/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/130109.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 Wednesday, January 9, 2013, Vol. 14, No. 6 Headlines C Z E C H R E P U B L I C * Moody's: High Credit Concentrations Major Risk for CEE4 Banks F R A N C E ALBEA BEAUTY: S&P Assigns 'B+' Corp. Rating; Outlook Stable G E R M A N Y FRESENIUS FINANCE: Moody's Rates EUR500MM Sr. Unsec. Notes 'Ba1' I C E L A N D GLITNIR BANK: Johannesson Pleads Not Guilty in Suit Over Loan I T A L Y ANDROMEDA FINANCE: Fitch Keeps Rating on Class A2 Notes at 'BB+' RICHARD GINORI: Declared Bankrupt by Italian Court L U X E M B O U R G TRUCKLEASE SA: Fitch Lifts Rating on Class D Notes From 'BB+' N E T H E R L A N D S FLASH DUTCH: Moody's Assigns 'B2' CFR/PDR; Outlook Stable P O L A N D PBG SA: Speeds Up "Restructuring" & Creditor Talks S W E D E N VIDA PAPER: Seeks Investor Following Bankruptcy S W I T Z E R L A N D * US Global Tax Deal Best Option for Swiss Banks, Says Fitch T U R K E Y PETKIM PETROKIMYA: Fitch Affirms, Withdraws 'B+' Long-Term IDRs U N I T E D K I N G D O M BANK OF SCOTLAND: Amendments No Impact on Moody's 'D+' BFSR GULISTAN CARPET: Bankrupt Owner to Shut Down Aberdeen Factory KENDAL RIVERSIDE: In Administration, Business as Usual SHERIDAN MILLENNIUM: Owner Declared Bankrupt After Administration WEAVERING CAPITAL: Director Appears in Court Over Collapse WILLIAM HILL: S&P Affirms 'BB+' Corp. Rating; Outlook Stable X X X X X X X X * EUROPE: 2013 to Remain Challenging for Western Telecoms Cos. ********* =========================== C Z E C H R E P U B L I C =========================== * Moody's: High Credit Concentrations Major Risk for CEE4 Banks --------------------------------------------------------------- Credit concentrations in the CEE4 region (i.e. Czech Republic, Hungary, Poland and Slovakia) are generally higher than in most developed banking systems, says Moody's Investors Service in a Special Comment report published on Jan. 7. At the same time, credit concentrations in the CEE4 banking systems are mostly in line with developing banking markets, and generally below those for the Commonwealth of Independent States (CIS) region. These findings come from Moody's recent survey of CEE4 banks' exposure to single borrowers, carried out on data covering the period 2009-11. The new report, titled "CEE4 Banks: Single-Client Concentration Survey Reveals High Credit Concentrations", is now available on www.moodys.com . Moody's subscribers can access this report via the link provided at the end of this press release. "High credit concentrations in the CEE4 banking systems remain a major credit risk for the banks," says Oscar Heemskerk, a Moody's Vice President -- Senior Credit Officer and co-author of the report. "However, we acknowledge that these concentrations include high sovereign exposures to CEE4 government debt, and that corporate concentrations are lower than the headline figures suggest," adds Mr. Heemskerk. Moody's notes that, excluding the sovereign exposures, Slovakia reveals the highest single-name concentration risk, albeit that the loss absorbing capacity of Slovak banks has historically been supported by their strong profitability. High borrower concentrations in Hungary, in particular to the higher-risk commercial real-estate and construction sectors, constitute a major risk for the Hungarian banking system, which is exacerbated by the weak operating environment and banks' deteriorating financial performance. In Moody's view, the relatively high level of credit concentrations in the region is generally reflected in the banks' standalone financial strength ratings, in particular when combined with their higher risk appetite, as evidenced by elevated exposures to riskier asset classes in the banks' top 20 exposures. Moody's believes that, for the CEE4 region, the high levels of average credit concentrations, as measured by the banking sectors' top 20 credit exposures relative to capital and earnings, primarily reflect (1) banks' focus on their respective relatively small domestic markets, with limited lending opportunities; and (2) the historical trend of growing a corporate franchise, followed by developing businesses into the more granular small and medium sized enterprises (SMEs) and retail segments. Risks are further exacerbated by relatively high industry concentrations in the domestic markets, and resulting high exposures to a few, and often higher-risk, industries in the banks' loan books. The survey consists of 26 rated banks throughout the CEE4 region. These banks account for over 50% of the banking assets in their respective countries, which in Moody's view makes its sample broadly representative of system-wide developments. The ratings that Moody's currently assigns to CEE4 banks incorporate the current concentration risks discussed in the report. =========== F R A N C E =========== ALBEA BEAUTY: S&P Assigns 'B+' Corp. Rating; Outlook Stable ----------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' long-term corporate credit rating to France-based beauty and cosmetics packaging manufacturer Albea Beauty Holdings S.A. (Albea). The outlook is stable. "At the same time, we assigned our 'B+' issue rating to Albea's EUR200 million senior secured notes (due 2019) and US$385 million senior secured notes (also due 2019). The recovery rating on these notes is '4', indicating our expectation of average recovery (30%-50%) in the event of a payment default. The rating on Albea reflects our assessment of the group's financial risk profile as "aggressive" and business risk profile as "fair" (post acquisition)," S&P said. "Our assessment of Albea's financial risk profile as "aggressive" reflects our view of the group's capital structure following the completion of the acquisition of Rexam PLC. Albea is owned by private-equity firm Sun Capital Inc., and we assess Albea's financial policy as "aggressive". The ratings are further constrained by limited audited historical financial data and a still-nascent track record. We forecast that Albea's Standard & Poor's-adjusted debt-to-EBITDA ratio will be just less than 4.5x at Dec. 31, 2013," S&P noted. "Our assessment of Albea's business risk profile as "fair" reflects the newly combined group's position as a global leader in the niche beauty and cosmetics packaging market, with combined sales about $1.5 billion in 2013. The combined group is likely to benefit from economies of scale, an enhanced product portfolio, and stronger market positions, (especially in higher- growth emerging markets, which we understand will represent 30% of total sales). The group benefits from long-standing relationships with blue-chip customers such as L'Oreal and Estee Lauder. It has improved its ability to pass on volatile raw material costs to customers--almost three-quarters of Albea's sales contracts included price-adjustment clauses in 2011," S&P added. These strengths are somewhat offset by the weak macroeconomic outlook in key European markets, which represent about 50% of combined group sales, and exposure to more cyclical end markets where spending is somewhat discretionary in nature. Further constraining the rating are weak, if improving, EBITDA margins versus peers. (S&P calculate an adjusted EBITDA margin of 8.4% for the 12 months to June 30, 2012, for Albea on a stand-alone basis.) The group also suffers from some customer concentration- -its top 10 customers account for more than one-half its sales. The issue rating on the senior secured note issues of EUR200 million (due 2019) and US$385 million (also due 2019) issued by Albea Beauty is 'B+', in line with the corporate credit rating. The recovery rating is '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. The recovery rating is supported by S&P's view of Albea's valuation as a going concern, its leading market position, and the synergies expected to be achieved through the acquisition of Rexam PLC (BBB-/Stable/A-3). The recovery rating on the proposed notes is constrained at '4'. The notes are contractually subordinated to the working capital assets pledged to the $60 million North American Asset-Based Lending (ABL) and the EUR100 million European factoring facilities. They are also structurally subordinated to debt raised at operating subsidiaries (currently about $16 million is available at subsidiaries). The notes' guarantee and security package have some important limitations, as they exclude the contributions from French operating subsidiaries -- these account for 33% of combined group sales and 22% of its EBITDA. As such, the proposed guarantee package as of the 12 months to June 30, 2012, only comprises Twist Beauty Packaging S.a.r.l. (Luxembourg) and material subsidiaries, which are expected to represent 47%, 53%, and 55% of the combined group's revenue, EBITDA and net assets, respectively. This is a relatively low coverage level by market standards. In line with S&P's criteria, to calculate potential recoveries, S&P simulate a hypothetical default scenario. Under this scenario, a default would occur following a combination of top- line deflation, due to intensified competition and slowing demand from challenging European markets; margin pressure, caused by inflation in raw material costs and delays in synergies from Rexam integration; and an increase in variable interest rates. This scenario would lead to a default in 2015 due to the group's incapacity to service interest, with EBITDA declining to US$117 million at the point of hypothetical default. "The stable outlook reflects our opinion that Albea has the capacity to reduce its debt leverage steadily over the medium term through an improved operating performance and robust cash generation. We anticipate that, following the acquisition of Rexam, pro forma credit metrics should be at levels commensurate with the 'B+' rating. Specifically, this means adjusted debt-to- EBITDA of less than 5x, and adjusted FFO-to-debt of more than 12% on a pro forma basis," S&P said. "We could lower the ratings if Albea's operating performance and cash generation do not improve enough to allow the group to deleverage, and credit metrics weaken to levels that we consider are commensurate with a "highly leveraged" financial risk profile," S&P said. If Albea materially reduces its debt leverage, S&P could consider raising the rating. ============= G E R M A N Y ============= FRESENIUS FINANCE: Moody's Rates EUR500MM Sr. Unsec. Notes 'Ba1' ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba1 rating to the proposed EUR500 million senior unsecured notes to be issued by Fresenius Finance B.V., a wholly owned subsidiary of Fresenius SE & Co. KGaA ("FSE" or "the group"). FSE, together with Fresenius Kabi AG and Fresenius ProServe GmbH, guarantees the notes. The senior unsecured notes are expected to be used to redeem the EUR500 million notes maturing at January 2013 and for general corporate purposes. Ratings Rationale "The Ba1 rating on the new senior unsecured notes to be issued at the level of one of FSE's financing subsidiaries reflects the instrument's relative position in the capital structure of FSE," says Alex Verbov, a Moody's Vice President and lead analyst for FSE. "The notes benefit from a downstream senior guarantee by FSE, and upstream guarantees by Fresenius Kabi AG and Fresenius ProServe GmbH, in line with the outstanding senior unsecured notes of various finance issuers in the group," adds Mr. Verbov. Fresenius' current Ba1 Corporate Family Rating reflects (1) the group's sizeable, and with recent acquisitions further increasing scale as a global provider of healthcare services and medical products as well as the recurring nature of a large part of its revenue and cash flow base; (2) its segmental diversification within the healthcare market, supported by strong positions in its four segments, which will be improved even further with the recently closed acquisition of Fenwal, a privately owned blood- transfusion equipment manufacturer, for an estimated purchase price of US$1.1 billion, based on indications that the amount is lower than the EUR1 billion of equity raised by FSE in May 2012 which are used to finance the acquisition; (3) its track record of accessing both equity and debt markets to support its acquisition growth and refinancing needs, and of successfully deleveraging following large acquisition peaks; and (4) the attractive valuation of FSE's 31% stake in its dialysis subsidiary FME. The rating is constrained by (i) FSE's leverage, with an estimated pro-forma for recent acquisitions debt/EBITDA ratio of 3.6x on a group basis (Moody's adjusted); (ii) the group's exposure to regulatory changes, reimbursement and pricing pressure from governments and healthcare organizations worldwide; (iii) by relatively weak structural liquidity profile driven by the need to continuously refinance its debt, despite adequate short term liquidity cushion; and (iv) a track record of aggressive acquisition strategy. Rating assignments/changes: Issuer: Fresenius Finance B.V. Unsecured senior notes due 2020, Assigned Ba1, LGD4, 57% What Could Change the Rating -- Up Moody's would consider an upgrade to investment grade only upon a significant change in financial strategy that would target debt/EBITDA below 3.0 times, equivalent to reported net debt/EBITDA (management's measure) well below 2.5 times. What Could Change the Rating -- Down The ratings could be subject to downwards pressure if Fresenius' leverage metrics weaken as exemplified by a debt/EBITDA exceeding 4.0x or CFO to debt falling towards the low teens. Large debt financed acquisitions or negative free cash flows, materially reducing the prospect of deleveraging could also be drivers of a downward rating migration. The principal methodology used in rating Fresenius Finance B.V. was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Fresenius SE & Co. KGaA is a global healthcare group providing products and services for dialysis, the hospital and the medical care of patients at home. It is a holding company whose major assets are investments in group companies and inter-company financing arrangements. Around 55-60% of group sales and EBIT are generated by Fresenius Medical Care (Ba1 Corporate Family Rating, stable Outlook), which is fully consolidated into the FSE group, although only 31% owned, based on managerial control and a particular ownership legal structure. Fresenius' other operations, which are majority or fully-owned, are Fresenius Kabi (infusion therapy, intravenously administered generic drugs and clinical nutrition), Fresenius Helios (operating private hospitals in Germany) and Fresenius Vamed (77% owned, hospital and other healthcare facilities projects and services). Based on the trailing 12 months figures as per September 30, 2012, the group reported revenues of EUR18.5 billion. ============= I C E L A N D ============= GLITNIR BANK: Johannesson Pleads Not Guilty in Suit Over Loan ------------------------------------------------------------- Richard Milne at The Financial Times reports that Jon Asgeir Johannesson, the Icelandic corporate raider who used to own large parts of the UK high street, has pleaded not guilty as one of the most notorious sagas in the collapse of the Icelandic banking system came to court. Mr. Johannesson, who was the leading shareholder of failed Icelandic bank Glitnir, proclaimed his innocence on Monday in Reykjavik, the FT relates. Larus Welding, the former Glitnir chief executive who has already been convicted in a separate case, and two of the bank's other employees also pleaded not guilty, the FT discloses. Monday's case revolves around a ISK6 billion (US$46 million) loan Glitnir made to a holding company that the bank then repurchased for only ISK1, the FT notes. According to the FT, Mr. Johannesson denied the charge that he was an accomplice to a breach of fiduciary duty by exerting undue influence on Mr. Welding and another Glitnir employee to approve the loan. Of the ISK6 billion loan, prosecutors allege that ISK1 billion was transferred to Mr. Johannesson's personal account, in part to pay off an overdraft, the FT states. The three ex- Glitnir employees are accused of a breach of fiduciary duty, the FT discloses. The presiding judge in the latest case adjourned the hearing on Monday against Mr. Johannesson and the three others for more than a week, to allow the defense time to read the 6,000 pages of evidence the special prosecutor had submitted, the FT relates. Glitnir loaned the ISK6 billion to the holding company to purchase shares in Aurum Holdings, a jewellery group that was recently sold to private equity investors and is the owner of Mappin & Webb and Goldsmiths, the FT recounts. A civil case, brought by Glitnir's administrators, started in 2010 and is ongoing, the FT notes. About Glitnir Banki Headquartered in Reykjavik, Iceland, Glitnir banki hf -- http://www.glitnir.is/-- offers an array of financial services to corporation, financial institutions, investors and individuals. Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District Court of New York granted Glitnir permission to enter into a proceeding under Chapter 15 of the U.S. bankruptcy code on January 6, 2008. ========= I T A L Y ========= ANDROMEDA FINANCE: Fitch Keeps Rating on Class A2 Notes at 'BB+' ---------------------------------------------------------------- Fitch Ratings says the more stringent operating requirements for solar PV (photovoltaic) projects in Italy are likely to be moderately negative for Andromeda Finance S.r.l's credit profile. Starting from January 2013, Andromeda PV S.r.l (the project company) as well as other PV plants in Italy that intend to continue receiving market revenues from Gestore dei Servizi Enegetici (GSE) under 'Ritiro Dedicato' arrangement will be subject to the new regulations 281/2012/R/efr and 493/2012/R/efr. Under the regulations, electricity generated by PV plants will be measured against day-ahead hourly forecasts. To the extent that deviations from the forecast lead to power system imbalances in a particular pricing zone, the project company will be subject to certain penalties. In some cases when the forecasts are accurate, the project company may be eligible for bonuses. The forecasts will be prepared by GSE, not by the project company as previously anticipated. Fitch regards this as a less optimal set-up as the project company will not have control and responsibility over the forecast. It is difficult at this point in time to predict the impact of potential negative cash flow swings on the project company due to forecasting penalties. This will depend on several factors such as (a) the accuracy of GSE's forecasts, (b) the direction of the forecasting error relating to the Andromeda plants and to what extent the error contributed to or alleviated the overall power system imbalances, and (c) the prevailing market price of imbalances that will be used to determine the rate of penalties. While the accuracy of GSE forecasts can be tested over a reasonable time, the latter two variables may fluctuate. Fitch expects the overall impact on Andromeda PV to be manageable given that imbalancing charges should amount to a marginal percentage of total revenues, particularly in light of the fact that feed-in tariff revenues (approximately 80% of the total) will not be affected. Fitch currently maintains these ratings on Andromeda Finance S.r.l.'s notes: * EUR97.6m Class A1 notes due 2028: 'A-'; Outlook Negative * EUR97.6m Class A1 notes due 2028 (underlying): 'BB+'; Outlook Negative * EUR97.6m Class A2 notes due 2028: 'BB+'; Outlook Negative Fitch placed Andromeda Finance S.r.l's ratings on Negative Outlook in June 2012 to reflect, among other things, the concern that tightening regulatory requirements, along the lines of those described above, may result in more challenging operating conditions for large Italian PV plants. By the end of H113, the mechanics of the regulation should be clearer and some track record of the accuracy of forecasts should be available, when Fitch may be able to assess the materiality of the regulatory changes on the issuer's credit profile. The transaction is a securitization of two project loans (Facility A1 and Facility A2) under law 130/99 (the Italian securitization law). The loan facilities were extended by BNP Paribas and Societe Generale to Andromeda PV S.r.l. (the project company) to build and operate two PV plants of 45.1MW and 6.1 MW (a total 51.2MW) in Montalto di Castro, Italy. The terms of the loans effectively mirror those of the rated notes, with payments under Facility A1 and Facility A2 servicing the class A1 notes and class A2 notes, respectively. The class A1 notes' rating and Outlook reflect the first-demand, irrevocable and unconditional guarantee provided by SACE S.p.A (the Italian export credit agency; 'A-'/Negative). The guarantee provided by SACE to the issuer is in respect of the project company's obligations under Facility A1 and not on the class A1 notes directly. RICHARD GINORI: Declared Bankrupt by Italian Court -------------------------------------------------- Silvia Ognibene at Reuters reports that an Italian court has declared Richard Ginori 1735 bankrupt, union and company sources said on Monday, potentially thwarting a takeover by a U.S.-led consortium. The sources told Reuters that a Florence court had submitted its decision on Monday, effectively blocking a sale procedure by special administrators appointed to prevent the company going bankrupt. Burdened by debts, Richard Ginori was first rescued in 2007 by Italian investor Roberto Villa, who restructured and brought the group back to the stock market in 2009, Reuters recounts. But fiscal problems and the impact of the credit squeeze during the 2008 financial crisis weighed on the relaunch of one of the symbols of Italian craftsmanship, which has worked with designers such as Gio Ponti and Missoni, Reuters notes. In November, the company had said an offer by a consortium led by American tabletop maker Lenox Corp had been accepted and talks to define the sale would follow, Reuters relates. Romania's largest porcelain manufacturer, Apulum, was also due to take part in the rescue of the company, Reuters discloses. Richard Ginori is a porcelain maker. The company has made fine china tableware for over 270 years. It has 325 employees. =================== L U X E M B O U R G =================== TRUCKLEASE SA: Fitch Lifts Rating on Class D Notes From 'BB+' ------------------------------------------------------------- Fitch Ratings has upgraded TruckLease S.A. Compartment No. 1, as follows: Class B notes upgraded to 'AAAsf' from 'AAsf'; Outlook Stable Class C notes upgraded to 'AAsf' from 'Asf'; Outlook Stable Class D notes upgraded to 'Asf' from 'BB+sf'; Outlook Stable Subordinated Note: unrated The upgrades reflect the transaction's robust performance as supported by low defaults and high recoveries in line with Fitch's expectations, leading to increased credit enhancement due to its amortizing structure. The ratio of cumulative recoveries to cumulative defaults is 100% to date. While recoveries from collateral foreclosure proceeds were approximately 80%-90%, the structure is supported by an additional reserve provided by the originator that tops up recoveries if needed. Consequently, no losses had been reported as of November 2012. The transaction started amortizing in fully sequential order having completed a three-month revolving period in May 2011. By the November 2012 payment date, the class A was paid in full and the collateral balance had amortized by around 67%, reflecting the leases' relatively short term. The cumulative default rate stood at 2.6% of purchased receivables as of November 2012, which is lower than the agency's expectation of 9% for that point in time. The transaction's strong performance is partially due to the benign macro-economic environment in Germany with unemployment at historically low levels and GDP growth despite uncertainty in the eurozone. The fast amortization combined with the solid performance has boosted credit enhancement levels for all classes since the end of the short revolving period. Fitch believes that TruckLease No. 1 could therefore withstand even increased stress levels, which is reflected in the upgrades. TruckLease S.A. is a Luxembourg securitization vehicle. Compartment No. 1 was the first issuance from the vehicle, followed by Compartment No. 2 in February 2012. The transaction is the securitization of a portfolio of finance lease receivables originated in Germany by Albis Mobil Lease GmbH (previously NL Mobil Lease GmbH) and its wholly owned subsidiary UTA-Leasing GmbH. NL Mobil is ultimately wholly owned by Albis Leasing AG. ===================== N E T H E R L A N D S ===================== FLASH DUTCH: Moody's Assigns 'B2' CFR/PDR; Outlook Stable --------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating (CFR) to Flash Dutch 1 B.V., the coatings business recently acquired by an affiliate of the Carlyle Group from DuPont in a transaction valued at US$4.9 billion. Moody's assigned B1 and Caa1 ratings to the company's secured and unsecured debt, respectively. Proceeds from the transaction of US$3.9 billion plus US$1.35 billion of cash equity are expected to be used to fund the cash purchase price of US$4.9 billion, and to pay for fees and expenses. The outlook is stable. Ratings Assigned: Flash Dutch 1 B.V. Corporate Family Rating -- B2 Probability of Default Rating -- B2 Outlook -- Stable Flash Dutch 2 B.V. & US Coatings Acquisition Inc. (Co-Borrowers) 5-year $400mm Senior Secured first priority Revolver -- B1 (LGD3, 34%) 7-year $2.5b Senior Secured first priority Term Loan (USD 2.3b, EUR 200mm) -- B1 (LGD3, 34%) 8-year $300mm (Euro equivalent) Senior Secured first priority Notes-- B1 (LGD3, 34%) 8-year $1.1b 8 year Senior Unsecured Notes -- Caa1 (LGD5, 86%) RATINGS RATIONALE The B2 Corporate Family Rating (CFR) assigned to Flash is constrained by weak pro forma leverage metrics. Upon completion of the transaction, pro forma debt/EBITDA is expected to be just under 7x using Moody's year-end 2012 projections -- typically a "Caa" metric (reflecting Moody's standard analytical adjustments). Other factors constraining the ratings include the lack of operating history as a standalone entity, significant exposure to the OEM automotive industry, recent revenue contraction, raw material exposure, potential event risk from the sponsor given the covenant-lite structure, and material European exposure. Adjusted pro forma debt of US$4.4 billion exceeding sales of US$4.3 billion, and the company's expected negative tangible net worth of roughly US$2.6 billion are also viewed as credit negatives. The key factors supporting the B2 are the company's leading positions in its targeted end markets, its high-margin Refinish segment, technological superiority amongst competitors, geographic diversity, low capital expenditure requirements, expected free cash flow generation, and long and stable customer relationships. Moody's also views the "sticky" nature of the business as a credit positive, as customers are often buying into a system, rather than just purchasing a product. Moody's expects that Flash will experience stable operating profitability over the next several years, assuming that it maintains its leading market positions after the acquisition. Flash's near term liquidity profile is very strong due to the company's proposed US$400 million revolver, expected cash balances of roughly US$150 million at close, and projected free cash flow generation. The covenant-lite structure of the transaction will provide the company with financial flexibility for the foreseeable future as the revolver is expected to remain largely undrawn. The presence of a cash flow sweep (yet to be finalized), albeit with a sliding scale based on leverage, will initially aid in debt reduction but may lead to a slower reduction in debt outstanding and thus more elevated gross debt financial metrics depending on its terms. The stable outlook reflects Moody's expectation that Flash will experience modest growth in its end markets over the next two years, benefit from lower overhead as a standalone entity, continue its history of low maintenance capital expenditures, and generate free cash flow. Moody's could raise the ratings if leverage were to fall sustainably below 5x and free cash flow to debt remaining sustainably greater than 5%. Moody's would be inclined to lower the ratings if the company encountered problems operating as a standalone entity, began generating negative free cash flow, EBITDA margins fell closer to 10%, or leverage became sustainably above 7x. Structural Considerations The B1 rating on the guaranteed senior secured revolving credit facility, term loans, and notes at one notch above the CFR is due to the presence of the US$1.1 billion of unsecured debt in the capital structure. Similarly, the significant amount of secured debt in the capital structure notches the ratings on the unsecured notes down to Caa1. The principal methodology used in rating Flash was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Flash Dutch 1 B.V. is the new legal entity formed in conjunction with the acquisition of DuPont's Performance Coatings by an affiliate of the Carlyle Group. The company is headquartered in Wilmington, DE, and revenues for 2012 are expected to US$4.2 billion. =========== P O L A N D =========== PBG SA: Speeds Up "Restructuring" & Creditor Talks -------------------------------------------------- According to Bloomberg News' Konrad Krasuski, Dziennik Gazeta Prawna newspaper reports, citing Jacek Balcer, adviser to PBG SA's management board, said the company speeded up its "restructuring" and talks with creditors about debt agreement. Mr. Balcer declined to say if the company may seek state aid again, Bloomberg notes. PBG filed for a PLN200 million loan from ARP state fund in July 2012 seeking financing to resume operations, Bloomberg recounts. The company is in talks with creditors to change conditions of its PLN2 billion debt repayment, Bloomberg discloses. PBG SA is Poland's third largest builder. =========== S W E D E N =========== VIDA PAPER: Seeks Investor Following Bankruptcy ----------------------------------------------- Pamela Mardle at PrintWeek reports that Vida Paper is looking for an investor to save the company after it declared bankruptcy at the end of 2012. The firm applied to take the company into reconstruction, similar to US Chapter 11 bankruptcy on November 6, 2012 after its bank terminated loans with immediate effect, PrintWeek relates. According to PrintWeek, Vida Paper's liquidator Bertil Stridh, of Swedish insolvency practitioner Amber, said that despite Vida Paper claiming it had fulfilled payment obligations, its bank cut its borrowing limit from SEK100 million (GBP9.5 million) to SEK40 million (GBP3.8 million), and the current owner was not prepared to raise the additional SEK60 million (GBP5.7 million) funds independently. The application was accepted by the Swedish courts the same day and Eric Edstrom of Glimstedt law firm was appointed as administrator to the company, which produces paper and dissolving pulp for the textile industry from its Lessebo mill in southern Sweden, PrintWeek discloses. On December 12, Vida Paper declared itself bankrupt and all payment plans to suppliers were ceased as Mr. Stridh was appointed liquidator, PrintWeek relates. The company continues to be fully operational, with all payments being submitted in cash, PrintWeek notes. Mr. Stridh, as cited by PrintWeek, said that there are a few parties interested in taking on the company, and he was in negotiations to find an investor by the end of January. Vida Paper is a Swedish paper manufacturer. ===================== S W I T Z E R L A N D ===================== * US Global Tax Deal Best Option for Swiss Banks, Says Fitch ------------------------------------------------------------ A government-led global settlement would be the best option for all Swiss banks involved in the dispute with US authorities about the private banks allegedly helping US citizens evade taxes, Fitch Ratings says. A global settlement has been pursued by the Swiss government since early 2012. While potentially costly, in our view it would remove the risk of potential indictments and other legal action, including ultimately the exclusion from US dollar clearing. This would allow the banks to refocus management attention on their core (non-US) private banking operations. Repercussions from inquiries and potential indictments by US authorities could be significant, take a long time to resolve and ultimately damage the banks' business models. This is despite US offshore clients typically accounting for a small proportion of the banks' earnings and assets under management. Fitch's ratings for Swiss private banks already factor in rising litigation and settlement expenses relating to tax matters. However, the ratings could come under pressure if the banks are unable to adjust their earnings or operating cost bases to mitigate the rising litigation and regulatory costs or if the disputes with US and other authorities structurally damage their competitive position or business model. The Swiss private banks will have to continue to center their business models on fully-declared off-shore client assets and on- shore operations, notably in European markets given the US investigations and also negotiations between Switzerland and several European countries (including Germany) about revised double-taxation agreements. Many banks, in particular the larger private banks, have pursued this strategy since the late 1990s, anticipating continued pressure on undeclared client assets. Smaller, less diversified private banks would be more susceptible to country-specific developments, such as temporary tax amnesties. For the larger private banks we rate, their operations are geographically diversified, notably in the Middle East and Asia, thereby reducing their reliance on single European markets such as Italy, France or Germany. Following the prominent US$780 million settlement between UBS AG and US authorities in early 2009, US authorities have since mid- 2011 started inquiries involving a number of other Swiss private banks including Credit Suisse, Zuercher Kantonalbank, Julius Baer, Pictet & Cie., Basler Kantonalbank and Wegelin & Co. Privatbankiers (Wegelin). In January 2012, Wegelin sold its non-US business to Switzerland's Raiffeisen, shortly before the bank was officially indicted by US authorities in February 2012. Last week, Wegelin pleaded guilty to helping US citizens evade paying taxes and paid US$74 million in fines and restitutions. Following the guilty plea, the bank will cease to operate. =========== T U R K E Y =========== PETKIM PETROKIMYA: Fitch Affirms, Withdraws 'B+' Long-Term IDRs --------------------------------------------------------------- Fitch Ratings has affirmed Petkim Petrokimya Holdings A.S.'s Long-term foreign and local currency Issuer Default Rating (IDRs) at 'B+' and National Long-term rating at 'A-(tur)'. The Outlook on the Long-term ratings is Negative. The agency has simultaneously withdrawn all the ratings. Fitch has withdrawn the ratings as Petkim has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for Petkim. =========================== U N I T E D K I N G D O M =========================== BANK OF SCOTLAND: Amendments No Impact on Moody's 'D+' BFSR ----------------------------------------------------------- Moody's Investors Service has announced that the amendments made to several transaction documents for Bank of Scotland's social housing covered bonds, will not, in and of itself and at this time, result in a reduction or withdrawal of the current Aaa ratings of the social housing covered bonds issued by the Bank of Scotland plc (A2 deposits, outlook negative; BFSR D+/BCA baa3, outlook stable; Prime-1). Moody's believes that the amendments do not have an adverse effect on the credit quality of the notes such that the Moody's ratings are impacted. Moody's does not express an opinion as to whether the amendment could have other, non credit-related effects. The principal methodology used in this rating was "Moody's Approach to Rating Covered Bonds" published in July 2012. Other methodologies and factors that may have been considered in the process of rating the Issuers' notes may also be found in the Rating Methodologies sub-directory on Moody's Web site. GULISTAN CARPET: Bankrupt Owner to Shut Down Aberdeen Factory ------------------------------------------------------------- Chris Bagley at Triangle Business Journal reports that the corporate owner of Gulistan Carpet filed for bankruptcy Monday morning and is closing down its factory in Aberdeen, which employed 400 people just a couple of months ago. The corporate entity behind Gulistan, Hampton Capital Partners LLC, cited nearly US$51 million in liabilities on its Chapter 11 bankruptcy filing Monday, Triangle Business Journal relates. Its US$27.8 million in assets included the US$3.4 million carpet factory in Aberdeen, a smaller building in Scotland County, US$11 million in inventory, US$4.4 million in machinery and equipment and US$8.4 million in accounts receivable, Triangle Business Journal discloses. According to Triangle Business Journal, its largest outside creditor is Bank of America, with a US$10 million claim. It also owes US$18.2 million to its own corporate owner, the Roanake, Va.-area carpet manufacturer Ronile Inc., Triangle Business Journal notes. KENDAL RIVERSIDE: In Administration, Business as Usual ------------------------------------------------------ The Westmoreland Gazette reports that Kendal Riverside Limited was placed into administration on December 28. John Hansen -- john.hansen@kpmg.ie -- and Stuart Irwin -- stuart.irwin@kpmg.ie -- of KPMG, have been appointed joint administrators. A spokesman for Kendal Riverside said: "The affairs, business and property of the company are being managed by the joint administrators. . . . The centre will continue to operate as normal and it is firmly business as usual," according to The Westmoreland Gazette. Kendal Riverside Limited is a GBP100 million complex opened in July 2010, with the company stating at that time that it aimed to attract more than 1.5 million visitors and up to 4,000 coaches a year. SHERIDAN MILLENNIUM: Owner Declared Bankrupt After Administration ----------------------------------------------------------------- Bridging and Commercial Distributor, citing Irish News, reports that Peter Curistan has been made personally bankrupt after debts of GBP50 million meant his property empire was placed into administration. Mr. Curistan met his fate on December 21, 2012 by a debtor's petition, the newspaper reported, following a two-year demise of his investments, Bridging and Commercial Distributor relates. In 2010, Mr. Curistan's Sheridan Millennium property empire was placed into administration by Anglo Irish Bank with recorded debts in excess of GBP50 million, Bridging and Commercial Distributor recounts. According to Bridging and Commercial Distributor, administrator KPMG has been in control of Sheridan Millennium since but Mr. Curistan continues to fight for ownership of it. The newspaper further reported that Mr. Curistan is also fighting a legal battle against the Irish Bank Resolution Corporation (IBRC) -- which was formerly Anglo Irish Bank -- as he alleged that the Bank was negligent when finding a buyer for the site, alongside claims of fraudulent misrepresentation, Bridging and Commercial Distributor notes. Despite claiming in 2011 that Anglo Irish Bank's appointment of KPMG was unlawful, Mr. Curistan failed to have the administrators removed, Bridging and Commercial Distributor states. According to Bridging and Commercial Distributor, he has since been keen to make big lenders "accountable" for their behavior in such circumstances, claiming that the way in which they have treated him has "breached the law". The Dublin High Court ruled in September 2012 that Mr. Curistan must repay GBP8.3 million to the IBRC, Bridging and Commercial Distributor recounts. WEAVERING CAPITAL: Director Appears in Court Over Collapse ---------------------------------------------------------- Jeremy Hodges at Bloomberg News reports that Weavering Capital (UK) Ltd. founding director Magnus Peterson appeared in a London court on Monday facing six charges of fraud, forgery, fraudulent trading and false accounting over the collapse of the hedge fund in 2009. According to Bloomberg, Judge Michael Snow ordered Mr. Peterson, 49, to appear at a higher criminal court in 12 weeks and surrender his passport to the Serious Fraud Office within seven days. The defunct fund had about US$640 million under management in late 2008 before discovering the counterparty for its biggest trading position was controlled by the fund's manager, Bloomberg notes. Prosecutors at the SFO dropped their initial criminal probe into Mr. Peterson over concerns it wouldn't win a conviction, Bloomberg discloses. The SFO reopened the case in July after the agency appointed a new director, according to Bloomberg. Bloomberg relates that Nicholas Bull, the agency's lawyer, said in court on Monday that if convicted of fraud Mr. Peterson, a Swedish national, could spend as much as 10 years in prison. The hedge fund's administrators won a lawsuit to recover US$450 million from Mr. Peterson and other former employees in May, Bloomberg recounts. Weavering Capital (UK) Limited is an English incorporated investment management firm, which went into administration on March 19, 2009, whose primary function was to act as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited ("the Macro Fund"). Liquidators were appointed over the Macro Fund on March 19, 2009. The Macro Fund was understood to have funds under management of around US$639 million in late 2008. WILLIAM HILL: S&P Affirms 'BB+' Corp. Rating; Outlook Stable ------------------------------------------------------------ Standard & Poor's Ratings Services said that it affirmed at 'BB+' its long-term corporate credit rating on U.K. bookmaker and gaming company William Hill PLC. The outlook is stable. At the same time, S&P affirmed the issue rating on William Hill's senior unsecured notes at 'BB+'. The recovery rating on the notes is unchanged at '3', reflecting S&P's expectation of meaningful (50%-70%) recovery in an event of default. The affirmation follows William Hill's announcement of the proposed debt-funded acquisition of certain parts of online sports betting company Sportingbet PLC (not rated) for a total cash consideration of EUR454 million. "It reflects our view that the transaction will not alter William Hill's "satisfactory" business risk and "significant" financial risk profiles. In our view, the proposed transaction will enhance the company's international diversification and online gaming presence. However, the proposed transaction will not substantially reduce William Hill's high concentration on its core U.K. market, where it currently generates more than 90% of its revenues," S&P said. "In our view, William Hill will be able to maintain revenue growth throughout the economic cycle thanks to growth in its online business and from gaming machines, and due to its recession-resilient retail business model. Despite the continuing decline in the company's EBITDA margin, we consider that William Hill is reasonably well-placed to withstand ongoing macroeconomic pressures in the U.K., supported by a large network of well-located betting shops, strong brand, and increasing international diversity," S&P added. "We could lower the rating if debt-funded acquisitions or adverse tax or regulatory developments cause William Hill's earnings capacity to decline faster than we currently anticipate; if substantial shareholder returns or acquisitions increase adjusted debt to EBITDA to more than 4x; or if the upcoming need to fund ongoing external acquisitions with debt weakens liquidity to below what we assess as "adequate" under our criteria. Rating upside is limited by management's focus on external growth and appetite for debt-funded acquisitions. A positive movement in the rating is likely to be linked to the adoption of a more conservative financial policy and a commitment from William Hill to maintain adjusted debt to EBITDA of less than 3x and FFO to debt of more than 25%. S&P could also take a positive rating action if the company's strong operating performance continues, coupled with increasing diversification of revenue sources, resulting in a sustainably improved business risk profile. =============== X X X X X X X X =============== * EUROPE: 2013 to Remain Challenging for Western Telecoms Cos. -------------------------------------------------------------- Fitch Ratings believes that 2013 will remain challenging for Western European telecoms companies due to regulatory and competitive pressures, with the sector exhibiting flat to declining revenue growth, EBITDA margins under pressure and gradually increasing leverage. In a report discussing the key rated companies across the Western European telecoms and cable sector, Fitch highlights that highly rated issuers in the sector tend to be larger, with strong local market shares in multiple countries, and experienced management teams which are able to react to market dynamics. Lower rated companies tend to be smaller and less diversified, and more exposed to cash flow volatility caused by regulation, competition and shifts in technology, or because they are burdened by debt. Telecoms operators with higher market shares in a particular geography benefit from scale economies relating to network efficiency, marketing and branding. Substantial fixed costs also act as a barrier to entry. The ownership of multiple platforms in a given country should allow operators to mix product offerings more easily to suit shifting customer behavior. Regulation within each market determines the extent of these scale benefits. Cable operators' superior network technology gives them a solid competitive position relative to the copper-based networks of the incumbent operators. This leads to strong pre-dividend free cash flow generation and, subject to sensible shareholder remuneration policies, should reduce leverage over the medium-term. ********* 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., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2013. 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$775 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 Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *