TCREUR_Public/140918.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

         Thursday, September 18, 2014, Vol. 15, No. 185



STORA ENSO: Fitch Withdraws LT 'BB-' Issuer Default Rating


HOLDELIS SAS: S&P Puts 'B+' CCR on CreditWatch Positive


IVG IMMOBILIEN: Exits Insolvency Following Restructuring
SOLON: Commences Insolvency Proceedings for Two German Units


ESPIRITO SANTO: DBRS Cuts Ratings to 'D' Over Controlled Mgmt.


SYNTHOS SA: S&P Assigns Prelim. 'BB' LT Corp. Credit Rating


BANCO ESPIRITO: DBRS Lowers Senior Debt Rating to 'BB (low)'


TRANSSIBERIAN RE: A.M. Best Affirms "bb+" Issuer Credit Rating


T-2: Ljubljana Court Commences Receivership Proceedings


SANTANDER PUBLICO: Fitch Raises Rating on Class B Notes to 'B+sf'


DOMETIC GROUP: S&P Affirms 'B-' CCR Over Atwood Mobile Deal


ASYA KATILIM: Seeks TRY225MM in Fresh Capital from Shareholders

U N I T E D   K I N G D O M

PHONES 4U: EE, Vodafone in Acquisition Talks with Administrator
PHONES 4U: Founder Calls on Markets Regulator to Probe Collusion
PHONES4U FINANCE: S&P Lowers CCR to D After Administration Filing
SHARP INT'L UK: S&P Revises Outlook on 'B+' CCR to Stable



STORA ENSO: Fitch Withdraws LT 'BB-' Issuer Default Rating
Fitch Ratings has affirmed and withdrawn Stora Enso Oyj's Long-
term Issuer Default Rating (IDR) and senior unsecured rating at
'BB-'.  The Outlook is Stable.

The ratings are no longer considered by Fitch to be relevant to
the agency's coverage.


HOLDELIS SAS: S&P Puts 'B+' CCR on CreditWatch Positive
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit ratings on French textile and appliances rental
provider Holdelis SAS (Elis) and its holding company Legendre
Holding 27 on CreditWatch with positive implications.

At the same time, S&P placed the following issue ratings on
CreditWatch positive:

  -- The 'B+' rating on Novalis S.A.S' EUR450 million senior
     secured notes due 2018. The recovery rating on this
     instrument is '3'.

  -- The 'B-' rating on the EUR380 million private senior
     subordinated notes due 2018. The recovery rating on this
     instrument is '6'.

  -- The 'B-' rating on holding company Legendre Holding 27's
     EUR173 million private senior payment-in-kind (PIK) due
     2018. The recovery rating on these instruments is '6'.

The CreditWatch placement follows the group's recent announcement
of an IPO, through which it plans to raise approximately EUR700
million. S&P understands that the group intends to use these
funds to:

  -- Repay 40% of the EUR194 million PIK notes (outstanding
     amount as of June 2014 including accrued interests). The
     remaining portion of the PIK notes will be reimbursed
     through a capital increase in benefit of Legendre Holding

  -- Repay 40% of the EUR380 million senior subordinated notes;

  -- Repay 36% of the existing senior term loans. The group
     already initiated negotiations with banks to refund the
     remaining amount through a new five-year EUR650 million
     senior term loan and set up a new EUR200 million revolving
     credit facility (RCF).

S&P said, "Based on these assumptions, we anticipate that the
group's current indebtedness of more than EUR2 billion (as of
June 2014) will reduce to approximately EUR1.4 billion and thus
significantly improve the group's financial risk profile.

"As part of this IPO, we understand that the group's private
equity owner, Eurazeo, will reduce its current 90% stake. Should
this holding remain in excess of 40%, we expect to maintain our
assessment that the group is owned by a financial sponsor, in
line with our criteria. As a consequence, we would continue to
account as debt the outstanding PIK notes (60% of the current
EUR193 million) at the level of Legendre Holding 27. Under these
circumstances, adjusted FFO to debt and debt to EBITDA would
likely be about 18% and 4x by Dec. 31, 2014.

"We continue to assess Elis' financial risk profile as "highly
leveraged," given its current credit metrics (total debt to
EBITDA slightly in excess of 5x as of June 30, 2014), alongside
execution risks inherent to an IPO transaction.

"As a consequence, a revision of the group's financial risk
profile would depend on the new ownership structure, together
with our review of the group's intended financial policy (i.e.,
acquisitive strategy, modest dividend distribution, and
consistent deleveraging).

"We still assess Elis' business risk profile as "satisfactory,"
given the group's concentration in the French market, although
that concentration has somewhat reduced with the recent
acquisition of Brazil-based Atmosfera. The Brazilian company
accounted for one-fourth of Elis' nondomestic revenues as of
June 30, 2014. Moreover, Elis operates in a fragmented and
competitive industry and focuses on Western European markets, for
which we anticipate a mild recovery in 2014. This is mitigated by
the company's leading positions in its key operating segments.
Its resilient and healthy EBITDA margins at about 30%, which we
consider to be higher than the industry average, provide further
support to the group's business risk profile.

"The prospective IPO would have no effect on our assessment of
the group's business risk profile as "satisfactory."

"The CreditWatch placement reflects our opinion that we could
raise our long-term corporate credit rating on Elis by at least
one notch upon completion of the IPO, and of our review of its
financial policy and new ownership structure.

"We aim to resolve the CreditWatch placement over the next 90
days following Elis' completion of the IPO and allocation of the
proceeds in line with the plan. We would assess the extent of the
deleveraging and revise our assessment of the group's financial
risk profile. The magnitude of any potential ratings upside would
depend on our view of the group's ability to deliver stronger
credit metrics; its new capital structure; possible changes in
its financial policy; its future shareholding structure; and its
liquidity remaining "adequate" under our criteria.

"We would likely affirm the ratings if Elis does not succeed in
placing the IPO," said S&P.


IVG IMMOBILIEN: Exits Insolvency Following Restructuring
Alexander Huebner at Reuters reports that IVG Immobilien on
Tuesday said it has emerged from insolvency following a sweeping
restructuring and a debt-for-equity swap and is now considering
options for a merger or stock market listing.

A local German court declared the insolvency proceeding
completed, the company, as cited by Reuters, said in a statement,
after the co-owner of London's landmark "Gherkin" tower began
proceedings in 2013.  IVG later delisted its shares, Reuters

One of Germany's best known real estate firms, IVG amassed more
than EUR4 billion (US$5.2 billion) in debt during a rapid
expansion when it financed a business and hotel complex located
at Frankfurt airport called "The Squaire" which suffered from
cost over-runs, Reuters discloses.

It was also hit by a growing unwillingness among European banks
to provide new loans, a consequence of the continent-wide credit
crunch, and new regulations forcing lenders to cut their exposure
to property, Reuters relays.

IVG Immobilien is Germany's largest property company by assets
under management.  In total, IVG has EUR21 billion of assets
under management.

SOLON: Commences Insolvency Proceedings for Two German Units
Andrew Lee at Recharge reports that Solon has announced that two
Germany-based units will file for insolvency, as its center of
gravity continues to shift away from Europe under parent company

Solon announced the start of insolvency proceedings in Berlin for
its Solon Modules GmbH and Solon Energy GmbH subsidiaries,
Recharge relates.

The move came as the company appointed Rolando Gennari as its new
European head, with a remit to reposition Solon "as a leading
player on the continent", Recharge relays.

UAE-based Microsol bought Solon -- one of the pioneers of the
German solar industry -- in 2012 after the latter went bankrupt,
Recharge recounts.

Microsol quickly announced plans to move most of Solon's
production to Asia and in March said the German company's iconic,
solar-powered HQ in Germany would close with the loss of 230
jobs, Recharge discloses.

According to Recharge, Tuesday's statement said the insolvency
proceedings for the two German units "are unpleasant, but
necessary in order to position the group on a solid operating and
financial base", adding that they relate to manufacturing units
that have been out of commission since April.

Solon is a PV group.


ESPIRITO SANTO: DBRS Cuts Ratings to 'D' Over Controlled Mgmt.
DBRS Inc. downgraded the ratings of Espirito Santo Financial
Group (ESFG or the Group) including its Senior Long-term Debt and
Senior Convertible Bonds rating due 2025 ratings to D from CC,
its Dated Subordinated Debt rating to D from CC (low) and its
Short-Term Instruments rating to D from R-5.

The rating action follows ESFG's announcement on July 24, 2014
that it has requested the Luxembourg Courts for controlled
management ("Gestion Controlee") under Luxembourg Law.  This
request comes following the Group's recognition that it will be
unable to meet its obligations under its commercial paper program
and its own standalone debt obligations.


SYNTHOS SA: S&P Assigns Prelim. 'BB' LT Corp. Credit Rating
Standard & Poor's Ratings Services assigned its preliminary 'BB'
long-term corporate credit rating to Poland-based producer of
synthetic rubbers and styrenics Synthos S.A. The outlook is

The final rating will depend on S&P's receipt and satisfactory
review of all final transaction documentation. Accordingly, the
preliminary rating should not be construed as evidence of the
final rating. If Standard & Poor's does not receive final
documentation within a reasonable time frame, or if final
documentation departs from materials reviewed, S&P reserves the
right to withdraw or revise S&P's ratings. Potential changes
include, but are not limited to, utilization of bond proceeds,
maturity, size and conditions of the bond and revolving credit
facility, financial and other covenants, security and

The rating on Synthos reflects its moderate leverage pro forma
the upcoming refinancing. "We understand the company intends to
issue a bond and use the proceeds to repay its existing debt and
fund upcoming investments. Under our baseline assumptions, we
expect Synthos' adjusted net debt-to-EBITDA ratio to be about
2.3x in 2014, rising modestly to about 2.5x in 2015. This
leverage level, subject to the final terms of the transaction,
balances risks related to the cyclicality and commodity-like
nature of Synthos' rubber and styrene activities, largely exposed
to the tire and construction industries (representing 70% of
Synthos' PLN5.3 billion [EUR1.3 billion] in revenues)," said S&P.

"Our assessment of Synthos' "fair" business risk profile is
mainly constrained by the company's overall limited scale -- with
currently two producing plants in Poland and Czech Republic and
EBITDA of about PLN600 million to PLN650 million this year -- and
by the highly commoditized nature of synthetic rubber and
polystyrene. A further strategic challenge relates to the decline
in European demand for emulsion based rubbers (eSBR), which
accounted for 30% of total 2013 EBITDA. We nevertheless expect
volume decreases in eSBR -- driven by a shift to more efficient
solution-based rubber (SSBR) tires for personal cars -- to have
only a gradual impact on Synthos, given management's strategy
focused on exporting part of its production to other regions,
notably to Asia.," said S&P.

Partly mitigating these weaknesses is Synthos' profitability that
is cyclical but higher than peers'. The company's current EBITDA
margin is about 14%, supported by its backward integration into
key raw material butadiene (58% of its needs), and full
integration into energy supply (with excess heat and power
accounting for 20% of 2013 EBITDA). This integrated production
set-up supports an adequate cost position, in S&P's view, and
results in profits being positively correlated with butadiene
prices, which are currently low. They could climb in the coming
years, though, because of the expected tightening of butadiene
supply from 2016. The company's profitability is also supported
by its limited operating leverage, with generally low fixed
costs, and a 50%-60% share of contracts with a cost-plus-fee
pricing structure.

Synthos ranks among the top five players in Europe in its key
products, eSBR and polystyrene, with strong market shares in
Central and Eastern Europe and long-standing relationships with
major tire manufacturers. In addition, Synthos plans to invest a
substantial PLN2.3 billion in 2014-2016 in expanding toward more
sophisticated products: SSBR (90,000 tons in Poland by 2015);
Nd-PBR (90,000 tons in Brazil by 2017); and low lambda expandable
polystyrene (50,000 tons by 2016). Another area of large
investment is the construction of new steam boilers, which S&P
expects will have a favorable impact on future energy costs.

"We think Synthos' leverage, pro forma the refinancing, remains
fairly supportive, although we expect it to be up markedly from a
few years ago when the company was debt-free. We understand the
company intends to keep targeting reported net debt to EBITDA in
the 1x-2x range (with a temporary maximum of 2.5x). This
financial policy, which we view as generally prudent, has enabled
Synthos to pay sizable dividends to its shareholders in recent
years (including to 62% beneficial owner Michal Solowow) and to
subsequently increase its leverage within this target range.
Management and the supervisory board have, however, confirmed
plans to lower dividends during the upcoming investment phase,"
S&P said.

"Our view of Synthos' "significant" financial risk profile takes
into account our expectation of adjusted net debt to EBITDA
peaking at about 2.6x during the investment phase, when the
company is likely to draw under its available lines. On the
downside, however, is our forecast for negative free operating
cash flow (FOCF) over 2014-2016, given the company's sizable
investments and the ensuing lag in EBITDA growth," said S&P.

In its base case, S&P assumes:

  A gradual decline in the eSBR segment, structurally challenged
  by higher-end product substitution in Europe.

  Continued tough rubber markets, which are currently at a
  cyclical low, but upside stemming from our assumed rise in
  butadiene prices toward EUR1,300 per ton.

  A stable share of styrenic products in EBITDA.

  A progressive contribution from the company's investment
  program as of 2016.

Based on these assumptions, S&P arrived at the following credit

  Unadjusted EBITDA of about PLN600 million-PLN650 million in
  2014, PLN700 million in 2015, and a rise to PLN750 million-
  PLN800 million in 2016.

  Negative FOCF in 2014-2016.

  Adjusted net debt to EBITDA rising to about 2.3x in 2014
  (compared with 1.3x in 2013), then increasing to about 2.5x in
  2015. In its adjusted debt, S&P nets 75% of reported cash. This
  remains subject to final terms of the transaction.

The stable outlook reflects S&P's view that Synthos will balance
its substantial investment spending in 2014-2016 while
maintaining adjusted net debt to EBITDA of about 2.5x, which S&P
views as commensurate with the current rating. S&P also factors
in its view of the company's "adequate" liquidity, with
substantial initial cash balances likely stemming from the
planned bond issuance.

"Because we forecast negative FOCF in the coming years, we do not
view rating headroom as sufficiently material to allow for
further large investments beyond those mentioned, or for
dividends, unless operating performance is materially higher than
we currently expect in our base case," said S&P.

"We don't currently envisage rating upside, given the commodity-
like nature of Synthos' products and the structural challenges in
the European emulsion rubber market. Stronger product and asset
diversification from the investment program, as well as a
commitment to low leverage could be potential contributors to an

"We could consider a negative rating action if we observed
deterioration in Synthos' credit metrics, such as adjusted debt
to EBITDA toward 3.0x or above, resulting from further cyclical
downside in polystyrene markets, accelerated substitution of the
company's eSBR rubbers, or a drop in butadiene prices. We
estimate that a EUR100 per ton movement in butadiene prices would
affect Synthos' EBITDA by PLN50 million. Lastly, unexpectedly
high shareholder distributions would also pressure the rating."


BANCO ESPIRITO: DBRS Lowers Senior Debt Rating to 'BB (low)'
DBRS Inc., on Aug. 1, 2014, lowered the Senior Long-Term
Debt & Deposit rating of Banco Espirito Santo, S.A. (BES or the
Bank) to BB (low) from BBB (low) and the Short-Term rating from
R-2 (middle) to R-4.  The rating of Dated Subordinated Notes
issued by BES and its subsidiaries has been downgraded to CC
(high) from B (high).  The Intrinsic Assessment (IA) of the Bank
is now B (low), from BB (high).  All ratings remain Under Review
with Negative Implications.

In lowering the IA by five notches to B (low), DBRS highlights
the severe impact on the Bank from the disclosures in the Bank's
1H14 results announced on July 30.  The Bank reported a net loss
of EUR3.5 billion, which negatively impacted capital levels to
such a degree that the Bank reported a transitional Basel III
Common Equity Tier 1 (CET1) ratio of 5%, well below the
regulatory minimum requirement of 7%.  DBRS view the nature of
the losses, which evidence control failures and possible illegal
behavior, as well as the fact that there is, in DBRS' opinion,
significant execution risk with regards to the capital plan, as
warranting a multi-notch downgrade.  DBRS anticipates that these
issues could have a significant impact on the customer franchise,
including the potential loss of deposits, and that the long-term
ramifications for the Bank's franchise could be significant.

The loss reported in 1H14 was primarily driven by a series of
provisions and impairments for extraordinary items related to
some previously-reported exposures to Espirito Santo (ES) Group
entities, as well as newly reported exposures and provisioning
requirements that came to light following a thorough review by a
third-party auditor.  The unexpected size of the losses and its
subsequent impact on capital followed on from earlier assurances
by the Bank of Portugal on July 11 that the Bank was sufficiently
well capitalized to absorb emerging exposures, and indicates
serious concerns regarding risk and compliance controls within
BES.  It has become apparent that a number of these transactions
were undertaken without the proper approvals or without being
recorded through the proper channels.

The Bank of Portugal has indicated in its most recent statement
of July 31 that a private solution for a capital increase is the
most desirable, but that the public recapitalization line,
provided in the Economic and Financial Assistance Programme,
remains available to support the banking system.  Given BES's
position as Portugal's second largest banking group by assets,
DBRS has maintained 3 notches of systemic support in the Senior
Long-Term Debt & Deposit ratings.  However, the uplift
incorporated in the senior ratings could be reduced if in DBRS's
view, the timeliness of support is prolonged, or if the
willingness for support reduces.  This could be the case given
the nature of the losses and the potential for further
irregularities to be uncovered.

As the capital planning process continues, DBRS expects that
BES's liquidity and funding profile will remain challenged,
heightened by the continued uncertainty, although the Bank has
access to ECB liquidity.  DBRS maintains its ratings Under Review
with Negative Implications, pending clarity on the capital
increase.  While near-term events could lead to rating actions,
especially if further irregularities were to arise, DBRS does not
expect to complete the review prior to the results of the ECB AQR
and EBA-EU stress tests.

Before concluding on the review, DBRS will also require further
clarification and details on the capital plan, as well as details
of new management's strategy.

The downgrade of the Bank's subordinated debt by six notches to
CC (high) reflects the increased risk to these instruments
pending recapitalization of the Bank, given the significant
deterioration in BES's capital position.  In the current European
regulatory environment DBRS notes that accepting state capital is
expected to have negative implications for holders of BES
subordinated debt and for the strategic flexibility of the Bank.
Although the long-term debt and deposit ratings of the Bank
continue to incorporate uplift for potential government support,
DBRS would not expect this to be forthcoming for more junior
instruments and therefore, given the potential pressure on BES's
capital position, the notching of these instruments from the IA
has been widened.


TRANSSIBERIAN RE: A.M. Best Affirms "bb+" Issuer Credit Rating
In a release dated July 18, 2014, A.M. Best Co. said it has
affirmed the financial strength rating of B (Fair) and the issuer
credit rating of "bb+" of OJSC Transsiberian Reinsurance
Corporation (Transsib Re) (Russia).  The outlook for both ratings
is stable.

The ratings of Transsib Re reflect the high execution risk and
limited expertise associated with its international expansion as
well as the company's weak technical performance.  Partly
offsetting these negative rating factors is Transsib Re's strong
level of risk-adjusted capitalization.

Transsib Re's business profile remains subject to variation,
owing to the challenging competitive conditions within its target
markets.  With gross written premiums of RUB764.7 million
(approximately USD22 million) in 2013, Transsib Re derives
approximately 70% of its business from Russia and the
Commonwealth of Independent States.  The company maintains a
strategy to develop its international portfolio, with a
particular focus on Africa, Asia and the Middle East.  To date,
Transsib Re's international expansion has yet to demonstrate
sustained growth and profitability.  This factor, combined with
soft market conditions in Russia, is likely to continue to
negatively affect Transsib Re's performance.

Transsib Re's overall underwriting performance in the most recent
five-year period has been poor, with an average combined ratio of
100%.  Technical results have been affected by a combination of
volatile claims experience in its domestic and overseas markets,
and high expenses relative to net premium volumes.  Following a
number of years of re-underwriting its insurance portfolio,
Transsib Re produced an improved combined ratio of 87.9% in 2013,
largely driven by an increase in net written premiums and
significant reserve releases following the settlement of several
large claims.  Additionally, Transsib Re reduced its expense
ratio to 34.4% compared with 41.2% in the previous year.  Despite
some signs of improvement in technical performance in 2013,
Transsib Re's ability to maintain these results going forward
remains uncertain due to its inconsistent expansion strategy.

Transsib Re's risk-adjusted capitalization remains at a strong
level following an increase in paid-up capital in 2013.  Capital
contributions from Transsib Re's shareholders have predominantly
supported growth of its surplus base since 2008.  Due to the
company's weak overall earnings profile over the past few years,
uncertainty continues to exist with the sustainability of
Transsib Re's capital management strategy in the medium to longer

Positive rating actions could occur if Transsib Re continues to
improve its operating performance, with risk-adjusted
capitalisation remaining at a supportive level.  Additionally,
Transsib Re will be expected to demonstrate consistency in its
strategic plans, particularly with regard to the international
expansion.  These fundamentals will be assessed over a longer

Negative rating actions could occur if Transsib Re's operating
results were to weaken.  Additionally, a decline in the company's
risk-adjusted capitalization or deterioration in the
macroeconomic conditions of Russia could negatively affect
Transsib Re's ratings.


T-2: Ljubljana Court Commences Receivership Proceedings
SeeNews reports that T-2 said on Tuesday the district court in
Ljubljana started receivership proceedings against the company.

However, the company said in a statement on its Web site it will
continue providing uninterrupted services to its customers,
SeeNews relates.

According to SeeNews, T-2 explained that the court ruling was
unexpected as it demonstrated that it is not insolvent.

The shareholders of T-2 intend to appeal the decision, SeeNews

News agency STA said on Tuesday that the proposal for
receivership was submitted by Slovenia's "bad bank" Bank Asset
Management Company (BAMC) and two lenders, SeeNews relays.

BAMC demanded receivership after taking over some EUR90 million
in unpaid loans of T-2 from local Nova Ljubljanska Banka and Nova
Kreditna Banka Maribor, SeeNews recounts.

T-2 is a Slovenian telecoms operator.  The operator has 175,000
subscribers and over 300 employees.


SANTANDER PUBLICO: Fitch Raises Rating on Class B Notes to 'B+sf'
Fitch Ratings has upgraded Santander Publico 1, F.T.A.'s notes

  Class A (ISIN ES0338185004): upgraded to 'BB+sf'; Outlook
  Stable from 'BBsf'; Outlook Negative

  Class B (ISIN ES0338185012): upgraded to 'B+sf'; Outlook Stable
  from 'Bsf'; Outlook Negative

The transaction is a securitization of loans to Spanish public
sector entities.


The upgrade reflects the improvement from a risk perspective in
the portfolio, which comprises debt originated by Spanish public
sector entities.  Credit enhancement has increased since the
previous rating review in September 2013 (to 14.07% from 10.39%
for class A, to 6.6% from 5.26% for class B).  The portfolio's
credit quality has improved since last year.  Loans in arrears by
more than 180 days have dropped to 0% from 1.8% in Sept. 2013.
The transaction is amortizing sequentially as the reserve fund is
below the required amount.

The Spanish sovereign upgrade on April 25, 2014 is a sign of a
better economic environment, which will have a positive impact on
the public entities' performance, providing stability to the
public system cash flows.

The Stable Outlook on the notes reflects Fitch's view on the
credit quality of the underlying portfolio of loans to public
sector entities including regions, municipalities and
universities, which depend significantly on transfer payments
from the Spanish sovereign.

The ratings are capped at the Spanish sovereign rating
(BBB+/Stable/F2).  Fitch has credit opinions or public ratings on
49% of the portfolio in notional terms, with an average credit
quality of 'BBB'.


Obligor concentration levels in the portfolio remain high.  The
largest 10 obligors represent around 47% of the portfolio.  The
largest obligor in the portfolio accounts for 9.9% of the
notional.  Nevertheless, Fitch's credit opinions on the largest
obligors remain above the rating of the class A notes.

Although recoveries are expected to remain high because of the
Spanish government support for the public sector entities, it
might be delayed for a significant period of time.  Fitch has
assumed that it would take on average up to eight years before
recoveries would be realized.  This results in a substantial
amount of negative carry for the transaction as the interest on
the rated notes has to be paid in the interim.


DOMETIC GROUP: S&P Affirms 'B-' CCR Over Atwood Mobile Deal
Standard & Poor's Ratings Services affirmed its 'B-' long-term
corporate credit rating on Sweden-based leisure product
manufacturer Dometic Group AB. The outlook is stable.

At the same time, S&P affirmed its 'CCC' issue rating on
Dometic's payment-in-kind (PIK) toggle notes. The recovery rating
on these notes is '6', indicating its expectation of negligible
recovery (0-10%) in the event of a payment default.

The affirmation follows Dometic's announcement that it has
reached an agreement to acquire U.S.-based Atwood Mobile Products
LLC. Atwood, which manufactures mobile equipment, mainly for the
recreational vehicle market, has annual sales of about US$200
million, which represents about 18% of the Dometic group's 2013
revenues. The acquisition price has not been publicly disclosed.
"We understand the company's intention is to finance half of the
acquisition with bank debt and the remainder by shareholders,
either as pure equity or a shareholder loan. Regardless of how
the equity part is structured, we forecast that FFO to debt will
remain below 5% and debt to EBIDTA leverage may reach 7x-8x,
ratios that are commensurate with Doemtic's 'B-' rating. We
understand from management that all term loans are underwritten,
subject to regulatory approval. The acquisition should therefore
not significantly weigh on liquidity, which we continue to view
as adequate," S&P said.

"We view the acquisition as somewhat positive for the business
risk profile: It improves the company's market position in North
America, and also increases its product diversification, but we
continue to view Dometic's business risk as "weak" under our
criteria. Although Atwood is sizable in relation to Dometic's
current size -- about 20% of pro forma revenues -- the group will
remain modest in size by global standards. It will also remain
dependent on the still somewhat weak European market, despite the
diversification in North America. We note that the company is
continuing its efforts to deal with the operating issues it has
faced in previous years, which we expect to lead to gradual
improvements in margins over coming years," S&P said.

On June 30, 2014, Dometic's total adjusted debt amounted to about
SEK8.5 billion (US$1.2 billion), including the group's EUR314
million PIK toggle notes. In its base-case scenario, S&P assumes
the PIK toggle notes will be paid in cash and therefore weigh on
free operating cash flow (FOCF) from 2014. Based on its
preliminary assessment, S&P considers that Dometic could report
funds from operations (FFO) of about SEK250 million-SEK300
million in 2014, rising to above SEK500 million-SEK600 million in
2015 if the acquisition is finalized.  The FFO improvement also
reflects the refinancing completed earlier in 2014, leading to
lower interest charges. Based on Atwood's revenue base in 2013,
assuming that the company is achieving an EBITDA margin close to
that of Dometic and a price multiple of about 10x-12x, S&P
expects the acquisition price to be in the SEK1.8 billion-SEK2.2
billion area.

The announced transaction does not materially change S&P's base
case for 2014, as it anticipates that it will close at the end of
the year, following regulatory approval. "We assume that the
still-fragile European markets will continue to constrain
Dometic's operations. In our view, recovery in these markets will
be arduous and GDP growth limited, at roughly 1%," said S&P.

Based on these assumptions, S&P arrived at the following credit

  -- EBITDA of about SEK1.1 billion-SEK1.2 billion, representing
     a 14%-15% margin over sales.

  -- FFO to debt of about 3%-4%, but ultimately depending on the
     structure of the new equity.

  -- Debt to EBITDA of about 7.0x-8.0x.

The stable outlook reflects S&P's assessment that Dometic's
liquidity will remain "adequate" at least through 2014 and 2015.
S&P also factors in its assumption of an improvement in EBITDA
following the acquisition announcement, supporting our
expectations of positive FOCF. S&P expects the group's credit
metrics to stay in line with the current rating, particularly an
EBITDA margin near 14%-15%, FFO to debt of 3%-5%, and EBITDA
interest coverage near 2x.

Upside scenario

If Dometic's financial risk profile improved -- with credit
ratios approaching FFO to debt of 12% and EBITDA interest expense
of 3x -- S&P could consider a positive rating action. "We don't
see this as a likely scenario over the medium term, however,
given Dometic's releveraging if the Atwood acquisition goes

Downside scenario

S&P could downgrade Dometic if the transaction was to be financed
through different means that would unduly burden the capital
structure or liquidity, or if the group's operating performance
did not remain at least in line with our expectations in 2014 and
2015. This could lead to narrowing covenant headroom and
deterioration of cash flows. Furthermore, an EBITDA margin below
12% would likely bear negatively on the rating.


ASYA KATILIM: Seeks TRY225MM in Fresh Capital from Shareholders
Isobel Finkel and Selcan Hacaoglu at Bloomberg News report that
Turkey faces the prospect of its first bank collapse in at least
a decade as Asya Katilim Bankasi AS struggles to maintain market
confidence amid pressure from President Recep Tayyip Erdogan over
its ties to exiled preacher Fethullah Gulen.

The Istanbul-based lender has lost 42% of its market value since
trading resumed on Sept. 15 after a five-week suspension,
Bloomberg relates.  Asya said on Sept. 16 it's seeking TRY225
million (US$102 million) of fresh capital from shareholders after
the loss of deposits and government contracts depleted its
finances, Bloomberg relays.

Bank Asya is caught in a political battle after Erdogan accused
U.S.-based Gulen of starting a corruption probe against members
of his government in December, Bloomberg discloses.  The feud has
spilled into business, where companies with links to Gulen such
as Asya and mining company Koza Altin Isletmeleri AS (KOZAL) say
they've been subject to negative regulatory actions and news
reports, Bloomberg notes.

According to Bloomberg, Hurriyet newspaper reported on Sept. 16
that Erdogan said the Turkish banking regulator should take a
decision on Bank Asya or else it will be "responsible".

Asya Katilim Bankasi A.S. --
provides various banking and financial services to corporate,
commercial, and retail customers primarily in Turkey. It is
engaged in interest-free banking as a participation bank, and
collects funds through current accounts and profit sharing
accounts, as well as lends such funds through production support,
finance lease, and profit/loss sharing partnership.

U N I T E D   K I N G D O M

PHONES 4U: EE, Vodafone in Acquisition Talks with Administrator
Daniel Thomas at The Financial Times reports EE and Vodafone, two
of the mobile operators that contributed to the demise of Phones
4U by withdrawing their business in the past few weeks, are in
talks with the administrator to buy parts of the company.

According to the FT, EE and Vodafone have each spoken separately
to the administrator about acquiring elements of Phone 4U's
business, including some of the stores, staff and stock across
the UK.

Dixons Carphone, the high street retailer, is also in talks to
offer the 800 staff that work in Phones 4U concessions
alternative roles within its own stores, according to one person
with knowledge of the situation, the FT discloses.  Dixons
Carphone could also be interested in some of the stores and in
acquiring the company's brands, the FT notes.

The person added that Dixons Carphone had agreed a waiver with
the administrator allowing them to talk directly to the staff,
which had previously been prevented by a "no-poaching" agreement,
the FT relays.

PwC was appointed as administrator by Phones 4u owner BC Partners
after the company lost major contracts with EE and Vodafone, the
FT recounts.  Some 550 stores and 6,000 jobs are at risk, the FT

According to the FT, one person close to the situation said that
EE could buy anywhere between "a handful" and 80 of the stores,
which would also save the jobs of the employees of those outlets.

EE and Vodafone had briefly considered a takeover of Phones4U
earlier this year, after being approached by the management, but
did not proceed with the talks, the FT relays.

Executives at the operators insist that they are blameless in the
demise of Phones 4U given their long-stated plans to pursue their
own retail strategies, the FT notes.

One person familiar with the negotiations at EE said that terms
being offered by Phones 4U were simply not attractive, the FT
relates.  Vodafone has blamed financial constraints imposed by BC
Partners, which withdrew GBP200 million from the group as a
special dividend by adding debt to its balance sheet, the FT

Phones 4u was a large independent mobile phone retailer in the
United Kingdom.

PHONES 4U: Founder Calls on Markets Regulator to Probe Collusion
Daniel Thomas, Jonathan Guthrie and Anne-Sylvaine Chassany at The
Financial Times report that John Caudwell, the outspoken founder
of Phones 4U, has called for the markets regulator to investigate
whether the "bully boy" mobile phone industry acted in collusion
to cause the demise of the company on Monday.

Phones 4U's collapse into administration has put the jobs of
almost 6,000 people and the future of 550 UK stores at risk --
making it the largest retail failure on Britain's high streets
since the demise of Comet in 2012, the FT relates.

Mr. Caudwell, who sold the business for GBP1.5 billion in 2006 to
Providence Equity Partners and Doughty Hanson, told the FT that
there had "probably been some collusion to ruthlessly eliminate
Phones 4U from the high street".

According to the FT, he called on the Competition and Markets
Authority to investigate why three of the UK's four mobile
operators had decided to withdraw from Phones 4U in the space of
a year, describing it as an "unprecedented attack" by
"multinational bully boys to kill a healthy business".

"Where is the regulator? Where is the government?" the FT quotes
Mr. Caudwell as saying on Monday.  "This is a blatant attempt to
remove competition.  I fear that there has probably been some
collusion to ruthlessly eliminate Phones 4U from the high street.
The only beneficiaries are the networks."

Phones 4U was reliant on the telecoms industry to provide mobile
contracts that it could sell to customers, the FT notes.  Mobile
phone groups have said that their decisions to withdraw from the
retailer were made on commercial grounds, and follow strategic
reviews that led them to move away from the long standing
practice of using third party stores to reach customers, the FT

Separately, the FT's Claer Barrett relates that Mr. Caudwell,
correctly predicted that the "ruthlessness" of mobile phone
operators would lead to creditors hanging up on the company he
started in the mid-1980s.

In a recent press interview, he criticized Vodafone's decision to
cut ties with the high street chain a fortnight ago as "ruthless"
and correctly predicted that Phones 4U would struggle to survive
before mobile operator EE's withdrawal on Sunday tipped the
company into administration, the FT discloses.

"It seems a shame that a business I spent 20 years of my life
growing looks like it could come to such a sticky end,"
Mr. Caudwell, as cited by the FT, said on Saturday, a day before
the administration was announced.

According to the FT, on Monday, he tweeted his view that the
business had been "brought to its knees by so called 'partners'
moving in for the kill".

The contract withdrawals reflect a strategic shift among mobile
network operators who would rather expand their own chains of
shops than pay commission to third-party retail competitors, the
FT states.

Phones 4u was a large independent mobile phone retailer in the
United Kingdom.

PHONES4U FINANCE: S&P Lowers CCR to D After Administration Filing
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on U.K.-based mobile phone retailer
Phones4U Finance PLC (Phones4U) to 'D' from 'B-', after the
company filed for administration protection.

In addition, S&P lowered its issue rating on Phones4U's GBP125
million super senior revolving credit facility (RCF) to 'D' from
'B+'. The recovery rating on the RCF is unchanged at '1',
reflecting S&P's expectation of very high (90%-100%) recovery for
senior secured lenders.

"We also lowered our issue rating on Phones4U's GBP430 million
senior secured notes to 'D' from 'B-'. We lowered the recovery
rating on the notes to '5' from '4', indicating our expectation
of modest (10%-30%) recovery prospects," S&P said.

"Finally, we lowered our issue rating on the GBP205 million
payment-in-kind (PIK) toggle notes issued by Phones4U's parent
Phosphorus Holdco PLC to 'D' from 'CCC'. The recovery rating on
these notes is unchanged at '6', reflecting our expectation of
negligible (0%-10%) recovery prospects," S&P added.

All ratings are also being removed from CreditWatch negative,
where they were placed on Sept. 5, 2014.

Phones4U filed for administration protection after the unexpected
loss of its only remaining long-term mobile network partner,
Everything Everywhere (EE), which operates under the brands EE,
Orange, and T-Mobile. EE has announced that it will not renew the
current network contract with Phones4U, which terminates on Sept.
30, 2015. Earlier this month, Vodafone had announced the
termination of its partnership with Phones4U after its current
contract terminates in February 2015.

S&P said, "As we pointed out in our previous release, when we
lowered Phones4U rating to 'B-' and put it on CreditWatch with
negative implications, the loss of the Vodafone contract --
coupled with Phones4U's termination of its distribution
relationship with Dixons -- heightened the company's dependency
on its largest remaining partner, EE. Against the backdrop of the
downside risks we pointed out -- Phones4U's increased network
concentration risk; reduced product-mix diversity; and
substantially reduced bargaining power in negotiations with
other network operators -- the negotiating process between
Phones4U and EE regarding the network contract renewal concluded
abruptly, and much earlier than we had anticipated."

On June 30, 2014, the company had about GBP800 million adjusted
debt. "In our debt assessment, we include the GBP205 million PIK
toggle notes borrowed by Phones4U's parent Phosphorus Holdco PLC
and the GBP430 million senior secured notes due in 2018. We make
adjustments to debt for capitalized operating leases of about
GBP150 million. As of end-July 2014, Phones4U had about GBP90
million cash in hand following the sale of its Lifestyle Services
Group insurance business in 2013. However, we do not reduce the
adjusted debt by this cash amount because of Phones4U's
"vulnerable" business risk profile. On Sept. 4, 2014, the company
had not made any cash drawings on its revolving credit facility
(RCF) but had used about GBP20 million for letters of credit,"
according to S&P.

S&P related, "We have revised our recovery expectations on the
senior secured notes to '5' from '4', indicating our expectation
that these noteholders have recovery prospects of between 10%-
30%, although we anticipate that recovery will be at the low end
of this range. We revised our recovery assumption because we now
consider the company more likely to liquidate its assets.

"The company is asset-light in nature; however, we believe that
secured debtholders should be able to recover value from the
group's receivables and inventories sufficient to provide at
least 10% recovery for noteholders. That said, the treatment of
trade payables could lower recovery prospects further. Moreover,
actual recovered value for the senior secured noteholders could
deviate from our estimate as a result of transaction costs,
timeliness of the execution, and other parameters of the
administration process.

"Our calculations assume around GBP20 million of drawings under
the group's revolving credit facility. Our recovery expectations
with regard to this instrument are unchanged at between 90%-100%,
with a recovery rating of '1.' Our recovery rating on the
subordinated PIK toggle notes of '6' remains unchanged."

SHARP INT'L UK: S&P Revises Outlook on 'B+' CCR to Stable
Standard & Poor's Ratings Services said that it had revised to
stable from negative the outlook on its 'B+' long-term corporate
credit rating on Sharp Corp. and its overseas subsidiary,
Sharp International Finance (U.K.) PLC. At the same time, S&P
affirmed its long-term corporate credit rating on Sharp at 'B+',
its long-term senior unsecured debt rating at 'B', and its short-
term corporate credit rating and rating on the company's
commercial paper program at 'B'. S&P also affirmed all
the ratings on Sharp International Finance (U.K.) PLC.

"The outlook revision reflects our view that the company's
operating performance will continue to recover moderately thanks
to significant cost reductions and a shift of its product mix
toward small-to-midsize liquid crystal displays (LCD). The
revision also incorporates our expectation that improving
operating performance is likely to support the company's stable
banking relationships and reduce liquidity risk for the company
over the next 12 months, despite our view that the company will
continue to depend heavily on short-term borrowings," S&P said.

The rating affirmations reflect S&P's view that intense
competition, particularly in the LCD industry, and rapid demand
and technology changes in other products will continue to
constrain Sharp's competitiveness and profitability. The
affirmation also reflects S&P's view that the company's heavy
dependence on short-term borrowings and our assessment of its
liquidity as "less than adequate" will continue in the next 12
months, and constrain Sharp's creditworthiness.

S&P continues to assess Sharp's business risk profile as "fair."
Sharp's operating performance has been recovering gradually,
supported by significant reductions in fixed costs in the past
two years. In S&P's view, the company's operating performance
will continue to recover moderately, thanks to efforts to shift
its product mix towards more stable small-to-midsize panels and
lower its exposure to more competitive large-size panels in its
LCD business. "We view the company's good technology strength as
having supported the transition of its product mix and that this
will help the company maintain its leading market share in small-
to-midsize LCDs. In addition, a more diversified customer base,
including rapidly growing Chinese smartphone makers, will also
help the company reduce its business volatility going forward, in
our view. However, we believe that inherent volatility in the
company's LCD business will remain high, given intense
competition and strong pricing pressure, volatile demand from end
smartphone and TV markets, and likely oversupply resulting from
aggressive capacity expansion for large LCDs in China over the
next two to three years. Sharp's concentration in the volatile
LCD industry constrains our assessment of the company's business
risk profile," said S&P.

S&P continues to assess Sharp's financial risk profile as
"aggressive," reflecting the company's close relationships with
its creditor banks. S&P believes that stronger EBITDA interest
coverage could enhance Sharp's financial risk profile.  "On the
other hand, we acknowledge that the company's core ratios, such
as debt to EBITDA at around 5x, are weak for the "aggressive"
category. This is because we still partially incorporate Sharp's
historical large ratio swings under the company's LCD business
strategy; for example, debt to EBITDA in fiscal 2012 (ended March
31, 2013) stood at 16.3x. Nonetheless, the ratio has improved and
we expect it to remain slightly below 4x in fiscals 2014 to 2015
in our base case, due to the gradual recovery in EBITDA, as well
as reductions in debt," said S&P.

S&P's base-case scenario for the next 24 months assumes that: (1)
Shipments of small-to-midsize LCD panels will increase in line
with increasing orders, despite fierce competition. Although
prices of small-to-midsize LCD panels will continue to fall, the
increase in shipments will make up for the price drop. As a
result, operating profits of Sharp's LCD business will increase
gradually in line with revenue growth; (2) Although earnings of
LCD TVs made by a joint venture will stabilize, the proportion to
consolidated operating profits is small; (3) Sharp's solar cell
business will see its profits decline substantially due to
setbacks in demand and intensifying competition; (4) Its
home appliances and copy machine businesses continue to generate
solid earnings.  "Based on these assumptions, we expect the
company's EBITDA margin to hover around 8%."

Given the base-case assumptions, S&P expects that: (1) Sharp will
continue to generate free operating cash flow of around JPY30
billion or more annually, backed by a gradual recovery in
operating performance, continual asset sales and selective
capital investments; (2) Its debt to EBITDA ratio will be around
4x, compared to 3.94x as of March 31, 2014. In addition, Sharp
has limited the use of capital and cash that it raised through a
public offering aimed at spurring growth through capital
investments. Therefore, S&P does not include funds from the
increased capital in our calculation of surplus cash, which is an
adjustment item under debt.

S&P assesses Sharp's liquidity as "less than adequate." "We
expect sources of liquidity to be below 1.2x uses for the next 12
months. This is because our calculation of sources of liquidity
does not include Sharp's uncommitted credit facilities. However,
we believe the likelihood Sharp will be able to roll over its
debt under the uncommitted credit facilities is high assuming
that banks are willing to provide Sharp with financial support.
We incorporate into the principal liquidity sources about JPY350
billion in cash and deposits, about JPY130 billion a year in
funds from operations, and proceeds from continual asset sales
that are definite or extremely close to definite. We also
incorporate into the principal liquidity uses about JPY700
billion in annual debt repayments and JPY50 billion a year in
capital expenditures," said S&P.

S&P said, "Our issue rating on Sharp's debt is one notch below
the issuer credit rating, reflecting a ratio of priority
liabilities to total assets in excess of 15% (the one-notch
threshold). The ratio stands at 23% based on our assessment, so
we do not expect this degree of notching to change for some time
to come.

"The outlook is stable. In our view, despite the intense
competition, Sharp's operating performance is likely to recover
gradually in the next 12 months, underpinned by Sharp's efforts
to maintain or even enhance its LCD business' competitiveness. We
expect the company's core financial measures to stay at the
current levels partly because Sharp continues to implement cash
management. In addition, we expect that liquidity risk has
fallen, as stabilizing operating performance and improving
leverage will help to sustain support from its lender banks on
its liquidity.

"We may downgrade Sharp if its operating performance shows signs
of significant deterioration, potentially due to a loss of
technological advantage or competitiveness in the LCD panel
business, and, as a result, key lender banks' supportive stance
changes and pressures Sharp's liquidity.

"We believe that Sharp's dependence on short-term borrowings is
likely to remain high and that its liquidity status including
rollovers under uncommitted credit facilities is unlikely to
change over the next 12 months. Based on this, we see the
likelihood of an upgrade as remote in the near


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.

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through  Go to order any title today.


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Ivy B. Magdadaro, and Peter A. Chapman,

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

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