/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/240719.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, July 19, 2024, Vol. 25, No. 145 Headlines I R E L A N D BARINGS EURO 2024-1: S&P Assigns B- (sf) Rating to Class F Notes P O R T U G A L TRANSPORTES AEREOS: Moody's Ups CFR & Sr. Unsecured Notes to Ba3 S P A I N HIPOCAT 11: S&P Affirms 'D (sf)' Rating on Class B, C, and D Notes S W E D E N OPTIGROUP BIDCO: Moody's Affirms 'B2' CFR, Alters Outlook to Neg. S W I T Z E R L A N D CONSOLIDATED ENERGY: Moody's Cuts LT CFR to B2, Outlook Negative U N I T E D K I N G D O M ARLINGTON LONDON: Quantuma Appointed as Administrators BLETCHLEY PARK 2024-1: S&P Assigns Prelim 'CCC' Rating to X2 Notes COGEN LIMITED: Virtual Meeting of Creditors on July 31 FEATHERFOOT HIGH STREET: Opus to Lead Administration Proceedings PARAMOUNT D&B LTD: Begbies to Lead Administration Proceedings SIGNATURE LIVING BF: Leonard Curtis Appointed as Administrators SIRANE LIMITED: Interpath Named as Administrators TERM HOLDINGS: RSM UK Named as Administrators ULTROMEX LTD: RSM UK Named as Administrators X X X X X X X X [*] BOOK REVIEW: Management Guide to Troubled Companies - - - - - ============= I R E L A N D ============= BARINGS EURO 2024-1: S&P Assigns B- (sf) Rating to Class F Notes ---------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Barings Euro CLO 2024-1 DAC's class A Loan, and class A, B, C, D, E, and F notes. At closing, the issuer also issued unrated subordinated notes. The ratings assigned to the notes and loan reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes and loan through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks CURRENT S&P Global Ratings' weighted-average rating factor 2,748.45 Default rate dispersion 583.43 Weighted-average life (years) 4.69 Obligor diversity measure 112.94 Industry diversity measure 22.82 Regional diversity measure 1.29 Transaction key metrics CURRENT Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.00 Covenanted 'AAA' weighted-average recovery (%) 37.77 Covenanted weighted-average spread (%) 4.10 Covenanted weighted-average coupon (%) 5.50 Under the transaction documents, the rated notes and loan pay quarterly interest unless a frequency switch event occurs. Following this, the rated notes and loan will switch to semiannual payments. The portfolio's reinvestment period will end 4.51 years after closing. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used the EUR400 million target par amount, the covenanted weighted-average spread (4.10%), the reference weighted-average coupon (5.50%), and the covenanted weighted-average recovery rate at all rating levels as indicated by the collateral manager. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our assigned ratings are commensurate with the available credit enhancement for the class A Loan, and class A, B, C, D, E, and F notes. Our credit and cash flow analysis indicates that the available credit enhancement for the class B, C, D, E, and F notes could withstand stresses commensurate with higher ratings than those we have assigned. However, as the CLO will be in its reinvestment phase starting from closing, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to these notes. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F notes." The transaction securitizes a portfolio of primarily senior-secured leveraged loans and bonds, and is managed by Barings (U.K.) Ltd. Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit assets from being related to certain activities (non-ESG collateral obligations)." Ratings list AMOUNT CREDIT CLASS RATING (MIL. EUR) INTEREST RATE (%) ENHANCEMENT (%) A AAA (sf) 165.25 3mE + 1.45 38.00 A Loan AAA (sf) 82.75 3mE + 1.45 38.00 B AA (sf) 44.00 3mE + 2.10 27.00 C A (sf) 23.00 3mE + 2.65 21.25 D BBB- (sf) 28.00 3mE + 4.50 14.25 E BB- (sf) 18.00 3mE + 7.24 9.75 F B- (sf) 12.00 3mE + 8.93 6.75 Sub NR 34.85 N/A N/A NR--Not rated. N/A--Not applicable. 3mE--Three-month Euro Interbank Offered Rate. =============== P O R T U G A L =============== TRANSPORTES AEREOS: Moody's Ups CFR & Sr. Unsecured Notes to Ba3 ---------------------------------------------------------------- Moody's Ratings has upgraded TRANSPORTES AEREOS PORTUGUESES, S.A.'s (TAP or the company) long-term corporate family rating to Ba3 from B1 and its probability of default rating to Ba3-PD from B1-PD. The rating on TAP's EUR375 million senior unsecured notes due 2024 has been upgraded to Ba3 from B1. Concurrently, the Baseline Credit Assessment (BCA) has been upgraded to b1 from b2. The outlook changed to stable from positive. RATINGS RATIONALE The upgrade reflects both the continuous strong operating profitability of the airline since Moody's last upgrade in November 2023 and the concomitant improvement in credit metrics post-pandemic with a high yield environment that is nevertheless expected to normalize over the next 12-18 months. TAP has maintained a strong operating performance supported by its leisure customer base and its exposure to both the North Atlantic and the Brazilian route, which are two buoyant routes since 2023. In the last twelve months until March 2024 TAP increased capacity as measured by Available Seat Kilometers (ASK) to 101% of 2019 levels and its load factor exceeded pre-pandemic level at 81%. Coupled with a strong pricing (Revenue per ASK as measured by the company was 27% above 2019 level and up 5% compared to 2022), a tight cost control from its restructuring programme (Cost per ASK up 18% versus 2019 and 12% excluding fuel cost) and despite an increase in labour costs, the favourable market conditions where ongoing high demand meets restricted capacity led an Moody's adjusted EBIT margin of 10.6%, well in excess of the margin of 2.2% posted in 2019. The recovery in earnings and the material equity injection that TAP has received from the Portuguese government (Government of Portugal, A3 stable) as part of its EU-approved restructuring program also led to a significant improvement in credit metrics of TAP. Moody's do not expect a privatization or even partial divestment to be concluded in the near-term. Moody's adjusted Debt/EBITDA is expected to be maintained below 4.0x as Moody's see the possibility for the company to refinance its upcoming EUR375 million senior unsecured bond maturity in December 2024. Its gross leverage compares also favorably to pre-pandemic levels with a Moody's adjusted Debt/EBITDA of 6.8x in 2019. The lower gross leverage is also achieved in the context of a much stronger liquidity profile with TAP holding around EUR1.1 billion of cash on balance sheet at March 2024 versus EUR426 million in 2019. Booking trends remain currently positive from both volume and yield perspectives. In common with the rest of the industry TAP is continuing to experience a robust price environment, enabling it to pass on a large proportion of fuel and other cost increases. This is driven by strong pent-up demand, excess savings post-pandemic and capacity discipline. Following the strong recovery of yields, Moody's expect that the strong price environment will moderately decline in 2024 and 2025. Beyond the factors discussed above TAP's Ba3 CFR is supported by the issuer's (1) strategic location in Lisbon with a strong market share at the capacity constrained Lisbon hub, (2) competitive cost structure compared to other European network airlines, and (3) strong market share in European – Brazilian routes with five exclusive routes to Brazil. On the other hand, the rating is constrained by TAP's (1) small size of the operated airline and the concentrated route network if compared to larger network carriers, (2) volatile and weak historical operating performance even after the partial privatization in 2015, (3) low profitability prior to the pandemic if compared to peers, and (4) negative free cash flow generation driven by high lease expenses. RATIONALE FOR THE STABLE OUTLOOK The stable outlook is underpinned by Moody's expectation that TAP will be able to maintain profitability levels in line with the recent rating category driven by increasing operating efficiency to compensate the expected decline in yields and labour cost pressure. This should enable TAP to maintain a gross debt/EBITDA below 4.0x and to move towards positive free cash flow generation. LIQUIDITY TAP's liquidity is good with estimated EUR1.1 billion of cash on balance sheet as of March 2024. TAP will receive the third and last cash injections of EUR343 million in December 2024 from the Portuguese government. This will further strengthen the liquidity profile of TAP. TAP's liquidity buffer should be sufficient to stem the high annual lease payments of around EUR550 million. STRUCTURAL CONSIDERATIONS Most of TAP's capital structure is unsecured and ranks pari passu with the EUR375 million senior unsecured notes. There is approximately EUR100 million of debt that is secured by certain contractual rights. Moody's treat trade payables as unsecured claims in line with the EUR375 million senior unsecured notes due to the absence of an all asset pledge security package for the secured debt instruments. In light of the relatively low percentage of secured debt in the capital structure, the rating of the senior unsecured notes is in line with the CFR at Ba3. The recovery of the corporate family is assumed to be 50%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive pressure would build on TAP's rating if its gross debt/EBITDA would be maintained sustainably below 3.5x, evidence that the company is capable of sustaining existing margins above 12% Moody's adjusted EBIT in the context of the current high margin environment and potential risks of increased costs and reduced yields and would generate consistent positive free cash flow. On the contrary gross debt/EBITDA of TAP increasing sustainably above 4.5x, persistent negative free cash flow generation, a deterioration in the group's liquidity profile, (FFO+Interest)/Interest reducing towards 3.0x and EBIT margin below 10%, would put negative pressure on the ratings. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS The Government of Portugal is the sole owner of TAP. Whilst the Government of Portugal has granted material support during the pandemic (EUR3.2 billion State aid and damage compensation), the ownership and governance strategy of the Government of Portugal has not been consistent over time with strategies of privatisation followed by reinvestment as during the pandemic. Moody's recently consider a consistent track record under the public ownership. PRINCIPAL METHODOLOGY The methodologies used in these ratings were Passenger Airlines published in August 2021. COMPANY PROFILE Headquartered in Lisbon, Portugal, TRANSPORTES AEREOS PORTUGUESES, S.A. (TAP) is a small Portuguese network carrier. TAP has been a member of the Star Alliance since 2005 and carried close to 16 million passengers and reported close to EUR4.2 billion of revenue in 2023. As of March 2024, the company's fleet was composed of 99 aircraft, which included 22 Airbus wide-bodies (of which 19 NEOs), 58 Airbus narrow-bodies (of which 35 NEOs) and 19 regional planes (Embraer). TAP is wholly owned by the Portuguese State. ========= S P A I N ========= HIPOCAT 11: S&P Affirms 'D (sf)' Rating on Class B, C, and D Notes ------------------------------------------------------------------ S&P Global Ratings raised to 'AAA (sf)' from 'AA+ (sf)' its credit rating on Hipocat 11, Fondo de Titulizacion de Activos' class A2 notes. At the same time, S&P affirmed its 'D (sf)' ratings on the class B, C, and D notes. The rating actions reflect its full analysis of the most recent information that we have received and the transaction's current structural features. After applying S&P's global RMBS criteria, its weighted-average foreclosure frequency assumptions decreased because of the transaction's reduction in both the effective loan-to-value ratio and in arrears. In addition, its weighted-average loss severity assumptions have increased due to an increase in its repossession market value decline assumptions. Table 1 Credit analysis results RATING WAFF (%) WALS (%) CREDIT COVERAGE (%) AAA 20.67 35.52 7.34 AA 14.04 31.10 4.37 A 10.76 23.70 2.55 BBB 7.32 19.64 1.44 BB 3.85 16.74 0.64 B 3.02 14.05 0.42 WAFF--Weighted-average foreclosure frequency. WALS--Weighted-average loss severity. The transaction is undercollateralized, given that the performing collateral balance is considerably lower than the asset-backed notes' outstanding amount. This means available funds are currently allocated exclusively to senior items, interest payments, and the class A2 notes' amortization. The reserve fund has been fully depleted since 2009. S&P said, "Despite the transaction's overall negative performance, the class A2 notes' available credit enhancement has increased since our previous review and is now above 40%. We raised our rating on the class A2 notes, considering that they can pass our 'AAA' stresses." Cumulative defaults, defined as loans in arrears for 18 months or more, represent 25.15% of the closing pool balance, which is well above the interest deferral thresholds for both the class B and C notes (13.2% and 8.9% respectively). As a result, these tranches' interest payments currently rank below the class A2 notes' amortization. As such, the class B and C notes continue to experience ongoing interest shortfalls. The class D notes, which are not asset-backed, also have outstanding interest shortfalls due to the lack of excess funds available to meet obligations ranking below the class A2 notes' amortization. As S&P's ratings in Hipocat 11 address the timely payment of interest and ultimate principal during the transaction's life it affirmed its 'D (sf)' ratings on the class B, C, and D notes. S&P said, "Our operational and legal risk analyses remain unchanged since our previous review. Therefore, these criteria do not cap the ratings assigned. "We also applied our counterparty criteria as part of our analysis. BBVA provides the interest rate swap contract, which is in line with our previous counterparty criteria. Considering the collateral arrangement's enforceability, the maximum supported rating is 'A+'. Our rating on the class A2 notes is delinked from the swap counterparty." Hipocat 11 is a Spanish RMBS transaction that closed in March 2007 and securitizes first-ranking owner-occupied mortgage credits, mainly in Catalonia. Catalunya Banc, which was formerly named Caixa Catalunya and is now part of BBVA, originated the loans in the pool. =========== S W E D E N =========== OPTIGROUP BIDCO: Moody's Affirms 'B2' CFR, Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Ratings has changed the outlook to negative from stable on OptiGroup BidCo AB ("Optigroup" or "the company"), a Sweden-based European distributor of business-to-business products. Concurrently, Moody's have affirmed the company's B2 corporate family rating, B2-PD probability of default rating, and B1 instrument ratings on the first lien facilities, including the EUR465 million senior secured term loan B (TLB) due 2029 and EUR60 million senior secured revolving credit facility (RCF) due 2028. "The change of outlook to negative reflects Optigroup's weaker trading performance in the last few quarters and its limited growth prospects for the next 12-18 months in the context of a sluggish macroeconomic backdrop in Europe", said Guillaume Leglise, a Moody's Ratings Vice President - Senior Analyst and lead analyst for the company. "Optigroup's credit profile continues to be supported by its diversified activities, asset-light business model and good liquidity", concludes Mr Leglise. RATINGS RATIONALE The rating action reflects Optigroup's deterioration in sales and earnings in the last 12 months, impacted by softer demand for the company's products, in a difficult macroeconomic context, notably in the paper and packaging segments. In the last 12 months to March 31, 2024, the company's sales and EBITDA (as adjusted by the company) declined by 13% and 15% respectively. This translates into weak credit metrics for the rating category, with Optigroup's leverage (Moody's-adjusted gross debt to EBITDA) estimated at 6.7x and its Moody's-adjusted EBITA to interest expense at around 1.0x as at end-March 2024. Despite resilient operating margins, thanks to the company's good cost control and softening inflation, Optigroup's performance is affected by lower demand from corporate customers, notably amongst retailers which currently face adverse trading conditions, while the company's paper division continues to face declining structural trends. Moody's expect the company's sales and earnings to remain sluggish in 2024, constrained by limited economic growth prospects in Europe, although lower interest rates and softening inflation should yield stronger economic growth in 2025. Moody's expect the company's leverage to be around 7.0x in 2024, before trending towards 6.5x in 2025. Moody's negative outlook reflects the uncertainty over the company's earnings recovery and the risk that its leverage remain well above 6.0x in the near term. The company is weakly positioned in the B2 rating category, owing to its high leverage and weak interest cover ratio. The CFR is also constrained by the soft demand in the company's packaging segment and structurally declining demand in the traditional paper industry. The company has pursued an acquisitive strategy in recent years, which Moody's expect to continue, potentially hindering future deleveraging. More positively, the affirmation of the B2 CFR considers the company's good liquidity profile, with an ample cash balance of EUR124 million at end-March 2024 and full availability under its €60 million RCF. The company had a good track record of positive free cash flows (FCF) historically, derived from its asset-light business model with limited capital spending requirements. While Moody's expect the company's FCF generation to deteriorate in 2024, it will remain around breakeven in Moody's base case scenario. The B2 CFR continues to reflect the company's strong position in the European B2B distribution of business essentials such as cleaning, safety or packaging products, with leading market shares and good product diversification in the Nordics and the Netherlands. LIQUIDITY Moody's view Optigroup's liquidity as good, supported by a cash balance of EUR124 million and a fully available EUR60 million of revolving credit facility (RCF) as of March 31, 2024. The company had a good track record of positive FCF generation historically, with EUR60 million (Moody's-adjusted) generated in 2023. However, Moody's project FCF to deteriorate and to be around breakeven in 2024, and to improve gradually in 2025. The seasonality of Optigroup's business is low, although FCF generation is typically stronger in the second half of the year. However, the company's working capital can fluctuate throughout the year, with some cash troughs during the first quarter and some inflows in the second half of the calendar year. The company's credit facilities contain a springing covenant defined as a senior secured net leverage test fixed at 8.1x for the life of the facilities, and tested every quarter. Moody's expect the company will continue to have ample headroom under this covenant going forward (4.5x as of end-March 2024). There is no material debt maturing before 2028, when the RCF expires. The first lien term loans and second lien term loan mature in 2029 and 2030 respectively. STRUCTURAL CONSIDERATIONS The CFR is assigned to OptiGroup BidCo AB, which is the top entity of the restricted group and the borrower of the senior secured bank credit facilities. In 2023, OptiGroup Holding AB, a holding company above the restricted group, became the reporting entity of the group. The TLB and RCF are rated B1. The size of the second lien debt relative to the total quantum of debt provides loss absorption to the first lien debt, lifting the first lien instruments one notch above the CFR. The first lien and second lien facilities benefit from the same maintenance guarantor package, representing around 80% of the company's consolidated EBITDA. They are also secured by share pledges in the company and material bank accounts. Optigroup's PDR is B2-PD, reflecting the use of a 50% family recovery rate, consistent with a debt structure composed of first lien and second lien debt. RATIONALE FOR THE NEGATIVE OUTLOOK The negative rating outlook reflects Optigroup's currently weaker operating performance in a difficult macroeconomic backdrop and Moody's expectations that its credit metrics will remain weak for its rating category over the next 12-18 months. A stabilisation of the outlook will require Optigroup's operating performance to recover in the next 12-18 months, resulting in a return of its credit metrics to levels commensurate with the B2 rating, including a leverage below 6.0x. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward pressure is unlikely in the short term given the negative outlook. Positive pressure could arise over time if the company displays sustained growth in sales and earnings; (i) its Moody's-adjusted debt/EBITDA ratio falls sustainably below 5.0x; (ii) its Moody's-adjusted EBITA/Interest Expense approaches 2.5x; and (iii) its Moody's-adjusted FCF/debt increases to high single digits (in percentage terms) on a sustainable basis. An upgrade would also require Optigroup to demonstrate a balanced financial policy and prudent liquidity management. Conversely, negative pressure on the rating could materialise if (i) the company's operating performance does not improve, such that its Moody's-adjusted debt/EBITDA remains above 6.0x for a prolonged period; (ii) its Moody's-adjusted EBITA/Interest Expense remains below 1.75x; (iii) it pursues other debt-funded acquisitions; or (iv) its FCF and liquidity weakens. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Distribution and Supply Chain Services published in February 2023. COMPANY PROFILE Optigroup is a B2B distributor of business essential services. Based in Molndal, Sweden, the group is organised into four business areas: Facility, Safety and Food Services (FSF); Packaging; Paper and Business Supplies (PBS), and Medical. Optigroup operates in 20 European countries and serves over 100,000 customers. In 2023, Optigroup generated pro forma (PF) revenue and EBITDA (pre-IFRS 16) of EUR1,5 billion and EUR134 million, respectively. ===================== S W I T Z E R L A N D ===================== CONSOLIDATED ENERGY: Moody's Cuts LT CFR to B2, Outlook Negative ---------------------------------------------------------------- Moody's Ratings downgraded Consolidated Energy Limited's (CEL or the company) long-term corporate family rating and probability of default rating to B2 from B1 and to B2-PD from B1-PD respectively. Concurrently Moody's downgraded all existing backed senior secured term loan B and the rating of the backed senior secured revolving credit facility to B1 from Ba3 and the rating of the backed senior unsecured notes to B3 from B2 issued by Consolidated Energy Finance S.A.(CEF). The outlook remains negative on both entities. RATINGS RATIONALE The downgrade of CEL's rating takes into account an increase of financial transactions and linkages with its shareholder Proman AG (Proman), a governance consideration negatively weighing on CEL's rating. In December 2023 the company provided a loan of $253 million to Proman which earns an interest rate of SOFR +250bps. Proman used the loan to finance a deferred purchase price consideration of $166 million and other financing needs at the Proman level. The borrowings to Proman increased by $127 million bringing the total amount of borrowings to Proman to $416 million as of the end of Q1-24. In May 2024 the company announced that it has acquired a 50% controlling stake in Caribbean Petrochemical Company AG (CPC) from Proman AG. CPC manages critical operations on behalf of CEL including the offtake of UAN and Melamine volumes. The consideration for the acquisition of CPC will not be paid in cash but will reduce the loan receivable from Proman by $60 million to $356 million. In addition, Consolidated Energy Limited has issued a guarantee in favor of debt borrowed from third parties by Proman. CEL does not record a liability on its statement of financial position as long as Proman AG remains in compliance with the terms of its loan facility as it does at present. Moody's consider the guarantee as debt like and hence reflect in Moody's adjusted debt. The high operational and financial interdependence with its parent company and the complex group structure with limited available information on Proman's operations outside of the CEL perimeter results in a risk that CEL will ultimately have to continue to support financing needs of its shareholder. Proman itself is a global leader in methanol, fertilizer and other natural gas derived products such as melamine using a fully-integrated approach across the entire supply chain from project development and production to marketing and logistics. Proman has various financing arrangements at the holding and its subsidiaries in place. CEL's rating furthermore is constrained by its high Moody's adjusted gross leverage of above 20x as of Q1-24, which Moody's expect to decrease to below 7x by year end supported by improving average selling prices for methanol, ammonia and UAN. The forecast improvement also assumes no further major production outages, which have negatively impacted production volumes at Natgasoline LLC and its AUM production during 2023 and historically have contributed to the company's pronounced earnings volatility. CEL's liquidity weakened with $119.2 million drawn out of $175 million ($140 million committed until 2029 and $35 million committed until 2025) committed under its revolving credit facility as of the end of Q1 2024, but remains adequate. CEL's rating reflects its leading market position in methanol, which is underpinned by its competitive cost position reflected by high EBITDA margins. The rating furthermore reflects Moody's expectation that CEL stringently applies FCF generation to gross debt reduction in the stronger parts of the cycle, as it has previously done. LIQUIDITY PROFILE CEL's liquidity profile is adequate. As of Q1-24 the company had $189 million of cash on balance sheet. Furthermore, the group has access to around $56 million under its $175 million RCF. The company has a $50 million revolver at the level of Natgasoline LLC, which matures in August 2025. In combination with Moody's expectation of FFO generation of around $300 million for 2024, these sources should be sufficient to accommodate swings in working capital and capital expenditures of around $120 - $150 million per annum. Moody's assessment of CEL's liquidity profile takes into account the expectation that debt maturities including Natgasoline's upcoming 2025 maturities will be addressed well in advance. STRUCTURAL CONSIDERATIONS Consolidated Energy Finance, S.A. 's (CEF) outstanding backed senior unsecured bonds are rated B3, one notch below the B2 CFR, reflecting the priority ranking of the backed senior secured term loan B and the $175 million RCF, which are rated B1. The rating of the backed senior unsecured bonds also reflects the structural subordination of CEF's creditors to those of its US-based operating subsidiary, Natgasoline LLC, which is not a guarantor to CEF's bonds and whose financial debt is largely secured against respective assets. Natgasoline has total debt of $885m while the replacement value of the facility is approximately $2.2 bn (estimate provided by the company). The rating of the backed senior secured bank credit facilities is B1, one notch above CEL's CFR, because of their priority ranking in the capital structure. RATING OUTLOOK The negative outlook reflects the risk that the company's cash flow generation will not be sufficient to reduce gross debt to the levels commensurate with the rating, be it due to continued weak earnings or cash outflows to its shareholder. The negative outlook also reflects the risk that CEL continues to support the financing needs of its shareholder. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider upgrading CEL's rating if the company reduces its Moody's adjusted gross debt to well below $3.1 billion and its FCF/debt would be in the high single digit. A simplification of its group and capital structure and transparency with regards to financing needs of its shareholder will be a prerequisite for a positive rating action. Moody's could downgrade CEL's rating if the company fails to reduce its Moody's adjusted gross debt to below $3.8 billion, ($4.2 billion as of March 2024, which includes $460m in relation to the guarantee provided by CEL to Proman's debt as part of Moody's Financial Statement Adjustments in the Analysis of Nonfinancial Corporations methodology), its liquidity situation worsens or if the company supports additional financing needs of its shareholder. The principal methodology used in these ratings was Chemicals published in October 2023. =========================== U N I T E D K I N G D O M =========================== ARLINGTON LONDON: Quantuma Appointed as Administrators ------------------------------------------------------ Arlington London Limited was placed in administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Court Number: CR-2024-004090, and Quantuma Advisory Limited was appointed as administrators on July 11, 2024. Arlington London Limited, which does business as TINCTURE London, is a manufacturer of cleaning and home products. Its registered office and principal trading address is at 4 Montpellier Street, London, SW7 1EE and it is in the process of being changed to 1st Floor, 21 Station Road, Watford, WD17 1AP. The Administrators may be reached at: Nicholas Simmonds Chris Newell Quantuma Advisory Limited 1st Floor, 21 Station Road Watford, Herts, WD17 1AP For further details, please contact: Clare Vila Tel: 01923 954 174 E-mail: Clare.Vila@quantuma.com BLETCHLEY PARK 2024-1: S&P Assigns Prelim 'CCC' Rating to X2 Notes ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary credit ratings to Bletchley Park Funding 2024-1 PLC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, X1-Dfrd, and X2-Dfrd notes. At closing, the issuer will also issue unrated J-VFN notes and residual certificates. This is an RMBS transaction that securitizes a portfolio of mortgage loans secured on properties in the U.K. The provisional mortgage portfolio is approximately GBP223 million as of April 30, 2024. The transaction is composed of buy-to-let mortgages originated by Quantum Mortgages Ltd. (93.2%; the "Carbon" portfolio) and owner-occupied mortgages originated by Hey Habito Ltd. (6.8%; the "Chronos" portfolio). The issuer will use the issuance proceeds to purchase the full beneficial interest in the mortgage loans from the seller at closing. The issuer will grant security over all of its assets in the security trustee's favor. S&P considers the originators' lending criteria to be conservative, given that a very small number of the loans are in arrears or none are related to borrowers currently under a bankruptcy proceeding. Credit enhancement for the rated notes will consist of subordination and excess spread. A liquidity reserve will provide liquidity support to cover senior fees, swap payments, and cure interest shortfalls on the class A and B-Dfrd notes. Principal can be used to pay interest on the class A and B-Dfrd through E-Dfrd notes, provided that, in the case of the class B-Dfrd to E-Dfrd notes, they are the most senior class outstanding or the outstanding principal deficiency ledger is less than 10%. There are no rating constraints in the transaction under its counterparty, operational risk, or structured finance sovereign risk criteria. S&P considers the issuer to be bankruptcy remote. Preliminary ratings CLASS PRELIMINARY RATING* CLASS SIZE (%) A AAA (sf) 87.25 B-Dfrd AA (sf) 5.50 C-Dfrd A (sf) 3.75 D-Dfrd BBB+ (sf) 2.00 E-Dfrd BB+ (sf) 1.50 X1-Dfrd B+ (sf) 1.75 X2-Dfrd CCC (sf) 1.25 J-VFN NR TBD Residual certs NR N/A NR--Not rated. TBD--To be determined. N/A--Not applicable. COGEN LIMITED: Virtual Meeting of Creditors on July 31 ------------------------------------------------------ The joint administrators of CG Realisations 2023 Limited, previously known as CoGen Limited, will hold a virtual meeting of creditors on July 31, 2024. CoGen was placed in administration proceedings in the High Court of Justice, Court Number: CR-2023-6053, and CBW Recovery LLP was appointed as administrators in December 2023. CoGen is an end-to-end developer of technically advanced energy recovery facilities. Its registered office is at Blythe House, Blythe Park, Cresswell Lane, Cresswell, Stoke-on-Trent, Staffordshire. Its principal trading address is at Third Floor, 4-8 Ludgate Circus, London, EC4M 7LF. According to a Notice of Meeting, a decision is to be sought from the Company's creditors at a virtual meeting to be held on July 31, 2024 at 10:00 a.m. The purpose of the virtual meeting is to form a committee, and if one is not formed, to increase the Joint Administrators' remuneration. In order for their votes to be counted, creditors must attend the meeting and vote either personally or by proxy, and must also have submitted proof of their debt (if not already lodged) at CBW Recovery LLP, 10 Lower Thames Street, London, EC3R 6AF by no later than 4:00 pm on the business day before the meeting and their proxy in advance of the meeting. Failure to do so will lead to their vote(s) being disregarded. The Joint Administrators may be reached at: Joseph Walter Colley John Anthony Dickinson CBW Recovery LLP 10 Lower Thames Street London, EC3R 6AF For further details, contact: Alice Guyatt Tel: 020 4581 7154 E-mail: Alice.Guyatt@cbwrecovery.co.uk A petition to wind up the Company was filed in January 2023 by the Commissioners for HM Revenue and Custom. FEATHERFOOT HIGH STREET: Opus to Lead Administration Proceedings ---------------------------------------------------------------- Featherfoot High Street WB Limited was placed in administration proceedings in the High Court of Justice, Court Number: CR-2024-000924, and Opus Restructuring LLP was appointed as administrators on July 11, 2024. Featherfoot High Street WB Limited is a property developer. Its registered office and principal trading address is at Empire House, 92-98 Cleveland Street, Doncaster, DN1 3DP. The Joint Administrators may be reached at: Frank Ofonagoro Mark Nicholas Ranson Opus Restructuring LLP 2nd Floor, 3 Hardman Square Spinningfields, Manchester, M3 3EB For further information, contact: Maria Price E-mail: Maria.price@opusllp.com Amanda Hamlin E-mail: Amanda.hamlin@opusllp.com PARAMOUNT D&B LTD: Begbies to Lead Administration Proceedings ------------------------------------------------------------- Paramount D&B Ltd was placed in administration proceedings in the High Court of Justice Business and Property Courts in Bristol Insolvency and Companies List (ChD) Companies List, Court Number: CR-2024-BRS-000066, and Begbies Traynor (Central) LLP was appointed as administrators on July 15. Paramount D&B Ltd is a building projects developer. Its registered office is at Summers House, Pascal Close, St. Mellons, Cardiff, CF3 0LW. The Joint Administrators may be reached at: Susan Clay Huw Morgan Powell Begbies Traynor (Central) LLP Ground Floor, 16 Columbus Walk Brigantine Place Cardiff, CF10 4BY For further information, contact: Nadine Romanick Begbies Traynor (Central) LLP Tel: 029 2089 4270 E-mail: nadine.romanick@btguk.com SIGNATURE LIVING BF: Leonard Curtis Appointed as Administrators --------------------------------------------------------------- Signature Living BF Limited was placed in administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Court Number: CR-2024-004123, and Leonard Curtis was named as administrators on July 12, 2024. Signature Living Bf Limited provides accommodation services. Its registered office is at Cavern Court, 1st Floor, 8 Mathew Street, Liverpool, Merseyside L2 6RE. The Administrators may be reached at: Nick Myers Alex Cadwallader Leonard Curtis 5th Floor, Grove House 248a Marylebone Road London, NW1 6BB Tel: 020 7535 7000 E-mail: recovery@leonardcurtis.co.uk Alternative contact: Toby Gibbons SIRANE LIMITED: Interpath Named as Administrators ------------------------------------------------- Sirane Limited was placed in administration proceedings in the High Court of Justice Business and Property Courts in Birmingham Isolvency and Companies List (ChD), Court Number: CR-2024-BHM-000415, and Interpath Advisory Ltd was appointed as administrators on July 15, 2024. Sirane Limited is a manufacturer of articles of paper and paperboard. Its registered office is at Stafford Park 10, Telford, TF3 3AB. The Joint Administrators may be reached at: Christopher Robert Pole Ryan Grant Interpath Advisory Ltd 2nd Floor, 45 Church Street Birmingham, B3 2RT For further details, contact: Oliver Trotman Tel: 0121 817 8657 E-mail: sirane@interpath.com TERM HOLDINGS: RSM UK Named as Administrators --------------------------------------------- Term Holdings Limited was placed in administration proceedings in the High Court of Justice, Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number: CR-2024-000668, and RSM UK Restructuring Advisory LLP was appointed as administrators on July 10, 2024. Term Holdings Limited is in the business of letting and operating of own or leased real estate. Its registered office and principal trading address is at 71-75 Shelton Street, London, WC2H 9JQ. The Joint Administrators may be reached at: Lee Van Lockwood Gareth Harris RSM UK Restructuring Advisory LLP Central Square, 5th Floor 29 Wellington Street Leeds, LS1 4DL Tel: 0113 285 5000 Correspondence address & contact details of case manager: Kirsty Baillie RSM UK Restructuring Advisory LLP Third Floor, 2 Semple Street Edinburgh, EH3 8BL Tel: 0131 659 8382 ULTROMEX LTD: RSM UK Named as Administrators -------------------------------------------- Ultromex Ltd was placed in administration proceedings in the High Court of Justice, Business and Property Courts in Manchester, Insolvency & Companies List (ChD), Court Number: CR-2024-894, and RSM UK Restructuring Advisory LLP was appointed as administrators on July 9, 2024. Ultromex Ltd creates novel green tech to promote sustainable aluminium production and the circular economy. Ultromex's novel Green Technologies for sustainable aluminium production turn difficult hazardous wastes from aluminium smelting into valuable secondary resources for use in other industries such as cement, steel, ceramics and many others. Its registered office and principal trading address is at Mersey Wharf Business Park, Dock Road South, Wirral, CH62 4SF. The Administrators may be reached at: Christopher Ratten RSM UK Restructuring Advisory LLP Landmark, St Peter's Square 1 Oxford Street Manchester, M1 4PB Tel: 0161 830 4000 - and - James Miller RSM UK Restructuring Advisory LLP Central Square, 5th Floor 29 Wellington Street Leeds, LS1 4DL Tel: 0113 285 5000 Correspondence address & contact details of case manager: Alex Collier Tel: 0161 830 4053 RSM UK Restructuring Advisory LLP Landmark, St Peter's Square 1 Oxford Street Manchester, M1 4PB =============== X X X X X X X X =============== [*] BOOK REVIEW: Management Guide to Troubled Companies ------------------------------------------------------- Taking Charge: Management Guide to Troubled Companies and Turnarounds Author: John O. Whitney Publisher: Beard Books Softcover: 283 Pages List Price: $34.95 Order a copy today at: http://beardbooks.com/beardbooks/taking_charge.html Review by Susan Pannell Remember when Lee Iacocca was practically a national hero? He won celebrity status by taking charge at a company so universally known as troubled that humor columnists joked their kids grew up thinking the corporate name was "Ayling Chrysler." Whatever else Iacocca may have been, he was a leader, and leadership is crucial to a successful turnaround, maintains the author. Mediagenic names merit only passing references in Whitney's book, however. The author's own considerable experience as a turnaround pro has given him more than sufficient perspective and acumen to guide managers through successful turnarounds without resorting to name-dropping. While Whitney states that he "share[s] no personal war stories" in this book, it was, nonetheless, written from inside the "shoes, skin, and skull of a turnaround leader." That sense of immediacy, of urgency and intensity, makes Taking Charge compelling reading even for the executive who feels he or she has already mastered the literature of turnarounds. Whitney divides the work into two parts. Part I is succinctly entitled "Survival," and sets out the rules for taking charge within the crucial first 120 days. "The leader rarely succeeds who is not clearly in charge by the end of his fourth month," Whitney notes. Cash budgeting, the mainstay of a successful turnaround, is given attention in almost every chapter. Woe to the inexperienced manager who views accounts receivable management as "an arcane activity 'handled over in accounting.'" Whitney sets out 50 questions concerning AR that the leader must deal with -- not academic exercises, but requirements for survival. Other internal sources for cash, including judiciously managed accounts payable and inventory, asset restructuring, and expense cuts, are discussed. External sources of cash, among them banks, asset lenders, and venture capital funds; factoring receivables; and the use of trust receipts and field warehousing, are handled in detail. Although cash, cash, and more cash is the drumbeat of Part I, Whitney does not slight other subjects requiring attention. Two chapters, for example, help the turnaround manager assess how the company got into the mess in the first place, and develop strategies for getting out of it. The critical subject of cash continues to resonate throughout Part II, "Profit and Growth," although here the turnaround leader consolidates his gains and looks ahead as the turnaround matures. New financial, new organizational, and new marketing arrangements are laid out in detail. Whitney also provides a checklist for the leader to use in brainstorming strategic options for the future. Whitney's underlying theme -- that a successful business requires personal leadership as well as bricks and mortar, money and machinery -- is summed up in a concluding chapter that analyzes the qualities that make a leader. His advice is as relevant in this 1999 reprint edition as it was in 1987 when first published. John O. Whitney had a long and distinguished career in academia and industry. He served as the Lead Director of Church and Dwight Co., Inc. and on the Advisory Board of Newsbank Corp. He was Professor of Management and Executive Director of the Deming Center for Quality Management at Columbia Business School, which he joined in 1986. He died in 2013. ********* 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 2024. 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 * * *