TCREUR_Public/110617.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

             Friday, June 17, 2011, Vol. 12, No. 119

                            Headlines



A U S T R I A

A-TEC INDUSTRIES: Posts EUR576.8 Million Net Loss in 2010
A-TEC INDUSTRIES: In Talks with Potential Investors


C Z E C H   R E P U B L I C

ECM REAL ESTATE: Preliminary Injunction Bans Asset Sale
METAZ: Sold to Czech Investor for CZK52 Million
SAZKA AS: Board to Hold Extraordinary General Meeting on July 19


I R E L A N D

ALLIED IRISH: Majority of Bondholders Back Debt Buyback
ALLIED IRISH: S&P Downgrades Rating on Hybrid Debt to 'D'
ANGLO IRISH: Noonan Wants Senior Bondholders to Share in Losses
BANK OF IRELAND: S&P Lowers Ratings on Hybrid Debt to 'C'
GLENROYAL HOTEL: Developers Application Over Receivers Fails

WHITE TOWER EUROPE: Fitch Cuts Rating on Class E Notes to 'CCsf'


K A Z A K H S T A N

ATF BANK: Moody's Reviews 'Ba2' Ratings for Possible Downgrade


N E T H E R L A N D S

ARCOS DORADOS: Moody's Says Ratings Unaffected by Note Redemption


R U S S I A

GLOBEXBANK: Fitch Affirms Long-Term Issuer Default Ratings at 'BB'
SEVERSTAL OAO: Moody's Upgrades CFR to Ba2; Outlook Stable
SEVERSTAL OAO: S&P Raises Long-Term Corp. Credit Rating to 'BB'
SVIAZ-BANK: Fitch Affirms Long-Term Issuer Default Ratings at 'BB'
SCT: Slovenia Launches Receivership Proceedings for Firm


U K R A I N E

* CITY OF KYIV: Fitch Assigns 'B-(exp)' Rating to LPN Issue
* CITY OF KYIV: S&P Puts 'CCC+' Rating on CreditWatch Developing


U N I T E D   K I N G D O M

HALDANES STORES: Terminated Staff Assert Non-receipt of Payment
KERLING PLC: Moody's Affirms B3 CFR; Assigns (P)B3 to Loan Notes
NORTHERN ROCK: Set to Be Sold for GBP1 Billion
PROFESSIONAL VENTURES: RBS Takes Control of 42 Marriott Hotels
SOUTHERN CROSS: Has Reached Deal with Landlords on Restructuring

SOUTHSEA MORTGAGE: Put Into Bank Insolvency Procedure
V8 GOURMET: Goes Into Administration Again Despite Recent Backing


X X X X X X X X

* BOOK REVIEW: Corporate Players


                            *********



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A U S T R I A
=============


A-TEC INDUSTRIES: Posts EUR576.8 Million Net Loss in 2010
---------------------------------------------------------
Zoe Schneeweiss at Bloomberg News reports that A-Tec Industries AG
posted a loss of EUR576.8 million in 2010, compared to a profit of
EUR54.2 million a year earlier.

On Oct. 22, 2010, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported that A-Tec sought court clearance to
reorganize debt after losing access to its line of credit because
of an Australian power-station project's financial difficulties.
Bloomberg disclosed A-Tec said in an Oct. 20 statement that it had
filed for self-administered reorganization proceedings at the
Vienna Commercial Court and appointed trustees for bondholders.
The company has a EUR798 million (US$1.11 billion) revolving
credit facility and EUR302 million in outstanding bonds, according
to Bloomberg data.

A-TEC Industries AG engages in plant construction, drive
technology, machine tools, and minerals and metals businesses in
Europe and internationally.  The company is based in Vienna,
Austria.


A-TEC INDUSTRIES: In Talks with Potential Investors
---------------------------------------------------
Michael Shields at Reuters reports that A-TEC Industries AG said
it is holding talks with potential investors and hopes to remain a
going concern.

A-TEC struck a deal with creditors in December to repay 47% of its
debts and agreed to find an outside investor by June 30 as a way
to avoid bankruptcy, Reuters relates.

"The management board of A-TEC Industries AG has received non-
binding offers from various potential investors and is conducting
intensive negotiations with them," Reuters quotes the company as
saying in a statement on Wednesday.  "Based on the offers and
negotiations, the management board is convinced that the
reorganization plan can be fulfilled and the company can
continue."

A-TEC became insolvent after its Austria Energy & Environment
unit, which makes thermal power generation systems and
environmental technologies, was forced into insolvency, Reuters
recounts.  A-TEC began restructuring in October after failing to
refinance a bond and obtain a bridge loan, its own insolvency
largely caused by AE&E's losses, Reuters discloses.

A-TEC Industries AG engages in plant construction, drive
technology, machine tools, and minerals and metals businesses in
Europe and internationally.  The company is based in Vienna,
Austria.


===========================
C Z E C H   R E P U B L I C
===========================


ECM REAL ESTATE: Preliminary Injunction Bans Asset Sale
-------------------------------------------------------
CTK reports that the Prague City Court on June 15 issued a
preliminary injunction banning ECM Real Estate Investments AG from
selling its assets and published the decision in the insolvency
register.

The preliminary injunction request was filed by a group of ECM's
creditors on Thursday, CTK relates.  The court, however, rejected
the creditors' proposal for reducing ECM's rights and duties in
its subsidiaries, CTK notes.

According to CTK, ECM cannot handle assets worth over CZK150,000
without the insolvency administrator's approval until decision is
made on solving the company's insolvency.  For handling assets
worth over CZK5 million, ECM will need the approval of the
preliminary creditors committee, CTK states.

As reported by the Troubled Company Reporter-Europe on June 16,
2011, CTK related that the proposal for the preliminary injunction
was signed by the firm Glancus Investments of the PPF group,
high-street bank Ceska sporitelna, rep of bondholders Astin
Capital Management and Volksbank CZ.  The creditors were concerned
that the ECM group wants to continue selling its assets as well as
the assets of its subsidiaries.  The creditors said in the
proposal that they wanted to make sure that the value of ECM
assets would not be lowered, in particular the most important part
of the assets, namely stakes in the debtor-controlled companies
that own real estate or stakes in them, according to CTK.  The
creditors argued that ECM sold stakes in some subsidiaries after
the start of insolvency proceedings.

ECM Real Estate Investments AG is known mainly as the builder of
high-rise buildings in Prague's Pankrac district.


METAZ: Sold to Czech Investor for CZK52 Million
-----------------------------------------------
CTK reports that Metaz was recently sold in a tender to a Czech
investor for CZK52 million.

Naxos, which organized the tender, estimated the firm's price at
CZK116 million in March, CTK recounts.  It said that the new owner
wants to maintain production activity, CTK notes.

According to CTK, insolvency administrator Vladimira Jechova
Vapenikova said earlier that Metaz registered 240 creditors with
claims worth around CZK260 million.

Metaz is a bankrupt castings and steel maker.


SAZKA AS: Board to Hold Extraordinary General Meeting on July 19
----------------------------------------------------------------
CTK, citing the spokeswoman of Sazka AS's receiver, reports that
the supervisory board of the company agreed to call an
extraordinary general meeting for July 19.

According to CTK, a new board of directors is expected to be
elected at the extraordinary general meeting.

Six members of the seven-strong board of directors have resigned
while board chairman Ales Husak retains the post to this day, CTK
notes.

Sazka AS is a provider of lotteries and sport betting games in the
Czech Republic.


=============
I R E L A N D
=============


ALLIED IRISH: Majority of Bondholders Back Debt Buyback
-------------------------------------------------------
Simon Carswell at The Irish Times reports that lenders with more
than 86% of the face value of debt on 15 Allied Irish Banks plc's
subordinated bonds have agreed to the bank's debt buyback, which
is expected to raise at least EUR1.6 billion towards the bank's
EUR13.3 billion capital bill.

AIB announced preliminary results for the buyback in relation to
15 of the 18 securities with a face value of about EUR2.3 billion,
The Irish Times relates.  Investors in the remaining three bonds,
which have a face value of about EUR350 million, have until
July 20 to tender for the offer, The Irish Times notes.

The bank is imposing losses of as high as 90% on subordinated
bondholders and virtually nothing -- one cent for every EUR1,000
of debt held -- if they decline, The Irish Times states.

AIB, which is 93% owned by the Irish State, was ordered to raise
EUR13.3 billion by the Central Bank following stress tests of the
banks, The Irish Times recounts.

                    About Allied Irish Banks

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

                          *     *     *

As reported by the Troubled Company Reporter-Europe on May 20,
2011, Moody's Investors Service downgraded the dated subordinated
debt of Allied Irish Banks (AIB) one further notch to C from Ca,
and downgraded the undated subordinated debt and tier 1
instruments to C(hyb) from Ca(hyb). This follows the announcement
of an offer from AIB to buy back its subordinated and tier 1 debt
for cash at very high discounts to the par value, and the previous
announcement on April 14 that the Irish High Court had made a
Subordinated Liabilities Order (SLO) with regard to AIB.  AIB is
rated Ba2/N-P for bank deposits, Ba3/N-P for senior debt and has a
D- bank financial strength rating (mapping to Ba3 on the long-term
scale).  The outlook on the ratings is negative.


ALLIED IRISH: S&P Downgrades Rating on Hybrid Debt to 'D'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
hybrid debt instruments issued by Allied Irish Banks PLC.

The 'BB/B' counterparty credit ratings on AIB remain on
CreditWatch, where they were placed with negative implications on
Nov. 26, 2010. The rating action does not affect AIB's debt issues
that are guaranteed by the Republic of Ireland (BBB+/Stable/A-2)
nor its unguaranteed senior or lower Tier 2 instruments.

"We consider the changes to the terms and conditions of the hybrid
instruments to be tantamount to an immediate default on the
affected notes. As a result, we have lowered the ratings on all
affected hybrid issues to 'D' from 'C'," S&P said.

On April 14, 2011, the High Court of Ireland acceded to the
Minister for Finance's request to exercise his powers under the
Credit Institutions (Stabilization) Act 2010 by changing the terms
and conditions of 18 of AIB's subordinated debt capital
instruments.  On June 9, 2011, the terms and conditions were
adjusted for 16 of the 18 issues, including all seven of the
hybrid debt instruments.

The court order imposed these changes to the hybrid instruments:

    Restrictions on the dividend payments or buybacks have been
    removed for parity on junior securities of four out of seven
    perpetual subordinated debt issues. The other three perpetual
    subordinated loans no longer require payment on arrears of
    interest upon payment of dividends by AIB.

"Under our criteria, we regard the potential changes as a loss of
value to investors because the noteholders face increased risk of
future nonpayment and hence they may receive less than the
original promise without compensation. We therefore regard the
government's intended action as a distressed exchange that is
tantamount to an immediate default on the notes," S&P said.

"It is currently unclear whether a rump of untendered securities
will remain after the tender offer closes. If a rump persists, in
line with our criteria we will consider at what level those
securities should be rated. AIB has said that it expects that the
government would take whatever steps it considers necessary to
maximize burden sharing by any remaining subordinated
noteholders," S&P said.


ANGLO IRISH: Noonan Wants Senior Bondholders to Share in Losses
---------------------------------------------------------------
Joe Brennan at Bloomberg News reports that Irish Finance Minister
Michael Noonan said senior bondholders should share in the losses
of Anglo Irish Bank Corp. and Irish Nationwide Building Society.

The Finance Minister's suggestion, if made effective, reserves a
policy of protecting owners of senior securities, the report
notes.

According to Bloomberg, Mr. Noonan said in an interview with
Dublin-based broadcaster RTE on Tuesday that he discussed sharing
the cost of rescuing both lenders with senior bondholders at a
meeting with the International Monetary Fund.

The lenders have about EUR3.8 billion (US$5.4 billion) of the
securities, Bloomberg discloses.  Ireland's central bank said on
April 1 that Anglo Irish has EUR3.2 billion of senior
unguaranteed, unsecured bonds and Irish Nationwide has EUR601
million of the securities.

Bloomberg notes that RTE said Mr. Noonan is also asking EU
authorities to let the government impose significant losses on
senior bondholders.

Ireland, which has injected a combined EUR34.7 billion into Anglo
Irish and Irish Nationwide over the past two years, is merging
both lenders and winding down their assets over a 10-year period,
Bloomberg discloses.  The government had previously said it
wouldn't seek to impose losses on senior bondholders unless the
lenders need additional capital, Bloomberg relates.

The European Central Bank has also opposed any moves to force
losses onto senior bondholders, Bloomberg notes.

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: S&P Lowers Ratings on Hybrid Debt to 'C'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
affected Tier 1 and Tier 2 hybrid debt instruments issued by Bank
of Ireland (BOI; BB+/Watch Neg/B) and subsidiaries to 'C' from
'CC' and affected lower Tier 2 subordinated debt instruments to
'D' from 'CCC'.

The 'BB+/B' counterparty credit ratings on BOI remain on
CreditWatch with negative implications, where they were placed on
Nov. 26, 2010. The rating action does not affect issuances by BOI
which are guaranteed by the Irish government. The two rated BOI
preferred instruments not subject to the offer remain at 'CC'.

On May 31, 2011, BOI announced its intent to launch a tender offer
for approximately EUR2.6 billion of its remaining Tier 1 and
Tier 2 instruments. The offer was subsequently formally announced
on June 8, 2011. The offer covers the vast majority of BOI's
outstanding subordinated instruments.

BOI has offered bondholders the opportunity to tender any or all
of their existing Tier 1 notes for equity or cash at a rate of 20
or 10 cents to the euro.  Similarly, BOI is offering 40 or 20
cents to the euro for upper and lower Tier 2 instruments depending
on an equity or cash exchange.  The equity alternative
incorporates both a premium to the cash alternative and a payment
in respect of interest accrued.

"The downgrade of the Tier 1 and Tier 2 subordinated debt ratings
reflects our opinion that this exchange offer is a 'distressed
exchange' and a de facto restructuring, in accordance with our
criteria (see 'Rating Implications Of Exchange Offers and Similar
Restructurings, Update,' published May 12, 2009, on
RatingsDirect). There is no related rating action on the
counterparty credit ratings because there is no default on
nonregulatory capital issues," S&P said.

S&P considers this to be a "distressed exchange" because:

    Bondholders stand to receive significantly less than the
    original promise; and

    "In the light of the Irish government's clearly expressed
    stance regarding burden-sharing by subordinated bondholders in
    troubled Irish institutions, and BOI's own circumstances as an
    institution needing to raise more capital, we consider that
    there is a realistic possibility of a government-enforced
    default through coercive burden-sharing on the instruments
    subject to the exchange, over the near-to-medium term," S&P
    said.

Depending on investor demand, BOI anticipates exchanging up to
EUR2.6 billion of its remaining subordinated instruments as part
of this offer. The additional core Tier 1 capital created by the
offer depends on the subscription to the equity or cash options,
resulting in a range between EUR1.7 billion (plus EUR0.9 billion
equity issued) and EUR2.1 billion. Further to the Prudential
Capital Assessment Review (PCAR) exercise (see related research of
April 5), BOI was told by the Irish financial regulator that it
must raise EUR4.2 billion of new equity plus EUR1.0 billion of
contingent capital by end-July 2011. BOI has said that further to
the described liability management exercise, it expects to
need to raise a further EUR1.8 billion-EUR2.2 billion in order to
meet the EUR4.2 million capital requirement. It expects to do this
via a rights issue underwritten by the Irish government, although
a share placing has not been ruled out.

"If any rump of untendered securities remains after the tender
offer closes, we will consider the ratings on those securities in
line with our criteria. In BOI's announcement, it notes that the
government would take whatever steps it considers necessary to
maximize burden sharing by any remaining subordinated
noteholders," S&P said.

The ratings on the two rated BOI preferred share instruments that
are not subject to the offer remain at 'CC'. "BOI is currently
servicing the coupons on these instruments, but, in our view,
given the bank's circumstances, the government's stance on burden-
sharing, and its powers under the Credit Institutions
(Stabilisation) Act 2010, there is a risk that these instruments
could yet be subject to a coupon deferral, a 'distressed
exchange,' or change of terms in the near-to-medium term," S&P
said.


GLENROYAL HOTEL: Developers Application Over Receivers Fails
------------------------------------------------------------
Irish Times reports that the High Court Justice Daniel O'Keeffe
has dismissed an application by two companies of developers Ray
and Danny Grehan for an injunction preventing the National Assets
Management Agency (NAMA) from appointing receivers to the
Glenroyal Hotel and leisure centre.

Glenkerrin Properties Ltd and Glenroyal Leisure Ltd brought
proceedings against the agency and accountants Paul McCann and
Michael McAteer, who were appointed receivers earlier this year,
according to Irish Times.

Glenkerrin Properties and Glenroyal Leisure allege that there is
no lawful basis for the appointment of the receivers of the hotel,
and sought injunctions, pending the outcome, restraining them from
operating the businesses, Irish Times notes.

NAMA, in an opposing action, said it was entitled to make the
appointments and rejected arguments made on behalf of the
companies, which the court heard are "hopelessly insolvent," The
Irish Times relates.

Irish Times notes that Justice O'Keeffe said he accepted NAMA's
argument that an injunction should not be granted on the grounds
the companies had failed to provide the court with information in
relation to their insolvency and their inability to have funding
required to carry on their business.  Irish Times relates that
there had been "non-disclosure to a material degree" of financial
information in relation to the companies.  Such information,
Justice O'Keeffee said, was "necessary to assess the commercial
and financial realities before any injunctive relief is made".


WHITE TOWER EUROPE: Fitch Cuts Rating on Class E Notes to 'CCsf'
----------------------------------------------------------------
Fitch Ratings has upgraded White Tower 2007-1's class A and B
notes, affirmed the class C notes and downgraded the class D and E
notes due 2015:

   -- EUR76.9m class A: upgraded to 'AAsf' from 'Asf'; Outlook
      Stable

   -- EUR19.7m class B: upgraded to 'Asf' from 'BBBsf'; Outlook
      Stable

   -- EUR19.5m class C: affirmed at 'BBsf'; Outlook Stable

   -- EUR19.4m class D: downgraded to 'CCCsf' from 'Bsf'; assigned
      a Recovery Rating (RR) of RR3

   -- EUR11.7m class E: downgraded to 'CCsf' from 'CCCsf';
      maintains a Recovery Rating (RR) of RR6

The upgrade of the class A and B notes and affirmation of the
class C notes reflect the full repayments of the Crown, Castor &
Pollux and Sebastopol loans, reducing the outstanding balance of
the notes to EUR147.2 million from EUR349.6 million at closing.
Since the Castor & Pollux and Crown loans were considered high-
risk loans, Fitch views their prepayment positively. In addition,
a significant proportion of principal proceeds were applied
sequentially, increasing credit enhancement and considerably
reducing the balance of the class A notes. However, the downgrade
of the class D and E notes reflects the increased likelihood of a
loss allocation from the remaining Heron City loan.

As a result of the repayments, the Heron City loan, secured by a
single shopping centre/entertainment centre asset located on the
outskirts of Barcelona, now accounts for 72% of the loan pool
balance. The property's largest tenants are Cinesa, a large
multiplex cinema operator, and Virgin Active, an international gym
operator, who together account for 41.9% of current passing rent.
A new valuation of the asset, performed in December 2010, suggests
the loan is considerably over leveraged, with a reported LTV of
130.2%. Fitch expects this loan to make a loss if it is not
successfully refinanced at loan maturity in December 2011.

The remaining two loans, together accounting for 28% of the loan
pool balance, are each secured by single office properties located
in Hanover and Nuremburg, Germany. Both assets are predominantly
let to Deutsche Bahn, with WA unexpired lease terms of over 8
years and 8.5 years, respectively. Although both loans are also
scheduled to mature in December 2011, updated valuations performed
in December 2010 indicate that a loss on these loans is unlikely.


===================
K A Z A K H S T A N
===================


ATF BANK: Moody's Reviews 'Ba2' Ratings for Possible Downgrade
--------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade ATF
Bank's Ba2 long-term local and foreign-currency deposit ratings,
Ba2 foreign-currency senior unsecured and B1 foreign-currency
junior subordinated debt ratings. The bank's E+ bank financial
strength rating (BFSR), which maps to B3 on the long-term rating
scale is unaffected by this and continues to have a stable
outlook.

Ratings Rationale

The decision to review the bank's ratings for possible downgrade
is triggered by the review for possible downgrade of UniCredit's
ratings, initiated by Moody's on May 17, 2011. Unicredit is ATF
Bank's ultimate parent. Moody's currently incorporates high
parental support probability in ATF Bank's deposit and debt
ratings, which results in four-notches of rating uplift from the
bank's standalone credit strength of B3. In the process of the
review, the rating agency said that it will (i) consider the
effect of a possible downgrade of UniCredit's ratings on ATF
Bank's ratings; and (ii) consider whether the current high
probability of parental support for ATF Bank remains appropriate.

Moody's notes that the bank's deposits and debt ratings may be
downgraded if UniCredit's ratings are downgraded. ATF Bank's
ratings are also likely to be downgraded if Moody's revises
downwards its assumption of high parental support. The rating
agency said that it could lower the parental support probability
for ATF Bank's ratings if it considers that the subsidiary's
strategic importance may have diminished.

The principal methodologies used in this rating were "Bank
Financial Strength Ratings: Global Methodology" published in
February 2007, and "Incorporation of Joint-Default Analysis into
Moody's Bank Ratings: A Refined Methodology" published in March
2007.

Headquartered in Almaty, Kazakhstan, ATF Bank reported total
assets of US$6.57 billion and total capital of US$239 million, in
accordance with its audited IFRS financial statements at year-end
2010.


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N E T H E R L A N D S
=====================


ARCOS DORADOS: Moody's Says Ratings Unaffected by Note Redemption
-----------------------------------------------------------------
Moody's Investors Service commented that the notes redemption of
Arcos Dorados B.V. has no immediate impact on its Ba2 corporate
family rating and senior unsecured rating. The outlook for the
ratings remains stable.

Recently, Arcos Dorados Holdings Inc. announced that Arcos Dorados
B.V. has exercised its option to redeem 31.42% (or US$141.4
million) of the outstanding principal amount of its 7.50% Senior
Notes due 2019 at a redemption price equal to 107.50% of the
principal amount of the notes with existent cash in AD's balance
sheet. The notes will be redeemed on July 18, 2011. In conjunction
with the redemption of the Notes, the company intends to enter
into a new financing, the net proceeds of which will also be used
to satisfy the company's previously announced capital expenditure
and reinvestment plans. Through this transaction, Arcos Dorados
expects to reduce its overall cost of funding without increasing
its net debt position.

Moody's believes that the successful completion of the notes
redemption is credit neutral given that the company's debt level
will remain largely unaffected. Meanwhile the company will
continue pursuing an aggressive store expansion plan in the next
few years as they seek to capitalize on the positive growth trends
in Latin America. The company continues to exhibit a concentration
of cash flows in a limited number of markets (including Brazil,
its largest market), performance challenges in Mexico, and
exposure to Argentina and Venezuela country risks.

As of the last twelve months ended March 31, 2011, Arcos Dorados
posted revenue growth of 14.1% and EBITDA margin of 13.0% driven
by higher average check, increased traffic, same stores sales and
new restaurant openings. Leverage remained at similar levels as
compared to 2010, with lease adjusted Debt/EBITDA of 3.8 times for
the last twelve months ended March 31, 2011.

Headquartered in Buenos Aires, Argentina and with legal domicile
in the Netherlands, Arcos Dorados B.V. is the leading quick
service restaurant operator in Latin America and the Caribbean and
McDonald's largest franchisee globally in terms of systemwide
sales and restaurant count Arcos Dorados began operating in
August 2007 when it acquired most of McDonald's operations in
Latin America and the Caribbean in a leveraged buyout led by the
company's controlling shareholder Woods Staton, who is also the
company's current CEO and chairman. For the last twelve months
ended March 31, 2011, the company's revenues reached US$3.2
billion.


===========
R U S S I A
===========


GLOBEXBANK: Fitch Affirms Long-Term Issuer Default Ratings at 'BB'
------------------------------------------------------------------
Fitch Ratings has affirmed GLOBEXBANK's and Sviaz-Bank's Long-term
foreign currency Issuer Default Ratings at 'BB' with Stable
Outlooks.

GB's and SB's IDRs and Support Ratings are driven by the potential
support that the banks could receive, in case of need, from their
majority shareholder, state-owned Vnesheconombank (VEB,
'BBB'/Stable). However, Fitch maintains a three-notch difference
between VEB's IDR and the IDRs of GB and SB, reflecting the fact
that the acquisitions of GB and SB were driven by the need to
rescue banks and VEB has also publicly confirmed its intention to
sell both banks in the long term.

SB's Individual Rating reflects the risks associated with rapid
recent and planned growth. The non-legacy loan book increased by
14% in Q111 (about 89% of total loans at end-Q111) and by a rapid
196% in 2010, mainly driven by large loans to a few corporate
clients of relatively good quality. The rating also considers
poorly diversified funding, mostly sourced from state-controlled
corporate entities and subordinated loans from VEB, and the
currently limited franchise. Uncertainty about the bank's future
business and financial profile, related to VEB's intention to
develop SB into a post bank, also weigh on the bank's Individual
Rating. Positive factors for the Individual Rating are the bank's
solid capitalization, with Basel 1 Tier I and Total capital ratios
at 18.9% and 37.8%, respectively, at end-Q111; ample liquidity and
currently healthy asset quality (NPLs made up 5% of total loans at
end-Q111) after VEB bought a further RUB27.3 billion of SB's
legacy loans in 2010.

SB is a medium-sized Russian bank, 99.5%-owned by VEB. SB was
ranked the 27th largest bank by total assets at end-Q111.

GB's Individual Rating reflects risk arising from the bank's rapid
growth (69% in 2010), high concentration on both sides of balance
sheet, significant exposure to real estate and construction
sectors (25% of total loans at end-2010). Additional risks arise
from the acquisition of National Trade Bank (NTB; RUB32 billion of
total assets at end-Q111) in February 2011, which is also heavily
exposed to the above sectors. On the positive side, the rating
also factors in the bank's currently adequate liquidity, low
impairment levels (less than 1% at end-Q111) and comfortable
capital position (equity/total assets of 23% at end-2010).
However, rapid planned growth and potential consolidation of NTB
is likely to result in lower capital ratios in the medium term.

GB is 99.2%owned by VEB, and on a standalone basis, ranked as the
33rd-largest bank in Russia. In February 2011, with the support of
VEB, GB acquired NTB, which operates in the Samara region.

The rating actions are:

GLOBEXBANK

   -- Long-term foreign currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Long-term local currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Short-term foreign currency IDR: affirmed at 'B'

   -- Support Rating: affirmed at '3'

   -- Individual Rating: affirmed at 'D/E'

   -- National Long-term rating: affirmed at 'AA-(rus)'; Stable
      Outlook

SB

   -- Long-term foreign currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Long-term local currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Short-term foreign currency IDR: affirmed at 'B'

   -- Support Rating: affirmed at '3'

   -- Individual Rating: affirmed at 'D/E'

   -- National Long-term rating: affirmed at 'AA-(rus)'; Stable
      Outlook


SEVERSTAL OAO: Moody's Upgrades CFR to Ba2; Outlook Stable
----------------------------------------------------------
Moody's Investors Service has upgraded the corporate family rating
and the bond ratings of OAO Severstal to Ba2 from Ba3. The outlook
on the rating is now stable from negative.

Ratings Rationale

The rating action reflects the fact that Severstal has completed
the disposal of all its unprofitable foreign assets, thereby
achieving a more efficient and very profitable operating
structure. It is Moody's understanding that there are no further
contingent liabilities associated with the disposed assets.

Furthermore, Severstal's FY 2010 and Q1 2011 results indicate
material improvements in its operating performance, including a
significant increase in profitability metrics. Its Moodys adjusted
EBITDA margin was 25.5% at year-end 2010 (up from 18.8% in 2009)
and was sustained at this level at end-Q1 2011. In addition, the
company managed to reduce its adjusted leverage to 1.8x (1.3x net
debt/EBITDA) at year-end 2010 (2009: 4x), to some extent helped by
the successful disposal of unprofitable assets in Italy and the
US.

Moody's expects that Severstal will be able to maintain its
current cost-competitive position on the back of a high level of
vertical integration into key raw materials and complete self-
sufficiency in coal and iron ore in its Russian operations. In
addition, the company's growing mining business, including
increasingly profitable gold assets, will continue to be one of
its main contributors to EBITDA going forward, given the current
favorable outlook on coal, iron ore and gold prices. A possible
initial public offering of its gold business would allow the
company to free funds for the development of newly acquired coal
and iron ore deposits. The rating also assumes that Severstal is
going to prudently use its positive free cash flows which are
currently generated for growth and/or shareholder distribution.

Severstal's loan participation notes, issued at the level of Steel
Capital S.A., and proceeds being on-lent to Severstal, are at the
same level as the corporate family rating, as there is only a
limited amount of debt, outstanding at the level of Severstal
Columbus, that is secured with assets. OAO Severstal is an
operating company and therefore the unsecured bonds that are
issued via Steel Capital S.A. rank at the same level as unsecured
debt outstanding at other operating subsidiaries.

Moody's would consider upgrading Severstal's rating if the group
were to continue to demonstrate a conservative financial profile,
with (i) an EBIT margin of around 20%; and (ii) (CFO-
Dividends)/Debt consistently above 30%. Moody's also expects that
Severstal will continue to prudently manage its liquidity.

Negative rating pressure would occur, if Moody's adjusted gross
debt/EBITDA ratio would be above 2.0x (per end of March 2011 1.6x)
and/or if the (CFO-dividends)/debt ratio would sustainably fall to
below 20%. A deterioration of the currently good short term
liquidity position would also exert pressure on the rating.

Principal Methodology

The principal methodology used in rating Severstal OAO was the
Global Steel Industry Methodology, published January 2009. Other
methodologies used include Loss Given Default for Speculative
Grade Issuers in the US, Canada, and EMEA, published June 2009.

OAO Severstal is the largest steel producer in Russia, with other
major subsidiaries in the US. Severstal's key operating assets are
located in more than 30 different locations around the globe. The
group also owns substantial mining assets in Russia and has mining
operations in the US and Western Africa. Severstal is listed on
the Russian Trading System and London Stock Exchange and is
directly and indirectly controlled by CEO Mr. Alexey Mordashov,
who owns a 77.97% of Severstal's share capital and has an option
to purchase another 4.96%.

In 2010, Severstal produced 14.7 million metric tons (mt) of crude
steel, up from 12.6 million mt in 2009. The group reported
revenues of US$13.6 billion (representing a 41% increase year-on-
year) and US$3.3 billion in EBITDA (a 105% decrease year-on-year).
Severstal posted a net loss of US$515 million in FY 2010, compared
with a net loss of US$1.1 billion in FY 2009.


SEVERSTAL OAO: S&P Raises Long-Term Corp. Credit Rating to 'BB'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit and Russia national scale ratings on Russian steelmaker
OAO Severstal to 'BB/ruAA' from 'BB-/ruAA-'. The outlook is
stable.

"The upgrade reflects Severstal's robust profitability and
financial metrics, which we have seen in 2010 and early 2011 and
which we expect to continue in coming years," S&P said.

"Severstal's disposal of loss-making operations in North America
and Europe will stop dilution of its core steel profits, we
believe. Currently stabilized steel markets and high global raw
material prices support Severstal's steel and mining profits,
translating into healthy credit metrics. Even in a lower price
environment, we would expect Severstal's profitability and credit
metrics to remain at a comfortable level, with adjusted debt to
EBITDA of about 1.5x through the cycle, thanks to the competitive
cost position of Severstal's key steelmaking plant in Russia," S&P
said.

"The ratings are constrained by our view of the highly cyclical,
capital intensive, and competitive nature of the steel industry,
and by Severstal's exposure to the risk of operating in Russia
where its key cash-generative assets are located. Other
constraints include the company's plan to significantly increase
its capital expenditures, which in our view could limit free cash
flow; a concentrated asset base; and acquisition ambitions," S&P
said.

The key factors supporting the ratings include stabilized global
steel market conditions, Severstal's healthy credit metrics,
moderate financial policy, low cost position in Russia, vertical
integration into mining, and solid market share in Russia.

"The stable outlook reflects our expectation that Severstal will
be able to maintain its policy of keeping the ratio of debt to
EBITDA at below 1.5x on average through the cycle. We actually
expect the ratio to be below that level in 2011, because of the
favorable pricing environment. The ratings have some room for
bolt-on acquisitions and for dividends in line with the company's
policy of about 25% payout," S&P said.

"If the steel and raw materials markets stay favorable for
Severstal, and if the company refrains from large acquisitions and
continues to keep comfortable credit metrics, it could lead us to
raise the ratings in the next two years," S&P said.

"We could lower the ratings if conditions in the steel industry
deteriorated substantially, which is not our base-case scenario
for the midterm. Persistently negative free operating cash flow,
large debt-financed acquisitions, or shareholder distributions
could also contribute to ratings downside," S&P said.


SVIAZ-BANK: Fitch Affirms Long-Term Issuer Default Ratings at 'BB'
------------------------------------------------------------------
Fitch Ratings has affirmed GLOBEXBANK's and Sviaz-Bank's Long-term
foreign currency Issuer Default Ratings at 'BB' with Stable
Outlooks.

GB's and SB's IDRs and Support Ratings are driven by the potential
support that the banks could receive, in case of need, from their
majority shareholder, state-owned Vnesheconombank (VEB,
'BBB'/Stable). However, Fitch maintains a three-notch difference
between VEB's IDR and the IDRs of GB and SB, reflecting the fact
that the acquisitions of GB and SB were driven by the need to
rescue banks and VEB has also publicly confirmed its intention to
sell both banks in the long term.

SB's Individual Rating reflects the risks associated with rapid
recent and planned growth. The non-legacy loan book increased by
14% in Q111 (about 89% of total loans at end-Q111) and by a rapid
196% in 2010, mainly driven by large loans to a few corporate
clients of relatively good quality. The rating also considers
poorly diversified funding, mostly sourced from state-controlled
corporate entities and subordinated loans from VEB, and the
currently limited franchise. Uncertainty about the bank's future
business and financial profile, related to VEB's intention to
develop SB into a post bank, also weigh on the bank's Individual
Rating. Positive factors for the Individual Rating are the bank's
solid capitalization, with Basel 1 Tier I and Total capital ratios
at 18.9% and 37.8%, respectively, at end-Q111; ample liquidity and
currently healthy asset quality (NPLs made up 5% of total loans at
end-Q111) after VEB bought a further RUB27.3 billion of SB's
legacy loans in 2010.

SB is a medium-sized Russian bank, 99.5%-owned by VEB. SB was
ranked the 27th largest bank by total assets at end-Q111.

GB's Individual Rating reflects risk arising from the bank's rapid
growth (69% in 2010), high concentration on both sides of balance
sheet, significant exposure to real estate and construction
sectors (25% of total loans at end-2010). Additional risks arise
from the acquisition of National Trade Bank (NTB; RUB32 billion of
total assets at end-Q111) in February 2011, which is also heavily
exposed to the above sectors. On the positive side, the rating
also factors in the bank's currently adequate liquidity, low
impairment levels (less than 1% at end-Q111) and comfortable
capital position (equity/total assets of 23% at end-2010).
However, rapid planned growth and potential consolidation of NTB
is likely to result in lower capital ratios in the medium term.

GB is 99.2%owned by VEB, and on a standalone basis, ranked as the
33rd-largest bank in Russia. In February 2011, with the support of
VEB, GB acquired NTB, which operates in the Samara region.

The rating actions are:

GLOBEXBANK

   -- Long-term foreign currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Long-term local currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Short-term foreign currency IDR: affirmed at 'B'

   -- Support Rating: affirmed at '3'

   -- Individual Rating: affirmed at 'D/E'

   -- National Long-term rating: affirmed at 'AA-(rus)'; Stable
      Outlook

SB

   -- Long-term foreign currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Long-term local currency IDR: affirmed at 'BB'; Stable
      Outlook

   -- Short-term foreign currency IDR: affirmed at 'B'

   -- Support Rating: affirmed at '3'

   -- Individual Rating: affirmed at 'D/E'

   -- National Long-term rating: affirmed at 'AA-(rus)'; Stable
      Outlook


SCT: Slovenia Launches Receivership Proceedings for Firm
--------------------------------------------------------
Slovenia Times reports that Slovenia's Ljubljana District Court
launched on receivership proceedings at builder SCT, which
withdrew its proposal for debt restructuring following months of
efforts to stave off bankruptcy.

The receivership, which will leave the remaining 760 workers of
the former construction giant jobless, will be managed by Benigar
Tosic as SCT's administrator, according to Slovenia Times.

Slovenia Times notes that SCT's debt stands at an estimated
EUR120 million or even EUR450 million when taking into account all
bank guarantees.

The creditors that haven't registered their claims have three
months to file their claims, Slovenia Times notes.

The report discloses that SCT's fall came after the management
told the creditors' committee that the company would not file a
supplemented debt restructuring plan after it failed to find a
strategic partner to provide the funds needed to pay out wages,
some of which were reportedly due since last December.

As reported in the Troubled Company Reporter-Europe on Dec. 23,
2010, STA related that economist Joze P. Damijan said it is just a
matter of time before SCT will go bankrupt.  STA noted that the
Economy Ministry said on Dec. 16 it will not help SCT to avoid
potential receivership or court-mandated debt restructuring in
response to several reports that company has trouble with
liquidity.  STA said a subsidiary of SCT filed for receivership
with the Ljubljana District Court.

SCT is a construction company based in Slovenia.


=============
U K R A I N E
=============


* CITY OF KYIV: Fitch Assigns 'B-(exp)' Rating to LPN Issue
-----------------------------------------------------------
Fitch Ratings has assigned the City of Kyiv's upcoming US$300
million loan participation notes issue, due in July 2016, an
expected Long-term foreign currency rating of 'B-(exp)'.

The city's Long-term foreign and local currency ratings are both
'B-' with a Negative Outlook. The city has a Short-term foreign
currency rating of 'B', and a National Long-term rating of
'BBB+(ukr)' with a Negative Outlook.

The final rating of the LPN is contingent upon the receipt of
final documents conforming to information already received.

The LPN have 10 semi-annual interest payment periods with the
interest rate to be determined at a later date. The proceeds from
the issue will be used to refinance maturing debt and to fund
capital expenditure.

The city of Kyiv is the capital of Ukraine and its economic and
financial centre. The city accounted for 18% of Ukraine's GDP in
2009 and accounts for 6% of the country's population.


* CITY OF KYIV: S&P Puts 'CCC+' Rating on CreditWatch Developing
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'CCC+' long-term
issuer credit rating on the city of Kyiv on CreditWatch with
developing implications.

"The CreditWatch placement reflects our uncertainty about Kyiv's
need to obtain new authorization from the Ukrainian central
government for a proposed bond placement to refinance existing
loan-participation notes on which a first bullet payment falls due
in mid-July 2011. We are particularly concerned about the central
government's actions in granting new approval if the city fails to
meet a bond coupon target contained in the existing authorization.
We would view timely and adequate authorization of the proposed
bond placement as positive for the ratings on Kyiv as it would
allow the city to refinance the loan participation notes," S&P
said.

"Kyiv has developed what we see as a viable plan to refinance the
U.S. dollar-denominated notes. The plan envisages placing a
medium-term foreign currency bond in international markets ahead
of their scheduled repayment. Given existing market sentiment we
are of the opinion that this would allow the city to meet its
obligations due in 2011 in a timely manner," S&P said.

Under Ukrainian law, all local and regional government borrowing
must be approved by the Ministry of Finance. However, existing
authorization granted to the city in May 2011 contains a bond
coupon ceiling that might not be compatible with current market
appetite for risk. "This is likely to require Kyiv to apply for
new authorization, in our view. We understand that in view
of the sovereign's own expected placements in 2011-2012, the
successful refinancing of Kyiv's debt is likely to be of high
importance to Ukraine's central government. However, given the
tight timing of the refinancing and the government's record of
issuing borrowing authorization to local governments, the
timeliness and adequacy of any approval of Kyiv's borrowing terms
will be critical to the city's refinancing plans," S&P said.

The ratings on Kyiv continue to reflect the city's material
foreign currency-denominated debt repayment needs in 2011 and
2012, limited fiscal flexibility, weak budgetary performance, and
contingent liabilities resulting from the city's companies.
"Support for the ratings is provided by the city's position as
Ukraine's key domestic economy and role as one of the host cities
for the 2012 UEFA European Football Championship, its diverse and
wealthy economy, and our expectation of some institutional support
from the central government," S&P said.

"We aim to resolve the CreditWatch placement in the next few weeks
once we have clarity on whether Kyiv needs new borrowing
authorization and, if so, its likelihood," S&P added.


===========================
U N I T E D   K I N G D O M
===========================


HALDANES STORES: Terminated Staff Assert Non-receipt of Payment
---------------------------------------------------------------
John O'Groat Journal reports that the 18 staff based in Wick,
Caithness, in Scotland, laid off by Haldanes have not been paid
for two weeks.

The Wick unit was one of a dozen stores throughout Scotland which
closed after Haldanes went into administration, according to John
O'Groat Journal.  Store manager Jennifer Oliphant, the report
notes, claims that staff has been treated very shabbily.

Ms. Oliphant said the firm had continued to operate over the past
fortnight when management knew they would struggle both to meet
the wage bill and afford new deliveries, John O'Groat Journal
relates.

The staff is expecting to only get back pay, paid by the
government, dating from last Wednesday when the firm went into
administration, John O'Groat Journal adds.

As reported in the Troubled Company Reporter-Europe on June 13,
2011, Retail Gazette said Haldanes Stores Chief Executive Officer
Arthur Harris confirmed that the retailer is to go into
administration.  Retail Gazette related that Haldanes has
officially started legal proceedings against The Co-operative
Group over the purchase of stores following the mutual's takeover
of Somerfield in 2008.  The dispute over the dispute has been
named as the major factor behind the fall into administration, as
Haldanes claims that Co-op breached the terms of their agreement
by misrepresenting the trading levels of the outlets it took on,
according to Retail Gazette.

Grocery store group Haldanes Stores has 26 outlets in United
Kingdom.


KERLING PLC: Moody's Affirms B3 CFR; Assigns (P)B3 to Loan Notes
----------------------------------------------------------------
Moody's Investors Service has affirmed at B3 the corporate family
rating of Kerling plc. Concurrently, Moody's has assigned a
provisional (P)B3 rating with a loss-given default assessment of 4
(52.25) to Kerling's proposed issuance of EUR75 million of senior
secured loan notes, which will be used to fund the acquisition of
the Tessenderlo Chemie Group's (unrated) Chlor-alkali/PVC
business.

These ratings are affected by this rating action:

   Kerling plc Corporate family rating -- B3

   EUR785MM of senior secured notes maturing in 2017 -- B3

   EUR75MM of senior secured loan notes maturing in 2016 -- (P)B3

The assignment of a definitive rating to the new EUR75 million
senior secured loan notes is subject to a review of the final
associated documentation. Moody's issues provisional ratings in
advance of the final issue of securities, and these ratings only
represent Moody's preliminary opinion. Upon a conclusive review of
the transaction and associated documentation, Moody's will
endeavor to assign definitive ratings to the securities. A
definitive rating may differ from a provisional rating.

Ratings Rationale

On June 14, 2011, Kerling announced plans to acquire the
Chlor-alkali/PVC business for EUR110 million. Moody's expects the
transaction to be funded by debt through the placement of
EUR75 million in senior loan notes and additional drawing under
the existing EUR120 million securitization facility. Following the
acquisition, Moody's expects Kerling's leverage to approach 5.3x
on a 2010 pro-forma basis and including Moody's adjustments.

The proposed acquisition, whose finalization is now subject to
regulatory approval, will add four new plants in Northern Europe,
and allow Kerling to consolidate its market share in the European
PVC sector at a time when it needs to further adjust its European
capacity to reflect reduced regional demand. Given the recent
performance of Tessenderlo's assets, Moody's expects the
acquisition to be initially dilutive to Kerling's pro-forma EBITDA
margin, pending the planned reduction in the fixed costs of the
Chlor-alkali/PVC business. However, Moody's anticipates that
Kerling's pro-forma EBITDA margin will be supported by better
capacity utilization and procurement synergies that the company
expects to attain in the medium term. In addition, Moody's notes
some execution risk associated with the restructuring, largely
balanced by the strong track record of Kerling's management team.

Moody's expects Kerling to maintain adequate liquidity following
its planned acquisition of the Chlor-alkali/PVC business. The
company's liquidity will be supported by: (i) the availability of
EUR100 million under a revolving credit facility (RCF) facility;
(ii) EUR17 million still available under a EUR120 million
securitization facility; (iii) EUR31 million in cash balances (at
the end of Q1 2011); and (iv) positive free cash flow (FCF)
generation expected in the next few quarters. Moody's notes that
the terms of the RCF facility include EBITDA-based financial
covenants and that, at the end of Q1 2011, Kerling had maintained
adequate headroom under these covenants.

The stable outlook on the ratings reflects Moody's expectation
that Kerling will robustly execute the restructuring of targeted
assets, supported by a strong operating performance and improved
FCF generation in 2011.

Positive pressure could be exerted on the ratings as a result of a
sustained improvement in underlying demand and a timely execution
of synergies, leading to an improved EBITDA margin exceeding 10%,
strong cash flow generation and a reduction in leverage, with a
ratio of total debt/EBITDA dropping below 4.0x and an FCF/debt
ratio in the high single digits. Moody's would consider
downgrading the ratings if there were a deterioration in Kerling's
operating performance from the current levels, resulting in: (i)
lower profitability; (ii) negative FCF generation; (iii) a total
debt/EBITDA ratio exceeding 5.5x; and/or (iv) a materially weaker
liquidity position.

The proposed EUR75 million loan notes will be senior secured
obligations of Kerling, ranking pari-passu with the existing
EUR785 million senior secured notes (rated B3/ LGD 4 (52.25)).
They will also share the existing security package. The new loan
notes are offered with a shorter maturity (by six months) than the
existing notes and will be borrowed in lieu of the EUR75 million
senior debt allowance permitted under the terms of the existing
notes. Moody's notes that Kerling will also retain the flexibility
to raise junior debt under the existing structure (subject to the
Fixed Charge covenant). The provisional (P)B3 rating on the new
loan notes and the B3 rating on the existing notes continue to
reflect the dominant share of the senior secured obligations in
the company's pro-forma capital structure, with only RCF facility
ranking ahead of the existing notes and the new proposed loan
notes.

The principal methodology used in rating Kerling plc was the
Global Chemical Industry Methodology, published December 2009.


NORTHERN ROCK: Set to Be Sold for GBP1 Billion
----------------------------------------------
Philip Aldrick and Harry Wilson at The Telegraph reports that
Chancellor George Osborne has confirmed that Northern Rock is to
be sold rather than re-mutualized or floated on the stock market.

According to The Telegraph, the deal is expected to value the
nationalized lender at about GBP1 billion, meaning the sale is
likely to result in a short-term loss for the taxpayer, which was
forced into a GBP1.4 billion rescue of the failed bank.

Addressing the Lord Mayor's Banquet for Bankers and Merchants of
the City of London last night, Mr. Osborne, as cited by The
Telegraph, said it was time to "get at least some of our money
back", and that "any interested party can bid, including mutuals."

Virgin Money and Yorkshire Building Society are expected to be
among the bidders, and the formal sale process could start within
the next month, The Telegraph says.

The Telegraph notes that although the sale of the so-called "good
bank" part of Northern Rock is likely to generate a loss, this
will be offset in the longer term by the repayment of tens of
billions of pounds of state aid loans held in the "bad bank", now
known as Northern Rock Asset Management.

                      About Northern Rock

Headquartered in Newcastle upon Tyne, England, Northern Rock plc
-- http://www.northernrock.co.uk/-- operating some 70 branches
across the UK.  Northern Rock offers residential mortgages and
savings accounts, including variable cash and fixed-rate
Individual Savings Accounts (or ISAs, which are tax-exempt savings
accounts offered in the UK), as well as bonds and traditional
savings accounts.  The bank also offers financial planning and
mortgage-related insurance and life assurance products through
third-party providers.  Northern Rock was formed in early 2010
after being spun off from its trouble predecessor of the same
name.  The remaining company was restructured and renamed Northern
Rock (Asset Management) plc.


PROFESSIONAL VENTURES: RBS Takes Control of 42 Marriott Hotels
--------------------------------------------------------------
Bloomberg News reports that Royal Bank of Scotland Group Plc (RBS)
spokesman David Gaffney said that the bank has taken control of 42
Marriott-branded hotels across the United Kingdom and appointed
Ernst & Young as receivers for Professional Ventures Corporation,
the owner of the hotels.

Bloomberg News, citing the Financial Times, relates that RBS has
assumed control of the GBP1 billion (US$1.64 billion) property
portfolio after failing to obtain a debt-for-equity restructuring
of one of its largest real estate loans completed in the property
boom.

The Financial Times reported that the properties were acquired
from the bank for about GBP1.1 billion in 2007, and RBS owns about
GBP700 million of the debt that was used to finance the
acquisition in a syndicated loan structure, according to
Bloomberg.

Ernst & Young will appoint a board of directors to run the
properties and prepare a sale, the newspaper added, Bloomberg
notes.

Marriott International Inc. will continue to operate the hotels,
and RBS's decision will not affect customers, suppliers or staff
at the hotels, Ernst & Young said in an e-mailed statement
obtained by the news agency.


SOUTHERN CROSS: Has Reached Deal with Landlords on Restructuring
----------------------------------------------------------------
Simon Mundy at The Financial Times reports that Southern Cross
Healthcare has reached an agreement with its landlords under which
the two parties will form a committee to restructure the company
over the next four months, keeping it clear of insolvency.

The FT relates that following a meeting on Wednesday, the parties
issued a joint statement saying that they "would work towards a
consensual solution to the current financial problems."  The
landlords also expressed "full support" for the company's
management team, the FT notes.

According to the FT, a document produced by AlixPartners, a
restructuring firm hired to advise the landlords' committee, gives
a detailed comparison of the landlords' proposal and a
counterproposal by Southern Cross, also written on Monday.

Both parties agreed Southern Cross would operate about 400 homes,
compared with the current 752, the FT discloses.  The rest would
be taken over by other operators, such as Bondcare and Four
Seasons, the FT states.

Southern Cross Healthcare provides residential and nursing care to
more than 31,000 residents cared for by 45,000 staff in 750
locations.  Its also operates homes that specialize in treating
people with dementia, mental health problems and learning
disabilities.


SOUTHSEA MORTGAGE: Put Into Bank Insolvency Procedure
-----------------------------------------------------
Svenja O'Donnell at Bloomberg News reports that Southsea Mortgage
and Investment Company Ltd. has been placed into a bank insolvency
procedure after a decision by the Financial Services Authority and
a court application by the Bank of England.

According to Bloomberg, the Bank of England said in an e-mailed
statement on Thursday that Malcolm Cohen and Mark Shaw, business
restructuring partners at BDO LLP, were appointed as joint
liquidators of the company.

Southsea had 250 depositors and retail deposits of GBP7.4 million
when it failed, Bloomberg cites.

Southsea Mortgage and Investment Company Ltd. is a bank based in
the United Kingdom.


V8 GOURMET: Goes Into Administration Again Despite Recent Backing
-----------------------------------------------------------------
Big Hospitality reports that V8 Gourmet has gone into
administration again despite receiving last minute backing from
new investors.

The group, which operates 17 restaurant and takeaway sites across
the Bombay Bicycle Club (BBC) and Tiffinbites brands, as well as
catering arm Khana by Vama, Silk Events and high-end Indian
restaurant Vama, received a winding up order from Her Majesty
Revenue & Customs (HMRC) last month after falling behind on its
debt repayments to Indian bank ICICI, according to Big
Hospitality.

Big Hospitality relates that investment group Calleon stepped
forward to take on the business' debt at the last minute, but
despite best efforts, V8 Gourmet was placed into administration on
June 13.

According to the most recent accounts filed with Companies House,
the group made a pre-tax loss of GBP2.6 million in 2009, with
sales of GBP10.4 million, Big Hospitality notes.   The report
relates that it is thought V8 Gourmet was making a loss of
GBP200,000 a month.

Joint administrators Nimish Patel and Finbarr O'Connell of Re10
are continuing to trade the business as usual.

V8 Gourmet is a troubled Indian restaurant group part-owned by
Bollywood actress Shipa Shetty.


===============
X X X X X X X X
===============


* BOOK REVIEW: Corporate Players
--------------------------------
Author: Robert Keidel
Publisher: Beard Books
Softcover: 271 pages
List Price: US$34.95
Review by Henry Berry
In American business, the metaphor of the sports team is commonly
used for business groups of all sizes -- from ad hoc teams of a
few members that deal with temporary problems to groups of
executive managers who are responsible for long-term corporate
survival and the profitability of an entire organization.

The sports team is a favored metaphor because sports bring
individuals with different talents and different responsibilities
together to perform a particular activity and pursue a common
objective.  Within its framework, sports also allow for the
outstanding performance of particular individuals and recognition
of that performance.  The sports team metaphor has become so
common in business and so routinely applied to business teams of
all sorts and sizes that little thought is usually given to its
specifics.

Corporate Players -- Designs for Working and Winning Together
takes a close look at what makes a sports team function
effectively and win.  The author then applies these observations
to develop a plan for those in the corporate world to be as
successful as those in the sports world.  While a reprint of a
1988 book, the lessons in this book are timeless.

Keidel identifies three main types of teams found in business:
autonomy, control, and cooperation.  The author relates each to a
particular type of sports team: autonomy for baseball, control for
football, and cooperation for basketball.  A chart compares
differences among the three with respect to organizational
strategy, organizational structure, and organizational style.  For
instance, the organizational strategy for autonomy in baseball is
"adding value through star performers"; while the organizational
strategy for cooperation in basketball is "innovating by combining
resources in novel ways."

With a sharp analytic eye and decades of experience in different
aspects of business, including academic and government positions,
Keidel delves into the specifics of business groups as sports
teams.  A fundamental point often overlooked by businesspersons is
that teams in different sports are different in significant ways.
An understanding of these differences is crucial for executives,
managers, and consultants who are responsible for conceptualizing
a team in relation to a particular business matter and then
bringing together a team of individuals.  As such, executives,
managers, and consultants have roles similar to a general manager
and coach of a sports team.  In some cases, they may also have the
role of a player on the team.

This chart and other aids, together with the author's engaging
commentary and enlightening analyses, will help business leaders
select the right personnel, assemble a team capable of performing
the task at hand, and then coordinate all of the players to
accomplish the desired objective.

Robert W. Keidel has a Ph.D. from Wharton, and has also been a
Senior Fellow at this top business school.  An author of three
other books and many articles, he teaches courses in business
strategy, technology, and organization at Drexel University's
LeBow College of Business.  Robert Keidel Associates is his
business consulting firm.


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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, 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.


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