TCREUR_Public/130410.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, April 10, 2013, Vol. 14, No. 70



ARMAVIA: Sukhoi to File Suit Over SSJ-100 Aircraft Mortgage


WIENERBERGER AG: Moody's Changes Outlook on 'Ba2' CFR to Negative


AMAGERBANKEN A/S: Bank Resolution Agency Seeks to Recoup DKK800MM


VIRGIN MEGASTORE: Gets Five Bidders for French Operations


ESAL GMBH: Fitch Rates US$500-Mil. Senior Unsecured Notes 'BB-'


YIOULA GLASSWORKS: S&P Raises Corporate Credit Rating to 'CC'


ALLIED IRISH: Incurs EUR3.6 Billion Net Loss in 2012


RICHARD GINORI: Gucci Puts Up EUR13 Million Bid


ALLIANCE BANK: Bulat Utemuratov Mulls Acquisition Bid
ASTANA FINANCE: Plans to Delay Debt Restructuring


BANKAS SNORAS: Creditors Okay New Sales Method for Snoro


CENTRAL EUROPEAN: U.S. Parents Seek Bankruptcy for Prepack Plan
CENTRAL EUROPEAN: Engages EY Poland as Auditors
CENTRAL EUROPEAN: Proposes to Assume RTL Investment Agreement
CENTRAL EUROPEAN: Proposes GCG as Claims Agent
CENTRAL EUROPEAN: Case Summary for U.S. Restructuring

CEVA GROUP: Payment Default Prompts Moody's to Cut CFR to Caa3


ELECTRICIDADE DOS ACORES: Moody's Confirms 'B1' Issuer Rating

* PORTUGAL: Constitutional Court Rejects Austerity Measures
* PORTUGAL: Fitch Says Ruling Potential Setback to Adjustment


EURASIA DRILLING: S&P Raises Corporate Credit Rating to 'BB+'
MAGNIT OJSC: S&P Raises Corp. Rating to 'BB'; Outlook Stable

S E R B I A   &   M O N T E N E G R O

RAZVOJNA BANKA: In Bankruptcy Proceedings; Postanska Takes Over


* SLOVENIA: Faces "Severe Banking Crisis," OECD Says


PESCANOVA SA: Expects to Seek Court Protection in 10 Days

* SPAIN: Corporate Bankruptcies Hit Record High in 1Q2013
* SPAIN: Fitch Says Covered Bonds Not Affected by Residual Claims
* SPAIN: Fitch Says Bank Restructuring on Track But Risks Remain


MHP SA: Moody's Says New Eurobond Issuance Credit Positive


* Moody's Sees Changing Investment Strategies for Bond Funds



ARMAVIA: Sukhoi to File Suit Over SSJ-100 Aircraft Mortgage
----------------------------------------------------------- reports that Sukhoi Civil Aircraft (SCAC) is ready
to sue Armenian airline Armavia over the unfulfilled terms of a
deal on SSJ-100 aircraft, the first Sukhoi Superjet in the
airline's fleet, and losses from the termination of the sale

According to, Russia Today, quoting,
reported that The Russian aircraft manufacturer is planning to go
to the International Commercial Arbitration Court.

"The lawsuit will be filed in the next few days.  The plaintiff's
claim totals around US$1.385 million," quotes an
unnamed source is quoted as saying.

The Armenian airline became the first customer of the Sukhoi
Superjet-100 airliner, discloses.  Under the terms
of the contract, the liner was mortgaged with SCAC until the full
price was paid by Armavia, notes.  However, the
carrier failed to pay the full sum for the aircraft and decided
to terminate the sales contract and return the aircraft to the
manufacturer, recounts.  SCAC said Armavia
mortgaged the aircraft to third parties while it was in their
possession, relates.

Armavia is Armenia's national airline.  The carrier currently has
14 aircraft conducting more than 100 flights a week to 20

Armavia declared bankruptcy on March 29 after failing to pay debt
accumulated to the Zvartnots airport in Yerevan, Armenia's
capital, and to its contractors.  The company's total debt was
less than US$50 million.


WIENERBERGER AG: Moody's Changes Outlook on 'Ba2' CFR to Negative
Moody's Investors Service changed its outlook on Wienerberger
AG's Ba2 Corporate Family rating to negative from stable.
Wienerberger AG's Corporate Family, Senior Unsecured and
Probability of Default ratings have been affirmed at Ba2, Ba2 and
Ba2-PD respectively. The rating on the group's EUR500 million
Perpetual Subordinated bond has also been affirmed at B1.

Ratings Rationale:

The revision of the outlook to negative was prompted by the weak
operating performance of Wienerberger's bricks & tiles activities
across most of its European markets during 2012. The group's
bricks & tiles business posted a 19% decline in EBITDA in Western
Europe and a 30% decline in Eastern Europe. The management
launched a EUR30 million cash restructuring plan in H2 2012,
which hurt the group's earnings and operating cash flow
generation especially in Q4 2012. The decline in the bricks &
tiles business could not be fully compensated by the continued
improvement in the group's US performance and the positive
contribution from 7 months of Pipelife consolidation. Mid 2012
Wienerberger acquired the 50% shareholding in Pipelife which it
did not own and started to fully consolidate it in June 2012.

Wienerberger's reported gross cash flow declined by close to
EUR60 million to EUR127 million. Coupled with the closing of the
Pipelife acquisition (approximately EUR230 million increase in
net debt) the credit metrics of Wienerberger deteriorated
markedly in 2012 with RCF/ net debt dropping to around 10% from
close to 16% in 2011. Pro-forma of the Pipelife acquisition
RCF/Net debt is estimated to be around 11%-11.5% still well below
Moody's expectation of at least 15% for the current rating

Moody's believes that Wienerberger should be able to improve its
credit metrics gradually over the next 12 to 18 months mainly
supported by consolidating effects from Pipelife (EUR30 million
impact on EBITDA) and from the positive impact from the group's
cost cutting measures. The ability of Wienerberger to improve its
metrics to a level commensurate with a Ba2 rating remains however
conditional to a gradual recovery in market conditions across
Europe in H2 2013 and 2014. A sustained recovery in macroeconomic
conditions in Europe in H2 2013 remains highly uncertain at this
stage especially in light of the recent further deterioration in
leading indicators for both the manufacturing and construction
sectors throughout Q1 2013. Despite the weakened profitability
Wienerberger was able to generate sizeable free cash flow in 2012
(EUR 83 million according to Moody's definition), predominantly
driven by a strong release in net working capital, and continued
low capital expenditure. For 2013 Moody's does not expect
Wienerberger to be able to repeat a similar working capital
release which will most likely lead to lower, but still positive
free cash flow generation.

The liquidity profile of Wienerberger is adequate. The group
reported EUR242 million of cash and marketable securities on
balance sheet at fiscal year-end 2012 as well as EUR430 million
committed unused credit lines. Wienerberger will not refinance
around EUR80mio of credit facilities coming due in 2013 to reduce
the negative carry on these facilities. Overall the group's
liquidity sources are more than sufficient to cover all liquidity
requirements for the next four quarters mainly consisting of
working cash, modest Working Capital requirements and debt
repayments as well as capex and dividends. Moody's notes that
Wienerberger has EUR250 million of maturities in 2014, which will
need to be addressed during the course of 2013.

A sharp deterioration in market conditions leading to materially
negative free cash flow generation and RCF/Net debt (pro-forma of
the acquisition of Pipelife) dropping sustainably below 15% would
exert negative pressure on Wienerberger's rating. EBIT / Interest
dropping below 1.0x would also exert negative pressure on the

A stronger market recovery than currently anticipated coupled
with a conservative financial policy leading to sustained
positive free cash flow generation as well an improvement in
RCF/Net debt towards 20% and EBIT / Interest towards 2.0x could
lead to a rating upgrade over time.

The principal methodology used in this rating was the Global
Building Materials Industry published in July 2009.

Headquartered in Vienna, Austria, Wienerberger AG is the world's
largest brick manufacturer and Europe's largest producer of clay
roof tiles as well as a leading supplier of pipe solutions
following the 100% integration of the Pipelife group (both
plastic and ceramic pipes). The group produces bricks, clay roof
tiles, pavers and clay and plastic pipes in 221 plants and
operates in 30 countries worldwide and five export markets.
Wienerberger has acquired Pipelife, a producer of pipes in 2012.
Pipelife used to be a 50%/50% joint venture with Solvay. The
company's main markets are North America (8% of 2012 sales),
Western Europe (65%), and Eastern Europe (27%). Wienerberger
generated revenues of close to EUR 2.4 billion in fiscal year


AMAGERBANKEN A/S: Bank Resolution Agency Seeks to Recoup DKK800MM
According to Bloomberg News' Frances Schwartzkopff, DR, citing
Henrik Zimino, a former board member of Amagerbanken A/S, reports
that Denmark's bank resolution agency is seeking to recoup DKK800
million (US$140 million) from the previous management and board
of now-defunct bank.

Bloomberg notes that DR said the Financial Stability Co. also has
referred the case to the police.

                       About Amagerbanken

Amagerbanken, the 8th largest bank in Denmark, was hit in 2008 by
the financial crisis and needed to refinance it on the market, in
order to balance necessary asset write-downs.  After continuous
unsuccessful efforts to obtain new financing or to find other
solutions, Amagerbanken was declared bankrupt on Feb. 7, 2011.
On Feb. 6, 2011, Amagerbanken had entered into a conditional
transfer agreement with the Danish publicly owned Financial
Stability Company (FSC), as part of the Danish bank wind-up


VIRGIN MEGASTORE: Gets Five Bidders for French Operations
According to Bloomberg News' Marie Mawad, Le Figaro, citing
Christine Mondollot, who heads Virgin Megastore's French
operations, said five bidders have offered to buy some of the
chain's 26 stores in France.

Figaro said that no offers were made to buy all stores at once,
Bloomberg relates.  According to Bloomberg, the paper said that
there is also no offer for the Champs-Elysees flagship store,
Bloomberg notes.  Figaro, as cited by Bloomberg, said that all
bids are from companies outside retail, which have no obligation
to keep employees.

The Virgin Stores chain in France filed for bankruptcy in
January, Bloomberg recounts.  A commercial court has appointed an
administrator to help find a solution, Bloomberg discloses.


ESAL GMBH: Fitch Rates US$500-Mil. Senior Unsecured Notes 'BB-'
JBS S.A. wholly owned subsidiary ESAL GmbH has announced the
reopening of its US$500 million senior unsecured notes due 2023,
which will carry the same rating as the original deal of 'BB-',
according to Fitch Ratings.

The proceeds from the current offering are expected to be used to
refinance shorter maturity indebtedness and for general corporate
purposes. These notes are unconditionally guaranteed by JBS and
JBS Hungary Holdings Kft.

Concurrently, Fitch has affirmed JBS's ratings and revised its
Ratings Outlook to Stable from Negative. A complete list of
ratings follows at the end of this release.

Key Rating Drivers

The 'BB-' rating takes into consideration JBS's strong business
profile, as the world's largest beef, leather and pork producer
and one of the largest producers of chicken and lamb. Further
factored into JBS' ratings are the company's geographic and
product diversity, which partially mitigates the risks of trade
barriers and animal diseases. JBS has high leverage and its risk
profile is above average due to cyclical risks associated with
the meat business and the company's aggressive attitude toward
growth through acquisitions.

The revision of the Ratings Outlook was prompted by improving
business outlook for JBS in 2013, particularly at its chicken
division in the U.S., Pilgrim's Pride (PPC). Fitch notes
positively the tangible reduction in leverage achieved by JBS in
the second half of 2012, mainly due to the turnaround in its US
beef operations. While cattle availability continues to be an
issue in certain parts of the US, the division is expected to
remain profitable in 2013, albeit at a reduced levels. More
importantly, price increases in chicken cuts in the US in the
latter part of 2012 suggest that the industry as a whole has
responded faster than expected to reduce volumes in response to
elevated grain prices. As a result, Fitch now anticipates that
this division will show stronger than expected profitability in

Leverage Reduction through Improving Operations

Fitch considers net debt-to-operating EBITDA in the 3.0x range to
be the normalized leverage ratio for the 'BB-' rating category
for companies in the protein industry, which face volatile and
cyclical operating earnings. As of Dec. 31, 2012, JBS' net
leverage ratio stood at 3.4x, and Fitch expects this ratio to
decline to about 3.0x by the end of 2013. Generating positive
free cash flow (FCF) within the next 12 - 18 months remains the
largest challenge for the company. Main concerns in 2013 are
cattle availability and oversupply of pork in the U.S. Possible
grain price shocks could also pressure costs and profitability,
which would hurt the company's ability to deleverage.

JBS' operating profit and cash flow improved in the second half
of 2012. Cash Flow from operations (CFFO) improved to BRL1.5
billion in 2012, as compared to BRL607 million in 2011. Negative
FCF of BRL147 million during 2012 continued to reflect high
capital expenditures of BRL1.6 billion. Net revenues have been on
an upward trend in the past five years, fueled by acquisitions
and capital investments. EBITDA margins remain between 4% and 7%,
which is typical for the industry. In 2012, net revenues of
BRL75.7 billion and EBITDA of BRL4.4 billion resulted in an
EBITDA margin of 5.8%.

Adequate Liquidity, Reliance on External Financing

JBS has an adequate liquidity position and a manageable 2013 debt
maturity schedule, both of which will be improved with the
current offering. As of Dec. 31, 2012, cash and marketable
securities of BRL5.4 billion covered short-term debt of BRL6.1
billion by 0.9x. As a mitigating factor, about 65% of short-term
debt corresponds to trade finance lines that support export
activity. The company also needs to maintain about 10% of EBITDA
to support its working capital, which was about BRL440 million in
2012. Considering these two adjustments, short-term maturities of
long-term debt were covered more than 2.0x by available cash. In
addition, the company's JBS USA division has about US$750.8
million available under its senior secured credit facility and
PPC has about US$572.7 million available under a separate

JBS's maturity schedule for 2014 is heavy with close to BRL4
billion of debt coming due. Fitch projects that JBS's FCF
generation will be neutral to slightly positive in 2013, which
will continue to make the company dependent upon external
financing to address its 2014 maturities.

Solid Business Profile

JBS' credit ratings are supported by a strong business position
in the world production of beef, lamb, chicken and pork. The
company benefits from geographic and product diversity, which
mitigate risks related to disease, the imposition of sanitary
restrictions by governments, market concentrations, as well as
tariffs or quotas applied regionally by some importing blocs or
countries. JBS has plants in 12 Brazilian states and is the most
geographically diversified player within this industry in Brazil,
as it has operations in the U.S., Canada, Mexico, Argentina,
Paraguay, Uruguay, Italy, and Australia. The company is domiciled
in Brazil and has a significant footprint in the U.S., with about
66% of its revenues coming from that region, per Fitch's

Above-Average Industry Risk and Acquisition Profile

The protein industry is volatile and exposed to fluctuations in
commodity prices by nature. The company's aggressive attitude
toward growth through acquisitions amplifies that risk. While its
business profile benefits from improved diversification through
past acquisitions, the risk of additional acquisitions remains.

Equity Financing

The credit benefits from the implicit support of the Brazilian
development bank's investment arm (BNDESPar), which directly and
indirectly holds 23% after it transferred 10.1% in December 2012.
The founding family indirectly controls 44% of JBS's shares. The
company's ability to finance part of its expansion with equity
benefited its capital structure, avoiding peaks in leverage.

Rating Sensitivities

A ratings upgrade could be triggered by a number of factors that
include financial improvements significantly above Fitch's
expectations, shift of corporate strategy away from acquisition
fueled growth and into cash flow generation, and/or sufficient
capital injections to meaningfully reduce debt. Rating upgrade is
unlikely in the short to medium term.

A downgrade could be precipitated by weakening of the company's
financial performance and leverage metrics. Continued negative
free cash flow (defined as cash flow from operations less capital
expenditures and dividends) beyond current expectations could
also result in negative rating actions.

Fitch affirms JBS's ratings as follows:


-- Foreign & local currency Issuer Default Rating (IDR) at 'BB-
-- Notes due 2016 at 'BB-';
-- National scale rating at 'A-(bra)'.


-- Foreign and local currency IDR at 'BB-';
-- Term loan B facility due in 2018 at 'BB'.

JBS USA Finance, Inc:

-- Foreign and local currency IDR at 'BB-'.

JBS USA jointly with JBS USA Finance:

-- Notes due 2014 at 'BB-';
-- Bonds due 2020 at 'BB-';
-- Notes due 2021 at 'BB-'.


-- Notes due 2023 at 'BB-';

JBS Finance II Ltd:

-- Foreign and local currency IDR at 'BB-';
-- Notes due 2018 at 'BB-'.

The Rating Outlook for JBS S.A., JBS USA LLC, JBS USA Finance
Inc. and JBS Finance II Ltd is Stable.


YIOULA GLASSWORKS: S&P Raises Corporate Credit Rating to 'CC'
Standard & Poor's Ratings Services said that it raised its long-
term corporate credit rating on Greece-based glass container
manufacturer Yioula Glassworks S.A. (Yioula) to 'CC' from 'SD'
(selective default).  The outlook is negative.

At the same time, S&P affirmed its 'CC' long-term issue rating on
Yioula's senior unsecured notes.

The rating actions reflect S&P's review of Yioula's financial and
business risk profiles after it downgraded the group to 'SD' on
Feb. 26, 2013, and follow the group's bank loan restructuring

S&P had lowered the rating to 'SD' to reflect its understanding
that Yioula had restructured certain amortizing loan repayments,
which were originally due in the last quarter of 2012.  The banks
verbally agreed to capitalize these repayments, as part of
refinancings that are currently being negotiated.  However, S&P
believes that the banks accepted the new terms without
appropriate compensation because Yioula was not able to fulfill
its original obligations.  Therefore, S&P viewed these extensions
as a distressed debt restructuring under its criteria.

S&P continues to assess Yioula's financial risk profile as
"highly leveraged," due to its high debt to EBITDA of 6.1x as of
Sept. 30, 2012.  S&P continues to assess Yioula's business risk
profile as "weak".  S&P assess management and governance as
"weak" under its criteria, due to ongoing liquidity issues.

The 'CC' rating reflects S&P's view that Yioula remains highly
vulnerable to further nonpayment of its debt.  S&P believes that
the key ratings constraint is Yioula's "weak" liquidity, due to
its low cash balance in combination with near-term refinancing
needs, which are dependent on external financing from strained
financial markets in Greece.  Prospects for significant free
operating cash flow (FOCF) generation remain limited due to heavy
capital intensity, which exacerbates Yioula's dependence on
external funding.

In S&P's view, a further deterioration of Yioula's liquidity
position is possible as a result of the group's near-term
refinancing risk and dependence on external financing from
strained Greek markets.  Furthermore, Yioula faces an uncertain
operating environment in its core markets over the near to medium

Yioula could default if it fails to make its debt amortization
payments as they fall due, or if the lending banks stop waiving
potential covenant breaches.  Cross-acceleration clauses on some
of the group's debt, including the senior unsecured notes, could
trigger further debt becoming immediately due for repayment in an
event of default.

S&P could consider revising the outlook to stable if Yioula were
to improve its liquidity position and/or if it were to improve
FOCF generation and tackle its financial covenant risk.


ALLIED IRISH: Incurs EUR3.6 Billion Net Loss in 2012
Allied Irish Banks filed with the U.S. Securities and Exchange
Commission its annual report on Form 6-K disclosing a loss of
EUR3.64 billion on EUR1.10 billion of net interest income for the
year ended Dec. 31, 2012, as compared with a loss of EUR2.29
million on EUR1.35 billion of net interest income in 2011.

Allied Irish's consolidated balance sheet at Dec. 31, 2012,
showed EUR122.51 billion in total assets, EUR111.27 billion in
total liabilities and EUR11.24 billion in total shareholders'

David Duffy, AIB Chief Executive, said: "AIB has now largely
completed the restructuring phase of its strategic plan as the
bank targets a return to sustainable profitability and growth
during 2014.  While 2012 was another very challenging year for
the Group, a number of important steps were taken to position the
bank for recovery over the longer term. We continued to make
progress on restructuring our balance sheet and undertook a
number of strategic initiatives which will reduce the bank's cost
base over time.  Progress was also made in reorienting the
organisation to be better aligned with the needs of our

"Assisting both SME and mortgage customers in difficulty will
continue to be a major priority for this year.  AIB intends to
meet or exceed the recently announced Central Bank of Ireland
2013 sustainable mortgage solution targets as part of ongoing
efforts to deal effectively and quickly with customers in

A copy of the Annual Report is available for free at:


                      About Allied Irish Banks

Allied Irish Banks, p.l.c. -- is a
major commercial bank based in Ireland.  It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin.  AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).

Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.

As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares.  On
April 8, 2011, the NPRFC converted the total outstanding amount
CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.

In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.


RICHARD GINORI: Gucci Puts Up EUR13 Million Bid
ANSAmed reports that Florentine fashion company Gucci said on
Friday that it has made a bid of EUR13 million for Richard

According to ANSAmed, Gucci said that its offer was "irrevocable"
and came with a "long-term plan" to protect the troubled
tablewear company and save its employees.

In January, a court in Florence declared the ceramics maker
bankrupt, ending a lengthy struggle and eliminating more than 200
jobs, ANSAmed recounts.

Ginori is a ceramics producer based in Tuscany.


ALLIANCE BANK: Bulat Utemuratov Mulls Acquisition Bid
Nariman Gizitdinov at Bloomberg News reports that Kazakh
billionaire Bulat Utemuratov is considering an acquisition of
Alliance Bank and Temirbank from the country's government.

According to Bloomberg, the lenders' state-run parent, sovereign
wealth fund Samruk-Kazyna, said in an e-mail yesterday that it
can't disclose information about potential investors because of a
confidentiality agreement.

Kazakhstan is seeking to shed assets in the financial industry
after bailing out banks hit by the 2007-2009 economic crisis and
handing control over defaulted lenders to its wealth fund,
Bloomberg notes.

Kazakh President Nursultan Nazarbayev last month ordered the sale
of state stakes in BTA Bank, Alliance and Temirbank by the end of
this year, Bloomberg recounts.  Bloomberg relates that Alliance
Chief Executive Officer Maksat Kabashev on April 3 said the two
lenders combined may be valued at between US$500 million and US$1

Yelena Bakhmutova, Samruk-Kazyna's deputy chief executive
officer, said Feb. 7 that the fund has been considering a merger
of Temirbank and Alliance Bank, the country's eighth- and 13th-
largest by assets, and is open to offers from any buyer,
including a local investor, Bloomberg relates.

BTA, Alliance and Temirbank restructured about US$20 billion in
debt after defaulting in 2009, Bloomberg discloses.  BTA
overhauled its debt in December for the second time since 2010,
Bloomberg states.

According to Bloomberg, in February, Verny Chairman Timur
Issatayev said his company is waiting for details about plans to
combine Alliance and Temirbank and wants to know how each
lender's competitive advantages are preserved before taking "any
serious steps."

                      About JSC Alliance Bank

JSC Alliance Bank is the sixth-largest bank in Kazakhstan by net
loans.  JSC Alliance is a bank with substantially all of its
operations in the Republic of Kazakhstan.  As of June 30, 2009,
the Bank's net assets constituted 4.9% of the total assets of the
banking system in Kazakhstan.  It has 3,900 employees.  The
Bank's only assets in the U.S. are certain correspondent accounts
with U.S. Banks.

JSC Alliance Bank filed for Chapter 15 bankruptcy (Bankr.
S.D.N.Y. Case No. 10-10761) to protect itself from U.S. lawsuits
and creditor claims while it reorganizes in Kazakhstan.  The
Chapter 15 petition says that assets and debts are in excess of
US$1 billion.  Law firm White & Case LLP, based in New York, is
representing JSC Alliance in the Chapter 15 case.

ASTANA FINANCE: Plans to Delay Debt Restructuring
Nariman Gizitdinov at Bloomberg News reports that AO Astana
Finance, the Kazakh financial company that defaulted in 2009,
said it plans to delay completion of its debt restructuring for a
second time as it struggles to win an exemption on corporate
income tax.

According to Bloomberg, Daniyar Nurskenov, a managing director at
the Astana-based company, on April 8 said "We plan to extend a
restructuring regime" as the company makes a case to the
government for amending Kazakh law and freeing it from a tax
payout of as much as US$400 million on expected profit from
writedowns and the debt overhaul.

Mr. Nurskenov, as cited by Bloomberg, said it's a "big sum" that
may scuttle the restructuring if Astana Finance is forced to make
the payment.

The company defaulted after it stopped servicing its
international debt in May 2009 as the central Asian nation
slipped into its first recession in a decade, Bloomberg recounts.
Mr. Nurskenov said that the company, whose creditors backed a
plan to restructure US$1.9 billion of debt in June, planned to
complete the restructuring last year before delaying it until the
end of March, Bloomberg notes.

Astana Finance creditors holding 79.6% of the company's debt
approved the plan in Almaty on June 29, 2012, Bloomberg
discloses.  Kazakhstan Stock Exchange data show that the
government owns 25.5% of the company.

Joint Stock Company Astana Finance (Astana Finance), through its
subsidiaries, provides various financial products and services in
the Republic of Kazakhstan.  It provides current accounts, saving
accounts, and other deposits; investment savings products; and
various loans comprising mortgage, consumer, and car loans, as
well as other credit facilities.


BANKAS SNORAS: Creditors Okay New Sales Method for Snoro
The Baltic Course reports that the creditors' committee of Snoras
approved a new sales method for Snoro Lizingas (Snoras Leasing)

According to the Baltic Course, LETA/ELTA said that Snoro
Lizingas will be sold separately from the other assets of the

"This suggestion satisfies interests of all creditors, thus they
approved of it unanimously.  Currently, the bankruptcy
administrator is working on sales details which we can only
disclose after the purchase contract is signed," the Baltic
Course quotes Aurelija Mazintiene, head of Snoras' creditors'
committee as saying.

                       About Bankas Snoras

Bankas Snoras AB is Lithuania's fifth biggest lender.  Snoras
held LTL6.05 billion in deposits and had assets of LTL8.14
billion at the end of September.  It competes with Scandinavian
lenders including SEB AB, Swedbank AB (SWEDA), and Nordea AB.  It
also controls investment bank Finasta and Latvian lender Latvijas
Krajbanka AS.

As reported in the Troubled Company Reporter-Europe on Dec. 2,
2011, The Baltic Times, citing LETA/ELTA, said Vilnius District
Court accepted the application regarding the initiation of
bankruptcy proceedings against Snoras bank.  The Bank of
Lithuania delivered application on Snoras bankruptcy on Nov. 28,

The TCR-Europe, citing Bloomberg News, reported on Nov. 28, 2011,
that Lithuania's central bank said that Snoras' financial
situation is "worse than previously identified" and saving the
bank "would cost significantly more and would take longer than
the available liquidity" at Snoras.  Governor Vitas Vasiliauskas
said at a news conference on Nov. 24 that some LTL3.4 billion
(US$1.3 billion) in assets are missing, according to Bloomberg.


CENTRAL EUROPEAN: U.S. Parents Seek Bankruptcy for Prepack Plan
Central European Distribution Corporation has sought bankruptcy
protection to implement a restructuring plan that relies on a
"contribution of enormous value" by Roust Trading Ltd., the
largest stakeholder and owner of 19.5% of the outstanding common

Under the prepackaged Chapter 11 plan, Roust Trading, the holding
company of the Russian Standard Group of Companies and controlled
by Russian businessman Roustam Tariko, will obtain 100% ownership
of the reorganized CEDC.

CEDC is asking the U.S. Bankruptcy Court to convene a hearing to
consider confirmation of the Plan in approximately 35 days
(second week of May).

Christopher S. Sontchi was set to convene a hearing on April 9,
2013, at 10:00 a.m., to consider approval of the first day
motions of Central European Distribution Corporation.  The
Debtors have filed, among other things, motions to:

  -- pay employee wages and benefits;
  -- maintain their existing bank accounts;
  -- extend by 44 days the deadline to file schedules of assets
     and liabilities and statement of financial affairs.

CEDC says it's important the Company brings its formal
restructuring to a successful conclusion relatively quickly.  It
notes that while none of its Polish, Hungarian or Russian
operating subsidiaries is subject to any insolvency proceedings,
chapter 11 is a concept that is very alien to CEDC's non-U.S.
employees, vendors and local credit support providers.

CEDC is one of the world's largest vodka producers, and is the
largest integrated spirit beverages business by total volume in
Central and Eastern Europe.  Founded in Poland in 1990, CEDC said
it faced a series of challenges immediately after entering the
Russian market.  Three major acquisitions -- Russian Alcohol
Group, Whitehall Group, and Copecresto Enterprises Limited --
were made before and during the worst years of the financial
crisis, which hit Russia more severely than other countries.

CEDC explains in court filings that it received alternative
proposals from (i) Dr. Mark Kaufman, the former owner of the
Whitehall Group and a veteran of the spirit business in Russia,
(ii) A1 Investment Company, a member of the Alfa Group, one of
the largest and most successful industrial and financial groups
in Russia whose affiliate, Alfa Bank, is the largest private bank
in Russia and one of the Company's largest providers of excise
tax guarantees, and (iii) SPI Group, a leader in the production
and distribution of spirits and alcoholic beverages worldwide.

However, the proposal offered by the consortium formed by
Kaufman, A1 and SPI offered collective recoveries that were less
than those offered under the Roust-backed restructuring.  CEDC
also said that the consortium proposal also contemplated a pre-
negotiated, rather than a pre-packaged, plan of reorganization,
whereas the Roust-backed restructuring is being implemented
through a prepackaged proceeding.

                         Capital Structure

CEDC had total assets of US$1.98 billion and total liabilities of
US$1.74 billion as of Sept. 30, 2012.  The Debtors and their non-
debtor operating subsidiaries organized under the laws of Poland,
Russia, and several other nations collectively are obligors on
three primary sets of debt obligations:

    * Debtor CEDC is obligated on US$262 million outstanding
      amount of 3% Convertible Notes due March 15, 2013 -
      Existing 2013 Notes -- which were used to partly fund the
      cash portions of the acquisitions of the Whitehall Group
      Copecresto Enterprises Limited.

    * CEDC Finance Corporation International Inc. (CEDC FinCo), a
      wholly owned (through CEDC Finance Corporation LLC (CEDC
      FinCo LLC)) subsidiary of CEDC, is an obligor on US$380
      million outstanding principal amount of 9.125% Senior
      Secured Notes due Dec. 1, 2016 and EUR430 million
      outstanding principal amount of 8.875% Senior Secured Notes
      due Dec. 1, 2016 -- Existing 2016 Notes.  The outstanding
      amount of the Existing 2016 Notes in U.S. dollars is US$982

    * Certain of the operating subsidiaries, including those in
      Poland and Russia, are party to several, credit support
      obligations, facilities and guarantee arrangements provided
      by several local lenders in those jurisdictions.  These
      obligations include factoring lines and revolving and term
      lines of credit in the amount of US$80.5 million and
      significant guarantees in the amount of US$696 million that
      support the Company's obligation to collect and remit
      and other taxes to regulatory authorities in Russia.

The Debtors also have US$50 million in secured debt under the RTL
Credit Facility Agreement dated March 1, 2013.  The Debtors also
owe US$20 million on account of unsecured notes issued by CEDC to
RTL pursuant to a Securities Purchase Agreement dated April 23,

None of the credit support obligations of CEDC's Polish, Russian
or other operating subsidiaries is being restructured in the
chapter 11 cases.

                       100% Shareholder

In exchange for its receipt of 100% of the equity of reorganized
CEDC, Roust Trading is contributing US$277 million of value
comprised of (i) its US$172 million in cash to be paid to holders
of the Existing 2016 Notes, (ii) the US$25 million in cash and
US$30 million in secured notes being provided to holders of the
Existing 2013 Notes, and (iii) the conversion of the RTL Credit
Facility to equity.

In addition, Roust Trading is agreeing to compromise its US$124.4
million of unsecured claims, including (i) approximately US$102.6
million in principal amount of Existing 2013 Notes it holds, (ii)
US$20 million in RTL Notes it holds and (iii) US$1.8 million in
accrued interest on unsecured claims in (i) and (ii) calculated
through March 15, 2013.

Holders of Existing 2016 Notes will receive total consideration
of at least US$822 million with respect to their claims, which
total US$982.2 million in U.S. dollars.  This minimum
consideration of US$822 million is comprised of US$172 million in
cash, US$450 million (plus certain accrued but unpaid interest)
in New Secured Notes, and US$200 million in New Convertible Notes
that together will afford holders of Existing 2016 Notes a
minimum estimated recovery of approximately 83.7%.

Holders of Existing 2013 Notes other than Roust Trading who
participate in the Roust Trading offer will receive total
consideration of US$55 million, comprised of US$25 million in
cash and US$30 million in secured notes issued by Roust Trading,
thereby affording the holders an estimated recovery of 35.4%.

Holders of Existing 2013 Notes that do not participate in Roust
Trading's offer will receive their proportionate share of US$16.9
million in cash under the Plan (shared with the RTL Notes).
Holders of Existing 2013 Notes that participate in Roust
Trading's offer will not receive a distribution under the Plan.

The restructuring will result in the elimination of approximately
US$665.2 million in debt from CEDC and CEDC FinCo's balance
sheets, comprised of (i) the reduction of approximately US$332.2
million in debt represented by the Exiting 2016 Notes; (ii) the
elimination of the full outstanding balance of the Existing 2013
Notes of approximately US$262 million and the US$20.3 million of
RTL Notes; and (iii) the conversion to equity of the US$50.7
million RTL Credit Facility.

                        Prepack Plan

A summary of the treatment provided by the Plan to each Class of
Claims against and Interests in the Debtors:

  Class  Designation                  Entitled to Vote   Recovery
  -----  -----------                  ----------------   --------
   1     Priority Non-Tax Claims      Unimpaired/           100%
                                      Not Voting
                                      (Deemed to accept)

   2     Existing 2016 Notes Claims   Impaired/ Yes        83.7%

   3     RTL Credit Facility Claims   Impaired/ Yes        70.5%

   4     Other Secured Claims         Unimpaired/ No
                                      (Deemed to accept)    100%

   5     Unsecured Notes Claims       Impaired/ Yes         6.0%

   6     General Unsecured Claims     Unimpaired/ No        100%
                                      (deemed to accept)

   7     Intercompany Claims          Impaired/ No            0%
                                      (deemed to reject)

   8     Subordinated 510(b) Claims   Impaired/ No            0%
                                      (deemed to reject)

   9     Existing Common Stock        Impaired/ No            0%
                                      (deemed to reject)

   10    Intercompany Interests       Unimpaired/ No        100%
                                      (deemed to accept)

Voting on the Plan closed April 4, 2013.  According to the
official vote tabulation prepared by CEDC's voting and
information agent, impaired creditors have voted overwhelmingly
to accept the Plan.  In particular, 95% of all Existing 2013
Notes were voted. The Plan was accepted by approximately 99% in
number and 99.99% in amount of those Existing 2013 Notes that
voted on the Plan. The 95% of all Existing 2016 Notes were voted.
Approximately 97% in number and 97% in amount of those Existing
2016 Notes that voted on the Plan voted to accept the Plan.

In addition, as part of the restructuring of the Existing 2016
Notes, CEDC FinCo sought the consent from holders of Existing
2016 Notes to certain amendments to the indenture governing such
Notes to, among other things, provide for the release of all of
the liens on the collateral securing the Existing 2016 Notes and
all Operating Subsidiary guarantees of the Existing 2016 Notes.
According to the official consent tabulation prepared by the
Company's tabulation agent, CEDC FinCo received the requisite
consent of almost 95% of holders of Existing 2016 Notes necessary
to effect these amendments.

A copy of the Chapter 11 Plan is available for free at:

A copy of the Disclosure Statement is available for free at:

A copy of the affidavit detailing the events preceding the
bankruptcy filing is available for free at:

         Foreign Units Not Affected by U.S. Bankruptcy

CEDC reiterates that its subsidiaries in Poland, Russia, and
several other nations are "fundamentally sound, profitable and
will continue to operate in the ordinary course of business."
The local subsidiaries are not part of the Chapter 11 filing.

CEDC says it will continue honoring all of its obligations to
vendors, employees, and local credit support providers in the
ordinary course of business, without interruption.

                            About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that will reduce debt by US$665.2 million.

Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor.  Houlihan Lokey is the investment
banker, and Alvarez & Marsal will provide the chief restructuring
officer.  GCG Inc. is the claims and notice agent.

CENTRAL EUROPEAN: Engages EY Poland as Auditors
Central European Distribution Corp. seeks authority to employ
Ernst & Young Audit sp. z o.o. as auditors, nunc pro tunc to the
Petition Date.

The Debtors have employed EY Poland as their auditor since
March 29, 2011.  Postpetition, EY Poland will provide audit
services as EY Poland and the Debtors shall deem appropriate and
necessary in the course of the chapter 11 cases, including:

   (a) audit and report on the Debtors' consolidated financial
       statements for the year ended December 31, 2012 and audit
       its internal control over financial reporting; and

   (b) audit and report on the effectiveness of the Debtors'
       internal control over financial reporting as of December
       31, 2012.

The Debtors are seeking expedited approval of the retention of
E&Y on shortened notice, to be heard shortly following the
Petition Date.  Specifically, CEDC's annual report on Form 10-K
was due to be filed with the Securities Exchange Commission on
March 18, 2013.

Due to the resources required of the Debtors and their management
in regard to the restructuring transactions contemplated by the
Plan and Offering Memorandum and Disclosure Statement, as well as
deeper audit procedures following the 2012 financial restatement,
CEDC was unable to timely file its Annual Report.

CEDC expects to complete its audit procedures and associated
Annual Report as soon as possible after the Petition Date.  In
order to file its Annual Report, CEDC requires an audit opinion
issued by E&Y.  E&Y cannot issue the required audit opinion
unless they are retained in these cases.  The prompt filing of
the Annual Report is of utmost importance and urgency for CEDC,
as CEDC is no longer in compliance with its SEC reporting
obligations in this regard.  Moreover, CEDC cannot file a
definitive proxy statement and hold its delayed annual general
meeting until the filing of the Annual Report.

EY Poland's fees for services performed under the Engagement
Letter are charged on an hourly-rate basis:

   Title                                   Rate
   -----                                   ----
   Partner                             US$1,150
   Senior Manager (Capital Markets)       $1,000
   Senior Manager (Audit)                  $560
   Manager                                 $520
   Senior                                  $290
   Assistant                               $150

EY Poland discloses it has retained the law firm Latham & Watkins
LLP in connection with its retention and fee applications in the
Chapter 11 cases, and that EY Poland will request reimbursement
of Latham's fees and expenses from the Debtors' estates.

                            About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.

Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor.  Houlihan Lokey is the investment
banker.  Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.

CENTRAL EUROPEAN: Proposes to Assume RTL Investment Agreement
Roust Trading has agreed to convert its secured debt claims
against Central European Distribution Corp. into equity in
reorganized CEDC, and contribute additional value to the Debtors'
creditors in the form of cash and notes.  In connection with the
contemplated restructuring, CEDC and Roust Trading entered into a
Securities Purchase Agreement, which became effective March 8,
2013, when executed by JSC "Russian Alcohol Group".

Under the RTL Investment Agreement, Roust Trading has agreed to
invest US$172 million in CEDC and terminate the US$50 million RTL
Credit Facility in exchange for equity in reorganized CEDC.  The
RTL Investment represents, in the aggregate, at least
US$222,000,000 of value to the Debtors.

The RTL Investment Agreement includes a "fiduciary out"
provision, providing that CEDC's Board of Directors may, in
response to a "Superior Proposal", cause CEDC to terminate the
RTL Investment Agreement.  As a result of the inclusion of the
fiduciary out provision and for the other consideration provided
under the RTL Investment Agreement, Roust Trading is entitled to
certain termination fees, expense reimbursement and other

Specifically, the RTL Investment Agreement provides for:

   (a) Payment of a US$10,000,000 break-up, which equals 4.5% of
       the total consideration, payable under certain conditions,
       including termination in connection with a "superior
       proposal", and

   (b) Payment of all out-of-pocket costs and expenses reasonably
       incurred by Roust Trading and its affiliates in connection
       with the transactions contemplated under the RTL
       Investment Agreement, including reasonable fees, costs,
       and expenses of Roust Trading's outside counsel and other
       professionals retained by Roust Trading, provided,
       however, that any transaction expenses owed to Roust
       Trading following termination of the Investment Agreement
       will be capped at an aggregate amount of US$3,500,000.

Moreover, the RTL Investment Agreement provides that CEDC and JSC
"Russian Alcohol Group", a non-Debtor Operating Subsidiary that
is jointly and severally obligated on CEDC's obligations under
the RTL Investment Agreement, will jointly and severally
indemnify and hold harmless Roust Trading and other related
persons from and against any and all losses claims, damages,
liabilities, and reasonable expenses.

While the Debtors are filing a motion on the "first day" of these
cases to approve the RTL Investment Agreement, the Debtors are
not seeking to have such relief heard or approved at the "first
day" hearing in these cases; rather the RTL Investment Agreement
requires only that a final order approving the RTL Investment
Agreement be entered no later than 35 days after the Petition

                            About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.

Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor.  Houlihan Lokey is the investment
banker.  Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.

CENTRAL EUROPEAN: Proposes GCG as Claims Agent
Central European Distribution Corporation and its affiliates have
numerous record holders of securities, creditors, and other
parties in interest whom the Debtors or the office of the Clerk
of the United States Bankruptcy Court for the District of
Delaware must serve various notices, pleadings and other
documents filed in these cases.  To relieve the Clerk of these
burdens, the Debtors seek to engage The Garden City Group, Inc.,
as noticing and claims agent in these chapter 11 cases.

The Debtors also seek authority to employ GCG as voting agent and
special noticing agent in these chapter 11 cases.  GCG rendered
services in connection with the out-of-court exchange offers, the
consent solicitation, and the solicitation of votes for the Plan
prior to the commencement of the chapter 11 cases.  A
representative of GCG is prepared to testify competently to the
facts regarding the solicitation of votes on the Plan and the
tabulation of such votes, if called upon to do so.

GCG has agreed to provide services at its discounted hourly rates
and cap the highest hourly rate at US$295:

   Position                                Discounted Rate
   --------                                ---------------
Administrative and Claims Control          US$45 to $55
Project Administrators                       $70 to $85
Quality Assurance Staff Consultant           $80 to $125
Project Supervisors                          $95 to $110
Systems, Graphic Support & Tech Staff       $100 to $200
Project Managers and Sr. Project Managers   $125 to $175
Directors and Asst. Vice Presidents         $200 to $295
Vice Presidents and above                       US$295

For its noticing services, GCG will charge US$50 per 1,000 e-
mails, and US$0.10 per page for facsimile noticing.  For its
claims administration services, GCG will charge US$0.15 per claim
for association of claimants' names and addresses to the
database, and will bill at its discounted hourly rates for
processing of claims.  For its contact services, GCG's live
customer service representatives will charge US$0.95 per minute.

                            About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.

Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor.  Houlihan Lokey is the investment
banker.  Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.

CENTRAL EUROPEAN: Case Summary for U.S. Restructuring
Debtor-affiliates filing separate Chapter 11 petitions:

     Debtor                                    Case No.
     ------                                    --------
Central European Distribution Corporation      13-10738
  aka CEDC
  3000 Atrium Way, Suite 265
  Mt. Laurel, NJ 08054
CEDC Finance Corporation, LLC                  13-10739
CEDC Finance Corporation International, Inc.   13-10740

Chapter 11 Petition Date: April 7, 2013

Court: U.S. Bankruptcy Court
       District of Delaware

Judge: Hon. Christopher S. Sontchi

Debtors' Counsel:       Mark S. Chehi, Esq.
                        Sarah E. Pierce, Esq.
                        SKADDEN ARPS SLATE MEAGHER & FLOM LLP
                        One Rodney Square, P.O. Box 636
                        Wilmington, DE 19899-0636
                        Tel: 302 651-3000
                        Fax: 302-651-3160

                             - and -

                        Jay M. Goffman, Esq.
                        Mark A. McDermott, Esq.
                        SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                        Four Times Square
                        New York, NY 10036-6522
                        Tel: (212) 735-3000
                        Fax: (212) 735-2000

Debtors' Invesment
Banker:                 HOULIHAN LOKEY INC.

Debtors' Restructuring
Advisor:                ALVAREZ & MARSAL

Debtors' Auditors:      ERNST & YOUNG AUDIT SP Z O.O.

Debtors' Claims &
Noticing Agent:         GCG INC.

Counsel to the Ad Hoc
Consortium of
3% Convertible
Senior Notes:           William P. Bowden, Esq.
                        Karen B. Skomorucha Owens, Esq.
                        ASHBY & GEDDES, P.A.
                        500 Delaware Avenue, 8th Floor
                        P.O. Box 1150
                        Wilmington, DE 19899-1150
                        Telephone: (302) 654-1888
                        Facsimile: (302) 654-2067

                             - and -

                        Robert J. Stark, Esq.
                        John F. Storz, Esq.
                        Gordon Z. Novod, Esq.
                        BROWN RUDNICK LLP
                        Seven Times Square
                        New York, NY 10036
                        Telephone: (212) 209-4800
                        Facsimile: (212) 209-4801

Total Assets at Sept. 30, 2012: US$1,980,166,000

Total Liabilities at Sept. 30, 2012: US$1,739,936,000

The petitions were signed by Grant Winterton, CEDC's CEO.

List of CEDC's Unsecured Creditors Holding the 30 Largest
Unsecured Claims:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
The Bank of New York Mellon      Convertible     US$257,858,000
(Indenture Trustee for the       Senior Unsecured
2013 Convertible Senior          Notes (Indenture
Unsecured Notes (Record          Trustee)
Attn: Sara Assasi
One Canada Square, 40th Floor
London E14 5AL
United Kingdom
Tel: +44(0)207-964-2536
Fax: +44(0)207-964-5781

JPMorgan Chase Bank, NA          Convertible       $114,090,000
Attn: Information Services       Senior Unsecured
I4201 Dallas Pkwy I JIP          Notes (Record
Dallas, TX 75254                 Holder)
       Tel: 469-477-5099

State Street Bank and Trust Co.  Convertible        $28,147,000
c/o Corp. Actions & Global       Senior Unsecured
Services                         Notes (Record
1776 Heritage Dr. Bldg JAB5E     Holder)
No Quincy, MA 02171
        Tel: 617-985-1136

JPMorgan Clearing Corp.          Convertible        $21,322,000
Attn: Paul Romero Zamudio
and Stephen Maner
3 Chase Metrotech Center
Proxy Dept/NY 1-H034
Brooklyn, NY 11245
Tel: 347-643-2302
Fax: 347-643-4625

Goldman Sachs                    Convertible        $17,069,000
Execution & Clearing             Senior
Attn: Anthony Bruno              Unsecured
Vice President                   Notes (Record
Proxy Department                 Holder)
30 Hudson Street
Jersey City, NJ 07302
Tel: 212-357-2134
Fax: 212-256-4020

Deutsche Bank                    Convertible        $11,270,000
Securities Inc.                  Senior Unsecured
Attn: Joe Varga                  Notes (Record
Corporate Actions                Holder)
5022 Gate Parkway Suite 200
Jacksonville, FL 32256
       Tel: 904-527-6351
       Fax: 904-527-6338

UBS Securities LLC               Convertible         $9,170,000
Attn: Michael Marciano
480 Washington Blvd.
Jersey City, NJ 07310
Tel: 201-793-6684

Citigroup Global Markets Inc.    Convertible         $9,165,000
Attn: Miguel Minguez             Senior Unsecured
111 Wall Street                  Notes (Record
21st Floor                       Holder)
New York, NY 10005
Tel: 212-657-0434

Barclays Capital Inc.            Convertible         $7,459,000
Attn: Asset Services/Corporate   Senior Unsecured
Actions                          Notes (Record
70 Hudson Street, 7th Floor      Holder)
Jersey City, NJ 07302
Tel: 201-499-8375

BNP Paribas Prime Brokerage Inc  Convertible         $6,263,000
Attn: Dean Galli                 Senior Unsecured
525 Washington Blvd, 9th Floor   Notes (Record
Jersey City, NJ 07310            Holder)
Tel: 201-850-5287
Fax: 201-850-4626

JPMorgan Chase Bank NA           Convertible         $3,875,000
Attn: Philip Roy                 Senior Unsecured
Vice President                   Notes (Record
14201 Dallas Parkway
12th Floor
Dallas, TX 75254
Tel: 469-477-1558

Goldman Sachs International      Convertible         $3,500,000
Attn: Reorg Department           Senior Unsecured
30 Hudson Street, 4th Floor      Notes (Record
Jersey City, NJ 07302            Holder)
Tel: 212-357-6221

Credit Suisse Securities         Convertible         $3,275,000
(USA) LLC                        Senior Unsecured
Attn: Anthony Milo               Notes (Record
Vice-President                   Holder)
7033 Louis Stephens Dr
Research Triangle Park, NC 27709
Tel: 212-538-9651
Fax: 212-322-2512

The Bank of New York Mellon      Convertible         $3,265,000
525 William Penn Place           Senior Unsecured
3rd Floor                        Notes (Record
Pittsburgh, PA 15259             Holder)
Tel: 412-236-7827
Fax: 412-234-8430

BNP Paribas Prime Brokerage Inc  Convertible         $2,495,000
Attn: Dean Galli                 Senior Unsecured
525 Washington Blvd, 9th Floor   Notes (Record
Jersey City, NJ 07310            Holder)
Tel: 201-850-5287
Fax: 201-850-4626

Dewey & LeBoeuf LLP              Legal fees          $2,450,000
1271 Avenue of the Americas
Suite 4300
New York, NY 10020

With a copy:

Togut, Segal & Segal LLP
Attn: Albert Togut
Attorneys for the Debtor
One Penn Plaza, Suite 3335
New York, NY 10119
Tel: 212-594-5000
Fax: 212-967-4258

With a copy:

Alan M. Jacobs, as liquidating
Trustee for Dewey & LeBoeuf
Liquidation Trust
AMJ Advisors LLC
999 Central Avenue, Suite 208
Woodmere, New York 11598
Tel: 516-791-1100
Fax: 212-937-2300

Pershing LLC                     Convertible         $1,945,000
Attn: Al Hernandez or            Senior Unsecured
Christopher Vargus               Notes (Record
Corporate Actions                Holder)
1 Pershing Plaza
Jersey City, NJ 09399
Tel: 201-413-2446
Fax: 201-413-5263

Merrill Lynch Pierce Fenner      Convertible         $1,780,000
& Smith Inc.                     Senior Unsecured
c/o Bank of America              Notes (Record
Attn: Catherine Changco          Holder)
4804 Deer Lake Dr. E
Mail Code: FL9-803-04-04
Jacksonville, FL 32246
Tel: 904-418-5452

Jefferies & Company Inc.         Convertible         $1,772,000
Attn: Robert Maranzano           Senior Unsecured
Harborside Financial Center      Notes (Record
705 Plaza 3                      Holder)
Jersey City, NJ 07311
Tel: 201-761-4034
Fax: 201-221-7907

Barclays Capital Inc             Convertible         $1,650,000
Asset Services/Corporate         Senior Unsecured
Actions Level                    Notes (Record
770 Hudson Street                Holder)
Jersey City, NJ 07302
Tel: 201-419-8119

National Financial Services LLC  Convertible         $1,620,000
Attn: Corporate Actions          Senior Unsecured
499 Washington Blvd              Notes (Record
5th Floor                        Holder)
Jersey City, NJ 07310
Tel: 866-755-6372
Fax: 508-362-5808

BMO Nesbitt Burns Inc.           Convertible         $1,250,000
Attn: Lila Mohamed/              Senior Unsecured
Louise Torangeau                 Notes (Record
Corporate Actions Dept.          Holder)
1 First Canadian Place 13th Fl
Toronto, ON M5X 1H3
Tel: 416-552-7073
Fax: 416-359-6755

Goldman Sachs                    Convertible         $1,030,000
Attn: Reorg Department           Senior Unsecured
30 Hudson Street, 4th Fl         Notes (Record
Jersey City, NJ 07302            Holder)
Tel: 212-357-6221

Brown Brothers Harriman & Co.    Convertible           $960,000
Attn: Michael Abbot              Senior Unsecured
525 Washington Blvd.             Notes (Record
New Port Towers                  Holder)
Jersey City, NJ 07302
Tel: 201-418-5877

RBC Capital Markets LLC          Convertible           $906,000
Attn Steve Schafer Sr. Assoc.    Senior Unsecured
Corp Actions or Proxy/Reorg      Notes (Record
Dept.                            Holder)
60 S. 6th St.
Minneapolis, MN 55402
Tel: 612-607-8501
Fax: 612-607-8501

RR Donnelley & Sons Company      Trade Payable         $714,409
Attn: Thomas J. Quinlan
111 South Wacker Dr
Chicago, IL 60606-4301
Tel: 312-326-8000
Fax: 312-326-8001

Union Bank of California NA      Convertible           $660,000
Attn: Maria Bragge Supervisor    Senior Unsecured
350 California Street            Notes (Record
8th Floor                        Holder)
San Francisco, CA 94104
Tel: 415-705-7411

Morgan Stanley Smith Barney LLC  Convertible           $594,000
Attn: Suzanne Mundle             Senior Unsecured
Harborside Financial Center      Notes (Record
Plaza 2, 7th Floor               Holder)
Jersey City, NJ 07311
Tel: 201-830-8785

First Clearing LLC               Convertible          $540,000
Attn: Matt Buettner              Senior Unsecured
Or Matt Oppelt                   Notes (Record
One North Jefferson St           Holder)
St. Louis, MO 63103
Tel: 314-955-3285

Charles Schwab & Co. Inc.        Convertible           $491,000
Attn: Marlene Giaconia/          Senior Unsecured
Nancy Brim                       Notes (Record
PHXPeak 01-1B551                 Holder)
2423 E Lincoln Dr
Phoenix, AZ 85016
Tel: 602-355-3721

CEVA GROUP: Payment Default Prompts Moody's to Cut CFR to Caa3
Moody's Investors Service downgraded CEVA Group plc's Corporate
Family Rating and Probability of Default Rating to Caa3 and Ca-PD
from Caa1 and Caa1-PD respectively. At the same time, Moody's
downgraded CEVA's senior secured ratings to B3 from B1; priority
lien notes to Caa2 from Caa1, junior priority notes to C from
Caa2 and senior unsecured notes to C from Caa3. Ratings (except
notes rated C) are placed under review for downgrade.

Ratings Rationale:

The rating action follows the company's announcement that it did
not make interest payments due as of April 1, 2013 on the 11.5%
junior priority lien notes due 2018 and 12.75% unsecured notes
due 2020. CEVA is now currently in a 30-day cure period. The
company has launched exchange offers to convert these and other
unsecured debt instruments into equity instruments and thereby
reduce debt by around EUR1.1 billion. It has already entered into
an agreement with parties representing 83% of the outstanding
principle amount of these unsecured debts and 69% of the junior
priority lien notes for the approval of the exchange. In
addition, they commit to invest approximately EUR205 million if
98% of the aggregate principal amount of these debts are

If the exchange offers are consummated, Moody's would view the
transaction constitutes a distressed exchange that is seen as a
default under the rating agency's definition. CEVA has also
stated that concurrent with the solicitation of the exchange
offers, it is soliciting votes for acceptance of a pre-packaged
plan of reorganization under U.S. law if the offers are not

The expiration time for the exchange offers and votes on the pre-
packaged plan of reorganization is April 30, 2013.

The PDR of Ca-PD reflects Moody's view that the company is
virtually certain to default, either through completing the
exchange offer or a plan of reorganization under U.S. law. The
rating agency expects group recovery to be greater than 50%
(hence the CFR is at Caa3) but may depend on whether the company
achieves the 98% approvals needed for the exchanges. Moody's
views the threshold as very high and notes that the review for
downgrade reflects the negative impact on group recovery that a
possible reorganization under U.S. law may have. In the
distressed exchange offers only EUR1.1bn out of EUR2.76 billion
financial debt would take a loss, implying around a 60% group
recovery for financial debt in that scenario.

CEVA Group plc's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside CEVA Group plc's core
industry and believes CEVA Group plc's ratings are comparable to
those of other issuers with similar credit risk. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

CEVA Group plc. is the fourth-largest integrated logistics
provider in the world in terms of revenues (EUR7 billion as at
September 30, 2012 on a last-12-months (LTM) basis). As at
financial year-end 2011, CEVA had a presence in more than 170
countries worldwide, employing around 51,000 people and managing
approximately 10 million square meters of warehouse facilities.


ELECTRICIDADE DOS ACORES: Moody's Confirms 'B1' Issuer Rating
Moody's Investors Service confirmed the B1 issuer rating of EDA
-- Electricidade dos Acores S.A. following the finalization of
its bond issuance, which reduces the company's refinancing risk.
The outlook on the rating is negative.

The rating action concludes the review initiated by Moody's on
December 11, 2012.

Ratings Rationale:

The rating action follows EDA's finalization of a three-year
EUR50 million bond, maturing in February 2016, the proceeds from
which were used to repay a bond originally maturing in August
2013. In Moody's view, this recent development mitigates the
short-term refinancing risk associated with EDA's approaching
debt maturities, thereby supporting the company's liquidity
profile and the confirmation of EDA's rating at the current

However, in the context of the company's liquidity needs beyond
2013, Moody's notes that EDA exhibits material funding
requirements in 2014, including the refinancing of EUR60 million
in commercial paper (CP) programs (of which EUR20 million is
undrawn) and a second bond amounting to EUR50 million. As such,
the company's B1 rating accounts for the risk to the company's
financial profile resulting from its sizeable refinancing
requirements, particularly in the context of the current
macroeconomic and financial pressures in Portugal. In addition,
Moody's notes that EDA will have to continue to renew short-term
lines (currently totaling EUR39.75 million and maturing between
June and November 2013) to ensure an adequate liquidity profile.

EDA's liquidity profile is further constrained by the delays in
payment to the company of outstanding receivables, specifically
overdue amounts from the Portuguese government that total
approximately EUR41 million. In Moody's view, the pressures at
the sovereign level reduce the visibility of the timing and
likelihood of the repayment of these amounts. The sovereign's
challenging position has already caused delays in finalization of
a new EUR80 million European Investment Bank (EIB) loan to EDA,
which the Portuguese government was to guarantee. However,
Moody's understands that the finalization of this new loan, which
will be largely earmarked for the funding of investments in 2013
and 2014, is expected over the next few weeks.

The negative outlook on EDA's rating reflects the risks
associated with the company's material refinancing needs in 2014,
in the context of the challenging macroeconomic and financial
conditions and the related sovereign pressures. The negative
outlook is also in line with the negative outlook on the ratings
of Portugal (Ba3 negative) and the Autonomous Region of Azores
(RAA, B1 negative).

What Could Change the Rating Up/Down

Moody's currently considers upwards rating pressure or a
stabilization of the rating outlook to be unlikely in the short-
term, given the liquidity profile exhibited by EDA and the
linkages between the company's rating and that of the sovereign
and RAA.

Moody's would consider downgrading EDA's rating if the company
makes no near-term progress in executing a plan for refinancing
its 2014 debt maturities and in strengthening its liquidity
position. Any downward migration in the ratings of the sovereign
or RAA could also result in an adjustment of EDA's rating.

Principal Methodologies

The methodologies used in this rating were Regulated Electric and
Gas Utilities published in August 2009 and Government-Related
Issuers: Methodology Update published in July 2010.

EDA is the dominant vertically integrated utility in Azores,
50.01% owned by the Autonomous Region of Azores. As of December
2011, the company reported revenues of EUR214 million, operating
profit of EUR27 million and gross debt of EUR325 million.

* PORTUGAL: Constitutional Court Rejects Austerity Measures
Peter Wise and James Fontanella-Khan at The Financial Times
report that the Lisbon government has blamed Portugal's
constitutional court for creating "serious difficulties" for the
country's EUR78 billion bailout program after the court rejected
austerity measures considered critical to meeting deficit-
reduction targets.

According to the FT, in a statement issued after an emergency
cabinet meeting on Saturday, the government said the court ruling
created problems for this year's budget and could damage
Portugal's international credibility.

The government, which is supported by a comfortable majority in
parliament, said that the court ruling had created a "complex
situation" ahead of an imminent decision by eurozone finance
ministers on Portugal's request for more time to pay back its
bailout loans, the FT notes.

The court ruled on Friday night that four out of nine contested
measures -- including planned cuts in public sector pay and state
pensions -- breached a constitutional requirement that the burden
of fiscal policy be fairly distributed and not discriminate
between the state and private sector workers or pensions, the FT

The measures represent about 20% of the EUR5 billion in revenue
and savings that the government expected to generate from its
austerity measures, the FT says.

Pedro Passos Coelho, Portugal's prime minister, faces the task of
tabling fresh cuts or negotiating a further relaxation of deficit
targets with international lenders, who have already given Lisbon
two extra years to meet agreed objectives, the FT notes.  He also
will have to make a decision on whether to delay plans to issue a
10-year bond, a move that had been expected in the coming weeks
as part of Lisbon's efforts to regain full access to
international debt markets, the FT states.

Brussels, the FT says, is closely monitoring the situation, as
the European Commission, the EU's executive arm, is concerned
that the constitutional court ruling could drag the country back
into crisis.

According to the FT, a southern European diplomat said that
Lisbon risked losing financial support from the EU.

"If they can't meet the bailout terms and they veer away from the
austerity measures they promised to undertake, it will become
difficult for EU finance ministers to give them more money," the
FT quotes the diplomat as saying.

The court ruling has triggered an escalation in opposition and
trade union pressure on Mr. Passos Coelho to resign and allow a
new government to negotiate a fresh, less-demanding bailout
agreement with international lenders, the FT relates.

* PORTUGAL: Fitch Says Ruling Potential Setback to Adjustment
Portugal's Constitutional Court ruling that elements of the
country's fiscal consolidation plans are unconstitutional shows
the institutional limits on the Portuguese government's room for
maneuver as it seeks to keep its EU/IMF program on track, Fitch
Ratings says.

Comments by Prime Minister, Pedro Passos Coelho, following the
ruling indicate that the government remains committed to
complying with the program. But the Court ruling appears to
constrain government policy at a time when medium-term fiscal
adjustment (from 2014) is becoming more dependent on spending

In blocking a plan to suspend a monthly salary payment to state
workers, the ruling could be interpreted as a saying that all
public spending cuts that affect civil servants are
unconstitutional. This raises concerns about how the government
would implement further cuts arising from its planned
comprehensive spending review, which will outline how the bulk of
savings from 2014 onwards (EUR4 billion, equivalent to 2.5pp of
GDP) will be achieved and is therefore central to Portugal's
medium-term fiscal adjustment.

If that interpretation is correct, the ruling represents a
setback to future fiscal adjustment efforts in Portugal. This is
a greater concern than its immediate impact. The expenditure cuts
affected by the ruling were worth EUR1.3 billion, or 0.8% of
Portuguese GDP. While significant, Prime Minister Coelho has
already said that the government will seek to make equivalent
cuts in other areas. This continued commitment to consolidation
is positive.

The European Commission has welcomed this commitment and said
continued and determined program implementation "is a
precondition for a decision on the lengthening of maturities of
the financial assistance to Portugal."  Fitch says, "Our 5.5%
deficit forecast for 2013 assumes that the government will adopt
offsetting measures. However, it will be challenging for the
government to identify such measures at short notice. This
increases the risk that the 2013 fiscal target will be missed."

Mr. Coelho has ruled out tax increases as a response to the
ruling, emphasizing the need for spending cuts after the 2013
budget, which relied strongly on revenue-raising measures. The
2013 budget was strongly influenced by an earlier Constitutional
Court decision that some public sector spending cuts would have
to be reversed. The government's initial response -- an increase
in the social security contribution rate for all employees -- was
dropped after large-scale public protests.

Rising political, implementation and macroeconomic risks to
Portugal's fiscal and economic adjustment are already reflected
in the Negative Outlook on the sovereign's 'BB+' rating, which we
affirmed last November. It is underpinned by continuing support
from the Troika. As we noted then, the EU-IMF program is on track
but at a delicate stage as cross-party commitment to
implementation, and social cohesion, are tested.

Medium-term sustainable public finances are not achievable
against a weak economic backdrop without a sizeable further
adjustment. Political uncertainty or material slippage in fiscal
consolidation could put negative pressure on the ratings. Weaker-
than-expected GDP growth, leading to a significantly higher peak
in public debt would also be a trigger for negative rating


EURASIA DRILLING: S&P Raises Corporate Credit Rating to 'BB+'
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Russia-based oilfield services company Eurasia
Drilling Co. to 'BB+' from 'BB' and affirmed the 'B' short-term
rating.  The outlook is stable.  At the same time S&P raised its
Russia national scale ratings on Eurasia Drilling to 'ruAA+' from

S&P also assigned a 'BB+' issue rating to Eurasia Drilling's
proposed Eurobond.  The '3' recovery rating on this bond
indicates S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default.

The upgrade reflects S&P's expectation that the company will
retain healthy credit metrics in the medium term, thanks to the
group's moderate financial policy and growing profits.  S&P
believes that the group should further benefit from growing
demand for drilling services in Russia's core oil provinces and
in the Caspian basin, so that the company's increase in capital
expenditures should help increase profits and cash flows.  S&P
expects free operating cash flow (FOCF) to be neutral to positive
in 2013-2014, and adjusted leverage to remain in line with the
company's stated financial policy of gross debt to EBITDA below

The rating reflects S&P's assessment of the company's financial
risk profile as "intermediate" and business risk profile as

The stable outlook reflects S&P's view that Eurasia Drilling's
credit metrics should remain in line with its stated financial
policy of gross debt to EBITDA at below 1.5x.  S&P expects the
company's FOCF to be neutral to positive.

S&P do not see any significant upside potential for the rating in
the near term, given the concentrated nature of the company's

Negative rating pressure could arise if the company's liquidity
position deteriorated to "less than adequate" or in case of
unexpected large debt-financed acquisitions or capital
expenditures, which would drive adjusted debt to EBITDA above

MAGNIT OJSC: S&P Raises Corp. Rating to 'BB'; Outlook Stable
Standard & Poor's Ratings Services said it raised its long-term
corporate credit rating on Russian retailer OJSC Magnit to 'BB'
from 'BB-'.  The outlook is stable.

The upgrade reflects S&P's opinion that continuing robust
earnings growth driven by selling space expansion will help
Magnit maintain its modest debt-to-EBITDA ratio.  S&P now expects
the company's leverage to remain below 2x for the next two years.
Consequently, S&P has revised its assessment of Magnit's
financial risk profile to "significant" from "aggressive."
Magnit's adjusted leverage improved to 1.5x in 2012, compared
with 2.0x in 2011, primarily on EBITDA growth.  For the 12 months
ended Dec. 31, 2012, the company's revenues grew by 26% and
adjusted EBITDA increased by 65%, helped by EBITDA margins
improvement of about 240 basis points over the same period the
previous year to about 10.6%.

Magnit is continuing its ongoing expansion, with an almost 30%
increase in net selling space in 2012, and S&P believes it will
be able to sustain these growth levels for the next two years.

The company's profitability benefits from increasing economy of
scale and limited competition in rural areas.  Strengthening
bargaining power with its large suppliers and strong control over
operating costs led to improvements in operating margins in 2012.
S&P now expects increasing competition from large competitors to
have significant impact only in the longer term as S&P believes
that Magnit will continue to develop its franchise over the next
two years primarily in the regions where its market positions are
strongest.  S&P also expects the company to further strengthen
its bargaining power with smaller local suppliers through the
increasing penetration of its stores in municipalities and local
districts.  S&P believes Magnit's profitability will level off
somewhat from currently high levels as we expect rising labor
costs to feed through to its bottom-line growth.

The rating reflects S&P's view of the group's "fair" business
risk profile and "significant" financial risk profile.  The
company is one of the two largest food retailers in Russia in
terms of revenues and runs the country's biggest network of
discount grocery stores, hypermarkets, and cosmetics shops.

Magnit's business risk profile reflects S&P's view of its
exposure to an expanding but highly cyclical emerging-market
economy. Unlike many food retailers in developed markets, Magnit
operates in a fragmented, increasingly competitive, and still
emerging food retail market.  These factors are partly offset by
the company's strong market position, leading market position in
cities with fewer than 500,000 inhabitants, and robust

S&P's assessment of Magnit's financial risk profile takes into
account its substantial share of short-term debt and fairly
short-term debt maturity profile, with most of the debt maturing
within the next two years.  It also factors in the company's
ambitious store rollout program and sizable capital spending,
which makes its free operating cash flow inherently volatile.
These factors are offset to some extent by the company's quite
low financial leverage.

The stable outlook reflects S&P's view that Magnit's adjusted
debt to EBITDA will remain broadly at the current level, despite
its continued focus on growth and expansionary capital spending.
Furthermore, the outlook reflects S&P's expectation that Magnit's
resilient operational performance and stable operating cash flow
generation will continue and that its liquidity will remain

S&P might consider a negative rating action if Magnit's
continuing high share of short-term debt, coupled with reduced
availability of external funding amid less prudent liquidity
management, led S&P to revise its assessment of its liquidity to
"less than adequate."  Additional rating pressure might appear if
S&P's perception of the company's double-digit sales growth
changed and S&P revised substantially upward its expectation of
its future debt-to-EBITDA, or if profitability suffered because
of increasing competition or overexpansion.  Deviation from the
company's current financial policy in the form of large-scale
debt-funded acquisitions might also pressure the company's
ratings, but S&P don't see this as an immediate risk.

S&P could consider a positive rating action if it saw substantial
lengthening of the company's debt maturity profile together with
sustainable reduction of the share of short-term debt and
meaningful free operating cash flow generation.  The latter might
result from business risk profile improvement over the medium
term through strengthening of the company's market position to
the extent that it could be assessed as "satisfactory."  This
would happen, in S&P's view, if the Russian retail market
consolidated to the extent that it had more visibility on how the
largest food retailers could withstand close competition in the
same regions.

S E R B I A   &   M O N T E N E G R O

RAZVOJNA BANKA: In Bankruptcy Proceedings; Postanska Takes Over
Reuters reports that Serbian state-owned bank Postanska
Stedionica said it took over the assets and liabilities of
collapsed lender Razvojna Banka Vojvodine on Monday.

RVB is the second Serbian bank to collapse since the Socialist-
nationalist government took over in 2012, after issuing loans
without insuring itself against default, Reuters discloses.

Police detained three former RVB officials in March on suspicion
of extending loans without adequate insurance, Reuters recounts.

The government of Serbia's northern Vojvodina province, which
owns 62% of the bank, and the Serbian government have agreed to
the transfer of the deposits of 70,000 RVB clients to another
bank, Reuters relates.

According to Reuters, under the terms announced on Monday,
Postanska Stedionica took over RSD17.5 billion (US$203.79
million) of deposits.  The uninsured deposits will be secured
with EUR70 million (US$91.15 million) in five-year bonds issued
by the provincial government and the central government, Reuters

RVB's loans will be placed in a fund of which Vojvodina will own
78.11%, with the central government holding the rest, Reuters

The bank's net loss grew to RSD7.9 billion (US$90.3 million) in
the third quarter of 2012, up from RSD163.6 million a year
earlier, Reuters states.

                     Bankruptcy Proceedings

SeeNews reports that a commercial court in Serbia has launched
bankruptcy proceedings against RBV.

Olivera Lazic Rusov, the court's spokesperson, told SeeNews that
the court has appointed state-run Deposit Insurance Agency as an
administrator of RBV.


* SLOVENIA: Faces "Severe Banking Crisis," OECD Says
Boris Cerni at Bloomberg News reports that the Organization of
Economic Cooperation and Development said Slovenia, hit hard by a
boom-bust cycle and the euro area's debt woes, faces a "severe"
banking crisis if it doesn't act quickly.

The Alpine nation should recapitalize "distressed, viable banks"
while holders of subordinated debt and "lower-ranked hybrid
capital instruments should absorb losses," Bloomberg quotes the
Paris- based OECD as saying in a report yesterday.  OECD said
that state-owned banks such as Nova Ljubljanska Banka d.d. and
Nova Kreditna Banka Maribor d.d. should be sold and non-viable
banks should be wound down, Bloomberg relates.

"Limited equity markets and the backlog in the privatization
program are hindering foreign direct investment, whose increase
would help smooth corporate deleveraging," Bloomberg quotes the
the group of the world's wealthiest countries as saying in the
report.  "An agreement on a list of public assets to be
privatized or managed by a new sovereign holding is still

Slovenian banks, burdened by rising bad loans and relying on
financing from the European Central Bank, are at the center of
investors' worry the nation may follow Cyprus and other
peripheral nations to ask for an international bailout, Bloomberg

The OECD, as cited by Bloomberg, said that the budget deficit
rose "significantly" during the current economic downturn and
restoring public finances has proved "difficult," contributing to
tensions in the sovereign bond market.

According to Bloomberg, the OECD said that "With no policy
changes," public debt could double to exceed 100% of gross
domestic product, including the expected costs of aging and
rescuing banks.


PESCANOVA SA: Expects to Seek Court Protection in 10 Days
Sharon Smyth at Bloomberg News, citing Europa Press, reports that
Pescanova expects to seek court protection from creditors within
10 days.

According to Bloomberg, EP said that the company sees chances of
reaching agreement on debt within legal timeframe as "scarce".

EP said that Pescanova warns it is insolvent, Bloomberg notes.
Bloomberg relates that EP said the company had sought preliminary
phase of protection from creditors for three months while it
renegotiated debt.

Pescanova, as cited by EP, said it's being in situation of
preliminary phase of protection was provoking "financial
deterioration" of the company, Bloomberg recounts.

                       Boardroom Battles

As reported by the Troubled Company Reporter-Europe on April 08,
2013, Reuters related that a month of boardroom battles ended in
stalemate and put the future of the debt-laden group at risk.
Sources told Reuters that negotiations with creditors are
deadlocked and the group is at odds with its auditors amid an
atmosphere of mistrust and management infighting.  According to
Reuters, a source said that the April 4 day-long board meeting
ended early on April 5 without agreement as shareholders locked
horns over the role of the company's chairman and main owner,
Manuel Fernandez, with many wanting him to step down.  The group
made a net profit of EUR25 million (US$32.13 million) in the nine
months to the end of September 2012, but has debts of at least
EUR1.5 billion after massive expansion, Reuters disclosed.

                       Auditor Suspension

Financial sources put the borrowings at closer to EUR2.8 billion,
Reuters noted.  The company suspended its auditors, BDO, and has
said it will hire forensic auditors to examine its accounts after
reporting discrepancies in its books on March 12, a day after the
market regulator said it would investigate the fishing firm over
possible market abuse, Reuters related.

Pescanova is a Galicia-based fishing company.  It catches,
processes and packages fish on factory ships.

* SPAIN: Corporate Bankruptcies Hit Record High in 1Q2013
Tomas Cobos and Clare Kane at Reuters, citing a survey by credit
rating agency Axesor, report that a record number of Spanish
companies went bust in the first quarter of 2013 as companies
remained under intense pressure from tight credit conditions and
meagre demand.

According to Reuters, the survey said that the 2,564 firms filing
for insolvency proceedings in first three months of the year was
a 10% rise from the previous quarter and a 45% increase on the
same period in 2012.

"Most Spanish businesses did not prepare for a crisis this big or
this long, which could be a determining factor," Reuters quotes
Javier Ramos-Juste, head of economic studies at Axesor, as

Axesor said that a credit freeze, liquidity problems, late
payments and poor risk management contributed to the record
number of bankruptcies since Spain's insolvency law changed in
2004, Reuters relates.

Axesor estimates that almost 28,000 companies have filed for
bankruptcy since Spain's economic crisis set in five years ago,
Reuters notes.

* SPAIN: Fitch Says Covered Bonds Not Affected by Residual Claims
Covered bonds ratings on stand-alone cedulas hipotecarias (CH,
Spanish mortgage-covered bonds) and the structured finance
ratings on multi-issuer cedulas hipotecarias (MICH) would not be
affected by legislative changes that undermined the residual
unsecured claim against the insolvency estate of a CH issuer upon
default, Fitch Ratings says.

Spanish newspaper "Expansion" reported on April 4 that the EU
might consider subordinating cedulas holders to unsecured
depositors (specifically those with deposits not covered by
guarantee schemes). However, the article did not suggest that the
EU is questioning the framework that results in the legal, valid,
binding and enforceable encumbrance of assets.

"Our rating criteria for covered bonds disregards any potential
unsecured recourse to the insolvency estate of a defaulted
issuer. In very simple terms, we check whether the stressed value
of the mortgage cover pools securing CH allows us to rate the
bonds above the issuing bank's rating, and we do not give any
credit to further recoveries," Fitch says.

"Under the current regime, covered bond investors in Spain have
an additional unsecured claim on a bankrupt institution, which
ranks pari passu with unsecured creditors (which include
unguaranteed depositors), and is used if the proceeds from the
cover pool are insufficient to repay their debt in full. If
covered bond investors became subordinated in this additional
unsecured claim, it would have no ratings implications because
the additional claim is given no credit in our analysis.

"We are confident that the legal framework protecting CH is not
at risk. We do not expect changes to the laws that allow for the
encumbrance of assets as this would go against the essence of the
legal framework. Spanish law clearly identifies CH investors as
special privileged creditors secured by the entire mortgage book
of a bank.

"Furthermore, recent legislative developments in Spain have aimed
to clarify the restructuring process of troubled banks (although
they do not specifically address covered bonds). These changes
are described in our Special Report "Cedulas Hipotecarias Legal
Framework Review", published April 5, 2013."

* SPAIN: Fitch Says Bank Restructuring on Track But Risks Remain
Progress in reforming the Spanish banking sector is good but
there are a number of remaining issues that will influence the
success, or failure, of the exercise, Fitch Ratings says.  "With
a five-year timeline for restructuring the recently recapitalized
banks, work remains. We are negative on the overall outlook for
the Spanish banking sector," Fitch says.

Banks that received state aid have to substantially reduce their
businesses to bolster their solvency, liquidity and long-term
viability. After transferring selected assets to Spain's bad
bank, SAREB, thousands of branches are being closed and staff
made redundant so these banks can focus on retail and SME lending
in their core regions.

Some of the sector's capital needs will be covered by bailing-in
subordinated debt and preference share investors. We estimate
around EUR13 billion of capital will be generated through these
measures, although in some cases investors may be given shares or
other debt in return. The subordinated liability exercises have
been delayed slightly, complicated by potential mis-selling to
retail investors. We estimate that up to 20% of outstanding
hybrid instruments could be affected by conduct allegations, with
this percentage varying from bank to bank. This will result in
additional capital having to be injected.

"We are pessimistic about asset quality and our ratings
incorporate an assumption that non-performing loans will increase
this year as problems spread to SME loans and residential
mortgages that have so far held up relatively well. Loan
provisions are likely to remain high in 2013, although probably
not at 2012 levels when provisions were frontloaded as part of
the banking reforms. But with SAREB actively managing down a
substantial real-estate portfolio over the next 15 years, there
could be knock-on effects for the asset quality of non-
recapitalized banks," Fitch says.

"High loan impairment charges will put pressure on profitability,
which will also continue to be affected by low interest rates,
subdued business activity in the recession and banks' commitment
to deleveraging. This could exert downward pressure on the
Viability Ratings (VR) of some banks not in receipt of state aid,
especially those more exposed to the domestic market.

"We expect to review soon the 'f' Viability Ratings of the banks
in receipt of state aid to capture the benefit of the
recapitalization and transfer of real-estate assets to SAREB. The
extent of likely VR upgrades will be influenced by restructuring
challenges, at least until the banks establish a track record,
and post-recapitalization financial and liquidity profiles as
well as banks' revised business plans.

"The sector's restructuring efforts are likely to fuel the higher
level of consolidation seen since the reforms started last year.
We expect the M&A trend to continue for the rest of 2013.
Together with the mandatory downsizing of recapitalized banks and
cost optimization by healthier banks, this should take further
excess capacity out of the system and in time, contribute to
sustained profitability.

"Support dynamics are in flux, as highlighted by the EU's Banking
Union and bank resolution initiatives and in the aftermath of the
Cypriot banking crisis, which saw the bail-in of senior creditors
and uninsured depositors at two banks. This may eventually affect
the Spanish banks' Support Rating Floors and Support Ratings. In
its analysis, Fitch will explore these themes and assess a number
of factors, including the banks' franchises post restructuring
and how this may impact their systemic importance and, the
authorities' propensity to support an entity that has already
received state assistance."


MHP SA: Moody's Says New Eurobond Issuance Credit Positive
Moody's Investors Services reports that MHP's (B3 Negative)
issuance of the new US$750 million, 8.25% Eurobonds due in 2020
is credit positive, as it will address the refinancing risks
related to maturity of US$585 million notes in 2015, support the
company's liquidity position in the next 12-18 months, and secure
funding for a potential expansion of the company's poultry and
grain business.

The notes are general unsecured and unsubordinated obligations of
MHP ranking pari passu with all its other unsecured and
subordinated indebtedness (including the existing US$585 million
notes) and will benefit from the irrevocable and unconditional
guarantees of its major operating subsidiaries.

The new issuance helps to address MHP's material refinancing
risks related to the bullet maturity of its existing US$585
million notes in 2015. It spent US$386 million of the new
issuance proceeds to repurchase US$350 million in existing notes,
thus reducing its bullet maturity in 2015 to US$235 million.

The new issuance will also improve the company's liquidity
position in the next 12-18 months with available funds, including
a cash balance and committed lines, sufficient to cover the
company's capex program and debt-service requirements as well as
its planned dividend payment.

The remaining proceeds from the Eurobond placement could be
utilized for the potential expansion of MHP's poultry and grain
business including potential acquisitions outside of the Ukraine.
This is in line with the company's recently announced strategy of
geographical diversification, which has the potential to reduce
its exposure to weather conditions and animal disease-related
risks in the Ukraine and to unlock MHP's growth potential in the
next three to five years given its already dominant position in
the domestic poultry market (30% of total consumption and 50% of
industrial poultry production). As a first step, the company has
announced its plans to purchase around 40 thousand hectares in
Russia in 2013. However, Moody's does not anticipate that MHP
will announce any further significant deals in 2013 and notes
that the majority of the remaining cash is unlikely to be used
before 2014. Alternatively, MHP may decide to use the available
cash for further refinancing of its existing bank loans, thereby
improving its borrowing capacity for future potential deals.

Moody's forecasts that MHP's adjusted leverage (measured as
adjusted debt/EBITDA) will increase to around 3.0x (2012: 2.7x)
following the issue of the notes, while the increase in debt will
be partly compensated by the incremental EBITDA arising from the
launch of the Vinnitsa poultry complex in 2013. The rating agency
positively notes that the company has addressed the risks of a
covenants breach by changing its covenants under the new and the
existing notes to unadjusted net debt/EBITDA of 3.0x from 2.5x
previously and aligning the covenants in its bank loans
accordingly. These steps are particularly important given MHP's
exposure to a potential devaluation of the hryvna, given that a
large part of the company's revenue (around 70% as of 2012) is
generated domestically, while its debt is mainly denominated in
hard currencies (84% in US dollars and 16% in euros). Moody's
forecasts that MHP's unadjusted net debt/EBITDA ratio as of end-
2013 will be within MHP's long-term internal guidance of 2.5x and
below 3.0x, and that the company will comply with all of its debt


* Moody's Sees Changing Investment Strategies for Bond Funds
New over-the-counter derivative margin rules will likely prompt
bond funds to alter their investment strategies, says Moody's
Investors Service in a new Special Comment entitled "Bond Funds:
OTC Derivatives Rules Prompt Shift in Investment Strategies."

The rules on the mandatory clearing of most standardized OTC
derivatives through central counterparties (CCPs) will come into
force in mid-2013 in the US and Europe. The rating agency
believes that the move to standardized OTC derivatives would
leave residual portfolio credit risks and increase operational

"The rule changes could entail the need for extra staff with the
expertise to manage the exposures, thereby increasing a fund's
costs, and/or render some hedging arrangements as imperfect as
funds take measures to counteract the extra costs of initial
margin requirements," says Soo Shin-Kobberstad, a Moody's Vice
President - Senior Analyst and the author of the report.

Under the rules, CCPs will require users of derivatives, such as
bond funds, to deliver collateral through the posting of initial
margins. If derivatives are uncleared, the new derivatives
regulation will establish more stringent initial margin
requirements outright. In addition, parallel regulatory
initiatives, which impose significantly greater capital set-
asides for dealers that provide uncleared derivatives, will
likely increase the cost of uncleared derivatives transactions.

The latest Basel Committee on Banking Supervision (BCBS) and
International Organization of Securities Commissions (IOSCO)
document released on February 15, 2013 presents its final
recommendations on a majority of the initial margin rules for
uncleared derivatives. One of the key elements clarified in the
February document is the BCBS-IOSCO recommendation for a
universal initial margin threshold of EUR50 million. Moody's
believes that this threshold will provide significant relief for
smaller firms that would have been disproportionately affected by
the margin rules.

"Despite the threshold, initial margin requirements could lead to
a drag on investment returns for many bond funds as initial
margins will become standard practice across the market for both
cleared and uncleared OTC derivatives. To reduce the cost of
using OTC derivatives, some funds may choose to use less costly
replacements such as standardized OTC derivatives or exchange-
traded bond futures instead of customized derivatives that are
tailored to their specific needs. Whilst lowering costs, these
shifts could lead to bond funds holding imperfect hedges or
additional credit risks in their portfolios," explains Ms. Shin-


Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through  Go to order any title today.


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., 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
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Information contained herein is obtained from sources believed to
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