TCREUR_Public/131016.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, October 16, 2013, Vol. 14, No. 205



ALCATEL-LUCENT SA: Gov't Faces Dilemma Over New Labor Law
GAD: French Court Accepts Rescue Plan; Around 900 Jobs Affected


PRAKTIKER AG: 130 Stores Across Germany Due to Close This Week


A-WEAR: To Ramp Up Wholesale Operation Under Rescue Plan
ENTRY FUNDING: Fitch Cuts & Withdraws D Ratings on 4 Note Classes
KINTYRE CLO I: S&P Raises Rating on Class D Notes to 'CCC+'


ALITALIA SPA: Shareholders Back EUR500-Mil. Rescue Package


GLOBAL TIP: S&P Affirms Preliminary 'BB' CCR; Outlook Stable


INVESTTRADEBANK JSC: S&P Assigns B+ LT Counterparty Credit Rating
REGIONAL DEV'T BANK: Put Under Temporary Administration by DIA
* Russian Refiners May Face Margin Hit From Tax Changes

U N I T E D   K I N G D O M

EDU UK: S&P Assigns 'B-' Corp. Credit Rating; Outlook Stable
HONOURS PLC: Fitch Affirms 'BB' Rating on Class D Notes
INEOS GROUP: Plant Closure Preparations Begin as Strike Looms
* UK: Scottish Business Failures Down 27% in Third Quarter 2013
* UK: Number of Zombie Companies Up 16%, Begbies Traynor Says


* EUROPE: Finance Ministers Seek Ways to Create Bailout Fund
* Upcoming Meetings, Conferences and Seminars



ALCATEL-LUCENT SA: Gov't Faces Dilemma Over New Labor Law
Grainne McCarthy at The Wall Street Journal reports that the
Alcatel, the ailing Paris-based telecom-equipment maker, said
that it had to slash some 10,000 jobs world-wide, including 900
in France, closing offices in cities like Toulouse and Rennes.

Within hours, several members of Francois Hollande's government,
including the president himself, suggested that the French cuts
were too deep, the Journal relates.  The next morning,
Mr. Hollande's prime minister threw down the gauntlet: He was
prepared to use a new labor law to block the layoffs if Alcatel
didn't reach a compromise with its unions, the Journal recounts.

The threat was remarkable because the law, which took effect just
three months ago, had been touted as a boon for business,
allowing companies to be more nimble in restructuring, partly by
making it easier for them to cut pay and working hours in
difficult times, the Journal states.  Instead, the government was
using it to prod Alcatel to dial back job cuts, the Journal

According to the Journal, the episode lays bare a deeper dilemma
facing France's year-and-a-half-old Socialist government: how to
be more pro-business without alienating left-wing factions of its
party and the electorate.

The issue stems partly from Mr. Hollande's strategy of towing the
middle ground: delivering enough stern rhetoric to please his
left-wing parliamentary majority and hoping that investors aren't
listening, the Journal discloses.  As the Alcatel-Lucent
situation shows, that balancing act is hard to pull off, the
Journal says.

The government's threat to block Alcatel's restructuring plan
frustrated France's business establishment, which read it as a
sign that the same old script applied to the new, supposedly
more-flexible labor system, the Journal states.  "We shouldn't
politicize this situation," the Journal quotes French business
lobby chief Pierre Gattaz as saying.  "Alcatel-Lucent must do
everything it can to adapt, restructure and survive."

Investors, who have pushed down Alcatel's shares, concluded that
government heavy-handedness could raise the eventual cost of the
company's restructuring and drag it out, both undesirable
outcomes for a company racing to turn itself around, the Journal

French officials stressed that the government is seeking to
pressure Alcatel to reach a deal with its unions under the new
labor law, something Alcatel has said it intends to try to do
anyway, the Journal relays.

Saddled with debt, the French government no longer has much money
to throw at struggling businesses and often runs into European
Union restrictions when it seeks to intervene, the Journal notes.

In the case of Alcatel, the government understands the desperate
need for a turnaround, the Journal says.  The company, born out
of the ill-fated 2006 merger of France's Alcatel and Lucent
Technologies of the U.S., has suffered losses in all but one of
the years since, the Journal recounts.

In fact, part of Alcatel-Lucent's struggle in Europe stems from
the highly competitive market environment that the EU -- with
France's consent -- has created across the continent, opening it
widely to Asian suppliers who have been shut out of the U.S.
because of security concerns, the Journal states.

Alcatel's latest cuts, spearheaded by its new chief executive,
Michel Combes, represent its sixth restructuring plan in six
years, the Journal relates.  The company has already axed more
than 20,000 jobs since the merger, the Journal notes.

Headquartered in Paris, France, Alcatel-Lucent is a developer and
manufacturer of telecommunications equipment, with sales of
approximately EUR15.3 billion for fiscal year 2011.

GAD: French Court Accepts Rescue Plan; Around 900 Jobs Affected
Stuart Todd at just-food reports that a French court has accepted
a rescue plan for Gad involving around 900 job cuts.

"Without significant restructuring, Gad's surplus production
would have condemned it to going out of business," just-food
quotes Gad's parent company, Cecab, as saying.

Cecab added Gad's difficulties were partly a result of it
"struggling" to compete with rivals in northern Europe able to
discount on prices due to wage levels being up to three times
lower than in France, just-food relates.

Gad, which has accumulated debts of around EUR100 million
(US$135.6 million), went into administration in February,
just-food recounts.  The company employs 1,700 staff, just-food

One of its two abattoirs -- located at Lampaul-Guimiliau in
Brittany -- will close, as will a cold meats plant and Gad's HQ,
just-food says.  The company will operate from a single site
where almost 350 jobs could be created, just-food states.

Had the court rejected the plan, Gad would have faced
liquidation, just-food notes.

Gad is a French pork firm.


PRAKTIKER AG: 130 Stores Across Germany Due to Close This Week
Charles Kingston at Refire reports that Praktiker AG's
preliminary insolvency administrator Christopher Seagon in
Hamburg said 130 of the Praktiker stores across Germany are due
to start closing their doors this week.

According to Refire, no offers have been received to take over
the chain, at any price, although there has been good demand for
many of the individual stores to be operated under different
brand names.

Praktiker's more upmarket DIY subsidiary Max Bahr, by contrast,
has received several takeover offers from private equity groups,
and the future for its staff and 132 outlets looks much
healthier, Refire notes.  The number includes 54 of the better-
performing Praktiker stores, which have been re-branded in recent
months since the chain's insolvency, Refire states.

According to Refire, a report in the Frankfurter Allgemeine
Zeitung suggested that in addition to an offer from DIY
competitor Hellweg, the supermarket chain Globus had also tabled
a non-binding offer for Max Bahr.

Refire, citing business magazine Wirtschaftswoche, says the
Dortmund-based DIY chain Hellweg, which had already established a
common purchasing alliance with Praktiker, is also trying to
stitch together a consortium to bid for the healthier (but still
insolvent) Max Bahr grouping.  The consortium is said to include
former Max Bahr CEO Dirk Moehrle, the Wuppertal-based
Einkaufsbuero deutscher Eisenhandler EDE and the British home
improvement chain Kingfisher, along with support from the
Trautwein family (owners of EDE) whose Etris Bank has been the
one institution keeping Max Bahr alive, Refire relates.

                            Max Bahr

Separately, Bloomberg News' Alex Webb, citing, reports that Globus Group must still agree
rental contracts with the stores' landlords.

Bloomberg notes that while Hellweg has agreed deal with lessor
Royal Bank of Scotland, it does not have the financing to
purchase the stores.  The stores are valued at between EUR100
million and EUR150 million, Bloomberg discloses.

A deal could be completed this week, Bloomberg says.

Max Bahr's administrators want to find a solution by the end of
the month, Bloomberg states.

Praktiker AG is a German home-improvement retailer.


A-WEAR: To Ramp Up Wholesale Operation Under Rescue Plan
Mark Paul at The Irish Times reports that the rescue plan being
proposed for the A-Wear chain of more than 30 fashion outlets,
which secured interim examinership this week, includes ramping up
its wholesale operation by supplying huge orders of low-cost
clothing to bigger retailers and websites across Europe.

It is also proposing to close its nine concession outlets in
House of Fraser stores in Britain, which it only opened earlier
this year, as well as reducing the cost of its upward-only leases
in Ireland, The Irish Times discloses.

Most of A-Wear's stock is sourced from Britain, The Irish Times
says.  Jack Stein, a Canadian businessman who bought A-Wear from
the Jesta group last month, is backing a plan to source more of
its stock from lower-cost locations such as India, China and
Turkey, The Irish Times discloses.

The company believes if it does this, it could cut prices by more
than 20% and crack the wholesale market, The Irish Times notes.

In the independent accounts report that accompanied its
examinership application, prepared by KPMG, it states that A-Wear
cannot meet current demand from its wholesale customers because
of cash constraints, The Irish Times relates.

It says A-Wear is in negotiations with "one of the largest
fashion outlets in Europe" for a new wholesaling contract, The
Irish Times relays.

"If [a deal] is successful, it would rapidly expand the market
into which A-Wear can sell," The Irish Times quotes the report as

According to The Irish Times, A-Wear says its cashflow problems
arose after its credit terms became restricted following the
company's previous receiverships.  It said it is unable to meet
wholesale demand from ASOS, the massive UK online-only retailer,
because of stock shortages, The Irish Times notes.

As it builds new relationships with cheaper suppliers, A-Wear
believes its margins will improve, The Irish Times states.

The report reveals A-Wear has been threatened with winding-up
petitions in recent weeks by creditors, The Irish Times
discloses.  It said it ran into trouble with Revenue this summer
over VAT, and is on a payment plan, The Irish Times notes.

According to The Irish Times, the report says A|Wear may close 11
Irish stores, but believes more could be saved if landlords
cooperated on rents.

A-Wear is an Irish fashion retailer.

ENTRY FUNDING: Fitch Cuts & Withdraws D Ratings on 4 Note Classes
Fitch Ratings has downgraded and withdrawn Entry Funding No. 1
PLC's ratings, as follows:

  EUR6.6m class C notes (ISIN: XS0277614888): downgraded to 'Dsf'
  from 'Csf'; assigned a Recovery Estimate (RE) of 'RE0%';

  EUR10.0m class D notes (ISIN: XS0277614961): downgraded to
  'Dsf' from 'Csf'; assigned 'RE0%'; withdrawn

  EUR11.0m class E notes (ISIN: XS0277615000): downgraded to
  'Dsf' from 'Csf'; assigned 'RE0%'; withdrawn

  EUR5.0m class F notes (ISIN: XS0277615265): downgraded to 'Dsf'
  from 'Csf'; assigned 'RE0%'; withdrawn

The downgrades of the ratings to 'Dsf' and the RE0% reflect the
fact that the notes were not fully repaid by their legal final
maturity on 28 September 2013. Hence, the noteholders will not
receive any additional payments.

The class A and B notes were paid in full. Of the EUR8 million
class C initial principal at closing, only EUR1.4 million was
repaid by legal final maturity. The class D, E and F notes did
not receive any principal repayments.

Fitch regards these notes as defaulted due to their failure to
make principal payments in full by their legal final maturity.
The withdrawal of the ratings follows the tranches' default.

KINTYRE CLO I: S&P Raises Rating on Class D Notes to 'CCC+'
Standard & Poor's Ratings Services raised its credit ratings on
KINTYRE CLO I PLC's class B, C, D and E notes.  At the same time,
S&P has affirmed its 'AA+ (sf)' credit rating on the class A

The rating actions follow S&P's credit and cash flow analysis of
the transaction using data from the trustee report, dated
July 31, 2013.  S&P has considered recent developments in the
transaction and reviewed its performance under our relevant

The class A to D notes continue to pass their par value coverage
tests at the required threshold under the transaction documents.
These notes are passing at higher levels since S&P's previous
review on March 21, 2012.  The class E notes continue to fail
their par value coverage test. However, the degree of failure
since S&P's previous review has reduced.  These improvements were
mainly due to lower haircuts on the par coverage numerator and
reduced the denominator (due to the partial pay down of the
class A notes' principal).

S&P has observed that the portfolio's weighted-average spread has
increased to 3.78% from 3.15% since its previous review.  The
available credit enhancement for all classes of notes has
increased.  This is mainly due to deleveraging of the class A
notes after the reinvestment period ended in December 2012.

The portfolio's weighted-average maturity remains similar to
S&P's previous review, while the performing collateral
portfolio's credit quality has marginally improved.  The scenario
default rates (SDRs) at each rating level have fallen as a
result.  The SDRs are the minimum level of portfolio defaults
that S&P expects each tranche to be able to support at the
specific rating level.

S&P conducted its cash flow analysis to determine the break-even
default rates (BDRs) for each rated class of notes at their
respective rating levels.  The BDR represents our estimate of
maximum gross defaults.  S&P incorporated various cash flow
stress scenarios using its standard default patterns, levels, and
timings for each rating category assumed for each class of notes,
in conjunction with different interest rate scenarios, as
outlined in S&P's 2009 corporate collateralized debt obligation
(CDO) criteria.

Of the portfolio's performing assets, 7.70% are non-euro
denominated -- of which a small portion (1.8%) is not hedged with
any of the counterparties to the transaction.  S&P has applied
foreign exchange stresses to non-euro denominated assets, as they
are exposed to currency risk, in line with its current
counterparty criteria.  S&P applied these stresses as the hedge
counterparties are not in line with the current framework under
its current counterparty criteria.

Based on S&P's analysis above, although the class A notes have
been deleveraging since the end of the reinvestment period, it
considers the available credit enhancement for the class A notes
to be commensurate with the currently assigned rating.  S&P has
therefore affirmed its 'AA+ (sf)' rating on the class A notes.

S&P's credit and cash flow analysis for the class B and C notes
indicates that the available credit enhancement is commensurate
with higher ratings than previously assigned.  S&P has therefore
raised its ratings on these classes of notes.

"In our previous review, we based our ratings on the class D and
E notes on the results of the supplemental tests outlined in our
2009 corporate CDO criteria.  Due to the positive rating
migration and the partial deleveraging of the class A notes, the
class D and E notes pass our supplemental tests at higher rating
levels than previously assigned.  As the available credit
enhancement for these classes of notes has increased, we have
raised our ratings on these classes of notes," S&P said.

S&P has raised its rating on the class D notes (to 'BB+ (sf)'
from 'CCC+ (sf)') by six notches due to the transaction's
positive performance since its previous review and the outcome of
its supplemental tests.  As S&P's previous review, although its
cash flow analysis suggested higher ratings, it had taken rating
action based on the supplemental test.

KINTYRE CLO I is a cash flow collateralized loan obligation (CLO)
transaction that securitizes loans granted to speculative-grade
corporate firms.  The transaction closed in March 2007 and is
managed by BNP Paribas.


SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.  The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:



                Rating          Rating
Class           To              From

EUR350 Million Floating-Rate Notes
Ratings Raised

B               AA- (sf)        A+ (sf)
C               A (sf)          BBB+ (sf)
D               BB+ (sf)        CCC+ (sf)
E               CCC+ (sf)       CCC- (sf)

Rating Affirmed

A               AA+ (sf)


ALITALIA SPA: Shareholders Back EUR500-Mil. Rescue Package
Tommaso Ebhardt and Lorenzo Totaro at Bloomberg News report that
Alitalia SpA secured a EUR500 million (US$677 million) rescue
package from shareholders, banks and the state-owned postal
service to avert a collapse of the airline that's losing more
than EUR1.5 million a day.

Alitalia said that the company's board members backed a plan to
raise EUR300 million by offering new shares to existing
shareholders, Bloomberg relates.

According to Bloomberg, Air France-KLM Group, the biggest
investor with a 25% stake, said its representatives agreed to
support the measure to "enable continued operations at Alitalia."

Italy's postal company Poste Italiane SpA agreed to contribute
EUR75 million for Alitalia, while the country's two biggest
banks -- UniCredit SpA and Intesa Sanpaolo SpA -- will guarantee
as much as EUR100 million for eventual unopted rights in the
capital increase, Bloomberg discloses.  They will also provide a
EUR100 million bridge-to-equity loan, Bloomberg says, citing a
release issued on Friday.

                         Air-France Talks

Separately, Bloomberg News' Andrea Rothman and Sonia Sirletti
report that Air France-KLM Group is leaning against participating
in a capital increase at Alitalia as it seeks to preserve funds
and the Italian airline shows no sign of a turnaround.

According to Bloomberg, three people familiar with the talks said
that while Air France-KLM directors on Alitalia's board support a
rescue to avert a bankruptcy of the Rome-based carrier, the
French airline is resisting the purchase of new stock.
Air France-KLM, whose 25% stake would drop by more than half if
it doesn't subscribe to a capital increase, has about a month to
decide, Bloomberg notes.

The capital increase is part of a EUR500 million (US$677 million)
bailout engineered under government supervision last week as
Alitalia's reserves dwindled, competition intensifies and its
fuel supplier threatened to halt deliveries, Bloomberg states.

Two of the three people familiar with the talks said the
airline's stance on Alitalia is preliminary and the company may
reconsider its commitment if conditions change, Bloomberg

Air France-KLM itself lost money last year and is eliminating
thousands of jobs to turn around domestic operations, raising
objections to fund a partner that has been unprofitable for
years, Bloomberg discloses.

Air France-KLM's stake in Alitalia, acquired in 2009, would
require the airline to commit about EUR75 million to anchor its
holding, Bloomberg states.  The capital increase will comprise
EUR300 million of the package, Bloomberg notes.

According to Bloomberg News' Messrs. Ebhardt and Totaro, the head
of Italy's postal service, which is helping bankroll an Alitalia
rescue, plans to meet his counterpart at Air France-KLM to sway
the Italian carrier's biggest investor to buy into a capital

Poste Italiane Chief Executive Officer Massimo Sarmi was set to
discuss the Alitalia business plan with Alexandre De Juniac at
Air France-KLM yesterday in Paris, Bloomberg says, citing
Corriere della Sera, Bloomberg relates.

According to Bloomberg, an Air France-KLM spokesman said on
Monday the company had no comment on its involvement in the
Alitalia rescue.

Investors have a month from Oct. 16 to decide whether to buy new
stock, Bloomberg discloses.

Daniel Michaels, Gilles Castonguay and Deborah Ball at The Wall
Street Journal report that Alitalia's latest tribulations
illustrate the problems faced by Europe's former national
airlines in deregulated markets and with limits to the subsidies
on which they long relied.  Despite Alitalia's 2008
restructuring, it has lost roughly a third of its home market and
almost 20% of its market share internationally, the Journal says,
citing Innovata, an aviation consulting firm.

The return to insolvency of a national symbol that generations of
politicians sought to protect epitomizes Italy's failure at
industrial policy, the Journal states.

                          About Alitalia

Alitalia-Compagnia Aerea Italiana has navigated its way through
a successful restructuring.  After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009.  Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania.  Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM.  An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.


GLOBAL TIP: S&P Affirms Preliminary 'BB' CCR; Outlook Stable
Standard & Poor's Ratings Services said that it affirmed its
preliminary 'BB' long-term corporate credit rating on
Netherlands-based trailer services provider Global TIP Holdings
One B.V. (TIP).  The outlook is stable.

At the same time, S&P affirmed its preliminary 'BB+' issue
ratings on the EUR203 million senior secured term loan B and
EUR55 million revolving credit facility (RCF) to be issued by
Global TIP Finance B.V.  The recovery ratings on the term loan B
and RCF are unchanged at '2', indicating S&P's expectation of
substantial (70%-90%) recovery in the event of a payment default.

In addition, S&P assigned its preliminary 'BB+' issue rating to
the US$100 million senior secured term loan C to be issued by
Global Finance America, LLC.  The recovery rating on the term
loan C is '2'.

Global TIP Finance and Global Finance America are fully owned
subsidiaries of TIP.

The final ratings are subject to the successful completion of
TIP's acquisition of TIP Trailer Services, and to:

   -- The placement of the senior secured term loans totaling
      EUR278 million;

   -- The placement of the six-year senior RCF of EUR55 million;

   -- S&P's receipt and satisfactory review of all final
      transaction documentation.

Accordingly, the preliminary ratings should not be construed as
evidence of the final rating.  If Standard & Poor's does not
receive the final documentation within what it considers to be a
reasonable time frame, or if the final documentation departs from
the materials S&P has already reviewed, it reserves the right to
withdraw or revise its ratings.

The affirmation reflects S&P's understanding that TIP's
acquisition of TIP Trailer Services is on track for completion
later this month, and on the same terms that S&P anticipated.
The affirmation also reflects S&P's assessment of the company's
business risk profile as "fair" and its financial risk profile as
"intermediate" post acquisition.

"Our assessment of TIP's business risk profile reflects the
company's relative small size in what we consider to be a
fragmented and cyclical industry.  Conditions in the European
trailer operating lease industry are closely linked to economic
conditions.  Therefore muted demand and oversupply, coupled with
TIP's fleet reduction in 2009, have weakened the company's
utilization rates and profitability.  Our assessment of TIP's
business risk profile is also constrained by the significant
number of long-term contracts that are due to expire in the next
two years and the challenge of renewing or closing new contracts
in current economic conditions.  That said, we consider that TIP
remained resilient during previous economic downturns," S&P

Partly mitigating these weaknesses is TIP's position as one of
the largest pan-European providers of trailer services, with
leading positions in the 16 European countries where it operates.
Furthermore, TIP benefits from a resilient and somewhat
predictable cash flow profile owing to the long-term nature of
its operating lease contracts.  S&P believes that TIP's strategy
to focus on full-service long-term leases (that is, leases
including maintenance and other services) will further support
the company's visibility of future earnings, while a shift in the
fleet mix toward higher-value trailer types will gradually
increase lease rates.

"Under our base case, we consider that TIP's financial ratios are
likely to remain commensurate with an "intermediate" financial
risk profile in the near to medium term.  Our base case includes
a stable or slightly lower utilization rate than the current 84%
growth in the services business, and a smaller fleet size.  Our
assessment also incorporates our understanding that TIP's new
shareholder, HNA Group, one of the largest private conglomerates
in China, does not intend to take dividend payments from TIP, or
to undertake any acquisitions in the medium term.  This is
because HNA Group deems that TIP's cash flows should be used
instead to fund capital expenditures (capex)," S&P added.

Under S&P's base-case operating scenario, it projects that TIP
will be able to maintain adjusted funds from operations (FFO) to
debt of at least 30% and debt to EBITDA of less than 3x, which
are commensurate with the current rating.

S&P could lower the rating if demand weakens, leading to a
decline in utilization and lease rates.  S&P could also consider
a negative rating action if growth in the services business does
not materialize, or if liquidity deteriorates as a result of
higher capex or lower remarketing proceeds than S&P anticipates,
resulting in FFO to debt declining to less than 30% or debt to
EBITDA exceeding 3x.  S&P could also lower the rating if HNA
Group's new financial policy is more aggressive than S&P
anticipates, for example, if it involves a change in TIP's
dividend policy.

An upgrade is unlikely at this point, but would primarily stem
from stronger demand and improved profitability, leading S&P to
revise its assessment of TIP's business risk profile upward.  A
positive rating action would also likely depend on stronger cash
flow generation, resulting in FFO to debt exceeding 40% and debt
to EBITDA falling to and staying at less than 2x.


INVESTTRADEBANK JSC: S&P Assigns B+ LT Counterparty Credit Rating
Standard & Poor's Ratings Services assigned its 'B+' long-term
and 'B' short-term counterparty credit ratings to Investtradebank
JSC, a Russian midsize bank.  The outlook is stable.  At the same
time, S&P assigned an 'ruA+' Russia national scale rating to the

The long-term counterparty credit rating on Investtradebank is
based on the 'bb' anchor for a commercial bank operating only in
Russia, as well as S&P's view of the bank's "moderate" business
position, "weak" capital and earnings, "adequate" risk position,
"average" funding, and "adequate" liquidity.  The stand-alone
credit profile (SACP) is 'b+'.

The stable outlook reflects S&P's view that Investtradebank will
continue to grow in line with the market, keeping its historical
focus on loans to SMEs and collateralized retail lending, and
staying away from riskier mass-market consumer finance lending.
S&P also expects the bank to preserve its prudent risk
management, with stabilization of nonperforming loans at the
current level, as well as an "adequate" liquidity profile.

S&P could lower the long-term rating if the bank accelerates its
growth, leading to the erosion of the capital base, with its RAC
ratio falling below 3%.  A negative rating action could also
result if the bank deviates from its current business focus and
lending discipline.  In particular, if risk costs do not reduce
as S&P anticipates or if asset quality metrics weaken, this could
lead to a downgrade.  Such a development would also indicate
greater vulnerability of the risk profile than S&P anticipates.

S&P will monitor the development of core revenues, which are
crucial to generate capital internally and tend to indicate
stability of a commercial franchise.

A positive rating action is unlikely over the next two years.  It
would necessitate sustainably stronger capital ratios and
earnings than Investtradebank currently displays.

REGIONAL DEV'T BANK: Put Under Temporary Administration by DIA
Itar-Tass reports that the Regional Development Bank in the
Russian North Caucasus Republic of North Ossetia has been placed
under temporary administration by the Deposit Insurance Agency
(DIA) and the National Bank of the Republic.

"The RDB license has been revoked [Mon]day.  The bank does not
exist anymore, which means the occurrence of an insured event.
We will start insurance payments to depositors in two weeks,
following orders from the Republic's head to minimize losses for
the retail clients," Itar-Tass quotes Vadim Tsarakov Tsarakov,
acting chairman of the RDB's Board, as saying.

Mr. Tsarakov said the major cause for the RDB's bankruptcy was a
shortage cash, Itar-Tass notes.

"I cannot say anything about the reasons for this shortage so
far.  Law-enforcement authorities are currently working on it,"
Mr. Tsarakov, as cited by Itar-Tass, said.

According to Itar-Tass, Yaroslav Gudkov, head of the Economic
Security and Anti-Corruption Department of the Interior Ministry
in North Ossetia, said the cash shortage in the bank vault
amounted to RUR1.272 billion and about US$25 million at the
moment of the inspection by the Interior Ministry.

A criminal case has been initiated against the bank's former CEO,
Sergei Doyev, who is accused of embezzling more than RUR300
million (US$9.3 million) in government funds, Itar-Tass

* Russian Refiners May Face Margin Hit From Tax Changes
The burden of higher Russian oil taxes over the next three years
will be split between the ultimate consumers and the refining
sector, possibly leading to weaker margins and earnings, Fitch
Ratings says. The impact, however, will probably not be enough to
drive rating downgrades, especially as the refining margins in
Russia are currently far higher than in Europe.

The Russian authorities recently enacted a plan to gradually
increase the mineral extraction tax (MET) over the next three
years while cutting oil export duty by the same amount. This
should increase net tax revenue by RUB175 billion (US$5.5
billion), as only around a half of Russia's oil is exported,
while almost all oil produced in the country is subject to MET.
We believe this will have no material effect on integrated
companies with larger upstream divisions, like Rosneft, Tatneft
and LUKOIL. This is because total tax on exported oil will remain
the same, while the lower export duty will push up unregulated
domestic oil prices, offsetting the higher MET. Refining margins,
however, will probably be squeezed.

Higher domestic oil prices could result in refiners raising fuel
prices to maintain stable margins. However, they will probably
face pressure from the state to keep unregulated fuel prices
unchanged or to increase them only gradually to curb inflation.

Even if fuel prices were unchanged, we still expect oil refining
to remain profitable in the medium term due to the difference
between taxes on crude and taxes on oil products. At US$8-US$10 a
barrel, Russian refiners' margins are two-to-three times higher
than those of European peers.

If fuel prices do remain unchanged, the tax move will probably
have the biggest impact on Alliance Oil, where refining volumes
exceeded oil production by 49% in 2012, and Bashneft, where the
refining excess was 34%. We estimate that Alliance Oil and
Bashneft's EBITDA could fall by up to 10% in absolute terms by
2016 under these circumstances. However, the more likely scenario
is that the state will allow oil companies to pass on at least a
part of higher costs to final customers, leading to the higher
tax burden being divided between refiners and households.

Plans to equalize export duties on crude and fuel oil in 2015
could squeeze margins further, however we believe that this is
likely to be delayed by at least one or two years to give
companies time to complete facilities upgrades and maintain their
profitability. Russian refineries generally have relatively low
complexity and low light product yield, while fuel oil production
is high. Therefore, if fuel oil duties were raised, this would
reduce the downstream profitability of companies such as Rosneft
that are falling behind on their modernization programs.

U N I T E D   K I N G D O M

EDU UK: S&P Assigns 'B-' Corp. Credit Rating; Outlook Stable
Standard & Poor's Ratings Services assigned its 'B-' long-term
corporate credit rating to EDU UK Bondco PLC (Study Group), a
special-purpose entity owned by U.K.-based provider of university
access programs, Study Group.  The outlook is stable.

At the same time, S&P assigned its 'B-' long-term issue rating to
the GBP205 million senior secured notes due 2018 issued by EDU UK
Bondco PLC.  The recovery rating on the notes is '4', indicating
S&P's expectation of average (30%-50%) recovery in the event of a
payment default.

The rating on Study Group reflects S&P's view of the company's
"weak" business risk profile and its "highly leveraged" financial
risk profile.

The final terms of the completed refinancing were broadly in line
with S&P's expectations when it assigned its preliminary 'B-'
corporate credit rating on Sept. 9, 2013.

Study Group is a provider of university access and preparation
programs and English language courses to international students,
as well as a provider of vocational courses to domestic students.
Its learning centers and colleges are located mainly in the U.K.
and Australia, with a small presence in the U.S.

The stable outlook reflects S&P's opinion that Study Group should
be able to maintain sufficient financial flexibility to meet its
debt service requirements over the next 12 months, which are
limited to servicing the interest on its senior debt instruments.
In S&P's base-case scenario, it anticipates that Study Group will
derive positive organic revenue and nominal EBITDA growth thanks
to the increasing attractiveness of its offer to university
partners and also to a growing community of international
students.  S&P views "adequate" liquidity, including more than
15% headroom under the revolving credit facility's covenant, and
adjusted EBITDA cash interest cover of 1.5x or more, as
commensurate with a 'B-' long-term rating.

S&P could lower the rating if unexpected operating setbacks were
to cause earnings generation to decline to an extent that
adjusted EBITDA interest cover -- excluding subordinated
preference certificates accruing interest -- fell below 1.5x, or
if S&P believed that Study Group's liquidity uses could exceed
its sources or that financial covenant headroom could contract to
under 15% over the next 12 months.

S&P sees limited rating upside over the next 12 months, given its
expectations of continuously high leverage and weak interest
coverage over the period.  However, S&P might consider a positive
rating action if Study Group's adjusted EBITDA cash interest
coverage ratio improved to above 2.0x, while it maintained
positive free cash flow and adequate liquidity.

HONOURS PLC: Fitch Affirms 'BB' Rating on Class D Notes
Fitch Ratings has affirmed all ratings on Honours Plc, as

Class A1 notes affirmed at 'AA+sf'; Outlook Stable
Class A2 notes affirmed at 'AA+sf'; Outlook Stable
Class B notes affirmed at 'Asf'; Outlook Stable
Class C notes affirmed at 'BBBsf'; Outlook Stable
Class D notes affirmed at 'BBsf'; Outlook Stable

The transaction is a securitization of UK not-for-profit student
loans originated by the UK government. The loans were originated
to individuals who commenced higher education courses prior to
September 1998.

Key Rating Drivers

Cumulative defaults to date have remained in line with Fitch's
expectations, and all notes deficiencies have been cleared with
excess spread to date.

In Fitch's opinion, the current ratings are consistent with
levels of, credit enhancement (CE) as of September 2013, being
34.6% for the class A1 and A2 notes, 18.7% for the class B notes,
10.1% for the class C notes and 4.4% for the class D notes. Pro-
rata redemption, which started in August 2013 following the
fulfillment of the relevant note amortization condition, does not
affect the ratings of the notes.

Fitch also sees the current ratings as compatible with the
significant levels of loans in deferment status (85.9% of the
non-defaulted loan portfolio). The UK sovereign is essentially
committed to indemnify the transaction for any such loans still
outstanding 25 years after origination at the principal
outstanding amount and any unpaid interest, provided that they
are not in arrears. In effect, the transaction would be exposed
to the credit of these borrowers only if these loans become due
for repayment.

The transaction also benefits from significant excess spread as
the yield on the loans after the subsidy netting (a swap of the
loans' RPI for the notes' Libor provided by the UK government)
amounts to 2.69% over Libor, either in the form of cash
collections from repayment loans or capitalization of unpaid
interest on deferred loans.

In Fitch's opinion, portfolio collections should be enough to
service the senior costs and notes interest, despite the now
small size (5%) of the portfolio in repayment status. This is
because portfolio receipts are largely complemented by
indemnities to be paid by the UK government in relation to
cancelled loans. Since such indemnities are due to remain limited
until 2017, there is still a marginal risk that portfolio
collections may be insufficient to service senior costs and notes
interest, particularly if RPI is to rise significantly and the
subsidy netting to be paid to the UK government increases as a
result. Fitch however considers the GBP20 million liquidity
reserve in an account with Deutsche Bank (A+/Stable/F1) as
largely sufficient to service the relevant liabilities. Fitch
also views the current rating on the class C and D notes as
compatible with the risk of a possible shortfall in interest
payment, as in the agency's view this shortfall would only be

Rating Sensitivities

Fitch estimates that over the past year around 5% of loans in
deferred status have become due for repayment, or 'reinstated'.
Based on the assumption that deferred loans are to be reinstated
at a pace of 5% per year going forward, Fitch calculated that the
class D notes would sustain 15% defaults among such reinstated
loans. The corresponding figures for the class C and B notes are
28% and 48%, respectively. On the basis of this analysis, Fitch
sees the current ratings as adequately reflecting the resilience
of each class of notes.

INEOS GROUP: Plant Closure Preparations Begin as Strike Looms
Roland Gribben at The Telegraph reports that preparations have
begun to shut the Grangemouth oil refinery ahead of a strike
planned by Unite union members that had threatened to disrupt
fuel supplies to much of Scotland.

Ineos ordered the shutdown work as a precautionary safety measure
ahead of the 48-hour stoppage scheduled to start on Sunday, The
Telegraph relates.  The move came as arbitration talks aimed at
avoiding the closure got under way in Glasgow on Monday, The
Telegraph notes.

According to The Telegraph, arbitration service ACAS was seeking
a deal to settle a dispute between Ineos and Unite over Stephen
Deans, a convenor at the plant and the union's most important
official in Scotland.

Unite, the biggest union at the plant, called the strike in
support of Mr. Deans, chairman of Unite Scotland and the Falkirk
Constituency Labour Party, The Telegraph recounts.  He was
involved in a Labour Party row over the selection of a
parliamentary candidate and cleared of any wrong-doing but was
suspended and then reinstated by Ineos, The Telegraph discloses.

The company has launched an investigation into whether he has
abused his position at the plant, The Telegraph relays.

According to The Telegraph, Ineos has told Unite its action is
"completely irresponsible" and is dismayed that the Deans issue
has overshadowed the threat of closure hanging over the loss-
making petrochemical plant and the risk to 800 jobs there.

As reported by the Troubled Company Reporter-Europe on Oct. 10,
2013, The Scotsman related that the future of Scotland's biggest
manufacturing plant was thrown into further doubt after Ineos
revealed that its high costs had forced the closure of a business
it supplies.  Ineos said that one of its divisions, a paint and
glue factory in Hull, had been taking up to 20% of Grangemouth's
ethylene but it could no longer compete with lower-cost raw
materials being imported from the United States and Saudi Arabia,
according to The Scotsman.  In a statement issued on Oct. 4, the
company, as cited by The Scotsman, said it was writing down the
value of the petrochemicals plant from GBP400 million to zero.
Calum MacLean, chairman of the petrochemicals business, described
the business as "worthless" and repeated earlier messages that it
would close by 2017 unless the union agreed to cost-cutting and
the company received government support for a bank loan, The
Scotsman relayed.  The refinery and the petrochemicals businesses
together have lost GBP150 million a year in each of the last four
years and the pension scheme has a GBP200 million deficit, The
Scotsman disclosed.

INEOS Group is the world's third largest chemical company
consisting of some 15 businesses.  Product lines include ethylene
oxide-based specialty and intermediate chemicals, fluorochemicals
used as refrigerants and propellants, and phenol and acetate
products. INEOS Chlor makes chlor-alkali chemicals.  INEOS Group
was formed in 1998 after CEO Jim Ratcliffe, who controls the
group, led a management buyout.  It now operates more than 60
manufacturing facilities in 13 countries worldwide.  Ratcliffe
has placed INEOS among the world's top chemical companies (with
ExxonMobil, Dow, and BASF) through his many and varied

* UK: Scottish Business Failures Down 27% in Third Quarter 2013
The Herald reports that figures analyzed by KPMG show that
Scottish business failures in 2013 remain well below their levels
of 2012.

According to The Herald, the total number of insolvencies in the
third quarter of 2013 was 230, a fall of 27% on the same period
last year, following falls of 45% and 46% in the two previous
quarters, compared with the same periods in 2012.

Company failures in the year to Sept. 30 fell by a third to
837 -- a 33% reduction from a year earlier, and the first time an
annualized drop has been recorded since 2008, The Herald

Liquidations fell by 30% to 704 in the third quarter against
2012, while administrations and receiverships remained static at
30, The Herald notes.

Blair Nimmo, head of restructuring for KPMG in Scotland,
suggested a number of factors were behind the drop in
insolvencies, The Herald relates.  "As we take the first steps
toward recovery, our figures suggest an increasingly more benign
environment, with trade creditors, banks and the HMRC now more
likely to explore alternative solutions rather than taking
insolvency action," The Herald quotes Mr. Nimmo as saying.

* UK: Number of Zombie Companies Up 16%, Begbies Traynor Says
Jonathan Moules at The Financial Times report that Begbies
Traynor, the UK's largest insolvency practitioner, has claimed as
many as one in seven businesses can be defined as "zombies"
because they can barely generate enough cash to service interest
on their debts and keep creditors at bay.

According to the FT, an estimated 432,082 businesses are zombies,
Begbies Traynor calculated, by extrapolating from the number of
companies classed as "red alert" by its credit scoring system.
The number is 16% higher than in 2010, and the highest in four
years of running the analysis, the FT notes.

Zombie businesses are those with far fewer tangible assets to
fall back on if there is a reduction in trading than other
companies, the FT discloses.  Their net assets or liabilities
therefore tend to be driven by turnover, the FT says.

Their survival is seen as a problem because they may block more
healthy competitors from growth, helping create jobs and provide
more innovation in the markets they serve, the FT states.

According to the FT, Julie Palmer, a partner at Begbies Traynor,
said: "These corporate zombies have clung on to life over the
last six years due to a low interest rate environment and
increased creditor forbearance, but this benign climate will not
continue forever.

"As unemployment rates fall fast, under Bank of England rules
interest rates could rise as early as 2014.  Even If they go up
by only 0.5%, insolvencies could increase sharply."

Not everyone agrees that zombie businesses are such a risk to
growth since it may well be in creditors interests to help them
flourish, the FT states.

It could well be that many of these zombie companies survive
because creditors are displaying more patience on debt repayments
than in previous downturns, according to the FT.

R3's own analysis, published last month, showed that the number
of companies put into administration fell 16.4 per cent to 1,224
in the first nine months of this year compared with the same
period in 2012, the FT recounts.

The highest proportion of businesses seen to be at risk by
Begbies Traynor were in property, support and professional
services, the FT discloses.  By region, the worst affected areas
were London, the southeast and the Midlands, the FT notes.


* EUROPE: Finance Ministers Seek Ways to Create Bailout Fund
Juergen Baetz at The Associated Press reports that eurozone
finance ministers on Monday sought ways to create a common fund
to restructure or bail out troubled banks, an effort to keep
financial problems in one country from endangering the entire 17-
nation currency zone.

According to the AP, the ministers' discussions in Luxembourg
were still in early stages, not least because of resistance from
Germany and other countries that have paid the bulk of Europe's
rescue programs.

The fund would complete Europe's planned banking union and help
restore market confidence, but Berlin and others capitals have
concerns about its legal basis and fear their taxpayers will be
stuck with bills to clean up messy banks in weaker European
economies, the AP notes.

The AP relates that Jeroen Dijsselbloem, who chairs the meetings
of the Eurogroup of finance ministers, said the discussions were
meant to make progress on technical details, but not yet to reach
an overall agreement.  Still, he acknowledged, "we need to
provide full clarity soon."

Before the fund can become operational, European countries aim to
set up a new banking authority with the power to restructure or
unwind banks that went bust, the AP states.  That is expected to
happen once the European Central Bank -- in its new role as
supervisor for the bloc's biggest banks -- has analyzed all
balance sheets to identify possible capital shortfalls by late
next year, the AP says.

* Upcoming Meetings, Conferences and Seminars
Nov. 1, 2013
      NCBJ/ABI Educational Program
         Atlanta Marriott Marquis, Atlanta, Ga.
            Contact:   1-703-739-0800;

Dec. 2, 2013
      19th Annual Distressed Investing Conference
          The Helmsley Park Lane Hotel, New York, N.Y.
          Contact:   240-629-3300 or

Dec. 5-7, 2013
      Winter Leadership Conference
         Terranea Resort, Rancho Palos Verdes, Calif.
            Contact:   1-703-739-0800;


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
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

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