/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/140131.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, January 31, 2014, Vol. 15, No. 22 Headlines A U S T R I A HYPO ALPE-ADRIA: Austrian Finance Minister Opposes Insolvency HYPO ALPE-ADRIA: Gov't to Set Aside EUR1 Billion in Aid This Year A L B A N I A PROCREDIT BANK: Fitch Cuts LT IDRs to 'B'; Outlook Negative C Z E C H R E P U B L I C CE ENERGY: Fitch Assigns 'B+(EXP)' LT Issuer Default Rating EP ENERGY: Fitch Affirms 'BB+' LT Issuer Default Rating F I N L A N D * FINLAND: Records Nearly 600 Business Restructurings in 2013 G E R M A N Y GROHE HOLDING: Moody's Withdraws B2 CFR & B2-PD Default Rating I T A L Y LUCCHINI SPA: Feb. 10 Submission Deadline Set for Asset Bids N E T H E R L A N D S NEW WORLD: S&P Lowers CCR to 'CCC' on Weak Coal Prices P O R T U G A L REN-REDES: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Stable S P A I N LA SEDA DE BARCELONA: Recuperacions Marcel to Buy PET Plant ZUCAMI: Big Dutchman Takes Over Insolvent Poultry Equipment Firm U N I T E D K I N G D O M HIBU INC: Yellow Pages Publisher Enters Chapter 15 HSS FINANCING: S&P Assigns Preliminary 'B' CCR; Outlook Stable LONDON & REGIONAL: Fitch Affirms 'Bsf' Rating on Class C Notes SAG SOLARSTROM: UK Unit Files For Insolvency Process STEMCOR HOLDINGS: Lenders Must Vote on Debt Restructuring Plan * UK: More Than 1,000 Firms Balk at Restructuring Unit Practices X X X X X X X X * EMEA 2013 Financial Sector Issuance Hits New Low, Fitch Says * Moody's Says Investor Shift to Alternative Investments Positive * BOOK REVIEW: Creating Value through Corporate Restructuring ********* ============= A U S T R I A ============= HYPO ALPE-ADRIA: Austrian Finance Minister Opposes Insolvency ------------------------------------------------------------- Michael Shields at Reuters reports that letting nationalised lender Hypo Alpe Adria go bust is not the way to shelter taxpayers from the bank's woes, Finance Minister Michael Spindelegger said on January 28, dismissing talk that such a move may still be an option. He told parliament the best way forward remained the government's plan to get commercial banks to support a "bad bank" that would absorb toxic assets from Hypo, which Austria had to nationalise in 2009, Reuters relates. According to the report, Mr. Spindelegger was responding to requests from the opposition Greens party about his strategy for handling loss-making Hypo, which has already got EUR4.8 billion ($6.6 billion) in state aid and could get up to 1 billion more in 2014. "Even if you like to keep saying . . . that an insolvency scenario would solve everything, I can only point to what the experts have presented to us in this regard: that is not the case," Reuters quotes Mr. Spindelegger as saying. "We have to favor instead a different solution that always aims to produce what is most favorable for taxpayers." Reuters notes that the parliamentary leader of the ruling Social Democrats (SPO) had earlier rejected as "playing with fire" speculation that the country could let Hypo go bust while propping up its home province of Carinthia, which has more than EUR12 billion in guarantees on Hypo debt. According to Reuters, the Wiener Zeitung paper reported this week that this scenario was under discussion despite earlier assurances from the government that this was ruled out. Andreas Schieder, a former finance ministry state secretary who now heads the SPO group in parliament, told the Wiener Zeitung this was too dangerous a path to consider, Reuters relates. "I see this as playing with fire. There are no contained bankruptcies. Questions about deposits, guarantees and spillover effects cannot be answered in a controlled way," he said, echoing concerns from the central bank and other lenders, Reuters adds. Hypo Group Alpe Adria -- http://www.hypo-alpe-adria.com/-- is an international financing group with more than 370 banking and leasing locations in 12 countries (Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Germany, Hungary, Bulgaria, Macedonia and the Ukraine), which can look back on a history of more than 110 years. The principal company of Hypo Group Alpe Adria is Hypo Alpe-Adria-Bank International AG, which has its head office in Klagenfurt (Austria). The Hypo Group Alpe Adria network currently has over 7,400 employees serving approximately 1.2 million customers. HYPO ALPE-ADRIA: Gov't to Set Aside EUR1 Billion in Aid This Year ----------------------------------------------------------------- James Shotter at The Financial Times reports that Austria's new government has set aside EUR1 billion this year to cover the needs of Hypo Alpe Adria, one of three midsized Austrian banks that had to be nationalized during the financial crisis, as it debates the best way of closing the lender. In September, the EU said Austria could provide Hypo with up to EUR5.4 billion in state aid over the next four years, as part of a plan that would see the bank's viable parts in Austria and the Balkans sold, and its rump wound down, the FT recounts. That plan envisaged between EUR400 million and EUR900 million of state aid for Hypo in 2014, but Michael Spindelegger, Austria's new finance minister, said on Wednesday he was now budgeting for EUR1 billion in assistance this year, the FT notes. Last year, Hypo received EUR1.75 billion in aid, meaning the government can provide a maximum of a further EUR3.65 billion, the FT discloses. According to the FT, the precise amount that the state will have to come up with depends on whether the government can persuade Austria's big banks -- Erste Group; Bank Austria, the local subsidiary of UniCredit; and Raiffeisen Bank International -- to participate in a so-called "bad bank" that could be set up to help wind down Hypo. A bad bank with participation from commercial lenders is the government's preferred option for winding down Hypo, as a state- run wind-down vehicle would increase the public debt, while allowing the bank to go bust could unsettle the capital markets, the FT says. The finance ministry hopes a task force set up to determine the best way to proceed will reach a decision by mid-February, the FT states. Hypo Alpe-Adria International AG is a subsidiary of BayernLB. It is active in banking and leasing. In banking, HGAA serves both corporate and retail customers and offers services ranging from traditional lending through savings and deposits to complex investment products and asset management services. ============= A L B A N I A ============= PROCREDIT BANK: Fitch Cuts LT IDRs to 'B'; Outlook Negative ----------------------------------------------------------- Fitch Ratings has downgraded ProCredit Bank Albania's (PCBA) Long-Term foreign currency and local currency Issuer Default Ratings (IDRs) to 'B' and 'B+' respectively and affirmed its Viability Rating (VR) at 'b'. The Outlook is Negative. Key Rating Drivers - IDRS and Support Rating of PCBA The downgrade of PCBA's Long-term foreign and local currency IDRs to 'B' and 'B+', respectively, reflects Fitch's assessment of heightened transfer and convertibility risks in Albania. This is because the Long-Term IDRs and Support Rating of PCBA are driven by potential support from its Germany-based parent, ProCredit Holding AG & Co. KGaA (PCH, BBB-/Stable), which in turn is constrained by Fitch's assessment of transfer and convertibility risks in Albania. The Negative Outlook on the bank's Long-term IDRs reflects that the balance of risks remains on the downside given Albanian country risks, as a result of weak domestic growth and worsened government finances. PCH's ratings are based on Fitch's view of the support it could expect to receive from its core shareholders when needed, particularly from its international financial institution shareholders. Rating Sensitivities - IDRS and Support Rating of PCBA The ratings are sensitive to changes to Fitch's view of transfer and convertibility risks in Albania. A weakening, in Fitch's view, of the support available to PCBA from PCH would also result in a downgrade to the bank's IDRs and potentially also the Support Rating, although this is not expected by Fitch at present. Key Rating Drivers - PCBA'S VR PCBA's VR reflects a difficult operating environment and the ensuing pressures on its asset quality, performance and capitalization. PCBA's capitalization is only adequate with a Fitch Core Capital ratio of 13.7% at end-9M13, in view of the bank's risk profile, high level (albeit typical for the sector) of predominantly EUR-denominated loans, moderate coverage of loans overdue by 90 days (PAR90; end-2013: 85%) and limited earnings prospects. However, liquidity is strong, refinancing risk is limited and the bank's retail funding base is a rating strength. Furthermore, Fitch expects PCBA's asset quality to stabilize over the medium term (PAR90; of up to 9%) following efforts to clean up the portfolio of 'medium-sized' loans (notably loans over EUR1 million) in 2013. Rating Sensitivities - PCBA'S VR PCBA's VR could be downgraded if the operating environment materially worsens and if asset quality further deteriorates to the extent of eroding profitability and capital. An upgrade of PCBM's VR is unlikely given Albanian country risks and Fitch's current assessment that the balance of risks is on the downside. The rating actions are as follows: PCBA -- Long-term foreign currency IDR: downgraded to 'B' from 'B+'; Outlook Negative -- Short-term foreign currency IDR: affirmed at 'B' -- Long-term local currency IDR: downgraded to 'B+' from 'BB-'; Outlook Negative -- Short-term local currency IDR: affirmed at 'B' -- Viability Rating: affirmed at 'b' -- Support Rating: affirmed at '4' =========================== C Z E C H R E P U B L I C =========================== CE ENERGY: Fitch Assigns 'B+(EXP)' LT Issuer Default Rating ----------------------------------------------------------- Fitch Ratings expects to assign Czech Republic-based CE Energy a.s. (CEE) a Long-term Issuer Default Rating (IDR) of 'B+(EXP)' with Stable Outlook. Fitch has assigned CEE's proposed senior secured notes a 'B+(EXP)'/'RR4' expected rating. CEE is a newly established holding company, which owns 100% of the shares of EP Energy, a.s. (and whose sole activity is related to additional borrowing through loans and notes. CEE's expected ratings reflect its reliance upon dividends from EPE as a single source of income and debt service, and CEE's bondholders' subordination to creditors of EPE. The final ratings are contingent on the proposed refinancing of CEE taking place and the final terms conforming with those already received. Fitch has assumed that EUR500 million is raised. The proposed refinancing and notes issue proceeds will be largely used for distributions to CEE's shareholders (repayment of a subordinated shareholder loan). The proposed notes terms include debt incurrence and restricted payments covenants, which may limit future distributions to CEE's parent. However, the tests are not forward looking and do not include cash sweeps or minimum liquidity provisions and as such do not provide material rating support. Key Rating Drivers Rating Constrained by Subordination CEE's prospective bondholders have recourse to CEE and a share pledge over 50% less one share of CEE's shares in EPE, whereas EPE's secured creditors have a pledge over the remaining shares, a pledge over certain EPE assets, and benefit from operating company guarantees. CEE's bondholders are therefore subordinated to EPE's creditors. Additionally, EPE's covenanted financial structure could limit the dividends it upstreams to CEE if its net debt/EBITDA ratio reaches 3.0x. This structural subordination, providing for ring-fencing protection around EPE, is reflected in the lower rating for CEE's debt. Sole Cash Flow Source CEE represents a simple holding company structure for EPE, solely reliant on a single cash flow stream of dividends. Its own debt service and payments to the parent company Energeticky a prumyslovy holding, a.s (EPH) are the two main uses for its cash. No withholding or income taxes are expected to be incurred. CEE's rating is also constrained by the lack of diversification in revenue source, no covenanted liquidity, and the leverage covenant at EPE, which could constrain dividend payments. High Consolidated Leverage Fitch forecasts consolidated FFO adjusted net leverage for CEE to peak at 4.9x at YE15 (assuming deconsolidating Stredoslovenska energetika, a.s. (SSE) and including only the dividend thereof in line with Fitch's rating approach for EPE) and dividend cover ratio (dividend income from EPE/interest expense) to remain over 3.5x. "We view the expected leverage, together with the subordination and a single income stream of CEE as the key rating constraints," Fitch said. Average Recovery Expectations Fitch estimates the recovery prospects for the proposed bond to be average (31%-50%). This is reflected by the notes' expected rating being in line with CEE's expected IDR. The provided security is a pledge over 50% less one share of EPE and over 100% shares of CEE. This compares with EPE's creditors having a pledge over 50% plus one share of EPE and over other key subsidiaries and certain assets of EPE, as well as the benefit of opco guarantees. Equity-like Shareholder Loan "We view CEE's liability under its subordinated shareholder loan as equity-like because it does not increase its probability of payment default or reduce expected recoveries for its creditors. The loan is due after the proposed notes' maturity, does not carry any interest and cannot be accelerated or enforced before its final maturity. Optional redemptions of the loans are possible subject to the restricted payments test in CEE's proposed notes' terms (net consolidated leverage below 4.0x)." Fitch said. Debt Structure And Liquidity The key debt instruments at EPE are the secured 2018 EUR600 million and 2019 EUR500 million notes (both rated 'BBB-'), a EUR231 m acquisition loan (connected to SSE) and subsidiary borrowings of EUR63 million (out of which EUR35 m represent 49% of loans of SSE). CEE is proposing to replace a bank loan, which was used to repay shareholder loans of EPH, with EUR500 million notes, the proceeds of which will be used to repay the term loan and the remainder upstreamed to EPH. Although CEE intends to maintain a six-month liquidity reserve and to build up a further cash balance from 2015 onwards from retained cash flows, these are not covenanted provisions or ring- fenced for the creditors. As such, we consider liquidity limited. Rating Sensitivities Positive: Future developments that could lead to positive rating actions include: -- A reduction of Fitch's expected consolidated FFO adjusted net leverage of CEE (including EPE, but deconsolidating SSE) to below 4.75x on a sustained basis combined with sustainable dividend cover of CEE in excess of 3.5x. Negative: Future developments that could lead to negative rating action include: -- A sustained drop in dividend cover to below 2.5x and an increase in the consolidated FFO adjusted net leverage to over 5.5x. -- Available liquidity falling below six months' debt service. EP ENERGY: Fitch Affirms 'BB+' LT Issuer Default Rating ------------------------------------------------------- Fitch Ratings has affirmed Czech Republic-based EP Energy a.s.'s (EPE) Long-term Issuer Default Rating (IDR) at 'BB+' with Stable Outlook, and its EUR1.1 billion senior secured notes at 'BBB-'. The affirmation reflects Fitch's expectations of increased dividend payments from EPE to its new holding company, CE Energy a.s., primarily to service new debt to be issued by CEE. Fitch expects EPE to pay between 80%-90% of adjusted net income in dividends to CEE, up from 50% assumed so far. While this limits the rating headroom, we forecast EPE's credit metrics will continue to support the current ratings. CEE's creditors are solely reliant on dividends from EPE for debt service, have no direct access to EPE's operational cash flow, and are structurally subordinated to EPE's creditors. EPE's dividends and leverage are limited within its existing restricted payment and debt incurrence covenants. Key Rating Drivers - Cash Flow Visibility EPE's credit profile is supported by its contracted lignite mining, low-cost heat supplies, cogeneration power sales as well as by regional regulated distribution monopolies and long-term power purchase agreements. These core divisions represent over 80% of EPE's EBITDA, with the rest derived from power generation, and supply, making its earnings and cash flows stable and predictable. EPE also benefits from geographical diversification and limited exposure to adverse regulation. - Contracted Lignite Mining Over 90% of EPE's expected external lignite sales (17 million tons in 2012) are contracted until 2020 and around 60% until 2039 with high-quality counterparties, comprising efficient base load power plants in Germany designed to use EPE's lignite. Sales are contracted on terms reflecting the cost structure of the mining operations (and inflation), thus limiting EPE's volume and price risk. EPE increased its lignite production to supply its cogeneration plants in the Czech Republic, which it started to supply since January 2014, as well as to supply its newly acquired power plant Buschhaus in Germany. - Leader in District Heating EPE is the largest heat supplier in the Czech Republic with an installed thermal capacity of 4.1 gigawatts (GW), mostly lignite- fired, and heat supplies of 18.5 peta joules (PJ) in 2012, mostly to households (57%) and large industrials (20%). The company supplies around 360,000 households in Prague and other major cities, which represent a stable customer base. It also operates one of the largest low-cost cogeneration plants in the country. EPE's heat prices are below the market average and those of alternative heating. - Emerging Structure and Integration Despite some recent improvement, EPE's group structure remains complex with a number of separate operating and holding companies in a number of jurisdictions. Centralized treasury and cash pooling is still being developed and operational integration is fairly limited, despite EPE's presence in the entire energy chain from pit to retail supply. - Recent M&A Marginally Positive EPE has continued its efforts on vertical integration by acquiring Buschhaus, a German coal power plant with a gross installed capacity of 390MW and a near-exhausted lignite mine, which allows EPE to make use of spare existing mining capacity at low marginal cost at EPE's current mining division. At the same time, EPE acquired 49% (with management control) of Stredoslovenska energetika, a.s. (SSE) a Slovak electricity distributor and supplier with a regulatory asset base (RAB) of almost EUR500 million, which was added as a fully consolidated entity (with acquisition debt of EUR240 million) to EPE's balance sheet in December 2013. Together these two companies represent around one third of the estimated 2014 EBITDA, assuming full consolidation of SSE. We consider these acquisitions as mildly positive for EPE's business profile. Even though leverage increased, it is still forecast to be within the current rating guidelines. - Leverage Above Peers EPE's leverage is above that of most rated central European peers, and the recently announced financial structure with EUR500 million incremental debt at CEE, solely serviced by upstreamed dividends from EPE will delay EPE's deleveraging. Its bond terms allow restricted payments (including dividends) providing that leverage (net debt to EBITDA) is not higher than 3.0x and also limit further indebtedness after gross debt exceeds 3.25x EBITDA. On funds from operations (FFO) net adjusted basis Fitch expects EPE's leverage to reach 3.7x at FYE15, a level which remains commensurate with the current rating. Rating Sensitivities Positive: Future developments that may, individually or collectively, lead to positive rating action include: - Longer track record of the current business structure with greater vertical integration of operations supporting fuel supply self-sufficiency without significant cost implications for the group - Reduction of target to and Fitch's expected leverage remaining at a level comparable with regional peers' (FFO adjusted net leverage below 3.5x) on a sustained basis Negative: Future developments that may, individually or collectively, lead to negative rating action include: - A more aggressive financial policy (including opportunistic M&A or higher dividends) that would increase Fitch-expected FFO adjusted net leverage to 4.0x or above on a sustained basis (this level would likely be in breach of EPE's bond covenants) - A significant deterioration in business fundamentals due to a large and sustained increase in carbon dioxide price or structural heat demand decline (perhaps as a result of more effective insulation and/or higher ambient temperatures) Liquidity and Debt Structure Following two bonds issuance in 2012 and 2013 of EUR500 million and EUR600 million respectively, EPE has moved away from a debt structure dominated by bank and shareholders loans to a structure mainly reliant on fixed-rate bonds. "We view its foreign exchange risks as manageable due to euro revenues in Germany and Slovakia and electricity sales being denominated in euro," Fitch said. Based on EPE's unaudited statements at end-September 2013, the company had around EUR254 million of cash and cash equivalents (assuming a historical exchange rate of CZK25/EUR), of which EUR167 million was subject to pledges (99% related to security for bondholders) in favor of senior creditors. Short-term debt stood at EUR32 million at end-September 2013. "We expect free cash flow to be neutral or slightly negative during 2014-15, subject to dividends being in line with our expectations and reflecting increased capex in the period," Fitch said. ============= F I N L A N D ============= * FINLAND: Records Nearly 600 Business Restructurings in 2013 ------------------------------------------------------------- Yle Uutiset reports that data from Statistics Finland tell a grim tale of hard times for many Finnish residents in 2013. According to Yle Uutiset, the numbers show some 3,800 filings for personal debt restructuring, 3,100 bankruptcies, and nearly 600 business restructuring applications -- all representing an increase over the previous year. ============= G E R M A N Y ============= GROHE HOLDING: Moody's Withdraws B2 CFR & B2-PD Default Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn the B2 corporate family rating and B2-PD probability of default rating of Grohe Holding GmbH. Ratings Rationale Moody's has withdrawn the ratings following the closing of the acquisition of Grohe by Lixil Corporation and Development Bank of Japan Inc. (Aa3, stable), and subsequent repayment of all outstanding debt. Grohe Holding GmbH is one of the world's leading single-brand manufacturers and suppliers of sanitary fittings, offering a broad range of products for delivering water to bathrooms and kitchens. ========= I T A L Y ========= LUCCHINI SPA: Feb. 10 Submission Deadline Set for Asset Bids ------------------------------------------------------------ The Extraordinary Receiver of Lucchini S.p.A. in a.s. ("Lucchini") and Lucchini Servizi S.r.l. in a.s. ("Lucchini Services") who had issued previous announcements for expression of interest for the purchase: OF ALL OR PART OF THE BUSINESS COMPLEXES RUN BY LUCCHINI AND LUCCHINI SERVIZI AT THE PLANTS OF PIOMBINO AND LECCO; OF ALL OR PART OF THE "VERTEK" BUSINESS COMPLEXES AT THE PLANTS IN PIOMBINO AND CONDOVE RUN BY LUCCHINI; and OF A SHAREHOLDING EQUAL TO 69.27% OF GSI LUCCHINI S.P.A.'S SHARE CAPITAL, announces that the Ministry of Economic Development, the Ministry of Environment, Protection of the Territory and Sea, the Ministry of Infrastructures and Transportation, the Region of Tuscany, the Province of Livorno, the City of Piombino and the Port Authority of Piombino, on January 16, 2014, signed a "Memorandum of Understanding" ("Protocollo d'Intesa") regarding the definition of the Government support package for requalification and reconversion of the industrial area of Piombino. In view of this new and important element that could be of further appreciation, the Extraordinary Receiver, Dr. Piero Nardi, announces that the deadline January 20, 2014, for submitting Expressions of Interest regarding the sale process is extended to February 10, 2014. Any expressions of interest for (i) ALL OR PART OF THE BUSINESS COMPLEXES RUN BY LUCCHINI AND LUCCHINI SERVIZI AT THE PLANTS OF PIOMBINO AND LECCO and/or, (ii) ALL OR PART OF THE "VERTEK" BUSINESS COMPLEXES AT THE PLANTS IN PIOMBI NO AND CONDOVE RUN BY LUCCHINI and/or A SHAREHOLDING EQUAL TO 69.27% OF GSI LUCCH INI S.P.A.'S SHARE CAPITAL must be sent to Lucchini S.p.A. in a.s., by Certified Electronic Mail (PEC) at the following address: affarisocietari@pec.lucchini.com specifying the object(s) of interest, also consistent with the options shown in the previous notice, and the e-mail must also indicate the name, phone number and e-mail address of interested party's legal representative. Expressions of interest on behalf of subjects yet to be appointed will not be considered. The Extraordinary Receiver reserves the right to admit the interested parties to the following phases by sending (i) a Confidentiality Agreement, and (ii) the Tender Regulations, both to be signed for acceptance by the interested party. This announcement is a call for expressions of interest and not an invitation to offer or an offer to the public. The publication of the announcement and the expressions of interest do not imply any obligation on the Extraordinary Receiver to admit any of the interested parties to the tender procedure and/or negotiate on the sale and/or sell to the interested parties, and do not entitle these parties to receive any service from Lucchini's Extraordinary Receiver. Any final decision with regard to the sale is subject to authorization by the Ministry of Economic Development, upon consultation with the Supervisory Committee (Comitato di Sorveglianza). The Extraordinary Commissioner also notes that a copy of the Government Agreement ("Protocollod'Intesa") signed on January 16, 2014, can be viewed and downloaded from the website of the procedure: www.lucchiniamministrazionestraordinaria.it Any inquiries can be sent via email to affarisocietari@lucchini.com Piombino, 20/01/2014 The Extraordinary Receiver Dr. Piero Nardi ===================== N E T H E R L A N D S ===================== NEW WORLD: S&P Lowers CCR to 'CCC' on Weak Coal Prices ------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Netherlands-headquartered coal miner New World Resources N.V. (NWR) to 'CCC' from 'B-'. The outlook is negative. In addition, S&P lowered its issue rating on NWR's senior secured notes to 'CCC' from 'B-' and its issue ratings on NWR's senior unsecured notes to 'CC' from 'CCC'. The downgrades follow the recent drop in the price of coking coal and NWR's agreement on thermal coal prices for 2014. These prices may result in NWR generating material negative free cash flow in 2014, consuming most of the company's current outstanding cash. S&P believes that a default or the introduction of a distressed exchange offer are therefore possible later this year. Consequently, S&P has also revised its assessment of NWR's liquidity to "weak" from "less than adequate." In the fourth quarter of 2013, the company completed the divestment of its coke facility for about EUR95 million and signed a covenant waiver for its export credit agency (ECA) facility. As a result, S&P estimates that NWR's cash balances remain substantial, at about EUR200 million at the end of 2013, but this is unlikely to be sufficient to weather prolonged depressed coal prices. Hard coking coal Australian reference spot prices have been lower than S&P previously expected, and it now assumes prices of US$140 per ton in 2014 (US$10 per ton below S&P's previous assumptions; the current price is US$125 per ton). Moreover, the company has signed agreements to sell 80% of its thermal coal production for EUR54 per ton (down from the already-low price of EUR56 per ton in 2013). S&P now assumes EBITDA in the range of zero to negative EUR50 million in 2014. After deducting interest charges of about EUR70 million and maintenance expenditure of about EUR90 million, negative free operating cash flow could be between EUR160 million and EUR210 million -- compared with estimated outstanding cash of about EUR200 million as of Dec. 31, 2013. S&P also understands that, according to the amended ECA facility, NWR needs to keep minimum liquidity of about EUR80 million in the coming three quarters and return to the original financial covenant ratios by the end of the year. S&P understands that the company is discussing alternatives to stabilize its capital structure. In a recent press release, the main shareholder, investment group BXR, confirmed its continued support for the company and its business strategy. BXR indicated that it is prepared to invest new equity capital into a revised and satisfactory capital structure. In S&P's view, a restructuring could include debt conversion as well as an equity injection. Under S&P's criteria, it could treat a distressed exchange offer below the debt's par value as a default. S&P's analysis does not include assumptions of the restructuring and asset retirement costs related to the closure of the Paskov mine, located near Ostrava in the Czech Republic. The company is currently discussing the possibility of operating the mine to the end of 2016 and then handing it over to the Czech government. If NWR decides to shut down the mine, it may face additional cash expenses of at least EUR30 million to be spread over several years, starting from 2015. S&P assess NWR's liquidity as "weak" under its criteria. S&P estimates that the company's ratio of sources to uses of liquidity will be below 1.0x in the next 12 months. The liquidity assessment is underpinned by the material negative cash flow in 2014 and the potential breach of the covenant under the amended ECA facility by the second half of 2014 (which requires minimum liquidity of about EUR80 million). In the current environment for coal prices, S&P also assumes that bank support for NWR has weakened and therefore it has not factored in a renewal of NWR's revolving credit facility (RCF), which expires in early February. Under S&P's base-case scenario, NWR's principal liquidity sources from Oct. 1, 2013, to Dec. 31, 2014, are: -- EUR148 million of estimated surplus cash, excluding EUR40 million that S&P estimates is tied to operations; and -- EUR95 million from the divestment of the coke facility in late 2014. S&P estimates that NWR's principal liquidity uses in the period are: -- Negative funds from operations of about EUR30 million in the fourth quarter of 2013 and about EUR70 million- EUR120 million in 2014; -- Capital expenditure of EUR90 million-100 million per year, most of which is maintenance; -- No dividend distributions; -- A potential early repayment of the ECA facility in the second half of 2014, if the covenants are breached and a second waiver is not arranged. -- As of Sept. 30, 2013, the outstanding facility was EUR71 million, of which the company has since repaid a portion; and -- Potential investment in working capital, if the current receivables factoring facility terminates. The negative outlook reflects S&P's view that NWR's negative free cash flow and weakening liquidity may lead to further downgrades in the coming months, and possibly to a default if very low coal prices persist. S&P could lower the rating in the event of one of the following: -- NWR initiates a distressed exchange offer regarding the outstanding debt. -- Adverse business conditions result in a cash shortfall by September 2014, meaning that NWR breaches the covenants under the amended ECA facility. S&P could revise the outlook to stable if NWR presents a plan that it considers to be achievable, including a build-up of sufficient cash to bridge the next 12 months. However, S&P believes that the challenging market conditions mean that the success of such a plan would be uncertain. =============== P O R T U G A L =============== REN-REDES: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had affirmed its 'BB+/B' long- and short-term corporate credit ratings on Portuguese utility REN-Redes Energeticas Nacionais, SGPS, S.A. (REN). The outlook is stable. At the same time, the 'BB+' issue rating on REN's senior unsecured debt was affirmed. The '3' recovery ratings on the rated issues is unchanged. The long-term and issue ratings were removed from CreditWatch, where they were placed with negative implications on Sept. 20, 2013. The affirmation of the ratings and removal of the long-term and issue ratings from CreditWatch follows S&P's similar outlook revision on Portugal. The outlook on REN is no longer constrained by the outlook on Portugal and, at stable, now reflects S&P's expectation that REN's credit profile will remain unchanged over the next two years. The CreditWatch on REN previously mirrored that on Portugal, which indicated a possible multinotch downgrade. The current negative outlook on Portugal is no longer a constraint on S&P's rating on REN, however, because under its revised criteria, a nonsovereign entity with "high" country risk exposure can be rated two notches above a sovereign rated 'B' or higher. Based on S&P's stress-test of the long-term rating on REN, it concluded that there is a measureable likelihood that the issuer would withstand a sovereign default. S&P therefore believes the utility's ability to service and repay debt is superior to that of the sovereign. The ratings continue to be based on S&P's view of REN's business risk profile as "strong" and S&P's assessment of REN's financial risk profile as "aggressive." The stable outlook reflects S&P's expectation that REN's business risk and financial risk profiles will remain resilient to the relatively uncertain and adverse economic and fiscal conditions in Portugal. S&P anticipates that regulatory conditions for REN's transmission activities will remain unchanged and that the company's core credit metrics will remain stable and consistent with the rating. The stable outlook also reflects that a one-notch downgrade of Portugal would leave the rating on REN unchanged, all else being equal. S&P could upgrade REN should its financial risk profile strengthen sustainably. This may result from the combination of lower capital expenditures, stronger recovery in tariff deviation, or lower taxes and interest than anticipated. S&P sees adjusted FFO to debt recurrently in excess of 14% as being commensurate with a higher rating, assuming no unexpected weakening of the regulatory, fiscal, or economic environment in Portugal. Ratings upside is, however, limited to one notch, as long as the rating on Portugal remains unchanged, because S&P assess REN's exposure to Portuguese country risk as "high." S&P could downgrade REN if REN's international expansion or an unexpected and far-reaching regulation overhaul in Portugal significantly diluted the company's business risk profile. A downgrade would also likely result if S&P believed that REN would struggle to achieve and maintain a ratio of adjusted FFO to debt exceeding 10%. This could result from the combination of a costly acquisition, larger capital expenditures, or increasing tax and interest charges. A downgrade of Portugal to 'B+' or lower would automatically trigger a downgrade of REN. ========= S P A I N ========= LA SEDA DE BARCELONA: Recuperacions Marcel to Buy PET Plant ----------------------------------------------------------- Richard Higgs at Platics & Rubber Weekly reports that Recuperacions Marcel Navarro i Fills, located in Llagostera near Girona, has agreed to acquire the production plant of PET recycler Artenius Green at Balaguer, Spain, as part of the liquidation process of insolvent PET group La Seda de Barcelona. According to PRW, LSB said the buyer will not be liable for outstanding Artenius Green tax, labor and other debts. The 18,800 tpa PET bottle recycling facility in Balaguer was due to close down with the loss of up to 37 jobs as subsidiary businesses of Barcelona-based LSB are sold off to pay the group's debts, PRW discloses. But now the buyer has agreed to resume and boost production at the plant, retaining a workforce of 23, PRW says, citing Catalan media reports. Earlier reports estimated that the likely value of the Artenius Green assets at around EUR150,000 (GBP123,000), PRW notes. La Seda de Barcelona is a Spanish plastics bottle maker. The Catalonia-based company makes bottles in Europe, Turkey and North Africa. ZUCAMI: Big Dutchman Takes Over Insolvent Poultry Equipment Firm ---------------------------------------------------------------- ThePoultrySite News Desk reports that the Big Dutchman group based in Vechta-Calveslage (Germany) is taking over the Spanish poultry equipment supplier Zucami. The company with its headquarters in Beriain, near Pamplona, recently became insolvent, the report says. "As a result of the bidding procedure, the insolvency court accepted our concept presented in December," the report quotes Bernd Meerpohl, Chairman of the Big Dutchman AG board of management, as saying. ThePoultrySite relates that this concept intends for Big Dutchman to purchase the assets of the competitor from Northern Spain while maintaining its headquarters and saving approximately half of the 120 jobs. Business will continue under the new name Zucami Poultry Equipment S.L. "Even as part of the Big Dutchman group, Zucami will remain an independent brand on the international market," Mr. Meerpohl, as cited by ThePoultrySite, said. "Management and distribution will not be affected substantially. We are also happy that the shareholders of the company are still available as consultants." According to the report, Mr. Meerpohl said the Spanish company had earned an outstanding reputation in the industry and a very impressive presence in some regions. In addition, Zucami's product line is designed in a very different but interesting way compared to Big Dutchman's products, thus ideally complementing the group's product range. Big Dutchman is the world's leading equipment supplier for modern pig and poultry production. The independent, family-owned company based in Vechta-Calveslage offers its products in more than 100 countries and achieved a turnover of EUR732 million in the past business year, ThePoultrySite discloses. Zucami distributes housing equipment worldwide and is considered a leading supplier of equipment for laying hens in Spain and South America. In 2012, the company's turnover still amounted to approx. EUR110 million. However, this figure took a nosedive in the last year of crisis, 2013, the report notes. =========================== U N I T E D K I N G D O M =========================== HIBU INC: Yellow Pages Publisher Enters Chapter 15 -------------------------------------------------- Patrick Holohan, writing for The Deal, reported that Yellow Pages publisher and website creator Hibu Inc. has sought Chapter 15 protection as it attempts to win approval of a U.K. restructuring that would reduce its debt by about GBP800 million ($1.29 billion). According to the report, the Uniondale, N.Y., company and five affiliates on Jan. 28 submitted petitions in the U.S. Bankruptcy Court for the Eastern District of New York in Central Islip. Hibu seeks a Feb. 27 hearing on its motion to recognize its scheme of arrangement in the U.K. as a foreign nonmain proceeding under Chapter 15, the report related. The debtors and affiliates print Yellowbook in the U.S., Yellow Pages in the U.K.and Paginas Amarillas in Spain, as well as white pages directories in Argentina and Chile, the report said. Hibu's digital products include online directories Yell.com, Yellowbook.com and Paginasmarillas.es, as well as mobile applications and website creator Hibu Business. Hibu said its debt structure "remains a significant burden [that] coupled with the continuing pressures faced by the print and digital directory business" forced it to restructure, the report further related. HSS FINANCING: S&P Assigns Preliminary 'B' CCR; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its preliminary 'B' long-term corporate credit rating to U.K.-based equipment rental services provider HSS Financing PLC. (trading as HSS Hire; HSS). The outlook is stable. At the same time, S&P assigned its preliminary 'B' issue rating to the proposed GBP200 million senior secured fixed-rate notes due 2019, to be issued by HSS. The recovery rating on these notes is '3', indicating S&P's expectation of meaningful (50%- 70%) recovery in the event of a payment default. The ratings on HSS reflect S&P's assessment of the group's financial risk profile as "highly leveraged" and business risk profile as "weak," as S&P's criteria define these terms. HSS is planning to issue GBP200 million of new senior secured fixed-rate notes, and to use the proceeds to repay GBP163.6 million of existing term debt and GBP29 million of existing shareholder loans and accrued payment-in-kind (PIK) interest. After the refinancing and partial repayment of shareholder loans and accrued interest, the group's capital structure will include GBP62.2 million of shareholder loans that accrue PIK interest at what S&P considers to be an aggressive rate of 10%. S&P views these loans as debt under its criteria. HSS' "weak" business risk profile reflects the fact that the group's geographical footprint is highly concentrated, with virtually all revenues generated in the U.K., and more than one- third of group revenues generated in London and the South East of England. HSS is the No. 2 equipment rental provider in a business-to-business market that is well penetrated and highly competitive. The players in this market price aggressively and differentiate themselves on speed and quality of service. "In our view, the slow growth environment that currently benefits the equipment rental services industry should continue through 2014. We forecast that HSS will be able to grow its revenues and slightly improve its margins over the rating horizon of 12 months, while investing heavily in new equipment to meet demand. We anticipate that the group's adjusted debt to EBITDA should be about 5x in 2014, with good cash interest coverage of more than 3x. However, we note that the group will have negative free operating cash flow due to its sizable capital expenditure (capex) plan. HSS will likely draw on its new revolving credit facility to fund capex, resulting in slightly higher debt and weaker leverage metrics," S&P said. S&P could lower the ratings if HSS were to experience severe margin pressure, or poorer cash flows, leading to weaker credit metrics. This could occur if the company did not curtail its capex in time to reduce debt prior to a potential drop in earnings. Downward rating pressure may also stem from debt- funded acquisitions and/or increased shareholder returns. S&P believes that rating upside is limited at this stage, because of HSS' high tolerance for aggressive financial policies and high leverage. The 'FS-6' financial policy score effectively caps HSS' financial risk profile at "highly leveraged," due to the high uncertainty over the potential for future releveraging, aggressive shareholder returns, and changes to the group's acquisition and disposal strategy. LONDON & REGIONAL: Fitch Affirms 'Bsf' Rating on Class C Notes -------------------------------------------------------------- Fitch Ratings has affirmed London & Regional Debt Securitization No. 2 plc's (LoRDS 2) commercial mortgage-backed floating-rate notes due 2018 notes, as follows: -- GBP162 million class A (XS0262542565): affirmed at 'BBBsf'; Outlook Negative -- GBP14.9 million class B (XS0262544348): affirmed at 'BBB-sf'; Outlook Negative -- GBP46.4 million class C (XS0262545402): affirmed at 'Bsf'; Outlook revised to Stable Key Rating Drivers The affirmation reflects the neutral to positive impact of the December 2013 restructuring on the notes. The Negative Outlooks on the senior notes reflect that their investment grade ratings are predicated on the borrower's adherence to the published business plan. However, the Outlook on the class C notes has been revised to Stable as full repayment of the securitized loan is expected in a 'Bsf' stress (even in an enforcement scenario). The proposed loan and bond restructure was passed by noteholders' extraordinary resolution in December 2013. Asset management initiatives and a borrower-led sell down of the secured assets should result in loan repayment over the next three years. Noteholders considered this more favorable than the potentially more problematic scenario of a trustee-led portfolio liquidation via an enforcement of security. The restructure includes the maturity extension of the loan and notes to October 2014 and October 2018, respectively. Two one- year loan extension options are also envisaged, providing sales targets are met (GBP33.2 million by October 2014 and a further GBP75 million by October 2015) and the loan is not in default. Noteholders will also benefit from a full cash sweep (100% of surplus rent and sales proceeds), enhanced by lower financing costs and suspension of subordinated debt payments until senior loan repayment, in exchange for a payment in kind coupon. All principal will be allocated sequentially. While Fitch believes that full repayment of the securitized debt could also be achieved by the enforcement route, as evidenced by the reported A-note loan-to-value (LTV) ratio of 75.9%, noteholders are compensated for the maturity extension with an increase in margin. Therefore Fitch does not consider the restructure to be a coercive or distressed debt exchange. Asset management initiatives include a GBP29 million subordinated loan available for capital expenditure (provided by the borrower and repayable after the secured debt), lease re-gearing and asset re-positioning prior to the marketing phase. Fitch regards the business plan as a credible pathway to enhancing portfolio values. While this is of most benefit to junior lenders, it should improve the marketability of the assets for a more timely sell down. The credit quality of the loan is upheld by several high value assets located in central London, which are expected to generate sufficient proceeds (either via refinancing or sale) to repay at least the senior notes. Rating Sensitivities A material driver for the ratings will be the borrower's ability to avoid default by meeting repayment hurdles. Failing to do so may warrant negative rating action, especially on the senior classes. Estimated 'Bsf' recoveries are GBP237.7 million. SAG SOLARSTROM: UK Unit Files For Insolvency Process ---------------------------------------------------- solarserver.com reports that a major creditor of S.A.G. Solar UK Ltd., a wholly owned subsidiary of S.A.G. Solarstrom AG (Freiburg, Germany), requested the High Court of Justice, Chancery Division, Companies Court on Jan. 21, 2014 to make an administration order in relation to S.A.G. Solar UK Ltd. The company received the application on Jan. 28, 2014, S.A.G. Solarstrom AG said in an ad hoc announcement. A hearing to appoint an administrator is scheduled for Jan. 29, 2014. Once an administrator is appointed, insolvency proceedings can be initiated according to English law, says solarserver.com. For S.A.G. Solarstrom AG, this could mean the loss of receivables, the loss of future potential earnings and a risk that claims will be made on guarantees that have been granted, the report relates. According to solarserver.com, delayed accreditation by the responsible authority Ofgem led to the situation that to date, it has not been possible to close the sale of a completed solar photovoltaic (PV) project and thus liquidity inflow could not be realized, S.A.G. Solarstrom notes in the ad hoc announcement. Founded in 1998, SAG Solarstrom is a German company that builds and operates solar power plants. As reported in the Troubled Company Reporter-Europe on Dec. 17, 2013, The Wall Street Journal said S.A.G. Solarstrom AG has filed for insolvency, making it the latest in a string of photovoltaic companies to buckle under intense international competition. Delayed cash inflows left the company in a liquidity squeeze, S.A.G. Solarstrom said and talks with banks, financial services providers and other creditors have been unable to secure the liquidity needed to guarantee the timely payment of liabilities, the Journal related. STEMCOR HOLDINGS: Lenders Must Vote on Debt Restructuring Plan -------------------------------------------------------------- Stephen Morris at Bloomberg News reports that a U.K. judge ordered lenders to Stemcor Holdings Ltd. to vote on a debt restructuring plan as the steel trader seeks to extend more than US$1 billion of loans and raise new debt. Justice Vivien Rose on Wednesday ruled creditors must vote Feb. 19 on a plan that includes converting existing debt into US$1.1 billion of term loans maturing at the end of 2015. The company faces insolvency if the proposal isn't approved, Bloomberg says, citing a company filing presented to the judge. Stemcor failed to repay an US$850 million credit line last year after reporting a loss in 2012 amid lower demand for steel, Bloomberg recounts. It was then given more time by lenders to repay the debt as it replaced chairman Ralph Oppenheimer with restructuring specialist John Soden and sought to sell assets in India, Bloomberg relays. According to Bloomberg, the document said that more than 80% of lenders to the US$850 million loan, as well as a US$225 million facility for its Singapore-based unit, have indicated their support for the deal. The restructuring plan is part of a U.K. legal process known as a "scheme of arrangement," which typically requires the backing of 75% of creditors, Bloomberg notes. The filing shows that Stemcor's creditors have also been asked to provide a new US$1.15 billion loan to enable it to continue operations, Bloomberg states. If the restructuring completes Stemcor will be able to repay debt using cash as well as proceeds from disposals, including its operations in India, Bloomberg says, citing the document. Headquartered in London, Stemcor Holdings Limited trades steel and steel-making raw materials worldwide. * UK: More Than 1,000 Firms Balk at Restructuring Unit Practices ---------------------------------------------------------------- Lianna Brinded at International Business Times reports that more than a 1,000 companies have made accusations about practices carried on at RBS's Global Restructuring Group (GRG), government advisor Lawrence Tomlinson has told a Treasury Select Committee. Mr. Tomlinson, who is an adviser to Britain's business secretary Vince Cable, said his dossier of cases against RBS's restructuring unit had "continued to grow" since he published his independent report into bank, IB relates. According to IBT, his report claimed that the 81% government-owned lender profited from struggling businesses which were pushed into default after being moved into the controversial unit. Mr. Tomlinson claimed that by moving businesses into GRG, this can create more revenue for the bank through higher fees and margins, IBT discloses. He added that it can also result in the purchase of devalued assets by its property division, West Register, IBT notes. Mr. Tomlinson told the committee that he was ready to hand the dossier over to the Financial Conduct Authority (FCA), in order for the watchdog to investigate, as the evidence he has collected revealed "morally wrong" practices, IBT relays. However, he did add that there was no evidence of criminal misconduct, IBT states. =============== X X X X X X X X =============== * EMEA 2013 Financial Sector Issuance Hits New Low, Fitch Says -------------------------------------------------------------- EMEA non-financial corporate bond issuance rose to a new high of EUR383.3 billion in 2013, while financial-sector issuance hit a new post-crisis low as covered bond volumes dropped sharply, according to Fitch Ratings' calculations. Non-financial corporate issuance in 2013 was 4% higher than the previous year's record level. The growth came as companies took advantage of tight spreads and low yields to refinance and extend debt maturities. It also reflects continued disintermediation in the region as corporates tap markets directly to replace bank loans. Issuance was particularly strong in the energy sector, which accounted for 17% of corporate issuance compared with 12% a year earlier. This increase was spurred by high upstream capital expenditure as high oil prices make it economical to extract oil from more technically challenging formations and geographies. The telecom and automotive sectors also saw a slight increase in their share of the corporate bond market. By contrast, financial-sector issuance dropped by 27%, largely reflecting deleveraging of banks' balance sheets. The headline figure was driven by a 47% fall in covered bond issuance, particularly from Italian and Spanish banks in the first nine months of the year. This fall highlights the deleveraging at banks in both countries, but also indicates steadily healing market conditions over the course of the year. The proportion of covered bonds as a total of financial-sector new issuance fell back to around one-third from more than 45% in the last two years. The divergent trends mean non-financial corporates also snared a record share of EMEA issuance in 2013, with 41% of the region's total corporate issuance compared with 33% in 2012 and more than double the pre-crisis levels of 2006 and 2007. However sentiment towards financial sector issuers improved towards the end of the year, with strong Q4 issuance and spreads trading within 20bp of their non-financial counterparts -- the tightest since February 2008. "We expect issuance from developed-market EMEA non-financial corporates to remain strong in 2014, supported by a modest increase in capex and the continuing favorable market conditions and relatively low interest rates. Emerging-market issuance will probably face increasing headwinds from slowing growth and weakening fund flows on the back of the Federal Reserve's tapering program," Fitch said. "We will publish more details on this data in our quarterly report "EMEA Corporate Bonds: Rating and Issuance Trends" in early February," Fitch said. * Moody's Says Investor Shift to Alternative Investments Positive ----------------------------------------------------------------- The structural shift among investors toward greater asset allocation to alternative investments will benefit asset managers with expertise in alternative asset classes. Well-established alternative asset managers with proven track records such as Blackstone, KKR, Oaktree and Carlyle will clearly benefit from this marked trend. However, traditional asset managers that have begun building their capabilities in alternative assets, such as BlackRock, Inc. (A1), Invesco Ltd. (A3), Clipper Acquisitions Corp (Ba1), Neuberger Berman Group LLC (Ba1), Franklin Resources, Inc. (A1) and Legg Mason, Inc. (Baa1), will also benefit, says Moody's Investors Service in a new report published. Assets under management (AUM) will see incremental growth, and management fees will be higher for alternative asset classes -- real estate, private equity, direct lending and absolute-return driven strategies -- compared with traditional asset classes, as stocks and bonds. The new report, entitled "Asset Managers Stand to Benefit from Investor Shift to Alternative Investments", is now available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release. Moody's says that increased allocations to alternatives will likely continue as investors, notably pension funds, search for higher returns. This structural shift by pension funds toward greater alternative investments is a credit positive development for skilled alternative asset managers that can mitigate the typically greater risks associated with alternative investments. "Pension funds are increasingly moving towards alternative investments, which offer higher portfolio returns and better protection against inflation and price volatility, says Soo Shin-Kobberstad, a senior analyst at Moody's and the author of the report. "In addition, asset classes such as real estate and infrastructure offer long-term asset duration and cash flows that match the profile of pension funds' long-term liabilities." In response to the shift towards alternative AUM, some traditional fund managers have been acquiring alternative asset- management expertise. In Moody's view, this gives them a strategic advantage, as building alternative asset-management expertise organically takes a long time, given the illiquid nature of and longer holding periods for alternative investments. Moody's also notes that investment management fees are significantly higher for alternative asset classes compared to traditional asset classes. In addition, alternative investment products offer asset managers performance-based fees while traditional asset classes do not. * BOOK REVIEW: Creating Value through Corporate Restructuring ------------------------------------------------------------- Author: Stuart C. Gilson Publisher: Wiley Hardcover: 516 pages List Price: $79.95 Review by David M. Henderson Most business books fall into two categories. The first is very important. It is like that stuff you have to drink before you have a colonoscopy. You keep telling yourself, this is very good for me, while you would rather be at the beach reading Liar's Poker or Barbarians at the Gate. Stuart Gilson, of the Harvard Business School, has managed to write a book important to everybody in the distressed market that is also quite enjoyable. His prose is fluid and succinct and a pleasure to read. But don't take my word for it. The dust jacket endorsements come from Jay Alix, Martin Fridson, Harvey Miller, Arthur Newman, and Sanford Sigoloff. At a collective gazillion dollars a billing hour, that's a lot of endorsement. Be advised that this is designed as a text book. The case study format might be off-putting to some. The effect can be jarring as you read the narrative history of the case and suddenly confront the financial statements without any further clue as to what to do, but this must be what it is like for the turnaround manager. Even after reading several of the cases, when I got to the financials I had that sinking feeling of, what do I do now? If you read carefully, clues to the solutions are in the introductions. The book is divided into three "modules", bizspeek for sections: Restructuring Creditors' Claims,. Restructuring Shareholders' Claims, and Restructuring Employees' Claims. The text covers 13 corporate restructurings focusing on debt workouts, vulture investing, equity spinoffs, tracking stock, assete divestitures, employee layoffs, corporate downsizing, M & A, HLTs, wage givebacks, employee stock buyouts, and the restructuring of employee benefit plans. That's a pretty comprehensive survey, wouldn't you say? Dr. Gilson's chapter on "Investing in Distressed Situations" is an excellent summary of the distressed market and a good touchstone even for seasoned vultures. Even in the two appendices on technical analysis, this book is marvelously free of those charts and graphs that purport to show some general ROI of distressed investing. Those are cute, aren't they? As Judy Mencher has famously said, "You can buy the paper at 50 thinking it's going to 70, but it can just as easily go to 30 if you are not willing to act on it." Therein lies the rub and the weakness, if inevitable, of this or any book on corporate restructurings. As Dr. Gilson notes, no two are alike, and the outcome is highly subjective, in our out of Court, but especially in Chapter 11. Is the Judge enthralled by Jack Butler as Debtor's Counsel or intimidated by Harvey Miller as Debtor's Counsel? Are you holding "secured" paper only to discover that when it was issued the bond counsel forgot to notify the Indenture Trustee of the most Senior debt? Is somebody holding Junior paper that you think is out of the money only to have Hugh Ray read the fine print and discover that the "Junior" paper is secured? This is the stuff of corporate reorganizations that is virtually impossible to codify into a textbook. That said, this is an especially valuable text for anybody working in the distressed market. As a Duke grad, I tend to be disdainful of all things Harvard, but having read Dr. Gilson's book, I am enticed to encamp by the dirty waters of the Charles long enough to take his course, appropriately entitled, "Creating Value Through Corporate Restructuring." ********* 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 * * *