/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/170830.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, August 30, 2017, Vol. 18, No. 172 Headlines G E R M A N Y AIR BERLIN: Bidders Have Until September 15 to Submit Offers AIR BERLIN: Lufthansa Aims to Snap Up 17 Long-Haul Aircraft AIR BERLIN: Germania Seeks to Block German Gov't Bridge Loan ALNO AG: Board Applies for Annulment of Self-Administration RHEINMETALL AG: Moody's Alters Outlook to Pos. & Affirms Ba1 CFR G R E E C E FREESEAS INC: Narrows Net Loss to $20.5 Million in 2016 I R E L A N D ONE HORIZON: Receives Non-compliance Notice from NASDAQ I T A L Y CASAFORTE SRL: Fitch Raises Ratings on Two Note Classes to 'Bsf' MONTE DEI PASCHI: Italy Faces More Than 30% Paper Loss on Rescue K A Z A K H S T A N NOMAD LIFE: A.M. Best Assigns 'B-(fair)' Fin. Strength Rating SALEM INSURANCE: A.M. Best Cuts Fin. Strength Rating to C(Weak) R U S S I A MK-HOLDING LLC: S&P Withdraws B-/B CCR on Lack of Information T A J I K I S T A N TAJIKISTAN: Moody's Assigns B3 Issuer Rating, Outlook Stable TAJIKISTAN: S&P Assigns 'B-/B' Sovereign Credit Ratings U N I T E D K I N G D O M SEADRILL LTD: Investors Likely to Receive No Recovery for Shares ********* ============= G E R M A N Y ============= AIR BERLIN: Bidders Have Until September 15 to Submit Offers ------------------------------------------------------------ Ilona Wissenbach at Reuters reports that bidders for assets of insolvent German airline Air Berlin plc have until Sept. 15 to submit their offer. "Air Berlin will complete the investor process quickly," Reuters quotes a spokesman for Air Berlin as saying in an e-mailed statement on Aug. 29. People familiar with the matter had told Reuters on Aug. 28 that the buyers of Air Berlin's assets would likely be picked by mid- September, as the race for the carrier's coveted take-off and landing slots in Germany heats up. According to Reuters, sources familiar with the negotiations have said Lufthansa, Thomas Cook's Condor, easyJet and Ryanair are among airlines interested in the carrier's business or parts of it. About Air Berlin In operation since 1978, Air Berlin PLC & Co. Luftverkehrs KG is a global airline carrier that is headquartered in Germany and is the second largest airline in the country. In 2016, Air Berlin operated 139 aircraft with flights to destinations in Germany, Europe, and outside Europe, including the United States, and provided passenger service to 28.9 million passengers. Within the first seven months of 2017, the Debtor carried approximately 13.8 million passengers. It employs approximately 8,481 employees. Air Berlin is a member of the Oneworld alliance, participating with other member airlines in issuing tickets, code-share flights, mileage programs, and other similar services. Air Berlin has racked up losses of about EUR2 billion over the past six years, and has net debt of EUR1.2 billion. On Aug. 15, 2017, Air Berlin applied to the Local District Court of Berlin-Charlottenburg, Insolvency Court for commencement of an insolvency proceeding. On the same day, the German Court opened preliminary insolvency proceedings permitting the Debtor to proceed as a debtor-in-possession, appointed a preliminary custodian to oversee the Debtor during the preliminary insolvency proceedings, and prohibited any new, and stayed any pending, enforcement actions against the Debtor's movable assets. To seek recognition of the German proceedings, representatives of Air Berlin filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 17-12282) on Aug. 18, 2017. The Hon. Michael E. Wiles is the case judge. Thomas Winkelmann and Frank Kebekus, as foreign representatives, signed the petition. Madlyn Gleich Primoff, Esq., at Freshfields Bruckhaus Deringer US LLP, is serving as counsel in the U.S. case. AIR BERLIN: Lufthansa Aims to Snap Up 17 Long-Haul Aircraft ----------------------------------------------------------- Ilona Wissenbach, Peter Maushagen, and Alexandra Schwarz-Goerlich at Reuters report that German airline Lufthansa aims to take on around a dozen of Air Berlin's 17 long-haul aircraft and their transatlantic routes in a carve-up of the insolvent carrier. At least half a dozen bidders for Air Berlin's assets are now racing to submit offers by a mid-September deadline, with around 140 leased aircraft and valuable take-off and landing slots in Germany up for grabs, Reuters notes. According to Reuters, a person familiar with the matter on Aug. 29 said Lufthansa, which currently does not offer long-haul flights from Berlin, is especially interested in the carrier's routes to U.S. cities including New York. Lufthansa, which has the German government's backing to take over major parts of Air Berlin, could acquire as many as 90 of its planes, including 38 aircraft it is already leasing from the airline and its leisure unit Niki, another source told Reuters this month. Such a deal, seen valued in the low hundreds of millions of euros, could see up to 3,000 of Air Berlin's workers move to Lufthansa, Reuters relays, citing the person familiar with the matter as saying on Aug. 29. About Air Berlin In operation since 1978, Air Berlin PLC & Co. Luftverkehrs KG is a global airline carrier that is headquartered in Germany and is the second largest airline in the country. In 2016, Air Berlin operated 139 aircraft with flights to destinations in Germany, Europe, and outside Europe, including the United States, and provided passenger service to 28.9 million passengers. Within the first seven months of 2017, the Debtor carried approximately 13.8 million passengers. It employs approximately 8,481 employees. Air Berlin is a member of the Oneworld alliance, participating with other member airlines in issuing tickets, code-share flights, mileage programs, and other similar services. Air Berlin has racked up losses of about EUR2 billion over the past six years, and has net debt of EUR1.2 billion. On Aug. 15, 2017, Air Berlin applied to the Local District Court of Berlin-Charlottenburg, Insolvency Court for commencement of an insolvency proceeding. On the same day, the German Court opened preliminary insolvency proceedings permitting the Debtor to proceed as a debtor-in-possession, appointed a preliminary custodian to oversee the Debtor during the preliminary insolvency proceedings, and prohibited any new, and stayed any pending, enforcement actions against the Debtor's movable assets. To seek recognition of the German proceedings, representatives of Air Berlin filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 17-12282) on Aug. 18, 2017. The Hon. Michael E. Wiles is the case judge. Thomas Winkelmann and Frank Kebekus, as foreign representatives, signed the petition. Madlyn Gleich Primoff, Esq., at Freshfields Bruckhaus Deringer US LLP, is serving as counsel in the U.S. case. AIR BERLIN: Germania Seeks to Block German Gov't Bridge Loan ------------------------------------------------------------ Maria Sheahan at Reuters reports that the Berlin court said on Aug. 29 German airline Germania has asked a court to block the German government from providing Air Berlin with a EUR150 million (US$180.5 million) bridge loan before the European Commission has given its approval. According to Reuters, the regional court said in a statement it would hold a hearing on the matter on Sept. 15. About Air Berlin In operation since 1978, Air Berlin PLC & Co. Luftverkehrs KG is a global airline carrier that is headquartered in Germany and is the second largest airline in the country. In 2016, Air Berlin operated 139 aircraft with flights to destinations in Germany, Europe, and outside Europe, including the United States, and provided passenger service to 28.9 million passengers. Within the first seven months of 2017, the Debtor carried approximately 13.8 million passengers. It employs approximately 8,481 employees. Air Berlin is a member of the Oneworld alliance, participating with other member airlines in issuing tickets, code-share flights, mileage programs, and other similar services. Air Berlin has racked up losses of about EUR2 billion over the past six years, and has net debt of EUR1.2 billion. On Aug. 15, 2017, Air Berlin applied to the Local District Court of Berlin-Charlottenburg, Insolvency Court for commencement of an insolvency proceeding. On the same day, the German Court opened preliminary insolvency proceedings permitting the Debtor to proceed as a debtor-in-possession, appointed a preliminary custodian to oversee the Debtor during the preliminary insolvency proceedings, and prohibited any new, and stayed any pending, enforcement actions against the Debtor's movable assets. To seek recognition of the German proceedings, representatives of Air Berlin filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 17-12282) on Aug. 18, 2017. The Hon. Michael E. Wiles is the case judge. Thomas Winkelmann and Frank Kebekus, as foreign representatives, signed the petition. Madlyn Gleich Primoff, Esq., at Freshfields Bruckhaus Deringer US LLP, is serving as counsel in the U.S. case. ALNO AG: Board Applies for Annulment of Self-Administration ----------------------------------------------------------- Reuters reports that the Board of Managing Directors of Alno AG applied for annulment of self-administration. The board will appoint Martin Hoermann as preliminary insolvency administrator of the company, Reuters discloses. According to Reuters, reorganization by way of "asset deal" has become more likely. About the ALNO Group The ALNO Group is a Germany-based kitchen manufacturer. ALNO produces a full range of kitchens for the German and international market at four international production facilities employing a total of around 1,900 members of staff. Working with over 6,000 sales partners, the ALNO Group operates in more than 64 countries around the world. In the financial year 2015, the company generated sales in the amount of EUR522 million. RHEINMETALL AG: Moody's Alters Outlook to Pos. & Affirms Ba1 CFR ---------------------------------------------------------------- Moody's Investors Service has changed the outlook on Rheinmetall AG's (Rheinmetall) Ba1 Corporate Family Rating, Ba1-PD Profitability of Default Rating, Not Prime Short-Term issuer rating and commercial paper rating, and the Ba1 senior unsecured instrument rating to positive from stable. At the same time, Moody's has affirmed these ratings. "The positive outlook reflects Moody's views that Rheinmetall's earnings will continue to improve on the back of a further strengthening in the performance of its automotive division and an ongoing recovery in defence. Moody's expects Rheinmetall's improvement in earnings to be sustainable and expect this will support credit metrics more in line with an investment grade rating" says Jeanine Arnold, a Moody's Vice President - Senior Credit Officer and lead analyst for Rheinmetall. RATINGS RATIONALE Moody's rating action follows Rheinmetall's conservative management of its balance sheet over the past few years and expectations that continued earning improvements will allow key credit metrics to further strengthen over the next 12-18 months. Moody's forecasts that Rheinmetall's reported EBIT will exceed EUR410 million in 2018 (2016: EUR353 million) and projects that this will allow free cash flow/debt to reach around 5% and debt/EBITDA to fall to around 3x. Moody's rating action also reflects Moody's expectations that this earnings improvement will be sustainable because of measures taken to improve the company's operating business model and cost structure. Moody's does not expect Rheinmetall to be immune to future cyclicality, but the company's more robust operating model should limit material swings in profitability and future credit metric volatility. Both Rheinmetall's divisions -- automotive and defence -- have been exposed to cyclicality, which have materially and negatively affected credit metrics in the past. Rheinmetall's more robust operating business model is evidenced by the steady strengthening in the EBIT margins of both businesses. The reported EBIT margin in the company's automotive division now exceed the company's long-term target of 8% (from - 12% in 2009 and 6.5% in 2011) due to the company's focus on higher value products in its Mechatronics division and the right- sizing of capacity. There has also been a strengthening in the company's defence division following the company's overhaul of its contract negotiation and execution practices. Compared with the negative margins of 3% generated back in 2014, defence margins are now approaching 5%. Furthermore, the company has proven over the last few years that it is committed to the generation of free cash flow and has undertaken measures such as dividend cuts and equity raises to support its balance sheet. Moody's expects Rheinmetall will continue to conservatively manage its balance sheet in the event future credit metrics come under pressure. However, while earnings visibility through 2017 is good, Moody's believes it is important to have greater certainty with regards to 2018 and 2019 earnings before considering further positive rating action. Q2 2017 appeared to show some slowdown in global light vehicle production, and if this continues through 2018, this could negatively affect Rheinmetall's automotive earnings. Moody's would expect some margin dilution as a result of reduced fixed cost absorption, but would expect growth to remain supported by the company's ability to expand revenues in excess of global LV production and for margins to still benefit from the company's focus on higher value products. Compared with industry peers Rheinmetall also has significant exposure to the production of gasoline and especially diesel combustion engines. Moody's does not expect Rheinmetall to be materially affected by this exposure in the short-term, but 2018 will prove insightful as the share of Alternative Fuel Vehicles (AFVs) begins to ramp up as a proportion of the global auto market. In defence, Moody's expects that higher military spending will support revenue growth but Rheinmetall's earnings stability is highly dependent on further margin improvement over the next few years. The key driver will be stronger margins in vehicle systems, which comprises 25% of turnover and around 50% of Rheinmetall's order backlog as at H1 2017. Given the significant de-risking of some of its larger vehicle system contracts, there should be further scope to improve margins over the next 12-18 months, but as at the 12-month period to H1 2017 the reported EBIT margins of the vehicle system division were still low at 3.2%. RATIONALE FOR POSITIVE OUTLOOK The positive outlook reflects Rheinmetall's stronger operating performance and improving cash flow generation. Moody's expects that combined with the company's disciplined conservative financial policy, this should allow key credit metrics to strengthen further over the next 12-18 months. Moody's also expects Rheinmetall will maintain a god liquidity profile. Moody's recognizes some risks associated with the transition towards electric vehicles, including the potential for this to require more R&D spending. This could have a negative effect on the company's operating model and business profile, but Moody's expects the risks to be over the longer-term, which provides Rheinmetall with some time to adapt its product portfolio. WHAT COULD CHANGE THE RATING UP/DOWN Moody's could upgrade Rheinmetall if Debt/EBITDA trends towards 3.0x, RCF/net is greater than 25% and FCF/Debt is greater than 5% on a sustainable basis. Rheinmetall tends to maintain a degree of excess cash on balance sheet, therefore, Moody's would always consider gross leverage metrics in the context of Rheinmetall's high cash balances. Moody's could downgrade Rheinmetall if Debt /EBITDA exceeds 4.0x, RCF/net debt falls below 15% as a result of a weaker operating performance and/or material debt-funded acquisitions. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. =========== G R E E C E =========== FREESEAS INC: Narrows Net Loss to $20.5 Million in 2016 ------------------------------------------------------- Freeseas, Inc., filed with the Securities and Exchange Commission its annual report on Form 20-F reporting a net loss of US$20.51 million on US$506,000 of operating revenues for the year ended Dec. 31, 2016, compared to a net loss of US$52.94 million on US$2.30 million of operating revenues for the year ended Dec. 31, 2015. As of Dec. 31, 2016, Freeseas had US$2.93 million in total assets, US$36.52 million in total liabilities and a total shareholders' deficit of US$33.59 million. Fruci & Associates II, PLLC, in Spokane, Washington, issued a "going concern" opinion on the consolidated financial statements for the year ended Dec. 31, 2016, noting that the Company has been unable to obtain ongoing sources of revenue sufficient to cover cost of operations and scheduled debt repayments. Additionally, the Company has not made scheduled payments and is in violation of debt covenants associated with its bank loan, and per the loan agreement, this violation may result in acceleration of outstanding indebtedness, which would require the Company to obtain significant additional financing in order to meet obligations under the loan agreement. These factors raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 20-F is available for free at: https://is.gd/X27BAU About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A. -- http://www.freeseas.gr/-- was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. ============= I R E L A N D ============= ONE HORIZON: Receives Non-compliance Notice from NASDAQ ------------------------------------------------------- One Horizon Group, Inc., received on Aug. 22, 2017, a written notification from Nasdaq Listing Qualifications notifying the Company that it failed to comply with Nasdaq's Marketplace Rule 5550(b)(1) because the Company's stockholders' equity as of June 30, 2017, fell below the required minimum of $2,500,000 and as of Aug. 21, 2017, the Company does not meet the alternative compliance standards of market value of listed securities or net income from continuing operations for continued listing. In accordance with Nasdaq's listing requirements, the Company has until Oct. 6, 2017, 45 calendar days from the date of the notification, to submit a plan to regain compliance. If the plan is accepted, Nasdaq can grant the Company an extension of up to 180 calendar days from the date it received the notification to evidence compliance. The Company intends to promptly evaluate various courses of action to regain compliance and to timely submit a plan to Nasdaq to regain compliance with the Nasdaq minimum stockholders' equity standard. However, there can be no assurance that the Company's plan will be accepted or that if it is, the Company will be able to regain compliance. About One Horizon Ireland-based One Horizon Group, Inc., is the inventor of the patented SmartPacketTM Voice over Internet Protocol ("VoIP") platform. The software is designed to capitalize on numerous industry trends, including the rapid adoption of smartphones, the adoption of cloud based Internet services, the migration towards all IP voice networks and the expansion of enterprise bring-your- own- device to work programs. The Company designs, develops and sells white label SmartPacketTM VoIP software and services to large Tier-1 telecommunications operators. One Horizon reported a net loss of $5.54 million on $1.61 million of revenue for the year ended Dec. 31, 2016, compared to a net loss of $6.30 million on $1.53 million of revenue for the year ended in 2015. As of June 30, 2017, One Horizon had $8.83 million in total assets, $7.20 million in total liabilities and $1.63 million in total stockholders' equity. The Company's independent accountants Cherry Bekaert LLP, in Tampa, Fla., issued a "going concern" opinion in its report on the Company's consolidated financial statements for the year ended Dec. 31, 2016, stating that the Company has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. ========= I T A L Y ========= CASAFORTE SRL: Fitch Raises Ratings on Two Note Classes to 'Bsf' ---------------------------------------------------------------- Fitch Ratings has upgraded Casaforte S.r.l.'s class A and B notes due 2040 as follows: EUR1,011.2 million class A upgraded to 'Bsf' from 'B-sf'; off Rating Watch Evolving (RWE); Outlook Stable EUR157.3 million class B upgraded to 'Bsf' from 'B-sf'; off RWE; Outlook Stable The transaction is a securitisation of rental income derived from the leasing of 683 bank branches and offices in Italy. The real estate assets are let to Banca Monte dei Paschi di Siena (MPS; B/Stable) and its subsidiaries until July 2033. KEY RATING DRIVERS The upgrade follows a recent similar rating action on MPS, to which the notes are credit-linked. MPS was upgraded to 'B'/Stable from' B-'/RWE on 11 August 2017. RATING SENSITIVITIES Rating actions on MPS will result in a corresponding action on the notes. MONTE DEI PASCHI: Italy Faces More Than 30% Paper Loss on Rescue ---------------------------------------------------------------- Massimo Gaia at Reuters reports that the Italian government faces a paper loss of more than 30% on its EUR3.85 billion (US$4.54 billion) rescue of troubled lender Monte dei Paschi di Siena, according to grey-market trading in the bank's new shares. The world's oldest lender has not formally traded on the Milan bourse since December when the bank failed to raise enough capital to remove the threat of collapse, Reuters discloses. In July, Rome bailed it out, paying EUR6.49 per share for a controlling stake, Reuters recounts. According to Reuters, traders and fund managers said on Aug. 24 that Monte dei Paschi's shares were fetching between EUR4.14 and EUR4.35 in the grey market, where shareholders can sell them over-the-counter ahead of the resumption of trade on the exchange. Italy's fourth-largest lender has not set a date for lifting the trade suspension, but says it will be in the autumn, Reuters notes. According to Reuters, a price of EUR4.14 would represent a paper loss of about EUR1.39 billion for Rome on the first phase of its bailout. It has pledged to later buy out retail holders of bank bonds for EUR1.5 billion, taking its stake to as much as 70%, Reuters relays. The government, though, has said it plans to hold its shares with a long-term aim of making a profit on its investment, Reuters relates. However, some institutional investors are already looking to sell their stock on the grey market, hedging against the risk that its value could sink even further ahead of resumed trade, Reuters states. In the rescue, institutional investors who held subordinated bonds in Monte dei Paschi were forced to take losses, Reuters says. Their holdings were cancelled and instead they received shares, according to Reuters. The grey-market share price is also supported by the credit default swap market, Reuters relays, citing traders of default swaps. Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is an Italy-based company engaged in the banking sector. It provides traditional banking services, asset management and private banking, including life insurance, pension funds and investment trusts. In addition, it offers investment banking, including project finance, merchant banking and financial advisory services. The Company comprises more than 3,000 branches, and a structure of channels of distribution. Banca Monte dei Paschi di Siena Group has subsidiaries located throughout Italy, Europe, America, Asia and North Africa. It has numerous subsidiaries, including Mps Sim SpA, MPS Capital Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA. =================== K A Z A K H S T A N =================== NOMAD LIFE: A.M. Best Assigns 'B-(fair)' Fin. Strength Rating ------------------------------------------------------------- A.M. Best has assigned the Financial Strength Rating of B- (Fair) and the Long-Term Issuer Credit Rating of "bb-" to Nomad Life Insurance Company JSC (Nomad Life) (Kazakhstan). The outlook assigned to these Credit Ratings (ratings) is stable. Nomad Life is a wholly owned subsidiary of Nomad Insurance Group Limited, a non-operating holding company also domiciled in Kazakhstan. The ratings of Nomad Life reflect its adequate risk-adjusted capitalisation, volatile operating performance and established business profile in the local life insurance market. The ratings also consider Nomad Life's limited diversification and the high country risk of Kazakhstan. Nomad Life's risk-adjusted capitalisation is constrained by its relatively high net underwriting leverage, stemming mainly from its significant reserve provisions, as well as a track record of onerous dividend payments. Furthermore, the company's asset base is exposed to the high financial system risk in Kazakhstan. Nomad Life's operating performance has been positive, albeit volatile in recent years, as demonstrated by its weighted average return on equity of 71.3%, which ranged from 13.4% to 158.1% between 2012 and 2016. The company benefits from good investment income reflective of the high interest and inflation rate environment in Kazakhstan. Nomad Life's exposure to the compulsory workers' compensation segment is a negative rating factor due to the potential for large and long tail losses. This concern is exacerbated following the discontinuation of its treaty reinsurance protection in 2016, which has increased the company's net exposure to workers' compensation risks. In the first half of 2017, almost a half of Nomad Life's portfolio was derived from this segment. Nomad Life has an established business profile in Kazakhstan, with a 23% share of the local life market, measured by gross written premiums in the first half of 2017. Nonetheless, in A.M. Best's opinion, Nomad Life's relatively small size (by international standards) leaves the company susceptible to sudden changes in its operating or regulatory environment, which are typical for the Kazakh insurance market. SALEM INSURANCE: A.M. Best Cuts Fin. Strength Rating to C(Weak) --------------------------------------------------------------- A.M. Best, on August 18, 2017, downgraded the Financial Strength Rating to C (Weak) from C+ (Marginal) and the Long-Term Issuer Credit Rating to "ccc+" from "b-" of JSC Salem Insurance Company (Salem) (Kazakhstan). Concurrently, A.M. Best has placed these Credit Ratings (ratings) under review with negative implications. Previously, in mid-June 2017, A.M. Best has downgraded the Financial Strength Rating to C+ (Marginal) from C++ (Marginal) and the Long-Term Issuer Credit Rating to "b-" from "b" of JSC Salem Insurance. Concurrently, A.M. Best revised the outlooks for these Credit Ratings (ratings) to negative from stable. The downgrades reflect the deterioration of Salem's risk-adjusted capitalisation at year-end 2016 to a level outside of A.M. Best's expectations. This decline follows rapid premium growth in 2016 combined with further erosion of capital, despite a capital injection from company shareholders during the year. In 2016, the company grew its gross and net written premiums by 74% and 30%, respectively. Capital and surplus declined to KZT 2.1 billion, reflecting retained losses of KZT 1.4 billion, partly offset by the capital injection of KZT 240 million in 2016. The August 18, 2017 rating downgrades follow the suspension by the National Bank of Kazakhstan (NBK) of Salem's voluntary insurance licence for three months from August 4, 2017. The company has breached a number of regulatory requirements during 2017, including the solvency margin prescribed by the NBK. The action taken by the national regulator has highlighted inadequacies in the company's risk management practices, particularly in respect of operational and regulatory risks, and is likely to negatively affect Salem's profile in Kazakhstan's competitive insurance market. The ratings have been placed under review with negative implications, as A.M. Best needs to assess the implications of the regulatory action on the company's profile and its ability to continue to write insurance business in Kazakhstan. Additional regulatory action, for example full suspension or withdrawal of the company's insurance licence, or deterioration in Salem's risk-adjusted capitalisation, likely will result in further negative rating actions. =========== R U S S I A =========== MK-HOLDING LLC: S&P Withdraws B-/B CCR on Lack of Information ------------------------------------------------------------- S&P Global Ratings today withdrew its 'B-/B' long- and short-term corporate credit ratings on Russian flour and baked goods producer LLC MK-Holding (Stoylenskaya Niva), since the company decided to stop the audit of its annual IFRS financial statements. S&P is unable to continue surveillance of the rating, due to lack of sufficient information. =================== T A J I K I S T A N =================== TAJIKISTAN: Moody's Assigns B3 Issuer Rating, Outlook Stable ------------------------------------------------------------ Moody's Investors Service has assigned first-time local and foreign-currency issuer ratings of B3 to the Government of Tajikistan. The rating outlook is stable. The rating and outlook reflect Tajikistan's robust medium-term economic growth prospects, which are supported by hydropower generation, notwithstanding inherent project risks attached to the construction and operation of the Rogun HPP project. The rating also incorporates the credit challenges posed by institutions that are weak on a global scale, although progress on financial reforms and macroeconomic stability indicate some improvements. In addition, external vulnerability risks are significant as a result of low, albeit rising, foreign reserves relative to external debt. The government's fiscal position is characterised by a moderately high and rising government debt burden with limited funding sources and outstanding contingent liability risks posed by the weak banking sector. Moody's has also assigned a B1 ceiling for local-currency bonds and deposits, a B3 ceiling for foreign-currency bonds and a Caa1 ceiling for foreign-currency deposits. In addition, the short- term foreign-currency bond and deposit ceilings are "Not Prime.'' These ceilings act as a cap on the ratings that can be assigned to the obligations of other entities domiciled in the country. RATINGS RATIONALE RATIONALE FOR B3 RATING ROBUST MEDIUM-TERM GROWTH PROSPECTS SUPPORTED BY HYDROPOWER GENERATION NOTWITHSTANDING PROJECT RISKS Tajikistan has enjoyed robust real GDP growth of around 7% per annum on average in the past five years. However, very low per capita income levels and limited sectoral diversification raise the sovereign's susceptibility to economic and financial shocks. GDP growth is reliant on agriculture and aluminium exports, and remittances from Tajiks working in foreign countries, which drive domestic private consumption. In this context, the construction of the Rogun HPP project, a hydropower project, is supporting GDP growth and has the potential to significantly boost income levels. The government's National Development Strategy 2030, which aims to boost GDP growth and support diversification into manufacturing, is tied to enhancing energy supply. A shortage of domestic power, particularly during the winter months, has been a constraint on the economy's productive capacity. Once the first phase of the project is completed in 2018, the existing and planned transmission line system will allow early generation production to serve both regional and domestic markets. The increase in electricity supply would support industry, investment and exports. Tajikistan's access to markets in the Kyrgyz Republic (B2 stable), Turkmenistan (unrated) and Afghanistan (unrated) and strong demand from South Asia including through existing power purchase agreements with Pakistan (B3 stable) bolster prospects for exports of power. Risks to the project include delays to the timeline of construction, financing of equipment costs, political risks and weather-related risks. Should these risks crystallise, they could delay or diminish the economic benefits from the project, while also raising the fiscal costs associated with it. WEAK INSTITUTIONS ALTHOUGH ONGOING REFORMS AND MACROECONOMIC POLICY RESPONSES POINT TO SOME STRENGTHENING Tajikistan's institutions are weak relative to other sovereigns, as reflected in very low rankings on government effectiveness, rule of law, and control of corruption in the Worldwide Governance Indicators. Nonetheless, the National Development Strategy 2030 focuses in part on strengthening the country's institutions. Already the National Bank of Tajikistan (NBT), the central bank, and the government have taken several measures to improve the operating environment, suggesting some strengthening of the institutional framework. The measures include new laws to give the central bank greater supervisory power, the requirement that banks be more transparent, the appointment of temporary NBT management to troubled banks to strengthen governance and the conduct of asset quality reviews to evaluate potential financial risks. Despite the severe stress in the banking system, the government and central bank have maintained relative economic stability. The economy continues to grow strongly and poverty rates are falling. Tighter monetary policy, including foreign exchange controls -- such as the requirement to convert ruble-denominated remittances into local currency -- are working to support exchange rate stability. These measures are also helping to de-dollarise the economy, reducing the share of deposits in foreign currency from around 70% in 2015 to around 60% at end-2016. Tajikistan has a track record of volatile inflation. But more recently, the NBT's increases in interest rates, reserve requirements and sterilisation of the money supply have helped control inflation expectations and inflation in the past few years, notwithstanding a temporary weather-related spike in recent months. SIGNIFICANT EXTERNAL VULNERABILITY RISKS Low foreign exchange reserves relative to annual external public and private sector debt repayments point to a vulnerability to external risks. Foreign exchange reserves (excluding gold) reached $101 million in March 2017, rising significantly from $34 million in 2015. Despite this increase, foreign exchange reserves are lower than the total short-term external debt of the government and the private sector, which amounted to $1.15 billion in 2016. Reserve accumulation has been facilitated by stable foreign exchange markets and gold purchases in the last two years. The recovery in prices for key exports such as aluminium and the central bank's membership to the World Bank's reserve management program have also bolstered the foreign reserve position. Moody's expects the external environment to continue to contribute to a further accumulation of reserves, although they will likely remain very low in relation to external payment commitments. The external vulnerability risks highlighted by the ratio of short-term debt to foreign exchange reserves are somewhat mitigated by Tajikistan's relatively substantial gold reserves. At around 80%, the share of gold in total foreign reserves is the highest in the world. As of June 30, 2017, 93% of gold holdings were in the form of relatively liquid monetary gold. The potential for monetising gold bolsters Tajikistan's capacity to meet its external repayment commitments, although the value of any gold sale would be subject to fluctuations in international prices. RELATIVELY HIGH AND RISING GOVERNMENT DEBT BURDEN A moderately high and rising government debt burden also weighs on Tajikistan's credit profile. Government debt rose to 44.8% of GDP in 2016, up from 33.3% in 2015, mostly as a result of government support to the banking system. Moody's expects government borrowing to increase to finance construction of the Rogun HPP project, which will weaken the government's fiscal strength in coming years. Moody's forecasts that the government debt-to-GDP ratio will rise to about 55% to 60% in 2017-18, a relatively high level to sustain for a small economy with limited financing sources. In addition, a significant proportion of government debt is foreign-currency denominated, exposing debt servicing costs to exchange rate movements. On the other hand, debt affordability benefits from the mostly concessional nature of government debt, which has maintained debt servicing costs at low levels. Moreover, the government's accumulation of deposits at the central bank, which equate to 6.3% of GDP as of May 2017, indicates availability of a domestic pool of funding. WEAK BANKING SYSTEM WILL CONTINUE TO POSE CONTINGENT LIABILITY RISKS TO THE GOVERNMENT Banking sector weaknesses pose contingent liability risks for the government. Asset quality and liquidity related stress led to the government recapitalising the two largest banks in 2016. Still, system-wide non-performing loan (NPL) ratios -- classified as loans overdue for 30+ days -- remain high at around 40% of total loans. Although half of these problem loans relate to the two recapitalised banks, the NPL ratio for the system, even when measured by conventional standards, is high, and suggests some of the other banks could potentially require government support, particularly in the event of an unanticipated economic or external shock. Banks' asset quality challenges stem from exposure to external trade, remittance and exchange rate volatility. Moreover, with system deposits insufficient to finance loans and banks relying on wholesale markets, pressure on banks' liquidity position will persist. Nevertheless, there are positive trends in the banking system. Non-performing loan ratios are trending downward, albeit from high levels, banks are returning to profitability and recovery in remittance earnings will support household incomes and debt servicing. RATIONALE FOR STABLE OUTLOOK The stable outlook balances Tajikistan's robust medium-term economic growth prospects and implementation of reform against persistent external vulnerability risks and potential further banking sector weaknesses that would raise contingent liability risks to the government. Moody's expects construction of the Rogun HPP project to continue ahead of planned power generation in late 2018. The potential tax and export revenues from the project would bolster the government's fiscal position and the central bank's stock of foreign reserves. Moody's also expects the authorities to continue to pursue reform in the financial sector to ensure macroeconomic and financial stability. These credit positive trends are balanced by risks related to the external liquidity position and contingent liabilities related to the banking system. WHAT COULD CHANGE THE RATING UP Upward rating pressure could develop as a result of 1) the successful implementation of the Rogun HPP project that delivers increasing tax and export revenues, in turn durably boosting fiscal strength and reducing external liquidity risks, or 2) effective implementation of banking and fiscal reforms that support macroeconomic and financial stability on a sustained basis and, 3) steps to address governance weaknesses such as rule of law and control of corruption that strengthen scores on institutional quality. WHAT COULD CHANGE THE RATING DOWN Downward rating triggers could stem from 1) deterioration in the foreign reserve position that raises repayment risks on external debt obligations, or 2) significant delays or underdelivery of the Rogun dam hydropower project that leads to lower economic activity, tax receipts and foreign currency revenues than Moody's currently expects, 3) materially larger fiscal costs than Moody's currently assumes for the recapitalisation of banks and, 4) lack of progress on reform that hinders macroeconomic stability and potential foreign direct investment inflows, weakening the economy's growth potential and the balance of payments position. GDP per capita (PPP basis, US$): 3,093 (2016 Actual) (also known as Per Capita Income) Real GDP growth (% change): 6.9% (2016 Actual) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 6.1% (2016 Actual) Gen. Gov. Financial Balance/GDP: -4.9% (2016 Estimate) (also known as Fiscal Balance) Current Account Balance/GDP: -3.6% (2016 Actual) (also known as External Balance) External debt/GDP: 67.5% (2016 Actual) Level of economic development: Very Low level of economic resilience Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On June 27, 2017, a rating committee was called to discuss the rating of the Tajikistan, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutional strength/ framework, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The issuer's susceptibility to event risks has not materially changed. The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2016. The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable. TAJIKISTAN: S&P Assigns 'B-/B' Sovereign Credit Ratings ------------------------------------------------------- S&P Global Ratings, on Aug. 28, 2017, assigned its 'B-/B' long- and short-term foreign and local currency sovereign credit ratings to the Republic of Tajikistan. The outlook is stable. S&P's transfer and convertibility (T&C) assessment for Tajikistan is at 'B-'. Tajikistan is the 131st sovereign rated by S&P Global Ratings. OUTLOOK S&P said, "The stable outlook reflects our view that official lenders will continue to support Tajikistan's external financing and the government's net debt burden will remain modest. "We could take a negative rating action if pressure on Tajikistan's fiscal and/or debt profiles were to increase, for example, as a result of widening general government deficits or deeper currency devaluation. Downward pressure on the rating may also build if remittances dropped and led to wider current account deficits (CADs) than we currently anticipate. "Conversely, we could consider an upgrade if we observed a significant improvement in Tajikistan's external balances that would translate into stronger international reserves. Greater monetary policy flexibility, resulting from a more flexible exchange rate or stronger financial intermediation, in addition to the reduced dollarization of the financial system, could also support a higher rating. Lastly, stronger economic growth, resulting in higher wealth levels as measured by GDP per capita, could also result in a positive rating action." RATIONALE The ratings on Tajikistan are supported by our opinion of its resilient growth prospects, underpinned by recent progress on land and property rights and pension reforms. S&P thinks these growth prospects will outlast a series of large shocks the economy has suffered since 2013. The ratings are constrained by Tajikistan's narrow export base (primarily cotton and processed alumina), and its weak external position owing to a sizable trade deficit and a remaining reliance on workers' remittances, largely coming from the Russian Federation. At $850, Tajikistan's per capita GDP is among the lowest of all the sovereigns we rate. INSTITUTIONAL AND ECONOMIC PROFILE: Relative political stability continues under President Emomali Rahmon's leadership; per capita GDP remains low Tajikistan has been politically stable since the late 1990s, when it ended a long civil war and recovered from a substantial economic decline following the collapse of the Soviet Union S&P said, "We see this stability as centered on President Emomali Rahmon, who has ultimate decision-making power. President Rahmon is currently serving his fourth consecutive term, which ends in 2020. We believe, decision-making remains highly centralized, which can reduce policymaking predictability. In our view, the president's administration controls strategic decisions and sets the policy agenda. Given the centralized nature of political power in the country, accountability and checks and balances are weak. We do not currently see immediate risks to domestic political stability that would undermine policy predictability. Relations with Russia are constructive, the border with Afghanistan is secure, and trade and financial links with China are increasing. "We project Tajikistan's GDP per capita will remain low, at $900 on average in 2017-2020, down from $1,100 in 2014, primarily reflecting the sharp depreciation in the local currency, the Tajikistani somoni (TJS), in 2015. At the same time, we note that that real GDP per capita growth will average a relatively high 3.8% in 2017-2020, and we project continued solid real GDP growth rates over the same period. We expect real GDP growth will be supported by what we estimate will be high expected returns on basic infrastructure investment in the country, owing to its lower level of absolute productivity, alongside a stabilizing Russian economy, and a ramp up in investment from China." FLEXIBILITY AND PERFORMANCE PROFILE: Current account deficit is gradually narrowing, while S&P expects debt to peak at end-2017 S&P said, "We estimate current account receipts (CARs) fell by almost 64% between 2013 and 2016, and we do not expect them to recover to 2013 levels by 2020. The fall in Tajikistan's CARs relates to a 49.2% drop in remittances from Russia over the same time period (in U.S. dollar terms, although not in the amount of rubles being remitted, owing to the depreciation of the ruble), alongside a decline in key export prices. Remittances from Russia accounted for 70% of Tajikistan's CARs in 2016. Russia is Tajikistan's key trading partner and a source of more than 80% of workers' remittances, which accounted for 35% of GDP in 2015 and 28% of GDP in 2016. These remittances support consumption, private construction, and imports of goods and services. Over the longer term, we believe that Tajikistan will diversify its trade toward other partners, not least China. "We expect a gradual improvement in the CAD between 2017-2020 toward 4% of GDP, compared with 6% on average in 2014-2016. Imports fell sharply in 2014-2016, following the 65% devaluation of the somoni over the same period. We do not expect imports to recover to pre-2014 levels, and we forecast further declines in the somoni, which might promote export growth. Usable reserves are equivalent to two months of current account payments, which is the highest level over the past several years. We estimate Tajikistan's narrow net external debt net of liquid assets to average 83% of CARs in 2017-2020, which is a relatively high level for a developing economy. At the same time, we project gross external financing needs will consistently exceed 100% of CARs plus usable reserves. We understand that the government plans to issue a commercial debt instrument to finance the Rogun Hydropower project via a Eurobond totaling up to $1 billion (14% of GDP). Since the exact amount has not been defined yet, we have added $500 million to our calculation of public-sector external debt. "We believe that the CAD will continue to be financed by a combination of external borrowing primarily from official and multilateral sources and foreign direct investment (FDI). In 2017-2020, net FDI should average about 3.0% of GDP, given ongoing Chinese investments in a broad array of products, including in materials, aluminum, metallurgy, and retail. We assume Tajikistan will continue raising debt with official lenders, particularly to finance infrastructure needs. Risks to funding of Tajikistan's external financing needs remain, and our external analysis of Tajikistan is complicated by gaps in reported external data (such as an international investment position statement) and inconsistencies between debt stocks and flows." The National Bank of Tajikistan (NBT), the central bank, manages the somoni through market intervention and a series of exchange controls, including a crackdown on the parallel currency market. Throughout 2015, the NBT tried to avoid a sharp depreciation of the somoni, and depleted a significant portion of its foreign currency reserves (gold now accounts for over 80% of total official reserves). S&P views positively that the NBT decreased the scale of interventions in 2016, restoring its reserves to two months of current account payments while relaxing a number of constraints on foreign-exchange operations it had imposed in 2015. In 2016, consumer price inflation stood at 6.1% (compared with 5.7% in 2015) according to official statistics. Tajikistan's economy is reliant on agriculture, mineral resources, remittances from abroad, and key export prices. Given low incomes, consumption is also highly sensitive to key import prices, particularly of food and fuel. S&P projects that inflation will rise somewhat over the next few years, due to the gradual rise of the oil price, especially in somoni terms, as well as planned increases in regulated electricity tariffs. Despite some reform progress, Tajikistan remains in the "medium human development" group according to the United Nations Development Program's human development indicators (rated 129 out of 188). There are a number of infrastructure bottlenecks that the government plans to address, however, having to invest to stimulate future growth will limit the government's fiscal flexibility. S&P expects that budget deficits, as well as moderate currency depreciation -- as over 70% of debt stock is denominated in foreign currency -- will keep the annual change in general government debt at about 3% of GDP over 2018-2020, after an 11% hike in 2016 and 2017. The TJS3.32 billion (approximately $376 million) domestic bonds issuance in 2016 to recapitalize two commercial banks, and the expected bond issuance in September 2017 contributed to these hikes. The government is considering a Eurobond placement (up to $1 billion) to fund the Rogun Hydropower project at the beginning of September this year. The Ministry of Finance will issue this debt. As a result of the issues mentioned, Tajikistan's general government debt net of liquid assets will peak at over 42% of GDP in 2017 against just 22% in 2014. Despite this pronounced hike, the country's government debt as a share of GDP remains at a modest level by international standards. Nevertheless, our assessment of the government's fiscal profile includes contingent liabilities from state-owned enterprises (SOEs) and banks. SOEs account for 30% of employment and more than 40% of GDP, and they are regularly involved in quasifiscal activities. By the Tajikistan government's estimate, debt of the 18-largest SOEs (including the Talco aluminum plant, the main electricity utility, and a state railway monopoly) amounted to approximately 26% of GDP in 2016. Nonperforming loans (NPLs) made up a high 43.3% of total loans in the banking system, stemming from directed lending, largely to the SOEs. S&P notes that official NPLs have significantly increased over the past year, as the NBT has strengthened its reporting standards and overdue loans with maturity of more than 30 days are included in the NPLs. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable (see 'Related Criteria And Research'). At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. RATINGS LIST Tajikistan(Republic of) Issuer Credit Rating Foreign and Local Currency B-/Stable/B Transfer & Convertibility Assessment B- =========================== U N I T E D K I N G D O M =========================== SEADRILL LTD: Investors Likely to Receive No Recovery for Shares ---------------------------------------------------------------- Mikael Holter at Bloomberg News reports that Seadrill Ltd., the offshore driller controlled by billionaire John Fredriksen, warned investors for the first time that they could be left with nothing after a restructuring of the industry's biggest debt load. According to Bloomberg, the company said shareholders are "likely to receive minimal or no recovery for their existing shares" as it reported a second-quarter net loss on Aug. 25. Seadrill had previously only used the expression "minimal recovery", Bloomberg notes. Seadrill, formerly the crown jewel of Fredriksen's business empire, has been engaged in talks with creditors and other stakeholders for over 1 1/2 years, Bloomberg relays. The company, as cited by Bloomberg, said it expects to implement the restructuring plan -- which it repeated is likely to involve Chapter 11 proceedings -- on or before a Sept. 12 deadline set earlier. Offshore drillers have been hit especially hard by the collapse of crude prices since 2014, as oil companies slashed spending at the same time as a wave of new rigs increased competition, Bloomberg recounts. Seadrill, which rose to become the biggest offshore rig company by market value at one point, cut dividends, renegotiated contracts, delayed the delivery of new vessels and drastically reduced costs, Bloomberg discloses. But as the worst market downturn in at least a generation persisted, a wall of debt and other liabilities forced it to start a restructuring process, Bloomberg notes. According to Bloomberg, the company said it plans to raise about US$1 billion in new capital, in line with earlier signals. The plan, Bloomberg says, will also probably involve an extension of about five years on bank facilities, and a deferral of amortizations, and the impairment or conversion of bonds. "Our primary objective at the moment is concluding final negotiations on our comprehensive restructuring plan, which is at an advanced stage," Bloomberg quotes Chief Executive Officer Anton Dibowitz as saying in a statement. Seadrill reported a net loss of $143 million, in line with a $140 million estimate, Bloomberg states. About Seadrill Seadrill Limited is a deepwater drilling contractor, which provides drilling services to the oil and gas industry. It is incorporated in Bermuda and managed from London. Seadrill reported a net loss of US$155 million on US$3.17 billion of total operating revenues for the year ended Dec. 31, 2016, following a net loss of US$635 million on US$4.33 billion of total operating revenues for the year ended in 2015. Seadrill had net income of US$57 million on US$569 million of operating revenue for the three months ended March 31, 2017, compared with US$149 million of net income on US$891 million of operating revenue in the same period in 2016. "[W]e continue to believe that implementation of a comprehensive restructuring plan will likely involve chapter 11 proceedings, and we are preparing accordingly. The extension provides additional time to finalise negotiations and prepare for the necessary potential implementation filings," Seadrill said in the July 26 statement. "It is likely that the comprehensive restructuring plan will require a substantial impairment or conversion of our bonds, as well as impairment and losses for other stakeholders, including shipyards. As a result, the Company currently expects that shareholders are likely to receive minimal recovery for their existing shares." The Company's business operations remain unaffected by these restructuring efforts and the Company expects to continue to meet its ongoing customer and business counterparty obligations. "Over the past year the Company has been engaged in discussions with its banks, potential new investors, existing stakeholders and bondholders in order to restructure its secured credit facilities and unsecured bonds, and in order to raise new capital. The Company expects the implementation of a comprehensive restructuring plan will likely involve commencing schemes of arrangement in the United Kingdom or Bermuda or proceedings under Chapter 11 of the United States Bankruptcy Code," Seadrill said in May 2017 when it released its first quarter 2017 results. "Although discussions are well advanced and significant progress has been made, until such time our restructuring is completed, uncertainty remains and therefore substantial doubt exists over the Company's ability to continue as a going concern for twelve months after the date the financial statements are issued." Seadrill reported $21.31 billion in assets against $4.732 billion in current liabilities and $6.473 billion in non-current liabilities as of March 31, 2017. ********* 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. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2017. 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 Joseph Cardillo at 856-381-8268. * * * End of Transmission * * *