/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/141205.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, December 5, 2014, Vol. 15, No. 241 Headlines D E N M A R K OW BUNKER: Mercuria Energy In Talks to Hire Traders F R A N C E ALTICE-NUMERICABLE: S&P Revises Outlook to Neg. & Affirms B+ CCR TEREOS UNION: S&P Revises Outlook to Neg. & Affirms 'BB+' CCR G E R M A N Y THYSSENKRUPP AG: S&P Revises Outlook to Stable & Affirms 'BB' CCR I R E L A N D AVOCA CLO VII: Fitch Affirms 'CCCsf' Rating on Class F Notes AVOCA CLO VIII: Fitch Affirms 'Bsf' Rating on Class E Notes L U X E M B O U R G AURIS LUXEMBOURG: S&P Assigns Prelim. 'B+' CCR; Outlook Stable P O L A N D * POLAND: Bankruptcies Down to 49 in November 2014 S L O V E N I A SAVA: Enters Bankruptcy Protection; Owes EUR243 Million S P A I N ABENGOA SA: S&P Affirms 'B' Corp. Credit Rating; Outlook Positive S W E D E N DANNEMORA MINERAL: Board Prepares Balance Sheet for Liquidation U N I T E D K I N G D O M BEACON HILL: Provides Update on Financing & Debt Restructuring MIDDLETON PRECISION: Buyer Sought for Manufacturer PHONES 4U: Inventory Goes Up for Auction Online TOWERGATE FINANCE: Creditors Taps Moelis for Debt Talks * UK: Directors Suspected of Wrongdoing in 30% of Insolvencies X X X X X X X X * BOOK REVIEW: Transnational Mergers and Acquisitions in the U.S. ********* ============= D E N M A R K ============= OW BUNKER: Mercuria Energy In Talks to Hire Traders --------------------------------------------------- Andy Hoffman and Yuji Okada at Bloomberg News report that Mercuria Energy Group Ltd. is plotting a major expansion into marine fuels and is in talks to hire traders from failed Danish supplier OW Bunker A/S. According to Bloomberg, two people familiar with the matter said Mercuria is negotiating to hire as many as 50 former employees of OW Bunker, which filed for bankruptcy protection last month after the company alleged it uncovered fraud by senior staff in Asia. The people, as cited by Bloomberg, said the talks are well advanced but could still collapse. Bloomberg notes that one of the people said the potential deal between Mercuria and the ex-OW Bunker traders does not include any physical assets although Mercuria might be interested in acquiring assets sold through the bankruptcy process. OW Bunker and some of its units filed for bankruptcy protection in November after saying two Singapore workers carried out a US$125 million fraud, Bloomberg recounts. The Noerresundby-based company said it lost another US$150 million on bad risk management, Bloomberg relays. John Sommer Schmidt, one of the trustees appointed in the bankruptcy case in Denmark, did not immediately respond to a phone call seeking comment, Bloomberg states. About OW Bunker OW Bunker A/S is a Danish shipping fuel provider. On Nov. 7, 2014, OW Bunker A/S, which went public in March, declared bankruptcy and reported two employees at its Singapore unit to the police following allegations of fraud. It owes 15 banks a total of about US$750 million. OW Bunker said on Nov. 5 it had lost US$275 million through a combination of fraud committed by senior executives at its Singapore office and poor risk management. Trading in its shares was suspended on Nov. 5 and the company said its banks had refused to provide more credit. OW Bunker's U.S. businesses, which opened in 2012 as part of its global expansion, filed for Chapter 11 bankrutpcy protection on Nov. 13, 2014, in the U.S. Bankruptcy Court for the District of Connecticut. The U.S. subsidiaries have assets worth as much as US$50 million and debt of as much as US$100 million. =========== F R A N C E =========== ALTICE-NUMERICABLE: S&P Revises Outlook to Neg. & Affirms B+ CCR ---------------------------------------------------------------- Standard & Poor's Ratings Services revised to negative from stable the outlook on cable and telecommunications holding companies Altice S.A., Altice International S.a.r.l., and Numericable Group. S&P affirmed the corporate credit ratings on these entities at 'B+'. At the same time, S&P placed its 'BB-' issue rating on Altice International's senior secured debt on CreditWatch with negative implications. The outlook revision follows the Altice group's announcement that it has made a binding offer to purchase the Portuguese assets of Portugal Telecom (PT) for total enterprise value of EUR7.025 billion, including an "earnout" provision of EUR800 million related to future performance. S&P understands that Altice International would carry out the acquisition using new debt and existing cash from Altice. The offer reflects an EBITDA multiple of about 7x, including adjusted pension liabilities of about EUR740 million (after deferred taxes) and the acquisition earnout. Altice S.A. is a pure holding company whose main assets are a 60% stake in France's Numericable and 100% ownership of Altice International, which owns non-French assets. S&P considers both subsidiaries to be "core" group entities under its group rating methodology. In S&P's view, this acquisition would push credit metrics at Altice S.A. to the lower end of S&P's rating expectations, including a Standard & Poor's-adjusted pro forma debt-to-EBITDA ratio in the 5.5x-6x band. S&P continues to proportionately adjust our key ratios for Altice's 60% ownership in Numericable. In addition, the PT acquisition would significantly raise integration and execution risks for Altice, in S&P's view. Numericable recently received regulatory approval to acquire the significantly larger French telecom company SFR, which is battling price falls in its mobile division and a more aggressive pricing environment in the fixed-line division. S&P expects the Numericable-SFR integration to be a long process, including potentially significant restructuring and asset disposals, while competition with better capitalized Orange, Bouygues Telecom, and Iliad remains fierce. Altice International also has recent acquisitions to integrate, albeit smaller ones, and significant exposure to growing competition in the Israeli telecom market. These factors pose further risks to its medium-term earnings, in S&P's view. That said, S&P thinks PT is solidly positioned in the Portuguese broadband, pay-TV, and "quadruple play" (broadband, TV, mobile, and fixed-line) markets, thanks in particular to its well- invested fiber network, even though its earlier investments in mobile are struggling to pay off given Portugal's weak economy. The solid positions of Altice's assets in their respective markets, a successful cost management track record, and increasing diversification from the potential PT acquisition also support S&P's assessment of Altice's business risk profile. The placement of Altice International's senior secured debt on CreditWatch negative reflects S&P's view that the announced acquisition could weaken recovery prospects for lenders under S&P's hypothetical default scenario. There have been no changes to the issue ratings and recovery analysis on the debt instruments issued by Altice S.A. and Numericable Group S.A. S&P has revised its stand-alone credit profile (SACP) on Altice International downward to 'b+' from 'bb-', reflecting S&P's view of its increased acquisition and leverage appetite. This does not affect the rating on Altice International because the rating was constrained by the entity's "core" group status under S&P's group rating methodology. The SACP is now aligned with the group credit profile of 'b+'. S&P revised the outlook on Altice International and Numericable Group owing to S&P's view that both of these entities are core to the group and will be key to servicing the debt at Altice S.A. S&P's stand-alone assessment of Numericable's credit quality is unchanged. S&P's base-case operating scenario for Altice's pro forma consolidation of SFR and PT assumes: -- Revenue declines of about 4% in 2014 and about 2% in 2015, resulting mainly from the continued impact of repricing in SFR's mobile division and fierce competition on triple and quadruple play bundles in Portugal; -- Stable group EBITDA margin of about 33% (unadjusted) in 2014, increasing by about 100 basis points in 2015 on a pro forma basis following the transactions; and -- Capital expenditure (capex) at about 16% of sales. Based on these assumptions, S&P arrives at these credit measures: -- Funds from operations (FFO) to debt of 11% at Altice S.A. and 12%-13% at Altice International; -- Debt to EBITDA of about 5.8x pro forma for 2014 at Altice S.A. and 5.2x at Altice International; -- Adjusted interest coverage of about 3.0x; and -- Adjusted free operating cash flow (FOCF) to debt of 3%-4% at Altice S.A. and 4%-5% at Altice International. S&P believes that the debt increase to finance the PT acquisition would push Altice's leverage close to its debt incurrence covenant limits. Altice only has maintenance financial covenants on its revolving credit facility, and S&P expects the company to manage its covenant headroom in order to allow for the acquisition. The negative outlook reflects the potential for a one-notch downgrade if the group's leverage exceeds 6x due to a higher acquisition price, or as a result of higher-than-expected earnings pressures, combined with challenges in creating meaningful merger-related synergies at SFR. S&P may downgrade the group if leverage (taking into account full-year consolidation of SFR and PT, and proportionate consolidation of Numericable-SFR) exceeds 6x, or if FOCF to debt erodes toward 2.5%. This may happen, for example, if Altice doesn't manage to significantly stem SFR's EBITDA decline over the next few quarters. S&P could stabilize the rating over the next 12 months if Altice's leverage and cash flow remain at about 5.5x following successful execution of cost efficiencies plan and slower topline decline in its core assets. S&P will also likely revise the outlook back to stable if the acquisition of the Portuguese assets of Portugal Telecom doesn't close. The CreditWatch placement on the senior secured loans and notes issued by Altice Financing reflects the potential for the announced acquisition to weaken recovery prospects for lenders under our hypothetical default scenario. This would most likely happen as a result of a meaningful increase in priority liabilities or similar-ranking senior secured debt, or due to a weakening of the collateral package provided to secured lenders. In that event, S&P could lower the issue ratings by one notch to 'B+' from 'BB-', in line with the corporate credit rating on Altice S.A., and revise downward the recovery rating to '3' from '2'. S&P aims to resolve the CreditWatch when it has further information on Altice International's capital structure following the acquisition of the PT assets. TEREOS UNION: S&P Revises Outlook to Neg. & Affirms 'BB+' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services revised to negative from positive its outlook on French sugar producer Tereos Union de Cooperatives Agricoles a Capital Variable (Tereos). At the same time, S&P affirmed its 'BB+' long-term corporate credit rating on the group and S&P's 'BB+' issue rating on the EUR500 million senior unsecured bond maturing in 2020. The recovery rating is unchanged at '3', indicating that S&P expects meaningful (50%-70%) recovery in the event of a payment default. The rating actions indicate that market supply and demand trends for sugar significantly deteriorated in 2014 for Tereos' European and Brazilian operations. S&P does not foresee a significant improvement in the group's revenue growth prospects in the next 12 months, given that European quota sugar prices are likely to remain low. Producers are holding high levels of inventory stock, production volumes are expected to increase next year, and producers face increasing competitive pressure. In addition, starch and gluten prices have decreased roughly in line with trends in crop prices in Europe and price upside on ethanol in Brazil partly depends on new government incentives. Two of Tereos' main business segments -- sugarbeet, which is grown in Europe, and sugarcane, which is the most profitable business and is mainly grown in Brazil -- saw a significant drop in EBITDA margin in the first half of this year. S&P now forecasts that EBITDA margin will stabilize at around 11%-12% in the next 12 months, compared with 14% in the financial year ending March 31, 2014. Earnings should continue to be affected by low revenues in the sugarbeet business, due to market oversupply in Europe and worldwide. However, some of the operational costs in the sugarcane business associated with unfavorable weather conditions, inflation, and investments in the Guarani division may not be repeated next year. For the next 12-18 months, S&P anticipates that Tereos will generate lower, but still positive, free operating cash flow (FOCF) of around EUR40 million from lower earnings. This is assuming reduced capital expenditure (capex) spending and no additional payments to farmers (price complement distributions). S&P's base case for 2014-2015 and 2015-2016 assumes: -- Revenue of EUR4.2 billion in 2014-2015 (down by 10% on last year) and EUR4 billion in 2015-16 (down by 5% on 2014-2015). -- EBITDA of around EUR470 million or EBITDA margin of 11%-12%; -- FOCF of about EUR30 million-EUR50 million; and -- Standard & Poor's-adjusted net debt of around EUR2 billion. Based on these assumptions, S&P arrives at these credit measures: -- EBITDA interest coverage ratio of around 4x; -- FFO/net debt between 15%-20%; and -- Net debt/EBITDA of around 4x. The negative outlook reflects S&P's view that low market prices for sugar quota in Europe and for world sugar should continue to impair Tereos' cash flow generation and debt leverage metrics over the next 12 months. S&P considers that there is a one-in- three chance that it could lower the rating by one notch, especially if it sees debt to EBITDA remaining above 4x and interest coverage ratio declining to near 3x. S&P considers these ratios as more compatible with an "aggressive" financial risk profile. S&P could revise the outlook to stable if it sees a significant rebound of the cash flow generated by the sugarcane business. This could occur if S&P saw lower operating costs, favorable market developments for ethanol prices in Brazil, and a return to more-favorable weather conditions. In particular, this would offset the weak cash flow contribution that S&P forecasts for the sugarbeet business. In terms of credit metrics, S&P considers a debt-to-EBITDA ratio sustained over the next 12-18 months at below 4x and interest coverage maintained at 3.5x-4x as compatible with an outlook revision. ============= G E R M A N Y ============= THYSSENKRUPP AG: S&P Revises Outlook to Stable & Affirms 'BB' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Germany-based industrial conglomerate ThyssenKrupp AG to stable from negative. S&P affirmed its 'BB/B' long- and short-term corporate credit ratings on ThyssenKrupp, as well as S&P's 'BB' issue and 4' recovery ratings on the company's senior unsecured debt. The outlook revision reflects ThyssenKrupp's improved financial performance across all its business areas, reduced risks related to the company's Brazilian steel plant CSA, and a reduction in leverage (debt to EBITDA) that S&P anticipates will continue. ThyssenKrupp's results have improved across all business areas thanks to its ongoing restructuring and efficiency programs. This was notably the case in the elevators and industrial solutions businesses that continue to benefit from strong order books and market positions. Standard & Poor's adjusted EBITDA for the company improved to EUR2.2 billion in financial year 2014 (ended Sept. 30, 2014), from EUR1.8 billion a year earlier. S&P also notes positive EBITDA for the Steel Americas business area, which resolved its operating issues and secured capacity utilization of about 80%-85% thanks to its long-term contract with Calvert steel plant and shorter-term contracts with steel rerollers in the U.S. and other markets. S&P therefore believes that the risk of material losses and negative free operating cash flow in this business area has substantially reduced. S&P anticipates that ThyssenKrupp's leverage will further decline gradually and that the adjusted ratio of funds from operations (FFO) to debt will stand comfortably within the 12%-17% range in financial 2015, due to further EBITDA growth and moderately positive free operating cash flow (FOCF). As a result, S&P has revised its financial risk profile assessment to "aggressive" from "highly leveraged." The FFO-to-debt ratio was still below 12% as of Sept. 30, 2014, partly due to restructuring provisions and an increase in pensions owing to a lower discount rate. S&P factors in its assumption that the company will remain focused on deleveraging, while capital expenditures and shareholder distributions will remain moderate. S&P continues to take into account strong interest coverage ratios with FFO to cash interest of above 4x, which is partly explained by high pension obligations in our adjusted debt number. Under S&P's base case, it assumes: -- Weak economic growth in Europe, but continued strong growth in the U.S. and China. -- Single-digit revenue growth and further margin expansion thanks to continued restructuring and efficiency programs. -- Provisions for restructuring and other nonrecurring items of EUR100 million-EUR200 million per year. -- Capital expenditures of about EUR1.5 billion annually. -- Dividends of EUR62 million proposed by supervisory board for 2014 and only slightly higher payout for 2015. Based on these assumptions, S&P arrives at these credit measures: -- FFO to debt of 13%-16% in 2015 and 14%-17% in 2016. -- FFO to cash interest above 4x. -- Moderately positive FOCF. S&P applies an upward rating adjustment of one notch for the moderate diversification of ThyssenKrupp's activities. The company has operations in several distinct business areas, with medium correlation between them, which S&P believes provides additional stability to the company's earnings. At the same time, S&P applies a one-notch downward adjustment for its comparable ratings analysis. Because the FFO to debt ratio was below 12% as of Sept. 30, 2014, S&P believes that ThyssenKrupp's financial risk profile is somewhat weaker than other companies in our "aggressive" financial risk category. The stable outlook reflects S&P's expectation of continued gradual improvement in ThyssenKrupp's profitability, an FFO-to- debt ratio comfortably between 12% and 17% in financial 2015 and moderately positive free cash flow. A downgrade could stem from, for example, ThyssenKrupp's inability to further increase EBITDA in financial 2015, as a result of a major slowdown in its key markets and notably in Europe, or from pronounced negative FOCF. An upgrade of ThyssenKrupp could hinge on further strengthening of the company's performance, including FOCF and return on capital, and an improvement of FFO to debt to the 17%-22% range. S&P don't anticipate this scenario over the next 12 months, however. ============= I R E L A N D ============= AVOCA CLO VII: Fitch Affirms 'CCCsf' Rating on Class F Notes ------------------------------------------------------------ Fitch Ratings has affirmed Avoca CLO VII plc's notes, as: EUR126 million class A-1 (ISIN XS0289562745): affirmed at 'AAAsf'; Outlook Stable EUR62.5 million class A-2 (ISIN XS0289563396): affirmed at 'AAAsf'; Outlook Stable EUR78.9 million class A-3 (ISIN XS0289564014): affirmed at 'AAAsf'; Outlook Stable EUR48.5 million class B (ISIN XS0289565763): affirmed at 'AAsf'; Outlook Stable EUR42 million class C1 (ISIN XS0289566571): affirmed at 'Asf'; Outlook Stable EUR4.5 million class C2 (ISIN XS0290383412): affirmed at 'Asf'; Outlook Stable EUR23 million class D1 (ISIN XS0289566902): affirmed at 'BBBsf'; Outlook Stable EUR8.5 million class D2 (ISIN XS0290383768): affirmed at 'BBBsf'; Outlook Stable EUR28.3 million class E1 (ISIN XS0289567546): affirmed at 'Bsf'; Outlook Stable EUR2.8 million class E2 (ISIN XS0290384493): affirmed at 'Bsf'; Outlook Stable EUR14 million class F (ISIN XS0289568437): affirmed at 'CCCsf'; Recovery Estimate (RE) reduced to 0% from 50% EUR40 million class V (ISIN XS0290386431): affirmed at 'AAAsf'; Outlook Stable Avoca CLO VII plc is a securitisation of mainly European senior secured loans, with a total note issuance of EUR711m invested in a portfolio of EUR663m. The portfolio is actively managed by KKR Credit Advisors. KEY RATING DRIVERS The affirmation reflects the transaction's significant deleveraging of the class A-1 and A-3 notes over the last 12 months, which balanced a loss of EUR15.5 million from the defaulted PHS and Vivarte loans during the same period. Following the end of the transaction's reinvestment period in May 2014, EUR224 million of principal were used to redeem the class A-1 notes by EUR157.9 million and the class A-3 notes by EUR66 million. As a result, credit enhancement increased across all rated notes, with that for the junior notes up by 1.05%, and all par value tests are passing and improved. The junior par value test is passing with a 1.15% buffer compared with 0.05% before the principal payments. Asset performance has been stable over the past year. The weighted average spread has decreased to 3.7% from 4.1%. The exposure of 'CCC' rated and below assets has increased to 2.6% from 2.1%. The weighted average rating factor has increased to 28 from 27.4. The weighted average maturity is extended by almost one year but the maturity profile has been moved forward with fewer assets maturing in 2016, 2017 and 2018. There are no defaulted assets in the portfolio. The portfolio's concentration has slightly increased over the past 12 months. Exposure to Italy and Spain currently accounts for 6.2%. The largest industry exposure is still business services and the top three industries make up 21.8% of the portfolio. Exposure to the largest obligor has reduced to EUR19.5 million from EUR21 million but as the target par has declined following amortization the relative exposure of the largest obligor increased to 4.3% from 3.1%. The affirmation of the class V combination notes reflects the affirmation of its components, class A-1, A-2 and A-3. The class V notes' rating addresses the timely payment of interest and the ultimate repayment of principal by the stated maturity date. RATING SENSITIVITIES Increasing the default probability by 25% would likely result in a downgrade of up to two notches on the mezzanine and junior notes. Furthermore, applying a recovery rate haircut of 25% on all the underlying assets would likely result in a downgrade of up to two notch on the mezzanine notes and junior notes. In both scenarios the senior notes' ratings are not affected. AVOCA CLO VIII: Fitch Affirms 'Bsf' Rating on Class E Notes ----------------------------------------------------------- Fitch Ratings has affirmed Avoca CLO VIII Limited, as: EUR294.1 million class A1 (ISIN XS0312372112): affirmed at 'AAAsf'; Outlook Stable EUR52.6 million class A2 (ISIN XS0312377772): affirmed at 'AAAsf'; Outlook Stable EUR34.0 million class B (ISIN XS0312378747): affirmed at 'AAsf'; Outlook Stable EUR30.0 million class C (ISIN XS0312379984): affirmed at 'BBBsf'; Outlook Stable EUR21.5 million class D (ISIN XS0312380305): affirmed at 'BBsf'; Outlook Stable EUR21.5 million class E (ISIN XS0312380727): affirmed at 'Bsf'; Outlook Stable EUR2.8 million class U (ISIN 0312381451): affirmed at 'BBsf'; Outlook Stable Avoca CLO VIII is a securitization of primarily senior secured loans, unsecured loans, mezzanine loans and high yield bonds, actively managed by KKR Credit Advisors (Ireland). KEY RATING DRIVERS The affirmation reflects the stable portfolio performance transaction since the last review in Jan. 2014. The reinvestment period ended in Oct. 2014 and the deal is now only able to reinvest unscheduled principal and proceeds from credit improved or credit impaired assets. The collateral manager is able hold unscheduled principal for one payment date before it is paid out to the notes. The transaction's maturity profile has shifted towards the legal maturity date in June 2014. For example, the proportion of assets maturing in 2021 has increased to 30.6% from 4.7% last year and the weighted average life of the transaction as calculated by Fitch has increased to 5 years from 4.6 years. As a result of this shift, no assets are scheduled to mature until 2016. The weighted average life is close to the allowed value of 5.13, which will constrain the reinvestment of unscheduled principal, for which the weighted average life test has to pass. The portfolio's quality has slightly improved with the weighted average rating factor reported in October's investor report decreasing marginally to 27.6 from 27.9. 'CCC' assets have reduced to 3.2% from 4.3% and there are now no defaulted assets in the portfolio. There was one defaulted asset at last review (EUR6.4m) but this has been restructured. the portfolio is 3.5% below target par but this has improved from last year when the value of the portfolio was 4.8% below target par. Peripheral exposure has also decreased to an 8.3% exposure to Spain. At the last review, this exposure was 11.8% to Spain, Ireland and Italy. Overcollateralization (OC) tests are all passing and cushions are expected to improve as the transaction delevers. Junior OC test levels have been volatile with the most recent failure in April 2013 resulting in a EUR1.8 million paydown on the class A1 note. Interest coverage tests have never failed and are currently passing with comfortable cushions. RATING SENSITIVITIES In its rating sensitivity analysis, Fitch found that a 25% increase of the default probability would result in a one category downgrade to the class B notes and a one-notch downgrade to the A-2 notes. A 25% reduction of the recovery rate would result in a downgrade of between one and two notches to the class A-2 and class B notes. =================== L U X E M B O U R G =================== AURIS LUXEMBOURG: S&P Assigns Prelim. 'B+' CCR; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B+' long-term corporate credit rating to Auris Luxembourg II S.a.r.l., a Luxembourg-based holding company set up for the acquisition of hearing instruments manufacturer Siemens Audiology Solutions (SAS) by a consortium of investors led by Swedish private equity firm, EQT. The outlook is stable. At the same time, S&P assigned a preliminary 'B+' issue rating to the proposed EUR75 million revolving credit facility (RCF) and the proposed EUR745 million first-lien term loan to be issued by Auris III Luxembourg S.a.r.l. S&P has assigned preliminary recovery ratings of '3' to these instruments, indicating S&P's expectation of meaningful (50%-70%) recovery prospects in the event of a payment default. S&P also assigned a preliminary 'B-' issue rating to the proposed EUR315 million senior unsecured notes to be issued by Auris Luxembourg II S.a.r.l. The preliminary recovery rating on the notes is '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. The final ratings and credit metrics will be subject to the successful closing of the transaction under terms similar to those currently indicated, and will depend on S&P's receipt and satisfactory review of all final transaction documentation. Accordingly, the preliminary ratings should not be construed as evidence of the final ratings. If the terms and conditions of the final transaction depart from the material S&P has already reviewed, or if the transaction does not close within what S&P considers to be a reasonable timeframe, it reserves the right to withdraw or revise its ratings. SAS is a leading manufacturer and distributor of hearing aid devices and accessories, which markets the majority of its products through the Siemens AudioServices and Rexton brands. The ratings on SAS are constrained by its relatively small size, product concentration, and the presence of innovation risk, reflected in S&P's business risk profile assessment of "fair." The group's majority financial sponsor ownership by EQT, with adjusted leverage of around 6.5x pro forma the transaction, underpins S&P's "highly leveraged" financial risk profile assessment. S&P's positive comparable rating analysis primarily reflects SAS' strong free cash flow generation and cash interest coverage, supported by S&P's calculation of funds from operations (FFO) to cash interest coverage comfortably above 2x. It further reflects S&P's view of SAS' business risk profile as firmly within the "fair" category, reflecting that the company is steadily improving its EBITDA margin. "Our business risk profile assessment is constrained by SAS' relatively small size and its product concentration. Although SAS occupies the No. 3 position in the global hearing aids market, it remains smaller in size relative to larger industry peers Sonova and William Demant (both unrated). In 2014, SAS had revenues of around EUR690 million and a market share of about 15%. In comparison, market leader Sonova generated revenues of about EUR1.6 billion with about 30% market share. The group's larger competitors benefit from a greater presence in the key U.S. market, as well as a higher perception of innovativeness in recent years. The group also has significant product and brand concentration; the majority of group revenues are derived from hearing aids as well as the Siemens brand. As part of the transaction, we understand that SAS is permitted to continue marketing its products through the Siemens brand over the medium term. We expect the pricing environment to remain challenging over the near term in SAS' main markets in the U.S. and Europe, as customers continue to seek cost savings amid a tough reimbursement environment. This pricing pressure has been exacerbated for SAS due to its historical focus on large key accounts. Although this provides for higher volume potential, such customers have greater bargaining power and often drive discounts and promotions. However, we understand that SAS is actively managing its channel mix with a growing focus toward the more profitable independent sector, as well as adopting a more selective approach to contract renewals with its large key accounts," S&P said. "These weaknesses are partially offset by the positive characteristics of the global hearing aids market and the group's strengthened pipeline of new products. The EUR5 billion global hearing aids market (including wholesale and retail) is highly consolidated around the top six players, which account for over 90% of the market. The industry is also characterized by high barriers to entry posed by intellectual property rights, regulation, and substantial upfront research and development (R&D) investment. It also benefits from long-term growth prospects due to an ageing population and an increasing penetration of hearing loss, with an expected compound annual growth rate of around 5% in the near term. What's more, there is little substitution risk from alternative technologies such as cochlear implants, which require surgery and represent a more expensive solution. Although SAS has historically lagged behind its competitors in terms of innovation and product launches, this has started to change after the successful launch of its "micon" product range in 2012. This is gradually improving the group's proportion of revenues from new products, those launched within the past two years. Furthermore, the recent launch of the group's new platform, "binax", has received positive market feedback during its early stages and is expected to significantly close the perceived technology gap between SAS and its competitors. SAS now spends approximately 7% of revenues on R&D, in line with its larger industry peers. Furthermore, we view SAS' customer diversity as adequate, with no single customer accounting for more than 10% of revenues. We also view positively the various operational efficiencies that the group is engaging in, optimizing its manufacturing footprint to lower-cost countries such as China and Poland, and shifting toward automated manufacturing processes for new products," S&P added. If the transaction materializes, Siemens AG, the current owner of SAS, will reinvest EUR200 million through a preferred equity instrument corresponding to 20% of equity funding in SAS. S&P views this instrument as equity-like under its criteria. The remainder will be controlled by a consortium of EQT and Germany- based Santo Holding GmbH, an investment vehicle of the Strungmann family. S&P understands that financial sponsor EQT will maintain a majority holding of at least 50% going forward. S&P's assessment of SAS' financial risk profile is underpinned by the group's majority ownership by financial sponsor, EQT, and S&P's expectation that its adjusted leverage will remain around 6x-7x over the next 12-18 months. S&P's calculation includes just over EUR1 billion of financial debt in the form of the proposed term loans and unsecured notes, about EUR30 million of capitalized operating leases, and EUR10 million-EUR20 million due to S&P's adjustment for pension obligations. Despite some amortized payments under the terms of the first-lien term loan, S&P expects leverage to remain high over the near term. This is partially offset by S&P's view of the group's relatively strong cash flow protection, as S&P expects FFO cash interest coverage to remain above 2x, and SAS' strong free cash flow generation of at least EUR40 million a year going forward. S&P's base-case assumes: -- 4%-5% revenue growth over the near term, mainly driven by increasing volumes and successful commercialization of new products; -- A slight improvement in the EBITDA margin toward the mid- 20s, supported by operational efficiencies and an improvement in the channel mix; -- Capital expenditure (capex) of 3%-4% of revenues per year; and -- Limited acquisitions in the near term. Based on these assumptions, S&P' arrives at these credit measures: -- Adjusted debt to EBITDA of around 6.5x over the next 12-18 months; and -- FFO cash interest coverage of 2.3x-2.5x over the next 12-18 months. The stable outlook reflects S&P's expectation that, over the next 12-18 months SAS will further improve on its recent operating performance, despite pricing pressure and the consolidated nature of the hearing instruments industry. S&P anticipates that the group will maintain its market position and increase profitability with an EBITDA margin approaching 25%, through the successful commercialization of new products, realization of planned operational efficiencies, and improving its channel mix. S&P would also expect adjusted FFO cash interest coverage nearing 2.5x, and at least "adequate" liquidity. S&P could lower the rating if SAS experiences adverse operating developments that lead to significantly weaker EBITDA and credit ratios than S&P anticipates. This could occur if SAS' Binax product is unable to gain traction in the market due to significant competition, or the group faces difficulties in growing its share of independent sector revenues. S&P could also lower the ratings if adjusted FFO cash interest coverage falls below 2x or, in S&P's view, SAS' liquidity deteriorates to below "adequate." In S&P's opinion, a positive rating action is unlikely over the next 12-18 months, due to SAS' high adjusted leverage. However, S&P could raise the rating if the group achieves and maintains debt to EBITDA of below 5x. In view of the amount of deleveraging required to achieve this, S&P considers that it would be most likely to occur because of a change in financial policy. =========== P O L A N D =========== * POLAND: Bankruptcies Down to 49 in November 2014 -------------------------------------------------- Kamila Wajszczuk at Warsaw Business Journal, citing Euler Hermes, reports that in November this year, 49 Polish companies were declared bankrupt, compared to 70 in November 2013. In January to November 2014 the number of bankruptcies was 760 compared to 868 in the corresponding period of 2013, WBJ discloses. =============== S L O V E N I A =============== SAVA: Enters Bankruptcy Protection; Owes EUR243 Million ------------------------------------------------------- The Slovenia Times reports that Sava, a conglomerate with roots in the rubber industry that has offloaded all but two core segments in recent years, entered a bankruptcy protection on Dec. 2. The proposal for what is called preventive restructuring was launched by the Ljubljana District Court at the initiative of the management after being endorsed by creditors holding more than the minimum 30% of claims, The Slovenia Times relays. Sava owes just shy of EUR243 million to financial creditors, the biggest of them being the Bank Asset Management Company (35.5% of the claims) and the bank Gorenjska banka (10.9%), The Slovenia Times says, citing the court's decision, posted on the website of the AJPES public company registry portal. The company said the reason it filed for bankruptcy protection with the support of creditors was to ensure equal treatment to all creditors, protect their interests and assets, The Slovenia Times relates. The procedure is aimed at enabling further steps for the repayment of financial debt, synergies in the tourism division and optimizing operation of the overhauled Sava group in a bid to avoid the risk of a fire-sale, The Slovenia Times notes. The company reported net loss of EUR4.4 million for the first three quarters of the year on EUR48.2 million in sales revenue, down 5% over the same period last year, The Slovenia Times discloses. Sava used to generate the bulk of its revenue from rubber, but it sold its rubber division two years ago to pay down debt, The Slovenia Times recounts. A major creditor, Gorenjska banka holds 2.81% in Sava, which in turn is the biggest shareholder of Gorenjska banka, The Slovenia Times states. Sava's principal line of business is tourism. The company is based in Slovenia. ========= S P A I N ========= ABENGOA SA: S&P Affirms 'B' Corp. Credit Rating; Outlook Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it had affirmed its 'B/B' long- and short-term corporate credit ratings on Spain- based engineering and construction company Abengoa S.A. The outlook is positive. S&P understands that Abengoa's management remains very committed to reducing its stake in Abengoa's yield company, which S&P thinks will lead to reduced consolidated leverage and improved credit ratios. This is despite recent market turmoil that followed the company's third-quarter results announcement reporting a guaranteed bond as nonrecourse debt. S&P views the classification as less prudent. This is because it makes it more difficult for investors to understand where in the complex group structure various debt types are located and also what portion of debt is guaranteed or not. S&P now perceives that the company will strive to improve disclosure, including releasing quarterly accounts and splitting overall financial debt into three categories: -- Full recourse corporate debt; -- Debt in process, guaranteed by Abengoa but still labelled as "nonrecourse in process" because refinancing at completion of projects should ultimately be in the form of nonrecourse project finance debt; and -- Nonrecourse project finance debt. In S&P's analytical approach, it uses reported consolidated debt, which includes both recourse and nonrecourse debt, and thereby S&P captures all of Abengoa's financial debt in S&P's analysis. S&P also understands that management remains committed to reducing its stake in Abengoa's 64%-owned yield company to below 50% in the near term. This implies that most of the debt associated with the yield company will be deconsolidated from Abengoa's reported balance sheet, and that an improvement of Abengoa's credit ratios is likely to follow. S&P currently do not envisage changing its analytical approach by deconsolidating any nonrecourse debt that is reported on the balance sheet. The positive outlook on Abengoa reflects a one-in-three possibility that Abengoa's financial risk profile will improve within the next six months, following management's plan to reduce ownership in its yield company. This could lead to reduction in reported consolidated debt, implying credit ratios at the upper end of the "highly leveraged" category. S&P expects the group to continuously place mature projects in the yield company. If these measures prove successful over the coming six months, S&P could raise its long-term rating on Abengoa by one notch, assuming the group's liquidity remains at least "adequate." S&P could revise the outlook to stable if Abengoa proves unable to tap capital markets over the coming six months as a consequence of recent investor concerns about its disclosures. S&P could also revise the outlook to stable if management, for any reason, proves unable to reduce its stake in the yield company below 50% and Abengoa's adjusted FFO to debt ratio remains near the currently low 4%-6%. S&P could also consider revising the outlook to stable if Abengoa stops placing concessions business into the yield company. S&P could raise the long-term rating in the next six months if Abengoa continues placing a material part of its concessions business into its yield company, and at the same time reduces its stake in the yield company. This would likely require credit ratios being at the higher end of the "highly leveraged" financial risk profile category. S&P is unlikely to take any positive rating action until the improvement is fully visible in the company's audited accounts. An upgrade would also hinge on the company maintaining at least "adequate" liquidity. =========== S W E D E N =========== DANNEMORA MINERAL: Board Prepares Balance Sheet for Liquidation --------------------------------------------------------------- The board of directors in Dannemora Mineral AB (publ) has prepared a balance sheet for liquidation purposes, which has been reviewed by the Company's auditor. The balance sheet shows that the Company's equity corresponds to less than half of the registered share capital. The board of directors will therefore convene the shareholders for an extraordinary general meeting (initial meeting for liquidation purposes) to be held on December 30, 2014 in order to resolve upon whether the Company shall enter into liquidation or continue its operations. The board of directors proposes that the Company shall not enter into liquidation but continue its operations. The extraordinary general meeting will be held on December 30, 2014, 2:00 p.m., at Roschier Advokatbyra AB, Blasieholmsgatan 4 A in Stockholm. Other information is evident from the notification which will be published in Post-och InrikesTidningar on December 5, 2014. The notification and other information will also be made available on the Company's website -- http://www.dannemoramineral.se-- from December 5, 2014. For further information, please contact: Ralf Norden, President and CEO Tel No: (46)709-374-891 E-mail: ralf.norden@dannemoramineral.se -- or -- Niklas Kihl, CFO Tel No: (46)730-797-363 E-mail: niklas.kihl@dannemoramineral.se About Dannemora Mineral AB Dannemora Mineral AB is a mining and exploration company of which the primary activity is mining operations in the Dannemora iron ore mine. The Company intends to engage in exploration activities to increase the iron ore base locally and regionally. The Company's most important asset is the iron deposit in the Dannemora Mine, and activity is focused mainly on the mining of this deposit at present. The Company is listed on NASDAQ OMX First North, Stockholm, and Oslo Axess. The Company's Certified Advisor on First North is Remium Nordic AB. The Company's independent qualified person is mining engineer Thomas Lindholm, Geovista AB, Lulea. Thomas Lindholm is qualified as a Competent Person, as defined in the JORC Code, based on education and experience in exploration, mining and estimation of mineral resources of iron, base and precious metals. =========================== U N I T E D K I N G D O M =========================== BEACON HILL: Provides Update on Financing & Debt Restructuring -------------------------------------------------------------- Beacon Hill, the coking coal developer focused on the Minas Moatize Coking Coal Mine in Tete, Mozambique (Minas Moatize), provided an update on its financing arrangements and the restructuring of its existing debt, aimed at significantly strengthening and de-risking the Group's balance sheet, in order to provide a more solid foundation for future growth as it targets the recommencement of more economic and competitive coking coal production in 2016. Highlights: * Conditional subscription agreed to raise up to GBP1.5 million (US$2.3 million) gross to provide sufficient working capital for the Group until the end of Q1 2015 * Commitments received to convert or postpone the maturity of US$13.2 million in convertible loan notes thereby significantly de-risking the Group's balance sheet * Capital reorganization which includes, inter alia, a one for 1,000 share consolidation, to facilitate the proposals and future funding activities * Proposed new senior debt facility of US$20 million at an advanced stage of negotiation * Intention to raise approximately a further US$14.5 million of new equity in Q1 2015, alongside the restructuring of the existing senior debt facility and introduction of the proposed new DFI facility, to fund the Minas Moatize expansion project * Assuming successful completion of these initial proposals and the remaining funding objectives, the Company is targeting re-commencement of more economic and competitive coking coal production in 2016, at a Tier 1 cash cost, following completion of the planned Minas Moatize expansion project Rowan Karstel, CEO of Beacon Hill, commented: "Reaching agreement to convert the majority of the outstanding convertible loan notes into equity is a significant step forward for Beacon Hill as it seeks to establish a financially robust and stable foundation for its future growth. The rationalization of our existing unsustainable debt structure, which has been achieved through the welcome support of our key stakeholders, including our existing senior debt provider and noteholder, Vitol Coal S.A., will substantially strengthen the Company's balance sheet as we endeavor to secure both the new US$20 million senior debt facility from the DFI and additional equity funding required to proceed with the development of Minas Moatize into a Tier 1 cash cost coking coal project. "We are cognizant of the fact that these proposals will result in significant dilution for the Company's existing shareholders. However, in light of the continuing depressed market conditions for coking coal and ongoing suspension of our mining operations, we believe that such measures are essential to ensure the Company's survival as we seek to secure the further financing to enable us to deliver on our washplant expansion project and resume more economic and competitive production in 2016." MIDDLETON PRECISION: Buyer Sought for Manufacturer -------------------------------------------------- Insider Media Limited reports that the administrators of Middleton Precision Engineering have said they are "confident" of securing a sale of the business which failed because of "order book uncertainty." Matt Hardy -- matth@poppletonandappleby.co.uk -- of Poppleton & Appleby was appointed as administrator to the Coventry engineering firm on Nov. 21, 2014. The report notes that Mr. Hardy said: "Middleton Precision Engineering will continue trading as we look to secure a buyer for the business and we are confident that we will receive significant interest." The family-run business was placed into administration after suffering as a result of changes in the manufacturing industry, the report notes. "Middleton, like many other small companies in the manufacturing industry, has witnessed operational difficulties due to order book uncertainty," the report quoted Mr. Hardy as saying. "The firm has seen customers switch from placing long-term orders months in advance to orders confirmed within weeks. This has resulted in a lack of confidence and uncertainty within the business," Mr. Hardy added. PHONES 4U: Inventory Goes Up for Auction Online ----------------------------------------------- The Herald reports that collapsed mobile phone retailer Phones 4u is auctioning off 600,000 items worth up to GBP10.8 million. PricewaterhouseCoopers (PwC) is auctioning stock from the company, which went into administration in September, according to The Herald. The report notes that stock including watches, speakers, headsets, cases and headphones are among the items up for grabs online. About 2,000 to 3,000 items will go on sale every week and auctions will run from Dec. 5 to Dec. 9. The report notes that site manager for John Pye Auctions's West Midlands Auction Hub, Steve Anderson, said: "There will be a sale every week until we get rid of the stock. The report notes that joint administrator Rob Hunt, from PwC, who was appointed alongside Ian Green and Rob Moran in September, said: "All the monies we collect, whatever source they come from, will first pay for the costs of the insolvency in terms of the pay roll and rent that's accrued while we've continued to occupy the premises. "Then the first call are the Phones 4u employees for any arrears of pay or holiday pay. They would only be entitled to statutory redundancy pay, which is organized by the Government, because their company is insolvent. Some will have received this already," the report quoted Mr. Hunt as saying. "A pot is then set aside for the general creditor body -- which is limited to a total of GBP600,000 around all the creditors," Mr. Hunt added. About Phones 4u Phones 4u was a large independent mobile phone retailer in the United Kingdom. On Sept. 15, 2014, Rob Hunt, Ian Green and Rob Moran of PwC were appointed as joint administrators of these nine companies: Phones 4u Limited, Life Mobile Limited, 4u Wi-Fi Limited, 4u Limited, Jump 4u Limited, MobileServ Limited, Phosphorus Acquisition Limited, Phones 4U Group Limited and Phones4u Finance Plc. On Sept. 16, 2014, Dan Schwarzmann, Nigel Rackham, Rob Hunt and Ian Green were appointed joint administrators of Policy Administration Services Limited. On Oct. 8, 2014, Rob Hunt, Ian Green and Paul Copley were appointed joint administrators of Phosphorus Holdco plc. The companies are part of Phones 4U group. TOWERGATE FINANCE: Creditors Taps Moelis for Debt Talks ------------------------------------------------------- Julie Miecamp and Luca Casiraghi at Bloomberg News report that Towergate Finance Plc's secured bondholders hired Moelis & Co. as advisers as they prepare for talks with the U.K. insurance broker about its US$1.6 billion of debt. According to Bloomberg, two people familiar with the mandate said investors in the company's GBP248.6 million(US$392 million) of 8.5% senior secured notes are also being represented by law firm Sullivan & Cromwell LLP. They said holders of the group's GBP304.6 million of 10.5% senior unsecured notes selected Houlihan Lokey as financial adviser, Bloomberg relates. Towergate, whose chief executive officer Mark Hodges resigned in October, earlier said that it appointed Evercore Partners Inc. and Rothschild after receiving takeover proposals, Bloomberg relays. The people, as cited by Bloomberg, said creditors are now preparing to form coordinating committees to negotiate with the company over its indebtedness. Towergate said it has drawn all of its 85 million-pound revolving credit facility, Bloomberg recounts. The group also said operating earnings declined 14% to GBP95.9 million in the nine month to September and that it may be unable to comply with loan terms, Bloomberg notes. Maidstone, England-based Towergate Finance is Europe's largest insurance broker. * UK: Directors Suspected of Wrongdoing in 30% of Insolvencies -------------------------------------------------------------- Directors in 30% of insolvency cases are referred to the Insolvency Service's Disqualification Unit for unfit conduct, accountancy firm Moore Stephens said. The 15,412 business insolvencies that were examined by insolvency practitioners in the last year (12 months to March 30, 2014), directors at 4,671 companies were reported for potential misconduct. There has been a sharp increase in the number of reports of potential wrongdoing that are acted on by the Insolvency Service. The Insolvency Service has started disqualification proceedings against 1,273 directors over the same period, meaning it started proceedings in 27% of the 4,671 cases reported to it for investigation. This is an up from just 21% three years ago when only 1,031 proceedings were started after 5,401 reports were sent to the Insolvency Service. If there is evidence of poor conduct by directors of an insolvent company, a report is filed to the Insolvency Service which can then take action to have that director disqualified from being a director for up to 15 years. Partner, Mike Finch comments: "These figures show just how frequently insolvency practitioners are finding evidence that points towards serious misconduct by directors. These are cases where there is strong evidence that a company director has broken the rules to the detriment of creditors like lenders, suppliers and HMRC." Significant budget cuts for the Insolvency Service had led to fears that reports of misconduct by directors were not being acted upon. Mike Finch says: "The Insolvency Service has delivered a substantial improvement in the number of disqualification proceedings against dishonest directors. "It is important that the funding is there to all the Insolvency Service to pursue these cases as disqualifying rogue directors acts as a crucial deterrent and is vital to ensuring a fair deal for creditors in an insolvency. "Having an effective enforcement regime for dishonest directors is in everyone's interests and is critical to ensuring that honest business owners can compete on a level playing field." Of the 15,412 businesses examined by insolvency practitioners in the 12 months to March 30, 2014, directors at 4,671 were reported for potential misconduct. Of those reported, the Insolvency Service has started disqualification proceedings against 1,273 directors in the same period -- around 27%. This is an increase on three years ago, where just 21% of reported directors had proceedings taken against them. Similarly, the tax year 2012-2013 saw just 19% of suspected misconduct cases were investigated. Mike Finch, a partner at the firm, said the increase showed a willingness by the Insolvency Service to act against unscrupulous directors, but warned that under funding could limit the Service's power to act. Finch said, "These figures show just how frequently insolvency practitioners are finding evidence that points towards serious misconduct by directors. "These are cases where there is strong evidence that a company director has broken the rules to the detriment of creditors like lenders, suppliers and HMRC. "It is important that the funding is there to all the Insolvency Service to pursue these cases as disqualifying rogue directors acts as a crucial deterrent and is vital to ensuring a fair deal for creditors in an insolvency. "Having an effective enforcement regime for dishonest directors is in everyone's interests and is critical to ensuring that honest business owners can compete on a level playing field," he added. An Insolvency Service spokesperson said, "The Insolvency Service considers all cases of unfit conduct by directors referred to us by insolvency practitioners. In the last 10 years, we have disqualified around 1200 directors a year for unfit conduct. "We have enough resources to pursue the cases that merit disqualification and we take forward all cases where we believe we have a greater than 50% chance of achieving a disqualification outcome. "Our figures show that we received reports of unfit conduct by directors in 48,443 cases in the last 10 years and we took action to disqualify 12,319 directors. Over 10% of all disqualifications are for 10 years or more, compared with 3% in 2003-2004. We are determined to take any director who does not play by the rules out of the business arena to maintain a level playing field." =============== X X X X X X X X =============== * BOOK REVIEW: Transnational Mergers and Acquisitions in the U.S. ----------------------------------------------------------------- Author: Sarkis J. Khoury Publisher: Beard Books Softcover: 292 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today at http://amzn.to/1zyRWpU Transnational Mergers and Acquisitions in the United States will appeal to a wide range of readers. Dr. Khoury's analysis is valuable for managers involved in transnational acquisitions, whether they are acquiring companies or being acquired themselves. At the same time, he provides a comprehensive and large-scale look at the industrial sector of the U.S. economy that proves very useful for policy makers even today. With its nearly 100 tables of data and numerous examples, Khoury provides a wealth of information for business historians and researchers as well. Until the late 1960s, we Americans were confident (some might say smug) in our belief that U.S. direct investment abroad would continue to grow as it had in the 1950s and 1960s, and that we would dominate the other large world economies in foreign investment for some time to come. And then came the 1970s, U.S. investment abroad stood at $78 billion, in contrast to only $13 billion in foreign investment in the U.S. In 1978, however, only eight years later, foreign investment in the U.S. had skyrocketed to nearly #41 billion, about half of it in acquisition of U.S. firms. Foreign acquisitions of U.S. companies grew from 20 in 1970 to 188 in 1978. The tables had turned an Americans were worried. Acquisitions in the banking and insurance sectors were increasing sharply, which in particular alarmed many analysts. Thus, when it was first published in 1980, this book met a growing need for analytical and empirical data on this rapidly increasing flow of foreign investment money into the U.S., much of it in acquisitions. Khoury answers many of the questions arising from the situation as it stood in 1980, many of which are applicable today: What are the motives for transnational acquisitions? How do 158foreign firms plans, evaluate, and negotiate mergers in the U.S.? What are the effects of these acquisitions on competition, money and capital markets; relative technological position; balance of payments and economic policy in the U.S.? To begin to answer these questions, Khoury researched foreign investment in the U.S. from 1790 to 1979. His historical review includes foreign firms' industry preferences, choice of location in the U.S., and methods for penetrating the U.S. market. He notes the importance of foreign investment to growth in the U.S., particularly until the early 20th century, and that prior to the 1970s, foreign investment had grown steadily throughout U.S. history, with lapses during and after the world wars. Khoury found that rates of return to foreign companies were not excessive. He determined that the effect on the U.S. economy was generally positive and concluded that restricting the inflow of direct and indirect foreign investment would hinder U.S. economic growth both in the short term and long term. Further, he found no compelling reason to restrict the activities of multinational corporations in the U.S. from a policy perspective. Khoury's research broke new ground and provided input for economic policy at just the right time. Sarkis J. Khoury holds a Ph.D. in International Finance from Wharton. He teaches finance and international finance at the University of California, Riverside, and serves as the Executive Director of International Programs at the Anderson Graduate School of Business. ********* 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 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 202-362-8552. * * * End of Transmission * * *