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T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Thursday, August 15, 2024, Vol. 25, No. 164
Headlines
F R A N C E
EDEN SAS: Moody's Upgrades CFR & Senior Secured Bank Debt to B1
I T A L Y
SIENA MORTGAGES 07-5: Moody's Ups EUR239MM C Notes Rating to Ba1
S P A I N
ALMIRALL SA: Moody's Ups CFR & EUR300MM Sr. Unsecured Notes to Ba2
U N I T E D K I N G D O M
BAUSERV LIMITED: Francis Clark Named as Administrators
BM REALISATIONS: Begbies Traynor Named as Administrators
FLOOR ROOM: PricewaterhouseCoopers Named as Joint Administrators
INTER EUROPA: Begbies Traynor Named as Administrators
LINK ELECTRICAL: Lines Henry Named as Administrators
ONE (HOUSING & SUPPORT): Evelyn Partners Named as Administrators
SAVALAS LTD: RSM UK Named as Administrators
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F R A N C E
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EDEN SAS: Moody's Upgrades CFR & Senior Secured Bank Debt to B1
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Moody's Ratings upgraded Eden S.A.S.'s (Safic-Alcan or the company)
corporate family rating and probability of default rating to B1 and
B1-PD from B2 and B2-PD, respectively. Concurrently, Moody's
upgraded Safic-Alcan's existing ratings for the senior secured bank
credit facilities to B1 from B2. The outlook remains stable.
RATINGS RATIONALE
The rating action reflects Moody's expectation that the company
will continue to operate with credit metrics, including expected
gross leverage of around 4.4x in 2024, that Moody's consider
acceptable for it to have a B1 rating. The rating action also
reflects the company's strong cash balance and its track record of
a more prudent approach towards acquisitions compared to private
equity-owned chemical distributors that Moody's rate.
After the EUR63 million capital increase in early 2023 and solid
free cash generation since the rating assignment in late 2022, the
company's cash balance increased significantly to around EUR132
million as of March 2024 from around EUR33 million as of December
2022. The company intends to use a large portion of its cash
towards acquisitions. The incremental earnings from these bolt-on
acquisitions will facilitate a further leverage reduction on a
gross debt basis.
Safic-Alcan's performance in 2023 and Q1-2024 was better compared
to other chemical distributors Moody's rate despite its high
exposure to Europe. Over the next 12-18 months, Moody's forecast
that the company's adjusted gross leverage will be in the range of
3.8x to 4.4x, which positions it solidly in the B1 rating category.
The adjusted debt amount does not include the subordinated
convertible note (obligations à bons de souscription d'actions,
OBSA), which is outside the restricted group.
The company's strong European market position in specialty
chemicals distribution; good profitability for a distributor,
supported by value-added services and private label activities;
capacity to generate meaningful free cash flow; and good liquidity
all support the B1 CFR.
However, the rating is constrained by its relatively small size
compared to other rated distributors (both chemicals distributors
and distributors more generally); limited geographical
diversification with a high focus on Europe; higher share of sales
to more cyclical applications (e.g. construction or automotive)
compared to other specialty chemicals distributors Moody's rate;
and absence of commitment to maintain a specific leverage ratio or
financial policy in line with a higher rating.
ESG CONSIDERATIONS
Governance considerations were among the key drivers of this rating
action. The company's additional track record of strong operational
performance and a more conservative approach to managing its growth
than what Moody's initially expected supported the upgrade.
LIQUIDITY PROFILE
The company's liquidity is good. As of end March 2024, the company
reported around EUR132 million of cash on balance sheet and EUR90
million of availability under its senior secured revolving credit
facility (RCF). In combination with funds from operations, these
sources are sufficient to cover working capital swings, capital
expenditure and working cash. The company's main debt maturity
(other than RCF) is in 2029 when its term loan B is due for
repayment.
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook reflects Moody's expectation that Safic-Alcan's
credit metrics will remain in line with those Moody's consider
appropriate for the company's B1 rating over the next 12 to 18
months and the company will generate positive FCF.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of the ratings would primarily require a further
significant expansion and diversification of Safic-Alcan's revenue
base. Other factors that could lead to an upgrade include evidence
of the application of financial policies leading to
Moody's-adjusted debt/EBITDA sustainably below 4.0x, with continued
positive FCF and good liquidity.
Factors that could lead to a downgrade of Safic-Alcan's ratings
include: i) its inability to generate sustained positive FCF or
deterioration of its liquidity profile; ii) Moody's-adjusted total
debt/EBITDA sustainably increases above 5.0x; iii) EBITA/interest
expense is below 2.5x on a sustained basis; and iv) evidence of
more aggressive financial policies which would favour shareholder
returns over creditors.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
COMPANY DESCRIPTION
Headquartered in France, Safic-Alcan is a leading Europe-focused
specialty chemical distributor. The company's main product
categories are rubber and adhesives, personal care,
pharmaceuticals, and coatings, inks and construction. The company
is majority owned (52.5%) by its management team, including shares
ultimately owned by employees, and a finance company (47.5%), which
is ultimately owned by various financial investors. The management
team controls around three quarters of total voting rights.
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I T A L Y
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SIENA MORTGAGES 07-5: Moody's Ups EUR239MM C Notes Rating to Ba1
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Moody's Ratings has upgraded the rating of the Class C notes in
Siena Mortgages 07-5 S.p.A. The rating action reflects the
correction of an input error in Moody's cash flow modelling.
Moody's also affirmed the ratings of the notes that had sufficient
credit enhancement to maintain their current ratings and were not
impacted by the above mentioned error.
EUR4765.9M Class A Notes, Affirmed Aa3 (sf); previously on Jul 26,
2024 Affirmed Aa3 (sf)
EUR157.45M Class B Notes, Affirmed Aa3 (sf); previously on Jul 26,
2024 Affirmed Aa3 (sf)
EUR239M Class C Notes, Upgraded to Ba1 (sf); previously on Jul 26,
2024 Upgraded to B1 (sf)
The maximum achievable rating is Aa3 (sf) for structured finance
transactions in Italy, driven by the corresponding local currency
country ceiling of the country.
RATINGS RATIONALE
Correction of an error
The rating action on Siena Mortgages 07-5 S.p.A. is prompted by the
discovery of an error in Moody's cash flow model related to the
coupons assumed at the time of last rating action. The coupons
modelled on Class A, B and C were not capped at the levels agreed
in the amended documentation introduced in 2016, which are 3.2% for
Class A, 3.7% for Class B and 3.9% for Class C. Reflecting the
correct coupons leads to higher excess spread in the transaction,
which has a positive impact on the rating of the Class C Notes.
The coupon caps started to have a beneficial effect when Euribor
increased above 0.9% in 2022, whereas the coupon caps were not
applied before then due to the prolonged period of negative
Euribor. The positive effect of the caps will decrease over time in
a lower interest rate environment and Moody's positioned the rating
of the Class C Notes considering different scenarios for the level
of Euribor.
The principal methodology used in these ratings was " Moody's
Approach to Rating RMBS Using the MILAN Framework" published in May
2024.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors or circumstances that could lead to an upgrade of the
ratings include (1) performance of the underlying collateral that
is better than Moody's expected, (2) an increase in available
credit enhancement, (3) improvements in the credit quality of the
transaction counterparties and (4) a decrease in sovereign risk.
Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk, (2) performance
of the underlying collateral that is worse than Moody's expected,
(3) deterioration in the notes' available credit enhancement and
(4) deterioration in the credit quality of the transaction
counterparties.
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S P A I N
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ALMIRALL SA: Moody's Ups CFR & EUR300MM Sr. Unsecured Notes to Ba2
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Moody's Ratings has upgraded Almirall, S.A.'s (Almirall or the
company) corporate family rating to Ba2 from Ba3 and its
probability of default rating to Ba2-PD from Ba3-PD. Concurrently,
the rating of the EUR300 million backed senior unsecured notes,
maturing in 2026, was upgraded to Ba2 from Ba3. The outlook remains
stable.
RATINGS RATIONALE
The upgrade of the CFR to Ba2 reflects Moody's expectation of
Almirall's strong revenue growth in the coming years, which will be
supported by its newly launched drug, Ebglyss (lebrikizumab), and
further sales growth of its existing dermatological portfolio, as
well as the improvement of its credit metrics to levels in line
with a Ba2 rating in the next 12-18 months. The rating action also
recognizes the company's positive track record to date at executing
its strategic shift to become a dermatology specialty
pharmaceutical company and the good visibility of Almirall's future
revenue and operating cash flow generation, as the company does not
face any major patent expiries in the coming years.
Governance considerations were key to the rating action. These
include the company's track record of prudent financial policy,
which Moody's expect Almirall to maintain. The company has indeed
operated for several years with a moderate leverage and modest
shareholder returns, and maintained a conservative liquidity
management. While the rating still considers some M&A risk, the
company's strategy is currently focused on developing its pipeline
through in-licensing and bolt-on acquisitions of early to mid-stage
assets. Following last year's EUR200 million capital increase,
Almirall has sufficient capital to support its pipeline development
in the next couple of years without re-leveraging its balance
sheet.
Moody's project Almirall's revenue to grow close to 10% annually in
2024-25, from the continued ramp-up of Ebglyss' sales — with
revenue estimated above EUR100 million in 2025 — and from
existing dermatological drugs, such as Ilumetri, which recorded
growth of 25% in H1 2024 and reached sales of EUR187 million in the
12 months that ended June 30, 2024. While Moody's expect
Moody's-adjusted EBITDA margin to further weaken in 2024, due to
Ebglyss' launch investments, Moody's project it will start
improving again in 2025 and reach close to 20% as sales of Ebglyss
ramp up.
Moody's expect Almirall's Moody's-adjusted leverage (gross
debt/EBITDA) to decline to around 2.5x in 2024 and towards 2.0x in
2025, with its cash flow from operations/debt increasing to the
mid-thirties in percentage terms by 2025, which will position the
company solidly in the Ba2 rating category. 2024 free cash flow
(FCF) will be strained by unusually large milestone payments of
around EUR120 million, but Moody's expect the company to generate
positive FCF (before any expenses linked to
in-licensing/acquisitions) of around EUR40 million in 2025.
The Ba2 rating also considers Almirall's small size, with revenue
of EUR926 million for the 12 months that ended June 30, 2024, which
limits economies of scale and increases the risk of earnings
volatility; its high geographical concentration in Europe, notably
in Spain and Germany; and its therapeutic concentration with
dermatology representing 54% of its revenue in H1 2024.
RATING OUTLOOK
The stable rating outlook reflects Moody's expectation that
Almirall's earnings will grow and its EBITDA margin improve over
the next 12-18 months driven by the ramp up of Ebglyss' sales and
the continuation of the sales growth of its existing key
dermatology drugs. After a temporary weakening on the back of the
significant launch costs of Ebglyss, Moody's expect
Moody's-adjusted gross debt/EBITDA to decrease towards 2.0x in the
next 12-18 months. The stable outlook assumes that in-licensing
transactions and any acquisitions over the next 12-18 months will
be funded with the remaining proceeds from the capital increase
undertaken in 2023.
LIQUIDITY
Almirall's liquidity is very good, supported by a cash balance of
EUR329 million as of June 30, 2024 and access to a EUR275 million
undrawn revolving credit facility maturing in February 2028.
Almirall's next large debt maturity is its EUR300 million senior
unsecured notes due 2026. Following large milestone payments in
2024, which will weigh on its FCF, Moody's project positive FCF of
around EUR40 million in 2025 and its FCF to further grow in 2026.
The EUR200 million proceeds of the capital increase completed in
2023 have been earmarked for in-licensing agreements or bolt-on
acquisitions.
STRUCTURAL CONSIDERATIONS
The Ba2 rating of the EUR300 million senior unsecured notes
maturing in 2026 issued by Almirall is in line with its Ba2 CFR,
reflecting their pari passu ranking with the company's other debt
instruments, which are all unsecured and include a European
Investment Bank (EIB) loan, under which EUR50 million was
outstanding as of June 30, 2024, and a EUR275 million revolving
credit facility.
All of Almirall's debt instruments are issued at the level of the
parent company, Almirall, S.A., which is also an operating company.
While the EIB loan and the revolving credit facility are not
guaranteed by any other operating subsidiaries, the senior
unsecured notes are guaranteed by several operating companies and
therefore have a better guarantee coverage. Overall, the issuer and
the guarantors of the notes represent about 90% of consolidated
EBITDA.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could consider upgrading Almirall's ratings if the company
materially enhances its scale and market positioning in
dermatology; it maintains prudent liquidity management and
conservative financial policies, including a clear commitment to a
leverage target; it achieves sustained growth in its FCF (after
milestone payments) and EBITDA; and its leverage sustainably
declines below 2.0x.
Moody's could consider downgrading Almirall's ratings if the
company's newly-launched dermatology drugs record slower revenue
growth than Moody's expect or its EBITDA margin does not recover as
expected; its Moody's-adjusted gross debt/EBITDA exceeds 2.75x for
a prolonged period or its liquidity deteriorates substantially. A
shift towards a more aggressive financial policy, with significant
debt-financed acquisitions, could also result in a downgrade.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Pharmaceuticals
published in November 2021.
COMPANY PROFILE
Headquartered in Barcelona, Spain, Almirall, S.A. is a
pharmaceutical company that researches, develops, produces and
markets a diverse portfolio of in-house developed and in-licenced
drugs in different therapeutic areas, with an increasing focus on
dermatology. For the 12 months that ended June 30, 2024, Almirall
generated revenue of EUR926 million. The Gallardo family is the
company's largest shareholder, with a 60.3% stake as of June 30,
2024.
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U N I T E D K I N G D O M
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BAUSERV LIMITED: Francis Clark Named as Administrators
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Bauserv Limited was placed into administration proceedings in the
High Court of Justice, Business and Property Courts of England and
Wales, Insolvency and Companies List, Court Number: CR-2024-004626,
and Lucinda Clare Coleman and Stephen James Hobson of Francis Clark
LLP were appointed as joint administrators on Aug. 6, 2024.
Bauserv Limited provides underfloor heating systems for commercial
residential and non-residential projects.
Its registered office address is at Centenary House, Peninsula
Park, Rydon Lane, Exeter, EX2 7XE. Its principal trading address
is at Melrose House Pynes Hill, Rydon Lane, Exeter, EX2 5AZ.
The administrators can be reached at:
Lucinda Clare Coleman
Francis Clark LLP,
Centenary House, Peninsula Park
Rydon Lane, Exeter
EX2 7XE
Tel. No: 01392 667000
- and -
Stephen James Hobson
Francis Clark LLP
Centenary House, Peninsula Park,
Rydon Lane, Exeter
EX2 7XE
Tel No: 01392 667000
For further information, contact:
Charles Bell
E-mail: Charles.Bell@pkf-francisclark.co.uk
BM REALISATIONS: Begbies Traynor Named as Administrators
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BM Realisations Limited was placed into administration proceedings
in the High Court of Justice, Business and Property Court,
Insolvency and Companies List, Court Number: CR-2024-004622, and
Paul Appleton and Paul Cooper of Begbies Traynor (London) LLP were
appointed as administrators on Aug. 7, 2024.
BM Realisations, previously named as Bargainmax Limited, is an
online retailer selling branded toys and games in the UK and
Europe. Its registered office address is at 47 Bury New Rd,
Prestwich, Manchester M25 9JY.
The administrators can be reached at:
Paul Appleton
Paul Cooper
Begbies Traynor (London) LLP
31st Floor, 40 Bank Street
London, E14 5NR
For further information, contact:
Benjamin Jackson
Begbies Traynor (London) LLP
E-mail: RC-Team@btguk.com
Tel No: 020 7400 7900
FLOOR ROOM: PricewaterhouseCoopers Named as Joint Administrators
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The Floor Room Limited was placed into administration proceedings
in the Business and Property Courts of England and Wales Insolvency
and Companies List (Chd), No CR 2024 004798, and appointed Adam
Seres, Peter David Dickens, and Zelf Hussain of
PricewaterhouseCoopers LLP as joint administrators on Aug. 9, 2024.
The Floor Room Limited -- https://www.thefloorroom.co.uk/ -- offers
flooring solutions for carpets, laminate, and hard wood. Its
registered office address is at Nestware House, Purfleet Bypass,
Purfleet, Essex, United Kingdom, RM19 1TT.
The joint administrators can be reached at:
Adam Seres
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
- and -
Peter David Dickens
PricewaterhouseCoopers LLP
1 Hardman Square
Manchester M3 3EB
- and -
Zelf Hussain
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
For further details, contact:
Sara Myers
Alison Trenholme
Tel No: 0113 289 4000
INTER EUROPA: Begbies Traynor Named as Administrators
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Inter Europa Limited was placed into administration proceedings in
the High Court of Justice, Business and Property Courts in
Manchester, Insolvencies & Companies (ChD) Court Number:
CR-2024-MAN-000985, and Christopher James Lawton and Keeley Lord of
Begbies Traynor (Central) LLP were appointed as administrators on
Aug. 6, 2024.
Inter Europa Limited provides security services to clients across
the United Kingdom. Its registered office address is at St James
Building, 79 Oxford Street, Manchester M1 6HT.
The administrators can be reached at:
Christopher James Lawton
Keeley Lord (IP No. 29350)
Begbies Traynor (Central) LLP
2-3 Winckley Court,
Chapel Street, Preston
Lancashire
PR1 8BU
For further information, contact:
Hamita Nayi
Begbies Traynor (Central) LLP
E-mail: Hamita.Nayi@btguk.com
Tel No: 017 7220 2000
LINK ELECTRICAL: Lines Henry Named as Administrators
----------------------------------------------------
Link Electrical Services (NW) Limited was placed into
administration proceedings in the High Court of Justice, Business
and Property Courts of Manchester, Insolvency & Companies (Ch D),
No CR-2024-MAN-001026, and Neil Henry of Lines Henry Ltd was
appointed as administrators on Aug. 5, 2024.
Link Electrical Services (NW) Limited is the business of repairing
electrical equipment. Its registered office address is at Mitchel
Charlesworth, 3rd Floor, 5 Temple Square, Temple Street, Liverpool,
L2 5RH. Its principal trading address is at The Matchworks, Speke,
Liverpool, L19 2PH.
The administrators can be reached at:
Neil Henry
Lines Henry Ltd
5 Tabley Court, Victoria Street,
Altrincham, Cheshire,
WA14 1EZ
For further details, contact:
Rob Jones
E-mail: rob@lineshenry.co.uk
Tel No: 0161-929-1905
ONE (HOUSING & SUPPORT): Evelyn Partners Named as Administrators
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One (Housing & Support) CIC was placed into administration
proceedings in the High Court of Justice, Chancery Division,
Companies Court, Court Number: CR-2024-004749, and Finbarr Thomas
O'Connell and Martyn Ewing of Evelyn Partners LLP were appointed as
administrators on Aug. 7, 2024.
One (Housing & Support) CIC provides homeless people with supported
housing, with the assistance and care services that are needed. Its
registered office and principal trading address is at Unit 7 The
Warehouse Studios, Glaziers Lane, Culcheth, WA3 4AQ.
The administrators can be reached at:
Finbarr Thomas O'Connell
Martyn Ewing
Evelyn Partners LLP
c/o RRS Department
45 Gresham Street, London
EC2V 7BG
Further details contact:
The Joint Administrators
Tel No: 020 7131 4000
Alternative contact:
Will Ranson
SAVALAS LTD: RSM UK Named as Administrators
-------------------------------------------
Savalas Ltd was placed into administration proceedings in the Court
of Session, No P632 of 2024, and Paul Dounis and Gareth Harris of
RSM UK Restructuring Advisory LLP were appointed as administrators
on Aug. 8, 2024.
Savalas Ltd's business is in television post production. Its
registered office address is at C/O Anderson Anderson & Brown LLP,
133 Finnieston Street, Glasgow, G3 8HB. Its principal trading
address is at Film City, 1 Merryland Street, Glasgow, G51 2QF.
The administrators can be reached at:
Paul Dounis
Gareth Harris
RSM UK Restructuring Advisory LLP
Third Floor, 2 Semple Street
Edinburgh, EH3 8BL
Case manager:
Kirsty Baillie
RSM UK Restructuring Advisory LLP
Third Floor, 2 Semple Street,
Edinburgh, EH3 8BL
Tel No.: 0131 659 8382
Further details contact:
Paul Dounis
Tel No.: 0131 659 8312
- or -
Gareth Harris
Tel No.: 0113 285 5000
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