/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/130828.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, August 28, 2013, Vol. 14, No. 170 Headlines D E N M A R K AMAGERBANKEN AS: Shareholders Sue Two Gov't Agencies E PIHL: Files for Bankruptcy; Owes DKK2.1-Bil. to Creditors VESTAS WIND: Ousts Chief Executive; To Focus on Restructuring F R A N C E PHOTONIS TECHNOLOGIES: S&P Affirms Prelim. B+ CCR; Outlook Stable RCI BANQUE: S&P Lowers Rating on Subordinated Debt to 'BB+' G E R M A N Y PRAKTIKER AG: At Least 10 Investors Express Interest in Max Bahr H U N G A R Y KAPUVARI HUS: Liquidator Won't Call for Third Tender I R E L A N D ANGLO IRISH: Seeks Creditor Protection in U.S. I T A L Y BANCA MONTE: Management Accused of Obstructing Supervisory Duties L A T V I A OMINASIS LATVIA: Auction for Kemeri Sanatorium Set for Sept. 24 P O L A N D KOMPANIA WEGLOWA: May Need State Aid After Coal Prices Plunge R U S S I A SEVERSTAL OAO: Moody's Alters Outlook to Positive & Keeps Ba1 CFR S E R B I A & M O N T E N E G R O * SERBIA: Fiscal Deficit Constrains Moody's B1 Bond Rating U N I T E D K I N G D O M CHALLINORS SOLICITORS: Administrators Sell Business to Rivals CO-OPERATIVE BANK: Leaders to Reassure Bail-Out on Course JESSOPS: Costa's Plans to Extend Into Firm's Empty Store MORE FINANCIAL: High Court Winds Up Firm Over Misleading Claims X X X X X X X X * Moody's Outlook on Euro Area Periphery Remains Negative ********* ============= D E N M A R K ============= AMAGERBANKEN AS: Shareholders Sue Two Gov't Agencies ---------------------------------------------------- Frances Schwartzkopff at Bloomberg News reports that shareholders of collapsed Amagerbanken filed a lawsuit against Denmark's financial regulator and bank resolution agency, alleging that the agencies failed to warn them of risks the bank faced. According to Bloomberg, Foreningen Amagerinvestor said in an e-mail that Financial Supervisory Authority and the Financial Stability Co. failed to say how weak Amagerbanken was when shareholders were asked to invest another DK898 million in the bank in 2010. Foreningen Amagerinvestor so far represents 1,482 shareholders, Bloomberg discloses. 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 scheme. E PIHL: Files for Bankruptcy; Owes DKK2.1-Bil. to Creditors ----------------------------------------------------------- Christian Wienberg at Bloomberg News reports that E. Pihl & Soen A/S said on Monday it filed for bankruptcy after the board failed to reach an agreement with creditors that would have allowed the company to continue operations. Bloomberg relates that Aarsleff, which employs about 3,600 people, said yesterday it will take over Pihl's tasks and hire some of its workers for the two contractors' joint project to renovate Noerreport, Copenhagen's busiest train station. Pihl, which was founded in 1887, said it was brought down by a strategy of expanding too aggressively during Denmark's property boom and after costs rose more than budgeted on some projects, Bloomberg discloses. According to Bloomberg News' Frances Schwartzkopff, Birgit Noergaard, Phil's chairman, as quoted by Berlingske, said the company owes DKK2.1 billion to creditors who are likely to experience "big loss". Danske Bank said in an e-mail to Berlingske that it won't change its full-year forecast or expected writedowns, Bloomberg notes. E. Pihl & Soen A/S is one of Denmark's largest contracting companies. Outside Denmark, the company has building contracts in Lebanon, Norway, Sri Lanka and Sweden. The company has 2,400 employees. VESTAS WIND: Ousts Chief Executive; To Focus on Restructuring ------------------------------------------------------------- Richard Milne at The Financial Times reports that the chairman of Vestas has said the focus of the embattled company will now be "stable profitability", after it jettisoned its chief executive in the wake of multiple profit warnings and thousands of job losses. On Wednesday, Ditlev Engel was replaced as chief executive of the Danish company by Anders Runevad, a career executive at Sweden's Ericsson, which also provided Vestas' chairman, Bert Nordberg, the FT relates. "The reason for this leadership change is that we want to finalize the restructuring and go into a phase of stable, profitable growth," the FT quotes Mr. Nordberg as saying. Mr. Engel, who was appointed chief executive in 2005, became a lightning rod for investor dissatisfaction in Vestas, which was overtaken as the world's biggest manufacturer of wind turbines by General Electric last year, the FT recounts. He was criticized for an aggressive expansion undertaken as the 2008 financial crisis pushed Vestas into deep financial trouble, which had to be unwound at a cost of almost a third of its workers' jobs, the FT discloses. Last year, the Danish group was forced to delay its half-year test of financial covenants after four profit warnings caused many investors to lose faith in the company, the FT relates. Overall, Vestas' net loss widened from EUR8 million to EUR62 million in the second quarter by EUR535 million from a year earlier, the FT discloses. Vestas is a wind turbine manufacturer. =========== F R A N C E =========== PHOTONIS TECHNOLOGIES: S&P Affirms Prelim. B+ CCR; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' preliminary long-term corporate credit rating on Photonis Technologies SAS, a France-headquartered electro-optic component manufacturer. The outlook is stable. At the same time, S&P affirmed its 'B+' preliminary issue rating on Photonis' EUR250 million (about US$325 million) proposed six- year first-lien secured loan. The preliminary recovery rating of '3' on the first-lien loan indicates S&P's expectation of meaningful (50%-70%) recovery for the lenders in the event of a payment default. S&P withdrew its 'B-' preliminary issue and '6' recovery ratings on the 6.5-year second-lien loan. The ratings are primarily constrained by S&P's view of Photonis' "highly leveraged" financial risk profile and "aggressive" financial policy, reflecting that the company was acquired through a leveraged buyout. S&P's assessment is based on its expectation that the company's proposed refinancing transaction will be completed as presented to us by Photonis and its majority owner, AXA Private Equity. "We assume that the current financial structure will be replaced by a EUR250 million six-year term loan and a EUR30 million revolving credit facility (RCF). We also assume the existing non-cash interest-bearing convertible bond (EUR175 million at year-end 2012) provided by shareholders and preferred shares (EUR25 million at year-end 2012) will remain in place. When calculating fully adjusted debt, we treat both instruments as debt-like in nature. The company's Standard & Poor's-adjusted debt-to-EBITDA ratio for 2013-2014 is slightly above 8x and funds from operations (FFO) to debt about 8%. We have noted the change in conditions for the EUR250 million six-year term loan and foresee that it may be more difficult for the company to sustain a cash interest cover ratio around 3x, a level we see as ratings- commensurate," S&P said. Excluding the non-cash interest-bearing debt, S&P forecasts debt to EBITDA at 4.0x-4.5x and FFO to debt at slightly above 15%. These metrics are for informative purposes only and are not to be construed as an indication that S&P do not treat the non-cash interest-bearing instruments as debt-like. The outlook is stable, based on S&P's anticipation that Photonis will maintain its solid market shares and operating margins in the coming years. In S&P's view, ratings-commensurate credit metrics include a cash interest cover ratio of about 3x and continuously positive discretionary cash flow. S&P could lower the ratings if Photonis were to report weaker revenues and profitability than currently. Additionally, ratings downside could occur if the company were to adopt a more shareholder-friendly financial policy as a result of its private equity ownership. Acquisitions and tight credit metrics for the current rating level could also prompt a negative rating action. S&P believes that an upgrade is unlikely in the next two years, given Photonis' highly leveraged capital structure. S&P already factors its forecast of continued strong operating performance into the ratings. RCI BANQUE: S&P Lowers Rating on Subordinated Debt to 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it has corrected its rating on RCI Banque's nondeferrable subordinated debt by lowering it to 'BB+' from 'BBB-'. Under S&P's criteria, it rates subordinated debt one notch below a bank's stand-alone credit profile (SACP) when the SACP is 'bbb- ' or higher. When S&P took a rating action on RCI Banque on Nov. 5, 2012, it inadvertently did not lower the rating on the subordinated debt. This action corrects this error. ============= G E R M A N Y ============= PRAKTIKER AG: At Least 10 Investors Express Interest in Max Bahr ---------------------------------------------------------------- Dorothee Tschampa at Bloomberg News, citing Bild, reports that at least 10 investors are interested in buying insolvent DIY chain Max Bahr with up to 180 outlets. According to Bloomberg, Bild said that insolvency administrators will examine bids next week to select investors for concrete negotiations. Potential investors have until Aug. 31 to submit their bids, Bloomberg discloses. As reported by the Troubled Company Reporter-Europe on August 1, 2013, Reuters related that the insolvency administrators of Praktiker on July 30 said they have stepped up the search for an investor by appointing Macquarie as advisor. The administrators hope that by finding an investor they can secure as many jobs and stores as possible at the group, which has around 20,000 full and part-time employees, Reuters disclosed. They said they did not expect any results from the search before the start of September, but that all the 300 stores affected by the insolvency would continue trading for now, Reuters related. Of the 300 stores in the insolvency process, 168 are Praktiker stores, 78 are Max Bahr stores and a further 54 are Praktiker-branded shops that have recently been converted to the Max Bahr signage, Reuters noted. Praktiker AG is a German home-improvement retailer. ============= H U N G A R Y ============= KAPUVARI HUS: Liquidator Won't Call for Third Tender ---------------------------------------------------- MTI-Econews reports that the liquidator for Kapuvari Hus will not call a third tender for the company following two unsuccessful tenders earlier this year. Pal Peter Jendrolovics, the bailiff, told MTI on Monday that Kapusvari Hus liquidators will attempt to sell the company's assets rather than continue to search for an investor. Kapuvari Hus, which has been under liquidation since the autumn of 2012, owes its creditors more than HUF8 billion, MTI discloses. Kapuvari Hus is a Hungarian meat company. ============= I R E L A N D ============= ANGLO IRISH: Seeks Creditor Protection in U.S. ---------------------------------------------- Peg Brickley, writing for Daily Bankruptcy Review, reported that the liquidation vehicle for what was once one of Ireland's largest banks filed for U.S. bankruptcy protection Monday to protect U.S. assets of the former Anglo Irish Bank Corp. from being seized by creditors. About Anglo Irish Anglo Irish Bank was an Irish bank headquartered in Dublin from 1964 to 2011. It went into wind-down mode after nationalization in 2009. In July 2011, Anglo Irish merged with the Irish Nationwide Building Society, with the new company being named the Irish Bank Resolution Corporation (IBRC). Standard & Poor's Ratings Services said that it lowered its long- and short-term counterparty credit ratings on Irish Bank Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'. S&P also lowered the senior unsecured ratings to 'D' from 'B-'. S&P then withdrew the counterparty credit ratings, the senior unsecured ratings, and the preferred stock ratings on IBRC. At the same time, S&P affirmed its 'BBB+' issue rating on three government- guaranteed debt issues. The rating actions follow the Feb. 6, 2013, announcement that the Irish government has liquidated IBRC. ========= I T A L Y ========= BANCA MONTE: Management Accused of Obstructing Supervisory Duties ----------------------------------------------------------------- Sonia Sirletti at Bloomberg News reports that Banca Monte dei Paschi di Siena SpA's management was accused by Italy's market regulator Consob of obstructing its supervisory duties last year by giving incorrect or incomplete information on past financing and derivatives deals that led to a fraud probe. According to a document reviewed by Bloomberg and originally obtained by consumer group Codacons, Consob wrote in a note to prosecutors in Siena dated Feb. 15 that the bailed-out bank misled the regulator between April 2012 and July 2012 in response to Consob request for information on the financing of Banca Antonveneta SpA's purchase in 2008. Bloomberg relates that Consob said in the document Monte Paschi also withdrew information on a derivative contract with Nomura Holdings Inc. in its communications to the regulator from November 2011 through October 2012. The document said that the Rome-based agency asked prosecutors to start a probe into alleged regulator obstruction, Bloomberg notes. Magistrates are accusing former executives, including ex-chairman Giuseppe Mussari and General Manager Antonio Vigni of withholding information from regulators about how the bank financed its purchase of Antonveneta, Bloomberg discloses. Prosecutors are also probing whether former managers at Monte Paschi, which piled up losses of EUR7.9 billion (US$10.5 billion) in the past two years, used derivative contracts to obscure more than EUR700 million of losses, Bloomberg says. Loss As reported by the Troubled Company Reporter-Europe on Aug. 9, 2013, Bloomberg News related that Banca Monte dei Paschi di Siena -- the Italian bank seeking to persuade European regulators it deserves a bailout -- reported a fifth straight loss in the second quarter on the cost of state aid and higher provisions for bad loans. The net loss fell to EUR279.3 million (US$372 million) from EUR1.64 billion a year earlier, when Monte Paschi wrote down goodwill and intangible assets by more than EUR1.5 billion, Bloomberg disclosed. Restructuring Plan Chief Executive Officer Fabrizio Viola is waiting for European regulators to approve the latest restructuring plan for Monte Paschi to retain rights to EUR4.1 billion of state aid, which it got from selling bonds to the government, Bloomberg said. The Siena-based bank, which must pay 9% annual interest on the bonds, plans more asset disposals, branch cuts and savings to return to profit this year, a necessary condition under the plan to avoid surrendering a stake to the government, Bloomberg noted. Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is an Italy-based company engaged in the banking sector. It provides traditional banking services, asset management and private banking, including life insurance, pension funds and investment trusts. In addition, it offers investment banking, including project finance, merchant banking and financial advisory services. The Company comprises more than 3,000 branches, and a structure of channels of distribution. Banca Monte dei Paschi di Siena Group has subsidiaries located throughout Italy, Europe, America, Asia and North Africa. It has numerous subsidiaries, including Mps Sim SpA, MPS Capital Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA. * * * As reported by the Troubled Company Reporter-Europe on June 19, 2013, Standard & Poor's Ratings Services said that it lowered its long-term counterparty credit rating on Italy-based Banca Monte dei Paschi di Siena SpA (MPS) to 'B' from 'BB', and affirmed the 'B' short-term rating. S&P also lowered its rating on MPS' Lower Tier 2 subordinated notes to 'CCC-' from 'CCC+'. S&P affirmed the ratings on MPS' junior subordinated debt at 'CCC-' and on its preferred stock at 'C'. At the same time, S&P removed the ratings from CreditWatch, where it placed them with negative implications on Dec. 5, 2012. =========== L A T V I A =========== OMINASIS LATVIA: Auction for Kemeri Sanatorium Set for Sept. 24 --------------------------------------------------------------- The Baltic Times, citing Nozare.lv, reports that the property of the insolvent Ominasis Latvia, including the Kemeri Sanatorium, will be sold at auction on Sept. 24, insolvency administrator Ainars Kreics said. The starting price of the company's property will be LVL3,905,901 (EUR5.5 million), which will be partly applied to value added tax. This will be the first auction of Kemeri Sanatorium, the report says. According to The Baltic Times, the Finance Ministry's Communications Department Director Aleksis Jarockis told Nozare.lv that the Jurmala City Council had not submitted information on the necessary financing needed to maintain the Kemeri Sanatorium over the next several years, as well as its vision, together with financial calculations, on how the sanatorium would be utilized. The Baltic Times relates that Kreics, in an effort to prevent Ominasis Latvia property from depreciating and due to conditions set by the Municipal Loan and Guarantee Control and Supervision Council, has decided to organize an auction of the Kemeri Sanatorium. This past July, the report recalls, creditors of Ominasis Latvia, the company that previously privatized the Kemeri Sanatorium, decided to sell the sanatorium complex to the Jurmala City Council without going to auction. They unanimously agreed to sell the property to the Jurmala City Council for LVL4.6 million. However, law firm Raidla Lejins & Norcous, representing Ominasis Latvia, said in a letter to the Jurmala City Council that the sale of the Kemeri Sanatorium to the Jurmala City Council without going to auction contradicts legal requirements and creditor interests, the report notes. =========== P O L A N D =========== KOMPANIA WEGLOWA: May Need State Aid After Coal Prices Plunge ------------------------------------------------------------- Agnieszka Barteczko and Dagmara Leszkowicz at Reuters report that Kompania Weglowa is considering asking a state agency for a bailout. According to Reuters, Poland still relies heavily on coal for its energy needs, but two sources familiar with the matter said Kompania Weglowa needs state aid after being hit by plunging coal prices over the past year. Like other state miners, the company also has to contend with high extraction costs in Poland, Reuters notes. The combination of high costs and low prices has served to make domestic coal more expensive than the imported variety, resulting in the company's large stockpiles almost doubling in the past year, Reuters discloses. The sources said that Kompania Weglowa could soon turn to the Agency for Industrial Development (ARP), which most recently bailed out troubled builder Polimex, Reuters relates. "Such talks are being held at the agency, but (the) technicalities are not clear at this stage", a person close to the matter told Reuters. A second source confirmed that discussions were taking place. Kompania Weglowa declined to comment and the ARP said that the miner had not formally asked for a bailout, Reuters notes. Though Kompania Weglowa has not released any financial data for this year, smaller KHW said it lost PLN70 million (US$22 million) in the first six months of 2013, Reuters states. Kompania Weglowa is a Polish mining company. It is the biggest hard coal producer in the European Union. =========== R U S S I A =========== SEVERSTAL OAO: Moody's Alters Outlook to Positive & Keeps Ba1 CFR ----------------------------------------------------------------- Moody's Investors Service has changed to positive from stable the outlook on OAO Severstal ratings. Moody's has also affirmed Severstal's corporate family rating and probability of default rating at Ba1 and Ba1-PD, respectively. Concurrently, Moody's has affirmed the ratings on the senior unsecured debt and med-term notes program issued by Steel Capital S.A. at Ba1 and (P)Ba1 (with a loss-given default assessment of LGD4, 54%), respectively. "[This] change in outlook reflects Severstal's strong operating performance, favorable cost structure and the company's commitment to keeping its leverage ratio as measured by net debt/EBITDA at below 2.0x over the next 12-18 months" says Denis Perevezentsev, a Moody's Vice President and lead analyst for Severstal. "This strongly positions the company's credit profile among its global peers in the highly competitive steel sector". Ratings Rationale: The positive outlook reflects Moody's view that Severstal's financial metrics will be resilient, even in the currently challenging macroeconomic environment and soft global steel market. The company's exposure to the Russian and US markets, where end-user demand and capacity utilizations are quite strong compared with Europe, and its fairly conservative leverage as measured by net debt/EBITDA will continue to position the company favorably among its global steel peers. The outlook also incorporates the rating agency's expectation that the company will maintain a solid liquidity profile. Moody's expects that Severstal will be able to maintain its current cost-competitive position as a result of the company's high level of vertical integration into key raw materials and self-sufficiency in coal and iron ore. Moreover, Moody's expects that Severstal's mining segment, into which the company is vertically integrated, will continue to be one of the main contributors to the company's EBITDA, primarily as a result of Severstal's adequate cash cost position and strong market environment in the iron ore sector, despite somewhat elevated cash costs and currently low prices for coking coal. What Could Change The Rating Up/Down Moody's would consider upgrading Severstal's rating if the company were to continue to demonstrate a conservative financial profile, with (1) gross debt /EBITDA below 2.0x on a sustainable basis; (2) EBIT margin sustainably in the mid-teens in percentage terms; and (3) prudent liquidity management. Negative rating pressure would occur if Severstal's Moody's- adjusted gross debt/EBITDA ratio moved above 3.0x or if its (CFO- dividends)/debt ratio declined to below 20% on a sustainable basis. A deterioration in the company's currently strong liquidity position would also exert pressure on the rating and/or outlook. The principal methodology used in these ratings was the Global Steel Industry published in October 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Severstal is a vertically integrated global steel and steel- related mining company, with assets in Russia, the US, Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Severstal is listed on the Moscow Interbank Currency Exchange (MICEX) and the company's global depository receipts are traded on the London Stock Exchange (LSE). Currently approximately 79.17% of Severstal's share capital is indirectly controlled by Mr. Alexey Mordashov, the company's CEO. In 2012, Severstal had revenue of $14.1 billion (2011: US$15.8 billion) and EBITDA of US$2.1 billion (2011: US$3.6 billion). Severstal's crude steel production in 2012 reached 15.1 million tonnes (2011: 15.3 million tonnes). ===================================== S E R B I A & M O N T E N E G R O ===================================== * SERBIA: Fiscal Deficit Constrains Moody's B1 Bond Rating ---------------------------------------------------------- Moody's Investors Service says that Serbia's B1 government bond rating incorporates the government's relatively high fiscal deficits and rising government debt burden, as well as the economy's uncertain growth prospects. The rating also incorporates the institutional and economic benefits that will accrue as Serbia proceeds along the path of accession to the EU. The rating has a stable outlook. The rating agency's report is an update to the markets and does not constitute a rating action. Moody's says that Serbia's general government fiscal deficit increased to about 6.4% of GDP in 2012 from 2.6% of GDP in 2008, while government debt has risen to 59% of GDP from 33.4% over the same period, and is expected to rise to 63% of GDP in 2013. As a large portion of total government debt is denominated in or indexed to foreign currencies, the government's debt-servicing costs are vulnerable to exchange-rate fluctuations. Moreover, in contrast to its historical reliance on multilateral and bilateral debt, over the last few years the government has turned to the international bond market for its deficit-financing needs. Consequently, its public finances are increasingly vulnerable to international market volatility and interest-rate trends as well. On the other hand, Moody's notes that Serbia's scores on survey indicators of governance have improved over the last few years, and compare well to those of several similarly rated peers. Moody's also notes that Serbia's per capita income levels are relatively high compared to similarly rated peers, as are infrastructure and labor force education levels. However, having averaged about 5% in the five years prior to the global financial crisis, GDP growth has decelerated to an average of 0.3% in the past three years, largely reflecting the effect of euro area uncertainties on trade and investment. GDP contracted by 1.7% in 2012 and Moody's expects GDP growth to range between 1.5% -2.5% in 2013-14, which is lower than the median growth rate for similarly rated peers. Serbia's rating also incorporates macroeconomic imbalances, as reflected in wide current account deficits, high inflation and unemployment and rising external debt. The rating outlook would improve with (1) a material reduction in government fiscal deficits and debt levels; or (2) a sustainable acceleration in growth that also reduces existing macroeconomic imbalances. Conversely, downward pressure on the rating could arise from (1) continued high fiscal deficits and increases in government debt levels to levels beyond what the economy can sustain; or (2) a slowdown or disruption in the EU accession process that suggests that anticipated institutional and operating environment improvements will not occur. =========================== U N I T E D K I N G D O M =========================== CHALLINORS SOLICITORS: Administrators Sell Business to Rivals ------------------------------------------------------------- Edward Devlin at insidermedia.com reports that the operations of Midlands law firm Challinors have been sold to a group of rivals, including two based in Birmingham, after RSM Tenon was appointed as administrator of the stricken business. The report relates that a substantial part of the firm's operational functions have been sold to various law firms including Clarke Willmott and Shoosmiths. As part of the client protection work, all the live client files were transferred to the new firms prior to the administration. The company's personal injury caseload was sold earlier this week to Liverpool firm SGI Legal, the report relates. According to the report, Challinors originally filed notice of intention to appoint insolvency practice KSA as administrator in July 2013 before replacing the firm with RSM Tenon, which itself was bought in a pre-pack deal by Baker Tilly on Aug. 22, 2013. Andrew Hosking and Simon Bonney from RSM Tenon were officially appointed as joint administrators of Challinors on Aug. 21, 2013, the report notes. insidermedia.com relates that the firm, which had offices in Birmingham, West Bromwich, Halesowen, Nottingham, Leicester, Loughborough and Wolverhampton, was placed into administration following a statutory demand issued by a creditor against the Challinors partners. CO-OPERATIVE BANK: Leaders to Reassure Bail-Out on Course --------------------------------------------------------- Roland Gribben at The Telegraph reports that leaders of the Co-operative Group will this week attempt to head off suggestions that the financial crisis facing the GBP8 million strong mutual group is even worse than forecast. The group announced a GBP1.5 billion capital raising program to cover the bail-out of its banking arm just two months ago, The Telegraph recounts. Further write-offs on loans in its commercial property and mortgage loans business that largely came with the acquisition of Britannia Building Society have been forecast to top GBP1 billion, The Telegraph notes. But interim financial results to be announced tomorrow, Aug. 29, are expected to show a lower figure, The Telegraph states. The latest estimates suggest the total will be under the GBP1 billion mark, although senior executives recognize that whatever the size of the reduction, it will do nothing to ease the crisis or the need for a costly bail-out, The Telegraph discloses. Bondholders, concerned that they will end up as losers in the reconstruction program, have written to George Osborne, Chancellor of the Exchequer, and Mark Carney, Governor of the Bank of England, for help, according to The Telegraph. The Bank has insisted the Co-op finds GBP1.5 billion to strengthen reserves, The Telegraph states. The Co-op parent organization is aiming to provide GBP1 billion to retain a majority holding in the bank, with the balance coming from the sale of its life and savings business to Royal London, and the disposal of its general insurance operation, The Telegraph says. Euan Sutherland, the Co-op Group's new chief executive, and Niall Booker, who replaced Barry Tootell as bank chief executive, will attempt to provide reassurance with this week's results that the bail-out program is on course, The Telegraph discloses. Some analysts, however, believe the group will be forced to increase bank writedowns later this year with the result that the parent will face fresh strains, The Telegraph notes. Co-op Bank -- part of the mutually owned food-to-funerals conglomerate Co-operative Group -- traces its history back to 1872. The bank gained prominence for specializing in ethical investment. It refuses to lend to companies that test their products on animals, and its headquarters in Manchester is powered by rapeseed oil grown on Co-operative Group farms. Founded in 1863, the Co-op Group has more than six million members, employs more than 100,000 people and has turnover of more than GBP13 billion. * * * As reported by the Troubled Company Reporter-Europe on May 13, 2013, Moody's Investors Service downgraded the deposit and senior debt ratings of Co-operative Bank plc to Ba3/Not Prime from A3/Prime 2, following its lowering of the bank's baseline credit assessment (BCA) to b1 from baa1. The equivalent standalone bank financial strength rating (BFSR) is now E+ from C- previously. JESSOPS: Costa's Plans to Extend Into Firm's Empty Store -------------------------------------------------------- Oxford Mail reports that the Costa coffee shop in the Market Place, Abingdon, is planning to extend and take over the Jessops store next door which has stood empty since January. The report relates that Jessops, the national camera chain, went into administration last year and shut its shops early this year. Costa's has applied for planning permission to the Vale of White Horse District Council to change the Jessops shop signs to Costa's signs, the report notes. A decision is due to be taken by October 16. MORE FINANCIAL: High Court Winds Up Firm Over Misleading Claims --------------------------------------------------------------- More Financial (MFL) Ltd, a loan brokerage company that took money from people in financial difficulties based on misleading claims, was wound up by the High Court on Aug. 19, 2013, following an investigation by the Insolvency Service. The petition to wind up the companies was brought on behalf of the Secretary of State for Business, Innovation and Skills in the public interest. MFL was wound up for taking a "brokerage" fee from clients seeking loans, based on misleading claims made on a number of websites and through telephone sales. The company claimed that its services left virtually no chance of failing to get a loan and that more than 90 per cent of its lenders were not on other comparison websites. It also claimed that it did not charge upfront fees, while charging �69.50 'processing fees' for presenting the client with a lender and lender options. In fact, none of those claims were true and all MFL did was to provide details of lenders to the clients who would then have to apply separately. Investigators found that over 50,000 customers had paid the up- front fee between January 2012 and January 2013, including over 10,000 in January 2013 alone. Only one client in every thousand appears to have been successful in their applications. Furthermore, there were claims that the company deducted fees from the bank accounts of clients without permission. Because of the lack of transparency with which the company operated, clients were unable to obtain refunds or make complaints either by telephone or by email. These failings were aggravated by the fact that: * The company was controlled by an individual not named as a current director at Companies House and who regularly used an alias. * The directors and shareholders failed to co-operate and actively hindered the investigation. * The company failed to maintain or preserve adequate trading records. * The company filed false or unverifiable accounts at Companies House. * Over GBP1 million was taken from the company's account after the investigation started without proper explanation. Commenting on the case, Alex Deane, an Investigation Supervisor with the Insolvency Service, said: "This company targeted individuals, many of whom were already in financial difficulties, and promised loans which it failed to deliver. This is unacceptable and the winding up orders should serve as a warning that the Insolvency Service will close down companies that operate in this way." The petition to wind up the company in the public interest was presented to the High Court under s124A of the Insolvency Act 1986 on June 13, 2013, following confidential enquiries carried out by Company Investigations under section 447 of the Companies Act 1985, as amended. A provisional liquidator was appointed to the company on June 13, 2013 and the company was wound up on Aug. 19, 2013. =============== X X X X X X X X =============== * Moody's Outlook on Euro Area Periphery Remains Negative --------------------------------------------------------- The countries of the euro area periphery (Cyprus, Greece, Ireland, Italy, Portugal and Spain) have made significant progress towards addressing the internal and external imbalances and the associated losses in competitiveness that were among the drivers of their unsustainably high public debt burdens, says Moody's Investors Service in a Special Comment entitled "Update on Structural Reforms in the Euro Area Periphery." However, these improvements are not in and of themselves a sufficient condition for sustainable growth, and the rating outlooks on periphery countries remain negative to reflect their remaining adjustment needs, the ongoing institutional developments at the euro area level and their overall sluggish macroeconomic prospects. Overall, Moody's does not expect the periphery to record pre-crisis GDP levels before 2016-17. Moody's notes that the reversal of the current account imbalances in the periphery continued last year. As of the end of 2012, all periphery countries had restored their current account balances to mid-1990 levels (-1.0% on average). Moreover, the rating agency expects Ireland, Portugal and Spain to be in surplus by the end of this year. The periphery's positive trade balance since 2011 is the main driver of these changes in the current account. These trade balance gains were initially driven by a contraction in imports, but have since been increasingly driven by stronger exports due to competitiveness improvements and increasing geographical diversification. However, it is unclear whether these competitiveness gains are sufficiently sustainable to enable the adjustment to be completed. Moody's also notes that structural reform programs have also progressed (with full implementation in some cases) for most periphery countries, which should provide some long-term support to the competitiveness gains. However, Moody's says that the return to pre-crisis GDP levels is taking longer for these countries than for other economies that have experienced financial shocks in the past. One of the reasons for this longer adjustment timeline may be that the common euro area currency prevents these countries from using a nominal depreciation of their currencies and requiring "internal devaluations" in order to improve international competitiveness. The report is an update on a Special Comment published last year. In it, Moody's re-assesses the extent of the economic adjustment achieved to date by the euro area periphery, and consider how far they still have to go. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *