/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/111020.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, October 20, 2011, Vol. 12, No. 208 Headlines C Z E C H R E P U B L I C BESTSPORT: Creditor Seeks Extension of Rescue Plan Deadline ECM REAL ESTATE: High Court Cancels Bankruptcy Decision G E R M A N Y BAGIR GERMANY: Cash Flow Problems Prompt Bankruptcy Filing PHOENIX PHARMA: Fitch Assigns 'BB' LT Issuer Default Rating G R E E C E * GREECE: Chance of Debt Default High, Milken Economists Say * GREECE: Austria Wants Bondholders to Contribute More to Bailout I R E L A N D IRISH LIFE: Three Bidders Left for Irish Life Assurance MR BINMAN: Bank of Scotland Opposes Court Protection I T A L Y THINK3 INC: AZA Wins Bankruptcy Rulings for Versata FZ K A Z A K H S T A N RG BRANDS: Moody's Changes Outlook on 'B3' CFR to Stable L U X E M B O U R G HIGH TIDE: Fitch Downgrades Rating on Class C Notes to 'Csf' N E T H E R L A N D S HIGHLANDER EURO: S&P Raises Rating on Class E Notes to 'CCC+' N O R W A Y SEVAN MARINE: To Sell Three Vessels & Shares to Teekay for $693MM R O M A N I A * ROMANIA: More Reorganizations Expected in 2012, CITR Says S P A I N BANCO CAM: Moody's Cuts Bank Financial Strength Rating to 'E+' BBVA-6 FYPYME: Fitch Downgrades Rating on Class C Notes to 'Csf' EMPRERAS BANESTO: Moody's Assigns (P)Ca Rating to Serie C Note S W I T Z E R L A N D * SWITZERLAND: Insolvencies Increase as Franc Hits Tourism T U R K E Y EREGLI DEMIR: S&P Raises Long-Term Corporate Credit Rating to 'B' U N I T E D K I N G D O M CERAMICA: Placed Into Creditors' Voluntary Liquidation DOUGLAS STREET: Continues to Operate Amid Liquidation Proceedings EMI GROUP: Turbulent Financing Markets May Derail Sale ICON ENERGY: Sister Company Continues to Trade Amid Liquidation PLYMOUTH ARGYLE: Council Agrees to Buy Club's Ground * UK: Proposes Tough Regulations for Residential Care Homes * UK: Seeing North-South Gap in Financial Distress Levels X X X X X X X X * Liquidity of EMEA Corporates Expected to Decline, Moody's Says * Upcoming Meetings, Conferences and Seminars ********* =========================== C Z E C H R E P U B L I C =========================== BESTSPORT: Creditor Seeks Extension of Rescue Plan Deadline ----------------------------------------------------------- CTK, citing the insolvency register, reports that PPF Healthcare, a creditor of Bestsport, which runs Prague's O2 arena, has asked an insolvency court to extend the deadline for submitting a reorganization plan by another 120 days from Oct. 19 when the deadline expires. The future of the O2 arena will depend on the reorganization plan for Bestsport, which went bankrupt in May, CTK notes. According to CTK, a court-appointed expert has not yet produced a report, which is the reason behind the requirement to extend the deadline. The report thus could not have been submitted to the court and approved by the creditor committee, CTK states. ECM REAL ESTATE: High Court Cancels Bankruptcy Decision ------------------------------------------------------- CTK, citing the insolvency register, reports that the High Court in Prague has cancelled the decision on the bankruptcy of ECM Real Estate Investments AG and returned the case to a first-instance court. According to CTK, the High Court complied with the appeal of part of creditors whose claims were not approved by ECM's insolvency administrator Ivo Hala. The court took into account an objection raised by part of creditors that the City Court in Prague did not follow the correct procedure when the creditor meeting was making its decision about the bankruptcy in July this year, CTK notes. Creditors registered claims on ECM worth a nominal CZK9.5 billion in total, but Mr. Hala acknowledged the validity of only around CZK2 billion worth of the claims, CTK states. ECM Real Estate Investments AG is known mainly as the builder of high-rise buildings in Prague's Pankrac district. ============= G E R M A N Y ============= BAGIR GERMANY: Cash Flow Problems Prompt Bankruptcy Filing ---------------------------------------------------------- Inbal Omer at Globes reports that BGI Investments (1961) Ltd. on Tuesday notified the TASE that the German unit of its suits manufacturer subsidiary, Bagir, has filed for bankruptcy. Last week, a German court approved the opening of insolvency proceedings against Bagir Germany Holding GmbH, as the company's cash flow is insufficient to meet its debts to creditors, Globes relates. Bagir Germany had US$20.1 million in sales in the first half of 2011, almost a third of Bagir's total revenue of US$68.5 million, Globes notes. Bagir Germany posted a loss of $1.1 million in the first half, Globes discloses. According to Globes, Bagir said that it reviewing the consequences of Bagir Germany's insolvency on the company, and that BGI will report a material loss and cash-flow reduction and in its financial report for the third and fourth quarters of the year. PHOENIX PHARMA: Fitch Assigns 'BB' LT Issuer Default Rating ----------------------------------------------------------- Fitch Ratings has assigned Phoenix Pharmahandel GmbH & Co. KGA ('Phoenix') a Long-term Issuer Default Rating (IDR) of 'BB' with Stable Outlook. Fitch has also assigned Phoenix's EUR506 million guaranteed senior unsecured bond a rating of 'B+''. The ratings are supported by Phoenix's market leading positions in the European pharmaceuticals wholesale markets, as well as the company's solid underlying fundamentals. Positive rating factors also include Phoenix's wide geographical coverage -- which leaves it relatively resilient to changes in healthcare systems in single countries, its integrated business model which enhances the Phoenix's profitability, and its solid and relatively predictable cash flow generation, with relatively low capex requirements. Negative ratings factors include Phoenix's relatively low EBITDA margin when compared to other industries, competitive pressure from pharmacy acquisitions if European pharmacy markets continue liberalizing as well as some margin pressure as a result of cost containment policies from European governments and the still relatively high leverage for the rating level. Fitch expects debt protection measures to improve by FYE2013/14 with the lease and ABS/Factoring adjusted ND/EBITDAR (x) to reach about 4x and EBITDAR net fixed charge cover to amount to above 3.5x. The company has a financial policy to reduce net debt further to reach an unadjusted net debt / EBITDA ratio of 3x at FYE2013/14. No large acquisitions or meaningful dividends are planned by the company over the next three years. Phoenix is the market leader in the European pharmaceuticals wholesale markets with 10 number one market positions and eight number two or three market positions in the 23 countries it operates in. Such strong market positioning helps Phoenix to benefit from economies of scale, while its pan-European coverage helps it to be a partner of choice for big pharmaceutical companies, which tend to reduce their number of wholesalers and prefer those with operations in many European countries. The group's cash flow generation is helped by the regulated markets it operates in. 70% to 80% of the group's wholesale turnover is generated with prescription drugs, the prices of which are regulated, thus ensuring a relatively predictable sales and EBITDA development. Demand for medicines is also non- discretionary- with the growth in pharmaceuticals wholesale and retail driven by the growing European medicines market. The European pharmaceuticals market is expected by IMS Health to grow by 2% to 5% in Europe from 2011 to 2015 -- driven mainly by the ageing of population, chronic diseases and technological advances. With an EBITDAR margin of 3.1%, which is enhanced by is presence in retail pharmacies, Phoenix has like many of its industry peers -- a relatively low profitability compared to other industries. The low level of profitability is however also linked to a relatively low risk in its operating model and connected with some stability and predictability in profit margin. Phoenix's cash flow generation is solid: Over the past four years the company has been showing consistently its ability to generate FFO of about EUR300 million annually, or an FFO margin of 1.4% to 1.6% of sales. FFO/Sales (%) is expected to increase further over time, due to lower interest costs, some sales growth and lower tax payments as a result of the group's program to optimize the tax structure. Phoenix's intention is to continue to acquire pharmacies and pharmacy chains in the current market to profit from higher margins in the retail segment. Size helps the company to leverage costs but also helps it to be a partner of choice for big pharma. As Phoenix's competitors are also acquiring pharmacies there might be the risk that Phoenix loses customers once pharmacy liberalization in a country starts and Phoenix's wholesale competitors acquire pharmacies in a larger scale. Further liberalization of the pharmacy markets in Germany and other key European markets is however not likely according to the company and recent legislation. The assigned ratings factor-in the company's intention to pursue profitable and financially sound add-on acquisitions (mainly pharmacies) within a pre-defined budget of EUR60 million-EUR70 million. Government's cost containment is expected to have a negative impact on sales and profitability over time. The effect is expected by Fitch to be somewhat mitigated by shifts in product mixes towards own label products and efficiency enhancement programs. =========== G R E E C E =========== * GREECE: Chance of Debt Default High, Milken Economists Say ------------------------------------------------------------ In a research paper released titled "Greece's Unpleasant Arithmetic: Containing the Threat to the Global Economy," Milken Institute economists Jim Barth, Cindy Li, and Penny Prabhavivadhana explore how a country that accounts for less than one fifth of one percent of the world population, and less than half of one percent of global GDP, has the potential to trigger a global recession. Despite its tiny size, Greece is edging ever closer to severely disrupting global financial and economic markets, unless decisive corrective action is taken. Among the paper's findings: -- Greek debt is comparatively small, but because so much is held by a few major banks in Europe, a default would disproportionately hit these institutions, and could disrupt global economic growth, Greece has the largest debt-to-GDP ratio among the so-called periphery countries of the European Union, at 143 percent. Greece's projected deficit for the year is 8.5 percent of GDP, well above its previous target and reaching levels at which it may be impossible to avoid default on its debt. -- The high and rising debt-to-GDP ratio puts a heavy economic and political burden on the Greek government. The fiscal austerity measures demanded by such a level of debt service may be so severe that they impede economic growth -- so that whatever loans Greece receives may simply postpone rather than avoid a default. -- Based on two separate measures of investor expectations of Greek default, the probability of default by Greece on its sovereign debt is between 89 and 97 percent. -- Total exposure of non-Greek European banks to Greek debt is $43 billion, and almost two-thirds of that exposure is at French and German banks. -- Six banks have high levels of exposure to the sovereign debt of the GIIPS European periphery economies (Greece, Ireland, Italy, Portugal and Spain): Dexia, Commerzbank, BNP Paribas, Societe Generale, Credit Agricole, and Deutsche Bank. Dexia was recently bailed out by the Belgian and French governments. With limited means and appetite by other European nations to bail out Greece (and possibly the other GIIPS countries as well), an alternative for Greece is to default on its debt through a substantial write-down of its face value, the Milken Institute researchers explain. This would lighten the political, economic and financial burden on the Greek government. Such a step, however, would adversely affect the financial condition of the banks holding that debt, which could require them to raise additional capital. If banks are unable to do so on their own, governments may find it necessary to recapitalize the banks. But this, in turn, could result in the downgrade of sovereign debt of countries such as France, pushing up its borrowing cost at a difficult time. Commenting on the policy implications of the report, Ross DeVol, chief research officer of the Milken Institute, says, "European policy makers must end the practice of doing too little, too late -- enough so that financial markets don't crater on Mondays after each weekend's emergency meetings. Given the potential contagion risk for the world economy, it would be preferable to err on the side of doing more than what seems necessary." DeVol concludes: "Greece should not be allowed to be the trigger for a global recession -- and it can be avoided with the proper policy actions." "Greece's Unpleasant Arithmetic: Containing the Threat to the Global Economy" is available at http://www.milkeninstitute.org/ About the Institute The Milken Institute -- http://www.milkeninstitute.org/-- is a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. It is based in Santa Monica, CA. which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. However, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. WaMu filed a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement, which it believes would address the Bankruptcy Court's concerns. On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's Modified Sixth Amended Plan and granted equity committee standing to prosecute claims for equitable disallowance but stayed the ruling pending mediation. Judge Walrath scheduled a status hearing for Oct. 7, 2011, at 11:30 a.m. to consider the issues to be referred to a mediator. WaMu said it would seek confirmation of a revised plan "as soon as practicable." The Plan proposes to pay more than US$7 billion to creditors and incorporates a global settlement agreement resolving issues among the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp. in its corporate capacity and as receiver for WaMu Bank, certain large creditors, certain WMB senior noteholders, and the creditors' committee. The Settlement Noteholders are Appaloosa Management, L.P., Aurelius Capital Management LP, Centerbridge Partners, LP, and Owl Creek Asset Management, L.P. * GREECE: Austria Wants Bondholders to Contribute More to Bailout ----------------------------------------------------------------- Boris Groendahl at Bloomberg News reports that Austrian Finance Minister Maria Fekter said the country wants bondholders to contribute more to a second Greek bailout than the 21% writedown agreed to in July, as long as the deal remains voluntary. The July agreement "was a program in which the banking sector could pick and choose at the expense of the governments," Bloomberg quotes Ms. Fekter as saying. "To tie up a new package that is demanding a bit more from the private sector is the Austrian position." Ms. Fekter added that creditors' participation needs to remain voluntary, Bloomberg notes. "A forced restructuring means default, in which credit default swaps are triggered, and that means billions around the world that have to be financed," Ms. Fekter, as cited by Bloomberg, said. "Everybody wants to avoid that." Bloomberg relates that Ms. Fekter said she was in favor of making the EUR440 billion (US$605 billion) European Financial Stability Facility more "flexible" by allowing it to "insure" government bonds. According to Bloomberg, she said that such a model could "create large volumes" without tapping further taxpayer funds, adding that the technical details for that are still being worked out. Meanwhile, Reuters reports European Central Bank Governing Council member Ewald Nowotny told a provincial news web site that Greece is not about to go bankrupt or have to leave the European Union because of its financial troubles. According to Reuters, Mr. Nowotny, as quoted by Web site Woche, said in comments published on Wednesday "I don't think Greece will go bankrupt or that the country will leave the European Union. EU treaties would need to be changed for this." ============= I R E L A N D ============= IRISH LIFE: Three Bidders Left for Irish Life Assurance ------------------------------------------------------- Laura Noonan at Irish Independent reports that Tennessee-based life insurance giant Unum has bowed out of the race to buy Irish Life Assurance, leaving just three bidders in the field. News of Unum's withdrawal emerged on Tuesday night as Irish Life & Permanent's advisers Deutsche Bank received second-round bids for the plc's life insurance arm, Irish Independent discloses. Unum was on a shortlist of five bidders after first-round offers, along with Canada Life Ireland, CVC, Delphi Financial and a joint bid by JC Flowers and Apollo Global Management, Irish Independent says. Delphi Financial subsequently withdrew; the Irish Independent understands Unum also failed to lodge a second-round bid by Tuesday's deadline, Irish Independent relates. According to Irish Independent, a spokesman for the Department of Finance declined to comment, citing the confidentiality of the bid process, as did a spokesman for Irish Life & Permanent. Irish Life Assurance is being sold off to contribute to a EUR3.8 billion capital demand levied on its parent company by last March's banking stress tests, Irish Independent notes. The Government has already pumped EUR2.7 billion into the group, giving it a 99.8% shareholding, Irish Independent discloses. If the sale of Irish Life and other actions don't raise the remaining EUR1.1 billion, more State cash will have to go in, Irish Independent states. The on-the-market life insurance business has an embedded value of EUR1.6 billion, but bids are expected to come in well below this level, with some likely to come in below the EUR1 billion mark, according to Irish Independent. Irish Independent notes that the Government had hoped to complete the sale by the end of the year, but sources now suggest that early next year looks "more likely". Headquartered in Dublin, Irish Life & Permanent plc -- http://www.irishlifepermanent.ie/-- is a provider of personal financial services to the Irish market. Its business segments include banking, which provides retail banking services; insurance and investment, which includes individual and group life assurance and investment contracts, pensions and annuity business written in Irish Life Assurance plc and Irish Life International, and the investment management business written in Irish Life Investment Managers Limited; general insurance, which includes property and casualty insurance carried out through its associate, Allianz-Irish Life Holdings plc, and other, which includes a number of small business units. MR BINMAN: Bank of Scotland Opposes Court Protection ---------------------------------------------------- Mary Carolan at The Irish Times reports that the High Court has been told that Bank of Scotland is opposing court protection for Mr. Binman and related companies. Ms. Justice Mary Finlay Geoghegan will hear the company's petition to appoint an examiner, which would mean court protection would continue while the examiner devises survival proposals which will need to be approved by shareholders, a majority of creditors and the court, The Irish Times says. An interim examiner, William O'Riordan of PricewaterhouseCoopers, was appointed last week, The Irish Times recounts. When the matter came before the court on Tuesday, Paul Sreenan SC, for Bank of Scotland, the group's biggest creditor, said it had filed an affidavit opposing examinership, The Irish Times relates. According to The Irish Times, Alison Keirse, for the Revenue Commissioners, which is owed EUR1.4 million, said her client was critical of the company's management practices but was "guardedly neutral" in relation to the core test for examinership -- if a company had a reasonable prospect of survival. The judge was also told that Greenstar, which is owed EUR2.5 million, and Limerick County Council are supporting the petition, The Irish Times notes. Lyndon MacCann SC, for Mr. Binman, said he needed time to reply to affidavits and the judge adjourned the matter for hearing today, according to The Irish Times. The group, as cited by The Irish Times, said that on October 7, Bank of Scotland said it would not provide further credit facilities with the effect it could no longer trade as a going concern. It claims it has a viable business and that it is in the best interests of creditors that an examiner be appointed, The Irish Times states. According to Irish Independent's Laura Noonan, officials from the Revenue claimed the company racked up an "unconscionable" EUR1.8 million bill after using tax money to "shore up" its cash flow. The claims are made in affidavits lodged with the courts in light of Mr. Binman's petition for examinership protection that would give the company 100 days to get new investment and restructure its debts, Irish Independent discloses. In affidavits, the officials detailed how Mr. Binman built up a "simply unconscionable" EUR1.8 million debt to the taxman after reducing monthly direct debit payments and failing to stick to agreed repayment schedules, Irish Independent notes. Mr. Binman is an Ireland-based waste disposal group. The company employs 331 people directly and approximately 280 indirectly. It also operates the local authorities' waste-gathering services in Limerick city. ========= I T A L Y ========= THINK3 INC: AZA Wins Bankruptcy Rulings for Versata FZ ------------------------------------------------------ The Houston complex commercial litigation law firm of Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C. recently won important rulings for firm client Versata FZ, LLC, that protect the company's intellectual property rights in computer-aided design software. AZA lawyers Demetrios Anaipakos and Kinan Romman won a two-day September trial in the U.S. Bankruptcy Court for the Western District of Texas on behalf of Versata, a Dubai-based company that owns the intellectual property of Austin-based Think3. In the ruling, U.S. Bankruptcy Judge H. Christopher Mott of Austin found that Versata is the sole owner of the contested Think3 software. The judge also ruled that an Italian bankruptcy proceeding based on a Think3 branch located in that country is not recognized as the proper forum for disposition of Think3 debt. "We are very happy with the rulings. An Italian bankruptcy trustee had asked the U.S. court to declare Italy was the proper place for these questions, and Versata is very pleased that effort failed," says Mr. Anaipakos, a founding member of Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., also known as AZA. In addition to not recognizing the Italian proceedings, the Austin court ruled that it maintains jurisdiction over the Italian trustee who asked for the trial. The court also ruled that Versata is the exclusive owner worldwide (excluding only China) of all right, title and interest in and to all of the intellectual property of Think3. China was excluded by the court because it was also excluded in the Versata-Think3 purchase contract in 2010. The case that included the property rights ruling is Case No. 11- 11252, and the Italian jurisdiction ruling is in Case No. 11- 11925. Both cases are in the Western District of Texas. Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., or AZA, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, intellectual property, securities fraud, construction, and business dispute cases. AZA is one of only 32 firms in the U.S. to be recognized as "awesome opponents" in a nationwide poll of corporate general counsel who were asked to name the law firms they hope their companies never have to face in court. In fact, AZA has been hired on many occasions by the same companies the firm has prevailed against at trial. About think3 Think3 Inc. develops computer-aided design software. Think3 has been a debtor in corporate reorganization proceedings under the laws of Italy pending before the Court of Bologna since March 14, 2011. Dr. Andrea Ferri was appointed to act as trustee in the Italian Proceedings. Think3 sought Chapter 11 protection (Bankr. W.D. Tex. Case No. 11-11252) on May 18, 2011, in Austin, its hometown, three months after creditors filed an involuntary bankruptcy petition against the company in a court in Bologna, Italy. The company didn't oppose the involuntary bankruptcy. Rebecca Roof was appointed as chief restructuring officer. The Italian trustee filed a Chapter 15 petition (Bankr. W.D. Tex. Case No. 11-11925) for Think3 in bankruptcy court in Austin on Aug. 1, claiming she has the right to control the company's restructuring through the Italian court. Since the Italian bankruptcy was filed, there have been continuing disputes over the right to control the company's assets. ESW Capital LLC acquired Think3 in September. The primary debt is a US$23 million tax liability in Italy. The Italian Trustee is represented by Duane Morris LLP. The Debtor disclosed US$0 in assets and US$45,447,716 in liabilities as of the Chapter 11 filing. Versata FZ-LLC, Versata Development Group, Inc., Versata Software, Inc., ESW Capital, LLC, the parent of Think3, and Gensym Cayman L.P., the DIP Lender, are represented by Fulbright & Jaworski L.L.P., and Morrison & Foerster LLP. =================== K A Z A K H S T A N =================== RG BRANDS: Moody's Changes Outlook on 'B3' CFR to Stable -------------------------------------------------------- Moody's Investors Service has changed to stable from negative the outlook on the B3 corporate family rating (CFR) and the B3 probability of default rating (PDR) of JSC RG Brands. Concurrently, Moody's has affirmed the CFR and the PDR. Ratings Rationale "Our decision to change RG Brands' outlook to stable was prompted by our expectation that the company's operating performance will continue to improve in line with recent trends," says Sergei Grishunin, an Assistant Vice President -- Analyst and Moody's lead analyst for RG Brands. Moody's expects this improvement to result in (i) a satisfactory liquidity position in 2011 and the first half of 2012; (ii) a reduction in leverage (measured by adjusted debt/EBITDA) toward the 3.5x range; and (iii) maintenance of EBITA margin and funds from operations/debt above 10% over the next 12- 18 months. Moody's forecasts for RG Brands assume a compound annual revenue growth rate (CAGR) of around 20% in 2011-12 driven by (i) an increase in the level of disposable income among the population of central Asia, as a result of which more is being spent on food and beverages; (ii) an increase in RG Brands' market shares in the juice, UHT milk, water and packaged tea segments due to improvement of customer sentiment/loyalty; and (iii) the company's penetration of markets of neighboring countries. Moody's also expects RG Brands' EBITA margin to grow beyond 10% due to the company's launch of high value-added packaging, flavors and products and an increase in capacity utilization. Indeed, Moody's anticipates the aforementioned improvements in RG Brands' credit metrics to result from this growth combined with the following: (i) a stabilization of the Kazakhstani tenge (KZT), in which RG Brands reports its earnings; (ii) the company's low capital expenditure (capex) requirements; and (iii) a stabilization of the level of the company's adjusted debt of around KZT20 billion in 2011-12. Moody's expects RG Brands to be in compliance with its debt covenants in financial year ended 2011. In Moody's view, RG Brands' liquidity position has improved since 2010. This improvement was underpinned by (i) stronger cash flow generation; and (ii) an improving debt structure as a result of the company's access to recently arranged revolving debt facilities in form of letters of credit, which now represent around 20% of its total outstanding debt. RG Brands has cash reserves and inflows of around KZT668 millions in the next 12 months starting from the third quarter of 2011. Moody's expects these to be sufficient to cover the company's debt maturities, working capital requirements and capex spending in the same period. RG Brands' liquidity position may be further enhanced by (i) the discretionary nature of the company's capex; (ii) its historical ability to lease fixed assets instead of purchasing them; (iii) expected partial repayment of intercompany receivables from RG Brands shareholder JSC Group of companies RESMI; and (iv) the fact that the company is in the final stages of negotiations with a number of credit institutions for additional multi-year lines totaling around KZT3.7 billion. The affirmation of RG Brands' CFR and PDR reflects that RG Brands' ratings continue to be constrained by (i) its relatively limited scale of operations; (ii) the low capacity utilization of the company's carbonated soft drinks production facilities (around 60% of spare capacity in 2011); (iii) its limited geographical diversification, with revenues derived mainly from Central Asia; (iv) material related party transactions; and (v) its exposure to Commonwealth of Independent States (CIS)-related risk factors. However, more positively, the rating affirmation also reflects (i) Moody's expectation that RG Brands will continue to benefit from its leading position in Central Asian markets; (ii) the diversified nature of RG Brands' product portfolio, with strong brand names; (iii) the long-term nature of the company's exclusive bottling agreement with PepsiCo; and (iv) its developed distribution network. What Could Change The Ratings Up/Down To consider upgrading RG Brands' ratings, Moody's would require the company to establish a track record of sustainably delivering on s financial targets including (i) a reduction in adjusted debt/EBITDA to below 3.5x; and (ii) maintenance of EBITA margin funds from operations/debt above 10%. In addition, Moody's would require RG Brands to maintain a satisfactory liquidity position and comply with all its debt covenants. RG Brands' ratings could come under pressure in the event that (i) as a result of an insufficient improvement in both RG Brands' operating performance and cash flow generation, the company were unable to demonstrate track record of improvements in profitability and credit metrics as anticipated over the next 12- 18 months; or (i) the company were unable to maintain adequate liquidity or to generate sufficient headroom under its debt covenants. Principal Methodology The principal methodology used in rating JSC RG Brands was the Global Packaged Goods Industry Methodology published in July 2009. Headquartered in Almaty, Kazakhstan, RG Brands is a leading manufacturer and distributor of beverages, food products and snacks, with operations predominantly in the Republic of Kazakhstan and Central Asia. =================== L U X E M B O U R G =================== HIGH TIDE: Fitch Downgrades Rating on Class C Notes to 'Csf' ------------------------------------------------------------ Fitch Ratings has downgraded High Tide CDO 1 S.A.'s (High Tide) notes, as follows: -- Class A (ISIN XS0169669081) downgraded to 'CCsf' from 'CCCsf'; -- Class B (ISIN XS0169669164) downgraded to 'CCsf' from 'CCCsf' -- Class C (ISIN XS0169669248) downgraded to 'Csf' from 'CCsf'; The downgrades reflect further negative portfolio credit migration since the review in November 2010. The current portfolio contains 14% of assets rated 'CCCsf' and below. Additionally, the portfolio contains a further 36% of assets rated below investment grade. It is positive that the notes are still current on interest due to the notes not having being written down as a result of credit events in the transaction. However, Fitch views the likelihood of principal being repaid at maturity as low, considering that aggregate losses on High Tide's structured finance portfolio from the default of underlying assets should start to come through in the next few years, eroding the credit enhancement that the tranches benefit from. High Tide is a synthetic arbitrage CDO of mainly European and North American structured finance securities. The ratings address the likelihood of full and timely payment of interest and ultimate payment of principal of all classes of notes by the scheduled maturity on February 15, 2040. Fitch has assigned a One Star Issuer Report Grade (IRG), "Poor", to the reporting due to the lack of detailed information about the liabilities and counterparties. ===================== N E T H E R L A N D S ===================== HIGHLANDER EURO: S&P Raises Rating on Class E Notes to 'CCC+' ------------------------------------------------------------- Standard & Poor's Ratings Services took rating actions on all rated classes of notes in Highlander Euro CDO III B.V. Specifically, S&P has: Raised its rating on class A to 'AA+ (sf)' from 'A+ (sf)'; Raised its rating on class B to 'A+ (sf)' from 'BBB (sf)'; Raised its rating on class C to 'BBB+ (sf)' from 'BB+ (sf)'; Raised its rating on class D to 'BB+ (sf)' from 'CCC+ (sf)'; Raised its rating on class E to 'CCC+ (sf)' from 'CCC- (sf)'; and Withdrawn its 'BB (sf)' rating on the class Q combination note. "The rating actions follow our assessment of the transaction's performance using data from the latest available trustee report, dated Aug. 15, 2011, in addition to a cash flow analysis. We have taken into account recent developments in the transaction and reviewed the transaction under our 2010 counterparty criteria (see 'Counterparty And Supporting Obligations Methodology And Assumptions,' published Dec. 6, 2010) and our cash flow criteria (see 'Update To Global Methodologies And Assumptions For Corporate Cash Flow And Synthetic CDOs,' published Sept. 17, 2009). We have been informed by the trustee that the class Q combination note has been decomposed into its constituent parts, and therefore we have withdrawn the rating on class Q," S&P related. "From our analysis, we have observed a positive rating migration of the performing portfolio, and there are no longer any defaulted assets in the pool. Credit enhancements for all classes of notes, and the weighted-average spread earned on the collateral pool, have increased--which in our view supports higher ratings on the class A, B, C, D, and E notes. We have also observed from the trustee report that the overcollateralization test results for all classes have improved," S&P stated. "We subjected the capital structure to a cash flow analysis to determine the break-even default rate for each rated class. In our analysis, we used the reported portfolio balance that we consider to be performing, the reported principal cash available for reinvestment, the current weighted-average spread, and the weighted-average recovery rates that we considered appropriate. We incorporated various cash flow stress scenarios using various default patterns, levels, and timing for each liability rating category, in conjunction with different interest stress scenarios," S&P stated. "In our opinion, the credit enhancement available to the class A to E notes is consistent with higher ratings than previously assigned, taking into account our credit and cash flow analyses. We have applied our updated counterparty criteria (see 'Counterparty And Supporting Obligations Methodology And Assumptions,' published Dec. 6, 2010), and in our opinion the counterparties can support the ratings on the notes. We have therefore raised our ratings on these notes," S&P said. "Class E was constrained by the application of the largest obligor default test, a supplemental stress test we introduced in our 2009 criteria update for corporate collateralized debt obligations (CDOs) (see 'Update To Global Methodologies And Assumptions For Corporate Cash Flow And Synthetic CDOs,' published Sept. 17, 2009)," S&P said. Ratings List Class Rating To From Highlander Euro CDO III B.V. EUR727 Million Senior Secured Floating-Rate Notes Ratings Raised A AA+ (sf) A+ (sf) B A+ (sf) BBB (sf) C BBB+ (sf) BB+ (sf) D BB+ (sf) CCC+ (sf) E CCC+ (sf) CCC- (sf) Rating Withdrawn Q combo NR BB (sf) NR--Not rated. =========== N O R W A Y =========== SEVAN MARINE: To Sell Three Vessels & Shares to Teekay for $693MM ----------------------------------------------------------------- Stephen Treloar and Marianne Stigset at Bloomberg News report that Sevan Marine ASA agreed to sell its three floating oil production and storage vessels and new shares to Teekay Corp., as well as convert about US$124 million of unsecured bonds to equity, to avoid bankruptcy. According to Bloomberg, Sevan on Tuesday said Teekay will pay US$668 million for the Voyageur, Piranema and Hummingbird vessels and US$25 million for a 40% stake. Sevan will also raise US$25 million in a sale of stock to existing share- and bondholders, Bloomberg says. Unsecured bondholders will receive Sevan Marine's 29% stake in Sevan Drilling ASA, Bloomberg discloses. Sevan Marine has struggled with larger-than-expected maintenance costs on its Voyageur unit, Bloomberg notes. The company has been in talks with bondholders to stave off bankruptcy after reaching an agreement in July to defer interest until the end of September, Bloomberg relates. The deal will see Teekay and existing shareholders end up with 40% each and unsecured bondholders with 20%, Bloomberg says. Sevan Marine ASA is a Norwegian maker of floating oil-production and storage vessels. ============= R O M A N I A ============= * ROMANIA: More Reorganizations Expected in 2012, CITR Says ----------------------------------------------------------- According to Ziarul Financiar's Andrei Circhelan, Rudolf Paul Vizental, senior partner within liquidator Casa de Insolventa Transilvania (CITR), on Tuesday said insolvency claims by companies will continue in 2012, but judicial reorganizations will outweigh bankruptcies. ========= S P A I N ========= BANCO CAM: Moody's Cuts Bank Financial Strength Rating to 'E+' -------------------------------------------------------------- Moody's Investors Service has downgraded Banco CAM's standalone bank financial strength rating (BFSR) to E+ from D. The E+ standalone BSFR maps to B3 on the long-term scale. At the same time, Moody's has confirmed Banco CAM's senior debt and deposit ratings at Ba1/Not Prime and its dated subordinated debt at Ba2. All of Banco CAM's ratings are on review with direction uncertain, except the government guaranteed debt rated Aa2 on review for possible downgrade. The action extends the rating review initiated on September 8, 2011. RATINGS RATIONALE DOWNGRADE OF BANCO CAM'S STANDALONE BANK FINANCIAL STRENGTH RATING Moody's decision to downgrade Banco CAM's standalone BFSR by several notches, to E+ from D, reflects the material deterioration on the bank's credit profile due to (i) its fragile liquidity position with a continuously increasing funding deficit that is only covered by ECB and domestic public debt Repo funding and the EUR3 billion credit facility provided by its owner the state-owned fund ("FROB", Fund for the Orderly Restructuring of the Banking System) (ii) significant deterioration in asset quality indicators, with a problem-loan ratio of 19% and a coverage ratio of 39.4%, compared with 9% and 53.4% as of Q1 2011 (iii) net loss of EUR1.1 billion at end-June 2011 compared with a net profit of EUR39.8 million at end-March 2011, due to the higher than expected level of impairments, and (iv) weak solvency indicators when compared to Moody's calculation of embedded expected losses in Banco CAM's balance sheet, despite the EUR2.8 billion capital injection committed by the FROB. Banco CAM was taken over by the FROB on July 22, 2011, after having committed EUR2.8 billion of capital injection into the bank and having granted a EUR3 billion credit facility as part of the Bank of Spain's restructuring plan. Moody's believes that without the support provided by the Spanish government via its owner (the FROB), Banco CAM would not be able to face its sizable refinancing requirements over the next 12 months given its weakening deposit base and lack of access to wholesale market financing. In addition, Moody's is concerned by the bank's very weak risk absorption capacity, with mounting losses and weak solvency indicators, which has been severely impacted by the rapid deterioration of its asset portfolio. The FROB and Bank of Spain have jointly initiated the auction process of Banco CAM, which is expected to conclude in the following weeks. Moody's has placed the bank's BFSR on review with direction uncertain to reflect the different rating implications for Banco CAM in case the sale process is completed or if the FROB fails to conclude it. By placing Banco CAM's BFSR on review with direction uncertain the rating agency wants to highlight: (i) the possibility for the bank's rating to be upgraded if it is acquired by a stronger peer, (ii) the possibility of being downgraded if the resulting entity after the sale process displays a weaker credit profile than Banco CAM's standalone financial strength and (iii) the possibility of Banco CAM's standalone rating being downgraded if the sale process fails to succeed and the government weakens its current support for the bank. CONFIRMATION OF BANCO CAM'S SENIOR DEBT AND DEPOSIT RATINGS, AND SUBORDINATED DEBT In its action, Moody's has also confirmed Banco CAM's debt and deposit ratings at Ba1/Not Prime. Following the downgrade of the bank's BFSR, Moody's has broadened the uplift from its standalone rating to five notches, to reflect the strong commitment of the FROB to continue providing support to Banco CAM in terms of liquidity and capital until the auction process is completed. At the same time, Moody's has confirmed Banco CAM's dated subordinated debt instruments at Ba2. These dated subordinated debt instruments continue to be rated one notch lower than the senior debt instruments, based on subordination in the case of liquidation. The bank's debt and deposits ratings as well as dated subordinated debt are on review with direction uncertain reflecting the review with direction uncertain of its standalone rating. In addition, Moody's notes that Banco CAM's debt ratings could be aligned with its standalone BFSR and therefore downgraded by several notches in case the government (via FROB) will provide any signal that it may weaken the support that is currently expected to be forthcoming for the bank in case of need. Headquartered in Alicante, Spain, Banco CAM had total assets of EUR71.3 billion as of end-June 2011. BBVA-6 FYPYME: Fitch Downgrades Rating on Class C Notes to 'Csf' ---------------------------------------------------------------- Fitch Ratings has taken various actions on BBVA-5 FTPYME and BBVA- 6 FTPYME as follows: BBVA-5 FTPYME, FTA -- EUR150m Class A1 (ES0370459002) affirmed at 'Asf', Outlook revised to Stable from Negative -- EUR41m Class A2 (ES0370459010) affirmed at 'Asf', Outlook revised to Stable from Negative -- EUR27m Class A3(G) (ES0370459028) downgraded to 'AA-sf' from 'AA+sf', Outlook Negative -- EUR40m Class B (ES0370459036) affirmed at 'BBsf'; Outlook Negative -- EUR57m Class C (ES0370459044) affirmed at 'AAAsf'; Outlook Stable BBVA-6 FTPYME, FTA -- EUR199m Class A1 (ES0370460000) affirmed at 'BBB-sf'; Outlook Negative -- EUR94m Class A2(G) (ES0370460018) downgraded to 'AA-sf' from 'AA+sf', Outlook Negative -- EUR50m Class B (ES0370460026) downgraded to 'CCsf' from 'CCCsf' Recovery Rating 'RR4' -- EUR32m Class C (ES0370460034) downgraded to 'Csf' from 'CCsf'; Recovery Rating 'RR6' The downgrades of BBVA-5 class A3(G) and BBVA-6 FTPYME class A2(G) reflect the dependence of the notes' ratings on the guarantee provided by the Kingdom of Spain ('AA-'/Negative/'F1+'). The affirmation of BBVA-5's class C notes reflects its linkage to the rating of the guarantor, the European Investment Fund ('AAA'/Stable/'F1+') The affirmations of the remaining classes of BBVA-5 reflect the increased level of credit enhancement and notes' ability to withstand credit scenarios commensurate with their current ratings. In addition, the principal deficiency ledger (PDL) balance has declined by EUR3.5 million to EUR1.5 million, mainly driven by the increased volume of recoveries which have more than doubled year on year. Cumulative defaults, defined as loans in arrears over 12 months, have decreased by EUR7 million over the year and currently represent 14% of the outstanding balance. However, they are likely to increase as the delinquencies over 90 days stand at 4.2%. Fitch has been provided with recent portfolio information on a loan-by-loan basis, which the agency used to simulate the various rating stresses within its Portfolio Credit Model (PCM), Fitch's primary tool in assessing the default and loss rates for SME CLO portfolios. Of the current portfolio balance, 61% is secured on real estate assets. The current portfolio has moderate obligor concentration exposure with the top one, 10 and 20 obligors representing 2%, 10% and 17% of current portfolio balance, respectively. The estimated mean default rate on the portfolio is 31% and the mean recovery rate 71%. BBVA 5's portfolio had amortized to EUR296 million as of August 2011 or 16% of the initial balance. Series A1 has amortized to 10% of its initial balance. The affirmation of BBVA-6's class A1 reflects sufficient levels of CE to support the ratings of the notes. The downgrades of BBVA- 6's class B and C are due to a combination of weakening performance trends and insufficient levels of structural CE of the classes. Cumulative defaults have risen by EUR7 million year on year and now represent 18% of the outstanding balance. The increase in defaults has led to a decline of CE for the class B and C to 0.8% and -7.8%, respectively, versus 2.2% and -4.4% a year ago. Also, while the delinquency pipeline has stabilized during the year, the current exposure to delinquencies between 30 and 90 days is still relatively high at 3.7% of the current balance. In addition, the principal deficiency ledger balance has increased by EUR8 million while recoveries are relatively low at 20%. BBVA-6's portfolio, 63% of which is secured on real estate assets, has amortized to EUR345 million or 23% of the initial balance. Series A1 has amortized down to 17% of its original value. The estimated mean default rate on the portfolio is 32% and the mean recovery rate is 68%. Obligor concentration of the portfolio is moderate with the top one, 10 and 20 obligors representing 1%, 8% and 13%, respectively. Fitch notes that as the transactions have significantly amortized, exposure to tail risk as well as real estate and construction sectors is a concern. Fitch has revised the Issuer Report Grade (IRG) for BBVA-5 and 6 to "Poor" (one star) based on the provided reports. The reports do not meet several standards for a higher grade including information on portfolio stratification and counterparties triggers, repossessions and recovery details. EMPRERAS BANESTO: Moody's Assigns (P)Ca Rating to Serie C Note -------------------------------------------------------------- Moody's has assigned the following provisional ratings to the debt to be issued by EMPRESAS BANESTO 6, Fondo de Titulizacion de Activos: EUR935M Serie A Note, Assigned (P)Aaa (sf) EUR165M Serie B Note, Assigned (P)Baa2 (sf) EUR264M Serie C Note, Assigned (P)Ca (sf) Ratings Rationale EMPRESAS BANESTO 6, Fondo de Titulizacion de Activos is a securitization of loans granted by Banco Espanol de Credito, S.A. (Banesto, A2/P-1/Negative Outlook) to micro, small- and medium- sized enterprises (SME) and corporate entities. Banesto is acting as Servicer of the loans while Santander de Titulizacion S.G.F.T., S.A. is the Management Company (the Gestora). The provisional pool analysed was, as of September 2011, composed of a portfolio of 5,731 loans granted to obligors located in Spain. The assets were originated between 2004 and 2011 (86.7% between 2008 and 2011), and have a weighted average seasoning of 2 years and a weighted average remaining term of 3.7 years. All exposures are unsecured loans. Geographically, the pool is located mostly in the regions of Catalonia (26.3%), Madrid (22.1%) and Valencia (10.1%). The provisional portfolio, as of its cut-off date, included 2.5% of loans in arrears between 31 and 90 days. However, loans in arrears exceeding 30 days will be excluded from the final pool at closing. According to Moody's, the deal has the following credit strengths: (i) the pool is well diversified both geographically and in terms of industry, with a relatively low exposure to obligors in the construction and real estate sector (which according to Moody's represents 13.8% of the pool); (ii) the portfolio has a significant presence of large corporate obligors (according to Banesto 16.6% of the pool consists of companies with annual turnovers exceeding EUR500 million) which are normally considered as having a stronger credit quality than smaller obligors; and (iii) the transaction has a weighted average life (WAL) of around 2 years which is relatively short and implies a lower degree of uncertainty regarding quantitative assumptions. Moody's notes that the transaction features a number of credit weaknesses, including: (a) high obligor concentration as the top exposure represents 5% of the pool balance and the top 25 names amount to 41.5%; (b) significant exposure (21.5% of the pool balance) to loans with bullet amortisation schedules; (c) as of the cut-off date of the provisional portfolio, 11.7% of the outstanding balance was linked to loans under a grace period with regards to principal payments. These characteristics were reflected in Moody's analysis and ratings, where several simulations tested the available credit enhancement for the notes to cover potential shortfalls in interest or principal envisioned in the transaction structure. The resulting key assumptions of Moody's analysis for this transaction are a mean default rate of 14.4%, and a stochastic mean recovery rate of 35%. The methodologies used in this rating were Moody's Approach to Rating CDOs of SMEs in Europe, published in February 2007, Refining the ABS SME Approach: Moody's Probability of Defaults Assumptions in the Rating Analysis of Granular SME Portfolios in EMEA, published in March 2009 and Moody's Approach to Rating Granular SME Transactions in Europe, Middle East and Africa, published in June 2007. As mentioned in the methodology papers, Moody's used a combination of its CDOROM model (to generate the default distribution) and ABSROM cash-flow model to determine the potential loss incurred by the notes under each loss scenario. In parallel, Moody's also considered non-modeled risks (such as counterparty risk). 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 key parameters for the rated notes. For instance, if the assumed default probability of 14.4% used in determining the initial rating was changed to 19.9% and the recovery rate of 35% was changed to 25%, the model-indicated rating for Serie A, Serie B and Serie C of (P)Aaa(sf), (P)Baa2(sf) and (P)Ca(sf), respectively, would have changed to (P)A1(sf), (P)B1(sf) and (P)C(sf) respectively. ===================== S W I T Z E R L A N D ===================== * SWITZERLAND: Insolvencies Increase as Franc Hits Tourism ---------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Swiss company insolvencies rose by almost a quarter in September, suggesting the strong franc is taking its toll on smaller enterprises, particularly in the tourism and restaurant sector, a survey published showed. =========== T U R K E Y =========== EREGLI DEMIR: S&P Raises Long-Term Corporate Credit Rating to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit rating on Turkey-based steel producer Eregli Demir ve Celik Fabrikalari T.A.S. (Erdemir) to 'B' from 'B-'. The outlook is stable. "The upgrade reflects our revision of Erdemir's financial risk profile to 'aggressive' from 'highly leveraged'. Our decision factors in a large, multi-year investment program, which has boosted financial performance significantly in the past 18 months and better positions the company to deal with increasing domestic competition. As a result, the company can establish itself in export markets and is better positioned to withstand a potential downturn in the global or European economy or a tougher Turkish market for flat steel products in the next one to two years. Efficiency improvements, incremental volume increases, and a greater proportion of higher value flat steel production are a consequence of major capital spending and a more commercial focus in recent years. Through dividends, we expect Erdemir to be the primary source of funds to service the US$1.6 billion of bank debt at its 49.3% owner, special-purpose vehicle Ataer (not rated), which itself is a wholly owned subsidiary of Ordu Yardimlasma Kurumu (OYAK; BB+/Stable/B). This stake gives OYAK effective control of Erdemir as a result of Erdemir's holding 3.08% of its shares as treasury stock. While Standard & Poor's continues to factor Ataer's debt into Erdemir's adjusted debt metrics, it sees OYAK as likely to support Ataer's borrowings under certain scenarios as it did during 2009 and 2010 when Erdemir did not pay cash dividends to its shareholders. Accordingly, we also consider Erdemir's stand-alone debt metrics meaningful, particularly if business conditions weaken. We do not incorporate any explicit notches of potential extraordinary support from OYAK," S&P elaborated. The ratings on Erdemir reflect Standard & Poor's view of the company's cyclical and capital-intensive steel business, which is subject to cost pressures due to volatile iron ore and coking coal prices, cyclical demand and risk of oversupply due to major new domestic flat steel capacity coming onstream in 2011 and 2012. "The stable outlook reflects our view that Erdemir should be able to cope with a less favorable operating environment in the face of an uncertain global economic outlook and increased domestic competition from new flat steel capacity additions," S&P stated. =========================== U N I T E D K I N G D O M =========================== CERAMICA: Placed Into Creditors' Voluntary Liquidation ------------------------------------------------------ Graeme Brown at Birmingham Post reports that Ceramica, a museum which explored the history of Staffordshire's pottery industry, has been placed into creditors' voluntary liquidation after being hit by cutbacks. Birmingham Post recalls that the museum was closed in March after its Stoke-on-Trent City Council funding was withdrawn, due to government cuts. Some of the exhibits were transferred to other locations and the future of the Town Hall is being reviewed. Bob Young and Steve Currie, of corporate recovery group Begbies Traynor, were appointed at a meeting of creditors held on Tuesday, October 18, 2011, the report discloses. According to the report, Ceramica chairman Paul Sherratt gave the creditors' meeting a statement of the company's history and where things went wrong. Birmingham Post says initial funding from all sources to launch the project totalled GBP3.5 million, much of it from the Millennium Commission but also the council, regional development agency Advantage West Midlands, English Heritage, and The Weston Foundation. The visitor attraction latterly charged GBP4.10 for a family and was operated by five full and part-time staff. "It was always intended that Ceramica should be self-funding, but in practice it never attained the visitor numbers that were anticipated. The original funding aspirations were with hindsight entirely unrealistic. Once the deficit funding from the council was withdrawn, the organisation could no longer continue," the statement noted. "Once it became clear that Ceramica would have to close, money that might otherwise have been set aside to meet staff redundancy and to pay creditors was used for day to day running. The building has to be insured and provided with heat and lighting and there is inevitably an on-going maintenance cost. These costs led to the shortfall." According to Birmingham Post, Begbies Traynor has appointed property agents Butters John Bee to assist them with the marketing of the property and contents. It is intended that Butters John Bee will be offering to the market the remainder of a 99-year lease which commenced in 1998, the report notes. Ceramica was a museum in Burslem, Stoke-on-Trent. It was located in the former Burslem Town Hall. DOUGLAS STREET: Continues to Operate Amid Liquidation Proceedings ----------------------------------------------------------------- TheCourier.co.uk reports that Dundee taxi firm Douglas Street Transport Limited, formerly known as Dundee Private Hire, is continuing to operate despite its trading company going into liquidation. A meeting of the creditors of Douglas Street is to be held on October 26 at the Edinburgh offices of interim liquidator Begbies Traynor, according to the report. TheCourier.co.uk relates that the firm was formally liquidated on August 5 but interim liquidator David Menzies admitted he had yet to interview any of the directors of Douglas Street Transport Ltd in connection with the situation. Despite the collapse, the distinctive silver cabs -- which first took to the road in 2001 with a fleet of Mercedes -- have continued to be available to taxi passengers in Dundee, the report relays. According to the report, Chief executive David Young said he was aware of the official liquidation notice but said it did not affect ongoing operations. Mr. Young said a new investor had come into the business and the taxis were now operating under the name Dundee Private Hire 203020 Ltd, TheCourier.co.uk adds. EMI GROUP: Turbulent Financing Markets May Derail Sale ------------------------------------------------------ Andrew Edgecliffe-Johnson and Anousha Sakoui at The Financial Times report that turbulent financing markets could derail Citigroup's attempt to sell EMI Group. According to the FT, people close to the US$3 billion-plus auction who warned that the US bank could abandon the sale if it cannot squeeze higher offers from bidders said that the bidding process remains fluid, with Citigroup expected to decide within two weeks whether to sell EMI in one piece, break the UK music company in two, or put the sale on hold. Most auction participants believe that it would be surprising for Citigroup to retain a company it seized in February from Guy Hands' Terra Firma private equity group if it could avoid doing so, the FT says. The FT relates that an adviser to one bidder said talk of scrapping the auction could be "posturing". However, three people involved said that second-round bids had come in at the low end of an expected US$3bn-US$4 billion range, and that tight credit markets made higher offers hard to finance, the FT notes. As reported by the Troubled Company Reporter-Europe on Sept. 9, 2011, the Financial Times said Citigroup was planning to indemnify bidders for EMI from any future damages claim from Guy Hands following a fresh legal action by the private equity financier over the music company. Citigroup financed his 2007 takeover of the music company, then seized it back in February, the FT recounted. He applied to the High Court in London for documents to be turned over in relation to the valuations used at the beginning of the year when the US bank wrested control of EMI from him through a pre-pack administration process, the FT related. The U.S. bank seized the company in February, four months before it was set to default on loan covenants, after concluding that a holding company had failed a solvency test triggered by the weight of its GBP3.4 billion debts, the FT disclosed. EMI Group Ltd. -- http://www.emigroup.com/-- is the fourth largest record company in terms of market share (behind Universal Music Group, Sony Music Entertainment, and Warner Music Group). It houses recorded music segment EMI Music and EMI Music Publishing. EMI Music distributes CDs, videos, and other formats primarily through imprints and divisions such as Capitol Records and Virgin, and sports a roster of artists such as The Beastie Boys, Norah Jones, and Lenny Kravitz. EMI Music Publishing, the world's largest music publisher, handles the rights to more than a million songs. EMI Music operates through regional divisions (EMI Music North America, International, and UK & Ireland). Financial services giant Citigroup owns EMI. ICON ENERGY: Sister Company Continues to Trade Amid Liquidation --------------------------------------------------------------- The Herald Scotland reports that Icon Energy has revealed that its sister sun power company Icon Solar is to continue trading. As reported in the Troubled Company Reporter-Europe on Oct. 17, 2011, BBC News reports that Icon Energy had entered voluntary liquidation "as a direct result" of Proven Energy appointing a receiver and ceasing to trade last month. Proven went into administration after a defect was identified in its P35-2 model, affecting 500 customers, according to BBC News. Icon Energy went into voluntary liquidation after losing out to Kingspan Renewables in a bid to take over Proven. Headquartered in Milnathort near Kinross, Icon Energy is a wind turbine installer. The company was one of the leading renewable energy installers in Scotland and Northern England. PLYMOUTH ARGYLE: Council Agrees to Buy Club's Ground ---------------------------------------------------- BBC News reports that Plymouth Argyle Football Club, commonly known as Argyle, could be saved after Plymouth City Council agreed to buy its ground. Plymouth City Council will pay GBP1.6 million for Home Park and rent it back to the club for GBP135,000 a year, according to BBC News. The report recalls that the club bought the ground from the council for GBP2.7 million in 2006. BBC News notes that the council's purchase of the ground was a proviso of a rescue bid by businessman James Brent, who hopes to complete the deal this week. The move was unanimously approved by the full Conservative- controlled council, the report notes. BBC News discloses that the council deal means Argyle would have an option to buy back the ground every five years for a sum equal to 12 times the then annual rent. The report relays that the rent would rise by 150% if the club reached the Championship and 300% if it reached the Premier League. The deal also removes covenants preventing non-football development around the ground, BBC News adds. About Plymouth Argyle Plymouth Argyle Football Club, commonly known as Argyle, or by their nickname, The Pilgrims, is an English professional football club based in Central Park, Plymouth. It plays in Football League One, the third division of the English football league system. As reported in the Troubled Company Reporter-Europe on March 8, 2011, the High Court placed Plymouth Argyle Football Club into administration. Brendan Guilfoyle, Christopher White and John Russell of The P&A Partnership have been appointed as administrators. The TCR-Europe, citing The Guardian, reported on March 3, 2011, that Plymouth Argyle directors have been warned that the club needs an injection of around GBP3 million if it is not to be placed into administration. The P&A Partnership has been trying to sell the debt-crippled Pilgrims since they were plunged into administration, according to Plymouth Herald. Devon businessman James Brent is expected to complete his takeover of the League Two club this month. Plymouth Herald noted that the deal would secure Argyle's short-term future and bring to an end a process that by lead administrator Brendan Guilfoyle's own admission has been "complex and protracted". * UK: Proposes Tough Regulations for Residential Care Homes ----------------------------------------------------------- Sally Gainsbury at The Financial Times reports that the government is considering a series of tough regulations for residential care homes following the collapse this year of Southern Cross, the UK's biggest home operator. According to the FT, the measures, outlined on Oct. 10 for consultation, include requiring companies to post capital upfront as a condition of their license, and giving councils and regulators the power to intervene in the management of homes if they come under the threat of closure. The proposals are contained in a formal government discussion paper, the FT discloses. When applied to privately run businesses, that could mean a home would have to undergo a "more rigorous financial check" as a condition of a license, the FT notes. The FT says its financial position would be reviewed periodically, or after significant changes "such as a securitization or highly leveraged transaction". The paper states that in the "event of persistent financial weakness" the regulator could intervene and ultimately remove the license to operate, the FT notes. According to the FT, the discussion paper shows those proposals are still under consideration, with ministers consulting on whether existing licensing requirements could be changed to "make sure that a care home cannot close suddenly, for example, by posting capital upfront in a segregated account or through a risk- pooling scheme". The consultation is due to close on December 2, the FT states. * UK: Seeing North-South Gap in Financial Distress Levels --------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that a divide in levels of financial distress between the north and south of England is developing as the impact of public sector cuts starts to hit home, insolvency specialists Begbies Traynor Group PLC said. =============== X X X X X X X X =============== * Liquidity of EMEA Corporates Expected to Decline, Moody's Says --------------------------------------------------------------- In its latest report on corporate liquidity published on Oct. 17, 2011, Moody's Investors Service says that liquidity positions are stronger than a year ago for both investment-grade and speculative-grade companies. Companies have been cautious about discretionary uses of cash and benefitted from extending debt maturities during a period of strong bond market access earlier this year. "From our study of 563 rated corporate borrowers, 91% of issuers demonstrate sufficient liquidity to cover their debt maturities over the next 12 months," says Moody's Senior Vice President Jean- Michel Carayon. "Some 9% of issuers, mostly in the B rating category, display insufficient or weak liquidity -- compared with 14% a year ago." However, Moody's says that the broad trend for corporate liquidity in EMEA has taken a decidedly negative trend, looking forward. High-yield bond issuance has declined steeply after reaching a peak of USD31 billion in the second quarter of 2011."Corporate cash flow will be pressured by slower growth in the global economy and recession in parts of Europe", says Mr. Carayon. "Moreover about US$545 billion of debt will mature by June 2012, representing a 5% increase compared with the previous year," he explains. We also think pressures on bank capital and asset quality portend a sustained period of tightened standards for bank loans and committed credit facilities. Non-investment- grade borrowers will find it the most challenging to maintain sound liquidity. The degree of severity and duration of a downturn in liquidity will be a key determinant for the extent of corporate stress. Our current expectation is that liquidity conditions will not deteriorate sufficiently to trigger a significant surge in the default rate over the near term, Moody's says. However, weaker liquidity profiles may lead to rating downgrades, particularly for speculative grade companies with limited flexibility to conserve cash without weakening their competitive business position. Moody's report is entitled "Liquidity of EMEA Corporates is Strong but Expected to Deteriorate". * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Nov. 28, 2011 BEARD GROUP, INC. 18th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York City Contact: 1-240-629-3300 Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. 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 * * *