TCREUR_Public/131025.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

            Friday, October 25, 2013, Vol. 14, No. 212



BANK OF CYPRUS: Appoints John Hourican as New Chief Executive


CLESTRA HAUSERMAN: Court Accepts Impala Group's Takeover Offer
HEDIARD: French Grocer Files For Bankruptcy


BD HOTELS: Mulranny Park Hotel Enters Voluntary Liquidation
DUBLIN BUS: Deloitte Called In to Try "Saving" Bus Company
HARLEY MEDICAL: Implants Victim Wins Leave to Apply For Judgment
HOMEBASE IRELAND: Exits Examinership; Almost 500 Jobs Secured
SIAC CONSTRUCTION: In Examinership; Subcontractors Dispute Move


PHARMA FINANCE: Fitch Cuts Rating on Class B Notes to 'BB+'


CABLE COMMUNICATIONS: Moody's Assigns '(P)B1' CFR; Outlook Stable


PORTUGAL: Fitch Affirms 'BB+' LT Foreign & Local Currency IDRs


RCS & RDS: S&P Assigns 'B+' CCR & Rates EUR300MM Loan 'B+'
REALITATEA MEDIA: Prosecutors Begin Criminal Action vs 3 Firms
* ROMANIA: Insolvencies Up 6 Percent at End-September


BANK ST PETERSBURG: Fitch Rates US$100MM Subordinated Notes 'B+'
STATE TRANSPORT: S&P Revises Outlook to Neg. & Affirms BB- Rating

U N I T E D   K I N G D O M

CO-OPERATIVE BANK: Sr. Bondholders Intact But Uncertainties Rise
FARRELL: Fashionline Goes Into Liquidation
INEOS GROUP: UK Gov't Seeks Buyer for Grangemouth Plant
SMARTSOURCE WATER: Goes Into Liquidation
SPIRIT PUB: Obtains Favorable Terms on Debt

TOWN & COUNTRY: Pub in Administration, Seeks Buyer
WR REFRIGERATION: In Administration, 600 Jobs at Risk
UK: Scottish Corp. Insolvencies Up 45.7% in Three Months to Sept.


* BOOK REVIEW: The Phoenix Effect



BANK OF CYPRUS: Appoints John Hourican as New Chief Executive
Daniel Schafer at The Financial Times reports that John Hourican,
the former head of Royal Bank of Scotland's investment bank, has
made a surprise comeback at the helm of crisis-stricken lender
Bank of Cyprus.

The bank, the Mediterranean island's largest financial
institution until the country's bailout in March, said on Tuesday
evening it had appointed Mr. Hourican as its new chief executive,
the FT relates.

The 43-year-old Irishman was RBS's head of markets and
international banking division but resigned in February amid the
mostly taxpayer-owned bank's GBP390 million settlement over the
manipulation of LIBOR, the FT discloses.

At Bank of Cyprus, the former accountant who headed the RBS
investment bank from 2008 will face the task of having to execute
a three-year restructuring of the lender that was severely hit by
its Greek sovereign debt exposure, the FT says.

BoC has been recapitalized through a bail-in of uninsured
depositors -- the first bank in the eurozone to embark on such a
drastic step, the FT recounts.  It subsequently received the
healthy assets of Cyprus' second-largest bank, Laiki (Popular
Bank), which was shut down under terms of the island's EUR10
billion bailout by the EU and International Monetary Fund earlier
this year, the FT relays.

Panicos Demetriades, head of the Central Bank of Cyprus, told the
FT earlier this week that the restructuring of BoC was proceeding
as planned, the FT notes.

Mr. Demetriades, as cited by the FT, said that its core tier one
capital ratio, the key measure of financial strength, was now
about 12.5% and would stay above 9% for the whole of the bank's
three-year restructuring.

It is believed that Mr. Hourican's experience in helping to
restructure RBS, which had to be bailed out by the UK government
at the height of the financial crisis with GBP45 billion in
taxpayer money, was one of the reasons for his appointment, the
FT notes.

Bank of Cyprus is a major Cypriot financial institution.  In
terms of market capitalization of 350 million in March 2013, it
is the country's biggest bank.  As of September 2012, the bank
held a 26.7% share of the Cypriot deposit market and a 22.5%
share of the Cypriot loan market, making it the largest bank in
Cyprus.  The Bank of Cyprus Group employs 11,326 staff worldwide.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on April 16,
2013, Moody's Investors Service downgraded Bank of Cyprus Public
Company Limited's deposit ratings to Ca, negative outlook, from
Caa3 and senior unsecured debt ratings to C, from Caa3.  The
subordinated and junior subordinated debt ratings of BoC were
affirmed at C.


Fitch Ratings has assigned Casino Guichard-Perrachon SA's
(Casino; BBB-/Stable) EUR750 million deeply subordinated fixed to
reset rate (DS) notes a final 'BB' rating. Fitch has applied a
50% equity credit treatment to this issue. The terms of the final
documentation are in line with the information already reviewed
when assigning the expected rating on this hybrid instrument.

Key Rating Drivers For The Notes

Equity Treatment Given Equity-like Features

The securities qualify for 50% equity credit as they meet Fitch's
criteria with regard to deep subordination, remaining effective
maturity of at least five years and deferrable interest coupon
payments at the option of the issuer. Fitch regards these as key
equity-like characteristics, allowing Casino more financial
flexibility. The terms and conditions of the notes also avoid
mandatory repayments, and exclude covenant defaults as well as
all other events of default, including cross default, that could
trigger a general corporate default or liquidity need.

No Maturity Date

The notes are undated securities and have no specified maturity
date. The issuer first has the option to redeem the notes on the
first reset date.

Cumulative Coupon Limits Equity Treatment

The coupon payments are cumulative and incur interest where
overdue by more than one year. The company will be obliged to
make a mandatory settlement of interest arrears payments under
certain circumstances, including following the payment of a
dividend. This is a feature similar to debt-like securities and
reduces the company's financial flexibility. Fitch has therefore
only applied equity treatment of 50% of the notes.

Rating Reflects Deep Subordination

The notes have been notched down by two levels from Casino's IDR
given their deep subordination and, consequently, lower recovery
prospects in a liquidation or bankruptcy scenario relative to
senior obligations. The notes rank senior only to the claims of
equity shareholders.

Key Rating Drivers For Casino

Strengthening Business Model

In 2013, Casino gained full control of Monoprix in France and GPA
in Brazil following the agreement reached with Abilio Diniz on
September 6. The full integration of Monoprix from Q213 and the
full consolidation of GPA into its accounts in 2013 strengthen
the group's business profile in terms of format and geographic
diversification, as well as sales growth prospects and profit
margin resilience.

Growing Exposure to Emerging Markets

Over the past three years, Casino's acquisitions have enlarged
its international operations, including GPA in Brazil and
Carrefour stores in Thailand. These significantly increase its
exposure to markets with favorable underlying growth trends,
although they also expose the group to country risk in the
markets where it operates. Fitch expects international operations
to represent more than 60% and 73% of Casino's 2013 revenues and
EBIT compared with 38% and 41%, respectively, in 2010.

Challenging French Economy

Key challenges facing Casino relate to a soft consumer
environment in France, which negatively affects its larger
formats (hyper- and supermarkets). Since 2012, the group has been
cutting prices and adjusting its product offer in response to
anaemic consumer demand and intense competition from other large
food retailers. Any meaningful positive impact from these
initiatives on hyper- and supermarket sales and profit margins
has yet to be seen despite the positive momentum seen in Q313.

Free Cash Flow to Improve

Fitch expects Casino to benefit from Monoprix's and GPA's full
integration in terms of cash flow generation as they are more
profitable and cash-generative than Casino. While remaining low
as a percentage of sales, Fitch expects FCF to strengthen beyond
EUR200 million in 2013 and EUR300 million in 2015.

Rating Headroom to Improve

From a financial perspective, rating headroom is currently
limited at the 'BBB-' rating. Casino's lease-adjusted net funds
from operations (FFO) leverage peaked at 4.5x in 2012, while the
FFO fixed charge cover was weak at 2.3x (both ratios with GPA
proportionally consolidated: lease-adjusted net debt/EBITDAR
equivalent is 3.9x). The group should regain reasonable headroom
under its rating in the next two years, due to the 100%
consolidation of GPA and Monoprix from 2013 onwards. Casino
should also benefit from further asset disposals in 2013 and
2014. The scale of debt reduction that can be achieved through
these disposals will therefore be considered a supporting factor
for the ratings.

Rating Sensitivities

Positive: Future developments that could lead to positive rating
actions include:

   -- Maintaining positive like-for-like growth
   -- FFO fixed charge cover above 3.0x
   -- Lease-adjusted FFO net leverage (adjusted for debt-like
      obligations) below 3.5x on a sustainable basis (equivalent
      to 3.0x lease-adjusted net debt/EBITDAR)

Negative: Future developments that could lead to negative rating
action include:

   -- Sharp contraction in group's like-for-like sales growth
      and EBIT
   -- FFO fixed charge cover below 2.0x
   -- Lease-adjusted FFO net leverage (adjusted for debt-like
      obligations) above 4.2x (equivalent to 3.7x lease-adjusted
      debt/EBITDAR) on a sustained basis

CLESTRA HAUSERMAN: Court Accepts Impala Group's Takeover Offer
EUWID reports that the commercial court in Strasburg on October
15 accepted the takeover offer for the French Clestra Hauserman
Group, which had been under compulsory administration since
November 2012.

EUWID relates that the French Impala Group under the management
of Jacques Veyrat as majority shareholder as well as the two
former Clestra managers Jean-Paul Chaudron and Jean-Luc Bikard
had submitted the takeover offer in September, as a consequence
of which the decision by the commercial court scheduled for
September 23 concerning a continuation of the company was
postponed once again until October 14.

Prior to this, former Clestra manager Xavier Negiar had submitted
a continuation plan, and a decision concerning this plan was
originally to be taken on August 19, EUWID recalls. The financing
of this continuation plan was, however not completely clear.

EUWID adds that the Bpifrance bank is now to participate in the
recently concluded takeover with a sum of EUR1 million in new
funds and a further EUR3 million for the refinancing.

HEDIARD: French Grocer Files For Bankruptcy
AFP reports, citing a source close to the case, that a luxury
French grocery chain owned by Russian tycoon Sergei Pugachev has
filed for bankruptcy.

Hediard, which has stores and dedicated shop corners in 30
countries including Madagascar and Vietnam, declared itself
insolvent at a commercial court in Paris, a source, who wished to
remain anonymous, told AFP.

A hearing is due to take place today, October 24, to determine
whether an administrator should be appointed, the source, as
cited by AFP, added.

AFP discloses that the luxury grocer, which started out in 1854
in Paris as a small shop of exotic foods, also counts one
restaurant in Moscow and six cafes in countries such as
Singapore.  Its foray onto the international scene started in
1973 when it opened in Japan and it has since expanded

In 2007, the Luxadvor group, controlled by Pugachev, bought it in
a deal that was due to help it expand abroad even more. But it
has been losing money for six years, AFP reports.


BD HOTELS: Mulranny Park Hotel Enters Voluntary Liquidation
Neill O'Neill at The Mayo News reports that the Mulranny Park
Hotel has entered voluntary liquidation, but will continue to
trade as usual, and all bookings, reservations, vouchers and
events, including weddings, will be fully honoured and will
proceed as normal.

The hotel released a statement to The Mayo News on October 21,
after several days of rumours in relation to them having entered

Confirming that this was indeed the case, they were nonetheless
very upbeat in relation to continuing trading, and maintaining
existing jobs in the hotel and leisure centre, the report notes.

"Mulranny Park Hotel has been informed that BD Hotels Ltd, the
company which operates the Mulranny Park Hotel in Mulranny, Co.
Mayo, has gone into voluntary liquidation," the statement read,
The Mayo News relates.

"This will have no effect on the operation of the hotel as the
company will continue to trade under the powers of a liquidator
until such time as a full plan for the future of the hotel is
finalised. We are confident that the business of the hotel will
be preserved for the long term and that the valuable employment
which it provides will remain a constant in the local community."

The Mayo News says the provisional liquidator to BD Hotels,
Anthony J. Fitzpatrick of Fitzpatrick O'Dwyer and Co. -- -- is confident that the hotel can
trade successfully.

According to the report, General Manager Dermot Madigan will
continue to lead the 30 strong team of full-time employees at the
hotel, which has been the recipient of a host of awards year
after year, across a range of departments.

The Mulranny Park Hotel is the only hotel on The Great Western

DUBLIN BUS: Deloitte Called In to Try "Saving" Bus Company
Paul Melia at Irish Independent reports that a consultancy firm
has been asked to examine how to "save" Dublin Bus if drivers
this week vote for industrial action.

Accountancy firm Deloitte has been asked to consider the
financial hit the company will endure if workers reject the
latest attempt to impose cost-cutting measures, which will be
voted on by unions later this week, Irish Independent relates.

According to Irish Independent, weekend reports said the firm was
asked to advise on a possible liquidation of the company;
however, sources said the motivation for employing the company
was to "save" the semi-state public transport company.

It comes after Transport Minister Leo Varadkar and Public
Transport Minister Alan Kelly last week warned the outlook for
the company was "very stark" unless workers agreed to changes to
conditions aimed at saving almost EUR12 million a year, notes.

Workers mounted a three-day strike in August, which both damaged
the company's reputation and failed to resolve the issues, a
report from independent consultants Noel Dowling and Ultan
Courtney into the industrial unrest found, Irish Independent

HARLEY MEDICAL: Implants Victim Wins Leave to Apply For Judgment
Ray Managh at Irish Independent reports that a woman, who had
defective silicone gel prostheses implanted in her breasts, has
been given leave to apply for judgment against Dublin-based
Harley Medical Group (Ireland) Limited which is in liquidation.

The report says Samantha Gibbs, of Hillside, Ballintubber,
Castlerea, Co Roscommon, is one of hundreds of women who have
sued the Harley Group and two other Irish cosmetic clinics, for
breach of contract in the surgical insertion of Poly Implant
Prothese (PIP) implants.

According to the report, the Circuit Civil Court has already
heard that Ms. Gibbs, in her EUR38,000 damages claim, stated that
in 2007, as a result of widespread media publicity she had
learned that her implants could rupture and leak industrial-grade
silicone into her body.

Judge Jacqueline Linnane was told October 15 that due to
liquidation of the company, Ms. Gibbs needed to re-enter
proceedings seeking judgment in default of appearance, Irish
Independent relates.

Judge Linnane said Ms. Gibbs' new application, on notification of
the liquidator, would proceed on October 29, the report notes.

Begbies Traynor on March 13 disclosed that investigators who
hunted the late Robert Maxwell's hidden fortune and who led the
search for the missing assets of collapsed claims management
company, The Accident Group, have been brought in to probe
cosmetic surgery business, Harley Medical Centre Ltd.

Paul Stanley, a partner at Begbies Traynor, will look into a
number of transactions -- including the payment of a dividend of
more than GBP1 million in 2010 -- at the company, which went into
administration in November 2012 following claims by thousands of
women fitted with faulty breast implants supplied by French firm,
Poly Implant Protheses (PIP).

The Harley Medical Group clinic had been carrying out cosmetic
surgery, including breast enlargement, since 1983 and was one of
three Irish clinics to have used PIP implants, Irish Independent

HOMEBASE IRELAND: Exits Examinership; Almost 500 Jobs Secured
DIY Week reports that having reached a settlement with its
creditors, Homebase Ireland has successfully exited examinership
and secured almost 500 jobs.

The loss-making operation, which is part of Homebase UK and Argos
owner Home Retail Group, appointed an examiner from accountancy
firm KPMG in July in order to provide protection to the company
from creditors while it re-structured, DIY Week relates.

Homebase Ireland had seen sales plummet by 31% in four years and
had failed to turn a profit for five years, having been hit hard
by upward-only rent reviews on its store leases, the slump in
house building in Ireland and lower consumer spending on home
improvement products, DIY Week recounts.  HRG finally withdrew
financial support for the company, DIY Week notes.

However, Homebase Ireland has now issued a statement saying that
it has successfully exited the examinership process "following
the approval of a Scheme of Arrangement by its creditors and by
the High Court in Dublin," thereby securing almost 500 jobs, DIY
Week relays.

"At the conclusion of the examinership, 13 stores have been put
on a more sustainable footing and will continue to trade.  Two
stores, as previously announced, Carlow and Castlebar, have
closed, with the regrettable loss of just over 50 jobs," DIY Week
quotes the company as saying in the statement.

The Carlow and Castlebar outlets were both earmarked for closure
early in the examinership process, along with the store at
Dublin's Fonthill retail park, DIY Week discloses.  However, the
Fonthill outlet will now stay open, DIY Week notes.

Homebase Ireland is a house and garden chain.

SIAC CONSTRUCTION: In Examinership; Subcontractors Dispute Move
--------------------------------------------------------------- reports that Siac Construction Ltd. has gone into

According to the report, the High Court has granted temporary
protection to Siac Construction and eight related companies with
250 full-time employees.

Michael McAteer's appointment as interim examiner to Siac
Construction was not without contention as two subcontractors,
flagged their opposition to the move, notes.

Graham Sheehan of Sabre Electrical Services asked if the court
could honestly trust the very same people he has been dealing
with for the last six to eight months and who have promised to
pay him, relates.

The court heard some aggrieved sub-contractors have blockaded one
of the company's premises, discloses.

Siac directors hope the interim examiner will be able to diffuse
the situation, says.

According to, their lawyers said Siac suffered in
the downturn, engaged in road building in Poland but now have
very significant liabilities.

The case returns to court next month, states.

Siac Construction Ltd. is one of Ireland's oldest and best known
building firms.


PHARMA FINANCE: Fitch Cuts Rating on Class B Notes to 'BB+'
Fitch Ratings has downgraded Pharma Finance 3 S.r.l.'s (PF3)
class A and B notes, as follows:

-- EUR63.2m class A floating-rate notes: downgraded to 'BBB-sf'
    from 'A+sf'; Outlook Negative

-- EUR6.1m class B floating-rate notes: downgraded to 'BB+sf'
    from 'A+sf'; Outlook Negative

-- EUR9.5m class C floating-rate notes: affirmed at 'AAAsf';
    Outlook Stable

Key Rating Drivers

Sudden Deterioration of the Asset Performance

Until the June 2013 payment date, PF3 had not reported any
arrears or defaults, however in this quarter EUR6.9 million of
defaults were posted, which accounted for 3.63% of the
transaction portfolio, together with EUR9.9 million
delinquencies, or 9.82% of the total non-defaulted portfolio. The
total number of contracts reported as defaulted is eight on a
total of 157 securitized loans. These contracts did not pass
through the arrears status as the originator directly classified
them as defaulted (in accordance with Bank of Italy's
regulations) following the borrowers' request of a "concordato
preventivo" (composition with creditors)

As of the September 2013 payment date no further defaults were
reported whereas arrears declined to EUR7.3 million. However,
most of the uncured delinquencies migrated to the later stages of
arrears, with the 120-150dpd bucket now accounting for almost
half of the total delinquencies. Given this marked migration,
Fitch expects further defaults by the next payment dates.

Pharmacists' Creditworthiness in Jeopardy

Although Fitch's view that the transaction is much more exposed
than other Italian deals to a sovereign event risk is unchanged
(most of the pharmacists' income depends on timely payments from
the local healthcare units), the recent defaults show how the
pharmacists' creditworthiness can quickly deteriorate,
irrespective of the indirect connection to the sovereign. The
pharmacists' industry is increasingly exposed to the troubled
economic environment and is enduring a liquidity crisis mainly
stemming from less favorable payment terms imposed by the larger
suppliers. Given the difficulties encountered to finance the
increasing working capital, Fitch expects to see a further
deterioration of the transaction performance as pharmacists will
strive to sustain the financial debt contracted in a completely
different environment.

Uncovered PDL and Fully Depleted Cash Reserve Increase Liquidity

Despite the drawing of all the funds deposited in the cash
reserve (EUR1.6 million) in just one quarter and the still
relatively healthy values of trapped excess spread in the past
two payment dates, the spike in defaults and arrears occurred in
June 2013 resulted in an uncovered principal deficiency ledger
(PDL) of EUR8.2 million as of September 2013. Until the PDL is
fully cleared, the cash reserve balance will remain zero, thus
exposing the transaction to increased payment interruption risk.
This is even more heightened for this transaction for which --
unlike most Italian deals -- principal collections cannot be used
to cover interest shortfalls. However, upon a servicer event of
default, which includes the missed transfer of collections on a
timely basis, a EUR2.2 million commingling reserve held at an
eligible counterparty is available to the vehicle to cover for
the interest payment shortfall.

Rising Obligor Concentration Risk

The performance deterioration further increased the obligor
concentration risk run by PF3 which was already high due to the
small number of securitized loans left in the pool (157). 48% of
the obligors individually account for more than 0.5% of the pool
with exposures for the top 20 obligors accounting for 38% of the
portfolio. The decrease in CE ensued from the inability to fully
provision for some defaults which increases the exposure of the
noteholders to the concentrated pool.

The increasing risks posed by the rating drivers described
above -- which are no longer in line with a rating in the 'Asf'
category -- led to the downgrade of the class A and B notes. The
ratings of the class A and B notes are now differentiated as the
pharmacists' defaults have proven that the transaction is exposed
not only to a systemic event risk on the sovereign, to which the
different classes are exposed in a virtually equal measure, but
also to the systematic risk run by the pool's single industry.
The class A noteholders are more protected from this latter kind
of risk than the class B noteholders thanks to a higher credit
enhancement (29.2% vs. 22.4%).

The European Investment Fund guarantees the class C notes and
will cover any interest or principal shortfall under the class C
notes. Its ratings have remained 'AAA'/Stable/'F1+' since
closing. As a result, the class C notes have been affirmed at
'AAAsf' with Stable Outlook.

Rating Sensitivities

As a sizeable part of the debited PDL is still uncleared, a
further wave of defaults would cause further downgrades on the
class A and B notes as the inability of the structure to cover
for defaults would jeopardise the ultimate repayment of the
notes' principal.

PF3 is a securitization of loans granted to pharmacists to fund
the purchase of licenses and premises, or of quotas of company-
owning and -managing pharmacies, or to finance other general
corporate purposes. The loans were originated and are serviced by
Comifin S.p.A., an Italian specialized lender.


CABLE COMMUNICATIONS: Moody's Assigns '(P)B1' CFR; Outlook Stable
Moody's Investors Service has assigned a first-time provisional
(P)B1 corporate family rating (CFR) to Cable Communications
Systems N.V. (CCS), the controlling shareholder of RCS & RDS S.A.
(RCS & RDS). Concurrently, Moody's has assigned a provisional
(P)B1 rating and loss given default (LGD) assessment of LGD3 to
the proposed EUR350 million worth of senior secured notes due in
2020 to be issued by CCS. The outlook for all ratings is stable.

This is the first time that Moody's has assigned ratings to RCS &
RDS. Moody's issues provisional ratings in advance of the final
sale of securities and these ratings reflect the rating agency's
preliminary credit opinion regarding the transaction only. Upon a
conclusive review of the final documentation, Moody's will
endeavor to assign a definitive rating to the company's proposed
EUR350 million worth of senior secured notes. The definitive
rating may differ from the provisional rating.

Ratings Rationale:

"The provisional (P)B1 CFR reflects RCS & RDS's strong market
positions within the Romanian and Hungarian cable TV, internet,
telephony and satellite TV markets, the company's track record of
solid operating performance, and its ability to maximize returns
on its state-of-the-art network given that the large investment
phase is over," says Ivan Palacios, a Moody's Vice President -
Senior Credit Officer and lead analyst for RCS & RDS. "In
addition, the rating takes into account the company's stable
financial profile, and its improved debt maturity profile
following the planned refinancing exercise," explains
Mr. Palacios.

"At the same time, the rating also reflects RCS & RDS's
relatively smaller size compared with its similarly rated peer
group, the highly competitive environment in which it operates,
and the company's concentration in Romania, despite some
geographical diversification," continues Mr. Palacios.
"Furthermore, the rating reflects the company's exposure to
foreign exchange risk, its moderate leverage, and its limited
free cash flow generation."

RCS & RDS is the leading cable operator in Romania, where the
company provides cable TV, broadband, and fixed and mobile
telephony services. Its business profile in Romania is strong,
supported by its modern network, solid market position and
integrated product offering. In addition, there is organic growth
potential in the domestic market, which could be supported by
bolt-on acquisitions pursued on an opportunistic basis.

Nevertheless, a high reliance on Romania, where RCS & RDS
generates 75% of its consolidated EBITDA, exposes the company to
emerging market risks. Moody's views the company's geographical
diversification into Hungary, Spain, Italy and Czech Republic as
credit positive, but is not material in terms of cash flow

The company has a track record of solid operating performance
despite a volatile macroeconomic environment, given that growth
in the customer base has translated into continued growth in
revenues and EBITDA in local currency. However, given that RCS &
RDS's revenues are mostly generated in domestic currency
(primarily in Romanian Lei) but costs, capital expenditure
(capex) and debt are denominated in foreign currency, the company
is exposed to foreign exchange fluctuations.

RCS & RDS has historically reported negative free cash flow
generation due to its high investment levels, both in network
capex and content. The company has reached an inflection point in
terms of network investments and the high investment phase is
mostly completed. However, while Moody's believes that RCS &
RDS's free cash flow generation will most likely break even, the
rating agency does not expect it to move materially into positive
territory, as the company will have to secure expensive content
for its TV offering.

RCS & RDS's debt/EBITDA (as adjusted by Moody's) for 2012 was
approximately 4.0x. Going forward, Moody's expects the company's
adjusted leverage to remain at around 4.0x. The company's
leverage ratio as adjusted by Moody's is higher than the ratio
reported by RCS & RDS (2.5x net reported debt/EBITDA as of YE
2012), primarily because the rating agency reclassifies annual
content costs from capex into operational expenditure (opex), in
order to improve comparability across industry peers.

The proposed issuance of EUR350 million worth of senior secured
notes and RCS & RDS's new EUR300 million bank facility will
refinance the company's existing bank debt and will improve its
debt maturity profile, reducing its refinancing risk. Moody's
notes, however, that failure to proceed with the bond issuance as
planned could have negative rating implications. The ratings
assigned are provisional and contingent upon a successful bond

The (P)B1 rating on the EUR350 million worth of senior secured
notes is at the same level as the company's CFR of (P)B1. Given
that the vast majority of liabilities in the waterfall rank pari
passu, the rating on the proposed notes is not notched from the

Rating Outlook:

The stable rating outlook reflects Moody's expectation that RCS &
RDS will continue to consistently operate in line with its
current financial profile, i.e., maintaining debt/EBITDA (as
adjusted by Moody's) at around 4.0x.

What Could Change the Rating Up/Down:

Upward pressure on the rating could develop if RCS & RDS delivers
on its business plan, such that its debt/EBITDA ratio (as
adjusted by Moody's) is well below 3.5x and the company generates
positive free cash flow on a sustained basis.

Conversely, downward pressure could be exerted on the rating if
RCS & RDS's operating performance weakens such that its
debt/EBITDA ratio (as adjusted by Moody's) rises towards 4.5x and
the company generates negative free cash flow on a sustained
basis. A weakening of the company's liquidity profile (including
a reduction in headroom under financial covenants) could also
exert downward pressure on the rating.


PORTUGAL: Fitch Affirms 'BB+' LT Foreign & Local Currency IDRs
Fitch Ratings has affirmed Portugal's 'Long-term foreign and
local currency IDRs at 'BB+' with a Negative Outlook. The 'B'
Short-term foreign currency IDR and the 'A+' Country Ceiling have
also been affirmed.

Key Rating Drivers

The affirmation reflects continued progress under the IMF-EU
program to date and the government's demonstrated commitment to
fiscal discipline in spite of several political and institutional
setbacks. Moreover, the economy has picked up recently and Fitch
expects growth in 2014. However, political and implementation
risks remain high and warrant, in our view, the maintenance of
the Negative Outlook.

The affirmation of Portugal's 'BB+' rating reflects the following
key rating drivers:

   -- Portugal is characterized by large fiscal imbalances, high
      indebtedness and has suffered from weak economic
      performance over the last six years. These factors make
      Portugal particularly vulnerable to adverse shocks. This
      explains Portugal's rating level despite its high per-
      capita income relative to its 'BB' category peers.

   -- The Portuguese economy is making progress with its external
      adjustment process. The current account is likely to reach
      a surplus of 0.5% of GDP in 2013 from a deficit of 11% of
      GDP in 2009.

   -- The 2014 draft budget, if fully implemented, would imply a
      significant fiscal deficit narrowing to 4% from 9.9% in
      2010, albeit Fitch forecasts some slippage to a deficit of
      4.5% for 2014. Moreover, planned measures consist mainly of
      expenditure cuts and should have a less detrimental effect
      on GDP than in previous budgets.

   -- Economic growth surprised on the upside in the first half
      of the year. Following 10 consecutive quarters of
      contraction, real GDP grew 1.1% qoq in Q213. In annual
      terms, real GDP declined 2.1% versus a 4.1% decline in the
      previous quarter.  Fitch revised its 2013 forecast to
      negative 1.8% of GDP from negative 2.6% of GDP in June and
      projects growth of 0.2% in 2014.

   -- Portugal's EUR78 billion financial assistance program and
      the government's commitment to its conditions alleviate
      short-term liquidity risks, thereby supporting the
      sovereign ratings.

   -- Structural reforms to achieve improvement in productivity
      have been central to the adjustment program. The number of
      measures already implemented is extensive, considering both
      the fragile underlying macroeconomic environment and
      compared witheurozone peers.

   -- The long-term fiscal cost of an ageing population is one of
      the most stable in the EU, due to past reforms.

   -- The intensity of the eurozone crisis has eased over the
      past 12 months reflecting progress with the country's
      fiscal and reform plans and policy enhancements at the EU
      level, including the ECB's outright monetary transactions
      and gradual steps towards banking union. Nevertheless, in
      Fitch's view the eurozone crisis is not over and the risk
      of further market volatility remains material.

The Negative Outlook on Portugal's foreign and local currency
IDRs reflects the following factors:

   -- There are implementation risks to the 2014 budget. In this
      respect, potential rulings by the Constitutional Court are
      the biggest risk. Although the government has committed to
      reformulate the budget law in the event that measures are
      deemed unconstitutional by the Court, such an outcome is
      likely to delay or weaken fiscal consolidation.

   -- Political risk remains significant. Cross-party commitment
      to the program has somewhat waned in 2013. The opposition
      Socialist party has taken a strong stance against the
      fiscal consolidation program, but will likely be involved
      in negotiations regarding further official support when the
      current program ends as elections are due in 2015. Any lack
      of cross-party support for additional official sector
      assistance could undermine investor confidence and reduce
      the likelihood of such assistance being provided. Such an
      outcome would be negative for the ratings.

   -- Public debt dynamics are worsening, reflecting a slower
      consolidation path than previously anticipated and some
      one-off factors. Fitch now forecasts general government
      gross debt (GGGD) to peak in 2014-15 at around 130% of GDP
      before declining gradually from 2016, and stabilizing at
      116% of GDP by 2022. This compares with Fitch's previous
      projections in November 2012 of GGGD peaking at 124% in
      2014 and declining to 116% of GDP by 2020.

   -- Despite the large external adjustment, net external debt
      remains high at an estimated 82% of GDP in 2013. This is
      the legacy of over-borrowing in the decade to 2009,
      particularly in the non-financial corporate sector.
      Portugal may only achieve a more marked decline in external
      debt ratios from larger current account surpluses.

Rating Sensitivities

The Negative Outlook reflects the following risk factors that
may, individually or collectively, result in a downgrade of the

   -- Political crisis or institutional gridlock that threatens
      material fiscal slippage and undermines successful
      completion of the adjustment program

   -- Material deviation from the adjustment program that
      threatens the provision of additional official support in
      the event that full market access is not regained by the
      end of the current program

   -- Material upward revision in Fitch's forecast for the peak
      in the GGGD/GDP ratio

Future developments that may, individually or collectively, lead
to the Outlook being revised to Stable include:

   -- Sustained return to economic growth and evidence that
      public debt is stabilizing

   -- Securing a credible precautionary program from June 2014
      and/or regaining market access on sustainable terms

Key Assumptions

Fitch assumes that fiscal consolidation is maintained beyond the
program period to ensure an exit from the Excessive Deficit
Procedure (EDP) by 2015, in line with the government's stability

Fitch assumes that Portugal will gradually regain market access,
supported by a post program precautionary agreement with the

In its debt sustainability analysis, Fitch assumes an average
primary surplus of 3% of GDP, potential growth of 1.5%, a GDP
deflator of 1.7% over 2016-22 and gradual regaining of market
access from 2014 reflected in higher marginal cost of funding.

Should the Constitutional Court reject part of the measures in
the 2014 draft budget law, Fitch assumes that the government will
adopt necessary alternative measures to comply with the IMF-EU

Fitch assumes there will be progress in deepening fiscal and
financial integration at the eurozone level in line with
commitments by policy makers. It also assumes that the risk of
fragmentation of the eurozone remains low.


RCS & RDS: S&P Assigns 'B+' CCR & Rates EUR300MM Loan 'B+'
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Romanian telecommunications and pay-TV
provider RCS & RDS.  The outlook is stable.

At the same time, S&P assigned its 'B+' issue rating to the
proposed EUR250 million term loan facility due 2018 and
EUR50 million revolving credit facility (RCF) due 2016, to be
borrowed by RCS & RDS and its parent Cable Communications Systems
N.V. (CCS).

S&P also assigned its 'B+' issue rating to the proposed
EUR350 million senior secured notes to be issued by CCS and
guaranteed by RCS & RDS.

The rating reflects S&P's assessment of RCS & RDS' business risk
profile as "fair," including its view of management and
governance as "fair," and its financial risk profile as
"aggressive," under its criteria.

S&P's business risk profile assessment is constrained by the
company's exposure to Eastern European markets, its modest
profitability, and intense competition from large players.  More
than 80% of RCS & RDS' revenues are generated in Romania and
Hungary, two small economies with volatile currencies that could
affect the financial performance of RCS & RDS.  The company's
Standard & Poor's-adjusted EBITDA margin, which notably deducts
the amortization of content rights because S&P views these
rights' expenditures as recurring operating expenses, was 31% in
2012. This is modest by European standards, given that 85% of RCS
& RDS' revenues come from fixed-line services, which tend to
attract higher margins.  RCS & RDS faces intense competition from
competitors that are part of large international operators with
stronger financial flexibility.  In Romania, in the mobile
segment, the company has a 6% market share, far behind the market
leaders Orange and Vodafone.

These weaknesses are partly offset by the company's state-of-the-
art network, solid market shares in its main segments, and a
degree of diversification.  RCS & RDS recently completed the
upgrade of 90% of its fiber network in Romania and Hungary to
Gigabit Passive Optical Network, or comparable technology,
offering speeds of up to 1 gigabit per second and easy
connection. S&P thinks this could attract new Internet customers.
RCS & RDS owns a 3G network covering 78% of the Romanian
population, and coverage will increase further following the
acquisition in 2012 of a block of the 900 mega hertz spectrum
license (the spectrum is technology neutral and can be used for
2G, 3G, and 4G services). This could result in additional
revenues in mobile telephony and data.  RCS & RDS has a leading
position in pay-TV and Internet in Romania, ranks No. 2 in the
fixed telephony market, and has a solid position in those
segments in Hungary.

The company is internationally diversified, operating as a mobile
virtual network operator in Spain and Italy, and has a presence
in the Czech Republic (after an exit from Croatia, Serbia, and
Slovakia during 2013).  RCS & RDS is also diversified in terms of
products and technologies. It offers cable and satellite TV,
fixed telephony, and Internet in Romania and Hungary; in the
Czech Republic it provides satellite TV; in Romania it offers
mobile voice and data services; and in Hungary it is a reseller
of mobile broadband.  While this diversification strengthens the
company's market position, S&P believes that it also explains its
lower adjusted EBITDA margin compared with that of cable peers.

S&P's financial risk profile assessment is constrained by its
anticipation of continued negative free operating cash flow
(FOCF) in 2013, and currency mismatches resulting from the
company's euro-denominated debt.  These weaknesses are partly
offset by RCS & RDS' lower leverage than that of most European
cable players, "adequate" liquidity, with no or limited debt
amortization until 2020, and robust interest coverage.

S&P expects modest organic growth in 2013 and 2014, supported by
a continued increase in subscribers in cable TV and fixed

However, as the company has exited a number of markets, S&P
thinks consolidated revenues could slightly decline.  S&P expects
RCS & RDS' adjusted EBITDA margin to improve to 32% or more in
2013, notably because of lower tax in Hungary and lower content
costs. S&P thinks profitability could also benefit from economies
of scale as customers subscribe to more products, and from the
exit of some territories with lower profitability.  However, S&P
also thinks profitability could be hindered by negative currency
developments or price competition.

S&P expects annual cash from operations of about EUR200 million
over the next two years, in line with previous years.  S&P also
assumes that capital expenditures (capex) will decline over time
after substantial investments to upgrade fixed and mobile
networks.  Therefore, S&P expects FOCF to improve to negative
EUR5 million in 2013 (compared with negative EUR77 million in
2012) and believe it could turn positive in 2014.  Assuming no
material cash spending for acquisitions or dividends, S&P thinks
discretionary cash flows could cover most of the scheduled debt
amortization from 2015.  S&P forecasts an adjusted-debt-to-EBITDA
ratio of 3.4x in 2013 and 2014.  S&P also thinks that RCS & RDS'
adjusted EBITDA interest coverage is good at 5.0x in 2013, but it
could decline to 4.2x in 2014 following the full annual impact of
the refinancing.

The issue rating on the proposed EUR250 million term loan
facility due 2018 and EUR50 million RCF due 2016 to be borrowed
by RCS & RDS and its parent CCS is 'B+'.  The issue rating on the
proposed EUR350 million senior secured notes to be issued by CCS
and guaranteed by RCS & RDS is also 'B+'.

The stable outlook reflects S&P's belief that RCS & RDS will
generate stable EBITDA and maintain adjusted leverage of less
than 4x and covenant headroom of more than 15%.

S&P could raise the rating if FOCF turns positive, and if it sees
solid prospects for adjusted FOCF to cover about 5% of adjusted
debt.  An upgrade would also likely depend on RCS & RDS hedging
the bulk of currency risks arising from its euro-denominated
debt. This is because S&P expects cash flows to be primarily
denominated and influenced by the local currencies of the
company's main operations.

A negative rating action appears remote at this point.  This
would probably require the company's leverage to reach or exceed
4.5x with continued negative free cash generation, and covenant
headroom dipping to less than 15%, which S&P sees as unlikely to
occur at this stage.

REALITATEA MEDIA: Prosecutors Begin Criminal Action vs 3 Firms
ACTMedia reports that prosecutors of the National Anticorruption
Directorate (DNA) have started criminal proceedings against three
trading companies in the case dealing with the criminal
activities carried out as part of the insolvency proceedings of
SC 'Realitatea Media' SA.

ACTMedia relates that DNA said in a release on October 17 that
charges were pressed against SC 'Realitatea Media' SA for money
laundering, given that reliable data and indications exist that
it was financed from tax evasion schemes, with the money being
transferred in the form of loan agreements.

DNA also started prosecuting SC 'Strategies-Research-Investments'
SRL for having produced counterfeit documents under private
signature and facilitated abuse of office against private
interests, as reliable data and indications exist that documents
have been forged to the benefit of this company by backdating so
as to change the shareholders register 'in order to prejudice the
creditors of SC Realitatea Media SA,' the prosecutors argued,
ACTMedia relays.

Another company facing charges is Rovigo SRL, accused of
fraudulent bankruptcy, given that there are well-grounded clues
that the company served to alienate the Realitatea Media brands,
according to ACTMedia.

ACTMedia recalls that criminal prosecution was initiated against
12 people, including businessman Maricel Pacuraru, a partner of
political guru Cozmin Gusa, and Fabian Schwartzenberg -- brother
of Elan Schwartzenberg. They are accused of having carried out
criminal activity in order to influence -- either directly, or
through intermediaries - the decisions made under the insolvency
proceedings regarding 'Realitatea Media' SA and taking control
over the company, the report notes.

Realitatea Media SA operates TV stations Realitatea TV, The Money
Channel, ActionStar, CineStar and ComedyStar, and radio stations
Realitatea FM, Radio Guerrilla and Radio Alpha.  It has almost
800 employees.

Realitatea Media filed for insolvency proceedings in September

* ROMANIA: Insolvencies Up 6 Percent at End-September
The Diplomat reports that the number of companies that filed for
insolvency increased 6 percent at nine months reaching more than
20,000 companies out of 1 million companies active in September
in Romania, according to data of the National Trade Register

In September this year, 1,734 out of 20,220 companies started the
insolvency procedures, The Diplomat relays. In September last
year, 1,028 companies have been registered as insolvent.

According to The Diplomat, data showed the leading counties for
this statistics are Bucharest with 2,593 insolvencies, up 15
percent compared to 2012 and Bihor, with 1,206 insolvent
companies, up 20 percent compared with the same period of last
year.  Also, Galati registered a larger number of insolvencies,
with 1,186 companies as the county posted also the largest
increase for registered insolvencies, of 60 percent. Counties as
Calarasi and Harghita posted the smallest number of insolvencies,
134, respectively 161 files, the report notes.

The most affected businesses appear to be the ones operated in
trade, with more than 7,170 insolvencies countrywide,
constructions, with 2,723 companies, hospitality with 2,221
companies and manufacturing with 2,211 insolvent companies, The
Diplomat relays.


BANK ST PETERSBURG: Fitch Rates US$100MM Subordinated Notes 'B+'
Fitch Ratings has assigned Russia-based OJSC Bank Saint
Petersburg's (BSPB; BB-/Stable/bb-) US$100 million "new style"
subordinated loan participation notes (LPN) issue a final Long-
term rating of 'B+'. The notes bear a coupon of 10.75% payable
semi-annually and have a maturity in April 2019.

Key Rating Drivers

Fitch rates BSPB's "new style" Tier 2 subordinated debt issues
one notch below the bank's 'bb-' Viability Rating (VR). The
notching comprises (i) zero notches for additional non-
performance risk relative to the VR, as Fitch believes these
instruments should only absorb losses once the bank reaches, or
is very close to, the point of non-viability; (ii) one notch for
loss severity (rather than two, as these issues are not deeply
subordinated, and rank pari passu with "old style" subordinated
debt in case of a bankruptcy).

Rating Sensitivities
Changes to the issue's rating will reflect those on the VR.

The VR could be downgraded due to marked deterioration in the
operating environment resulting in erosion of asset quality and
capitalization if not compensated by fresh equity injections. A
significant increase in risk appetite could also be rating-

Upward pressure may stem from improved profitability,
capitalization and franchise diversification.

STATE TRANSPORT: S&P Revises Outlook to Neg. & Affirms BB- Rating
Standard & Poor's Ratings Services said it had revised its
outlook on Russia-based State Transport Leasing Co. OJSC (STLC)
to negative from stable.  At the same time, S&P affirmed its
long- and short-term counterparty credit ratings at 'BB-/B', and
its Russia national scale rating at 'ruAA-'.

The outlook revision to negative acknowledges the gradual
weakening of STLC's financial profile.  S&P sees a risk that
STLC's historically very strong capital base will be eroded and
will no longer support a rating in the 'BB' category.  The rating
affirmation reflects STLC's strong capital position, which
provides a substantial buffer against unexpected losses due to
nonperforming leases.  S&P also takes into account its
expectation of continued support from STLC's main government-
related owner, the Russian Ministry of Transport.

During 2011 and 2012, S&P observed extremely aggressive growth of
STLC's lease portfolio.  At year-end 2012, STLC reported a
significant increase in nonperforming assets and net new
provisions, which raises S&P's concerns about the company's
underwriting standards at a time of rapid expansion.  This trend
may continue in 2013 and 2014 as the lease portfolio seasons, and
it may further weaken STLC's profitability and capital.

"Our assessment of the company's stand-alone position is largely
based on the performance of its net investment in leasing.  We
have recently observed a significant increase in nonperforming
leases: Nonperforming leases represented 4.6% of the net
investment portfolio as of year-end 2012, versus 0.4% as of year-
end 2011.  We are aware that management is taking certain
corrective actions to improve the lease portfolio's quality, but
the results are not yet evident and we do not expect an
improvement of this ratio in 2013 or 2014," S&P said.

"On the positive side, deteriorating portfolio quality is
balanced to some extent by strong capitalization and potential
growth of the company's business involvement in several
government initiatives to develop sectors, such as local
aviation, or a liquefied natural gas (LNG) fuel program for
public transport, due to the company's link with the Ministry of
Transport. Nevertheless, capital is gradually being eroded from
its historically very strong level, due to lease portfolio
growth.  We expect the equity-to-assets ratio to remain at about
15% in 2013 and 2014.  We consider the current level of
capitalization to be relatively strong, although much lower than
that in 2012 (when the ratio was 19.7%) and in 2011 (31.3%)," S&P

STLC has strong niche positions in the leasing of railroad
transport equipment, road construction equipment, and passenger
transport.  However, in line with the slowdown of the Russian
economy, STLC's target market segments--the Russian railway and
road construction industries--have started to slow.  S&P expects
intensified competition in the leasing segment in the coming
years, which will likely depress margins.  Given that STLC's
margins are already rather low, this will represent an additional
challenge for the company.

The Russian government owns 100% of STLC through the Ministry of
Transport.  The long-term rating continues to incorporate a one-
notch uplift from STLC's stand-alone credit profile of 'b+' to
reflect S&P's opinion that the likelihood of timely and
sufficient extraordinary government support from the Russian
Federation is "moderate."  In accordance with S&P's criteria for
government-related entities, this view is based on its assessment
of STLC's:

   -- "Strong" link with the Russian Federation, because of the
      state's 100% ownership of the entity.  S&P understands that
      there are currently no privatization plans until at least
      2015.  The link is supported by the strong supervision and
      coordination of STLC's strategy by the Ministry of
      Transport; and

   -- "Limited importance" to the government.  STLC is one of the
      government's policy tools, aimed at stimulating demand for
      domestically produced road-building machines and public
      transport vehicles, and modernizing the transport sector.

The negative outlook reflects the risk of a deterioration of
STLC's financial profile, notably its asset quality and
capitalization.  In addition, the sustainability of STLC's
business model is uncertain, in S&P's opinion, in view of the
slowdown of the Russian economy, frequent changes in the
management team, and the quality of the company's risk
management, as highlighted by the lease portfolio's deteriorating

S&P could consider a negative rating action if it observed
further deterioration of lease portfolio quality, for example, if
nonperforming leases reached or exceeded 5% of the net lease
portfolio.  Also, a negative rating action might follow if
capitalization substantially weakened, with equity to assets
falling below 15%.  S&P would also consider a negative action if
privatization were to be implemented by the state more rapidly
than currently envisaged.

S&P could revise the outlook to stable if it observed significant
improvement of lease portfolio quality and sustainable growth of
new business.  An additional capital injection from the state
might serve as evidence that, despite weak financial results, the
government would like STLC to continue its activities and that
its relationship with the government remains unchanged.

U N I T E D   K I N G D O M

CO-OPERATIVE BANK: Sr. Bondholders Intact But Uncertainties Rise
Fitch Ratings says senior bondholders in The Co-operative Bank
(BB-/Rating Watch Evolving) have not had to take any losses under
an alternative capital raising plan recently agreed by the bank's
owner, the Co-operative Group. However, both the plan and
operating performance year to date have raised uncertainty around
the bank's strategy, franchise and capital buffer levels.

Under the new plan holders of subordinated (lower Tier 2) debt,
amounting to around GBP930 million, will convert their debt
holdings into a 70% equity stake in the bank. This will reduce
the bank's liabilities and restore capital by the same amount.
The Co-operative Group will remain the single largest shareholder
with a 30% holding. There is also a possibility that an exchange
offer is made to holders of the bank's upper Tier 2 and
preference shares; the potential loss rate for these cannot be
established until further details of the plan are announced.

The change in ownership is substantially different than
previously envisaged and it may result in strategic changes that
are difficult to predict at this stage. Fitch downgraded the
bank's Issuer Default Rating to 'BB-' in June 2013 to reflect the
EUR1.5 billion additional capital requirements requested by the
UK regulator to restore the bank to a stable position.

Higher-than-expected loan impairments, further write-downs of IT
systems and additional conduct provisions announced since H113
may reduce the capital buffers raised under the alternative
recapitalization plan. In its June 2013 rating action, Fitch
referred to an upside to the rating based on an expectation that
the bank would meet at least a 9% common equity Tier 1 ratio on a
fully loaded Basel III basis by end-2013 with further increases
in future years. Fitch will look to review the likely capital
buffers and resolve the Rating Watch on announcement of the
details of the plan. A targeted deleveraging plan could mitigate
some of the capital attrition, but strategy around this is vague
at this stage.

"Our June rating announcement also assumed that the bank would
stabilize its franchise, with new management setting down a
sustainable, credible longer-term strategic plan. Ownership
changes announced this week create further uncertainty around
these drivers. Although the Co-operative Group remains the single
largest shareholder, having the majority of the bank owned by
institutional investors may further damage its core retail
franchise as an advertised co-operatively-run 'ethical' bank.
Underlying operating profitability is already under pressure and
franchise erosion could push the bank into a structural loss-
making position without a clear strategy to prevent this," Fitch

FARRELL: Fashionline Goes Into Liquidation
Eleanor Ward at reports that Farrell, the
fashionline founded by pop star Robbie Williams, has been
liquidated. notes that the line was launched back in
September 2011 and sold through high-end department stores,
including Selfridges and House of Fraser. The company also had an
online outline through

However, despite recent efforts to revive the brand and the
launch of a pop-up shop in Covent Garden just six weeks ago, the
company has now been liquidated, the report relays.

"The support of the men's press and retailers internationally
since we started has been incredible and I want to thank them,"
Mr. Williams said in a statement cited by

"I have also been fortunate to have had the opportunity to work
with the talented Ben Dickens and will miss creating and working
with and wish him every luck for the future."

The pop-up shop closed last week and staff in the design studio
and the shop floor were made redundant. The website has also
ceased trading, the report discloses.

INEOS GROUP: UK Gov't Seeks Buyer for Grangemouth Plant
Mure Dickie and Kiran Stacey at The Financial Times report that
the UK government is seeking a buyer for Grangemouth after Ineos,
the chemical company, decided to close Scotland's largest
petrochemical plant.

The decision, against the backdrop of continuing uncertainty over
the neighboring refinery, follows a weeks-long dispute between
the company and the Unite union over pay, conditions and union
representation, the FT notes.

Ed Davey, energy secretary, told MPs he had asked the business
secretary and UKTI, the UK's trade and investment body, to try to
find another company to invest in the plant, which employs more
than 800, the FT relates.

"We will be using all our efforts through the [business]
department and UKTI to assist should we need to have a buyer for
the petrochemical plant," the FT quotes Mr. Davey as saying in an
address to parliament.

Officially, ministers are urging Ineos and the Unite union to
return to the negotiating table to talk about how to keep open
the plant, 15 miles northwest of Edinburgh, the FT discloses.

But privately, senior members of the government admit Ineos is
not likely to do so and the plant can only be saved with new
investors, the FT notes.  One minister, as cited by the FT, said:
"It's all about finding a buyer now."

Alistair Carmichael, the Scottish secretary, has called for a new
owner to be found, backing an effort begun by Scottish leaders,
the FT discloses.

Ineos announced the news on Wednesday morning, saying half of
Grangemouth employees, and a large majority of shop floor
workers, had rejected its demand for changes to pay, pension and
union representation, the FT relays.

The company proposal included ending final salary pensions, a
2014 to 2016 pay freeze, a removal of a bonus up to 2016, and a
reduced shift allowance, the FT states.

Ineos claims the plant is losing some GBP10 million a month and
needs investment of GBP300 million, the FT notes.

                       About INEOS Group

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

SMARTSOURCE WATER: Goes Into Liquidation
David Millward at getreading reports that Smartsource Water, a
Reading company which claimed it could guarantee householders and
businesses savings on their water bills, has gone into

It is feared homeowners and businesses could be been left owing
thousands of pounds to water companies after the collapse of
Smartsource Water, getreading relates.

According to the report, the Consumer Council for Water said it
is working with water companies to help protect customers who
have paid money which has not been passed on.

Smartsource Drainage and Water Reports Ltd was founded in 2008 by
two former water company executives, Maureen Murphy and Peter

The company, based in Brook Drive, Green Park, appeared to be
thriving in July this year, when it was reported the firm had
signed a 10-year deal to move into Fountain House, in Queen's
Walk, to support its expansion and with recruitment plans under
way, the report discloses.

SPIRIT PUB: Obtains Favorable Terms on Debt
Duncan Robinson at The Financial Times reports that Spirit Pub
Company became the latest pubs group to win more favorable terms
on its debt, as creditors give the debt-laden sector more room
for maneuver.

The pub company, which has a net debt of GBP706 million, has
agreed to pay creditors a higher coupon over a longer, more
flexible period, giving the company smoother cash flow, the FT

As earnings have risen, Spirit's net debt to ebitda ratio has
fallen from 4.9 times to 4.7 times, the FT states.

The debt deal comes the month after rival pub company Enterprise
Inns refinanced GBP100 million of its net debt through an
unsecured convertible bond, in a sign that creditors are willing
to fund the highly leveraged pub industry once more, the FT

Pub groups loaded up on debt in the 2000s, leaving the industry
vulnerable when the financial crisis hit later that decade, the
FT discloses.

The "reprofiling" came as Spirit reported roughly flat full-year
revenues of GBP758 million, the FT recounts.  Like-for-like sales
in its managed division rose 1.6%, the FT states.  The group's
leased pubs continued to struggle, posting a 2.1% drop in like-
for-like sales for the year, the FT says.

Pub tenants have struggled in the downturn as a combination of
rising costs and falling custom hurt publicans, the FT recounts.

TOWN & COUNTRY: Pub in Administration, Seeks Buyer
The Publican's Morning Advertiser reports that Town & Country Pub
Company has been placed on the market after falling into

On behalf of administrators O'Hara's, Colliers International has
been instructed to dispose of the group's six leasehold sites in
London, Berkshire and Oxfordshire, according to The Publican's
Morning Advertiser.

The report relates that the portfolio features Bollo House in
Chiswick, the Bridge Tavern in Barnes, and Ealing Park Tavern in
South Ealing, all in west London.  The report relays that the two
Berkshire properties are the Casanova in Hungerford and the
Spring Inn in Sulhamstead.  In Oxfordshire, the Flowing Well in
Abingdon is being offered for sale, the report discloses.

The report relays that a seventh site operated by the company,
the Salthouse in St John's Wood, north-west London, was recently
secured by Greene King for its Realpubs format.

Ross Kirton -- --, director at Colliers
International, said: "The administrators will continue to operate
the businesses as a going concern while the sales process is
undergoing. The sale of this portfolio will especially appeal to
independent and small multiple operators."

Town & Country Pub Company is the south east-based pub group led
by Desmond Jones.

WR REFRIGERATION: In Administration, 600 Jobs at Risk
BBC News reports that WR Refrigeration has gone into
administration putting 600 jobs at risk across the UK.

WR Refrigeration was served with a winding up petition by Her
Majesty's Revenue & Customs earlier this month, according to BBC
News.  The report relates that administrators now said it faces
"the real risk of imminent closure".

The report notes that some 296 jobs are under threat in Leicester
and 59 in East Kilbride.  The firm also has sites in Ipswich,
Weston Super Mare, Dartford, Leeds, Spalding, Cardiff, Swansea
and Belfast.

The report discloses that WR Refrigeration had been experiencing
cash-flow and trading problems prior to the HMRC winding up
petition.  Administrators were called in after the firm was
unable to secure additional funding, the report notes.

The report relays that joint administrator Eddie Williams -- -- from PricewaterhouseCoopers, said:
"Over the last few weeks the directors, funders and other key
stakeholders have been in extensive dialogue with regards to
securing additional financial support for the business,
particularly in light of the winding up petition. . . .
Unfortunately, these discussions have not been successful and
have led to our appointment as administrators,"

"The level of losses and funding requirements mean that the
business may not be able to continue to trade and faces the real
risk of imminent closure," the report quoted Mr. Williams as

Mr. Williams, the report notes, added that there had been no
redundancies and employees would be paid on an on-going basis.

The report adds that Mr. Williams: "We have had expressions of
interest in the business and we will try to move forward, but we
need to retain support of customers and the employees . . . .  We
need all aspects of this to come together reasonable quickly."

Leicester-based WR Refrigeration is a fridge repair and servicing

UK: Scottish Corp. Insolvencies Up 45.7% in Three Months to Sept.
Herald Scotland reports that the number of Scottish corporate
insolvencies leapt by 45.7% quarter-on-quarter in the three
months to September, according to official figures which were
described by one expert as "unwelcome if not unexpected".

The Accountant in Bankruptcy (AiB) revealed on Wednesday that 268
Scottish companies had fallen into insolvency in the three months
to September, up from 184 in the preceding quarter and from 143
in the January to March period, Herald Scotland relates.

However, although the number of Scottish corporate insolvencies
in the three months to September was up 45.7% on the previous
quarter, it was 2.2% lower than in the same period of last year,
Herald Scotland notes.

Corporate insolvencies in Scotland in the three months to
September, the second quarter of the AiB's 2013/14 financial
year, comprised 155 compulsory liquidations, 107 creditors'
voluntary liquidations, and six receiverships, Herald Scotland

The AiB figures do not cover corporate administrations.

According to Herald Scotland, Bryan Jackson, a Glasgow-based
business restructuring partner at accountancy firm BDO, said of
the latest figures: "The rise in the number of corporate
insolvencies . . . is unwelcome, if not unexpected, news.  Many
companies have simply been existing for some time, barely
maintaining solvency in the hope and expectation that an upturn
in the market will be around the corner.  These firms, sometimes
called 'zombie' businesses, will have been in the doldrums for
several years and a slight change in circumstance, such as the
loss of a key customer, could push them over the edge."

And Mr. Jackson warned of more corporate failures, against the
backdrop of only a slow improvement in economic conditions,
highlighting the need for owners of businesses to adapt to the
changed circumstances, Herald Scotland discloses.


* BOOK REVIEW: The Phoenix Effect
Title: The Phoenix Effect: Nine Revitalizing Strategies
No Business Can Do Without
Authors: Carter Pate and Harlann Platt
Publisher: John Wiley & Sons, Inc.
Softcover: 244 Pages
List Price: $27.95
Review by Gail Owens Hoelscher

Buy a copy for yourself and one for a colleague on-line at

Think of all the managers of faltering companies who dream of
watching those companies rise from the ashes all around them!
With a record number of companies failing in 2001, and another
record-setting year expected for 2002, there are a lot of ashes
from which to rise these days.

Carter Pate and Harlan Platt highly value strong leadership able
to sharpen a company's focus and show the way to the future.
They believe that all too often, appropriate actions required to
improve organizations are overlooked because upper management
either isn't aware of the seriousness of the issues they face or
they don't know where to turn for accurate information to best
address their concerns. In the Phoenix Effect, the authors
present their ideas to "confront, comprehend, and conquer a
company's ills, big and small."

These ideas are grouped into nine steps: (i) Find out whether
the company needs a tune-up, a turnaround, or crisis management.
Locate the source of "the pain." (ii) Analyze the true scope of
the company's operations. Decide whether to stay in the same
businesses, withdraw from existing businesses, or enter new
ones. (iii) Hold the company to its mission statement. If it
strives to be "the most environmentally friendly." Figure out
how. (iv) Manage scale. Should the company grow, stay the same
size, or shrink? (v) Determine debt obligations and work toward
debt relief. (vi) Get the most from the company's assets.
Eliminate superfluous assets and evaluate underused assets.
(vii) Get the most from the company's employees. Increase output
and lower workforce costs. (viii) Get the most from the
company's products. Turn out products that are developed and
marketed to fill actual, current customer needs. (ix) Produce
the product. Search for alternate ways to create the product:
owning or leasing facilities, outsourcing, etc.

The authors believe that "how you're doing is where you're
going." They assert that the "one fundamental source of life in
companies, as in people,.is the capacity for self-renewal, the
ability to excite your team for game after game. to go for broke
season after season." This ability can come from "(g)enetics,
charisma, sheer luck, stock options - all crucial, yes, but the
best renewal insurance is a leader who always knows exactly how
his or her company is doing."

There are a lot of books written on this topic. Pate and Platt
successfully bridge the gap between overgeneralization and too
detail. They are equally adept at advising on how to go about
determining a business's scope and arguing for Monday rather
than Friday for implementing layoffs. They don't dwell on sappy
motivational techniques. They don't condescend to the reader or
depend too much on folksy vernacular and clich,. Their message
is clear: your company's phoenix, too, can rise from its ashes.

* Carter Pate is a well known turnaround expert at
PricewaterhouseCoopers with more than 20 years experience
providing strategic consulting and implementation strategies.

* Harlan Platt is a professor of finance at Northeastern
University and author of the book Principles of Corporate


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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