/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/180824.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, August 24, 2018, Vol. 19, No. 168 Headlines G R E E C E AELOS SA: Fitch Raises Rating on Floating Rate Notes to 'BB-' ALPHA BANK: Fitch Puts 'BB-' Mortgage Covered Bond Rating on RWP I R E L A N D BRADLEY PHARMACY: High Ct Confirms Appointment of PwC as Examiner HOMEBASE: Plans to Close Three of 11 Irish Stores Under CVA N E T H E R L A N D S STEINHOFF INTERNATIONAL: Ex-CFO May Have to Appear in Parliament R U S S I A CONFIDENCE BANK: Liabilities Exceed Assets, Assessment Shows OK BANK: Bankruptcy Hearing Scheduled for August 29 U N I T E D K I N G D O M CAMBRIDGE ANALYTICA: Facebook Users Seek Information on Finances OFFICE OUTLET: Enters Into CVA, Shoosmiths Serves as Advisers X X X X X X X X * BOOK REVIEW: Crafting Solutions for Troubled Businesses ********* =========== G R E E C E =========== AELOS SA: Fitch Raises Rating on Floating Rate Notes to 'BB-' ------------------------------------------------------------- Fitch Ratings has placed nine Greek structured finance tranches on Rating Watch Positive (RWP) and upgraded Aeolos S.A.'s floating rate notes. KEY RATING DRIVERS Sovereign Upgrade The rating actions follow the upgrade of Greece's Long-Term Issuer Default Rating (IDR) to 'BB-'/Stable from 'B' and the revision of its Country Ceiling to 'BBB-' from 'BB-'. Fitch may upgrade the tranches placed on RWP after a detailed analysis of each transaction's current portfolio, and after calibrating credit assumptions up to the new Country Ceiling, which is also the maximum achievable rating for structured finance transactions in Greece. Aeolos S.A. Credit-linked to Sovereign Rating Aeolos S.A.'s floating-rate notes are linked to the Greek sovereign IDR due to the unconditional and irrevocable undertaking by the Hellenic Republic to provide any shortfall amounts due by the issuer on the notes and expenses. As a result, the upgrade of the notes to 'BB-'/Stable reflects the August 2018 action on the Greek sovereign. RATING SENSITIVITIES Fitch may upgrade the tranches placed on RWP after a detailed analysis of the current portfolio of each transaction, and after calibrating credit assumptions up to the new Country Ceiling that is also the maximum achievable rating for structured finance transactions in Greece. Changes to Greece's sovereign rating could affect the rating of Aeolos's floating-rate notes. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has not conducted any checks on the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. SOURCES OF INFORMATION Not applicable MODELS Not applicable Fitch has taken the following rating actions: Estia Mortgage Finance Plc Class A (XS0220978737): 'BB-sf'; placed on RWP Class B (XS0220978901): 'BB-sf'; placed on RWP Estia Mortgage Finance II Plc Class A (XS0311458052): 'BB-sf'; placed on RWP Grifonas Finance No. 1 Plc Class A (XS0262719320): 'BB-sf'; placed on RWP Class B (XS0262719759): 'BB-sf'; placed on RWP Class C (XS0262720252): 'BB-sf'; placed on RWP Kion Mortgage Finance Plc Class A (XS0275896933): 'BB-sf'; placed on RWP Class B (XS0275897311): 'BB-sf'; placed on RWP Class C (XS0275897741): 'BB-sf'; placed on RWP Aeolos S.A. Floating rate notes (XS0140322743): upgraded to 'BB-' from 'B'; Outlook Stable ALPHA BANK: Fitch Puts 'BB-' Mortgage Covered Bond Rating on RWP ---------------------------------------------------------------- Fitch Ratings has placed the 'BB-' ratings of the Greek mortgage covered bonds programmes of Alpha Bank AE (RD/RD/ccc+), National Bank of Greece S.A. (NBG, RD/RD/ccc+) under its Programme I (NBG I) and Programme II (NBG II) and Piraeus Bank S.A. (RD/RD/ccc) on Rating Watch Positive (RWP). KEY RATING DRIVERS Sovereign Upgrade The rating actions follow the upgrade of Greece's Sovereign Long- Term Issuer Default Rating (IDR) to 'BB-' from 'B' and Country Ceiling to 'BBB-' from 'BB-'. Fitch will resolve the RWP upon the publication of new assumptions for Greek residential mortgages up to the 'BBB-' rating scenario, which is the new Country Ceiling and the maximum achievable for Greek covered bonds. Overcollateralisation (OC) Buffers Each covered bond programme could be upgraded up to 'BBB-' if the 25% contractual OC is enough to support timely payments above the covered bonds rating floors, given by each issuer's Viability Rating (VR) as adjusted by the IDR uplift. This outcome would imply that Fitch will start factoring a number of notches represented by each programmes' payment continuity uplift (PCU), as the programmes benefit from dedicated liquidity arrangements designed to mitigate cash flow stresses upon issuer default. Alpha's and NBG's covered bonds could be upgraded to 'BB' if the 25% contractual OC is sufficient to compensate for the cover pool stressed credit losses under the new rating. At present, the estimated credit losses under a 'BB-' stress scenario are 8.2% (Alpha), 20.3% (NBG I) and 6.5% (NBG II). Currently, the unchanged 'BB-' breakeven OC for the programmes are derived from the cover pools' stressed credit losses: 8% (Alpha), 20.5% (NBG I), 6.5% (NBG II) and 15.5% (Piraeus, from a 15.6% credit loss in a 'BB-' stress scenario). IDR Uplift The unchanged IDR uplift of two notches above the corresponding VR reflects Greek covered bonds' exemption from bail-in and the low risk of undercollateralisation in a bank resolution scenario. As the banks' Long-Term IDRs remain at 'Restricted Default' (RD), Fitch uses the corresponding VR as the starting point for its covered bond rating analysis. PCU The PCU is currently not a driver for the covered bonds' ratings, as the 'BB-' rating is achievable via the assigned IDR uplift and recovery uplift. The PCU is unchanged at six notches for the soft bullet programmes of Alpha and NBG I and eight notches for the conditional pass-through covered bonds of NBG II and Piraeus. The assessment also considers the protection for interest payments of at least three months. RATING SENSITIVITIES All else being equal, an upgrade up to 'BBB-' could be possible if the 25% contractual OC is enough to support timely payments above the rating floor of each programme, which are 'B' for Alpha and NBG, and 'B-' for Piraeus. For Alpha and NBG, an upgrade to 'BB' is possible if the contractual OC offsets the corresponding credit losses in a 'BB' rating scenario. The Fitch breakeven OC for the covered bond ratings will be affected, among others, by the profile of the cover assets relative to outstanding covered bonds, which can change over time, even in the absence of new issuance. Therefore the breakeven OC to maintain the covered bond rating cannot be assumed to remain stable over time. ============= I R E L A N D ============= BRADLEY PHARMACY: High Ct Confirms Appointment of PwC as Examiner ----------------------------------------------------------------- Aodhan O Faolain at Independent.ie reports that the High Court has confirmed the appointment of an examiner to the Bradley Pharmacy Group, which has debts of approximately EUR24 million. According to Independent.ie, Ken Tyrell of PwC was confirmed as examiner to the various companies in the group, which employs 139 people and operates several pharmacies in Counties Louth, Meath, Monaghan, Dublin, Wicklow and Kerry, by Mr Justice Denis McDonald on Aug. 20. The judge said there were no objections by any creditors to the confirmation of Mr Tyrell, who now has 100 days to come up with an arrangement to ensure the group's survival, and that there had been several expressions of interest in the group by potential investors, Independent.ie relates. However, the judge, as cited by Independent.ie, said there was a failure to disclose relevant matters and a lack of candour shown by Brian Pagni -- who is a director of the companies within the group -- to the court when the group applied for Mr Tyrell's appointment as the examiner. The judge said he was not satisfied with Mr. Pagni's explanations of what was alleged and said there is a duty on persons to fully disclose all relevant matters when seeking orders including the protection of the courts from their creditors, Independent.ie notes. However, given the expressions of interest and the number of jobs involved the judge said he was prepared to allow the examinership proceed, Independent.ie relays. According to Independent.ie, he said the examiner, when putting together a scheme of arrangement with the creditors, will have to consider what future role Mr Pagni will play in the management of the group. The judge welcomed that Mr. Tyrell would investigate the matters of concern raised by the creditors at the Aug. 20 hearing, Independent.ie discloses. HOMEBASE: Plans to Close Three of 11 Irish Stores Under CVA ----------------------------------------------------------- Mark Paul at The Irish Times reports that Homebase plans to close three of its 11 Irish stores as part of a wider plan to close 42 of its 241 stores in Britain and Ireland. It also plans to cut as many as 1,500 jobs as the struggling home-improvement chain seeks to shore up performance, The Irish Times notes. The retailer plans to close the stores by early 2019 under a company voluntary arrangement (CVA), The Irish Times relays, citing a statement on Aug. 14. The three Irish stores listed for closure include two outlets in west Dublin -- Fonthill and the Naas Road -- and one in Limeric, The Irish Times states. Another casualty of the UK's demanding retail sector, Homebase has suffered from a reduction in customer spending and confidence, The Irish Times relates. Australian home-improvement company Wesfarmers purchased the chain for GBP340 million in 2016, but the business lost more than GBP600 million over two years, The Irish Times recounts. Restructuring company Hilco Capital LP bought the group for a pound sterling in May, The Irish Times discloses. The company, as cited by The Irish Times, said it currently employs about 11,000 people, and would try to redeploy employees within the business where possible. Turnaround specialist Alvarez and Marsal will handle the CVA for Homebase, and has consulted with the property owners, according to the statement, according to The Irish Times. ===================== N E T H E R L A N D S ===================== STEINHOFF INTERNATIONAL: Ex-CFO May Have to Appear in Parliament ---------------------------------------------------------------- Janice Kew at Bloomberg News reports that Steinhoff International Holdings NV former Chief Financial Officer Ben La Grange could be legally ordered to appear before a South African parliamentary committee after declining to attend a scheduled hearing this week. The finance committee said in a statement on Aug. 21 the severity of Steinhoff's accounting crisis and subsequent impact on public- sector pension funds requires Mr. La Grange to be held to account, Bloomberg relates. It's requested the Speaker's office to issue a subpoena immediately for the former CFO to answer questions at a parliamentary briefing on Aug. 29, Bloomberg discloses. Mr. La Grange worked under Steinhoff ex-Chief Executive Officer Markus Jooste, who quit when Steinhoff reported accounting irregularities that triggered a share price collapse in December, Bloomberg notes. The ex-CFO stepped down the following month, but has remained an employee at the owner of Conforama in France and Mattress Firm in the U.S. to help repair the company's finances, Bloomberg recounts. The committee, as cited by Bloomberg, said Mr. La Grange won't attend next week's hearing because his lawyer is unavailable. The hearing was initially set for Aug. 22, but was postponed because Steinhoff representatives are at a court hearing in the Netherlands instead, Bloomberg states. Steinhoff International Holdings NV's registered office is located in Amsterdam, Netherlands. =========== R U S S I A =========== CONFIDENCE BANK: Liabilities Exceed Assets, Assessment Shows ------------------------------------------------------------ The provisional administration of CB Confidence Bank LLC (hereinafter, the Bank), appointed by Bank of Russia Order No. OD-937, dated April 13, 2018, due to the revocation of its banking license, in the course of examination of the Bank's financial standing revealed that the Bank's management and owners had executed transactions aimed at siphoning off assets by issuing loans to borrowers, including companies affiliated with the owners, with dubious solvency and not engaged in real business activities. The provisional administration estimates the value of the Bank's assets to be no more than RUR3.2 billion, whereas its liabilities to creditors exceed RUR4.5 billion. On July 13, 2018, the Arbitration Court of the Kostroma Region recognized the Bank as bankrupt. The state corporation Deposit Insurance Agency was appointed as a receiver. The Bank of Russia submitted the information on the financial transactions bearing the evidence of criminal offence conducted by the Bank's executives to the Prosecutor General's Office of the Russian Federation, the Ministry of Internal Affairs of the Russian Federation and the Investigative Committee of the Russian Federation for consideration and procedural decision making. The current development of the bank's status has been detailed in a press statement released by the Bank of Russia. OK BANK: Bankruptcy Hearing Scheduled for August 29 --------------------------------------------------- The provisional administration to manage PJSC OK Bank (further referred to as the Bank) as appointed by Bank of Russia Order No. OD-1329, dated May 25, 2018, following banking license revocation, conducted an investigation of the Bank's financial standing and identified that the Bank's management replaced liquid assets with low-liquid securities. Such actions resulted in up to RUR3.5 billion of financial damage. Also, the provisional administration encountered obstruction of its operations from the Bank's management that failed to pass over to the provisional administration part of the originals of credit agreements concluded between the bank and its borrowers, which makes it impossible to recover the debt in court. The provisional administration estimates the value of the Bank's assets to be under RUR1.9 billion, whereas its liabilities to creditors amount to RUR7.6 billion, including RUR5.9 billion to individuals. The Bank of Russia submitted a claim to the Court of Arbitration of the Yaroslavl Region to declare the bank bankrupt. The hearing is scheduled for August 29, 2018. The Bank of Russia sent the information on the financial transactions bearing the evidence of criminal offence, conducted by the Bank's executives, to law enforcement authorities of the Russian Federation for consideration and procedural decision making. The current development of the bank's status has been detailed in a press statement released by the Bank of Russia. =========================== U N I T E D K I N G D O M =========================== CAMBRIDGE ANALYTICA: Facebook Users Seek Information on Finances ---------------------------------------------------------------- Tiffany Kary at Bloomberg News reports that Facebook users who say their personal data was misused, potentially to distort the last U.S. election, will have to wait to see if they can wring more information from Cambridge Analytica, the disappearing company that played a key role in the drama. The political consulting firm is winding down both in the U.K., its home country, and in a New York Chapter 7 bankruptcy case, Bloomberg discloses. Some of the dozens of Facebook users who sued both Facebook and Cambridge Analytica in U.S. district court appeared in the bankruptcy as "data breach plaintiffs" to ask if they can gather more information about the defunct company's finances, Bloomberg relates. According to Bloomberg, U.S. Bankruptcy Judge Sean Lane said in Manhattan court on Aug. 21 that they'll have to wait until September to hear his answer, when more information will hopefully become clear. Meanwhile, he entered an order in their favor to preserve any records, Bloomberg notes. At stake in the data breach plaintiff's pending request is whether there's any value to claim if they succeed in their lawsuits, which are still in early stages, Bloomberg states. One topic of interest, the data breach group says, is Emerdata Ltd., a company that bought 89.5% in Cambridge Analytica from Chief Executive Officer Alexander Nix and Cambridge Analytica affiliates just before the bankruptcy, according to Bloomberg. Emerdata, said to be under court administration, is also a figure of interest to British lawmakers, who last month recommended it be investigated amid concerns that Kremlin-backed groups used social media to influence elections, Bloomberg relays. The data breach group represents only some Facebook members who have sued, according to Bloomberg. Cambridge Analytica, Facebook Inc. and a trustee overseeing the case all filed objections to the data breach group's requests in bankruptcy court, Bloomberg recounts. The bankruptcy case is Cambridge Analytica LLC, 18-11500, U.S. Bankruptcy Court, Southern District of New York (Manhattan). Cambridge Analytica LLC is a US-based Limited Liability Corporation which has a service agreement with and the exclusive right to offer services in North America on behalf of SCL Elections Ltd. SCL is a privately owned English data analytics company based in London that uses novel data analysis to make predictions about the behavior of individuals. Cambridge Analytica LLC filed a chapter 7 petition on May 17, 2018, in the U.S. Bankruptcy Court for the Southern District of New York. The Debtor estimates its assets at $100,000 to $500,000 and its liabilities at $1 million to $10 million. OFFICE OUTLET: Enters Into CVA, Shoosmiths Serves as Advisers ------------------------------------------------------------- National law firm Shoosmiths has advised leading stationary chain Office Outlet on its Company Voluntary Arrangement (CVA), which has been announced on Aug. 21. As part of the CVA, Office Outlet proposes to close four stores this year, while keeping its online service and the remaining 95 stores open. Office Outlet was given legal advice by Shoosmiths corporate partner James Keates -- james.keates@shoosmiths.co.uk -- and senior associate Charles Williams -- charles.williams@shoosmiths.co.uk. It is the seventh retail CVA Shoosmiths has advised on in under two years. Mr. Keaes said: "There is no shying away from how difficult the retail landscape is for many at the moment, with many household names needing to significantly change the way their businesses are structured. "Office Outlet has made significant strides but this CVA will allow it to reduce further costs, and to restore long-term profitability so it can continue to service its customers." Chris Yates, Office Outlet CEO, said: "Shoosmiths has been invaluable in helping us through the terms of this CVA, through discussions with our key landlords and strategic partners. "The operational restructuring that has already taken place at Office Outlet has seen a big improvement, but the challenging retail environment has left us with no option other than to restructure our fixed costs so we can continue in the long-term. "This will give greater security for our staff, suppliers, landlords, customers and members -- and we are confident our company will be in excellent shape after this process has finished." A CVA meeting will be held on Sept. 6. =============== X X X X X X X X =============== * BOOK REVIEW: Crafting Solutions for Troubled Businesses --------------------------------------------------------- Authors: Stephen J. Hopkins and S. Douglas Hopkins Publisher: Beard Books Hardcover: 316 pages List Price: US$74.95 Own your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587982870/internetbankrup t Crafting Solutions for Troubled Businesses: A Disciplined Approach to Diagnosing and Confronting Management Challenges, by Stephen J. Hopkins and S. Douglas Hopkins, will change the way you think about the problems of businesses in distress. The book will be of great value to turnaround management practitioners, lenders facing loan covenant defaults, Board Members of struggling companies who need a basis for evaluating and assisting their management to realistically confront problems, and private equity firm management facing problems with portfolio companies or seeking to identify turnaround investment opportunities. ********* 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 2018. 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. * * * End of Transmission * * *