bond ratings to B2 and has
assigned a negative outlook to the ratings.
The rating action was prompted by two key concerns:
1) Belarus' significant near term external financing gaps, and
2) The medium term difficulties of reorienting the current
external debt funded, domestic demand-led growth model.
In addition, Belarus' foreign currency bond ceiling has been
lowered to B1 and the foreign currency bank deposit ceiling to B3.
Belarus' local currency bond and deposit ceilings were lowered to
Ba1.
Ratings Rationale
Moody's immediate concern is the external financing requirements
of Belarus' large current account deficit, which was about 16% of
GDP in 2010. Current levels of official foreign exchange reserves
of approximately US$1.3 billion fall short of Moody's estimate of
a 2011 external financing requirement of between US$8 and US$10
billion. Recent indications are that authorities are likely to
obtain some funding from Russia. Additional funds may also flow
in from planned privatizations. Still, since a large part of the
external financing will be in the form of debt, Belarus' debt
levels will continue to worsen and the funding may not be enough
to prevent external financing gaps from emerging again over the
medium term. Therefore, even taking into account the likelihood
of obtaining near term funding, the risk of recurrent and
significant external financing problems in Belarus has risen
higher than that consistent with a B1 government bond rating.
In addition to external financing constraints, Moody's downgrade
reflects Moody's concern that Belarus will not be able to smoothly
transition from its current external debt funded growth model to
one that relies on productivity and competitiveness improvements
for output growth. Belarus' per capita income (US$13,040 on a PPP
basis) is high relative to peers in the B rating range, as is its
average annual growth rate (7% over the last decade). These
factors have been a positive for the country's rating. However,
the country's high levels of income growth owe much to external
financial assistance and subsidized oil imports from Russia.
External borrowings have funded wage increases, high credit growth
as well as subsidies for households and corporations. These have,
in turn, eroded competitiveness, and shifted the growth impetus
away from exports and towards domestic demand. Over the past few
years, this has led to a deterioration in the current account
deficit, external debt and government debt ratios.
Belarus' government deficit and debt ratios have generally been in
line with or better than those in the B rating range. However,
the fiscal condition is less benign than it seems: state-owned
banks and enterprises absorb some of the costs of government
policy. Fiscal consolidation, therefore, would involve not just
an improvement in the government deficit but would also require
consolidation of the government's social programs that are
conducted through banks and other institutions.
The negative outlook on the B2 rating incorporates Moody's concern
that even if external financing gaps are bridged, necessary
adjustments to improve international competitiveness and economic
resilience will be hard to implement. Reversing an entrenched
social welfare and subsidy system is a difficult political project
against the backdrop of an implicit social contract that imposes
political restraints in exchange for economic benefits. If
structural adjustment policies are to be initiated, potential
political repercussions will represent an additional risk.
What could change the Rating Up/Down
The negative outlook on the rating could be moved back to stable
upon the implementation of policies that significantly improve
Belarus' external competitiveness, narrow the current account
deficit, and reduce reliance on external funding and subsidized
energy for growth. On the other hand, further downward pressure
on the rating could come from continued difficulties in obtaining
funding to bridge external financing gaps coupled with lack of any
action to correct the erosion of international competitiveness and
narrow the current account deficit.
The last rating action on Belarus was on Aug. 22, 2007 when the
country's bonds were rated B1.
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F R A N C E
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RHODIA SA: Fitch Upgrades Long-Term Issuer Default Rating to 'BB'
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Fitch Ratings has upgraded France-based Rhodia S.A.'s Long-term
Issuer Default Rating and senior unsecured ratings to 'BB' from
'BB-'. The Outlook on the IDR is Positive.
The rating action reflects the fundamental improvements in
Rhodia's business profile, favorable structural changes in some of
its key markets, and a strengthening in financial metrics beyond
the level anticipated by Fitch.
"The Positive Outlook reflects Fitch's view that Rhodia's credit
profile is likely to improve further on the back of its current
operational and financial strategy, and that performance in line
with the agency's forecasts could warrant an upgrade to 'BB+' in
the next 12 to 18 months," said Myriam Affri, Director in Fitch's
Industrials team.
Rhodia posted strong 2010 results with consolidated revenues up
25% year-on-year and EBITDAR margin at a record 15.5%. Free cash
flow was EUR270 million compared with EUR276 million a year
earlier when strong working capital relief and cash preservation
measures had offset poor operating results.
Rhodia's performance is not unique in the chemicals sector where a
rebound in demand, strong export markets and the low raw material
cost environment of H110 supported a strong recovery in results
throughout 2010. However, Fitch believes that part of the group's
achievement is underpinned by fundamental and structural changes
in markets/segments where cyclicality and volatility was
previously a cause for concern. In particular, permanent capacity
shutdowns and supply discipline in the polyamide market (40% of
sales/35% of EBITDA in 2010) are supporting tight demand-balance
conditions, and producers' pricing power.
The upgrade also reflects the group's increased exposure to high
growth economies with the acquisition of an 87.5% stake in
Feixiang, China's leading producer of specialty amine and
surfactants (Novacare division) in November 2010. The Chinese
surfactants market recorded revenue growth rates of 20% over the
past five years (on a compound annual growth rates basis) and the
outlook for the sector remains strong. Asia contributed
approximately 29% to 2010 sales (pro-forma for Feixiang), a
positive factor in the context of expected low growth in Europe in
2011.
The ratings are also underpinned by Rhodia's clear growth strategy
for the next three to five years, with plans to increase EBITDA to
EUR1.0 billion through organic growth (EUR100 million),
innovations (EUR50 million) and external expansion (EUR100
million). Fitch also notes that the company's plans do not factor
in revenues from the Carbon Emission Rights trading activity,
reliance on which had previously constrained the ratings.
Rhodia's commitment to maintaining a conservative financial
profile while achieving those targets, backed by an expected
continued gradual reduction in leverage and net debt, is also a
key factor in Fitch's assessment. Funds from operations adjusted
leverage reduced to 2.6x in 2010, from 2.3x over 2007-2009.
The agency forecasts high single digit sales growth in 2011
(including Feixiang) and EBITDA margins of 14%-15%. Fitch also
projects that Rhodia will maintain positive FCF despite higher
capex requirements supporting its strategy. Gross FFO leverage
maintained below 3.0x (excluding CERs contribution), along with
stable margins in the polyamide division could warrant an upgrade
to 'BB+'.
TECHNICOLOR SA: S&P Raises Long-Term Corp. Credit Rating to 'B-'
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Standard & Poor's Ratings Services said that it has raised its
long-term corporate credit rating and senior debt rating on French
technology company Technicolor S.A. (formerly Thomson S.A.) to
'B-' from 'CCC+'. S&P also raised its short-term corporate credit
rating to 'B' from 'C'. The outlook is stable.
The recovery rating on Technicolor's credit facilities and notes
is unchanged at '4', reflecting average (30%-50%) recovery
prospects in S&P's hypothetical scenario of default.
"The upgrade follows Technicolor's completion of its asset
disposal program, the repayment of its liability related to the
disposal proceeds notes without affecting its cash balances, and a
good rebound in operating performance in the second half of 2010,"
said Standard & Poor's credit analyst Guillaume Trentin.
The action reflects S&P's expectations of stabilization in the
company's performance in 2011, with potentially low-single-digit
revenue growth, a return to a positive free operating cash flow
(FOCF) from continuing operations and importantly the maintenance
of adequate liquidity, including covenant headroom. In addition,
S&P believes that the combination of potentially improving
industry conditions and meaningful customer wins last year should
support the stabilization of the group's operations overall.
These factors mitigate to some extent the continuing volume and
price pressures in the physical media business (DVD, film) and the
highly competitive environment in the Connect set-top box
business.
S&P expects the company's liquidity position to remain an
important factor for Technicolor's rating for some time. It is
currently adequate according to S&P's criteria.
The stable outlook reflects Standard & Poor's belief that
Technicolor's earnings will not deteriorate from current levels,
and that the company will be able to sustain and gradually
increase positive free cash flow generation from continuing
operations over the next two years. Also factored into the
outlook is S&P's anticipation that the company will maintain
adequate liquidity in the form of cash balances of at least EUR150
million and covenant headroom of at least 15%.
S&P could consider a positive rating action over the next 18
months if revenue growth resumes and seems sustainable in the
medium term, without a material deterioration in profitability.
Importantly, an upgrade would be predicated on prospects of
sufficient positive FOCF generation to face growing annual debt
amortization. In addition, liquidity and covenant headroom would
need to be adequate.
A downgrade could occur if trading conditions deteriorate and lead
to a deterioration of the company's cash position or covenant
headroom (less than 10%). Rating pressure could also result from
ongoing litigation with holders of Technicolor's perpetual
subordinated debt.
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G E R M A N Y
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HEIDELBERGER DRUCKMASCHINEN: Moody's Puts 'B2' Corp. Family Rating
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Moody's Investors Service has assigned a B2 corporate family
rating and probability-of default rating to Heidelberger
Druckmaschinen AG. Concurrently, Moody's has assigned provisional
ratings to the company's proposed issuance of EUR300 million worth
of senior unsecured notes (rated (P) Caa1), which are issued in
the context of a refinancing of the company's existing debt
package. The rating outlook is positive. This is the first time
that Moody's has rated Heidelberger Druck.
Moody's issues provisional ratings in advance of the final sale of
securities and these reflect the rating agency's credit opinion
regarding the transaction only. Upon a conclusive review of the
final documentation, Moody's will endeavor to assign definitive
ratings to the instrument mentioned above. A definitive rating
may differ from a provisional rating, for example due to a
different amount of total debt at closing or changes to the
underlying terms and conditions of the instruments.
Ratings Rationale
The B2 corporate family rating reflects Moody's expectation that
Heidelberger Druck -- despite showing first signs of performance
improvements following a major cyclical downturn -- will exhibit a
relatively high leverage as per March 2011 with still
comparatively low levels of profitability and negative free cash
flow generation. "While the relatively weak initial credit
metrics -- Moody's adjusted debt/EBITDA estimated to be around
7.3x as of March 2011 -- are a constraining factor on Heidelberger
Druck's rating, Moody's also notes the company's strong business
profile with leading market positions and a diversified geographic
footprint, which positions the company well to benefit from an
improving market environment," said Sabine Renner, Assistant Vice
President and Moody's lead analyst for Heidelberger Druck. "The
positive outlook reflects Moody's expectation that a sustained
rebound in demand levels together with a leaner cost base should
allow the company to improve its metrics relatively quickly."
added Ms. Renner. Moody's notes that the positive outlook does
not incorporate headroom for major, extraordinary investment
activity or acquisitions.
With expected revenues of approximately EUR2.6 billion as per
March 31, 2011, Heidelberger Druck is the world's leading producer
of sheetfed offset printing presses and related equipment, which
(according to Heidelberger Druck's estimates) benefits from a 41%
market share that is supported by the company's technological
edge, its comprehensive product and service offering and its
strong brand name. Heidelberger Druck exhibits a broad geographic
profile, with a strong footprint in emerging markets, in
particular Asia, which have been and are expected to continue to
be major drivers of demand.
Given its end market concentration, Heidelberger Druck is exposed
to the highly cyclical nature of the print equipment business (55%
of revenues in the financial year ending March 2010), which tends
to follow the global GDP development but exhibits stronger
volatility. The magnitude of this exposure became visible during
the last economic downturn, when revenues decreased by
approximately 37% during the two years ending March 2010.
Combined with a relatively high fixed cost base and major
restructuring costs, the decrease in revenues resulted in a
significant weakening of profitability to negative operating
profit levels. Following the successful implementation of several
restructuring measures Heidelberger Druck should now be well
positioned to benefit from an expected improvement in market
conditions and sustain profitability. In order to reduce the
company's exposure to cyclical fluctuations, Heidelberger Druck's
strategy focuses on the strengthening of its packaging printing as
well as services and consumables businesses, which tend to follow
more stable patterns, and thus improve the overall visibility and
stability of the company's revenue streams.
While Heidelberger Druck's leverage as of March 2011 is expected
to be high at approximately 7.3x debt/EBITDA (including Moody's
adjustments, mainly for pensions, operating leases and guarantees
for third party debt), Moody's expect leverage metrics to improve
relatively quickly, as a more favorable market environment is
likely to fuel top-line growth, lead to improved levels of
profitability and thus free cash flow generation, which has been
negative during the crisis years ending March 2009 and 2010.
While a continuation of the recent positive trends in order intake
and revenues is expected to be supported by a rebound in
investment activity in industrialized countries and increasing
demand from emerging markets, Moody's notes that the overall mid-
term visibility with regard to the sustainability and magnitude of
this trend remains limited at this stage.
Moody's views Heidelberger Druck's liquidity position as good,
given that the company had approximately EUR149 million of cash as
per end of December 2010 (of which approximately EUR50million are
estimated to be temporarily restricted due to foreign exchange
restrictions); and will have access to a EUR500 million revolving
credit facility, which will be largely undrawn initially. The
facility is subject to a material adverse change clause and
financial covenants, which -- assuming a continuing trend of top
line growth, profitability improvements and at the same time
stringent management of working capital -- is likely to have
satisfactory headroom, in the rating agency's view. The next
major maturity of financial debt is in March 2013, when EUR50
million of promissory notes are due to mature. Moody's also
expects Heidelberger Druck's internal and external sources of
liquidity to be sufficient to cover its cash outflows relating to,
for example, working capital or capital expenditures.
Heidelberger Druck's financing package consists of a EUR500
million senior secured revolving credit facility, EUR58 million of
senior secured promissory notes as well as the proposed EUR300
million senior unsecured notes, which all benefit from guarantees
of group entities representing approximately 75% of total assets.
The (P) Caa1 (LGD5, 78%) rating assigned to the senior unsecured
notes is two notches below the B2 CFR and reflects the junior
ranking of the notes behind a sizable amount of senior secured
debt (assuming that the revolving credit facility would be largely
drawn in a default scenario), which also benefits from pledges on
the majority of the company's assets.
Assignments:
Issuer: Heidelberger Druckmaschinen AG
-- Probability of Default Rating, Assigned B2
-- Corporate Family Rating, Assigned B2
-- Senior Unsecured Regular Bond/Debenture, Assigned (P)Caa1
-- Senior Unsecured Regular Bond/Debenture, Assigned a range of
LGD5, 78 %
The positive outlook on the rating reflects Moody's expectation
that, going forward, Heidelberger Druck is likely to benefit from
an improving market environment that should support a rebound in
revenues and profitability and thus allow the company to reduce
its leverage to levels commensurate with the B1 rating category,
as exemplified by a leverage of debt/EBITDA sustainably below
5.0x, while free cash flow should reach positive levels. To
support an upgrade, Moody's would also expect the global economy
and market for print equipment to show at that time evidence of
further growth.
Moody's would consider changing the outlook on the B2 rating to
stable if Heidelberger Druck would fail to reduce its leverage
towards 5.0x within 12 to 18 months after the rating assignment.
Based in Heidelberg, Germany, Heidelberger Druck is the leading
manufacturer of sheetfed offset printing presses with expected
revenues of approximately EUR2.6 billion as per financial year end
March 2011. Heidelberger Druck supplies equipment for sheetfed
offset printing as well as associated upstream and downstream
activities, services and consumables to printing companies,
primarily in the advertising and packaging printing segment.
HEIDELBERGER DRUCKMASCHINEN: S&P Assigns 'B+' Corp. Credit Rating
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Standard and Poor's Ratings Services said that it assigned its
'B+' long-term corporate credit rating to Germany-based printing
equipment manufacturer Heidelberger Druckmaschinen AG. At the
same time, S&P assigned its 'B-' issue rating to the company's
EUR300 million senior unsecured notes, including a recovery rating
of '6' that indicates S&P's expectation of a "negligible" recovery
(0%-10%) in a default scenario. The outlook is stable.
"The ratings on Heidelberger Druckmaschinen AG reflect S&P's
assessment of the company's "weak" business risk profile and
"aggressive" financial risk profile," said Standard & Poor's
credit analyst Werner Staeblein.
The business risk profile is constrained by S&P's view of the
marked cyclicality of HDM's end-markets, its weak profitability,
and over-capacity in the industry with intense pricing
competition. Further constraints include certain substitution
risks from electronic publishing and digital printing, high
operational gearing, and highly variable operating earnings. In
contrast, the business risk profile is supported by the company's
stable global market shares for sheetfed offset printing equipment
and its high share of resilient service revenues.
"The outlook is stable, incorporating S&P's expectation of modest
revenue growth in fiscal 2012," added Mr. Staeblein. "In
addition, S&P also expects an EBITDA margin of 5%-6%, minimally
positive FOCF, no dividend payments, and compliance with the
financial covenants under the company's bank financing."
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G R E E C E
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* S&P Downgrades Greece's Long-Term Sovereign Rating to 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered its
long-term sovereign credit rating on the Hellenic Republic
(Greece) to 'BB-' from 'BB+'. The rating remains on CreditWatch
with negative implications, where it was placed on Dec. 2, 2010.
At the same time, Standard & Poor's placed its 'B' short-term
sovereign credit rating on Greece on CreditWatch with negative
implications. Both the '4' recovery rating and 'AAA' transfer and
convertibility assessment are unchanged.
"The downgrade reflects S&P's view of the concluding statement of
the European Council meeting of March 24-25, 2011, that confirms
its previously published expectations that (i) sovereign debt
restructuring is a possible pre-condition to borrowing from the
European Stability Mechanism, and (ii) senior unsecured government
debt will be subordinated to ESM loans," said Standard & Poor's
credit analyst Marko Mrsnik. "Both features are, in S&P's view,
detrimental to the commercial creditors of EU sovereign ESM
borrowers."
The EC's concluding statement addresses the issues of sovereign
debt restructuring and government bond subordination in items 1
and 3 of the ESM's term sheet.
According to the EC: "If, on the basis of a sustainability
analysis, it is concluded that a macro-economic program cannot
realistically restore the public debt to a sustainable path, the
beneficiary Member State will be required to engage in active
negotiations in good faith with its creditors to secure their
direct involvement in restoring debt sustainability. The granting
of the financial assistance will be contingent on the Member State
having a credible plan and demonstrating sufficient commitment to
ensure adequate and proportionate private sector involvement."
"Like the IMF (International Monetary Fund), the ESM will provide
financial assistance to a Member State when its regular access to
market financing is impaired. Reflecting this, Heads of State or
Government have stated that the ESM will enjoy preferred creditor
status in a similar fashion to the IMF, while accepting preferred
creditor status of IMF over ESM."
S&P sees two key differences between the ESM, scheduled to be
operational from mid-2013, and the current EFSF, both of which, in
S&P's view, would likely be detrimental to Greece's commercial
creditors.
S&P believes that the abovementioned pre-conditions of the ESM,
against the background of Greece's hefty government debt and high
borrowing needs, undermine Greece's plans to resume commercial
borrowing by mid-2013, when the current EU/IMF program of official
financial support terminates, and increase the likelihood of debt
restructuring. Following the expiration of the initial program of
official support, Greece is likely, in S&P's opinion, to seek ESM
funding.
At the same time, S&P note growing risks to Greece's budgetary
position, highlighted by what S&P views as the likely budgetary
deterioration in 2010. The Greek government's recently released
provisional data on its 2010 general government balance indicate,
in S&P's view, a relatively higher cash deficit and larger
outstanding spending arrears than planned. This suggests that
last year's general government deficit could exceed the
government's 9.6% of GDP target. Moreover, S&P believes that the
government has not tightened spending controls sufficiently to
prevent further accumulation of arrears in 2011. In addition,
government revenues have been underperforming budgetary
expectations, most recently in the current quarter. In S&P's
view, prospects for enhanced tax collection remain uncertain, due
both to the impact of weaker domestic demand and persisting
inefficiencies in tax administration. In the absence of
additional deficit-reducing measures, S&P believes that the
government is unlikely to meet its 2011 budget deficit target of
7.5% of GDP. S&P believes that additional measures to meet the
targets could create further political and social pressures which,
in turn, could undermine the government's resolve to fully comply
with the EU/IMF program. S&P currently anticipate that Greece's
general government debt, which S&P estimates at 144% of GDP in
2010, will peak in 2013 at just above 160% of GDP before
declining.
"Standard & Poor's aims to resolve the CreditWatch listing within
the next three months, after the Greek government releases its
final data on 2010 budgetary performance and fiscal trends in 2011
become clearer," said Mr. Mrsnik.
S&P could affirm its sovereign credit ratings on Greece if S&P's
current expectations about the budgetary deterioration in 2010 and
2011 do not materialize.
If, on the other hand, there is evidence of budgetary
deterioration, reflected in a significant worsening of Greece's
fiscal position in 2010 relative to the government's target or in
underperformance with respect to the government's 2011 budgetary
targets, S&P could further lower its sovereign credit ratings on
Greece by one or two notches.
S&P could lower its sovereign credit ratings on Greece for other
reasons as well, notably if S&P was to conclude that the Greek
government's ability to comply with its stabilization program were
undermined by domestic political opposition.
=============
I R E L A N D
=============
ANGLO IRISH: Incurs EUR17.7 Billion Loss in 2010
------------------------------------------------
BreakingNews.ie reports that Anglo Irish Bank has incurred losses
of EUR17.7 billion in 2010, the biggest in Irish corporate
history.
According to BreakingNews.ie, the losses include impairment
charges of EUR7.8 billion, and a loss of EUR11.5 billion on
disposal of assets to the National Asset Management Agency.
"This extremely disappointing result for the year has been driven
by EUR14.1 billion of losses associated with Nama assets and
further impairments on other assets of the bank of EUR5.2
billion," BreakingNews.ie quotes a statement from the group chief
executive Mike Aynsley as saying.
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 Sept. 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 March 8,
2011, Moody's Investors Service downgraded the bank deposit
ratings of Anglo Irish Bank Corporation Limited and Irish
Nationwide Building Society to Caa1/Not-Prime, from Baa3/P-3 (on
review for possible downgrade), the same level as the unguaranteed
senior unsecured debt ratings of the two institutions. The Caa1
long-term bank deposit ratings remain on review for possible
downgrade, in line with the review on the unguaranteed senior
unsecured debt ratings. S&P said there is no rating impact on the
stand-alone bank financial strength ratings, on the senior
unsecured and subordinated debt ratings, and on the government-
guaranteed debt ratings.
BANK OF IRELAND: Makes Last Attempt to Avert Nationalization
------------------------------------------------------------
Laura Noonan and Emmet Oliver at Irish Independent report that
bosses at Bank of Ireland on Tuesday made a last-ditch attempt to
ensure their bank doesn't succumb to the wave of nationalization
that has engulfed the rest of the sector.
Irish Independent relates that Chief Executive Richie Boucher and
Chairman Pat Molloy pushed the case for BoI's survival in private
ownership at their first face-to-face meeting with Finance
Minister Michael Noonan on Tuesday.
According Irish Independent, the duo are understood to have used
the meeting to impress upon the minister that the bank should be
given time to raise cash from the markets rather than taking a
state handout. BoI already has EUR1.4 billion in fresh capital to
raise after the last round of banking 'stress tests' in November,
Irish Independent discloses.
The bank, Irish Independent says, still believes it stands a
fighting chance of avoiding majority state ownership and raising
fresh cash from the markets -- if the Government gives it enough
time.
BoI is believed to be pushing for an arrangement that would see
the Government put in some cash now as a "bridge" until fresh
private money could be raised, Irish Independent notes. This
bridge would be designed in such a way that the Government did not
own more than 50pc of the bank's ordinary shares, and therefore
did not control the bank, Irish Independent notes.
Headquartered in Dublin, Bank of Ireland --
http://www.bankofireland.com/-- provides a range of banking and
other financial services. These include checking and deposit
services, overdrafts, term loans, mortgages, business and
corporate lending, international asset financing, leasing,
installment credit, debt factoring, foreign exchange facilities,
interest and exchange rate hedging instruments, executor, trustee,
life assurance and pension and investment fund management, fund
administration and custodial services and financial advisory
services, including mergers and acquisitions and underwriting.
The Company organizes its businesses into Retail Republic of
Ireland, Bank of Ireland Life, Capital Markets, UK Financial
Services and Group Centre. It has operations throughout Ireland,
the United Kingdom, Europe and the United States.
EBS BUILDING: Main Offer Insufficient, Department of Finance Says
-----------------------------------------------------------------
Geoff Percival at Irish Examiner reports that the EBS Building
Society has been taken off the market after the Department of
Finance decided that the main offer on the table for the lender
wasn't sufficient.
According to Irish Examiner, in a brief statement, the National
Treasury Management Agency (NTMA) said that the sale process had
been terminated "following the decision by the Minister for
Finance not to pursue any further the proposal to acquire EBS by a
consortium of investors led by Cardinal Capital Group."
Irish Examiner relates that the consortium -- comprising of
Dublin-based investment group, Cardinal Capital and US-based asset
management and private equity groups Carlyle and WL Ross -- had
seemingly pipped Irish Life & Permanent in the race to acquire EBS
in recent weeks and was offering to inject more than EUR600
million into the company, as well as committing to what it called
"an extensive and expertly constructed multi-billion euro funding
and restructuring program, to strengthen the long-term funding
base of the EBS."
On behalf of Finance Minister Michael Noonan, the NTMA, as cited
by Irish Examiner, said that "having evaluated, at length, the
proposal from the consortium, it was concluded that the bid was
not sufficiently commercially attractive to the state to merit
continuing with the sale process."
Capital Injection
As reported by the Troubled Company Reporter-Europe on Dec. 17,
2010, The Irish Times said that the Irish government injected a
further EUR525 million into EBS. The new funding came through
special investment shares issued to Minister for Finance
Brian Lenihan, The Irish Times disclosed. The shares gave
Mr. Lenihan control of the building society, including the
composition of the board and passing of members' resolutions, The
Irish Times noted.
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.
* * *
As reported by the Troubled Company Reporter-Europe on Feb. 14,
2011, Moody's Investors Service downgraded the tier 1 instruments
of EBS Building Society (issued through EBS Capital No1 S.A.) one
further notch to C (hyb) from Ca (hyb). This follows the
announcement of an offer from EBS Building Society to buy back its
dated subordinated and tier 1 debt for cash at substantial
discounts to the par value. Moody's would classify the exchange
offer on the dated subordinated debt as a distressed exchange.
The society is rated Baa3/P-3 for bank deposits and senior debt
and has a D- bank financial strength rating (mapping to Ba3 on the
long-term scale). The dated subordinated debt of the bank is
rated Ca. Moody's said the outlook on the ratings is negative.
EIRLES FOUR: Moody's Lowers Rating on Series 86 Notes to 'C (sf)'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the rating of notes
issued by Eirles Four Limited. The notes affected by the rating
action are:
Issuer: Eirles Four Limited
-- Series 86 EUR5,000,000 Floating and Variable Rate Secured
Notes (Repack of Deutsche Bank AG, London Branch - TSAR_05
Class B(1) CDS), Downgraded to C (sf); previously on Nov 18,
2008 Downgraded to Ca (sf)
Ratings Rationale
These credit-linked notes issued by Eirles Four Limited are a
repack of a credit default swap entered into by Deutsche Bank AG,
London Branch. The rating of the notes is essentially a pass-
through of the rating of the underlying swap, TSAR_05 Class B(1)
swap. The rating action is a response to the Ca (sf) rating of
TSAR_ 05 Class B(1) swap being downgraded to C (sf) on
April 23, 2009. This action was not taken in April 2009 due to an
administrative oversight.
Moody's Investors Service did not receive or take into account a
third-party due diligence report on the underlying assets or
financial instruments related to the monitoring of this
transaction in the past six months.
G SQUARE: S&P Cuts Ratings on Three Classes of Notes to 'D'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CC
(sf)' its credit ratings on G Square Finance 2007-1 Ltd.'s class
A-1, A-2, and B notes. At the same time, S&P affirmed its 'CC
(sf)' ratings on the class C, D, and E notes.
The rating action follows publication of the transaction's
March 2011 payment date report. The report shows that after
paying higher-ranking creditors in accordance with the
transaction's priorities of payments, the issuer had insufficient
funds to fully meet interest payments due on the most senior class
of notes. As a result, the issuer failed to pay interest in full
on the class A-1 notes and made no interest distribution at all on
any other class of notes.
As S&P's rating on the class A-1, A-2, and B notes addresses
timely payment of interest, S&P is lowering its rating on these
notes to 'D (sf)'.
S&P's ratings on the class C, D, and E notes address ultimate
payment of interest and S&P does not consider that these classes
are yet in payment default. However, the March payment date
report shows that the transaction currently has assets with a par
value of approximately US$751 million and an outstanding rated
issuance of more than US$1,659 million, including more than
US$1,537 million class A-1 issuance. In S&P's opinion, all
classes of notes will ultimately experience principal losses. S&P
is therefore affirming its 'CC (sf)' ratings on the class C, D,
and E notes, denoting that in its view these notes remain highly
vulnerable to nonpayment.
G Square Finance 2007-1 is a collateralized debt obligation of
primarily U.S. structured finance securities that closed in May
2007. The majority of assets in the collateral pool are U.S.
residential mortgage-backed securities. In March 2008, the
trustee issued an event of default notice under the terms and
conditions of the notes, when the transaction's class A/B par
value ratio fell below 100%.
The original collateral manager, Wharton Asset Management Bermuda
Ltd., resigned in January 2011.
Ratings List
G Square Finance 2007-1 Ltd.
US$1.7 Billion Senior Secured Floating-Rate Notes
Ratings Lowered
Rating
------
Class To From
----- -- ----
A-1 D (sf) CC (sf)
A-2 D (sf) CC (sf)
B D (sf) CC (sf)
Ratings Affirmed
Class Rating
----- ------
C CC (sf)
D CC (sf)
E CC (sf)
=========
I T A L Y
=========
ARES FINANCE: S&P Cuts Ratings on Two Classes of Notes to 'D'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
ARES FINANCE S.r.l.'s class E and F notes to 'D (sf)'. S&P
subsequently withdrew the ratings, effective in 30 days time.
The maturity date of the notes was March 25, 2011. The rating
actions follow the receipt of notice from ARES FINANCE confirming
that it has not fully repaid its class E and F notes. S&P has
been informed too that the maturity date of the notes has been
extended to 2020.
S&P's rating on the notes is its opinion of the issuer's ability
to meet interest payment obligations on a timely basis and
principal obligations on the original scheduled note maturity date
(namely March 25, 2011). Accordingly, S&P has lowered its ratings
on these notes to 'D (sf)' before withdrawing them. The ratings
will remain at 'D (sf)' for a period of 30 days before the
withdrawal becomes effective.
ARES FINANCE is a commercial mortgage-backed securities
transaction that securitizes a pool of secured and unsecured
nonperforming loans (NPLs) originated in Italy by Banca Nazionale
del Lavoro SpA (AA-/Stable/A-1+).
Ratings List
ARES FINANCE S.r.l.
EUR633.2 Million Asset-Backed Floating-Rate Notes
Ratings Lowered
Rating
------
Class To From
----- -- ----
E D (sf) CCC- (sf)
F D (sf) CCC- (sf)
PARMALAT SPA: Italian Court Refuses to Fast-Track Tanzi's Trial
---------------------------------------------------------------
Italian Judge Guido Piffer turned down on March 24, prosecutors'
request for a fast-track trial of Calisto Tanzi and other members
of his family for their part in Parmalat's 2003 collapse,
guardian.co.uk reports.
Mr. Tanzi is Parmalat's founder and former chief executive
officer. He was sentenced to 18 years in prison for his role in
the collapse of the European dairy giant.
Judge Piffer ruled that investigating magistrates in Milan, Italy,
had not provided enough evidence to justify putting the 29
individuals and three financial institutions involved in the
collapse on an accelerated trial, Mark Tran of the guardian.co.uk
says. Judge Piffer maintained that there was sufficient evidence
to order eight of the accused, including Mr. Tanzi and two outside
auditors, to go immediately to trial, but not enough material to
warrant a trial for all defendants now.
Mr. Tran explains that an immediate trial would have skipped
preliminary hearings, which could have lasted for several years,
with defendants possibly going before a judge as early as April
2011. However, Judge Piffer decided that it would be better not
to divide the accused into two groups in different trials because
their roles in the case were still unclear.
About Parmalat S.p.A.
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products that can
be stored at room temperature for months. It also has about 40
brand product lines, which include yogurt, cheese, butter, cakes
and cookies, breads, pizza, snack foods and vegetable sauces,
soups and juices.
The Company's U.S. operations filed for Chapter 11 protection
on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, represent the Debtors. When the U.S. Debtors
filed for bankruptcy protection, they reported more than
US$200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on December 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases. On
January 20, 2004, the Liquidators filed Sec. 304 petition, Case
No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presided over the Parmalat Debtors'
U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.
PARMALAT SPA: Settles Disputes With PPL Partecipacoes
-----------------------------------------------------
Parmalat S.p.A. communicates that it has settled PPL Partecipacoes
Limitada in bankruptcy's outstanding claims.
The settlement envisages withdrawal of all of PPL's claims for the
consideration of 7 million Parmalat shares and assignment to
Parmalat of all outstanding PPL claims against Parmalat South
American affiliates for the consideration of 1 Euro.
The settlement includes payment of EUR1,563,000 by Parmalat to PPL
in full satisfaction of PPL's holding of 9.01% of Parmalat
Colombia Ltd's share capital.
The settlement is subject to these precedent conditions:
(i) With respect to PPL: approval by the creditors'
committee, the public prosecutor and the bankruptcy
judge; and
(ii) With respect to Parmalat: ruling by the bankruptcy
court of Parma authorizing adjustment of the bankruptcy
total liability and issuance of Parmalat shares to PPL.
This settlement brings to an end the Brazilian litigation that has
originated from Parmalat's bankruptcy.
About Parmalat S.p.A.
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products that can
be stored at room temperature for months. It also has about 40
brand product lines, which include yogurt, cheese, butter, cakes
and cookies, breads, pizza, snack foods and vegetable sauces,
soups and juices.
The Company's U.S. operations filed for Chapter 11 protection
on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, represent the Debtors. When the U.S. Debtors
filed for bankruptcy protection, they reported more than
US$200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on December 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases. On
January 20, 2004, the Liquidators filed Sec. 304 petition, Case
No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presided over the Parmalat Debtors'
U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.
PARMALAT SPA: Creditors Convert Warrants for 2,539,389 Shares
-------------------------------------------------------------
Parmalat S.p.A. said on March 16 that, following the allocation of
shares to creditors of the Parmalat Group, the subscribed and
fully paid up share capital has now been increased by 2,539,389
euros to 1,737,925,715 euros (of which 1,710,499,008 shares and
27,426,707 shares deriving from the exercise of warrants) from
1,735,386,326 euros. The share capital increase is due to the
exercise of 2,539,389 warrants.
The latest status of the share allotment is 7,158,556 shares,
representing approximately 0.4% of the share capital, are still in
a deposit account c/o Parmalat S.p.A., of which:
* 4,989,460 or 0.3% of the share capital, registered in the
name of individually identified commercial creditors, are
still deposited in the intermediary account of Parmalat
S.p.A. centrally managed by Monte Titoli (compared with
5,722,423 shares as at February 18, 2011);
* 2,169,096 or 0.1% of the share capital registered in the name
of the Foundation -- Fondazione Creditori Parmalat -- of
which:
(i) 120,000 shares represent the initial share capital
of Parmalat S.p.A. (unchanged);
(ii) 2,049,096 or 0.1% of the share capital pertain to
currently undisclosed creditors (unchanged).
On Feb. 18, Parmalat said that following the allocation of shares
to creditors of the Parmalat Group, the subscribed and fully paid-
up share capital were increased by 1,801,684 euros to
1,735,386,326 euros (of which 1,710,499,008 shares and 24,887,318
shares deriving from the exercise of warrants) from 1,733,584,642
euros.
About Parmalat S.p.A.
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products that can
be stored at room temperature for months. It also has about 40
brand product lines, which include yogurt, cheese, butter, cakes
and cookies, breads, pizza, snack foods and vegetable sauces,
soups and juices.
The Company's U.S. operations filed for Chapter 11 protection
on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal
& Manges LLP, represent the Debtors. When the U.S. Debtors
filed for bankruptcy protection, they reported more than
US$200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on December 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the Cayman
Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman)
Ltd. serve as Joint Provisional Liquidators in the cases. On
January 20, 2004, the Liquidators filed Sec. 304 petition, Case
No. 04-10362, in the United States Bankruptcy Court for the
Southern District of New York. In May 2006, the Cayman Island
Court appointed Messrs. MacRae and Cleaver as Joint Official
Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham
& Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon,
Herlands Randolph, represent the Finance Companies in the Sec. 304
case.
The Honorable Robert D. Drain presided over the Parmalat Debtors'
U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.
===================
L U X E M B O U R G
===================
BOZEL SA: Seeks to Employ Rolim Godoi as Brazilian Counsel
----------------------------------------------------------
Bozel S.A. and Bozel, LLC seek permission from the U.S. Bankruptcy
Court for the Southern District of New York to employ Rolim,
Godoi, Viotti & Leite Campos Advogados as its Brazilian counsel,
in the ordinary course of business, effective as of Feb. 18, 2011.
In the wake of Bozel's sale of substantially all of its assets to
Japan Metals & Chemicals Co., Ltd., Bozel requires Rolim Godoi's
post-closing assistance in connection with taxation, governmental
matters and general corporate advice in Brazil. The
Firm will not represent the Debtors in connection with the
administration of the Chapter 11 cases.
As the Debtors' Brazilian counsel, Rolim Godoi will:
(i) draft all sorts of legal documents necessary to carry out
the post-closing acts;
(ii) provide legal advice and support with respect to Brazilian
tax, corporate, and foreign investments issues that may
arise after the closing;
(iii) provide Legal Opinions; and
(iv) representing the interests of Bozel SA before Brazilian
courts and administrative bodies, if necessary,
The Debtors will pay Rolim Godoi's professionals according to
their customary hourly rates:
Title Rate per Hour
----- -------------
Partner $280
Senior Attorney $225
Junior Attorney $150
Assistant $100
The Debtors propose that they be permitted to pay Rolim Godoi,
without prior application to the Court, 100% of the fees and
disbursements incurred by the firm, upon receipt and acceptance by
the Debtors of appropriate invoices substantially in accordance
with the bankruptcy fee guidelines of the Court and the United
States Trustee for Region 2 setting forth in reasonable detail the
nature of the services rendered and disbursements actually
incurred, provided, that the firm's aggregate fees will not exceed
the equivalent of $15,000 and the firm's aggregate expenses will
not exceed the equivalent of $2,000.
Fabio Appendino, Esq., a partner at Rolim Godoi, relates that his
firm was engaged by Wellgate International, Ltd., which owns 100%
of Bozel's shares. Rolim Godoi provided services to Wellgate
since May 2010 relating to its interests in Bozel's wholly owned
subsidiary, Bozel Mineracao Ltda. -- Bozel Brazil. Rolim Godoi
was engaged by Bozel Brazil in September 2010, he discloses. To
the extent that Rolim Godoi has been engaged by and rendered
services to Wellgate and Bozel Brazil, these services have been
entirely consistent with those provided to Bozel following the
sale of Bozel Brazil to Japan Metals. The interests of Wellgate,
Bozel Brazil and Bozel are aligned in these matters, as all
entities sought to effectuate a successful sale in order to
maximize the value available to the Debtors' estates, he assures
the Court.
Mr. Appendino insists that Rolim Godoi is a "disinterested person"
as the term is defined under Section 101(14) of the Bankruptcy
Code.
About Bozel S.A.
Bozel S.A. is a mineral mining company based in Luxembourg. Bozel
S.A. sought bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-11802) on April 6,
2010. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth
Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent
the Debtor, and BDO Consulting serves as the Debtor's financial
advisor. Allen G. Kadish, Esq. -- kadisha@gtlaw.com -- Kaitlin R.
Walsh, Esq. -- walshkr@gtlaw.com -- and Mark D. Bloom, Esq. --
bloomm@gtlaw.com -- at Greenberg Traurig, LLP, represent the
Liquidator. The Debtor estimated assets and debts at US$50
million to US$100 million in its Chapter 11 petition.
Bozel, LLC, a subsidiary of Bozel SA, filed a separate petition
for Chapter 11 on January 10, 2011 (Bankr. S.D.N.Y. Case No.
11-10033). Gary C. Fischoff, Esq., at Steinberg, Fineo, Berger &
Fischoff, in Woodbury, N.Y., represents the Debtor as counsel.
The Debtor estimated assets of US$1 million to US$10 million and
debts of US$10 million to US$50 million in its Chapter 11
petition.
The two cases are jointly administered under Case No. 10-11802.
BOZEL SA: Wants Until Aug. 1 to File U.S. Debt Repayment Plan
-------------------------------------------------------------
Pursuant to Section 1121(d) of the Bankruptcy Code, Bozel S.A. and
Bozel, LLC ask Judge Arthur J. Gonzalez of the U.S. Bankruptcy
Court for the Southern District of New York to extend their
exclusive periods to:
(i) file a Chapter 11 plan through Aug. 1, 2011; and
(ii) solicit acceptances on that plan through Sept. 28, 2011.
Bozel S.A.'s Exclusive Plan Filing Period expires on April 1, 2011
and Exclusive Plan Solicitation Period on June 1, 2011. Bozel
LLC's Exclusive Plan Filing Period expires on May 5, 2011, and its
Exclusive Plan Solicitation Period expires on July 4, 2011.
In an effort to reduce expense to the Debtors' estates by
proposing a single joint plan of reorganization, the Debtors seek
to establish uniform Exclusive Periods for Bozel S.A. and Bozel
LLC. The Debtors also seek the extension of the Exclusive Periods
to avoid the necessity of having to propose a Chapter 11 plan
prematurely, and to ensure sufficient time after passage of the
proposed uniform claims bar dates to formulate a plan that best
addresses the interests of the Debtors' creditors and their
estates.
Allen G. Kadish, Esq., at Greenberg Traurig, LLP, in New York,
insists that despite an initial delay in the Debtors' Chapter 11
cases, the Debtors have made substantial progress in moving these
Chapter 11 cases forward:
(i) Bozel has secured postpetition financing at below-market
rates to ensure continuity of its operations while it was in
bankruptcy;
(ii) solicited bids for Bozel's shares in Bozel Mineracao S.A. or
Bozel Brazil and Bozel Europe S.A.S. or Bozel Europe, which
required coordination and management of significant
diligence requests across three continents and conducted the
Auction; and
(iii) consummated the sale on Feb. 17, 2011, which resulted in
Japan Metals & Chemicals Co., Ltd. purchasing significantly
all of Bozel's assets for $30 million and the satisfaction
of all amounts due pursuant to the DIP Order and of the only
secured claims against the Debtors.
Since the Closing on February 17, 2011, the Debtors have been able
to shift their focus to other critical, but less time-sensitive,
post-closing issues which necessarily must be resolved in
order to formulate a plan of reorganization, Mr. Kadish says.
Given the unique and extraordinary circumstances of these Chapter
11 cases, a further extension of exclusivity is appropriate in
order for the Debtors to continue their progress, the focus of
which now shifts to gathering information about the creditor
bodies of the Debtors across multiple countries on at least three
continents, he points out.
Mr. Kadish also tells the Court that the allowed secured claims of
the only two known secured creditors have been paid in full, and
the thrust of the Debtors' efforts in this post-Closing phase of
the case is to identify and provide notice of a uniform Bar Date
to creditors so that proofs of claim can be filed, analyzed, and
evaluated in order to formulate a joint plan.
Judge Gonzalez scheduled a hearing to consider the Debtors'
request for March 30, 2011. Objections were due March 23.
About Bozel S.A.
Bozel S.A. is a mineral mining company based in Luxembourg. Bozel
S.A. sought bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-11802) on April 6,
2010. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth
Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent
the Debtor, and BDO Consulting serves as the Debtor's financial
advisor. Allen G. Kadish, Esq. -- kadisha@gtlaw.com -- Kaitlin R.
Walsh, Esq. -- walshkr@gtlaw.com -- and Mark D. Bloom, Esq. --
bloomm@gtlaw.com -- at Greenberg Traurig, LLP, represent the
Liquidator. The Debtor estimated assets and debts at US$50
million to US$100 million in its Chapter 11 petition.
Bozel, LLC, a subsidiary of Bozel SA, filed a separate petition
for Chapter 11 on January 10, 2011 (Bankr. S.D.N.Y. Case No.
11-10033). Gary C. Fischoff, Esq., at Steinberg, Fineo, Berger &
Fischoff, in Woodbury, N.Y., represents the Debtor as counsel.
The Debtor estimated assets of US$1 million to US$10 million and
debts of US$10 million to US$50 million in its Chapter 11
petition.
The two cases are jointly administered under Case No. 10-11802.
BOZEL SA: Amends Schedules of Assets and Liabilities
----------------------------------------------------
Bozel S.A. filed with the U.S. Bankruptcy Court for the Southern
District of New York on Feb. 22, 2011, corrected schedules of its
assets and liabilities, disclosing:
Name of Schedule Assets Liabilities
---------------- ---------- -----------
A. Real Property US$0
B. Personal Property US$41,134
C. Property Claimed as Exempt US$0
D. Creditors Holding
Secured Claims US$16,811
E. Creditors Holding Unsecured
Priority Claims US$148,500
F. Creditors Holding Unsecured
Nonpriority Claims US$30,405,428
---------- -------------
TOTAL US$41,134,010 US$47,365,036
A copy of the corrected schedules is available for free at:
http://bankrupt.com/misc/bozelfeb22sal.pdf
About Bozel S.A.
Bozel S.A. is a mineral mining company based in Luxembourg. Bozel
S.A. sought bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-11802) on April 6,
2010. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth
Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent
the Debtor, and BDO Consulting serves as the Debtor's financial
advisor. Allen G. Kadish, Esq. -- kadisha@gtlaw.com -- Kaitlin R.
Walsh, Esq. -- walshkr@gtlaw.com -- and Mark D. Bloom, Esq. --
bloomm@gtlaw.com -- at Greenberg Traurig, LLP, represent the
Liquidator. The Debtor estimated assets and debts at US$50
million to US$100 million in its Chapter 11 petition.
Bozel, LLC, a subsidiary of Bozel SA, filed a separate petition
for Chapter 11 on January 10, 2011 (Bankr. S.D.N.Y. Case No.
11-10033). Gary C. Fischoff, Esq., at Steinberg, Fineo, Berger &
Fischoff, in Woodbury, N.Y., represents the Debtor as counsel.
The Debtor estimated assets of US$1 million to US$10 million and
debts of US$10 million to US$50 million in its Chapter 11
petition.
The two cases are jointly administered under Case No. 10-11802.
BOZEL SA: Creditors Have Until May 6 to File Claims in U.S.
-----------------------------------------------------------
The Hon. Arthur J. Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York has set May 9, 2011, at 5:00 p.m.,
as the bar date for each person or entity that asserts a claim
against, or interest in, Bozel S.A. that arose on or prior to
April 6, 2010, and all claims against, and interests in, Bozel,
LLC that arose on or prior to January 5, 2011.
Governmental units must file their claims on or before July 5,
2011, at 5:00 p.m.
About Bozel S.A.
Bozel S.A. is a mineral mining company based in Luxembourg. Bozel
S.A. sought bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-11802) on April 6,
2010. William F. Savino, Esq., Daniel F. Brown, Esq., and Beth
Ann Bivona, Esq., at Damon Morey LLP in Buffalo, N.Y., represent
the Debtor, and BDO Consulting serves as the Debtor's financial
advisor. Allen G. Kadish, Esq. -- kadisha@gtlaw.com -- Kaitlin R.
Walsh, Esq. -- walshkr@gtlaw.com -- and Mark D. Bloom, Esq. --
bloomm@gtlaw.com -- at Greenberg Traurig, LLP, represent the
Liquidator. The Debtor estimated assets and debts at US$50
million to US$100 million in its Chapter 11 petition.
Bozel, LLC, a subsidiary of Bozel SA, filed a separate petition
for Chapter 11 on January 10, 2011 (Bankr. S.D.N.Y. Case No.
11-10033). Gary C. Fischoff, Esq., at Steinberg, Fineo, Berger &
Fischoff, in Woodbury, N.Y., represents the Debtor as counsel.
The Debtor estimated assets of US$1 million to US$10 million and
debts of US$10 million to US$50 million in its Chapter 11
petition.
The two cases are jointly administered under Case No. 10-11802.
=========
S P A I N
=========
FTA SANTANDER: Moody's Assigns '(P)Caa1' Rating to Series B Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned provisional (P) ratings to
two series of notes to be issued by FTA SANTANDER EMPRESAS 9 (the
Fondo):
-- EUR4,226.5 million series A notes, assigned (P) Aaa (sf)
-- EUR1,123.5 million series B notes, assigned (P) Caa1 (sf)
Ratings Rationale
FTA SANTANDER EMPRESAS 9 is a securitization of standard loans and
credit lines mainly granted by Banco Santander (Aa2/P-1; Negative
Outlook) to corporate and small and medium-sized enterprise.
At closing, the Fondo -- a newly formed limited-liability entity
incorporated under the laws of Spain -- will issue two series of
rated notes. Santander will act as servicer of the loans and
credit lines for the Fondo, while Santander de Titulizacion
S.G.F.T., S.A. will be the management company (Gestora) of the
Fondo.
As of February 2011, the provisional asset pool of underlying
assets was composed of a portfolio of almost 30,000 contracts
granted to companies in Spain. In terms of outstanding amounts,
68% corresponds to standard loans and 32% to credit lines. The
assets were originated mainly between 2006 and 2010. The
weighted-average seasoning is 1.0 year for the loans sub-pool and
0.7 years for the credit-lines sub-pool, while the weighted-
average remaining terms for these pools are 4.2 years and 0.5
years, respectively. Around 6.6% of the portfolio is secured by
first-lien mortgage guarantees. Geographically, the pool is
concentrated mostly in Madrid (30%), Catalonia (14%) and Andalusia
(11%). At closing, there will be no loans more than 30 days in
arrears.
In Moody's view, the strong credit positive features of this deal
include, among others: (i) a relatively short weighted average
life of 2.2 years; (ii) a swap agreement guaranteeing an excess
spread of 1.0%; and (iii) a geographically well-diversified pool.
However, the transaction has several challenging features: (i) a
low portfolio granularity (effective number of obligors below
300); (ii) a relatively high exposure to the construction and
building industry sector (33.6% according to Moody's industry
classification); (iii) a low percentage of assets secured by a
first-lien mortgage guarantee (6.6%); and (iv) a complex mechanism
that allows the Fondo to compensate (daily) the increase on the
disposed amount of certain credit lines with the decrease of the
disposed amount from other lines, and/or the amortization of the
standard loans. These characteristics were reflected in Moody's
analysis and provisional ratings, where several simulations tested
the available credit enhancement and 20% reserve fund to cover
potential shortfalls in interest or principal envisioned in the
transaction structure.
Moody's analysis focused primarily on (i) an evaluation of the
underlying portfolio of assets; (ii) historical performance
information and other statistical information; (iii) the credit
enhancement provided by the pool and swap spreads; and (iv) the
cash reserve and the subordination of the notes.
The resulting key assumptions of Moody's analysis for this
transaction are a mean default rate of 14.1%, with a coefficient
of variation of 45% and a stochastic mean recovery rate of 37%.
As mentioned in the methodology, Moody's used ABSROM cash-flow
model to determine the potential loss incurred by the notes under
each loss scenario. In parallel, Moody's also considered non-
modelled risks (such as counterparty risk).
The ratings address the expected loss posed to investors by the
legal final maturity of the notes (March 2048). In Moody's
opinion, the structure allows for timely payment of interest and
ultimate payment of principal on series A and B at par on or
before the rated final legal maturity date. Moody's ratings
address only the credit risks associated with the transaction.
Other non-credit risks have not been addressed, but may have a
significant effect on yield to investors.
The V Score for this transaction is Medium/High, which is in line
with the score assigned for the Spanish SME sector and
representative of the volatility and uncertainty in the Spanish
SME sector. V-Scores are a relative assessment of the quality of
available credit information and of the degree of dependence on
various assumptions used in determining the rating. For more
information, the V-Score has been assigned accordingly to the
report "V Scores and Parameter Sensitivities in the EMEA Small-to-
Medium Enterprise ABS Sector," published in June 2009.
Moody's also ran sensitivities around the key parameters for the
rated notes. For instance, if the assumed default probability of
14.1% used in determining the initial rating was changed to 18.1%
and the recovery rate of 37% was changed to 27%, the model-
indicated rating for the series A notes would change to A2 from
Aaa, while the series B model indicated rating would remain Caa1.
Moody's Investors Service did not receive or take into account a
third party due diligence report on the underlying assets or
financial instruments in this transaction.
FTA SANTANDER: Fitch Cuts Ratings on Two Classes of Notes to 'C'
----------------------------------------------------------------
Fitch Ratings has downgraded FTA Santander Financiacion 2's class
D and E notes and affirmed the other classes:
-- EUR85.6m class A: affirmed at 'AA'; Loss Severity Rating 'LS-
2'; Outlook Stable
-- EUR58m class B: affirmed at 'BBB+'; Loss Severity Rating
revised to'LS-2' from 'LS-3'; Outlook revised to Stable from
Negative
-- EUR44.9m class C: affirmed at 'B'; Loss Severity Rating
revised to'LS-2' from LS-4; Outlook Negative
-- EUR29m class D: downgraded to 'CC' from 'CCC'; 'RR4'
-- EUR63.8m class E: downgraded to 'C' from 'CC'; 'RR5'
-- EUR21.8m class F: affirmed at 'C'; 'RR6'
The downgrades reflect the uncertainty regarding the transaction's
ability to support the junior tranches, given increasing principal
deficiency ledger balances.
The reserve fund has been completely utilized to offset
significant losses as the level of bad debts have exceeded the
guaranteed excess spread since February 2009 leading to PDL
balances of EUR72 million as of February 2011.
Cumulative losses reached 9.7% in February 2011, 5% higher than
the Fitch base case value of 4.2% for the same point in seasoning.
Credit enhancement levels for the class A, B and C notes were 59%,
31.3% and 9.8% in February 2011. For the class D and E notes,
credit enhancement levels have been significantly weakened as
losses have fed through the structure, reaching -4.1% and -34.6%,
respectively, in February 2011.
As of February 2011, Santander Financiacion 2 had amortized to 21%
of its original size, with the class A notes representing 7% of
their initial balance.
===========================
U N I T E D K I N G D O M
===========================
COVENTRY CITY: SISU Injects Funding; Averts Administration
----------------------------------------------------------
Coventry Telegraph reports that Coventry City owners SISU saved
the club from going into administration with a GBP4 to 5 million
injection of funding.
According to Coventry Telegraph, it is not yet known if more cash
will be needed to pay the bills before the end of the season.
It emerged that SISU has lost GBP25 million since buying the club
in December 2007, Coventry Telegraph notes.
"We need to get greater funding. This is not sustainable. Sisu
have taken no dividends out. All the debt is with Sisu," Coventry
Telegraph quotes Club chairman Ken Dulieu as saying at a press
conference at the Ricoh Arena.
The board insists the club is not for sale and that they still
want to buy the stadium, Coventry Telegraph states.
About Coventry City Football Club
Coventry City Football Club -- http://www.ccfc.co.uk/--
currently plays its football (soccer) in the English Football
League Championship (formerly known as Division 1). Coventry
City FC was originally formed in 1883 and was known as Singers
until 1898, when the team changed its name to Coventry City.
The team, nicknamed the Sky Blues, wears jerseys that are
sponsored by the Cassidy Group. The majority of the club's
revenues are derived from game day receipts like ticket sales
and television broadcasts.
DUNDEE FOOTBALL: Tayside Police Writes Off GBP30,000 Bill
---------------------------------------------------------
Andrew Argo at The Courier reports that Dundee FC'S debt of more
than GBP30,000 to Tayside Police, incurred when the club went into
administration, has been written off.
The Courier relates that on Monday, the finance sub-committee of
Tayside Joint Police Board accepted there was no prospect of the
money being recovered. The debt was due to the force as payment
for the policing of matches at Dens Park, the Courier discloses.
According to the Courier, a report to the sub-committee explained
that there were invoices regarded as unlikely to be recovered and
in the period concerned there were GBP649.47 worth related to
charges for the securing of premises. The Courier notes that due
to their nature they were difficult to collect normally because
the debtor becomes untraceable and letters to them are often
returned marked "gone away."
The finance sub-committee agreed to write off the debts, with the
sum being removed totaling GBP30,375.86, the Courier says.
Dundee Football Club -- http://www.thedees.co.uk/-- is a Scottish
football club.
* * *
As reported in the Troubled Company Reporter-Europe on October 18,
2010, Agence France-Presse said that Dundee Football Club was
placed into administration on Oct. 14, 2010, after failing to
pay a GBP365,000 (US$583,525) tax bill. The report related that
Dundee had no option but to accept administration after being
unable to negotiate the payment and the process was finally
confirmed on.
HURST TRANSPORT: Administrator Reveals More Insolvency Details
--------------------------------------------------------------
Joanna Bourke at RoadTransport.com reports that Hurst Transport
administrator said the company could not implement fuel duty
esculators quick enough to match fluctuating diesel prices.
RoadTransport.com relates that Hurst Transport collapsed on
March 18, with administrator Chris Rooney of
PricewaterhouseCoopers, citing volatile fuel costs and a tough
winter as the reason behind the insolvency.
According to RoadTransport.com, Mr. Rooney told Commercial Motor
that the firm suffered because its cash flow could not sustain
keeping up fuel payments while it waited for a surcharge to come
through.
Hurst Transport is a Lincolnshire-based haulier.
JARVIS PLC: York MP Urges Network Rail to Employ Sacked Workers
---------------------------------------------------------------
Mike Laycock at York Press reports that Network Rail is being
urged to help hundreds of people who are still unemployed, a year
after losing their jobs when Jarvis plc collapsed.
According to York Press, York Central MP Hugh Bayley said he
believed about a third of Jarvis' 1,100 employees who were thrown
out of work when the firm went into administration have failed to
find permanent jobs and either work on a casual basis from time to
time when the opportunity arises, or are unemployed.
Mr. Bayley estimated that another third were subsequently taken on
by Babcock when Network Rail awarded it the contract for work
previously placed with Jarvis and the other third had found other
jobs, often outside the railway industry and frequently at lower
rates of pay, York Press relates.
Mr. Bayley has written to David Higgins, chief executive of
Network Rail, to say he believes the company has some obligations
to former Jarvis staff without work, York Press discloses. He
said it had been suggested to him that Network Rail should invite
former Jarvis employees who had not yet found permanent jobs to
join a register of people who were available and willing to work
for railway contractors on a temporary basis, York Press
discloses.
York Press notes that a spokeswoman for Network Rail said they
would consider Mr. Bayley's idea to draw up a register of names.
Rail Crash
Separately, York Press's Mr. Laycock reports that Jarvis is to
escape prosecution over the Potters Bar rail crash of 2002.
According to York Press, the Office of Rail Regulation has
confirmed it will not proceed with the prosecution of Jarvis Rail
Limited over the derailment, in which seven people were killed and
another 76 injured.
The ORR said it had concluded that, while there remained
sufficient evidence to provide a realistic prospect of conviction
of Jarvis, a prosecution would no longer be in the public
interest, York Press relates. It said it had taken account of a
number of factors, including that Jarvis's administrator's had
advised they would take no part in any proceedings and that
Network Rail had already pleaded guilty to charges over the crash,
York Press notes. According to York Press, it said members of the
victims' families had also expressed the view there was little
value in continuing with the prosecution.
Citing The Associated Press, the Troubled Company Reporter-Europe
reported on March 29, 2010, that Jarvis PLC said on March 25 it
was going into administration after failing to reach agreements
with lenders to support its operations. According to AP, Jarvis
said it had been hit by cutbacks in railway maintenance work. AP
disclosed trading in Jarvis shares was suspended March 24 on the
London Stock Exchange.
Jarvis plc -- http://www.jarvisplc.com/-- is a United Kingdom-
based company engaged in rail infrastructure renewal and
enhancement, plant hire, freight and facilities management. The
Company is organized into three segments: Rail, Plant and
Accommodation Services. Rail segment provides rail infrastructure
works to the United Kingdom rail industry, including rail renewal,
major track development, electrical and signaling services. Plant
segment provides on-track machinery, small plant equipment and
manages a fleet of purpose-built vehicles for the rail and other
industries; provides bulk haulage and container freight services.
Accommodation Services segment undertakes facilities management
operations. Jarvis Rail Limited (Jarvis Rail) is the rail
engineering arm of the business, which undertakes rail enhancement
projects, signaling and telecommunications, overhead line and
track renewals nationwide.
LEED PETROLEUM: Faces Liquidation after Talks with Creditors Fail
-----------------------------------------------------------------
Steve Marshall at upstreamonline.com reports that Leed Petroleum
Plc has suspended trading of its shares and is facing liquidation
after failing to reach a deal with creditors on repayment of debt.
The report says the company's financial position has deteriorated
as declining production from its Gulf of Mexico wells has hit cash
flow, leaving it unable to meet a March 31, 2011, deadline to
repay a $12 million credit facility with UniCredit Bank.
According to upstreamonline.com, Leed had started a strategic
review process last December with financial advisor Macquarie
Tristone to look at options including divesting some or all of the
company's assets, securing a new credit facility or a merger with
another company.
However, discussions with several parties have failed to bear
fruit and UniCredit has now informed Leed that it intends to
pursue a near-term cash sale of the company's oil and gas assets
to cover outstanding debt, upstreamonline.com relates.
Leed, according to upstreamonline.com, said March 30 that its
directors had "voted to cease business operations and either have
the bank appoint a receiver or, if they refuse, place before the
shareholders a proposal for voluntary liquidation".
Leed said the company and its subsidiaries are currently insolvent
and would not continue as a going concern, the report notes.
The company suffered a net loss of $146.7 million in the second
half of 2010, compared to a loss of $7.4 million a year earlier,
while revenue increased 13.8% year-on-year to $12.5 million,
upstreamonline.com discloses.
The report adds that the company has suffered from falling output
at its Eugene Island A-8 well as well as the Ship Shoal 201 A-6
well, leaving it with insufficient funds to support future
drilling activity.
Leed Petroleum PLC is a United Kingdom-based company. The
company, along with its subsidiaries, is engaged in the business
of exploring for, and developing and producing oil and natural gas
from onshore and offshore locations within the Gulf Coast region
of the United States. As of June 30, 2009, the Company had
working interests in seven producing offshore blocks, nine non-
producing offshore blocks and one non-producing onshore field.
The Company subsidiaries include Leed Petroleum Inc and Leed
Petroleum LLC. The Company holds operating interests in Eugene
Island, Grand Isle, Main Pass, Sorrento Field, South Marsh Island,
Ship Shoal, West Cameron and East Cameron. In April 2009, the
Company acquired a 75% working interest in Ship Shoal blocks 197
and 202, and Eugene Island block 133.
MISSOURI TOPCO: Moody's Downgrades Corp. Family Rating to 'Ba3'
---------------------------------------------------------------
Moody's Investors Service has downgraded to Ba3 from Ba2 the
corporate family rating and probability of default rating of
Missouri TopCo Limited. Concurrently, Moody's has affirmed
Matalan Finance Limited's senior secured rating at Ba1 and it has
downgraded the senior unsecured rating to B1 from Ba3. The
outlook on the ratings remains negative.
Ratings Rationale
"The rating action reflects Moody's view that the inflationary
pressures that have been building on Matalan's supply chain since
the second half of 2010 are likely to continue over the medium
term, causing higher-than-anticipated stress on the company's
operating margins," said Yasmina Serghini-Douvin, a Moody's
Assistant Vice President- Analyst and lead analyst for Matalan.
In a context of weakness in the consumer segment in the UK,
Moody's expects the company's gross margins to be constrained by
the surge in cotton prices over recent months combined with the
rise in freight rates and labor costs in Matalan's sourcing
countries. Matalan reported a decline in its gross margins of 300
basis points in its third quarter ending November 2010, to 21.8%,
and indicated that trading had also subsequently been hurt by
unusual factors such as snowfall.
Moreover, uncertainty remains as to how the UK clothing industry
will respond to these rising costs for the autumn/winter season;
whilst Moody's expects prices to increase to enable retailers to
recoup at least some of the cost increase, it also believes that
Matalan's positioning as a value clothing retailer leaves less
room for maneuver, and that the company could have to wait before
acting on the cost inflation, to preserve its price positioning
and volumes. Moody's therefore considers that the risk to
Matalan's profits will crystallize in the latter part of the
current year, when the full effect of the cost increases kicks in.
Notwithstanding these challenges, the ratings acknowledge
Matalan's intention to slow the pace of new investments, and to
pursue its tight buying and inventory management in order to
preserve its cash flows. The ratings also reflect the company's
good level of profitability supported by its track record of
operating in an efficient manner and the expectation of sustained
positive free cash flow generation.
However, in light of the weakening in Matalan's operational
performance, Moody's now expects the company's (adjusted)
debt/EBITDA ratio to be between 5.0x and 5.5x at FYE February
2011, a level which is deemed stretched for the rating category
and which compares with the rating agency's expectation when
assigning the ratings of a reduction towards 4.0x. In addition,
the rating agency considers that, going forward, the pace of de-
leveraging will be slower, reflecting a more volatile input cost
environment in 2011 and going into 2012.
The negative outlook signals that Matalan's ratings are weakly
positioned in the new rating category and remain vulnerable, given
Moody's concerns that industry conditions might further
deteriorate in the coming quarters, thereby pushing Matalan's
credit metrics outside of the ranges acceptable for the rating
category.
A downgrade of Matalan's ratings could occur if (i) the company
were unable to stabilize then improve its performance, such that
its debt/EBITDA ratio were not to improve towards 5.0x; and (ii)
its liquidity profile were to deteriorate, as a result of a
material reduction in its cash on the balance sheet, insufficient
covenant headroom or concerns on its access to financing, for
example. Although, in view of the rating action and the negative
outlook, no material upward pressure is currently contemplated.
The outlook could be stabilized if the company's performance were
to improve, which would translate into higher free cash flow
generation and stronger credit metrics.
Matalan's liquidity profile is supported by: (i) cash on the
balance sheet, which Moody's estimates to be in excess of
GBP80 million at FYE February 2011; (ii) its moderate capital
requirements; and (iii) access to a revolving credit facility of
GBP50 million. Moody's cautions that the contraction in profit
seen in FYE February 2011 will have reduced Matalan's headroom
under the financial covenants attached to its credit agreements,
especially as the leverage covenant continues to step down.
Last Rating Action & Principal Methodology
Moody's last announcement on Matalan was implemented on
Feb. 7, 2011, when the rating agency changed the outlook on the
company's ratings to negative from stable.
Headquartered in Skelmersdale, UK, Missouri TopCo Limited is the
ultimate holding company that owns Matalan Retail Limited -- the
principal operating subsidiary of the group -- a leading out-of-
town value clothing retailer with estimated revenues of GBP1.1
billion in the 12 month period to November 2010.
NORWICH & PETERBOROUGH: Moody's Cuts Bank Strength Rating to 'D-'
-----------------------------------------------------------------
Moody's Investors Service has lowered the standalone bank
financial strength rating to D- (mapped to a Ba3 on the long-term
scale) from D of Norwich & Peterborough Building Society with a
stable outlook. The long-term deposit rating of Baa2 has been
placed under review (with direction uncertain). The P-2 short-
term rating is unaffected by the rating action.
Ratings Rationale
In downgrading the Society's standalone BFSR, Moody's noted that a
large loss due to the one-off provision for the claims related to
Keydata Investment Services Ltd has appreciably weakened the
Society's absolute level of capital.
In the absence of external capital generation, Moody's believes
that this development may put further pressure on the Society to
reduce its risk-weighted assets. Together with the reputational
impact of the losses, this deleveraging may negatively affect
N&P's franchise at least in the short term and has put downward
pressure on the Society's standalone ratings.
In this respect Moody's notes that, although the Society's
underlying profitability improved during 2010, this result was
mostly bolstered by a reduction in administrative expenses and the
scaling down of its branch network. The Society's operating
income remained broadly flat during the last year. The net
interest margin of the Society improved from 0.7% to 0.84% in 2010
In addition, the Society's capital ratios remain adequate, even
after accounting for the large loss of GBP48.9 million, with a
tier 1 ratio of 13.7% (calculated using an IRB approach).
However, this level of capital ratio was supported by the fact
that the society amortized its loan book by 12% over the last
year.
The stable outlook on the standalone BFSR is based on the fact
that the Society's asset quality, supported by its focus on prime
mortgages, has remained resilient throughout the crisis and
compares favorably to its peer group. The retail deposit base
fully funds its loan book and the Society holds sufficient levels
of high-quality liquid assets with low dependence on market
funding. Also, the stable outlook indicates that Moody's, at this
stage, assumes that the GBP 57 million one-off provisioning will
fully cover the liabilities arising from Keydata claims.
The review on the LT rating with direction uncertain is due to the
public announcement concerning a possible merger with another
Building Society. N&P has publically disclosed that it is
actively engaged in merger discussions with Yorkshire Building
Society (D+/Baa1/P-2) on an exclusive basis. Moody's also notes
that these discussions have no certainty of resulting in a merger
and it will review the ratings once more clarity on this issue
becomes available. However, Moody's estimates that, depending on
the terms of the merger, there is potential of upward pressure on
N&P's long-term rating should the merger occur with a higher-rated
society.
However, should N&P remain a stand-alone entity, with no binding
announcement on merger plans within the review period (typically
three months), Moody's expects that the current multi-notch uplift
benefiting its long-term deposit rating of Baa2 may be revised
downwards.
Moody's last rating action on N&P was implemented on April 14,
2009, when the ratings were downgraded to Baa2/P-2/D from A2/P-
1/C.
NOVAE GROUP: Fitch Downgrades Rating on Subordinated Debt to 'BB'
-----------------------------------------------------------------
Fitch Ratings has downgraded Novae Group plc's Issuer Default
Rating to 'BBB-' from 'BBB' with a Stable Outlook and subordinated
debt issue to 'BB' from 'BB+' and removed both ratings from Rating
Watch Negative Fitch has subsequently withdrawn the ratings as
they are no longer considered to be relevant to the agency's
coverage.
The downgrade reflects a decrease in Novae's risk-adjusted capital
adequacy, as calculated by Fitch, as well as the agency's
expectation that the group's 2011 earnings will be significantly
reduced by net claims from a number of catastrophe events that
occurred in Q111.
The reduction in risk-adjusted capitalization reflects the
repatriation of GBP32.9 million to its shareholders in 2010 and
strong premium growth in 2010. Prior to the reorganization of
Novae's operations in 2009/2010, capital had been a supportive
rating factor.
The Stable Outlook reflects the agency's expectation that the
reduced capital base has stabilized at a level commensurate with
the new rating, assuming expected catastrophe losses are in line
with Novae's published exposure limits.
Fitch put Novae on RWN in December 2009 following its decision to
transfer the business of Novae Insurance Company Ltd (NICL) into
the group's Lloyd's Syndicate and return residual capital to its
shareholders. At the same time, NICL's Insurer Financial Strength
rating was downgraded to 'BBB' with a Negative Outlook, and
simultaneously withdrawn, meaning that Fitch stopped providing
analytical or rating coverage for NICL from that point.
London-based Novae provides insurance and reinsurance underwriting
services to international and UK provincial market and operates
through its Lloyd's operation Novae Syndicates. In 2010, the
group recorded a profit before tax of GBP35.1 million (2009:
GBP4.2 million).
RADAMANTIS PLC: Fitch Downgrades Rating on Class G Notes to 'Bsf'
-----------------------------------------------------------------
Fitch Ratings has downgraded Radamantis (European Loan Conduit No.
24) plc's class F and G tranches and revised the Outlooks on the
class B to E notes to Stable from Negative:
-- GBP315m class A (XS0263691346) affirmed at 'AAAsf'; Outlook
Stable
-- GBP64m class B (XS0263697111) affirmed at 'AA+sf'; Outlook
Stable
-- GBP25m class C (XS0263697970) affirmed at 'AA-sf'; Outlook
Stable
-- GBP18.4m class D (XS0263698945) affirmed at 'A+sf'; Outlook
Stable
-- GBP39.1m class E (XS0263700279) affirmed at 'BBB+sf'; Outlook
Stable
-- GBP14m class F (XS0263700782) downgraded to 'BBsf' from
'BBBsf'; Outlook Stable
-- GBP18m class G (XS0263695172) downgraded to 'Bsf' from
'BBsf'; Outlook Stable
Despite the transaction's stable performance since the last rating
action in June 2010, the downgrade is driven by the uncertainty
surrounding the workout of the Hayes Business Park loan. The
rating action also reflects the uncertainty relating to the 2012
maturities of the Milton & Shire Houses and 15 Westferry Circus
loans, which is driven by both loans having whole loan Fitch LTVs
well in excess of 100%. While asset performance remains stable
and value recovery is underway in the prime UK commercial property
sector, Fitch believes that the borrowers may still experience
difficulties securing sufficient new debt to enable orderly
repayment of the whole loan balances.
The Hayes Business Park loan was transferred to special servicing
when the borrower failed to repay the debt in full at its
scheduled maturity date in January 2011. Fitch estimates that the
securitized loan has an LTV of 94%. However, the presence of a B-
note increases the overall leverage to 120% and is likely to
complicate a potential re-financing of the loan.
The Stable Outlooks are driven by the solid performance of the
remaining loans. The servicer granted the borrower of the largest
loan in the portfolio (Milton & Shires Houses, 54% of the
portfolio) an 18-month loan extension in February 2010, subject to
certain conditions, including cash trap and amortization.
Westferry Circus (19.6% of the portfolio) and South Quay Plaza
(15%) are both secured by single office properties located in
Canary Wharf and let to strong tenant covenants. While Westferry
Circus benefits from a long lease length of 15.6 years, the South
Quay Plaza lease profile is significantly weaker at 3.7 years.
The value of the asset therefore is highly dependent on the
actions of the tenants.
STEPHENSON BELL: GBP500,000 Bad Debt Prompts Restructuring
----------------------------------------------------------
Manchester Evening News reports that Stephenson Bell is being
restructured after being hit by almost GBP500,000 of bad debt.
According to MEN, the firm has been forced to write off
substantial fees after the collapse of several major clients,
including property firm Modus. Its directors have entered into a
company voluntary arrangement to reschedule its own debts, which
are due mainly to HM Revenue and Customs, MEN relates.
MEN says the practice will continue to trade as normal and is
being re-named Roger Stephenson Architects following the departure
of director Jeff Bell.
Stephenson Bell is a Manchester architectural practice.
THOMAS COOK: S&P Assigns 'BB-' Long-Term Corporate Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
corporate credit rating to Thomas Cook Group PLC. The outlook is
stable.
At the same time, S&P assigned a 'BB-' issue rating to the EUR400
million senior unsecured notes due 2015 and the GBP300 million
senior unsecured notes due 2017 issued by Thomas Cook. S&P also
assigned a recovery rating of '4' to these notes, indicating its
expectation of average (30%-50%) recovery prospects in the event
of a payment default.
"The ratings on Thomas Cook are constrained by S&P's view of the
company's limited capacity for debt repayment, which S&P believes
will keep its financial metrics in a range that S&P views as
aggressive over the next two years," said Standard & Poor's
analyst Patrizia D'Amico. "This limited capacity for debt
repayment is due to what S&P assess as Thomas Cook's marginal
ability to generate discretionary cash flow. Further constraints
on the rating are the cyclicality and the seasonality of tourism,
which creates ongoing margin pressure; threats to discretionary
consumer spending in some markets; and a high level of event risk
such as terrorism, diseases, and natural disasters."
As of Sept. 30, 2010, Thomas Cook's Standard & Poor's-adjusted
leverage was 4.5x. S&P anticipate that the ratio will decline
slightly, but will remain within 4.5x-4.0x by the financial year
ending Sept. 30, 2011, mainly supported by EBITDA growth.
Mitigating the above constraints are Thomas Cook's well-
established market position in various European markets; its
flexible business model that allows it to shift capacities and
destinations quickly in case of adverse events; and the critical
mass of its operations. The company has historically posted a 4%
EBITDA margin (before nonrecurring costs), which S&P considers to
be one of the highest EBITDA margins in the industry.
In S&P's view, Thomas Cook's scale and flexible business model
should enable the company to maintain its strong competitive
position in the travel industry and to protect its historical
earnings capacity, even in difficult market conditions. Despite
the ongoing potential for event risks to adversely affect cash
flow generation, S&P believes that the company should be able to
improve its financial metrics gradually over time.
Pressure on the rating could arise if Thomas Cook's credit metrics
were to fail to improve from their current levels, and if adjusted
leverage were to increase above 5.0x as a result of deteriorating
operating performance. Such deterioration could arise from a
softening of the economy and a weakening of the company's EBIT
margin. Any move toward more aggressive shareholder returns could
also put additional pressure on the rating.
S&P could raise the rating in the medium term if Thomas Cook were
able to reduce its leverage to less than 4.0x on a sustainable
basis. S&P considers this to be unlikely over the coming 12
months.
THOMAS COOK: Fitch Assigns 'BB-' Long-Term Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has assigned Thomas Cook Group plc a Long-term
Issuer Default Rating and senior unsecured rating of 'BB-'. The
Outlook is Stable.
The ratings reflect TCG's strong market position as one of the
leading travel groups in Europe. The ratings factor in the
group's geographical diversification and scale, which gives it
strong bargaining power with its suppliers and hoteliers. They
also reflect TCG's flexible business model, thanks to its multi-
channel strategy (retail shops, online and its own airline fleet),
allowing it to adjust its operating model in response to a
reduction in tourist demand in a timely manner. The Stable
Outlook incorporates industry risks and Fitch's expectation that
TCG's credit metrics should not deteriorate over the next 18
months.
However, Fitch considers risks associated with the tour operating
industry as high, due to significant exposure to macro economic
factors in its source markets and external shocks (such as
geopolitical, currency and jet fuel price volatility, which are
currently managed through a hedging tool six to eighteen months in
advance, as well as raising fuel surcharges). Although not immune
to negative currency changes (such as the strengthening of the US$
or EUR against GBP) or increased jet fuel prices, Fitch
acknowledges TCG's capacity to adjust and respond to these
fluctuations over time through its hedging policy or by applying
price increases (fuel surcharges) (which will be necessary in FY12
if the current jet fuel price remains at its current level above
US$1000/T). The group's response to external shocks included re-
booking passengers to other destinations.
Competition in the sector remains intense, notably from low-cost
airlines for shorter destinations, or the rapid development of
online players. The low operating margin and seasonality inherent
to the industry, are also constraining factors. The group's
profitability varies by source market and is influenced by the
company's in-house controlled distribution level (52.4% for the
total group). The group has been able to achieve a relatively
higher operating margin (4.1%) compared to its peers due to its
flexible business model. TCG is also implementing efficiency
measures to reduce operating costs, including aircraft fleet
harmonization. Fitch expects that the group's restructuring and
exceptional charges will also be reduced compared to previous
years (linked to the ash cloud, merger with MyTravel and other
integration costs).
Additionally, Fitch views liquidity management as critical due to
the swing of working capital change during the year (around GBP0.7
billion) with the lowest point for liquidity being in December.
Fitch understands that management follows liquidity forecasts
carefully and liquidity headroom management is through existing
committed bank lines. In May 2010, TCG entered into a GBP1,050
million committed bank facility agreement with a number of banks,
maturing in May 2013. The new facilities include a revolving
credit facility of GBP850 million to support the seasonal
liquidity requirements and the general corporate purposes of the
group. At year-end (September 2010), the group had available
undrawn committed debt facilities of GBP846 million.
Fitch therefore considers TCG's net and gross lease-adjusted debt
ratios on FFO and EBITDAR base at FYE but also at peak time in
December (the negative impact being up to 1x on year-end debt
ratios at peak). Fitch considers that TCG's current credit
metrics are commensurate with the 'BB-' ratings, given the
industry risk and seasonality of the business performance, with
lease-adjusted debt to FFO of 4.2x and a lease-adjusted interest
coverage of 2.4x as of FY10. Nevertheless, the current high
dividend payout ratio (40%-50%) is constraining its free cash flow
generation. A deterioration of credit ratios, liquidity or a
sharp compression of the group's recurring operating profit could
put pressure on the rating.
TOM WOOD: Consortium Buys Brewery, Restarts Production
------------------------------------------------------
Morning Advertiser reports that a consortium of six local people
have taken control of Lincolnshire brewer and retailer Tom Wood
and brewing was set to re-start on March 30.
The firm, according to the report, went into liquidation owing
just over GBP2 million to creditors, including the HM Revenue &
Customs, banks, regional and national brewers and local service
suppliers.
Morning Advertiser says former owner Tom Wood has been appointed
head brewer of the new venture, known as Tom Wood Beers Ltd, after
the six partners paid just over GBP100,000 for the business.
"The six people approached me independently," Morning Advertiser
quotes Mr. Wood as saying. "I felt I would be a lot happier
working for a group of people passionate about the product rather
than those who just want to extract value out of the business."
Morning Advertiser relates that the new venture includes the
brewery assets of the previous business, but not the wholesale
arm, which Mr. Wood blamed for the previous company going under.
"The margins were tight and it's a very aggressive market that was
declining," he said.
While two of the company's pubs were closed by the liquidators,
its flagship site, the Yarborough Hunt in Brigg, has stayed open
because the Highwood Brewery has a 50% share in it - the other
half is owned by another local operator, Morning Advertiser
reports.
According to the report, the liquidation was handled by Grimsby
accountant Charles Gorwood.
"There seems to be a quite of lot of interest in the process of
micro-brewing and we received seven firm enquiries over the sale
of Highwood," Mr. Gorwood told a local newspaper, Morning
Advertiser says. "Tom Wood's Beer is a well-known and liked
product, and that helped the sale."
The remainder of the brewery assets is to go on sale on April 5 in
a sale organized by CJM Assets in Scunthorpe.
Headquartered in Melton High Wood Farm in North Lincolnshire,
Tom Woods Beer is a county brewery.
VEDANTA RESOURCES: Fitch Affirms 'BB+' LT Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has affirmed Vedanta Resources Plc's Long-Term
Issuer Default Rating at 'BB+', and simultaneously removed it from
Rating Watch Negative. The Outlook is Stable. The agency has
also affirmed Vedanta's senior unsecured debt at 'BB'. This
rating is maintained at the single notch differential from the IDR
to reflect the continuing structural subordination at Vedanta --
the holding company -- due to its complex holding structure
spanning multiple countries.
The resolution of the RWN follows Fitch's detailed analysis of the
acquisition, including funding plans, of a majority stake in Cairn
India Ltd announced in August 2010, for a consideration of up to
US$9.6 billion. Fitch assumes the successful completion of the
acquisition in FY12 based on the current terms and conditions.
The acquisition was originally scheduled to be completed in
Q4FY11, and awaits regulatory approvals.
The ratings reflect CIL's successful ongoing ramp-up of its
Rajasthan fields, low finding and development costs, and the
partial completion of its heated pipeline. The ratings also
reflect the fact that the company has tied up sales arrangement
for an output of around 143,000 barrels of oil equivalent per day.
Fitch has assumed that CIL will achieve its targeted gross
production rate of 240,000 boepd in FY12 from the Rajasthan
fields, which currently awaits approvals. CIL has a working
interest of 70% in these fields, which will account for the bulk
of its effective volumes.
The affirmations reflect Vedanta's continued cost-leadership
position in India's zinc industry and its strong cash flows from
zinc and iron ore businesses. The agency has factored in the
impact of the Anglo Zinc acquisition which was completed in
February 2011. The affirmations also reflect the high-cost
structure of Vedanta's Indian aluminium operations due to the lack
of bauxite mining linkages. The company awaits regulatory
approval for its Indian aluminium and copper smelter expansions,
and has consequently postponed a sizable part of its capex. The
company has also faced regulatory issues with regard to its custom
copper smelting operations in India, and the matter remains sub-
judice.
Vedanta has benefited strongly from the firm metal prices
prevailing during the nine months ended Dec. 31, 2010 (9mFY11),
which more than offset higher operating costs. Fitch expects the
company to face rising operating costs in certain businesses,
although the impact could be partly offset by higher volumes.
Although metal prices are likely to remain firm, there could be
some softening from current levels, which could moderate
profitability. The agency has assumed a capex of US$7 billion-
US$8 billion over FY12-FY14.
Any fresh capex/ investments and/or major debt-led acquisition
impacting credit metrics and increasing operating risks could put
pressure on the ratings. In any case, a net adjusted
debt/operating EBITDAR of beyond 2.75x on a sustained basis would
act as a negative rating guideline. This forms a part of the
company's maintenance covenants across certain facilities.
Conversely, substantial improvements in earnings and cost
structure coupled with strong returns from the ongoing capex
program may result in a ratings upgrade. A sustained de-levering
of the company leading to a net adjusted debt/operating EBITDAR of
below 2x on a sustained basis would act as a positive rating
guideline.
For 9mFY11, Vedanta's revenues grew 49.5% yoy to US$7,659 million,
with an EBITDA margin of 29% (9mFY10: 27.5%). In FY10, it
reported revenues of US$7.9 billion, with an EBITDA margin of 29%
and a net adjusted debt/ operating EBITDAR of 0.5x.
Vedanta Resources Plc, UK
-- US$1.25bn senior unsecured bonds: affirmed at 'BB'; and
-- US$180m senior unsecured loan facility: assigned 'BB'.
Twinstar Holdings Ltd, Mauritius
-- US$150m unsecured loan facility backed by an unconditional,
irrevocable guarantee of Vedanta Resources Plc: assigned
'BB'.
WASHINGTON DISPLAY: Bought Out of Administration; 62 Jobs Saved
---------------------------------------------------------------
Peter McCusker, writing for The Journal, reports that Washington
Display has been bought out of administration saving the jobs of
its 62 staff.
According to The Journal, Washington Display has been bought in a
pre-pack deal by its former director and majority shareholder
Shaun Allen.
The Journal relates that the firm has suffered from the ongoing
decline in sales in the retail sector and is understood to have
had debts of around GBP100,000 when it went into administration.
"The business was in need of immediate financial investment to
continue trading," The Journal quoted joint administrator, Andrew
Haslam of Begbies Traynor in Newcastle, as saying.
"Our colleagues in BTG Corporate Finance, part of Begbies Traynor
Group, undertook a marketing campaign to locate a third party
purchaser and the only party to come forward was the associated
company.
"Detailed negotiations were commenced which have led to the
successful sale of the business, safeguarding 62 jobs which is
welcome in the current economic climate, as well as reducing
disruption to the supply chain for customers."
The new company will be known as WDL Products, The Journal notes.
Washington Display is a manufacturer of retail point-of-display
material based in Washington.
WOODHEAD BAKERY: Goes Into Administration
-----------------------------------------
BBC News reports that Woodhead Bakery has gone into
administration.
According to BBC, the firm said it had made 30 of its 310
employees redundant. The business will continue to operate under
administrators, P&A Partnership, BBC discloses.
BBC relates that the company said it had been "hit by inflation
and the impact of rising global wheat prices". It also said
"harsh economic conditions" on the high street had made it
difficult to run the business, BBC notes.
Woodhead Bakery is based in Scarborough. It has been trading for
75 years.
===============
X X X X X X X X
===============
* S&P Takes Various Rating Actions on 15 European CDO Tranches
--------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
15 European collateralized debt obligation tranches.
Specifically, S&P has:
* Lowered its ratings on three tranches;
* Lowered and kept on CreditWatch negative its ratings on two
tranches;
* Lowered and placed on CreditWatch negative its rating on two
tranches; and
* Raised its ratings on eight tranches.
The rating actions follow S&P's recent rating actions on the
underlying collateral. According to the transaction documents,
the ratings on these tranches are weak-linked to the rating on the
underlying collateral. Under its criteria applicable to
transactions such as these, S&P would generally reflect changes to
the rating on the collateral in S&P's rating on the tranche.
Ratings List
Ratings Lowered
CID Finance B.V.
EUR15 Million Credit-Linked Secured Limited-Recourse Notes
Series 40
Rating
------
To From
-- ----
BBB+ (sf) A (sf)
CID Finance B.V.
EUR26 Million Credit-Linked Secured Limited-Recourse Notes
Series 50
Rating
------
To From
-- ----
BBB+ (sf) A (sf)
Coriolanus Ltd.
EUR6 Million Pass-Through Floating-Rate Secured Notes Series 28
Rating
------
To From
-- ----
CC (sf) B- (sf)
Ratings Lowered and Kept on Creditwatch Negative
Coriolanus Ltd.
EUR6 Million Pass-Through Floating-Rate Secured Notes Series 27
Rating
------
To From
-- ----
B- (sf)/Watch Neg AA+(sf)/Watch Neg
Lunar Funding I Ltd.
GBP120 Million Fixed-Rate Notes Series 16
Rating
------
To From
-- ----
BBB (sf)/Watch Neg BBB+ (sf)/Watch Neg
Ratings Lowered and Placed on Creditwatch Negative
CID Finance B.V.
EUR10 Million Credit-Linked Secured Limited-Recourse Notes
Series 39
Rating
------
To From
-- ----
A (sf)/Watch Neg A+ (sf)
CID Finance B.V.
EUR9 Million Credit-Linked Secured Limited-Recourse Notes
Series 43
Rating
------
To From
-- ----
A (sf)/Watch Neg A+ (sf)
Ratings Raise
Elva Funding PLC
$9.996 Million Secured Variable Interest Rate Notes Series 2004-8
Rating
------
To From
-- ----
BB (sf) BB- (sf)
Lunar Funding I Ltd.
EUR10 Million Secured Asset-Backed Credit-Linked Notes Series 2
Rating
------
To From
-- ----
B- (sf) CCC- (sf)
Lunar Funding V PLC
GBP50 Million Secured Asset-Backed Credit-Linked Notes Series 11
(Raphael CDO I)
Rating
------
To From
-- ----
A- (sf) BBB+ (sf)
Willow No.2 (Ireland) PLC
EUR17.666 Million Secured Limited-Recourse Floating-Rate Notes
Series 6
Rating
------
To From
-- ----
BBB+ (sf) BBB (sf)
Willow No.2 (Ireland) PLC
EUR30 Million Secured Limited-Recourse Fixed-Rate Notes Series 8
Rating
------
To From
-- ----
BBB+ (sf) BBB (sf)
Willow No.2 (Ireland) PLC
EUR16.238 Million Secured Limited-Recourse Floating-Rate Notes
Series 12
Rating
------
To From
-- ----
BBB+ (sf) BBB (sf)
Willow No.2 (Ireland) PLC
EUR7 Million Secured Limited-Recourse Variable-Rate Index-Linked
Notes Series 14
Rating
------
To From
-- ----
BBB+ (sf) BBB (sf)
Willow No.2 (Ireland) PLC
EUR44.5 Million Secured Limited-Recourse Variable-Rate Notes
Series 15
Rating
------
To From
-- ----
BBB+ (sf) BBB (sf)
* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy
----------------------------------------------------------
Authors: Thomas J. Salerno; Craig D. Hansen; Jordan A. Kroop
Publisher: Beard Books
Hardcover: 728 pages
List Price: US$174.95
The newly revised edition of The Executive Guide To Corporate
Bankruptcy is perfectly timed. As the global economy continues to
deteriorate, more and more companies are sinking into insolvency
with executives at their helm who need a crash course in
bankruptcy realities. This excellent book will quickly get both
the seasoned executive and the uninitiated lawyer up to speed on
the bankruptcy process.
Salerno, Kroop and Hansen understand that the reorganization
process can be intimidating, puzzling, and generally unpleasant.
They penetrate the opaque gloom that some lawyers tend to
perpetuate. Each chapter of this book addresses a different
aspect of the reorganization process, beginning with an overview
of the origins and purpose of US bankruptcy laws and ending with a
debunking of common myths about reorganization. In between, they
discuss each chapter of the bankruptcy code; discussing the gamut
from liquidations through Chapter 11 sales and full-blown
reorganizations. The authors' ability to distill the bankruptcy
code's complex language into comprehensible and manageable blocks
of information makes the book extremely readable.
The Executive Guide is full of pragmatic advice. After laying out
the essential elements and key players in the restructuring
process, the authors get down to the nitty gritty of navigating a
distressed company through reorganization. They realistically
assess the challenges that an executive should expect to face in
Chapter 11. They discuss how to assuage and balance the concerns
of employees and key vendors, address the inevitable creditor
dissatisfaction with executive compensation, deal with members of
their professional team and work effectively as an executive whose
actions will be constantly scrutinized and second-guessed. The
authors also provide the cautionary note that "executives
preparing to embark on a reorganization are usually too
preoccupied with business emergencies to think about the personal
toll that the process will exact."
One common flaw in books that try to be accessible while dealing
with technical topics is that they fall short in providing the
reader with a substantive understanding of the subject matter.
The Executive Guide to Corporate Bankruptcy avoids this pitfall.
The book's fourth and fifth chapters provide in-depth analysis of
the strategic decisions and steps that should be taken during the
restructuring process. The authors explain the importance that
venue can have a case, the intricacies of first day motions and
how to prepare for confirmation. There is a detailed discussion
of the sale of assets during the course of a Chapter 11
restructuring and the importance of making sure that major
constituencies are a part of the decision-making process. They
also walk the reader through the specifics of a plan of a
reorganization, explaining the dynamics of the negotiation
process, especially how to understand and appreciate the needs of
your constituents and how to get a plan confirmed.
The icing on the cake for this book is the excellent appendix.
The final section of the book includes a user-friendly glossary of
commonly used bankruptcy terms and a reorganization timeline. It
also includes sample documents such as debtor-in-possession (DIP)
financing agreements, operating reports, first day motions and
orders, management severance agreements, and more. The summary of
management incentive stock plans implemented in recent
restructuring transactions is particularly informative.
This is a terrific book. While geared to the non-lawyer
executive, it will also be a useful resource for any lawyer who
wants to gain practical familiarity with the bankruptcy process.
This should be a best seller in today's environment, though it may
need to be delivered to most executives in a brown paper wrapper.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/booksto order any title today.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Psyche A. Castillon, Julie Anne G. Lopez,
Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman,
Editors.
Copyright 2011. 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 * * *