/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/140122.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, January 22, 2014, Vol. 15, No. 15 Headlines G E R M A N Y LOEWE AG: Investors Group to Take Over Television Maker PROKON: Opts to Halt Interest Payments Amid High Redemptions WIRSOL GROUP: Court Appoints Provisional Liquidator to Unit H U N G A R Y AURORA HOTELS: Enters Into Agreement with Creditors I C E L A N D LANDSBANKINN HF: S&P Assigns 'BB+/B' Counterparty Credit Ratings I T A L Y GRUPPO ARGENTA: KKR Agrees to Inject EUR100MM to Reduce Debt Load K A Z A K H S T A N ALLIANCE BANK: Dollar Bond Up Amid Second Debt Restructuring N E T H E R L A N D S GATEWAY II: Moody's Affirms Ba3 Rating on EUR20MM Class B-2 Notes HALCYON STRUCTURED: Moody's Raises Rating on Class E Notes to Ba1 P O L A N D P4 SP ZOO: Fitch to Assign 'B+' LT Issuer Default Rating PLAY HOLDINGS 2: S&P Assigns Prelim. 'B+' Corp. Credit Rating R O M A N I A CARREFOUR ROMANIA: Bucharest Court Cancels Insolvency Procedures * ROMANIA: 3,700 Corporate Insolvencies Recorded in Bucharest S P A I N GC PASTOR: S&P Lowers Rating on Class C Notes to 'D' SANTANDER CONSUMER: Fitch Affirms 'CCC' Rating on Class D Notes SUPERMERCADO LA NUCIA: In Receivership, Assets Auction Set * SPAIN: Banks' Bad Loans Up in November 2013 U N I T E D K I N G D O M CO-OPERATIVE BANK: KPMG Faces Probe Over Handling of Accounts DCT GROUP: In Administration Over Legal Costs, Cuts 100 Jobs DONCASTER ROVERS: Denies Administration Talk GAME: Stores Rebound From Falling Into Administration GLYNN PRINT: In Creditors' Voluntary Liquidation KMS COMPONENTS: In Administration, Cuts 30 Jobs PUNCH TAVERNS: Gives Ultimatum to Lenders on Restructuring Deal PYKES THE JEWELLERS: In Administration, Assets for Sale SCHOOL DINNER: Goes Into Liquidation TANFIELD ENGINEERING: Dozens Jobs Saved as Tinsley Buys Business * UK: RBS Faces Probe Over Business Loan Default ********* ============= G E R M A N Y ============= LOEWE AG: Investors Group to Take Over Television Maker ------------------------------------------------------- Reuters reports that Loewe AG said it would be taken over by a group of investors that include former senior managers at Apple and Bang & Olufsen, six months after seeking creditor protection. Reuters says German family-business entrepreneurs and executive board members at Loewe were also part of the group, which is acquiring "significant parts" of Loewe's assets. "Continuity of the Loewe traditional brand in German hands has been secured," the company said in a statement, without disclosing financial terms. As reported in the Troubled Company Reporter-Europe on Oct. 2, 2013, Reuters related that Loewe filed for insolvency on Oct. 1 and needs to find an investor before the end of the year to avert closure. Loewe fell into difficulties after it failed to keep up with mass-market rivals such as Samsung and LG Electronics, and struggled to cope with a slide in the average price of TV sets, Reuters disclosed. It filed for protection from creditors' demands in July to give it breathing space while it sought an investor and restructured the company, Reuters noted. Loewe AG is a German high-end television maker. PROKON: Opts to Halt Interest Payments Amid High Redemptions ------------------------------------------------------------ Ludwig Burger at Reuters reports that Prokon said it had to stop interest payments and would not for now redeem the millions of euros worth of so-called profit-sharing certificates sold to mainly retail investors, as too many were demanding their money back. "In the current situation we are unable to make repayments or interest payouts," Reuters quotes the group's managing director Carsten Rodbertus as saying in a statement on the group's website on Friday, addressing its 75,000 certificate holders. "Any payments could be and would be claimed back by an administrator in case of insolvency proceedings anyway." The company had raised some EUR1.4 billion (US$1.9 billion) by selling the profit-participation certificates, Reuters discloses. According to Reuters, the company had won mainly retail investors through TV advertising campaigns on German prime-time television, but last week warned it may have to file for insolvency if it was unable to strike a deal with investors. It had drawn criticism from consumer advocate groups for luring investors with promises of possible returns of at least 6%, without sufficiently warning of the risks, Reuters relays. More and more investors have requested their money back following several reports in German media that have questioned whether Prokon's payouts are backed by actual profits, Reuters relates. According to Reuters, the company added that to avert insolvency, at least 95% of investors' capital would have to remain with the company until the end of October, urging investors not to cancel their securities. Financial reports posted by Prokon on its website showed that as of October 2013, it had paid out EUR330 million in interest, even though it had made a loss of EUR210 million (US$287 million), Reuters discloses. Prokon is a German wind park operator. WIRSOL GROUP: Court Appoints Provisional Liquidator to Unit ----------------------------------------------------------- Solar Server reports that a German district court has assigned provisional liquidator Steffen Rauschenbusch to oversee the sale of assets for Wirsol Solar Energy AG (Mannheim, Germany), a subsidiary of Wirsol Group (Waghaeusel, Germany). According to the report, Wirsol Group and three subsidiaries entered insolvency in October 2013, with the aim of rehabilitating the company. Wirsol has since sold its UK division to an investor, and announced that it will liquidate its wind division, the report relates. No investor has been found to purchase the entire group, and the company has not published any news on what will happen to the other subsidiaries, Solar Server relays. Additionally, founder Markus Wirth and Mark Hogan have stepped down from the board of the company, leaving Nikolaus Krane alone on the management committee, adds Solar Server. ============= H U N G A R Y ============= AURORA HOTELS: Enters Into Agreement with Creditors --------------------------------------------------- MTI-Econews reports that troubled Aurora Hotels, which operates the Ramada Hotel in Balatonalmadi, on Lake Balaton, has reached an agreement with its creditors. According to MTI-Econews, Zoltan Kungli, the bailiff overseeing the company's assets, said the agreement was reached in the first week of January. Aurora Hotels filed for bankruptcy protection last November, MTI-Econews recounts. Wossala Hotels, the Balatonalmadi Ramada's earlier operator, went under liquidation in 2011 and the hotel was acquired by Erste Leasing, MTI-Econews relays. Erste Leasing then leased the hotel to Aurora Hotels, a company set up by the hotel's management, MTI-Econews relates. Balatonalmadi Ramada is a twelve-storey, 210-room hotel in Hungary. ============= I C E L A N D ============= LANDSBANKINN HF: S&P Assigns 'BB+/B' Counterparty Credit Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services said it had assigned its 'BB+' long-term and 'B' short-term counterparty credit ratings to Iceland-based Landsbankinn hf. The outlook is stable. The ratings reflect S&P's 'bb' anchor for banks operating in Iceland and its view of Landsbankinn's "adequate" business position, "strong" capital and earnings, "adequate" risk position, "average" funding, and "adequate" liquidity, as S&P's criteria define these terms. The stand-alone credit profile (SACP) is at 'bb+'. Landsbankinn was created in October 2008 from the domestic operations of the now defunct Landsbanki Islands hf. (LBI) group. S&P considers Landsbankinn's business position "adequate" because of its strong domestic market share (30%-40%) in primary business lines (corporate and retail banking, asset management, and corporate finance) and growing presence in retail mortgage lending. However, Landsbankinn is relatively small, with total assets of Icelandic krona (ISK) 1.2 trillion (about EUR7 billion) in September 2013, which limits its diversification in an international context. S&P considers that Landsbankinn has been well managed since its creation in 2008, demonstrating superior operating efficiency and a reduction of nonperforming loans. The bank also operates with significant liquidity and capital buffers and low leverage in the difficult economic environment. Capital and earnings are "strong" because S&P projects its risk- adjusted capital (RAC) ratio for Landsbankinn to remain below 15% at year-end 2015, after 13.1% at year-end 2012. Given the relatively high risk weights for Icelandic exposures, this strong RAC ratio understates the bank's leverage position. S&P's leverage ratio for Landsbankinn (adjusted common equity to adjusted assets) was higher than 20% in September 2013. In S&P's view, Landsbankinn's "adequate" risk position reflects its significant market shares and loan book, given risks in the market and the time to restructure existing loans. Landsbankinn's nonperforming loan stock is decreasing, which S&P expects to continue as the market recovers. S&P considers Landsbankinn's funding to be "average," balancing its relatively strong funding metrics against its high use of wholesale funding and demanding debt-repayment schedule. As of Sept. 30, 2013, S&P estimates the bank's stable funding ratio at 127%, demonstrating a steady improvement from 106% in 2010. "Despite solid ratios by our measures, we assess the bank's liquidity as "adequate." In September 2013, Landsbankinn's ratio of broad liquid assets to short-term wholesale funding was 2.7x," S&P said. S&P considers Landsbankinn to have "high" systemic importance in Iceland; however, S&P do not add any notches of uplift to the SACP because future extraordinary government support is uncertain. The stable outlook reflects S&P's view that over the next 24 months Landsbankinn's capital will continue to strengthen and that it will restructure a significant amount of legacy bonds due in 2014-2018. S&P could take a positive rating action if the bank's capital improved beyond its present forecast and it reported sustainably stronger revenues or lower credit losses than S&P expects. S&P could also take a positive rating action on Landsbankinn if risks for Iceland's economy and banking sector were to diminish. In addition, S&P could revise its assessment of the bank's overall funding and liquidity upward if it reduced the concentrations in its debt-maturity profile, which might lead to an upgrade. S&P could take a negative rating action if the asset quality of the bank's loan portfolio required significant additional provisioning or if unexpected valuation risks in the legacy loan book and securities portfolio arose. However, S&P has used conservative loss assumptions in its capital and earnings forecast, so S&P views a downgrade as unlikely at present. ========= I T A L Y ========= GRUPPO ARGENTA: KKR Agrees to Inject EUR100MM to Reduce Debt Load ----------------------------------------------------------------- Anne-Sylvaine Chassany at The Financial Times reports that KKR has agreed to inject EUR100 million into Gruppo Argenta mostly in the form of loans to help the company reduce its debt load and get cash for expansion. Argenta's private equity owner, Paris-based Motion Equity Partners, has agreed to inject an additional EUR10 million, the FT relates. KKR will become a minority shareholder with board representation, Marc Brown, a director at KKR's special situations in London, told the FT. According to the FT, banks approached the New York-based fund manager because they wanted to have the riskier junior debt they were holding repaid. The riskier the loan, the bigger the regulatory capital a lender needs to put aside to cover potential losses, the FT notes. "It was too onerous for them from a capital requirement point of view to keep that junior tranche. The refinancing means the company will also have more headroom in terms of maturities and covenants. We'll see more of that type of transaction as banks seek to de-lever," the FT quotes Mr. Brown as saying. Gruppo Argenta operates vending machines that offer snacks, beverages and coffee from Illy, Lavazza and Nespresso in 88,000 sites throughout Italy. The company employs 1,200 people. =================== K A Z A K H S T A N =================== ALLIANCE BANK: Dollar Bond Up Amid Second Debt Restructuring ------------------------------------------------------------ Reuters reports that the dollar bond due 2017 of Kazakhstan's Alliance Bank rose 1.5 points to 41.5 cents on Monday, Jan. 20, as investors awaited the terms of the banks' second debt restructuring since the global financial crisis. Alliance said on Monday it would meet creditors in London on Wednesday, Reuters relates. At a similar meeting last month the bank said it would not pay out on a series of recovery notes, Reuters discloses. The bond has slumped from a high of 93 cents set last May, due to expectations of the restructuring, Reuters recounts. But investors are hoping to recover around 50 cents on the dollar, citing the 44% recovery rate on another Kazakh bank, BTA, which they said was in a worse financial condition than Alliance, Reuetrs notes. About JSC Alliance Bank JSC Alliance Bank is the sixth largest bank in Kazakhstan by net loans. JSC Alliance is a bank with substantially all of its operations in the Republic of Kazakhstan. As of June 30, 2009, the Bank's net assets constituted 4.9% of the total assets of the banking system in Kazakhstan. It has 3,900 employees. The Bank's only assets in the U.S. are certain correspondent accounts with U.S. Banks. JSC Alliance Bank filed for Chapter 15 bankruptcy (Bankr. S.D.N.Y. Case No. 10-10761) to protect itself from U.S. lawsuits and creditor claims while it reorganizes in Kazakhstan. The Chapter 15 petition says that assets and debts are in excess of US$1 billion. Law firm White & Case LLP, based in New York, is representing JSC Alliance in the Chapter 15 case. ===================== N E T H E R L A N D S ===================== GATEWAY II: Moody's Affirms Ba3 Rating on EUR20MM Class B-2 Notes ----------------------------------------------------------------- Moody's Investors Service has taken the following rating actions on the following notes issued by Gateway II Euro CLO B.V.: Issuer: Gateway II Euro CLO B.V. (Previously Named Hudson CLO 1 B.V.) EUR190M (outstanding balance of EUR161.4M) Class A-1E Senior Secured Floating Rate Notes due 2023, Affirmed Aaa (sf); previously on Apr 28, 2011 Upgraded to Aaa (sf) EUR80M (outstanding balance of EUR67.8) Class A-1R Senior Secured Variable Funding Notes due 2023, Affirmed Aaa (sf); previously on Apr 28, 2011 Upgraded to Aaa (sf) EUR35.5M Class A-2 Senior Secured Floating Rate Notes due 2023, Upgraded to Aa1 (sf); previously on Sep 21, 2011 Confirmed at Aa2 (sf) EUR27.5M Class A-3 Deferrable Senior Secured Floating Rate Notes due 2023, Upgraded to A1 (sf); previously on Sep 21, 2011 Upgraded to A2 (sf) EUR24M Class B-1 Deferrable Senior Secured Floating Rate Notes due 2023, Affirmed Baa3 (sf); previously on Sep 21, 2011 Upgraded to Baa3 (sf) EUR20M (outstanding balance of EUR19.2M) Class B-2 Deferrable Senior Secured Floating Rate Notes due 2023, Affirmed Ba3 (sf); previously on Sep 21, 2011 Upgraded to Ba3 (sf) Gateway II Euro CLO B.V., issued in April 2007, is a multicurrency Collateralised Loan Obligation ("CLO") backed by a portfolio of mostly high yield European loans. The portfolio is managed by Pramerica Investment Management. This transaction passed its reinvestment period in July 2013. RATINGS RATIONALE According to Moody's, the rating actions taken on the notes result from an improvement in credit metrics of the underlying portfolio and also the benefit of modelling actual credit metrics following the expiry of the reinvestment period in July 2013. The credit quality has improved as reflected in the average credit rating of the portfolio (measured by the weighted average rating factor, or WARF). As of the trustee's November 2013 report, the WARF was 2702, compared with 2754 in January 2013 and 2855 at the time of the last rating action in September 2011. The weighted average spread also increased to 4.07% in November 2013, from 3.33% in September 2011. In light of reinvestment restrictions during the amortization period, and therefore the limited ability to effect significant changes to the current collateral pool, Moody's analyzed the deal assuming a higher likelihood that the collateral pool characteristics will continue to maintain a positive buffer relative to certain covenant requirements. In particular, the deal is assumed to benefit from a shorter amortization profile and higher spread levels compared to the levels assumed prior the end of the reinvestment period in July 2013. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's analyzed the underlying collateral pool as having a performing par and principal proceeds balance of EUR343.2 million, defaulted par of EUR10.7 million, a weighted average default probability of 19.37% (consistent with a WARF of 2767 with a weighted average life of 4.34 years), a weighted average recovery rate upon default of 49.34% for a Aaa liability target rating, a diversity score of 38 and a weighted average spread of 4.07%. In its base case, Moody's addresses the exposure to obligors domiciled in countries with local currency country risk bond ceilings (LCCs) of A1 or lower. Given that the portfolio has exposures to 12.38% of obligors in Italy, Ireland, and Spain, whose LCC are A2 (Ireland and Italy) and A3 (Spain), Moody's ran the model with different par amounts depending on the target rating of each class of notes, in accordance with Section 4.2.11 and Appendix 14 of the methodology. The portfolio haircuts are a function of the exposure to peripheral countries and the target ratings of the rated notes, and amount to 0.952% for the Class A- 1E, A-1R and A-2 notes and 0.595% for the Class A-3 notes. The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. For a Aaa liability target rating, Moody's assumed that a recovery of 50% of the 97.37% of the portfolio exposed to first-lien senior secured corporate assets upon default and of 15% of the remaining non-first-lien loan corporate assets upon default. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analyzing. Methodology Underlying the Rating Action: The principal methodology used in this rating was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in November 2013. Factors that would lead to an upgrade or downgrade of the rating: In addition to the base-case analysis, Moody's conducted sensitivity analyses on the key parameters for the rated notes, for which it assumed lower credit quality in the portfolio to address refinancing risk. Loans to European corporates rated B3 or lower and maturing between 2014 and 2015 make up approximately 4.76% of the portfolio, which could make refinancing difficult. Moody's ran a model in which it raised the base case WARF to 2910 by forcing ratings on 50% of the refinancing exposures to Ca; the model generated outputs that were within one notch of the base- case results. Moody's also considered a model run where the base case weighted average spread (WAS) reduced from 4.07% to 3.50%. This run generated model outputs that were one to two notches away from the base case results. This transaction is subject to a high level of macroeconomic uncertainty, which could negatively affect the ratings on the note, in light of 1) uncertainty about credit conditions in the general economy and 2) the large concentration of lowly- rated debt maturing between 2013 and 2015, which may create challenges for issuers to refinance. CLO notes' performance may also be impacted either positively or negatively by 1) the manager's investment strategy and behavior and 2) divergence in the legal interpretation of CDO documentation by different transactional parties due to because of embedded ambiguities. Additional uncertainty about performance is due to the following: 1) Portfolio amortization: The main source of uncertainty in this transaction is the pace of amortization of the underlying portfolio. Pace of amortization could vary significantly subject to market conditions and this may have a significant impact on the notes' ratings. In particular, amortization could accelerate as a consequence of high levels of prepayments in the loan market or collateral sales by the liquidation agent / the Collateral Manager or be delayed by rising loan amend-and-extend restructurings. Fast amortization would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. 2) Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over- collateralization levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Moody's analyzed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. 3) Foreign currency exposure: The deal has significant exposure to GBP denominated assets. Volatility in foreign exchange rates will have a direct impact on interest and principal proceeds available to the transaction, which can affect the expected loss of rated tranches. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. HALCYON STRUCTURED: Moody's Raises Rating on Class E Notes to Ba1 ----------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of the following notes issued by Halcyon Structured Asset Management European Long Secured/Short Unsecured CLO 2008-I B.V.: EUR278M Class A Senior Secured Floating Rate Notes due 2023 (outstanding balance: EUR 260.9M), Upgraded to Aaa (sf); previously on Nov 7, 2011 Upgraded to Aa1 (sf) EUR10M Class B Deferrable Secured Floating Rate Notes due 2023, Upgraded to Aa1 (sf); previously on Nov 7, 2011 Upgraded to A2 (sf) EUR20M Class C Deferrable Secured Floating Rate Notes due 2023, Upgraded to A1 (sf); previously on Nov 7, 2011 Upgraded to Baa2 (sf) EUR17M Class D Deferrable Secured Floating Rate Notes due 2023, Upgraded to Baa2 (sf); previously on Nov 7, 2011 Upgraded to Ba1 (sf) EUR11M Class E Deferrable Secured Floating Rate Notes due 2023, Upgraded to Ba1 (sf); previously on Nov 7, 2011 Upgraded to B1 (sf) Ratings Rationale According to Moody's, the rating actions taken on the notes result from the benefit of modeling actual credit metrics following the expiry of the reinvestment period in June 2013. In particular, prior to the end of the reinvestment period Moody's modeled the weighted average spread as the midpoint between the covenant and the actual level. The weighted average spread increased to 4.38% in November 2013, compared with 3.96% in November 2012 and 3.16% of the last rating action in November 2011 based on the trustee report as of October 2011. In consideration of the reinvestment restrictions applicable during the amortization period, and therefore the limited ability to effect significant changes to the current collateral pool, Moody's analyzed the deal assuming a higher likelihood that the collateral pool characteristics will continue to maintain a positive buffer relative to certain covenant requirements. In particular, the deal is assumed to benefit from a shorter amortization profile and higher spread levels compared to the levels assumed before the end of the reinvestment period in June 2013. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's analyzed the underlying collateral pool as having a performing par and principal proceeds balance of EUR363.9 million (EUR4.9 million of non-Euro obligations hedged via perfect assets swaps), defaulted par of EUR11.5 million, a weighted average default probability of 23.42% over 4.5 year WAL (consistent with a 10 year WARF of 3243), a weighted average recovery rate upon default of 49.10% for a Aaa liability target rating, a diversity score of 33 and a weighted average spread of 4.19% for variable paying assets and WAC of 6.82% for fixed paying. In its base case, Moody's addresses the exposure to obligors domiciled in countries with local currency country risk bond ceilings (LCCs) of A1 or lower. Given that the portfolio has exposures to 10.83% of obligors in Ireland and Spain, whose LCC are A2 and A3, respectively, Moody's ran the model with different par amounts depending on the target rating of each class of notes, in accordance with Section 4.2.11 and Appendix 14 of the methodology. The portfolio haircuts are a function of the exposure to peripheral countries and the target ratings of the rated notes, and amount to 0.33% for the Class A notes, 0.21% for the Class B notes and, 0.08% for the Class C notes. The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. For a Aaa liability target rating, Moody's assumed that a recovery of 50% of the 97.44% of the portfolio exposed to first-lien senior secured corporate assets upon default and of 15% of the remaining non-first-lien loan corporate assets upon default. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analyzing. Methodology Underlying the Rating Action The principal methodology used in this rating was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in November 2013. Factors that would lead to an upgrade or downgrade of the rating In addition to the base-case analysis, Moody's conducted sensitivity analyses on the key parameters for the rated notes, for which it assumed lower credit quality in the portfolio to address refinancing risk. Loans to European corporates rated B3 or lower and maturing between 2014 and 2015 make up approximately 4.5% of the portfolio, which could make refinancing difficult. Moody's ran a model in which it raised the base case WARF to 3311 by forcing ratings on 25% of the refinancing exposures to Ca; the model generated outputs that were within one notch of the base- case results. This transaction is subject to a high level of macroeconomic uncertainty, which could negatively affect the ratings on the note, in light of 1) uncertainty about credit conditions in the general economy 2) the exposure to lowly- rated debt maturing between 2014 and 2015, which may create challenges for issuers to refinance. CLO notes' performance may also be impacted either positively or negatively by 1) the manager's investment strategy and behavior and 2) divergence in the legal interpretation of CDO documentation by different transactional parties due to because of embedded ambiguities. Additional uncertainty about performance is due to the following 1) Exposure to credit estimates: The deal contains a large number of securities whose default probabilities Moody's has assessed through credit estimates. If Moody's does not receive the necessary information to update the credit estimates in a timely fashion, the transaction could be affected by any default probability stresses Moody's assumes in lieu of updated credit estimates 2) Portfolio amortization: The main source of uncertainty in this transaction is the pace of amortization of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortization could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortization would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. 3) Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over- collateralization levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Moody's analyzed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. In addition to the quantitative factors that Moody's explicitly modeled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. =========== P O L A N D =========== P4 SP ZOO: Fitch to Assign 'B+' LT Issuer Default Rating -------------------------------------------------------- Fitch Ratings expects to assign Poland-based P4 Sp. z.o.o. (P4 or Play) a Long-term Issuer Default Rating (IDR) of 'B+' with a Positive Outlook. The agency has assigned expected ratings of 'BB-(EXP)'/'RR3' to the proposed senior secured notes to be issued by Play Finance 2 S.A. and 'B-(EXP)'/'RR6' to the senior notes to be issued by Play Finance 1 S.A. Final ratings of the notes are contingent on the receipt of final documents conforming materially to the preliminary documentation. The expected IDR assumes the successful completion of P4's refinancing/recapitalization activity, including the issuance of the expected senior secured and unsecured notes, repayment of existing bank debt (approximately PLN2.5bn) and the payment of a shareholder dividend of PLN1.3bn. P4 has proven a nimble and fast-growing challenger in the Polish mobile market, establishing itself as a strong brand, with an easily understood service message and competitive distribution network. Revenues and cash flows demonstrate strong growth, with the company exhibiting improving margins, albeit below market and positive (pre-distribution) free cash flow. The rating is constrained by some uncertainty over future financial policy, the pace of growth, market position among competitors, and the currency mismatch of the proposed debt structure. The Positive Outlook reflects Fitch's opinion that delivery of management's planned 2014 budget would result in robust financial metrics for a 'B+' rating. The evolution of the capital structure following the transaction (i.e. how closely the shareholders choose to manage leverage to covenant), continued rational development of the market and evidence that roaming agreements are largely insulated from material price inflation or renegotiation risk, could support a higher rating. Rational Market, Low Convergence Risk Fitch views competition in the Polish mobile market as developed and well dimensioned with no single operator owning a disproportionate share of the market, while as the market challenger, Play has taken a measured approach to market share gains, product position and pricing. The agency considers that a population of 38 million people in a reasonably advanced economy can support a four player market and that the market structure is less likely to experience the kind of value-destructive price wars seen in some markets. The somewhat underdeveloped fixed telephony infrastructure and limited pervasion of traditional triple-play services, suggest an aggressive move to convergent fixed-mobile bundles is currently a limited medium-term risk. Efficient Infrastructure Strategy Play has developed an efficient approach to network coverage concentrating its own network infrastructure in more populous and urban areas, relying to a limited extent on roaming agreements, which currently exist with each of the other three main network operators. Data traffic is almost entirely carried on the company's own network, while spectrum and planned LTE (next generation data technology) investment appear adequately provisioned relative to the competition. This hybrid asset-light approach allows for a lower level of capital intensity, in turn supporting an improving cash flow. While roaming agreements are entirely commercially negotiated, Fitch does not perceive a high degree of renegotiation risk given the current existence of multiple agreements. Effective Commercial Approach Play appears to have developed a consistent and well-communicated brand, seeking to be the mobile number porting destination of choice and has acquired customers on a relatively evenly balanced basis across the market (ie. without targeting any one particular competitor). Management appear conscious of the need not to be seen as a disruptive challenger, which could provoke a destructive price war. Distribution channels (ie. the number of retail shops/distributors) among competitors appear evenly matched, which is important, given the absence of an independent distribution chain (ie. a Carphone Warehouse equivalent) . Although virtual mobile network operators have been present in the market for a number of years, they have not proven overly disruptive. Mature Competitive Market As the smallest in a four player market in an emerging economy, Play has proven a nimble competitor and has grown quickly and consistently. The pace of growth will continue to require careful management while the presence of two large incumbent- owned multinational competitors -- Orange (BBB+/Negative) and T-Mobile (Deutsche Telecom; BBB+/Stable) -- provides financially strong and experienced competitors with the capacity to intensify the operating environment if they choose. Financial Policy Evolving Financial policies that allow leverage to remain somewhat high (incurrence tests of 4.25x net leverage; 3.0x net secured leverage and a restricted payment test limited at 3.75x net debt to EBITDA) and the currency mismatch of a predominantly euro- denominated debt structure and 100% domestic revenue base, are constraining factors for the rating. POSITIVE: Any positive action would be subject to the continued rational behavior of the market and that market share gains and other performance indicators are in line with Fitch's rating case. The shareholders' approach to financial policy will also be important. With a potential IPO deemed a number of years off and the bonds incorporating a restricted payment test (set at 3.75x) Fitch expects recurring dividends to consistently re- leverage the balance sheet. The level at which the shareholders choose to establish this, combined with continued operational performance will determine whether the financial profile supports a 'BB-' rating. The following metrics would be important for an upgrade to be considered: -- Continued strong subscriber growth and an ongoing shift in the subscriber mix to postpaid customers, with subscriber acquisition cost and postpaid churn close to management's expectations. -- EBITDA margin in the high 20s and EBITDA less capex margin in the high teens. -- A financial policy that is likely to see FFO net adjusted leverage managed at or below 4.0x, a level consistent with net debt/EBITDA of around 3.3x-3.4x. A stabilization of the rating at the current ('B+') level is likely if the competitive (pricing) environment intensifies, making revenue growth and margin expansion targets more challenging. An expectation that convergent services were deemed by the market to be a more important offering could also undermine the Positive Outlook. A financial policy that included FFO net adjusted leverage consistently managed above 4.0x would be expected to stabilize the rating at 'B+'. In the absence of greater clarity on publicly stated financial policy from management/the owners, Fitch would not expect any positive rating action until a second dividend has been declared. Full List of Rating Actions -- P4 Sp. Z.o.o. Long-Term IDR: Fitch expects to rate: 'B+'; Outlook Positive -- Play Finance 2 S.A. Senior Secured Notes: 'BB-(EXP)'/'RR3' -- Play Finance 1 S.A. Senior Notes: 'B-(EXP)'/'RR6' PLAY HOLDINGS 2: S&P Assigns Prelim. 'B+' Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its preliminary 'B+' long-term corporate credit rating to Poland- based wireless telecommunications company Play Holdings 2 S.a.r.l. (PLAY). The outlook is stable. At the same time, S&P assigned its preliminary 'B+' issue rating to the group's EUR630 million equivalent proposed senior secured notes due 2019, to be issued by Play Finance 2 S.A. and S&P's 'B- ' issue rating to the group's EUR240 million proposed unsecured notes due 2019, to be issued by Play Finance 1 S.A. The preliminary rating on PLAY reflects S&P's assessment of its financial risk profile as "aggressive" and its view of its business risk profile as "fair," as well as its view of the group's significant exposure to currency mismatch risk owing to its euro-denominated debt and Polish zloty-denominated revenue. PLAY is planning to issue EUR870 million of senior secured and unsecured notes and use the proceeds, along with cash on its balance sheet, to refinance existing debt and fund shareholder distributions of about EUR309 million. "PLAY's "fair" business risk profile reflects our view of its solidifying position as the No. 4 mobile network operator in Poland, with relatively significant subscriber market share of over 18%, representing over 10 million subscribers. We also consider PLAY to have a strong brand as a value-for-money provider, and we view the company's meaningful growth in recent years and declining customer turnover as positives for our assessment. In addition, the business risk profile is supported by our anticipation of additional growth in revenue and EBITDA for PLAY, owing to the room for growth from mobile broadband and additional subscribers. We consider its operating efficiency to be adequate, with a relatively low-cost business model and attractive network sharing agreements," S&P said. The business risk profile is constrained by PLAY's lack of operating diversity, as it relies on a single market in a single country, with a relatively high proportion of low value-based prepaid subscribers. S&P views the competition from larger operators -- which have greater financial resources, higher network coverage, or broader product ranges -- as a primary constraint to S&P's evaluation of PLAY's business risk profile. S&P also assess the company's profitability as below average for the industry. S&P's assessment incorporates its view of the telecoms and cable industry's "intermediate" risk and its view of Poland's "moderately high" country risk. "We assess PLAY's financial risk profile as "aggressive" due to its controlling financial sponsor ownership of over 40% (it is about 50% owned by NTP S.a r.l.) and the degree of uncertainty we have regarding its long-term financial policy and leverage targets. Our financial risk profile assessment also reflects our forecast that the group's Standard & Poor's-adjusted debt-to- EBITDA ratio will decline to below 4.0x in 2014 from about 5.3x in 2013, pro forma the planned recapitalization of its balance sheet. Furthermore, we forecast that the group's adjusted debt to EBITDA will likely remain comfortably below 5x going forward, in view of its meaningful organic deleveraging prospects and limitations on debt incurrence. We anticipate that the group's free cash flow generation will be negative in 2013, due to the acquisition of a spectrum license. We anticipate that free cash flows could be negative in 2014, as they were in 2013, due to the possible purchase at auction of a 800MHZ/2600 MHZ spectrum license. However, we forecast meaningful improvement in the group's recurring free cash flows, excluding one-off spectrum license acquisitions, despite increasing interest burden and capital expenditure (capex) requirements in order to increase the company's LTE high-speed data coverage," S&P added. "We assess PLAY's anchor at 'bb-'. To reach the long-term corporate credit rating of 'B+', we make a one-notch downward adjustment to the anchor for our comparable ratings analysis, whereby we review an issuer's credit characteristics in aggregate. This reflects what we view as significant currency mismatch exposure. The group's debt will be predominantly euro- denominated, but we anticipate that it will generate nearly 100% of its EBITDA in Polish zloty (PLN), with no hedging of its principal in place. The company's plans to hedge near-term coupon payments only partly offsets currency risks, in our view. The modifier also reflects our view of the company's lower-than- average profitability compared with industry peers," S&P noted. S&P's base-case operating scenario for PLAY assumes: -- GDP growth in Poland of 1.0% this year and 2.0% in 2014; -- Meaningful service revenue growth in 2013 (about 20%), reflecting a significant increase in subscribers following PLAY's introduction of all-inclusive voice plans, mostly offset by declining interconnect revenues--leading to overall revenue growth of 3%-4%. -- High-single-digit revenue growth in 2014, reflecting continued, though moderated, subscriber growth and stabilizing average revenue per user (ARPU) due to growth in data revenues. -- Subscriber acquisition and retention costs remaining significant at over 20% of revenues. -- Adjusted EBITDA margin of about 21% in 2013, increasing to over 25% in 2014, from about 19% in 2012. The main factor behind the margin growth is the meaningful decline in interconnect costs in 2013 thanks to a 48% cut in Poland's mobile termination rates (MTR) in July (PLAY is a net payer of MTR). In addition, margins are supported by improving economies of scale. -- Capital expenditure (capex) of 10%-11% of revenues in 2014. Based on these assumptions, S&P arrives at the following credit measures: -- Funds from operations (FFO) to debt of 13% at year-end 2013, increasing to over 15% in 2014; -- Debt to EBITDA of 5.3x at year-end 2013, declining to below 4.0x in 2014; -- Adjusted interest coverage of over 3.0x in 2014; and -- Adjusted free operating cash flow to debt of 7%-10% in 2014, excluding the potential spectrum license acquisition. The stable outlook reflects S&P's view of the prospects that PLAY's profitability and cash flow generation will meaningfully improve over the next 12 months. S&P anticipates that this is likely to happen even if growth is slower than in its base-case scenario, due to lower subscriber acquisition costs. S&P sees limited chances of an upgrade over the next 12 months. This is due to S&P's view that it will continue to assess PLAY's business risk profile as fair given its position as a challenger in the mobile market and its relatively low profitability. The company's currency risk exposure, controlling sponsor ownership, and lack of a defined financial policy also reduce the likelihood of an upgrade. S&P could consider raising the ratings, however, if PLAY substantially hedges its debt principal, while maintaining adjusted leverage below 5x and EBITDA margins in the mid-20% range. This will likely require the company to clarify any additional spectrum spending requirements. "We also see limited chances of a downgrade in the short term, given our view of the company's solid deleveraging prospects. We could lower the rating if we were to revise downward our assessment of PLAY's business risk profile. This could happen if the group's positive momentum significantly slows in 2014 due to tougher market conditions and an increase in subscriber retention costs, leading to lower profitability. We may also assess the business risk profile as weaker if PLAY has no access to 800MHZ spectrum (either by owning licenses or acquiring access through a wholesale agreement), as we think it could place PLAY at a significant long-term disadvantage compared with its competitors. We may also lower the rating if financial policy is more aggressive than in our base-case assumptions, leading to an increase in leverage to over 5x and decline in free cash flow to debt (excluding one-off spectrum acquisition) to below 5%," S&P added. ============= R O M A N I A ============= CARREFOUR ROMANIA: Bucharest Court Cancels Insolvency Procedures ---------------------------------------------------------------- The Diplomat reports that Carrefour Romania wins in court the cancellation of insolvency procedures previously asked by one of the company's suppliers, on the ground of unpaid debts worth EUR180,000. The company was represented in court by law firm Acuca Zbarcea and Associates. According to The Diplomat, GSL Logistic, a distributor for children and adult accessories has asked for the insolvency. The retailer officials, the report relates, commented that the decision of Bucharest Court of Law has been taken in rush and Carrefour does not face any financial distress. The retailer recently announced it opened two more proximity stores of Express network in Bucharest, in partnership with Salviamax, respectively in Brasov, in partnership with RostCom. Both stores will be run in franchise system. Following the openings, Carrefour reached a total network of 58 proximity stores, out of which 10 are located in Brasov and 48 are located in Bucharest and Ilfov. Currently, Carrefour operates 4 retail formats, with a total of 159 stores: 25 hypermarkets, 77 supermarkets, 56 proximity Express stores and online store. Carrefour Romania has more than 1,500 private label products on the local market, which represent around 13 percent of the company total turnover. * ROMANIA: 3,700 Corporate Insolvencies Recorded in Bucharest ------------------------------------------------------------- Romania-Insider.com reports that around 30,000 Romanian companies entered insolvency last year, up 10 percent on 2012. Over a third of the newly insolvent ones were retail companies, according to Trade Registry data. December saw the start of insolvency procedures for 2,400 companies, down on 3,500 in November and 3,300 in October, Romania-Insider.com discloses. Romania-Insider.com relates that most insolvencies were recorded in Bucharest -- 3,700, up 5.4 percent on 2012 -- and Bihor, with 1,800 insolvencies, a 40 percent growth on 2012. The smallest number of insolvencies was recorded in Calarasi -- only 217 cases, and Olt -- 244 cases. After retail trade, construction companies were the second most affected by insolvency -- 3,800 insolvencies, which was however down on 6,100 in 2012. Hotels and restaurants kept a steady trend -- 3,400 insolvencies, compared to 3,100 in 2012, relays Romania- Insider.com. ========= S P A I N ========= GC PASTOR: S&P Lowers Rating on Class C Notes to 'D' ---------------------------------------------------- Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CCC- (sf)' its credit rating on GC Pastor Hipotecario 5, Fondo de Titulizacion de Activos' class C notes. The downgrade follows the class C notes' interest payment default on the Dec. 23, 2013 interest payment date (IPD). The rest of the capital structure remains unaffected. As S&P noted in its previous review on July 26, 2013, its rating on the class C notes reflect the proximity of the notes to their interest deferral trigger and the lack of liquidity, as the reserve fund has been fully depleted since July 2010. The trustee's data for the December 2013 IPD shows that cumulative defaults account for 7.04% of the closing portfolio balance, which is above the transaction's 6.7% trigger for the class C notes. The class C notes defaulted on their interest payment on the December 2013 IPD following the breach of the interest deferral trigger and a lack of available liquid funds. As S&P's ratings in this transaction address the timely payment of interest and the ultimate payment of principal, it has lowered to 'D (sf)' from 'CCC- (sf)' its rating on the class C notes. GC Hipotecario Pastor 5 closed in June 2007 and securitizes a portfolio of mortgages granted to individuals, self-employed individuals, and small and midsize enterprises (SMEs) to buy Spanish residential or commercial properties. Banco Pastor (now Banco Popular) originated and currently services the portfolio. SANTANDER CONSUMER: Fitch Affirms 'CCC' Rating on Class D Notes --------------------------------------------------------------- Fitch Ratings has taken rating actions on Santander Consumer Spain 09-1 FTA (09-1) and Santander Consumer Spain 10-1 FTA (10- 1). The rating actions are as follows: Santander Consumer Spain 09-1, FTA: -- EUR70.9m class B: affirmed at 'A+sf'; Outlook Stable -- EUR37.8m class C: upgraded to 'BBB+sf' from 'BBBsf'; Outlook Stable -- EUR35.7m class D: affirmed at 'CCCsf'; Recovery Estimate 70% Santander Consumer Spain 10-1, FTA: -- EUR48.6m class A: affirmed at 'AA-sf'; Outlook Stable -- EUR57m class B: affirmed at 'AA-sf'; Outlook Stable -- EUR49.5m class C: affirmed at 'Asf'; Outlook Stable Santander Consumer 09-1 and 10-1 are both securitizations of auto and consumer loans extended to Spanish consumers. Key Rating Drivers The rating actions reflect the transaction's solid performance over the past 12 months. Both deals have significantly deleveraged, leading to an increase in the available credit support. Fitch expects this deleveraging trend to continue. Arrears for Santander Consumer 10-1 have seen an increasing trend since closing in July 2010, albeit on a low level. As of the most recent interest payment date (IPD) in November 2013, 30+ days past-due delinquencies stood at 3.3%. As a result, excess spread trends have remained healthy. The reserve fund for 10-1 has also remained fully funded since closing. Santander Consumer 09-1 has seen less positive trends, based on the most recent IPD in October 2013, with late-stage delinquencies continuing to increase and the reserve fund being drawn for the second time since closing in August 2009. A principal retention reserve is also in place whereby collections of up to 20% of the outstanding portfolio balance, including write-offs, are retained within the structure with the intention of extending the life of the notes. This introduces an additional layer of counterparty exposure to the account bank as EUR56.7 million of enhancement for the deal is currently held in cash. Despite these factors, Fitch has upgraded the ratings of the class C note by one notch as the available credit enhancement, after accounting for the additional risks, is still sufficient to support the higher rating. However, the recent reserve fund draw may have a negative impact on the future performance of the lower class D tranche, which Fitch will to continue to monitor. The ratings of the senior tranches for each deal are capped by a five-notch uplift from Spain's sovereign rating (BBB/Stable/F2), despite the considerable credit enhancement available. Rating Sensitivities Santander Consumer Spain 09-1,FTA Expected impact upon the note rating of increased defaults (class B/C/D): Current ratings: 'A+sf'/'BBB+sf'/'CCCsf' Increase base case defaults by 25%: 'A+sf'/'BBB+sf'/'CCCsf' Expected impact upon the note rating of reduced recoveries (class B/C/D): Current ratings: 'A+sf'/'BBB+sf'/'CCCsf' Reduce base case recoveries by 25%: 'A+sf'/'BBB+sf'/'CCCsf' Santander Consumer Spain 10-1,FTA Expected impact upon the note rating of increased defaults (class A/B/C): Current ratings: 'AA-sf'/'AA-sf'/'Asf' Increase base case defaults by 25%: 'AA-sf'/'AA-sf'/'Asf' Expected impact upon the note rating of reduced recoveries (class A/B/C): Current ratings: 'AA-sf'/'AA-sf'/'Asf' Reduce base case recoveries by 25%: 'AA-sf'/'AA-sf'/'Asf' SUPERMERCADO LA NUCIA: In Receivership, Assets Auction Set ---------------------------------------------------------- Euroweekly News reports that official receivers have decided to auction Supermercado La Nucia. Supermercado La Nucia is one of the few places where foreign residents could buy products they missed from home, according to Euroweekly News. The report relates that it gradually but inexorably fell victim to the crisis and the brothers failed to reach agreement over the supermarket's future and it is now in receivership. The report notes that an auction was decided on to ensure that the business continues to operate and the 34 employees do not lose their jobs. It will be held on January 23 in Alicante, with a reserve price of EUR2,213,539. Supermercado La Nucia was founded by brothers Enrique and Juan Bautista Mendoza just over 33 years ago. * SPAIN: Banks' Bad Loans Up in November 2013 --------------------------------------------- David Roman at The Wall Street Journal reports that bad loans held by Spanish banks rose again in November, the latest in a series of months in which they hit an all-time high, an indication that the balance sheets of the country's lenders will take time to reflect the gradual improvement of the economy since mid-2013. According to the Journal, data released Friday by the Bank of Spain showed that non-performing loans stood at 13.07% of all loans in November, up from 13% in October. Bad loans amounted to EUR192.5 billion (US$262 billion) in November, up from EUR190.9 billion in the previous month, the Journal says. In a significant departure from previous months, total loans increased to EUR1.471 trillion from EUR1.469 trillion in October -- the first such monthly increase since March 2013, the Journal discloses. =========================== U N I T E D K I N G D O M =========================== CO-OPERATIVE BANK: KPMG Faces Probe Over Handling of Accounts ------------------------------------------------------------- BBC News reports that KPMG is being investigated over its handling of the troubled Co-operative bank's accounts. According to BBC, the Financial Reporting Council will look into the "preparation, approval and audit" of the Co-op bank's finances up to the end of 2012. The accountancy group said it would co-operate fully, BBC relates. The Co-op bank is struggling financially, and is also suffering from a scandal involving its former chairman Paul Flowers, BBC relays. Mr. Flowers, a Methodist minister with little experience in banking, joined the Co-op board in 2009 as a non-executive director, BBC discloses. Co-op Bank was rescued last year under a deal with bondholders, after it emerged the bank faced a GBP1.5 billion black hole, BBC recounts. About Co-operative Bank Co-op Bank -- part of the mutually owned food-to-funerals conglomerate Co-operative Group -- traces its history back to 1872. The bank gained prominence for specializing in ethical investment. It refuses to lend to companies that test their products on animals, and its headquarters in Manchester is powered by rapeseed oil grown on Co-operative Group farms. Founded in 1863, the Co-op Group has more than six million members, employs more than 100,000 people, and has turnover of more than GBP13 billion. * * * The Troubled Company Reporter-Europe on Nov. 14 and 18, 2013 has reported that Moody's Investors Service has affirmed The Co-operative Bank's Caa1 senior unsecured debt and deposit ratings, and changed the outlook on the rating to negative from developing, and Fitch Ratings has downgraded the company's Issuer Default Rating to 'B' from 'BB-' and placed it on Rating Watch Negative. DCT GROUP: In Administration Over Legal Costs, Cuts 100 Jobs ------------------------------------------------------------ BBC News reports that engineering firm DCT Group is in administration over legal costs About 100 staff at a civil engineering firm has been made redundant after the company went into administration, according to BBC News. The report relates that DCT Group said legal costs following a dispute with Liverpool City Council had pushed it into insolvency. Liverpool City Council said it was "disappointed" it had not been contacted to discuss the situation, the report relays. The report notes that administrator Tom Jack said DCT Group had been involved in a long-standing legal dispute with Liverpool City Council. "DCT Group was a long-established engineering business that has been impacted by the outcome of a legal dispute. As a result the group has insufficient cash flow to fund continued trading," the report quoted Mr. Jack as saying. Oldham-based DCT Group is an engineering firm. The company focused on infrastructure projects relating to highways, public realm, environmental, renewable energy and water and sewerage. DONCASTER ROVERS: Denies Administration Talk -------------------------------------------- Paul Goodwin at Thorne and District Gazette reports that Doncaster Rovers have strenuously denied they are considering entering administration. Doncaster Rovers was thought to be weighing up the drastic move due to concerns centered on money owed to John Ryan, according to Thorne and District Gazette. But, the report notes that following the announcement of Richie Wellens' arrival on an 18-month contract, Doncaster Rovers was keen to point to that deal in a statement denying they were contemplating administration. The report says that Chief Executive Gavin Baldwin said: "The club's top priority is to support the manager in every way possible to ensure we maintain our Championship status. . . . The owners have shown a clear intent for the future by making funds available for new signings during the transfer window." "In addition to this we have also gone above and beyond our normal parameters to ensure that Richie Wellens remains at the club long term . . . . These are not the actions of a club who are considering administration as an option," the report quoted Mr. Baldwin as saying. The report says that news surfaced in the national press suggesting the club could be on the verge of going into administration; the latest twist in an extraordinary season of off the field activity. The report relates that the issue at the heart of that story is the money owed to Mr. Ryan. Mr. Ryan revealed he is owed GBP4 million by the club when he announced his resignation as chairman and a director following the 0-0 draw at Barnsley in November, the report notes. Sequentia Capital is understood to have agreed to buy that loan off Ryan as part of their strategy to take over the club, the report discloses. The Free Press understands that neither Mr. Ryan nor Sequentia Capital are likely to call that loan in -- but there has been anxiety in the Rovers boardroom about the cash owing, the report notes. Sequentia have written to Rovers' majority shareholders attempting to dissuade them from entering administration and also expressing their continued interest in buying the club and investing in squad strengthening, the report relates. GAME: Stores Rebound From Falling Into Administration ----------------------------------------------------- express.co.uk reports that the popularity of new computer games such as Grand Theft Auto 5 helped retailer Game steal a march on rivals and boost festive sales. Games like Grand Theft Auto V have boosted sales by over 80 per cent for Game stores Games like Grand Theft Auto V have boosted sales by over 80 per cent for Game stores, according to express.co.uk. The report notes that the gaming group, which fell into administration two years ago before being bought by private equity outfit OpCapita, said total sales in the six weeks to January 4 had raced 83 per cent higher compared to market growth of 53 per cent. The report relates that sales at stores open at least a year grew 90 per cent and online sales, helped by a new mobile app, surged 213 per cent. Led by Chief Executive Martyn Gibbs, it said games such as FIFA 14 as well as new computer consoles PlayStation 4 and Xbox One proved popular at its 320 stores, the report notes. The report relays that Mr. Gibbs said: "These figures reflect the transformation of the operational and financial profile of the business. Gamers are coming to us because of our in-depth product knowledge and exclusive content. We see strong momentum in our business." Analyst Nick Bubb said: "Game might very well be big enough again to be thinking about a listing," the report adds. GLYNN PRINT: In Creditors' Voluntary Liquidation ------------------------------------------------ PrintWeek News reports that joint liquidators Chris Stirland -- chris.stirland@frpadvisory.com -- and Phil Pierce -- phil.pierce@frpadvisory.com -- from restructuring firm FRP Advisory were appointed on Dec. 31, following a meeting of the board of directors on December 17 during which the decision was taken to place the company into CVL. The Stourton-based group, which employed 49 staff at The Website and 77 at Glynn Print Finishers, ceased trading immediately, according to PrintWeek News. The report notes that its demise has been blamed on the unexpected cancellation just before Christmas of a major contract, for which a number of full-time employees had been recruited, as well as a string of bad debts impacting cashflow. The report relates that the last contract, speculated to be for pizza chain Domino's, is understood to have involved as much as GBP500,000 worth of work every six weeks. PrintWeek understands that a change in the management of the Domino's contract has resulted in a switch of print supplier. Following the contract, cancellation attempts to sell off some of the group's assets, in an effort to ease the cash flow shortages, were unsuccessful, the report notes. The report relays that statement from FRP Advisory said: "The wider paper and card printing market has been in chronic decline over a number of years since the advent of online publishing and the pace of that decline is increasing, however the group had managed to win market share in the past three years by investment in cutting edge printing press machinery." "The group was increasingly reliant on revenue provided from The Website but the cancellation of a key order from a previously loyal customer on short notice without warning left it with a large deficit which it was unable to fund." The report discloses that joint liquidator Mr. Stirland said: "It is hugely regrettable that a strong Leeds-based business with a loyal national customer base and which has employed over 100 staff for more than a decade has had to close." A source told PrintWeek that final negotiations were now underway with a potential buyer for some of the group's assets that "could lead to a couple of dozen jobs being created within the next few days." KMS COMPONENTS: In Administration, Cuts 30 Jobs ----------------------------------------------- Penarth Times reports that KMS Components Limited has gone into administration with the loss of more than 30 jobs. KMS Components went into administration on Wednesday, January 8. Of the 55 people that were employed at KMS House, by Penarth Marina, 36 have been made redundant with 19 staff currently remaining, according to Penarth Times. Richard Michael Hawes -- rhawes@deloitte.co.uk -- and Matthew David Smith of Deloitte LLP were appointed Joint Administrators of KMS Components Limited on January 8. Penarth-Based KMS Components Limited is one of the largest distributors of tablets and other computer components in the UK. KMS Components was founded in 1994. PUNCH TAVERNS: Gives Ultimatum to Lenders on Restructuring Deal --------------------------------------------------------------- This is Money reports that Troubled Punch Taverns has given an ultimatum to lenders to accept a restructuring deal or risk Britain's second largest pubs group falling into administration. Punch Taverns' board has wrangled with a consortium of pension funds, who control the GBP2.3 billion debt pile, over the past 14 months, according to This is Money. But in a surprise move Punch Taverns issued 'final proposals', warning that failure to push them through -- at a meeting on Valentine's Day -- could result in the business defaulting, the report notes. The report relates that Executive Chairman Stephen Billingham said: "Failure to do so will lead to a much worse outcome with considerable uncertainty for the business and potentially significant loss of value." The report discloses that the details of the restructuring were made without final consultation of the ABI Senior Noteholder Committee pension funds. The group believes Punch is overplaying 'future uncertainty' in a bid to force lenders to agree to the restructuring, the report relays. The ABI consortium is just one of 16 groups of lenders who have to vote 75 per cent in favor for the restructuring to go through. As reported in the Troubled Company Reporter-Europe on Jan. 16, 2014, Nathalie Thomas at The Telegraph reports that Punch Taverns has published final proposals to restructure its GBP2.3 billion debt pile, warning that failure to secure agreement from lenders will lead to "considerable uncertainty." According to The Telegraph, the company said the restructuring deal will create a "robust debt structure" that will provide stability for the business. Punch is weighed down by two complex debt structures, which suck up large amounts of cash from the company to avoid a default, The Telegraph notes. The structures, which together amount to GBP2.3 billion, are a legacy of a debt-fuelled acquisition boom last decade, The Telegraph states. The company has so far faced opposition to its restructuring plans from senior lenders, who warned in December that they would vote against the proposals on the table at that time, The Telegraph relates. Punch Taverns plc is a United Kingdom-based pub company. The Company is engaged in the operation of public houses under either the leased model or as directly managed by the Company. The Company operates in two business segments: punch partnerships, a leased estate and punch pub company, a managed estate. PYKES THE JEWELLERS: In Administration, Assets for Sale ------------------------------------------------------- Chester Chronicle News reports that Pykes the Jewellers is up for sale after going into administration on Jan. 3 more than 135 years since being founded. It is believed the business has been impacted by reduced discretionary spending during the down-turn, competition from online jewelry websites and a rise in the price of precious metals, according to Chester Chronicle News. The report notes that Liverpool-based Parkin S Booth & Co has been instructed to oversee the administration of the company, with Ian Brown and John Fisher appointed as joint administrators. The report relates that they hope to sell the business as 'a going concern' with 'some interest' already expressed from potential buyers. Pykes' four shops will remain open while a buyer is sought, with no redundancies so far, the report discloses. There is currently a discount sale across all stores to help drive footfall and sales, the report adds. Pykes the Jewellers is a family-run jewellery chain. It has shops in Chester, Birkenhead, and Liverpool. The North West jeweller was established by William Pyke in Market Street, Birkenhead, in 1876. SCHOOL DINNER: Goes Into Liquidation ------------------------------------ Gloucester Citizen reports that 17 primary schools across Gloucestershire are searching for a new school dinner provider after an independent Cheltenham caterer has gone into liquidation. The School Dinner Company (SDL) has informed schools and creditors that it stopped trading as of Jan. 2. The report notes that its chefs cooked out of seven kitchens in the Cheltenham area serving primary schools including St Gregory's, Rowanfield School, and Swindon Village Primary School and catered for around 1,500 schoolchildren and staff. The report notes that a notice said: "We regret to advise you that The School Dinner Company LLP has ceased to trade and will shortly be commencing liquidation proceedings. The Partners have instructed Andrew Shackleton of Smart Insolvency Solutions to assist in this process. If you are a creditor of the Company you will receive formal notification shortly." School Dinner Company (SDL) is based in Park Farm Industrial Estate, Evesham Road, was set up by partners Julie Owen and Adam Hands and, on its website, claimed to have more than 22 years experience. TANFIELD ENGINEERING: Dozens Jobs Saved as Tinsley Buys Business ---------------------------------------------------------------- Robert Gibson at The Journal reports that dozens of North East jobs have been saved after a buyer was found for one of the Tanfield Group plc's divisions. The Journal notes that Tanfield Engineering Systems Ltd was placed into administration in November last year by its directors after posting substantial losses in the previous financial year. The Recovery & Insolvency team at RMT Accountants & Business Advisors was appointed as administrators for the Tanfield-based business with a view to trading the business to protect its substantial debtor book, marketing it and attempting to sell it as a going concern, the report says. According to the report, interest was shown by a number of potential buyers, and after the suitability of each interested party was assessed, a deal was agreed with specialist heavy transport industry manufacturer Tinsley Special Projects Ltd, which has premises in Eaglescliffe and Peterlee in County Durham. The Journal reports that 68 jobs have been retained from the 97- strong Tanfield Engineering Systems workforce as part of the sale to Tinsley. "The synergies that lay within Tanfield Engineering Systems made it an excellent fit with our existing portfolio of operations, and this strategic acquisition has developed an even stronger overall client offering and indeed client base," the report quotes a spokesperson for Tinsley Special Projects as saying. "The RMT team was very proactive in ensuring that the Tanfield business remained a viable going concern, and their support in reaching a successful conclusion to this process has been invaluable." UK-based Tanfield Engineering Systems Ltd provides engineering services. * UK: RBS Faces Probe Over Business Loan Default ------------------------------------------------ Max Colchester at The Wall Street Journal reports that the U.K. banking regulator is bringing in external help to probe allegations that Royal Bank of Scotland Group Royal Bank of Scotland Group PLC forced several small businesses into default to boost its profits. According to the Journal, the regulator said it hired Promontory Financial Group and accountancy group Mazars to write a report. The review will look at a sample of customers who were referred to RBS's restructuring unit and decide whether they were badly treated and whether this behavior was widespread, the Journal says. The FCA will publish its final findings in the third quarter of 2014, the Journal discloses. The probe followed a report by Lawrence Tomlinson, an adviser to Business Secretary Vince Cable, which alleged that RBS forced several business customers to default on loans so that the bank could charge higher fees or seize their assets, the Journal notes. Mr. Tomlinson's report fueled concern in political circles that banks aren't doing enough to support the U.K.'s small and medium sized businesses -- an accusation that 81% state controlled RBS has long sought to deny, the Journal relays. RBS has also denied its GRG unit mistreated these customers, the Journal relates. An independent report commissioned by RBS found that fewer than 10% of businesses referred to the bank's Global Restructuring Group unit ended up in bankruptcy, the Journal discloses. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2014. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *