TCREUR_Public/160901.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Thursday, September 1, 2016, Vol. 17, No. 173



* DENMARK: Economy Sluggish as Government Faces Challenges


NEW CO: S&P Assigns Preliminary 'B+' CCR, Outlook Developing
PICARD GROUPE: S&P Revises Outlook to Stable & Affirms 'B+' CCR


GREECE: PM Urges International Creditors to Honor Pledges


REITALY FINANCE: Fitch Raises Rating on Class E Notes to 'BBsf'


STORM 2016-II: Fitch Assigns 'B+(EXP)' Rating to Class D Notes


FARSTAD SHIPPING: In Stand-Still Agreement with Lenders
* NORWAY: Debt Restructuring of OSV Companies May Take Years

U N I T E D   K I N G D O M

CATTLES PLC: FRC Imposes GBP2.3MM Fine on PwC Over Audit Failures
GULF KEYSTONE: Launches Open Offer as Part of Restructuring
MELLON COUNTRY: Put Up for Sale Following Receivership
SOFTEX INTERNATIONAL: Atradius Payout Keeps Business Afloat
TRAVELEX HOLDINGS: S&P Lowers CCR to 'B-', Outlook Stable



* DENMARK: Economy Sluggish as Government Faces Challenges
Charles Duxubury at The Wall Street Journal reports that
Denmark's economy is struggling for momentum, official data
showed on Aug. 31, highlighting the challenge facing the
government as it weighs tax cuts against public sector

Denmark's statistics agency said economic output increased 0.5%
on the quarter and 0.4% on the year in the second quarter of
2016, largely in line with analysts' forecasts in a Wall Street
Journal poll.

The agency said public sector consumption and exports helped lift
growth while total domestic demand fell, the Journal relates.

Denmark's economy has been sluggish since the financial crisis of
2008, when a property bubble burst and hit many households'
spending power, the Journal notes.  Successive center-right and
center-left governments have struggled for the right economic
mix, the Journal states.

According to the Journal, the export-dependent country, home to
corporate giants like shipping company Maersk and drugs maker
Novo Nordisk, has also been hit by ebbing demand in its main
European market.

Recent government forecasts peg growth expectations this year at
0.9% and 1.5% next year, lower than previously thought, the
Journal discloses.

The country's high tax level on earned income has come into focus
as a possible handbrake on growth and a fierce debate is raging
about whether a cut to the top rate of tax could help boost the
economy, the Journal says.


NEW CO: S&P Assigns Preliminary 'B+' CCR, Outlook Developing
S&P Global Ratings said that it has assigned its 'B+' preliminary
long-term corporate credit rating to France-based nuclear
services company New Co.  The outlook is developing.

The final rating depends on S&P's receipt and satisfactory review
of New Co's final capital structure.  Accordingly, the
preliminary rating should not be construed as evidence of the
final rating.  A key assumption for the preliminary rating is
that AREVA will transfer its bonds maturing after 2016 to New Co,
while the key syndicated bank and undrawn credit facilities
remain at AREVA.

The preliminary rating on New Co mirrors that on the company's
100% owner AREVA.

As part of the reorganization of its activities, AREVA intends to
transfer all its outstanding unsecured bonds totaling
EUR4.8 billion (excluding EUR1 billion to be repaid in September
2016) to New Co.  AREVA will retain the bank debt -- a EUR2
billion syndicated facility and a short-term EUR1.2 billion
undrawn credit facility -- except for EUR0.6 billion of debt at
AREVA NC, which is attributed to New Co.

S&P believes New Co's business risk profile shows stronger credit
characteristics than AREVA's and assess it as satisfactory versus
fair for the AREVA group.  However, New Co's initial leverage
will be very high, with future viability of its capital structure
dependent on the planned capital increase.  Like its parent,
New Co is, in S&P's view, a government-related entity (GRE) with
an important role for and strong link with the French government,
even though the state's direct and indirect shareholding in the
group may be only about 67% after the capital increase.  With
respect to New Co's own status as a GRE, S&P do not anticipate
that the high likelihood of extraordinary support from the French
government, which results in a three-notch uplift to New Co's
stand-alone credit profile, will reduce after the capital

S&P understands that AREVA plans to request consent from existing
holders of its EUR4.8 billion bonds (excluding about EUR1 billion
to be repaid in September 2016) for the transfer of the bonds to
New Co.  If the bond transfer is approved, S&P expects New Co's
initial capital structure will be unsustainable, with adjusted
leverage (debt to EBITDA) above 9x-10x.  As a result, S&P assess
New Co's current stand-alone credit profile at 'ccc+'.  S&P
currently estimates that the company's leverage may improve to
about 6x if, as S&P assumes, it receives about EUR3 billion of
the proceeds from AREVA's EUR5 billion capital increase, which is
targeted for the first quarter of 2017.  But there are execution
risks, in S&P's view, such as from potential delays in obtaining
the European Commission's approval of the proposed capital
increase.  In S&P's view, obtaining a firm commitment to New Co
from minority shareholders would smooth this process.

S&P expects that the 'B+' issue rating and recovery rating of
'3H' on the unsecured AREVA bonds will remain unchanged upon
their transfer to New Co.

The developing outlook on New Co mirrors that on the parent AREVA
until other shareholders take a majority share and S&P considers
that the rating on New Co can be delinked from that on AREVA.

Rating upside would come from allocation to New Co of about
$3 billion of AREVA's planned EUR5 billion capital increase,
targeted for January 2017.  S&P thinks this could reduce adjusted
debt to EBITDA to about 6x on average.  If AREVA were no longer
New Co's majority owner after the capital increase, S&P could
consider raising the rating on New Co by a few notches to the
'BB' category.

S&P could lower the rating on New Co if AREVA were downgraded,
notably if S&P has concerns about AREVA's ability to secure a
shareholder loan by the end of November 2016, should there be a
delay in the approval of the capital increase.

Other risk factors that could create rating downside for New Co

   -- The timing of the European authorities' approval of the
      state's capital injection in AREVA and the need for a firm
      offer from a minority investor in New Co; and

   -- Approval from AREVA's banks regarding the sale of a
      majority stake in New Co at the time of the capital

PICARD GROUPE: S&P Revises Outlook to Stable & Affirms 'B+' CCR
S&P Global Ratings revised its outlook on French frozen food
retailer Picard Groupe S.A.S. to stable from negative and
affirmed its 'B+' long-term corporate credit rating on the group.

At the same time, S&P affirmed its 'BB-' issue rating on the
group's senior secured notes (about EUR772 million outstanding
after buybacks).  The recovery rating on the senior secured notes
remains unchanged at '2', indicating S&P's expectation of
substantial (70%-90%) recovery prospects in the event of a

S&P also affirmed its 'B-' issue rating on the group's senior
unsecured notes (about EUR428 million outstanding) and payment-
in-kind (PIK) notes.  The recovery rating on the senior unsecured
notes and PIK notes remains unchanged at '6', indicating S&P's
expectation of negligible (0%-10%) recovery prospects in the
event of a default.

S&P's outlook revision primarily reflects its expectations that
Picard will defend its niche market position in the French
grocery market, achieve modest growth from new store openings,
maintain strong margins, and generate free operating cash flow
(FOCF) for reducing debt gradually.  Supported by bond buybacks
of up to EUR50 million per year from free cash flows, S&P
forecasts an adjusted debt to EBITDA of about 6.0x and an
improved EBITDAR cash interest coverage of around 2.0x over the
next 12 months.

Picard is the leading frozen food retailer in France with about
18% market share.  It offers customers a wide spectrum of
products under its own brand across over 950 stores in the
country.  High quality food at affordable prices has built a
strong Picard brand and a loyal customer base favored by the
French population.  This enables the group to achieve a superior
adjusted EBITDA margin of about 17% and strong cash flow

Picard's competitive position is constrained by its modest size
and scale, as it only accounts for around 1% of the overall
French grocery market.  As the macroeconomic environment in
France is weak and major grocers increasingly focus on
competitive pricing and expanding their convenience store
network, macroeconomic and competitive pressure has led the group
to exhibit weak like-for-like sales growth since 2012.  S&P has
therefore lowered Picard's business risk profile assessment to
the high end of fair.

Picard has sizable debt considering its operating scale.  Its
ownership by a private equity group (Lion Capital) also exposes
the group to the inherent risk of dividend recapitalization.  S&P
forecasts S&P Global Ratings-adjusted debt to EBITDA to be around
6.1x for the financial year ending March 2017 (FY2017) and 5.9x
for FY2018 (or 5.3x in FY2017 and 5.0x in FY2018 excluding the
PIK notes).

In light of the noncash interest from the PIK notes and high rent
costs, S&P also assess Picard's EBITDAR cash interest coverage
(defined as unadjusted EBITDA before deducting rent over cash
interest plus rent).  S&P expects Picard's EBITDAR cash interest
coverage will remain healthy at around 2.0x in FY2017 and FY2018.

Notwithstanding increasing capital expenditure (capex), S&P
expects that Picard will generate strong reported FOCF of
EUR30 million-EUR40 million per year in FY2017 and FY2018.
Following the recent notes buyback of EUR50 million in 2016, S&P
anticipates that Picard will continue to use FOCF for reducing
leverage.  S&P also expects Picard to commit to a conservative
financial policy over the medium term.  These supportive factors
result in S&P's positive comparable ratings assessment, which
provides a one-notch uplift to S&P's anchor of 'b' to arrive at
the 'B+' corporate credit rating.

In S&P's base case, it assumes:

   -- Following the U.K.'s Brexit vote, S&P forecasts real GDP
      growth in France slightly slowing to 1.2% in 2017 and 1.4%
      in 2018.

   -- Increased consumer price index (CPI) growth in France of
      1.4% in 2016 and 1.2% in 2017.

   -- About 3% revenue growth in FY2017 and around 2% in FY2018.
      Growth is mainly driven by about 20 new store openings per
      year.  S&P expects like-for-like sales growth to remain
      weak at less than 2% due to the weak macroeconomic
      environment and high price competition among grocers in

   -- Stable adjusted EBITDA margin of around 17% in FY2017 and
      FY2018.  S&P expects that some competitive pressure on
      Picard's margin could be mitigated by cost savings on labor
      and logistics.

   -- Increase in capex to about EUR40 million-EUR45 million in
      FY2017 and FY2018 from EUR35 million in FY2016 for
      investing in new store expansion and information technology

   -- Supportive financial policy demonstrated by buyback of
      notes at around EUR50 million per year.

Based on these assumptions, S&P arrives at these credit measures:

   -- Adjusted debt to EBIDTA of around 6.1x in FY2017 and 5.9x
      in FY2018 (or 5.3x in FY2017 and 5.0x in FY2018 excluding
      the PIK notes).

   -- EBITDAR cash interest coverage of around 2.0x in FY2017 and

   -- Reported FOCF generation of EUR30 million-EUR40 million per
      year in in FY2017 and FY2018.

The stable outlook reflects S&P's view that, despite strong
competition, Picard will defend its niche market position in the
French grocery market, achieve modest growth from new store
openings, maintain strong margins and generate FOCF for reducing
debt gradually.  S&P forecasts an adjusted debt to EBITDA of
about 6.0x and an EBITDAR cash interest coverage of around 2.0x
over the next 12 months.

S&P could lower the ratings if Picard's operating performance
deteriorates, leading to EBITDAR cash interest coverage weakening
towards 1.7x, free operating cash flow reduces significantly, or
if planned debt reduction does not materialize.  This could
result from an economic downturn in France, intensified price
competition in the French grocery market, a food safety scare
damaging its brand reputation, a supply chain disruption, or an
inability to pass on hikes in labor costs and food inflation to

S&P could also lower the ratings if the financial sponsor owner
Lion Capital materially increases leverage by adopting a more
aggressive financial policy with respect to growth, investments,
or shareholder returns.

S&P currently considers an upgrade unlikely over the medium term.
However, S&P could raise the ratings if, on the back of strong
reported FOCF generation and an adequate liquidity position,
Picard reduces its leverage such that S&P's adjusted debt to
EBITDA improves to below 5x (including the PIK notes) on a
sustainable basis.

An upgrade would also be contingent on the management and the
financial sponsor demonstrating a commitment to a conservative
financial policy.


GREECE: PM Urges International Creditors to Honor Pledges
Xinhua News Agency reports that Greek Prime Minister
Alexis Tsipras urged Greece's international creditors to honor
pledges and implement specific measures by the end of 2016 to
make the Greek debt load sustainable and support Greece's
economic recovery.

"We are not just requesting, we are demanding and expecting -- on
the basis of the deal we are implementing -- the specific
measures which will make the debt sustainable," Xinhua quotes
Mr. Tsipras as saying in an interview published by local
newspaper Real News on Aug. 28.

Mr. Tsipras, as cited by Xinhua, said the debt relief will open
the way to economic recovery.

According to Xinhua, a new round of talks between the Greek
government and international creditors was set to resume on
Aug. 29 in Brussels during the first Euro Working Group meeting
after the summer lull.

Mr. Tsipras said that his government is keeping its part of the
deal and will push lenders to do the same, Xinhua relays.

Greece, Xinhua says, believes that any continuation of harsh
austerity will undermine all sacrifices made by Greek people to
overcome the crisis, fuel recession and unemployment rates.

Under the previous agreement with international creditors, Greece
must meet budget surplus targets of 0.5% of the GDP this year,
1.75% in 2017 and 3.5% in 2018, among others, Xinhua discloses.

Greek officials recently have insisted that the goal is not
feasible and requested some alterations, Xinhua notes.

Greece has been relying on international rescue loans since 2010,
when its economy collapsed, Xinhua states.  It will be eligible
to receive the remaining third bailout tranche of EUR2.8 billion
(US$3.1 billion) if it passes further reforms requested by
creditors, according to Xinhua.


REITALY FINANCE: Fitch Raises Rating on Class E Notes to 'BBsf'
Fitch Ratings takes multiple rating actions on REITALY Finance
S.r.l.'s floating rate notes due 2027 as:

  EUR70 mil. class A1 affirmed at 'A+sf'; Outlook Stable
  EUR39.3 mil. class A2 affirmed at 'Asf'; Outlook Stable
  EUR33.3 mil. class B affirmed at 'BBBsf'; Outlook Stable
  EUR12.4 mil. class C affirmed at 'BBB-sf'; Outlook Stable
  EUR17.7 mil. class D affirmed at 'BBsf'; Outlook Stable
  EUR9.3 mil. class E upgraded to 'BBsf' from 'BB-sf'; Outlook

The transaction is a securitization of a single EUR191.5 mil.
commercial real estate loan advanced by Goldman Sachs
International Bank (GS) to an Italian fund, which is secured by a
portfolio of 25 Italian real estate assets.  GS has retained 5%
of the loan.

The collateral falls into five sub-portfolios: (i) five large
retail assets with exposure to a cinema operator; (ii) five cash-
and-carry assets; (iii) three retail galleries; (iv) five retail
boxes; and (v) seven smaller retail units.

                         KEY RATING DRIVERS

The upgrade reflects the improvement in property investment
conditions in Italian retail markets since the transaction was
issued in September 2015.  In some cases market rental yields
dropped from above their long-term average to below-average,
reflected in a fall in the reported loan to value ratio (LTV) to
58% currently, from 62% at closing.  While Fitch's 'BBsf' cap
rate assumptions are designed to be higher than the long-term
average, they had in some cases previously been floored by even
higher actual yields.  Where those yields have since fallen, any
floored cap rates have also been reduced, improving projected
recovery value at 'BBsf'.

Investment-grade cap rate assumptions, however, have not fallen,
since they remain above the path of actual yields.  Along with
the largely unchanged loan performance, and lack of property
disposals, this supports today's affirmations.

The interest coverage ratio for the transaction remains above 2x.
Rental income has increased over the last 12 months as a result
of rental increases and new lettings.  While positive, almost
half of contracted income is set to expire by loan maturity in
2020. Rising rent will have little impact on ratings unless it is
accompanied by an increase in reported estimated rental values
deemed sustainable by Fitch.

                        RATING SENSITIVITIES

If rising rental income translates into higher sustainable rental
values, this may support future upgrades, although not exceeding
the 'A+' rating cap on transactions with significant exposure to
southern Italian properties.  A major downturn in the Italian
retail sector could affect the ratings adversely.

Fitch's estimate of 'Bsf' LTV is 75.5%.


STORM 2016-II: Fitch Assigns 'B+(EXP)' Rating to Class D Notes
Fitch Ratings has assigned STORM 2016-II B.V.'s notes expected
ratings as:

  Class A floating-rate notes: 'AAA(EXP)sf'; Outlook Stable
  Class B floating-rate notes: 'AA-(EXP)sf'; Outlook Stable
  Class C floating-rate notes: 'BBB+(EXP)sf'; Outlook Stable
  Class D floating-rate notes: 'B+(EXP)sf'; Outlook Stable
  Class E floating-rate notes: not rated

This transaction is a true sale securitization of prime Dutch
residential mortgage loans originated and sold by Obvion N.V., an
established mortgage lender and issuer of securitizations in the
Netherlands.  Since May 2012, Obvion has been 100% owned by
Cooperatieve Rabobank U.A.  This is the 35th transaction issued
under the STORM series since 2003, and the first such transaction
with a revolving feature.

The expected ratings address timely payment of interest on the
class A and B notes, including the step-up margin accruing from
the payment date falling in August 2021, and full repayment of
principal by legal final maturity in accordance with the
transaction documents.  The final ratings are contingent upon the
receipt of final documents and legal opinions conforming to the
information already received.

Credit enhancement (CE) for the class A notes will be 8% at
closing, provided by the subordination of the junior notes and a
non-amortizing cash reserve (1%), fully funded at closing through
the class E notes.

                          KEY RATING DRIVERS

Market Average Portfolio: This is a 59-month seasoned portfolio
consisting of prime residential mortgage loans, with a weighted
average (WA) original loan-to-market-value (OLTMV) of 89.2% and a
WA debt-to-income ratio (DTI) of 27.2%, both of which are typical
for Fitch-rated Dutch RMBS transactions and in line with previous
STORM transactions.

Revolving Transaction: A five-year revolving period will allow
new assets to be added to the portfolio.  In Fitch's view, the
replenishment criteria adequately mitigate any significant risk
of potential migration due to future loan additions.  Fitch
considered a stressed portfolio composition, based on the
replenishment criteria, rather than the actual portfolio

Interest Rate Hedge: At close, a swap agreement will be entered
into with Obvion to hedge any mismatches between the fixed and
floating interest on the loans and the floating interest on the
notes.  In addition, the swap agreement guarantees a minimum
level of excess spread for the transaction, equal to 50bp per
annum of the outstanding A through D notes' balance, less
principal deficiency ledgers (PDLs).  The remedial triggers are
linked to the parent's ratings, Rabobank.

Rabobank Main Counterparty: This transaction relies strongly on
the creditworthiness of Rabobank, which fulfils a number of
roles. Fitch analyzed the structural features in place, including
those mitigating construction deposit set-off and commingling
risk and concluded that counterparty risk is adequately

Robust Performance: Past performance of transactions in the STORM
series, as well as data received on Obvion's loan book, indicate
good historical performance in terms of low arrears and losses.
For more information, see the Performance Analytics section.

                       RATING SENSITIVITIES

Material increases in the frequency of defaults and loss severity
on defaulted receivables could produce losses larger than Fitch's
base case expectations, which in turn may result in negative
rating actions on the notes.  Fitch's analysis revealed that a
30% increase in the WA foreclosure frequency, along with a 30%
decrease in the WA recovery rate, would result in a model-
implied-downgrade of the class A notes to 'A-(EXP)sf', class B
notes to 'BBB-(EXP)sf', class C notes to 'B(EXP)sf' and the class
D and E notes to below 'B(EXP)sf'.

                        DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation
to this rating action.

                          DATA ADEQUACY

For its ratings analysis, Fitch received a data template with all
fields fully completed.

Fitch reviewed the results of a third party assessment conducted
on the asset portfolio information, and concluded that there were
no findings that affected the rating analysis.

Fitch conducted a small file review on a targeted sample of
origination files at the premises of Obvion and found the
information contained in the reviewed files to be adequately
consistent with the originator's policies and practices, and the
other information provided to the agency about the asset

Overall and together with the assumptions referred to above,
Fitch's assessment of the asset pool information relied upon for
the agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.


FARSTAD SHIPPING: In Stand-Still Agreement with Lenders
Ole Petter Skonnord at Reuters reports that Farstad Shipping's
CEO Karl Johan Bakken said the company is in stand-still
agreement with lenders until Oct. 1.

According to Reuters, the CEO said the company is talking to both
industrial and financial investors on how to refinance NOK11.6
billion in net interest bearing debt (US$1.4 billion).  He said
7-8 significant banks are involved in the talks, Reuters relays.

Farstad said at present there are no visible signs of improvement
in the market balance for offshore service vessels, and is
uncertain how long it will take before the market recovers,
Reuter relates.

Mr. Bakken, as cited by Reuters, said the market needs
consolidation to be sustainable in the future.

Farstad's operating profit before depreciation, amortizations and
impairments fell to NOK735 million in Q2 from NOK1.04 billion in
same period in 2015, and far below what it needs to be able to
service its debt, Reuters discloses.

Farstad Shipping is a provider of large, modern offshore service
vessels to the oil and gas industry worldwide.  The company is
based in Alesund, Norway.

* NORWAY: Debt Restructuring of OSV Companies May Take Years
Stine Jacobsen at Reuters reports that restructuring the debt of
struggling offshore oil service vessel (OSV) and drilling rig
companies will take years to complete and complex cases must go
through multiple stages.

Dozens of exploration rigs and more than 100 service vessels have
been mothballed since the plunge in oil prices began in mid-2014,
leaving owners unable to repay billions of dollars to banks and
bondholders, Reuters relates.

"I think there is a chance that for many companies you may have a
two-step process," Reuters quotes DNB's head of lending to large
customers, Harald Serck-Hanssen, as saying on the sidelines of an
energy conference.

"Ideally we would have liked to see restructurings taking
companies into 2020, but I think in many cases that is not
possible to achieve," Mr. Serck-Hanssen, as cited by Reuters,
said, adding that the large number of lenders involved added
complexity to the process.

According to Reuters, Mr. Serck-Hanssen said the first phase will
likely see companies through to the second half of 2018 or first
half of 2019, and unless markets have recovered they would then
need a second phase.

While more consolidation should be expected, he cautioned that
mergers and restructurings must also involve the injection of new
equity to make firms viable, Reuters notes.

However, Mr. Serck-Hanssen said not all companies would be able
to restructure their debt and bankruptcies among vessel and rig
owners could occur already in 2016, Reuters relays.

U N I T E D   K I N G D O M

CATTLES PLC: FRC Imposes GBP2.3MM Fine on PwC Over Audit Failures
Marion Dakers at The Telegraph reports that the accountancy firm
that gave Cattles a clean bill of health before its near-collapse
has been fined GBP2.3 million for not doing enough to spot the
problems lurking at the doorstep loans company.

PwC agreed to the penalty from the Financial Reporting Council
after it signed off the 2007 accounts at Cattles, which then
issued a string of profit warnings and suspended its shares,
leaving investors wiped out, The Telegraph relates.

The auditor and one of its partners, Simon Bradburn, admitted
that their work on Cattles' books "fell significantly short of
the standards reasonably to be expected", the FRC, as cited by
The Telegraph, said.  The watchdog also fined Mr. Bradburn
GBP75,600 and gave both him and the company a severe reprimand,
The Telegraph discloses.

The penalty draws a line under the controversies surrounding
Cattles' creaking sub-prime loan books ahead of the financial
crisis, The Telegraph notes.  The firm, once a member of the FTSE
250, announced in 2009 that its loan books were much weaker than
thought, forcing it into two profit warnings within 11 days,
followed by a restructuring deal with creditors to ward off
administration in 2011, The Telegraph recounts.

Two Cattles directors were banned from the City in 2012 for
misleading investors about the quality of the firm's loan books,
The Telegraph relays.  The FRC accepted that these executives did
not give PwC the full picture when compiling the accounts, The
Telegraph states.

Cattles and its creditors nevertheless took PwC to court to claim
GBP1.6 billion for negligence, with the case settled last October
for an undisclosed sum, according to The Telegraph.

The watchdog reduced PwC's fine from GBP3.5 million to GBP2.3
million to reflect its cooperation during the long-running probe,
The Telegraph says.

Cattles plc -- is a financial
services company engaged in providing consumer credit to non-
standard customers in the United Kingdom and the provision of
debt recovery services to external clients and the Company's
consumer credit business.  Cattles also provides working capital
finance for small and medium size businesses.

GULF KEYSTONE: Launches Open Offer as Part of Restructuring
UPI reports that a potential takeover target, Iraqi-focused
company Gulf Keystone Petroleum said it was offering up common
shares in an effort to raise more capital.

"The company announces that it has launched an open offer for up
to 2,294,295,672 new common shares in the company at a price of
0.8314 pence ($1.08) per share, to raise up to $25 million," UPI
quotes the company as saying in a statement.

The company, which lists headquarters in London, reached an
agreement last month with the majority of its creditors and
shareholders to restructure its debt obligations, UPI recounts.
Andrew Simon in July stepped down as chairman, opening the door
for non-executive director Keith Lough to help steer a US$500
million debt conversion proposal, UPI recounts.

The company, as cited by UPI, said the open offer for shares was
in coordination with its restructuring efforts.

                       Debt-for-Equity Swap

As reported by the Troubled Company Reporter-Europe on July 19,
2016, Reuters related that distressed debt funds will become big
shareholders in troubled oil firm Gulf Keystone after bondholders
agreed to swap US$500 million of debt for equity, wiping out some
of the world's top funds as shareholders.  According to Reuters,
the firm has been fighting to avoid insolvency after low oil
prices and overdue oil export payments from the Kurdistan
regional government crippled its balance sheet.

Gulf Keystone Petroleum Limited is an oil and gas exploration and
production company operating in the Kurdistan region of Iraq.  It
is listed on the main market of the London Stock Exchange.

MELLON COUNTRY: Put Up for Sale Following Receivership
John Mulgrew at Belfast Telegraph reports that The Mellon Country
Hotel in Omagh has been put up for sale for GBP450,000, after
going into administrative receivership.

Now, a detailed report from administrators Keenan Corporate
Finance shows the losses and financial position of the hotel,
Belfast Telegraph discloses.

It says the 18-room hotel was kept open until June 30, but was
then shut "due to its loss-making position and the inability to
fund working capital", Belfast Telegraph relays.  But it said
that "all of the employees were made redundant", Belfast
Telegraph notes.

It's understood around 30 staff, mainly part-time, had worked at
the hotel, Belfast Telegraph states.

It left behind debts of more than GBP650,000 to KBC Bank Ireland,
according to Belfast Telegraph.  Its biggest debts were to
unsecured creditors, amounting to more than GBP1 million, Belfast
Telegraph says.

According to Belfast Telegraph, the sale process of the hotel is
"ongoing".  And it says, based on initial estimates, "we do not
anticipate that a dividend will be payable to unsecured non-
preferential creditors", Belfast Telegraph notes.

A creditors' meeting is now scheduled to take place in Belfast
next month, Belfast Telegraph discloses.

KBC Bank appointed Keenan Corporate Finance as administrative
receiver to the company that owns the hotel, Mellon Country Hotel
Limited, in June, Belfast Telegraph recounts.

SOFTEX INTERNATIONAL: Atradius Payout Keeps Business Afloat
Softex International Limited, based in Leicester, imports yarns
for knitting with the final products ending up in the stores of
Burberry, M&S, John Lewis, Laura Ashley, Debenhams, and New Look.
In November last year, the firm was threatened with financial
turmoil after one of its customers, a fashion manufacturer, went
into administration.

However, they received a pay out from trade credit insurer
Atradius for over GBP55,000 which kept the business afloat.
Today, Softex is continuing to trade successfully in the region.

Kiran Yarashi, managing director of Softex which was established
15 years ago, said: "In an already extremely tough textile
environment in the UK, had we not been able to recover this
defaulted payment from Atradius, we would have been facing a very
difficult financial situation ourselves.

"The administration was unexpected.  It was a long-standing
customer with a reported turnover of GBP15 million and there were
no signs that it was about to go under.  The loss would have left
a big hole in our finances and we couldn't have continued
operating without the claims payout from Atradius."

Softex's experience demonstrates that you can never assume that
you're safe from the risks of insolvency.  In an economic report
earlier this year, Atradius predicted that there would be little
improvement to the UK insolvency climate in 2016 despite being
another year on from the recession.  The volatility of recent
weeks following the referendum is unlikely to have improved the
predicted outlook with pre-Brexit forecasts indicating that
insolvency levels in England & Wales were expected to hit 12,725
in 2016.  While below the 12,855 compulsory liquidations and
creditors' voluntary liquidations recorded last year, the drop is
small at just 1%.  High profile insolvencies already this year
include BHS and Austin Reed.  However, as Softex has experienced
it is not only the failure of high-profile customers that can
cause a financial headache.

Tanya Giles, Regional Manager at Atradius, said:
"The economy grew 0.6% in the three-month period to the end of
June.  However, as we review the impact of the weeks following
the referendum we need to bear in mind that the effects of the
recession continue to cast a shadow with business insolvencies
still running at troubling levels.  Businesses can be
significantly impacted when they do not get paid.  Insolvencies
are brutal and leave a trail of destruction along the supply
chain.  Small businesses are particularly at risk as they may not
be able to sustain the financial impact of unpaid invoices, nor
indeed the loss of a customer from their book.

"However, while some insolvencies may be a shock, there will
often be tell-tale signs of an impending failure.  The warning
signs include customers failing to pay on time, permanently
taking advantage of full credit lines asking to prolong overdue
bills, changing banks or offering bills of exchange in lieu of

"The biggest single thing a business can do to mitigate the risks
of non-payment is to protect themselves.  Trade credit insurance
provides simple, cost effective protection to your business
against the risk of not getting paid.  If you can't get paid, for
instance if your customer becomes insolvent, defaults on the
payment or is affected by political risk, you can make a claim to
Atradius, reducing the need for bad debt provision and releasing
money back into the business."

As a trade credit insurer, Atradius protects businesses from the
risks of non-payment and also advises businesses on trading risks
and opportunities in the domestic and export markets using
intelligence gathered from millions of firms around the world.
Mr. Yarashi, of Softex which has been a customer of Atradius for
a decade, added:

"Atradius is always opening up limits for new customers for us.
For instance, when I had the opportunity to supply a multimillion
pound turnover company, I wanted to ensure I could supply them
with whatever they needed -- with the right protection.  Atradius
gave me a large credit limit and we could start doing business
immediately.  That year, we turned over รบ1m of business with that
company; Atradius played a major role in our business' success.
I would always take the opinion of Atradius whether to supply a
customer as they can advise if I'm likely to get paid or not --
and I don't want to take a hit.  They help me decide where to do
business and where not to do business."

Kiran Yarashi has further appreciated the support extended by
long term dedicated Account Manager - Claire Bowen who understood
his business and extended maximum support.  Adjusting the policy
premiums, extending maximum credit periods, quick and positive
support for credit limits for customers where business was
possible are some of the instances.

This kind of an excellent understanding of the client's business
by this dedicated manager helped Softex to sail through difficult

TRAVELEX HOLDINGS: S&P Lowers CCR to 'B-', Outlook Stable
S&P Global Ratings lowered its corporate credit rating on U.K.-
based foreign exchange services provider Travelex Holdings Ltd.
to 'B-' from 'B'.  The outlook is stable.

At the same time, S&P lowered the issue rating on Travelex's
GBP350 million senior secured notes due in 2018 to 'B-' from 'B'.
S&P's recovery rating on the notes is unchanged at '4',
indicating its expectation of recovery in the higher half of the
30%-50% range in the event of a payment default.

S&P also lowered its issue rating on the GBP90 million super
senior revolving credit facility (RCF) to 'B+' from 'BB-'.  The
recovery rating remains at '1', indicating S&P's expectation of
very high recovery (90%-100%) in a default scenario.

The downgrades reflect S&P's view that Travelex faces a number of
business challenges that will result in material EBITDA
contraction and significantly negative free operating cash flows
(FOCF), in the current financial year.  S&P anticipates a degree
of recovery in 2017, but are uncertain that such recovery will
sustain metrics consistent with a higher rating level.

In the six months to June 30, 2016, Travelex reported a 58% drop
in core group EBITDA (before exceptional items) due to lower
wholesale banknote shipments to Nigeria resulting from the
imposition of capital controls, continued challenging conditions
in Brazil, the impact of terrorist attacks in Europe, and
increased investments in the group's digital platforms.  S&P sees
these factors continuing, to varying degrees, into the second
half of the year, which, in S&P's view, limits the visibility on
the recovery that Travelex predicts in 2017.  Positively, S&P
expects the company to benefit from a weaker pound sterling
through higher inbound traffic to the U.K. and revenues from U.K.
value-added tax refunds.  A lower sterling also improves the
translation of profits for Travelex.

Travelex's financial risk profile is constrained by high debt,
consisting of GBP347 million in senior secured notes, a GBP90
million super senior RCF, and GBP681 million in payment-in-kind
(PIK) notes and non-cash-pay preferred shares, all at the
restricted group, as defined in the bond documentation.  There is
also a $490 million cash-pay loan at BRS Ventures & Holdings Ltd.
(BRSV), Travelex's holding company.

"As a result of EBITDA contraction, we forecast that our key
measure of reported EBITDA interest coverage at the restricted
group (including restructuring costs but excluding exceptional
items) will fall to about 1.5x in 2016, compared with our
previous forecast of about 2.0x.  We exclude interest on the debt
at BRSV from our calculation, because we understand that the
upstreaming of dividends is currently restricted.  We also
anticipate a greater drop in FOCF in 2016 than we previously
expected, as lower operating cash flows and increased investment
in digital will be compounded by a one-time working capital
outflow of about GBP35 million.  This will result from the change
in terms of a key bank notes supplier, and will only partially be
offset by new alternative supply arrangements," S&P said.

S&P's revision of Travelex's business risk profile to weak from
fair reflects the pressures on Travelex's profitability, with the
core group EBITDA margin before exceptional items declining to 4%
in first half of 2016, from 9% in the first half of 2015.  The
business risk profile also reflects Travelex's exposure to the
cyclical travel industry, the decreasing share of cash used by
travelers, and the complex regulated environment in which
Travelex operates.

These business risk weaknesses are partly offset by the company's
position as the largest nonbank provider of travel money
worldwide, its product and geographic diversification, and strong
franchise, coupled with favorable long-term trends for air travel

In S&P's base case, it assumes:

   -- Mid-single-digit revenue growth, including the opening of
      new stores and ATMs, and an increase in outsourcing

   -- A four-to-five percentage point decline in the core group
      EBITDA margin in 2016, excluding exceptional expenses, due
      to lower wholesale shipments to Nigeria, declining activity
      in Brazil, higher investment in digital, and lower retail
      volumes due to European terror attacks.  S&P anticipates
      stable to modestly improving EBITDA margins from 2017

   -- GBP8 million in exceptional expenses in 2016 related to the
      sale of Travelex to Dr. Shetty in 2015.

   -- Working capital requirement in 2016 of about GBP50 million,
      of which GBP35 million is a one-time outflow related to the
      change in terms of a key bank notes supplier, partly offset
      by new alternative supply arrangements.  Disposal proceeds
      of GBP32 million in 2016 from the sale of Currency Select.

   -- Capital expenditures (capex) of about GBP30 million in 2016
      and GBP20 million in 2017.

   -- No dividend payments to shareholders.

Based on these assumptions, S&P arrives at these credit measures:

   -- Adjusted debt to EBITDA of about 9x in 2016 and 8x in 2017,
      including non-cash-pay shareholder loans and preferred
      shares of about GBP640 million, and the holding company's
      debt of $490 million.  Unadjusted EBITDA cash interest
      coverage at the restricted group of about 1.5x in 2016 and
      2x in 2017.  S&P uses reported coverage ratios because its
      lease adjustments result in artificially improved metrics
      due to the importance of short-term lease commitments.

   -- S&P's forecast of FOCF after exceptional items at about
      negative GBP65 million in 2016 and positive GBP15 million
      in 2017.

The stable outlook reflects S&P's opinion that Travelex's
operating performance will progressively stabilize in the next 12
months, and that EBITDA in 2017 will moderately recover.  S&P
expects Travelex will report adjusted debt-to-EBITDA in 2016 of
about 9x (including shareholder loans and holding company debt),
and reported EBITDA cash interest coverage at the restricted
group of about 1.5x (or about 2x on an adjusted basis, including
the effect of operating leases).  S&P also forecasts that FOCF
will be materially negative in 2016 and broadly neutral in 2017,
and that liquidity will stay adequate.

S&P could lower the ratings if Travelex's earnings and FOCF
deteriorated beyond S&P's current expectations, for example due
to the loss of important wholesale contracts or a further
deterioration of the geopolitical environment, resulting in
increased leverage such that S&P no longer considered the capital
structure to be sustainable.  S&P could also lower the ratings if
liquidity weakened, or if Travelex upstreamed cash to the holding

An upgrade would require Travelex's operating performance to
recover more strongly and quickly than S&P currently expects,
with a broad based recovery in key markets and all business
lines, resulting in EBITDA margins before exceptional items of
clearly and sustainably in the double digits, and sustainably
neutral-to-positive FOCF.  An upgrade would also be contingent on
leverage being at least stable.


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, Julie Ann L. Toledo, Ivy B. Magdadaro, and
Peter A. Chapman, Editors.

Copyright 2016.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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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,
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