TCREUR_Public/160601.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Wednesday, June 1, 2016, Vol. 17, No. 107



DEUTSCHE FORFAIT: Applies for Share Capital Reduction


ZSOLNAY: MFB Mulls Liquidation Procedure


PETROCELTIC INT'L: Staff Retain William Fry to Advise on Scheme


GIUSSANO: Sale of Properties Scheduled for June 6
VERANO BRIANZA: Sale of Property Scheduled for June 6


AGEASFINLUX SA: Moody's Affirms Ba3( hyb) Jr. Sub. Debt Rating
SES SA: S&P Assigns 'BB+' Rating to Proposed Hybrid Securities
XELLA HOLDCO: S&P Affirms 'B+' CCR Then Withdraws Rating


DRUZBA ZA: June 24 Deadline Set for Binding Offers


BANCO POPULAR ESPANOL: Fitch Affirms 'BB-' Viability Rating


NOBINA AB: S&P Raises CCR to 'BB', Outlook Stable

U N I T E D   K I N G D O M

AUSTIN REED: Majority of Stores to Close, 1,000 Jobs at Risk
BHS GROUP: Used Loophole to Cut Annual Pension Deficit Levy
PETRA DIAMONDS US: Moody's Confirms B2 Rating on Sr. Sec. Notes
SANDS HERITAGE: Low Volume of Visitors Prompts Administration



DEUTSCHE FORFAIT: Applies for Share Capital Reduction
In the insolvency proceedings over the assets of DF Deutsche
Forfait AG, the company applied for the decrease of the share
capital of the company according to the insolvency plan confirmed
by the court and in line with the regulations about simplified
capital reduction from EUR6,800,000 to EUR680,000 to
be registered in the company's commercial register.  The entry of
the resolution about the decrease of the share capital was
entered into the company's commercial register on May 25, 2016.
Therefore, the capital decrease is valid.

With the capital decrease becoming effective, the partial debt
waiver of Creditor Group 1, i.e. the group of the non-secondary
insolvency creditors, which do not belong to groups 2 and 3
formed according to the insolvency plan, became effective in the
amount of 61.96 % of their claims.  In order to cause the partial
debt waiver becoming effective, the resolution regarding the
decrease of the share capital was applied for registration into
the company's commercial register before registering the cash and
non-cash capital increase planned in the near future as also
resolved upon in the insolvency plan.

DF Deutsche Forfait AG is German-based company engaged in the
non-recourse purchase and sale of receivables -- the forfeiting
business -- as well as the acceptance of risks through purchasing


ZSOLNAY: MFB Mulls Liquidation Procedure
Budapest Business Journal, citing Hungarian daily Nepszabadsag,
reports that not long after Zsolnay's majority owner Bachar
Najari aired concerns of a "hostile takeover", Hungarian state-
owned Development Bank (MFB) has decided to launch a liquidation
procedure against the porcelain maker, if the company fails to
comply with the repayment scheduled on a HUF413 million loan
which matured in August.

According to BBJ, Nepszabadsag reported that the local council of
Pecs, which is the minority owner, already set up a company with
the name Ledina Keramia to take over the operation of the
porcelain manufacturer if it is liquidated.

Nepszabadsag added Zsolnay's liabilities have grown to HUF900
million and its headcount has been cut from 220 to 150.


PETROCELTIC INT'L: Staff Retain William Fry to Advise on Scheme
Mark Paul at The Irish Times reports that a group of senior staff
at Petroceltic International, the exploration company that is on
the verge of being bought out of examinership by its biggest
shareholder, have retained William Fry to advise them following
their rejection of a proposed scheme of arrangement that would
cost them more than US$4 million (EUR3.6 million).

According to The Irish Times, the staff, including senior
executives and management, are due to receive just 5% of monies
owed to them under "change of control" clauses in their
contracts.  The total sum owed is more than US$4.5 million, The
Irish Times discloses.

Petroceltic is on the verge of being bought by Worldview Capital,
a Swiss-Cayman fund that was previously engaged in a bitter
dispute with Petroceltic's management, The Irish Times notes.

A series of creditors' meetings were held on May 30 at which the
examiner, Michael McAteer of Grant Thornton, sought approval for
a scheme of arrangement, The Irish Times relates.

The scheme was approved by most classes of creditors, including
the all-important group of secured lenders that also includes
Worldview, The Irish Times relays.

However, all employee classes voted against the scheme,
potentially setting up a courtroom row over the examinership,
The Irish Times recounts.

The rejection by employees of the scheme, which will see
Worldview take control of the company for a cash injection of
US$7.8 million, does not automatically delay a resolution of the
examinership,  The Irish Times states.

However, the High Court has the discretion to take the views of
the staff into account when deciding whether or not to approve
the scheme, according to The Irish Times.

A full hearing is expected to take place next week, at which the
senior staff would be entitled to raise an objection, The Irish
Times discloses.

Up to 30 Petroceltic staff are affected, The Irish Times says.  A
group of about half of that number have appointed William Fry to
engage with the examiner and try to get them a better deal, The
Irish Times says.  It is understood they have also sought the
opinion of a senior counsel, The Irish Times notes.

Petroceltic International is a Dublin-based oil and gas explorer.


GIUSSANO: Sale of Properties Scheduled for June 6
Dott. Mario Carlo Novara, the court-appointed receiver of
Giussano (MB) Via Superstrada Valassina snc, has put up for sale
the following properties:

-- 12-month lease of FEG business unit, 25, 123 sq. m. comprised
    of property and offices for a starting price of EUR500,000
    minimum bid price of EUR500,000; and

-- Salvarani business unit for a starting price of EUR3,000,000
    and minimum bid price of EUR3,000,000.

The sale without auction will be held on June 6, 2016 at 2:40

The court-appointed receiver can be reached at

Further details are available at

VERANO BRIANZA: Sale of Property Scheduled for June 6
Dott. Mario Carlo Novara, the court-appointed receiver of Verano
Brianza (MB) Via Superstrada Valassina snc, has put up for sale
the company's property housing the salvarani business unit,
17,011 sqm., for a starting price of EUR9,000,000 and minimum bid
price of EUR9,000,000.

The court-appointed receiver can be reached at

Further details are available at


AGEASFINLUX SA: Moody's Affirms Ba3( hyb) Jr. Sub. Debt Rating
Moody's Investors Service has changed the outlook on Ageas SA/NV
to positive and affirmed the Baa3 issuer rating of Ageas SA/NV.

                         RATINGS RATIONALE

The change in outlook to positive reflects Moody's view that the
recent settlement agreement filed in the Netherlands is a
fundamental milestone towards resolving the uncertainty related
to the legal risks and the corresponding costs arising from
legacy issues in relation to Fortis group (as the issuer was
formerly known) for events occurred in 2007 and 2008.

The Baa3 long-term issuer rating of Ageas SA/NV reflects the
combined financial strength and dividend capacity of the group's
operating insurance companies, the subordination of the holding
company creditors, and sound liquidity and capital positions at
the holding company.  Ageas Baa3 rating is four notches below the
A2 Insurance Financial Strength Rating of the main operating
company, AG Insurance; this additional notch than the standard
three notches reflects the risks arising from the above mentioned
legacy issues.  A possible resolution of these issues is likely
to put upward pressure to this rating, hence the positive

Last March, Ageas announced to have agreed with four claimants'
organisations on a deal to indemnify eligible shareholders in the
amount of EUR1.2 billion.  This agreement, which according to the
issuer represented an estimated 90% of the shares involved in
said litigations, has been subsequently endorsed by other
claimants and then submitted for filing with the Amsterdam Court
of Appeal on May 23, 2016.

Moody's notes that the settlement will not be approved and
binding until: (1) the court approves the deal on the grounds of
it being reasonable and fair and (2) Ageas chooses not to
exercise its termination right which entitles the issuer to end
the agreement if more than 5% of shareholders eligible for
compensation decide to opt-out.  This option protects Ageas
against the scenario of interested parties extensively opting-
out, which could be accompanied with further legal proceedings
and costs.

The entire legal proceeding will likely take an estimated 12-18
months and Ageas expects the filed agreement to be eventually
approved given the high amount of claimants being represented and
endorsing the deal.  Moody's is likely to solve the positive
outlook only when the legal proceeding has been concluded and
Ageas proceeds with the compensation.

As a result of the settlement proposal, Ageas estimates a net
cash outflow of EUR1.02 billion.  This amount is expected to be
gradually paid over a period of two to three years from now,
depending on the pace at which the legal procedure can be
executed.  At 1Q 2016, Ageas reported a liquidity position of
EUR1.2 bil., which is sufficient to cover the expected cash
outflow.  Additionally, the company received EUR 1.26 billion
from the sale of the group's Hong Kong life insurance business
which completed earlier in May 2016.  Overall, Moody's
anticipates that Ageas liquidity buffer and group solvency will
remain sound and able to address future possible liquidity needs,
such as the possible repurchase of the non-controlled interest in
AG Insurance, at the election of BNP Paribas Fortis, which was
valued at EUR1.1 billion at March 31, 2016.

As concerns the capitalization of Ageas, the reduction in
Solvency II capital ratio by around 20ppts as a result of the
expected settlement (180% reported as at 1Q 2016, which already
reflects the impact of the expected settlement) will be more than
compensated by the sale of the Hong Kong business, which is
expected to boost the group Solvency II coverage ratio by 30ppts.

Ageas SA/NV is the holding company of the Ageas Group, a
composite insurer active in several markets, primarily focused on
writing insurance business in Belgium, Continental Europe, United
Kingdom, and in Asia via partnerships.

As at Dec. 31, 2015, Ageas reported total assets of EUR104.5 bil.
(YE 2014: EUR103.6 bil.), total equity of EUR12 bil. (YE 2014:
EUR10.9 bil.) and a consolidated net income attributable to
shareholders of EUR770.2 million (YE 2014: EUR475.6 million).

                       FINANCING VEHICLES

Moody's said that the affirmations of Ageas Hybrid Financing and
Ageasfinlux S.A. ratings reflect the guarantees received by these
financing vehicles from the Group's holding company and therefore
follow the affirmation of Ageas SA/NV rating.  The hybrid debt
issued by Ageas Hybrid Financing, Hybrone, has been on-lent to AG
Insurance, and is therefore economically matched by a loan to
this operating entity.  Ageas intends to call the Hybrone
Securities on June 20, 2016.  The FRESH securities, perpetual and
mandatory convertible debt, were issued by Ageasfinlux with Ageas
SA/NV acting as co-obligor.



Upward pressure on the rating may result from (i) a favorable
resolution of outstanding legal disputes and/or ii) a material
improvement of the financial strength of the operating companies,
notably through an upgrade of the A2 IFSR of AG Insurance
Conversely, while a downgrade is unlikely given the positive
outlook, negative pressure on the rating may be the result of (i)
a negative outcome of the settlement agreement filed in the
Netherlands and/or of any remaining legal dispute which could, in
adverse scenarios, materially affect the financial resources of
the holding company and/or (ii) a deterioration of the financial
strength of the operating companies, principally evidenced by a
downgrade of the A2 IFS rating of AG Insurance.
Principal Methodologies

The methodologies used in these ratings were Global Life Insurers
published in April 2016, and Global Property and Casualty
Insurers published in April 2016.


These ratings have been affirmed:

  Ageas SA/NV -- Long term issuer rating at Baa3
  Ageas Hybrid Financing -- Backed pref stock debt rating at Ba2
  Ageasfinlux S.A. -- Backed junior subordinated debt rating at
   Ba3 (hyb)

Outlook action:
Outlook on all issuers changed to Positive from Negative

SES SA: S&P Assigns 'BB+' Rating to Proposed Hybrid Securities
S&P Global Ratings assigned its 'BB+' long-term issue rating to
the proposed perpetual subordinated hybrid securities to be
issued by Luxembourg-based fixed satellite services operator SES
S.A. (BBB/Stable/A-2) and guaranteed by SES Global Americas
Holdings G.P.  The first call date is set to be at least 5.5
years after issuance.

The completion and size of the issue will be subject to market
conditions.  At this stage, S&P anticipates a ratio of
outstanding hybrids to adjusted capitalization to be comfortably
below 15%.

Upon issuance, S&P will initially classify the proposed hybrids
as having minimal equity content, given the early redemption risk
in case the pending acquisition of O3b Networks is not completed.
Still, if the latter successfully completes, S&P expects to
reclassify the proposed hybrids as having intermediate equity
content until no later than the first call date.

Consequently, in S&P's calculation of SES' credit ratios, S&P
will reclassify 50% of the principal outstanding and accrued
interest under the proposed hybrids as debt, and 50% of the
related payments on these securities as an interest expense, as
S&P understands the instrument will be recognized as equity on
SES S.A.'s balance sheet.

The two-notch difference between S&P's 'BB+' issue rating on the
proposed hybrid notes and S&P's 'BBB' corporate credit rating
(CCR) on SES S.A. reflects:

   -- One notch for the proposed notes' subordination because the
      CCR on SES S.A. is investment grade; and

   -- An additional notch for the optional deferability of

The notching of the proposed securities takes into account S&P's
view that there is a relatively low likelihood that SES S.A. will
defer interest payments.  Should S&P's view change, it may
significantly increase the number of downward notches that S&P
applies to the issue rating, and more quickly than S&P might take
a rating action on the CCR.

S&P understands that the interest to be paid on the proposed
securities will increase by 25 basis points five years after the
first call date, and a further 75 basis points 20 years after the
first call date.  S&P considers the cumulative 100 basis points
as a moderate step-up, which creates an incentive to redeem the
instruments at that time.  Consequently, in accordance with S&P's
criteria, and assuming the acquisition has closed and thereafter
S&P classifies the proposed instrument as having intermediate
equity content, S&P would no longer recognize the proposed
instrument as having intermediate equity content after the first
call date at the latest, because the remaining period until its
economic maturity would, by then, be less than 20 years.


Although the proposed securities are perpetual, SES S.A. can
redeem them as of the first call date 5.5 years after issuance,
and every year thereafter.  If this occurs, the company intends
to replace the proposed instruments, although it is not obliged
to do so.

Critically for S&P's assessment of permanence, it believes that
any repurchase, irrespective of the size, could jeopardize the
equity content of the securities, as it will lead S&P to question
management's intentions to maintain and replace such securities.


The proposed securities will be deeply subordinated obligations
of SES S.A., ranking junior to all unsubordinated or subordinated
obligations, and only senior to share capital.


In S&P's view, the issuer's option to defer payment of interest
on the proposed securities is discretionary, thus it may elect
not to pay accrued interest on an interest payment date because
it has no obligation to do so.  However, any outstanding deferred
interest payment would have to be settled in cash if an equity
dividend or interest on equal-ranking securities is paid or if
common shares or equal-ranking securities are repurchased.

That said, this condition remains acceptable under S&P's rating
methodology because, once the issuer has settled the deferred
amount, it can choose to defer payment on the next interest
payment date.

The issuer retains the option to defer coupons throughout the
instrument's life.  The deferred interest on the proposed
securities is cash cumulative and compounding.

XELLA HOLDCO: S&P Affirms 'B+' CCR Then Withdraws Rating
S&P Global Ratings affirmed its 'B+' long-term corporate credit
rating on Xella group's finance entity Xella Holdco Finance S.A.,
and subsequently withdrew the rating at the issuer's request.
Xella Holdco Finance S.A. previously issued Xella group's EUR200
million payment-in-kind toggle notes that were repaid in June
2015.  S&P understands that the rating on this entity is no
longer required.

At the same time, S&P Global Ratings affirmed its 'B+' long-term
corporate credit rating on Xella International S.A.  The outlook
is stable.

Finally, S&P affirmed its 'B+' issue rating and '3' recovery
rating on the EUR215 million senior secured term loan G and on
the EUR325 million senior secured notes issued by Xella's
special-purpose vehicle Xefin Lux S.C.A.  This indicates S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.  S&P expects recovery prospects to be in the
upper half of the range.

Xella International occupies leading positions as Europe's
largest autoclaved aerated concrete producer by capacity and the
largest producer of calcium silicate by production units.  The
company's diversification across a variety of product lines and,
to a lesser extent, end markets, is a key factor supporting its
credit quality.

The stable outlook reflects S&P's view of Xella's improving and
historically stable profitability, which will continue to support
the group's cash flows.  The outlook also reflects S&P's forecast
that Xella will maintain funds from operations (FFO) interest
coverage of above 3x over the next 12 months.

Downward rating pressure could arise from increased competition
and a sustained decline in construction in Xella's key markets,
which together would constrain its cash flow and result in
sustained negative FOCF.  S&P could consider lowering the rating
if it sees a deterioration in Xella's credit metrics, including
FFO cash interest coverage falling below 3x.  This could result
from depressed end markets and pricing pressure or the incurrence
of additional cash-interest paying debts to replace existing
payment-in-kind (PIK) shareholder loan instruments.
Additionally, S&P could downgrade Xella if the group's liquidity

S&P believes that ratings upside remains limited in the near term
due to Xella's high debt burden including the shareholder loan.


DRUZBA ZA: June 24 Deadline Set for Binding Offers
Druzba za upravljanje terjatev bank, d.d.. Davcna ulica 1, 1000
Ljubljana, is interested in selling a bundle of its claims,
including accrued interest and other accessory rights held
against the following Companies:

   -- DZS zaloznistvo in trgovina, d.d., Dalmatinova 2, 1000

   -- DELO PRODAJA druzba za razsirjanje in prodajo casopisov,
      d.d., Dunajska cesta 5, 1000 Ljubljana, and

   -- TERME CATEZ, d.d., Catez ob Savi, Topliska cesta 35, 8250
      Brezice; as at May 3, 2016, which amounts to a total of
      EUR78,995,232.08 (including all accrued interest).

The deadline for the submission of binding offers is June 24,

More detailed information is available on the website of the BAMC


BANCO POPULAR ESPANOL: Fitch Affirms 'BB-' Viability Rating
Fitch Ratings has affirmed Banco Popular Espanol S.A.'s (Popular)
Long-Term Foreign Currency Issuer Default Rating (IDR) and
Viability Rating (VR) at 'BB-' and 'bb-', respectively. The
Rating Outlook on the bank's Long-Term IDR remains Positive.
Fitch's action follows the announcement that Popular will make a
EUR2.5 billion capital increase by end-June 2016.



Fitch said, "Popular's IDRs, VR and senior debt ratings remain
constrained by its large stock of problem assets (non-performing
loans plus foreclosed assets) and capital tied to unreserved
problem assets. Even after the planned capital increase, and
taking into account problem asset reductions so far this year, we
project that unreserved problem assets will continue to represent
well above 100% of Popular's Fitch Core Capital (FCC) for the
rest of 2016. The Positive Outlook, however, reflects upside
potential for the bank's ratings within the next one to two
years, or possibly sooner, from its plans to reduce problem asset
stock. Fitch sees potential for the bank to accelerate problem
asset disposals once it receives the new capital, as this will
assist it in writing down book values to a level that makes sales
more attractive."

Popular announced plans to issue EUR2.5 billion new shares at
1.25 euros per share to strengthen its balance sheet by
offsetting the capital impact from booking about EUR4.7 billion
of problem asset impairment charges in 2016, which will result in
the bank reporting losses. Popular expects to maintain its fully-
loaded CET1 ratio around 10.8% by end-2016 post capital increase
and considering the acquisition of the card business of Barclays
in Spain.

Fitch calculates that the ratio of unreserved problem assets to
FCC could improve substantially from a very high 217% level at
end-2015. This combined with the bank's more ambitious plan to
actively manage down volumes of problem assets (about EUR15
billion by 2018) should provide greater margin of maneuver to
absorb unexpected shocks. Popular's problem assets ratio improved
to 24.8% at end-2015, from 26.1% at end-2014, despite slight loan
deleveraging, but will need to reduce considerably further for
ratings to be upgraded. Fitch views the bank's targeted problem
assets coverage levels of 50% by end-2016 to be more in line with
the sector average.

While loan impairment charges (LICs) will erode internal capital
generation in 2016, Fitch expects this to be restored in 2017
supported by lower impairment charges on problem assets as
pressure to improve coverage levels eases and problem assets
reduce. Also, the bank should continue to benefit from its
resilient revenue generation capacity on the back of its good SME
franchise and cost efficiency. The bank also has further scope to
reduce funding costs, particularly on retail deposits, which
should help to offset the impact from the removal of interest
rate floors in January 2016.

Popular's ratings are further supported by its adequate funding
and liquidity profile. Funding is primarily based on retail
deposits, and liquidity is underpinned by a sizeable stock of
unencumbered ECB-eligible assets relative to forthcoming
wholesale debt maturities.


The Support Rating (SR) of '5' and Support Rating Floor (SRF) of
'No Floor' of Banco Popular reflect Fitch's belief that senior
creditors can no longer rely on receiving full extraordinary
support from the sovereign in the event that it becomes non-



The Positive Outlook reflects potential rating upside if the bank
progresses in substantially reducing problem assets (including
foreclosed assets) in 2016 and beyond and achieves its ambitious
targets convincingly, which combined with the completion of the
capital increase, will help reduce the very high sensitivity of
FCC to unreserved problem assets.

Conversely, any setback on asset quality improvements or on
capital could put ratings under pressure. Similarly, a
deterioration of the bank's funding and liquidity profile would
put pressure on the ratings.


Any upgrade of the SR and upward revision of the SRF would be
contingent on a positive change in the sovereign's propensity to
support its banks. While not impossible, this is highly unlikely,
in Fitch's view.


Popular's subordinated (lower Tier 2) debt issues are rated one
notch below the bank's VR to reflect the below-average loss
severity of this type of debt compared with average recoveries.

Popular's preference shares are rated three notches below the
bank's VR to reflect the higher loss severity risk of these
securities (two notches) compared with average recoveries as well
as moderate risk of non-performance relative to its VR (one

The ratings of the instruments are primarily sensitive to a
change in the bank's VR, which drive the ratings, but also to a
change in Fitch's view of non-performance or loss severity risk
relative to the bank's viability.

Fitch has taken the following rating actions:

Long-Term IDR: affirmed at 'BB-'; Outlook Positive
Short-Term IDR: affirmed at 'B'
Viability Rating: affirmed at 'bb-'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'NF'
Long-term senior unsecured debt programme: affirmed at 'BB-'
Short-term senior unsecured debt programme and commercial paper:
affirmed at 'B'
Subordinated lower Tier 2 debt: affirmed at 'B+'
Preferred Stock: affirmed at 'B-'

BPE Financiaciones S.A.:
Long-term senior unsecured debt and debt programme (guaranteed by
Popular): affirmed at 'BB-'
Short-term senior unsecured debt programme (guaranteed by
Popular): affirmed at 'B'

BPE Preference International Limited:
Preference shares: affirmed at 'B-'

Popular Capital, S.A.
Preference shares: affirmed at 'B-'


NOBINA AB: S&P Raises CCR to 'BB', Outlook Stable
S&P Global Ratings raised its long-term corporate credit rating
on Swedish bus operator Nobina AB to 'BB' from 'BB-'.  The
outlook is stable.

The upgrade follows Nobina's resilient and improving performance
since the company's IPO in June 2015, which has improved its
competitive position, in S&P's view.  Nobina's margins have
steadily improved in the past five years, with the replacement of
old weaker-performing contracts with new contracts.  S&P thinks
that Nobina's stable business model, in combination with a clear
and transparent financial policy, will enable it to maintain its
current financial risk profile, which S&P assess at significant,
and hence a 'BB' rating.

Nobina posted an all-time high operating result (adjusted for
IPO-related costs) in financial year ended Feb. 29, 2016.  This
was primarily due to higher volumes and a more favorable contract
structure, since some weaker contracts had matured in the
previous financial year.  Although this was partly offset by
higher start-up costs stemming from the high proportion of new
contracts in the portfolio, Nobina still posted an EBITDA margin
of 16.2%, up from 16.1% in the previous financial year.  S&P
thinks that the young contract portfolio (3.6 years as of
financial year-end 2016) will enable further profitability
improvements as the portfolio matures.

In line with operational improvements, credit metrics also
improved in financial 2016, with funds from operations (FFO) to
debt of 21.1% (adjusted for IPO-related costs) compared with
19.5% a year earlier.  S&P thinks that this ratio will improve
only slightly in the coming year as large improvements will
likely be prevented by new contract wins (which will add finance
leases) and Nobina's relatively shareholder-friendly dividend
policy.  However, S&P thinks that Nobina's financial policy of
maintaining net debt to EBITDA (according to the company's
definition) of 3.0x-4.0x will prevent a deterioration in credit
metrics and hence support the current financial risk profile.

The stable outlook takes into account S&P's expectations of
further improvement in Nobina's operating performance and
margins. S&P expects that the company will maintain a careful and
selective approach when bidding for new contracts and that costs
will be contained under the index clauses in its contracts.  S&P
further expects that the company will stick to its financial
policy of maintaining leverage at 3.0x-4.0x and that dividend
payments and any possible acquisitions will fit into this policy.

Although unlikely in the coming 12 months, S&P could raise the
rating to 'BB+' if S&P considered that Nobina's business risk
profile had strengthened.  This could result if, for example,
Nobina's profitability improved beyond S&P's expectations or if
it thought the Nordic public transport markets would become less
competitive.  S&P thinks that there is limited upside to the
rating stemming from Nobina's financial risk profile since any
unexpected improvement will likely result in higher shareholder

S&P could lower the rating if Nobina's operating performance were
to deteriorate, which could be the case if a large contract were
to make losses or if Nobina diverted from its prudent bidding
policy and took on less profitable contracts compared with its
existing portfolio.  S&P could also lower the rating if Nobina's
credit metrics weakened significantly such that FFO to debt
remained below 20%.  This could be the result of deteriorating
performance in combination with high capex and dividend payments
or potentially a large acquisition, although S&P sees such a
scenario as remote at the moment.

U N I T E D   K I N G D O M

AUSTIN REED: Majority of Stores to Close, 1,000 Jobs at Risk
Ben Marlow at The Telegraph reports that the majority of Austin
Reed's stores will close with the loss of nearly 1,000 jobs after
administrators to the collapsed menswear chain were only able to
find a buyer for its famous brand and stock.

According to The Telegraph, sources familiar with the
negotiations said Edinburgh Woollen Mill had refused to take the
bulk of the shops as part of a deal, meaning administrators will
now begin an orderly "wind down" of the chain's estate in the
coming days.

It is understood Edinburgh Woollen Mill will take just five
Austin Reed concessions located at the Boundary Mill outlet
villages across the north of England, from Austin Reed's entire
estate, The Telegraph relates.  The CC womenswear brand will also
survive, The Telegraph notes.

Administrators at Alix Partners will now begin looking for buyers
for close to 100 properties, which will soon be left empty, The
Telegraph discloses.  Austin Reed's head office will also close,
The Telegraph says.

The chain, which is best known as a men's tailor, but once
counted Elizabeth Taylor among its high-profile customers,
collapsed last month, blaming cashflow difficulties, The
Telegraph recounts.

Austin Reed is a Thirsk-based fashion retailer.

BHS GROUP: Used Loophole to Cut Annual Pension Deficit Levy
Josephine Cumbo at The Financial Times reports that failed
retailer BHS exploited a widely used loophole to nearly halve the
annual levy it paid to the pension lifeboat to cover its GBP274
million deficit.

Documents published recently showed that the retail chain, while
still under Sir Philip Green's ownership, used an intragroup
guarantee that the head of the Pension Protection Fund has called
"pretty much" worthless to secure a substantial discount on the
levy it was required to pay to the PPF in 2011-12, the FT

A parliamentary investigation into the collapse of BHS, which
fell into administration in April, has revealed how companies
deemed to be at risk of falling into insolvency exploited weak
checks on the use of guarantees to shift the burden of protecting
their pensioners on to other businesses, the FT notes.

Details provided by the PPF to the Work and Pensions Committee,
and recently published, revealed that the levy for the BHS
pension scheme was GBP372,000 in 2010-11, the FT discloses.

But in 2011-12, BHS -- whose financial health was weakening --
put forward a guarantee over its deficit, backed by Davenbush,
part of the BHS group, the FT relays.  That cut BHS's levy to
GBP196,000, the FT notes.  The levy on the smaller BHS senior
management pension scheme was slashed by two-thirds from
GBP30,000 to GBP10,000 after a guarantee was provided, the FT

According to the FT, Alan Rubenstein, chief executive of the PPF,
told the committee that BHS was one of a number of pension
schemes the fund had written to in 2012 over concerns the
guarantees put forward to cover deficits were "not justified".

"The guarantee for the BHS pension scheme could not meet, in our
view, the value of the shortfall that it was being pledged
against," the FT quotes Mr. Rubenstein as saying.  When asked if
the company behind the guarantee for the BHS pension scheme was
worthless, and could never "cough up the guarantee",
Mr. Rubenstein replied, "yes, pretty much".

After the BHS guarantee was not recertified, its subsequent levy
bill for the both BHS pension schemes jumped to GBP2.4 million
and GBP129,000 respectively, the FT notes.

BHS Group is a department store chain.  The company employs
10,000 people and has 164 shops.

PETRA DIAMONDS US: Moody's Confirms B2 Rating on Sr. Sec. Notes
Moody's Investors Service confirmed the corporate family rating
(CFR) and probability of default rating (PDR) of predominantly
South African diamond producer, Petra Diamonds Limited (Petra),
at B1 and B1-PD, respectively. The outlook on all the ratings is

This concludes the review for downgrade initiated by Moody's on
January 22, 2016, following its review of the global mining
sector, whose operating environment has undergone a fundamental

"Our decision to confirm Petra's B1 ratings takes into account
the company's success in renegotiating its bank facility
covenants to increase their cushioning to more easily accommodate
additional debt for funding its Cullinan mine mill extension
project," said Douglas Rowlings, a Moody's Assistant Vice

"It also recognizes Petra's ability to significantly reduce
leverage in the next 12 months, even with Moody's conservative
diamond price assumptions, as it expands into new areas that are
planned to produce higher volumes and higher value diamonds at
its Cullinan and Finsch mines at a lower cost from new higher
grade ore bodies generating increasing EBITDA at higher margins,"
adds Mr. Rowlings.

Concurrently, Moody's confirmed the B2 rating assigned to the
US$300 million senior secured notes due May 31, 2020 issued by
Petra Diamonds US$ Treasury Plc and guaranteed by Petra and
certain of its subsidiaries. The outlook is stable.

While diamonds have not experienced the same magnitude of recent
price reductions seen in base metals, it is nevertheless a
volatile commodity, the price of which is very hard to predict as
it is not driven by normal industrial supply and demand factors.

Moody's however does recognize the track record of supply
intervention to support prices by the diamond industry's two
largest producers, De Beers (unrated), a subsidiary of Anglo
American plc (Ba3 positive), and ALROSA PJSC (Ba1 negative).
Moody's expects Petra's diamond price risk will be mitigated by
focusing on cost efficiencies and prudent project development, as
well as financial risk reduction (i.e. reducing leverage,
increasing interest coverage and bolstering liquidity).


The confirmation primarily considers the track record of support
that Petra's lenders continue to demonstrate with their agreement
to renegotiate bank facility covenant levels, as well as
sustained improvement in diamond prices over the course of 2016.
Petra's lenders waived their 31 December 2015 covenant test last
year and on 25 April 2016 they agreed to reset covenants to less
restrictive levels running to 31 December 2017.

Furthermore, Moody's sees limited execution risk for Petra in
terms of delivering undiluted ore from new mining areas at its
Cullinan and Finsch mines, and developing its mill extension at
the Cullinan mine. This is supported by observed progress to date
and an independent technical assessment of the projects plans.
Together, these operations are planned to deliver higher volumes
and higher value diamonds at lower cost with better recovery
rates (especially of larger diamonds), as well as significantly
increasing EBITDA and free cashflow generation allowing for
accelerated deleveraging.

Petra's B1 CFR reflects (1) the strong medium- to long-term
fundamental forecasts for the diamond market, in which demand is
expected to outstrip supply, supporting long-term diamond prices;
(2) its competitive cost positioning with predominantly long-
life, well-prospected underground mines producing diamonds at
costs on a par with cheaper open-pit mines; and (3) conservative
financial policies and a strong financial profile, which will
improve as undiluted ore contributes more significantly to the
production of high-value diamonds with low execution risks.

The ratings are constrained by (1) Petra's scale as a mid-tier
diamond producer (revenues of $364 million for the last twelve
months ended 31 December 2015) with four mines in South Africa
(Baa2 under review for downgrade) including extensive tailings
operations in Kimberley (via its 49.9% interest in the Kimberley
Mines), one mine in Tanzania (unrated) and exploratory land in
Botswana (A2 stable); (2) elevated operational risk as more than
90% of its EBITDA comes from the Cullinan and Finsch mines in
South Africa; and (3) a single commodity producer business
profile with full exposure to volatility in diamond prices and
ZAR/$US exchange rate, noting however the favourable interplay on
credit metrics of these two drivers to date.


Moody's sees Petra's liquidity as being adequate over the next
year and able to meet forecast capital expenditures of around
US$200 million. At March 31, 2016, Petra had unrestricted cash
balances totalling US$26.7 million and undrawn committed bank
facility availability of around US$114.2 million.

The rating agency recognizes that in spite of covenant levels
being repositioned, the next testing period at June 30, 2016,
will have limited headroom. The ability to ensure prospective
compliance however is supported by (1) operating performance to
date with only two months remaining in the test period ensuring
greater visibility around the ability to achieve the remaining
EBITDA hurdle; (2) cautious optimism for 2016 diamond prices,
although Moody's assumes prices of 9% below company guidance
which is equivalent to the average dollar per carat prices
realised over the first half of Petra's financial year ending 30
June 2016; and (3) mine profiling which together with higher
production will see an increasing shift in the mix to undiluted
ore being processed which yields a higher EBITDA margin and
overall EBITDA generation.

Notwithstanding these considerations Petra's consortium of banks
have a demonstrated track record of affording Petra flexibility
with regards to its covenant tests. Furthermore, the requirement
for debt facilities is attributed to an extension of the mill at
Petra's Cullinan mine. This is not seen as critical to
deleveraging, which is more a factor of undiluted ore
contribution as opposed to milling efficiency and recovery
improvement. The mill extension will further reduce processing
costs and improve recoveries, especially of larger high value
stones. Therefore the company, could, if needed, defer the mill
extension, although this is not the current intention given that
the banking consortium are supportive.

The majority of capex associated with Petra's Cullinan mine
expansion is denominated in depreciated South African rand with
prices locked in, which mitigates against potential overspending.


The stable outlook reflects Moody's view that Petra will be able
to deliver on its capex programme and undiluted mining production
areas with debt/EBITDA falling below 2.5x and EBIT/interest
expense trending above 4x. The rating agency also expects that
Petra, at all times, will maintain a liquidity profile that
provides sufficient cash sources against forecasts cash uses.

This stable outlook also factors an expectation that the company
will remain in compliance with its bank covenants at all times.


Downward pressure on the rating could result if it does not
become apparent that debt/EBITDA is trending below 2.5x and
EBIT/interest expense is trending above 4x. Similar downward
pressure could result if Petra were to face (1) long-term
challenges in accessing undiluted ore at its Cullinan and Finsch
mines; or (2) a deterioration of Petra's liquidity profile.

SANDS HERITAGE: Low Volume of Visitors Prompts Administration
BBC News reports that the Thanet council leader Chris Wells says
failure to attract enough visitors forced Margate's Dreamland
amusement park to call in administrators.

The park reopened in a blaze of publicity in 2015 after an GBP18
million restoration but operator Sands Heritage went into
administration on May 27, BBC relates.

Mr. Wells, as cited by BBC, said they had failed to produce the
volume of people they had hoped for.

According to BBC, administrator Duff and Phelps said it was
looking for a new operator.  It said Dreamland would remain open
and continue to operate as normal, BBC notes.

Sands avoided administration in December under a company
voluntary arrangement (CVA), which gave it five years to repay
nearly GBP3 million of debts, BBC recounts.

The council, which is owed GBP50,000, is among the creditors, BBC
discloses.  It has also invested another GBP900,000 in the site,
for which it is the leaseholder, BBC states.


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 2016.  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

                 * * * End of Transmission * * *