/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/070119.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, January 19, 2007, Vol. 8, No. 14 Headlines A U S T R I A ALBERT FILSEKER: Creditors' Meeting Slated for February 1 AROM DIENSTLEISTUNG: Claims Registration Period Ends Feb. 1 DEGERDON & CO: Feldkirch Court Orders Business Closure DIETRICH & DORINGER: Claims Registration Period Ends January 30 GINDA DATENSERVICE: Property Manager Declares Lack of Assets GJIZ HANDEL: Vienna Court Orders Closure of Business STIBAL PHARMA: Creditors' Meeting Slated for February 1 ZLOMREX INTERNATIONAL: Moody's Rates EUR170-Mln Notes at (P)Caa1 ZLOMREX INT'L: S&P Rates EUR170 Million Notes at Prelim B F I N L A N D METSO OYJ: Acquires 100% of Japanese Metso-SHI Joint Venture F R A N C E EUROTUNNEL GROUP: Posts GBP568 Million in Revenues for 2006 HIGHLANDER EURO II: Moody's Rates Cayman Unit's EUR24.5-Mln Debt G E O R G I A * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness G E R M A N Y AQUA SOCIETY: Auditors Express Going Concern Doubt BBG-ZIMMEREI: Claims Registration Ends February 16 DAIMLERCHRYSLER AG: Heavy Truck Division Sales Rise 1.4% in 2006 DERMBACHER MALER: Claims Registration Ends February 14 F & F WOHNBAU: Claims Registration Ends February 9 LANDESBANK BERLIN: Moody's Assigns D+ Financial Strength Rating LB-BAUBETREUUNG: Claims Registration Ends February 6 MAX POBURSKI: Claims Registration Ends February 16 PAPIER-SCHAFER: Claims Registration Ends February 9 SCHMIDT+ALTENSTADTER: Claims Registration Ends February 9 U. ZMUGG: Claims Registration Ends February 2 VOLKSWAGEN AG: Discusses Hostile Bid with Scania & MAN WEC COMMUNICATIONS: Claims Registration Ends February 6 I R E L A N D SAUCE BOAT: Enters Into Liquidation Due to Refurbishment Losses I T A L Y ALITALIA SPA: Air France Chief Executive Quits as Director ALITALIA SPA: Government Meeting Spurs Unions to Cancel Strike ALITALIA SPA: Funds Enough to Operate Until Autumn, Report Says BANCA DI CREDITO: Fitch Assigns Individual C Rating FIAT SPA: Italian Sales Rising; to Pay Dividends This Year K A Z A K H S T A N AGROSOUZ LLP: Creditors Must File Claims by February 27 CONSULTING-B LLP: Claims Filing Period Ends February 27 FARIDA LLP: Creditors' Claims Due February 27 OREAL-K LLP: Proof of Claim Deadline Slated for February 27 PETRO ENGINEERING: Claims Filing Period Ends February 27 SANEL LLP: Creditors Must File Claims by February 27 STROY SERVICE: Karaganda Court Opens Bankruptcy Proceedings STROY SOUZ: Proof of Claim Deadline Slated for February 27 TALDY LLP: Claims Filing Period Ends February 27 VK KAZNEFTESERVICE: Creditors' Claims Due February 28 K Y R G Y Z S T A N PACKPEN TRADE: Creditors' Claims Due February 28 TECHNO-TRADE LLP: Claims Filing Period Ends February 28 L U X E M B O U R G DANA CORP: Will Share Parts Production for Ford's F-150 Truck M A C E D O N I A * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness N E T H E R L A N D S KONINKLIJKE AHOLD: Claimants May Fix Documentation Deficiencies KONINKLIJKE AHOLD: Names Trond Kongrod as COO for ICA Norge Unit PYATEROCHKA HOLDING: Q4 2006 Like-For-Like Group Sales Up 13% N O R W A Y KONINKLIJKE AHOLD: Names Trond Kongrod as COO for ICA Norge Unit P O L A N D ZLOMREX SA: Moody's Puts B2 Corporate Family Rating ZLOMREX SA: S&P Puts B+ Long-Term Corporate Credit Ratings P O R T U G A L * Moody's Sees More SME Deals for Portuguese Securitizations R U S S I A ALATYRSKIY FEED: Claims Filing Deadline Set Feb. 23 DALI CJSC: Claims Filing Deadline Set Feb. 23 DYURTYULINSKOYE FEED: Claims Filing Deadline Set Feb. 23 GORNOMARIYSKIY LLC: Claims Filing Deadline Set Feb. 23 GORNYJ CJSC: Claims Filing Deadline Set Jan. 23 GRANITE LLC: Claims Filing Deadline Set Jan. 23 MONOLITH GROUP: Bankruptcy Hearing Slated for March 29 MOSCOW MORTGAGE: Global Default Cues Moody's Ba2 Rating NIVA OJSC: Claims Filing Deadline Set Jan. 23 OBININSKIY PLYWOOD: Claims Filing Deadline Set Feb. 23 PERMSKIY WOOD-PROM-KHOZ: Creditors Must File Claims by Jan. 23 ROS-INVEST CJSC: Creditors Must File Claims by Jan. 23 ROSNEFT OIL: Names Sergey Makarov as Financial Chief ROSNEFT OIL: Looks on Contractor to Build New Tuapse Refinery SADOVOYE CJSC: Claims Filing Deadline Set Jan. 23 SHAKHTA-TRANSTPORT OJSC Claims Filing Deadline Set Feb. 23 SIBACADEMBANK: Merger Cues Moody's to Lift UVTB's Rating to B1 TURQUOISE CJSC: Creditors Must File Claims by Jan. 23 URALVNESHTORGBANK: Merger Cues Moody's to Lift Rating to B1 URALVNESHTORGBANK: Moody's Withdraws Rating After Merger Closing PYATEROCHKA HOLDING: Q4 2006 Like-For-Like Group Sales Up 13% S E R B I A & M O N T E N E G R O * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness S W I T Z E R L A N D ACM METALL: Zug Court Starts Bankruptcy Proceedings ALMAK JSC: Lucerne Court Suspends Bankruptcy Proceedings BATIX LLC: Lucerne Court Suspends Bankruptcy Proceedings EMBLI LLC: Lucerne Court Suspends Bankruptcy Proceedings PRO-HEALTH JSC: Davos Court Starts Bankruptcy Proceedings R. + J. LLC: Lucerne Court Suspends Bankruptcy Proceedings RISTORANTE - BAR UPS!: Lucerne Court Closes Bankruptcy Process TURM-GARAGE JSC: Willisau Court Starts Bankruptcy Proceedings WINDIRECT JSC: Lucerne Court Suspends Bankruptcy Proceedings XENAPRISE LLC: Lucerne Court Starts Bankruptcy Proceedings T U R K E Y * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness U K R A I N E * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness U N I T E D K I N G D O M ADVANCED MARKETING: Court Approves Securities Suit Settlement BAA PLC: Parent Making Progress on Refinancing Plans CHESBEE CELEBRATIONS: Taps Andrew Rosler to Liquidate Assets CHILTERN INVADEX: Taps KPMG Restructuring as Administrators CITY PLACEMENT: Nominates Liquidators from Abbot Fielding COMMCARE LTD: Joint Liquidators Take Over Operations COMPLETE BUILDING: Names Sabia Sahota Liquidator DURA AUTOMOTIVE: Inks Pact with American Electric and NITCo EUROTUNNEL GROUP: Posts GBP568 Million in Revenues for 2006 GAP INC: Credit Quality Declines Amid Rumors of Sale or Spin-off H. PLUMB: Closes Eight Stores as Administrators Take Helm HIGHLANDER EURO II: Moody's Rates Cayman Unit's EUR24.5-Mln Debt LANDESBANK BERLIN: Moody's Assigns D+ Financial Strength Rating LC REALISATIONS: Brings In Administrators from PwC MMS ELECTRICAL: Names Jeremy Nicholas Bleazard as Administrator MISYS PLC: Earns GBP22.8 Million in Six Months to Nov. 30, 2006 NASDAQ STOCK: LSE Reiterates Call for Rejection of Final Offer ORION LOCUMS: Appoints Joint Administrators from Leonard Curtis OWEN OWEN: HSBC Bank Taps Grant Thornton as Receivers PEEL FABRICATIONS: Taps Langley Group as Administrators SECURITY RESPONSE: Appoints Jonathan Lord as Liquidator SOLUTIA INC: Committee Wants to Intervene in Calpine Arbitration STOCKLE COLOUR: Appoints Administrators from Baker Tilly THPA FINANCE: Fitch Affirms B Rating on GBP30-Mln Class C Notes VOGUE CONTRACTS: Appoints Paul John Webb as Administrator YOUR HEALTH: Appoints Zafar Igbal to Administer Assets * BOOK REVIEW: Partners: Forming Strategic Alliances in Health Care ********* ============= A U S T R I A ============= ALBERT FILSEKER: Creditors' Meeting Slated for February 1 --------------------------------------------------------- Creditors owed money by LLC Albert Filseker (FN 97230k) are encouraged to attend the creditors' meeting at 1:00 p.m. on Feb. 1 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Wels Hall 101 1st Floor Maria Theresia Str. 12 Wels, Austria Headquartered in Attnang - Puchheim, Austria, the Debtor declared bankruptcy on Dec. 5, 2006 (Bankr. Case No. 20 S 155/06d). Christian Rumplmayr serves as the court- appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Christian Rumplmayr Stadtplatz 36 4840 Voecklabruck, Austria Tel: 07672/75931 Fax: 07672/75953 E-mail: mail@rumplmayr.at AROM DIENSTLEISTUNG: Claims Registration Period Ends Feb. 1 ----------------------------------------------------------- Creditors owed money by LLC Arom Dienstleistung (FN 226789p) have until Feb. 1 to file written proofs of claims to court- appointed property manager Michael Lesigang at: Dr. Michael Lesigang Landstrasser Hauptstrasse 14-16/8 1030 Vienna, Austria Tel: 715 25 26 Fax: 715 25 26/27 Email: michael@lesigang.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:15 p.m. on Feb. 15 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Trade Court of Vienna Room 1703 Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Dec. 5, 2006 (Bankr. Case No. 5 S 159/06a). DEGERDON & CO: Feldkirch Court Orders Business Closure ------------------------------------------------------ The Land Court of Feldkirch entered Dec. 4, 2006, an order closing the business of LLC Degerdon & Co (FN 62851d). Court-appointed property manager Guenter Flatz recommended the business closure after determining that the continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Guenter Flatz c/o Dr. Egon Kasseroler Muehletorplatz 12 6800 Feldkirch, Austria Tel: 05522/39100 Fax: 05522/391001 E-mail: office@tfd.at Headquartered in Bludesch, Austria, the Debtor declared bankruptcy on Nov. 29, 2006 (Bankr. Case No. 14 S 52/06v). Egon Kasseroler represents Dr. Flatz in the bankruptcy proceedings. DIETRICH & DORINGER: Claims Registration Period Ends January 30 --------------------------------------------------------------- Creditors owed money by LLC Dietrich & Doringer (FN 113345i) have until Jan. 30 to file written proofs of claims to court- appointed property manager Thomas Wanek at: Dr. Thomas Wanek Hochstrasse 31 2380 Perchtoldsdorf, Austria Tel: 01/8693888 Fax: 01/869166033 Email: anwalt@aon.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on Feb. 13 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Land Court of Wiener Neustadt Room 15 Wiener Neustadt, Austria Headquartered in Perchtoldsdorf, Austria, the Debtor declared bankruptcy on Dec. 5, 2006 (Bankr. Case No. 11 S 133/06d). GINDA DATENSERVICE: Property Manager Declares Lack of Assets ------------------------------------------------------------ Dr. Hubert Sacha, the court-appointed property manager for LLC Ginda Datenservice (FN 214382v), declared Dec. 4, 2006, that the Debtor's property is insufficient to cover creditors' claim. The Land Court of Krems an der Donau is yet to rule on the property manager's claim. Headquartered in Grunddorf, Austria, the Debtor declared bankruptcy on Oct. 30, 2006 (Bankr. Case No. 9 S 55/06w). The property manager can be reached at: Dr. Hubert Sacha Gartenaugasse 3 3500 Krems, Austria Tel: 02732/76767 Fax: 02732/76767-20 E-mail: drsacha@aon.at GJIZ HANDEL: Vienna Court Orders Closure of Business ---------------------------------------------------- The Trade Court of Vienna entered Dec. 4, 2006, an order closing the business of LLC Gjiz Handel (FN 275309t). Court-appointed property manager Kurt Bernegger recommended the business closure after determining that the continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Kurt Bernegger c/o Mag. Waltraud Kohlfuerst Jacquingasse 21 1030 Vienna, Austria Tel: 7991580 Fax: 7965914 E-mail: kanzlei@bernegger-wt.comm Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Oct. 31, 2006 (Bankr. Case No. 4 S 157/06z). Waltraud Kohlfuerst represents Dr. Bernegger in the bankruptcy proceedings. STIBAL PHARMA: Creditors' Meeting Slated for February 1 ------------------------------------------------------- Creditors owed money by LLC Stibal Pharma (FN 249238b) are encouraged to attend the creditors' meeting at 1:20 p.m. on Feb. 1 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Wels Hall 101 1st Floor Maria Theresia Str. 12 Wels, Austria Headquartered in Wels, Austria, the Debtor declared bankruptcy on Dec. 5, 2006 (Bankr. Case No. 20 S 156/06a). Thomas Humer serves as the court-appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Thomas Humer Ringstrasse 4 4600 Wels, Austria Tel: 07242/47240 Fax: 07242/68650 E-mail: office@hofer-humer.at ZLOMREX INTERNATIONAL: Moody's Rates EUR170-Mln Notes at (P)Caa1 ---------------------------------------------------------------- Moody's Investors Service assigned a B2 foreign currency corporate family rating to Zlomrex S.A., the largest Polish steel scrap provider and a leading producer and distributor of high-grade long steel products in the domestic market. It also assigned a (P)Caa1 senior secured rating to the EUR170 million notes issued by Zlomrex International Finance S.A. The rating outlook is stable. This is the first time Moody's has assigned ratings to Zlomrex. Moody's issues provisional ratings in advance of the final sale of securities, and these ratings only represent Moody's opinion on the draft documentation of the notes received at the time of the press release. Upon a conclusive review of the transaction and associated documentation, Moody's will endeavor to assign a definitive rating to the securities. A definitive rating may differ from a provisional rating. Zlomrex is in the process of acquiring voestalpine Stahlhandel GmbH, the steel distribution arm of Austrian steel producer voestalpine AG. Under Moody's rating methodology for the global steel industry, Zlomrex's corporate family rating -- based on pro-forma last-twelve-month figures as at September 2006 including voestalpine Stahlhandel and the effects from the debt- financed acquisition -- would map to a Ba2. The actual assigned rating of B2, three notches below the indicated rating under the methodology, reflects Moody's concerns with regard to the company's trailing performance and its exposure to cyclical demand patterns, which means that its resilience in terms of profitability and cash generation has yet to be tested through a prolonged weakness in the pricing/demand environment. "Zlomrex's B2 rating additionally factors in (i) the company's comparatively small size, (ii) its dependence on regional steel markets (Central and Eastern Europe in general but the Polish construction market in particular), (iii) the limited corporate history in the current form, (iv) the significant level of additional debt relating to the voestalpine acquisition, (v) risks arising from the integration of the voestalpine business, and (vi) Moody's expectation of continued external and debt- financed growth, which may not allow for any significant improvement in the company's credit metrics in the short to medium term," said Matthias Hellstern, Moody's lead analyst for Zlomrex. These risks are, however, partially mitigated by: (i) the company's strong position in niche markets, (ii) the positive market dynamics currently seen in Poland and other Central and Eastern European countries and (iii) Zlomrex's comparatively flexible cost structure, which should allow it to at least partially offset any negative swings in operating results with a negative swing in either revenues or costs. The rating of the EUR170 million notes has been notched down to (P)Caa1 in light of their contractual subordination to existing secured term bank debt. Headquartered in Poraj, Poland, Zlomrex S.A. is the largest trader of steel scrap and one of the leading producers and distributors of high-grade long steel products in its domestic market. Founded in 1990 as a pure scrap trader, the company has transformed itself into a fully integrated producer of steel products through a range of acquisitions in the long steel production and distribution business. ZLOMREX INT'L: S&P Rates EUR170 Million Notes at Prelim B --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term and 'B' short-term corporate credit ratings to Poland-based integrated steel group Zlomrex S.A. The outlook is stable. At the same time, Standard & Poor's assigned its preliminary 'B' senior secured debt rating to the proposed EUR170 million notes due 2014 to be issued by subsidiary Zlomrex International Finance S.A. (Zlomrex Finance), guaranteed by Zlomrex and certain subsidiaries. The notes will be used to finance the sizable acquisition of a 74.9% stake in steel distribution business voestalpine Stahlhandel GmbH (VA Stahl), refinance debt, and for general corporate purposes. "The ratings reflect Zlomrex's vulnerable business risk profile characterized by management's ambitious growth strategy; short track record; and the group's small size relative to peers," said Standard & Poor's credit analyst Alex Herbert. "This is even allowing for significantly increased revenues after the closing of the group's acquisition of VA Stahl from voestalpine AG, which is active mostly in Austria." The ratings are also constrained by Zlomrex's still limited diversity and volatile margins in a cyclical, volatile, and competitive steel sector. The ratings are further constrained by the group's aggressive financial risk profile, as demonstrated by the wholly debt-financed nature of the VA Stahl acquisition, and volatile cash flows. Supporting the ratings are Zlomrex's integrated steel operations including steel scrap, production, and distribution, which will be enhanced by the VA Stahl acquisition; moderate leverage even after the purchase; and minimal debt maturities in the medium term. "Standard & Poor's expects Zlomrex to succeed in closing and integrating the acquisition of VA Stahl," Mr. Herbert added. "The ratings assume that the enlarged group will generate free operating cash flows, although these are likely to remain volatile." To maintain the ratings, S&P expects Zlomrex to have credit protection ratios of funds from operations to adjusted debt of 15%-20% and adjusted debt to EBITDA of below 3.5x over the cycle. No further material debt-financed acquisitions are factored into the ratings, although S&P expects Zlomrex to use cash flows to purchase the remaining 25.1% stake in VA Stahl in 2009 or 2010. Upside rating potential is limited by the group's business risk. Downside rating pressure could develop if management follows a more aggressive financial policy, or if there is a marked downturn in the steel sector. ============= F I N L A N D ============= METSO OYJ: Acquires 100% of Japanese Metso-SHI Joint Venture ------------------------------------------------------------ Metso Paper, a unit of Metso Oyj, has acquired all of Sumitomo Heavy Industries' shares at Metso-SHI Co. Ltd. joint venture. Previously Metso Paper possessed 50%, Metso Automation 15% and SHI 35% of the joint venture, through which Metso Paper has handled all its business, and Metso Automation its pulp and paper industry related business in Japan. This arrangement allows Metso Paper to organize their Japanese operations flexibly now that the company has closed the acquisition of Aker Kvaerner's Pulping and Power businesses. The Japanese pulp and paper market, in which Metso has been actively present in cooperation with SHI since 1976, is widely considered as one of the world's most demanding. In 2005 the country's paper and board production totaled around 31 million tons, whereas pulp production reached 11 million tons. The Metso-SHI joint venture employs a total of about 50 people, located in Tokyo and Okayama. About Metso Headquartered in Helsinki, Finland, Metso Corporation -- http://www.metso.com/-- serves customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. The company's principal production plants are located in Brazil, China, Finland, France, Germany, India, Italy, South Africa, Sweden, the United Kingdom and the United States. * * * As reported in the TCR-Europe on April 11, 2006, Standard & Poor's Ratings Services revised its outlook on Finland-based machinery and engineering group Metso Corp. to positive from stable, reflecting improvements in the group's operating performance and capital structure that offer it the potential to return to a low investment-grade rating. The 'BB+' long-term and 'B' short-term corporate credit ratings, as well as the 'BB' senior unsecured debt rating on the group were affirmed. =========== F R A N C E =========== EUROTUNNEL GROUP: Posts GBP568 Million in Revenues for 2006 ----------------------------------------------------------- Eurotunnel Group recorded revenues of GBP568 million in 2006, compared with GBP542 million revenues in 2005. The growth resulted from Eurotunnel's Passenger and Truck Shuttle activities that increased 7% to GBP318 million. "Eurotunnel has seen a significant growth in revenue from the now mature cross-Channel market, for the second year in a row. These excellent results are ahead of the business plan which has served as the foundation for the company's financial restructuring and are an encouraging indicator for the success of the safeguard plan," Jacques Gounon, Eurotunnel's chairman and CEO disclosed. Total revenue for Eurotunnel, which included transport and non- transport activities, has reached GBP568 million in 2006. At constant exchange rates, this equates to an increase of 5% when compared to the previous year. It rose by 1% between 2004 and 2005. The Shuttle services linking Folkestone to Coquelles, carrying trucks or passenger vehicles are the main driver for this growth: their revenues have grown by 7% to GBP318 million. Revenues from the Railways posted GBP240 million for 2006. This included payments due under the minimum usage charge of GBP65 million for the 11-months of 2006. The ending of this arrangement deprived Eurotunnel GBP6 million of revenue compared with 2005. About Eurotunnel Headquartered in Folkestone, United Kingdom and Calais, France, Eurotunnel Group -- http://www.eurotunnel.co.uk/-- operates a fleet of 25 shuttle trains, which carry cars, coaches and trucks. It manages the infrastructure of the Channel Tunnel and receives toll revenues from train operating companies whose trains pass through the Tunnel. The British and French governments have granted Eurotunnel a concession to operate the Channel Tunnel until 2086. Eurotunnel Group files reports in the U.S. Securities and Exchange Commission under the names of Eurotunnel PLC (ETNUF.PK) and Eurotunnel SA (ETTFF.PK). Company Crisis Eurotunnel's crisis began when costs to build the tunnels that connect U.K. and France started to overrun before it opened in 1994. The Iraq war followed, which didn't help as tourist traffic fell. In May 2004, Eurotunnel appointed Lazard (global coordinator) and Lehman Brothers as bank advisors, and Dresdner Kleinwort Wasserstein as restructuring adviser. In July 2004, auditor KPMG Audit Plc said the company faced uncertainty after 2005. The firm's survival is dependent upon its ability to put in place a refinancing plan or, if not, to obtain an agreement with the lenders under the existing Credit Agreement within the next two years, the auditor said. Eurotunnel obtained Aug. 2 an order placing the channel operator under the protection of the Court pursuant to the new safeguard legislation (Procedure de sauvegarde). On Jan. 15, the Court approved Eurotunnel's safeguard plan, backed by the court-appointed representatives to the company and to the creditors. HIGHLANDER EURO II: Moody's Rates Cayman Unit's EUR24.5-Mln Debt ---------------------------------------------------------------- Moody's Investors Service assigned long-term ratings to the notes issued by Highlander Euro CDO II B.V. on Dec. 14, 2006, a special purpose vehicle incorporated in The Netherlands: -- Aaa to the EUR479.5 million Class A Primary Senior Secured Floating Rate Notes due 2022; -- Aa2 to the EUR56 million Class B Primary Senior Secured Floating Rate Notes due 2022; -- A3 to the EUR42 million Class C Primary Senior Secured Deferrable Floating Rate Notes due 2022; and -- Baa3 to the EUR28 million Class D Primary Senior Secured Deferrable Floating Rate Notes due 2022. The Primary Issuer has also issued EUR58.8 million Class M Primary Mezzanine Secured Notes due 2022 and EUR35.7 million Class F-2 Primary Subordinated Notes due 2022* which are not rated by Moody's. Highlander Euro CDO II (Cayman) Ltd., and SPV incorporated in Cayman Islands, will acquire the unrated Class M Primary Mezzanine Notes directly from the Primary Issuer. It will be re-issued in a split form into a EUR24.5 million Class E Secondary Senior Secured Deferrable Floating Rate Notes due 2022* and a EUR34.3 million Class F-1 Secondary Mandatorily Redeemable Preferred Securities. The Class F-1 Secondary Mandatorily Redeemable Preferred Securities effectively rank pari passu to the Class F-2 Primary Subordinated Notes due 2022. The Secondary Issuer will also purchase EUR3 million of the Class C Primary Senior Secured Deferrable Floating Rate Notes and EUR2.5 million Class D Primary Senior Secured Deferrable Floating Rate Notes which will be re-issued and included in the Class X Secondary Combination Securities together with EUR1.5 million Class F-1 Secondary Mandatorily Redeemable Preferred Securities. These ratings are assigned to the notes to be issued by Highlander Euro CDO II (Cayman) Ltd.: -- A3 to the EUR3 million Class C Secondary Senior Secured Deferrable Floating Rate Notes due 2022; -- Baa3 to the EUR2.5 million Class D Secondary Senior Secured Deferrable Floating Rate Notes due 2022; -- Ba3 to the EUR24,500,000 Class E Secondary Senior Secured Deferrable Floating Rate Notes due 2022; and -- Baa1 to the EUR7,000,000 Class X Secondary Combination Securities due 2022. These ratings address the expected loss of noteholders by the legal final maturity date in December 2022. The rating assigned to the Class X Secondary Combination Securities addresses the expected loss on such securities as a portion of the Rated Balance and the payments of interest thereon at a Rated Coupon of 0.25% per annum, where the Rated Balance is defined at any time as the initial principal amount of such securities on the Closing Date, less all payments made in respect of such securities in excess of the Rated Coupon (including, for the avoidance of doubt, any allocation of principal, interest in excess of the Rated Coupon and dividends) at such time. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks, such as those associated with the timing of principal prepayments and other market risks, have not been addressed and may have a significant effect on yield to investors. These ratings are based upon: 1. an assessment of the credit quality and of the diversification of the assets to be included in the portfolio; 2. an assessment of the eligibility criteria, reinvestment criteria and portfolio limits applicable to the future additions to the portfolio; 3. the protection against losses through the subordination of the more junior classes of notes to the more senior classes of notes; 4. the expertise of Highland Capital Management Europe, Ltd. in the management of loans portfolios; and 5. the legal and structural integrity of the transaction. This transaction is a high yield collateralized loan obligation related to a portfolio of EUR686 million comprised of senior loans, mezzanine loans and high-yield bonds. The portfolio is dynamic and Highland Capital Management Europe, Ltd. will provide investment advice to the Primary Issuer in respect thereof. The portfolio is around 90% ramped-up at closing, and is expected to be fully ramped-up within six months after closing, subject to compliance with the eligibility criteria and portfolio guidelines (including, amongst other tests, the diversity score, the weighted average rating factor, the weighted average recovery rate, the weighted average spread and the weighted average life of the assets in the portfolio). This transaction was arranged by Goldman Sachs International and managed by Highland Capital Management Europe, Ltd. ============= G E O R G I A ============= * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness --------------------------------------------------------------- Standard & Poor's Ratings Services expects 2007 to be a positive year for economic growth but a mixed one for sovereign creditworthiness in Europe, with fewer ratings changes than in 2006. This separation between economic conditions and potential ratings changes in the European region is one of the key trends for 2007 and beyond, but there are also a number of country- specific developments that could affect sovereign ratings. As of Jan. 17, 2007, European sovereign ratings show: European Sovereign Ratings List Foreign Currency Local Currency Sovereign Ratings Ratings --------- ---------------- -------------- Andorra (Principality of) AA/Stable/A-1+ AA/Stable/A-1+ Austria (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Belgium (Kingdom of) AA+/Stable/A-1+ AA+/Stable/A-1+ Bulgaria (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Croatia (Republic of) BBB/Stable/A-3 BBB+/Stable/A-2 Cyprus (Republic of) A/Stable/A-1 A/Stable/A-1 Czech Republic A-/Positive/A-2 A/Positive/A-1 Denmark (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Estonia (Republic of) A/Stable/A-1 A/Stable/A-1 Finland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ France (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Georgia (Government of) B+/Stable/B B+/Stable/B Germany (Federal Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Hellenic Republic (Greece) A/Stable/A-1 A/Stable/A-1 Hungary (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Iceland (Republic of) A+/Stable/A-1 AA/Stable/A-1+ Ireland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Isle of Man AAA/Stable/A-1+ AAA/Stable/A-1+ Italy (Republic of) A+/Stable/A-1+ A+/Stable/A-1+ Latvia (Republic of) A-/Stable/A-2 A-/Stable/A-2 Liechtenstein (Principality of) AAA/Stable/A-1+ AAA/Stable/A-1+ Lithuania (Republic of) A/Stable/A-1 A/Stable/A-1 Luxembourg (Grand Duchy of) AAA/Stable/A-1+ AAA/Stable/A-1+ Macedonia (Republic of) BB+/Stable/B BBB-/Stable/A-3 Malta (Republic of) A/Stable/A-1 A/Stable/A-1 Montenegro (Republic of) BB/Positive/B BB/Positive/B Netherlands (State of The) AAA/Stable/A-1+ AAA/Stable/A-1+ Norway (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Poland (Republic of) BBB+/Stable/A-2 A-/Stable/A-2 Portugal (Republic of) AA-/Stable/A-1+ AA-/Stable/A-1+ Romania (Republic of) BBB-/Stable/A-3 BBB/Stable/A-3 Russian Federation (The) BBB+/Stable/A-2 A-/Stable/A-2 Serbia (Republic of) BB-/Positive/B BB-/Positive/B Slovak Republic A/Stable/A-1 A/Stable/A-1 Slovenia (Republic of) AA/Stable/A-1+ AA/Stable/A-1+ Spain (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Sweden (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Swiss Confederation (Switzerland) AAA/Stable/A-1+ AAA/Stable/A-1+ Turkey (Republic of) BB-/Stable/B BB/Stable/B Ukraine BB-/Stable/B BB/Stable/B United Kingdom AAA/Stable/A-1+ AAA/Stable/A-1+ ============= G E R M A N Y ============= AQUA SOCIETY: Auditors Express Going Concern Doubt -------------------------------------------------- Amisano Hanson expressed substantial doubt about Aqua Society Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended Sept. 30, 2006 and 2005. The auditing firm pointed to the company's accumulated losses, working capital deficiency and the expectation that the company will continue to incur losses in the development of its business. At Sept. 30, 2006, the company's balance sheet showed US$1.8 million in stockholders' deficit, compared with US$463,306 in stockholder's equity at Sept. 30, 2005. The company's Sept. 30 balance sheet also showed strained liquidity with US$854,960 in total current assets available to pay US$2.9 million in total liabilities coming due within the next 12 months. For the 12-month period ended September 2006, the company posted US$4.3 million of net losses on US$2.2 million of sales, compared with US$25.8 million of net losses on US$896,535 of sales for the same period in 2005. Financial Resources The company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. Headquartered in Herten, Germany, Aqua Society Inc., designs and develops applied technologies and provides consulting services in the areas of heating, ventilation, air conditioning, refrigeration, water purification, waste water treatment and energy. BBG-ZIMMEREI: Claims Registration Ends February 16 -------------------------------------------------- Creditors of BBG-Zimmerei und Holzbau GmbH Beelitz have until Feb. 16 to register their claims with court-appointed insolvency manager Torben Ottmar Herbold. Creditors and other interested parties are encouraged to attend the meeting at 1:00 p.m. on March 31, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Potsdam Hall 301 3rd Floor Branch Linden Road 6 14467 Potsdam, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Potsdam opened bankruptcy proceedings against BBG-Zimmerei und Holzbau GmbH Beelitz on Dec. 29, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: BBG-Zimmerei und Holzbau GmbH Beelitz Bruecker Road 53-54 14547 Beelitz, Germany The insolvency manager can be contacted at: Torben Ottmar Herbold Haeckelstrasse 10 39104 Magdeburg, Germany DAIMLERCHRYSLER AG: Heavy Truck Division Sales Rise 1.4% in 2006 ---------------------------------------------------------------- DaimlerChrysler AG disclosed that it sold 537,000 heavy trucks in 2006, an increase of 1.4% from 2005, as demand from construction and transportation companies surged, Bloomberg News reports. The company reported a boost in sales in Europe, Japan, and North America. "The Truck Group offers customer-focused products on all continents. Throughout the world, these products are the technological leaders in their respective segments - a fact that is also reflected in our sales success," said Andreas Renschler, DaimlerChrysler Board of Management member responsible for the Truck Group & Buses. At 142,100 units, Trucks Europe & Latin America sold 4.0% fewer vehicles than in 2005. On the other hand, sales were substantially above the previous year's level in the core markets of Western Europe, particularly in Germany. The main factor for this success continued to be the company's flagship truck, the Actros. Sales of this truck totaled 59,700 units, thus matching the high level posted in 2005. Sales increases in Western and Eastern Europe were offset by declines in regions such as the Middle East as well as by a declining market in Brazil. However, its North American unit is expecting a sales decline this year because buyers accelerated truck purchases in 2006, before new emission standards and higher prices were implemented on Jan. 1. The company plans to lay off 4,000 workers in North America because of the anticipated decline, Bloomberg News states. "As a result of cyclical and regulatory developments, we expect the markets in NAFTA and Japan to weaken significantly in 2007, while we anticipate that the demand in the European markets will contract only slightly," said Mr. Renschler. "In addition, we expect the markets to recover in 2008 because new emissions regulations will probably lead to pre-buy effects," Mr. Renschler observed. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices, and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. Outlook As reported in the TCR-Europe on Oct. 30, 2006, DaimlerChrysler said it expects a slight decrease in worldwide demand for automobiles in the fourth quarter and thus slower market growth than in Q4 2005. For full-year 2006, the company anticipates market growth of around 3%. It expects unit sales in 2006 to be lower than in the previous year (4.8 million units). On Sept. 15, 2006, DaimlerChrysler reduced the Group's operating profit target for 2006 to an amount of US$6.3 billion. Although the company now has to assume that the profit contribution from EADS will be US$0.3 billion lower than originally anticipated because of the delayed delivery of the Airbus A380, DaimlerChrysler is maintaining this earnings target due to very positive business developments in the divisions Mercedes Car Group, Truck Group and Financial Services. DERMBACHER MALER: Claims Registration Ends February 14 ------------------------------------------------------ Creditors of Dermbacher Maler GmbH Feldatal have until Feb. 14 to register their claims with court-appointed insolvency manager Steffen Zerkaulen. Creditors and other interested parties are encouraged to attend the meeting at 11:40 a.m. on March 14, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court Meiningen Hall A 0208 Linden Avenue 15 Meiningen, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Meiningen opened bankruptcy proceedings against Dermbacher Maler GmbH Feldatal on Jan. 1. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Dermbacher Maler GmbH Feldatal Attn: Werner Heumueller, Manager Untere Roede 4 36466 Dermbach, Germany The insolvency manager can be contacted at: Steffen Zerkaulen Gustav-Weisskopf-Str. 4 99092 Erfurt, Germany F & F WOHNBAU: Claims Registration Ends February 9 -------------------------------------------------- Creditors of F & F Wohnbau GmbH have until Feb. 9 to register their claims with court-appointed insolvency manager Andreas Schulte-Beckhausen. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on March 16, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bonn Hall S2.22 2. Stick William Route 21 53111 Bonn, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Bonn opened bankruptcy proceedings against F & F Wohnbau GmbH on Dec. 21, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: F & F Wohnbau GmbH Attn: Dennis Froesch, Manager Wolfsgasse 10 53639 Koenigswinter, Germany The insolvency manager can be contacted at: Dr. Andreas Schulte-Beckhausen Schulte-Beckhausen Oxfordstr. 2 53111 Bonn, Germany LANDESBANK BERLIN: Moody's Assigns D+ Financial Strength Rating --------------------------------------------------------------- Moody's Investors Service assigned an A1 Issuer Rating to Landesbank Berlin and affirmed the existing A1 Deposit, P-1 Short-term Deposit and D+ Financial Strength Ratings for the bank. The Issuer Rating has been assigned at the request of Landesbank Berlin. Issuer Ratings are opinions of the ability of entities to honor senior unsecured financial obligations and contracts. Moody's rating symbols for Issuer Ratings are identical to those used to indicate the credit quality of long-term obligations. The A1 Issuer rating is consistent with the existing A1/P-1 Deposit Ratings for Landesbank Berlin and reflect the bank's current majority ownership by the City of Berlin (rated Aa1). Domiciled in Berlin, Germany, Landesbank Berlin reported total assets of EUR144.4 billion and interim operating income of EUR216 million as of end-September 2006. LB-BAUBETREUUNG: Claims Registration Ends February 6 ---------------------------------------------------- Creditors of LB-Baubetreuung GmbH have until Feb. 6 to register their claims with court-appointed insolvency manager Mathias Dorn. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Feb. 16, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Memmingen Meeting Room 103 Ground Floor Law Courts Buxacher Road 6 Memmingen, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Memmingen opened bankruptcy proceedings against LB-Baubetreuung GmbH on Dec. 29, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: LB-Baubetreuung GmbH Attn: Brader Erwin and Losanksky Horst, Managers Madlenerstr. 6 b 87700 Memmingen, Germany The insolvency manager can be contacted at: Mathias Dorn Allgauer Str. 1 87435 Kempten, Germany Tel: 0831/5800434 Fax: 0831/5800464 MAX POBURSKI: Claims Registration Ends February 16 -------------------------------------------------- Creditors of Max Poburski + Soehne GmbH & Co. KG have until Feb. 16 to register their claims with court-appointed insolvency manager Michael W. Scholz. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on March 15, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Hamburg Hall B 405 (Civil Law Courts) 4th Floor Anbau Sievkingplatz 1 20355 Hamburg, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Hamburg opened bankruptcy proceedings against Max Poburski + Soehne GmbH & Co. KG on Dec. 22, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Max Poburski + Soehne GmbH & Co. KG Randersweide 69-73 21035 Hamburg, Germany Attn: Max Dietrich Wilhelm Poburski, Manager Billeweg 24a 21465 Wentorf, Germany Guenter Poburski, Manager Sigismundkorso 54 13465 Berlin, Germany The insolvency manager can be contacted at: Michael W. Scholz Welckerstrasse 8 20354 Hamburg, Germany PAPIER-SCHAFER: Claims Registration Ends February 9 --------------------------------------------------- Creditors of Papier-Schafer GmbH have until Feb. 9 to register their claims with court-appointed insolvency manager Claudia Jansen. Creditors and other interested parties are encouraged to attend the meeting at 8:50 a.m. on March 6, at which time the insolvency manager will present her first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Frankfurt/Main Hall 2 Building F Klingerstrasse 20 60313 Frankfurt/Main, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Frankfurt/Main opened bankruptcy proceedings against Papier-Schafer GmbH on Oct. 31, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Papier-Schafer GmbH Hostatostrasse 7 65929 Frankfurt-Unterliederbach Germany The insolvency manager can be contacted at: Claudia Jansen Bockenheimer Highway 20 60323 Frankfurt/Main, Germany Tel: 069/4272686-5270 Fax: 069/42726865555 SCHMIDT+ALTENSTADTER: Claims Registration Ends February 9 --------------------------------------------------------- Creditors of Schmidt+Altenstadter GmbH have until Feb. 9 to register their claims with court-appointed insolvency manager Kanzlei U. Hauter. Creditors and other interested parties are encouraged to attend the meeting at 1:30 a.m. on March 7, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court Erfurt Hall 6 Judicial Center Rudolfstr. 46 99092 Erfurt, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Erfurt opened bankruptcy proceedings against Schmidt+Altenstadter GmbH on Nov. 2, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Schmidt+Altenstadter GmbH Karl-Marx-Road 1 99610 Soemmerda, Germany The insolvency manager can be contacted at: Kanzlei U. Hauter Untermarkt 12 99974 Muehlhausen, Germany U. ZMUGG: Claims Registration Ends February 2 --------------------------------------------- Creditors of U. Zmugg Tankstellen GmbH have until Feb. 2 to register their claims with court-appointed insolvency manager Eberhard Stock. Creditors and other interested parties are encouraged to attend the meeting at 9:02 a.m. on Feb. 9, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Krefeld Meeting Room H 131 1st Floor Nordwall 131 47798 Krefeld, Germany The Court will also verify the claims set out in the insolvency manager's report on 10:03 a.m. on March 16 at the same venue. The District Court of Krefeld opened bankruptcy proceedings against U. Zmugg Tankstellen GmbH on Nov. 9, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: U. Zmugg Tankstellen GmbH Lange Str. 105 47829 Krefeld, Germany Attn: Hans Ulrich Zmugg, Manager Preussischer Hut 40 47802 Krefeld, Germany The insolvency manager can be contacted at: Eberhard Stock Wilhelmshofallee 75 47800 Krefeld, Germany VOLKSWAGEN AG: Discusses Hostile Bid with Scania & MAN ------------------------------------------------------ Volkswagen AG's head Ferdinand Piech and Scania AB's Jacob Wallenberg met with MAN AG to discuss the latter's EUR10.3 billion hostile bid for Scania on Jan. 15, AFX News Ltd. reports. "They were exploratory talks. They were figuring out where they now stand," Kjell Wallin, head of Scania's work council was quoted by AFX as saying. VW's Supervisory Board of Volkswagen AG rejected MAN's offer to take over Scania on Jan. 11. It has requested that the Board of Management worked on a friendly merger of Scania and MAN. Volkswagen holds the biggest share in Scania with 34% of the voting rights and 18.7% of the equity. VW also holds a 20% stake in MAN. According to The Wall Street Journal, Scania's second-largest shareholder, the Wallenberg family, through its investment arm Investor AB, acknowledged that a merger makes sense. But they are opposed the hostile nature of the bid. The Wallenbergs disclosed that an agreement is not possible by MAN's bid deadline, implicating that the offer of MAN will expire without success. "If the shareholders say no, then we'll accept that. This isn't our only option," Hakan Samuelsson, MAN's chief executive officer said in December 2006. Mr. Samuelsson also told WSJ that MAN's Jan. 31 deadline for Scania's shareholders wont be extended. A combination of MAN and Scania would create Europe's biggest maker of commercial vehicles by market share and the world's third biggest behind Sweden's Volvo AB and Germany's DaimlerChrysler AG. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Africa, and Asia, including China, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle- related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by then CEO Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. In November 2005, Volkswagen maintained its 2005 earnings guidance amid rumors it may lower targets. The company predicts a year-on-year improvement in both operating profit after special items and profit before tax this year. Rumors flew that the company would slash full-year earnings forecast due to higher restructuring costs. The company said the impact of its workforce reduction measures, which will be charged as special items in the fourth quarter, will be lower than last year's. The company also admitted there were no significant improvements in the economic environment in the first nine months of 2005, and the overall situation in the important automotive markets remained difficult. It also expected tougher competition in the Chinese and U.S. markets, and the rise in fuel prices to influence consumer confidence. WEC COMMUNICATIONS: Claims Registration Ends February 6 ------------------------------------------------------- Creditors of WEC Communications GmbH have until Feb. 6 to register their claims with court-appointed insolvency manager Andreas Mueller-Stein. Creditors and other interested parties are encouraged to attend the meeting at 10:30 a.m. on March 6, at which time the insolvency manager will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Cologne Meeting Room 1240 12th Floor Luxemburger Road 101 50939 Cologne, Germany The Court will also verify the claims set out in the insolvency manager's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Cologne opened bankruptcy proceedings against WEC Communications GmbH on Nov. 28, 2006. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: WEC Communications GmbH Attn: Goeycali Selcuk and Ibrahim Polat, Managers Cologne-Aachener-Str. 30 50127 Bergheim, Germany The insolvency manager can be contacted at: Andreas Mueller-Stein Schuetzenstr. 5 50126 Bergheim, Germany ============= I R E L A N D ============= SAUCE BOAT: Enters Into Liquidation Due to Refurbishment Losses --------------------------------------------------------------- Sauce Boat, the main trading company behind the John M Keating pub in Dublin, Ireland, will go into liquidation after failing to recover from significant redevelopment costs, The Sunday Business Post reports. The pub is located in the refurbished St. Mary's Church on Mary Street in Dublin 1. Sauce Boat is scheduled to be wound up at a creditors' meeting in Dublin on Jan. 16 wherein a liquidator will also be appointed. Recent accounts of Sauce Boat revealed retained losses of more than EUE4.3 million at the end of 2004. The company incurred a loss of EUR688,000 during the year, The Post relates. According to the accounts, the directors were confident that the company would "return to profitability in 2005." John Keating is a shareholder and director of Sauce Boat. Mr. Keating owns the premises through a separate entity along with other investors. ========= I T A L Y ========= ALITALIA SPA: Air France Chief Executive Quits as Director ---------------------------------------------------------- Jean-Cyril Spinetta, chief executive officer of Air France-KLM resigned as a director of Italian national carrier Alitalia S.p.A. Alitalia said in a statement that Mr. Spinetta resigned due to the government's plan to sell its 30.1% stake in the carrier. Mr. Spinetta's resignation bolstered speculations that Air France would submit a non-binding offer for the Italian government's stake in Alitalia. Air France, which holds a two- percent stake in Alitalia, might resume exploratory talks with the Italian carrier to cool off some of the pressure for a rapid tie-up, a source privy to the French carrier told Reuters. "Air France wants to bid without a potential conflict of interest," Patrizio Pazzaglia of Bank Insinger de Beaufort N.V., who co-manages US$330 million in Alitalia shares. "The market views Spinetta's exit positively as it believes an offer is now closer," a Milan-based trader told BBC News. Air France, however, said Mr. Spinetta resigned "since there is a bidding process launched by the Italian government and given that Air France-KLM is a business partner of Alitalia, its CEO cannot be part of the board anymore," Reuters reports. "You're telling me right now, I'm surprised," Italian Prime Minister Romano Prodi told Agenzia Giornalistica Italia, adding that his surprise was neutral. "I didn't know that, but don't make me talk about Alitalia now," Transport Minister Alessandro Bianchi commented. Mr. Spinetta's resignation spurred positive reaction from the stock market, with Air France and Alitalia's share prices posting gains on Jan. 18, Bloomberg News relates. Analysts, however, cautioned the move might more likely reflect Air France' desire to gain maximum flexibility. "I think the Italians overestimate the importance of Alitalia to Air France-KLM," a senior French banker told Reuters. "In a way, things might have to get worse and really hit bottom before it's the right time to get involved." Board Dissolution Following Mr. Spinetta's resignation, Alitalia now has only two members of the board: Chief Executive Giancarlo Cimoli and government representative Giovanni Sabatini. Alitalia's by-laws require that the board comprise three to five directors. Four of Alitalia's board members resigned in the past six months, with one being replaced by Mr. Saba, AFX News reports. With just two members, the carrier's board was effectively dissolved. Infrastructures Minister Antonio Di Pietro expressed concerned that Mr. Spinetta's resignation not only weaken the Alitalia's board but also spelled defeat for Air France. Union Calls Unions, meanwhile, called for the government and Alitalia's shareholders to intervene, fearing the dissolution would cause disarray. "With the resignation of Jean Cyril Spinetta, the Alitalia Board of Directors has fallen and the carrier is in chaos," Fabrizio Solari, Secretary General of Federazione Italiana Lavoratori dei Trasporti-Confederazione Generale Italiana del Lavoro, said. "The Alitalia Board of Directors is now almost 'monocratic'," Guglielmo Epifani, Secretary General of Confederazione Generale Italiana del Lavoro, commented. "The government should say what they want to do and shareholders will have to make the decisions also because there is some time." Alitalia's shareholders will convene on a date between Feb. 19 and Feb. 23 to appoint a new member of the board. Formal Bidding Process In a TCR-Europe report on Jan. 3, the Italian government formally launched the bidding process for its 30.1% stake in troubled national carrier Alitalia S.p.A. on Dec. 29, 2006. Italy's Ministry of Economy and Finance is inviting interested parties to submit a non-binding offer for around 30.1% to 49.9% of Alitalia's capital and 1,207,147,404 convertible bonds of the carrier's 7.5% 2002-2010 debenture loan. The sale will take place through a competitive procedure involving direct negotiations with potential buyers. Interested parties, which should have at least EUR100 million in capital, have until 6:00 p.m. on Jan. 29, 2007, to submit their written expression of interest to Merrill Lynch International, the sale advisor. According to the Ministry, potential buyers will be selected based on the economic terms of the offers received and an analysis of the business plans. The Ministry will also examine the compatibility of the offers and business plans with the Alitalia's restructuring, development and relaunch objectives. The Ministry also outlined mandatory commitments for the buyer to: -- keep at least a 30.1% stake in Alitalia until the business plan is successfully carried out: -- safeguard Alitalia's national identity; and -- guarantee the quality and quantity of services offered and coverage of the territory. Several Italian entrepreneurs are reportedly interested in Alitalia, The Times reports. Local bets include: -- Carlo Toto, founder of Air One, -- Luca di Montezemolo, head of Fiat and Ferrari; -- Diego Della Valle, chief of the Tod's shoe empire; and -- Banca Intesa and Sanpaolo IMI; As reported in the TCR-Europe on Jan. 5, Paolo Alazraki, owner of Real Dreams Italy Srl, heads a group of 16 investors that indicated their interest in acquiring the national carrier. The government aims to complete the process this month. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. In Europe, the company reaches 45 airports, with 1,238 flights per week. In the rest of the world, the Alitalia Group's aircrafts operate out of 32 airports with 255 flights per week. The Alitalia Group network is centered on two main airports, Rome Fiumicino and Milan Malpensa, and includes, as of Sept. 30, 2006, an operating fleet of 182 aircrafts. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia registered EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked consecutive annual net losses of EUR520 million in 2003, EUR813 million in 2004, and EUR168 million in 2005. ALITALIA SPA: Government Meeting Spurs Unions to Cancel Strike -------------------------------------------------------------- Labor unions at Alitalia S.p.A. cancelled today's strike after setting a meeting with the Italian government on Feb. 1. The Italian government sent convocation letters to: -- Federazione Italiana Lavoratori dei Trasporti- Confederazione Generale Italiana del Lavoro, -- Federazione Italiana Trasporti-Confederazione Italiana Sindacati Lavoratori, -- Unione Generale del Lavoro, and -- Sindacato Unitario Lavoratori dei Trasporti. The meeting will particularly discuss the roles to be played by unions on: -- Alitalia's future, -- workers' bonds; and -- the airline's privatization process. Transport Minister Alessandro Bianchi had invited the unions to discuss the guidelines on air transport reform, but was bounded by the Jan. 29 deadline for the submission of bid for the government's 30.1% stake in Alitalia. "All the conditions are met to suspend the strike," Claudio Genovesi, Secretary General of the FIT-CISL union, said. In a TCR-Europe report on Jan. 11, the FIT-CISL said it might call off or postpone the scheduled Jan. 19 strike, after the government committed to involve the union in the future of Alitalia. As reported in the TCR-Europe on Jan. 18, Union Piloti joined Alitalia's main pilot union, Associazione Nazionale Piloti Aviazione Commerciale, in boycotting today's strike. Formal Bidding Process In a TCR-Europe report on Jan. 3, the Italian government formally launched the bidding process for its 30.1% stake in troubled national carrier Alitalia S.p.A. on Dec. 29, 2006. Italy's Ministry of Economy and Finance is inviting interested parties to submit a non-binding offer for around 30.1% to 49.9% of Alitalia's capital and 1,207,147,404 convertible bonds of the carrier's 7.5% 2002-2010 debenture loan. The sale will take place through a competitive procedure involving direct negotiations with potential buyers. Interested parties, which should have at least EUR100 million in capital, have until 6:00 p.m. on Jan. 29, 2007, to submit their written expression of interest to Merrill Lynch International, the sale advisor. According to the Ministry, potential buyers will be selected based on the economic terms of the offers received and an analysis of the business plans. The Ministry will also examine the compatibility of the offers and business plans with the Alitalia's restructuring, development and relaunch objectives. The Ministry also outlined mandatory commitments for the buyer to: -- keep at least a 30.1% stake in Alitalia until the business plan is successfully carried out: -- safeguard Alitalia's national identity; and -- guarantee the quality and quantity of services offered and coverage of the territory. Several Italian entrepreneurs are reportedly interested in Alitalia, The Times reports. Local bets include: -- Carlo Toto, founder of Air One, -- Luca di Montezemolo, head of Fiat and Ferrari; -- Diego Della Valle, chief of the Tod's shoe empire; and -- Banca Intesa and Sanpaolo IMI; As reported in the TCR-Europe on Jan. 5, Paolo Alazraki, owner of Real Dreams Italy Srl, heads a group of 16 investors that indicated their interest in acquiring the national carrier. The government aims to complete the process this month. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. In Europe, the company reaches 45 airports, with 1,238 flights per week. In the rest of the world, the Alitalia Group's aircrafts operate out of 32 airports with 255 flights per week. The Alitalia Group network is centered on two main airports, Rome Fiumicino and Milan Malpensa, and includes, as of Sept. 30, 2006, an operating fleet of 182 aircrafts. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia registered EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked consecutive annual net losses of EUR520 million in 2003, EUR813 million in 2004, and EUR168 million in 2005. ALITALIA SPA: Funds Enough to Operate Until Autumn, Report Says --------------------------------------------------------------- Alitalia S.p.A. has enough resources to operate until autumn, newspaper Finanza & Mercati reports without citing a source. According to the daily, though declining oil prices has eased Alitalia's financial burden, the company is still suffering from high costs and may have to endure losses caused by industrial actions. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. In Europe, the company reaches 45 airports, with 1,238 flights per week. In the rest of the world, the Alitalia Group's aircrafts operate out of 32 airports with 255 flights per week. The Alitalia Group network is centered on two main airports, Rome Fiumicino and Milan Malpensa, and includes, as of Sept. 30, 2006, an operating fleet of 182 aircrafts. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia registered EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked consecutive annual net losses of EUR520 million in 2003, EUR813 million in 2004, and EUR168 million in 2005. BANCA DI CREDITO: Fitch Assigns Individual C Rating --------------------------------------------------- Fitch Ratings assigned Italy-based Banca di Credito Popolare ratings of Issuer Default BBB, Short-term F3, Individual C, and Support 3. The Outlook on the Issuer Default rating is Stable. The ratings reflect the bank's stable moderate performance, sound capitalization and adequate risk management. The ratings also reflect the bank's higher-than-average exposure to credit risk and relatively small size. BCP's profitability is moderate but stable. Its performance reflects cautious lending policies as its net interest margin is relatively low. Operating expenses weigh on results, reflecting the bank's investments in its structure. Nevertheless, the bank has managed to keep the cost of credit under control, which has in turn underpinned operating profit. Exposure to credit risk arises mainly from lending while the relatively high stock of net impaired loans, at 31% of eligible capital at the end of June 2006, reflects regional asset quality and late write-offs. BCP benefits from an ample customer-funding base - over 150% of customer loans - which has proved stable in the past. With an eligible capital/regulatory weighted risks ratio of 11.71% at the end of June 2006, Fitch considers BCP's capitalization adequate given the relatively large stock of impaired loans on its balance sheet and the bank's expansion plans. BCP is a small cooperative bank with equity of EUR170 million at the end of 2005. The bank is headquartered in Torre del Greco near Naples in southern Italy, where its operations are concentrated. From its home base, the bank has since 2000 accelerated its growth by opening new branches within the Campania region and by acquiring small single-branch cooperative banks. The bank also plans to extend its branch network into the neighboring Lazio region. FIAT SPA: Italian Sales Rising; to Pay Dividends This Year ---------------------------------------------------------- Fiat S.p.A. might pay dividends this year as it expects a rise in Italian car sales, Bloomberg News reports, citing Chief Executive Officer Sergio Marchionne. "We have seen exceptional numbers in the first 15 days of the month," Mr. Marchionne was quoted by Bloomberg News as saying. Mr. Marchionne, who attributes the rising car sales to a government tax incentive program, noted that the dividend payment would be the company's first in five years. Mr. Marchionne is credited with Fiat's turnaround. Under his stewardship, Fiat's European sales rose 17% in 2007 while shares almost doubled, Bloomberg News notes. "Given the sales they had in the fourth quarter, it's sure results will be in line with expectations," Eric-Alain Michelis, an analyst at Societe Generale, commented. About Fiat S.p.A. Headquartered in Turin, Italy, Fiat S.p.A. -- http://www.fiatgroup.com/-- is one of the largest industrial groups in Italy and the fourth largest European-based automobile manufacturer, with revenues of EUR33.4 billion in the first nine months of 2005. Fiat's creditors include Banca Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano. * * * As reported in the TCR-Europe on Nov. 6, 2006, Moody's Investors Service changed the outlook on Fiat S.p.A.'s Ba3 Corporate Family Rating to positive from stable and affirmed the long-term senior unsecured ratings as well as the short-term non-Prime rating. Outlook Actions: Issuer: Fiat Finance & Trade Ltd. * Outlook, Changed To Positive From Stable Issuer: Fiat Finance Canada Ltd. * Outlook, Changed To Positive From Stable Issuer: Fiat Finance Luxembourg S.A. * Outlook, Changed To Positive From Stable Issuer: Fiat Finance North America Inc. * Outlook, Changed To Positive From Stable Issuer: Fiat France S.A. * Outlook, Changed To Positive From Stable Issuer: Fiat S.p.A. * Outlook, Changed To Positive From Stable Fiat's Ba3/non-Prime ratings continue to reflect -- Fiat Group's scope and geographically well spread operations, -- the solid market position of Case New Holland and its potential to improve its highly indebted financial profile, and -- Iveco's stable market share in the European truck markets. On Oct. 4, 2006, Fitch Ratings affirmed Fiat S.p.A.'s Issuer Default and senior unsecured ratings at BB- and Short-term rating at B. This follows Fiat's exercise of its call option to buy back 29% of Ferrari's capital from a consortium led by Mediobanca. Fitch said the Outlook is Positive. On Aug. 8, 2006, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Fiat S.p.A. to 'BB' from 'BB-'. At the same time, Standard & Poor's affirmed its 'B' short-term rating on Fiat. S&P said the outlook is stable. =================== K A Z A K H S T A N =================== AGROSOUZ LLP: Creditors Must File Claims by February 27 ------------------------------------------------------- LLP Agrosouz has declared insolvency. Creditors have until Feb. 27 to submit written proofs of claim to: LLP Agrosouz Valihanov Str. 81 Pavlodar Pavlodar Region Kazakhstan CONSULTING-B LLP: Claims Filing Period Ends February 27 ------------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty Region entered an order placing LLP Consulting-B (RNN 092200004195) into compulsory liquidation. Creditors have until Feb. 27 to submit written proofs of claim to: LLP Consulting-B Room 208 Jangusurov Str. 113a Taldykorgan Almaty Region Kazakhstan Tel: 8 (32822) 24-19-77 FARIDA LLP: Creditors' Claims Due February 27 --------------------------------------------- The Specialized Inter-Regional Economic Court of Kyzylorda Region declared LLP Farida insolvent on Dec. 15, 2006. Creditors have until Feb. 27 to submit written proofs of claim to: The Specialized Inter-Regional Economic Court of Kyzylorda Region Aiteke bi Str. 29 Kyzylorda Kyzylorda Region Kazakhstan OREAL-K LLP: Proof of Claim Deadline Slated for February 27 ----------------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty Region entered an order placing LLP Oreal-K (RNN 092300210146) into compulsory liquidation. Creditors have until Feb. 27 to submit written proofs of claim to: LLP Oreal-K Room 208 Jangusurov Str. 113a Taldykorgan Almaty Region Kazakhstan Tel: 8 (32822) 24-19-77 PETRO ENGINEERING: Claims Filing Period Ends February 27 -------------------------------------------------------- LLP Petro Engineering has declared insolvency. Creditors have until Feb. 27 to submit written proofs of claim to: LLP Petro Engineering Kaldayakov Str. 59-67 Almaty, Kazakhstan SANEL LLP: Creditors Must File Claims by February 27 ---------------------------------------------------- LLP Trade House Sanel has declared insolvency. Creditors have until Feb. 27 to submit written proofs of claim to: LLP Trade House Sanel Micro District Jetysu-2, 70a-25 Almaty, Kazakhstan STROY SERVICE: Karaganda Court Opens Bankruptcy Proceedings ----------------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region commenced bankruptcy proceedings against LLP Construction Company Stroy Service (RNN 301200019466). LLP Stroy Service is located at: Privokzalnaya Str. 2/1 Temirtau Karaganda Region Kazakhstan STROY SOUZ: Proof of Claim Deadline Slated for February 27 ---------------------------------------------------------- LLP Construction Company Stroy Souz Service has declared insolvency. Creditors have until Feb. 27 to submit written proofs of claim to: LLP Stroy Souz Service Micro District Gulder-1, 15-70 Karaganda Karaganda Region Kazakhstan TALDY LLP: Claims Filing Period Ends February 27 ------------------------------------------------ The Specialized Inter-Regional Economic Court of Almaty Region entered an order placing LLP Taldy (RNN 092300000294) into compulsory liquidation. Creditors have until Feb. 27 to submit written proofs of claim to: LLP Taldy Room 208 Jangusurov Str. 113a Taldykorgan Almaty Region Kazakhstan Tel: 8 (32822) 24-19-77 VK KAZNEFTESERVICE: Creditors' Claims Due February 28 ----------------------------------------------------- The Specialized Inter-Regional Economic Court of East Kazakhstan Region declared LLP East Kazakhstan Oil Service VK Kaznefteservice insolvent on Dec. 4, 2006. Subsequently, bankruptcy proceedings were introduced at the company. Creditors have until Feb. 28 to submit written proofs of claim to: LLP VK Kaznefteservice Chasnikov Str. 55 Micro District 23 Ust-Kamenogorsk East Kazakhstan Region Kazakhstan Tel: 8 (3232) 25-47-06 =================== K Y R G Y Z S T A N =================== PACKPEN TRADE: Creditors' Claims Due February 28 ------------------------------------------------ LLC Packpen Trade Company (INN 02912200510120) has declared insolvency. Creditors have until Feb. 28 to submit written proofs of claim. Inquiries can be addressed to (+996 312) 60-38-42. TECHNO-TRADE LLP: Claims Filing Period Ends February 28 ------------------------------------------------------- LLC Techno-Trade has declared insolvency. Creditors have until Feb. 28 to submit written proofs of claim to: LLC Techno-Trade Kurmanjan Datka Str. 111-35 Bishkek, Kyrgyzstan =================== L U X E M B O U R G =================== DANA CORP: Will Share Parts Production for Ford's F-150 Truck ------------------------------------------------------------- Dana Corp. will share production of structural components and assembly of frames for the next generation of Ford Motor Company's F-150 trucks, Michael L. DeBacker, Dana Corp.'s vice president, general counsel and secretary, discloses in a regulatory filing with the U.S. Securities and Exchange Commission. Dana Corp., however, will continue to supply 100% of hydroformed side rails and a significant portion of other structural components for the frames, Mr. DeBacker adds. Greg Bensinger of Bloomberg News says Magna International, Inc., based in Aurora, Ontario, won the portion of the Ford contract that Dana Corp. lost. About Dana Corp. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed US$7,900,000,000 in total assets and US$6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors' exclusive period to file a plan expires on Sept. 3, 2007. They have until Nov. 2, 2007, to solicit acceptances to that plan. (Dana Corporation Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). ================= M A C E D O N I A ================= * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness --------------------------------------------------------------- Standard & Poor's Ratings Services expects 2007 to be a positive year for economic growth but a mixed one for sovereign creditworthiness in Europe, with fewer ratings changes than in 2006. This separation between economic conditions and potential ratings changes in the European region is one of the key trends for 2007 and beyond, but there are also a number of country- specific developments that could affect sovereign ratings. As of Jan. 17, 2007, European sovereign ratings show: European Sovereign Ratings List Foreign Currency Local Currency Sovereign Ratings Ratings --------- ---------------- -------------- Andorra (Principality of) AA/Stable/A-1+ AA/Stable/A-1+ Austria (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Belgium (Kingdom of) AA+/Stable/A-1+ AA+/Stable/A-1+ Bulgaria (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Croatia (Republic of) BBB/Stable/A-3 BBB+/Stable/A-2 Cyprus (Republic of) A/Stable/A-1 A/Stable/A-1 Czech Republic A-/Positive/A-2 A/Positive/A-1 Denmark (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Estonia (Republic of) A/Stable/A-1 A/Stable/A-1 Finland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ France (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Georgia (Government of) B+/Stable/B B+/Stable/B Germany (Federal Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Hellenic Republic (Greece) A/Stable/A-1 A/Stable/A-1 Hungary (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Iceland (Republic of) A+/Stable/A-1 AA/Stable/A-1+ Ireland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Isle of Man AAA/Stable/A-1+ AAA/Stable/A-1+ Italy (Republic of) A+/Stable/A-1+ A+/Stable/A-1+ Latvia (Republic of) A-/Stable/A-2 A-/Stable/A-2 Liechtenstein (Principality of) AAA/Stable/A-1+ AAA/Stable/A-1+ Lithuania (Republic of) A/Stable/A-1 A/Stable/A-1 Luxembourg (Grand Duchy of) AAA/Stable/A-1+ AAA/Stable/A-1+ Macedonia (Republic of) BB+/Stable/B BBB-/Stable/A-3 Malta (Republic of) A/Stable/A-1 A/Stable/A-1 Montenegro (Republic of) BB/Positive/B BB/Positive/B Netherlands (State of The) AAA/Stable/A-1+ AAA/Stable/A-1+ Norway (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Poland (Republic of) BBB+/Stable/A-2 A-/Stable/A-2 Portugal (Republic of) AA-/Stable/A-1+ AA-/Stable/A-1+ Romania (Republic of) BBB-/Stable/A-3 BBB/Stable/A-3 Russian Federation (The) BBB+/Stable/A-2 A-/Stable/A-2 Serbia (Republic of) BB-/Positive/B BB-/Positive/B Slovak Republic A/Stable/A-1 A/Stable/A-1 Slovenia (Republic of) AA/Stable/A-1+ AA/Stable/A-1+ Spain (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Sweden (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Swiss Confederation (Switzerland) AAA/Stable/A-1+ AAA/Stable/A-1+ Turkey (Republic of) BB-/Stable/B BB/Stable/B Ukraine BB-/Stable/B BB/Stable/B United Kingdom AAA/Stable/A-1+ AAA/Stable/A-1+ ===================== N E T H E R L A N D S ===================== KONINKLIJKE AHOLD: Claimants May Fix Documentation Deficiencies --------------------------------------------------------------- Entwistle & Cappucci LLP, lead plaintiffs' counsel, and The Garden City Group, the claims administrator appointed by the U.S. District Court for the District of Maryland in the class action against Koninklijke Ahold N.V., issue this informational release to clarify certain incorrect statements made by the Dutch Investors Association (VEB) concerning claims submitted to participate in the settlement of the suit. In a statement, the law firm and claims administrator stated that contrary to the VEB's recent statements to the media, claimants in the Ahold class action in the Netherlands and all over the world are provided more than one opportunity to correct deficiencies in the documentation that they have submitted to participate in the Ahold settlement. The First Deficiency Notice, which about 16% of Dutch claimants received, is the first opportunity that such claimants have to correct the identified problems. Most of the noted deficiencies involve forms that do not include all of the information needed to substantiate the purchases and sales of Ahold common stock noted on the claimant's form. The claims administrator had requested that claimants receiving the First Deficiency Notice submit a response Jan. 8. Claimants who do not respond by that date will receive a second opportunity to correct the information submitted with their claim forms, but all claimants are encouraged to correct noted deficiencies as soon as possible to ensure payment. Claimants must understand that the procedure for addressing and correcting deficiencies is designed to accomplish the important goals of: -- making sure that claimants with valid claims have an opportunity to demonstrate the validity of their claims; and -- preventing the submission of fraudulent claims. The process for addressing noted deficiencies proceeds according to a carefully planned schedule, which remains on track and no claims have been rejected or will be rejected until each claimant has at least two opportunities to correct or otherwise address any noted problems. Claimants are encouraged to act as quickly as possible to correct identified problems. The majority of the identified deficiencies involve incomplete transaction information. Contrary to statements made by the VEB, these problems do not involve the format of the documents provided by claimants and/or their banks, the law firm and claims administrator said. Instead, these problems arise from incomplete documentation that does not enable the claims administrator to perform the arithmetic required to calculate the value of claims. Despite the volume of statements made in the Dutch press, the VEB has no official role in the claims process, according to the statement. Instead, each claimant that has received a deficiency letter must communicate directly with the claims administrator to resolve his or her claims. Anyone that still has a deficient claim as of Jan. 8 will receive a second letter explaining the remaining deficiency and providing an additional period of time for the claimant to resolve any remaining issues directly with the claims administrator. Claimants must understand that the VEB has never had any approved role in the U.S. class action against Ahold, and the VEB has no official role in the procedure for correcting deficient claims submitted in the settlement, according to the statement. The VEB is not authorized to speak to the Claims Administrator on behalf of any investor, and no claimant should contact the VEB expecting to resolve deficiencies or to address officially any other issue regarding the Ahold settlement, the statement added. Instead, all claimants, banks, and other financial institutions that manage funds or otherwise invest for claimants should act as quickly as possible to submit all required transaction information directly to the claims administrator. For more details, contact The Claims Administrator Phone: 001- 800-1020-4060 or 001-941-906-4864 (International Toll-free call center), E-mail: Questions@AholdSettlement.com. The best time for Dutch claimants to call is between 9:00 a.m. and 5:00 p.m. About Ahold Headquartered in Amsterdam, Koninklijke Ahold N.V. -- http://www.ahold.com/-- retails food through supermarkets, hypermarkets and discount stores in North and South America, Europe. The company's chain stores include Stop & Shop, Giant, TOPS, Albert Heijn and Bompreco. Ahold also supplies food to restaurants, hotels, healthcare institutions, government facilities, universities, stadiums, and caterers. * * * As reported in the TCR-Europe on Dec. 22, 2006, Standard & Poor's Ratings Services revised its outlook on the Dutch food retailer and food service distributor Koninklijke Ahold N.V. to positive from stable. At the same time, the 'BB+/B' long- and short-term corporate credit ratings were affirmed. Moody's Investors Service and Standard and Poor's has assigned low-B ratings to the company's 5.625% senior notes due 2007. Also, the company's 5.875% senior unsubordinated notes due 2008 and 6.375% senior unsubordinated notes due 2007 carry Moody's, S&P's and Fitch's low-B ratings. KONINKLIJKE AHOLD: Names Trond Kongrod as COO for ICA Norge Unit ---------------------------------------------------------------- Trond Kongrod has been appointed new chief operating officer of ICA Norge, a unit of Koninklijke Ahold N.V. He was most recently format director for the Norwegian ICA formats. As COO for ICA Norge, Mr. Kongrod will be part of ICA AB's Executive Board and report to ICA's president Kenneth Bengtsson. Trond Kongrod takes over after Erland Bjorn. Erland Bjorn will remain in ICA AB's Executive Board and moves on to work with strategic assignments for the ICA group. ICA Norge has been involved in a significant change process. Erland Bjorn has lead and managed this work during a build-up phase for three years. ICA Norge is now entering a new phase. Therefore, Erland's assignment in ICA Norge has been completed. "I am very pleased that Trond has accepted this challenge. He is an enthusiastic and energetic leader with a strong sales focus. A profile which is an excellent fit for ICA," Kenneth Bengtsson, CEO and President ICA AB, said. About Ahold Headquartered in Amsterdam, Koninklijke Ahold N.V. -- http://www.ahold.com/-- retails food through supermarkets, hypermarkets and discount stores in North and South America, Europe. The company's chain stores include Stop & Shop, Giant, TOPS, Albert Heijn and Bompreco. Ahold also supplies food to restaurants, hotels, healthcare institutions, government facilities, universities, stadiums, and caterers. * * * As reported in the TCR-Europe on Dec. 22, 2006, Standard & Poor's Ratings Services revised its outlook on the Dutch food retailer and food service distributor Koninklijke Ahold N.V. to positive from stable. At the same time, the 'BB+/B' long- and short-term corporate credit ratings were affirmed. Moody's Investors Service and Standard and Poor's has assigned low-B ratings to the company's 5.625% senior notes due 2007. Also, the company's 5.875% senior unsubordinated notes due 2008 and 6.375% senior unsubordinated notes due 2007 carry Moody's, S&P's and Fitch's low-B ratings. PYATEROCHKA HOLDING: Q4 2006 Like-For-Like Group Sales Up 13% ------------------------------------------------------------- Pyaterochka Holding N.V. (nka X5 Retail Group N.V.) provided a trading update including store opening data and like-for-like sales trends for the Pyaterochka and Perekrestok chains for Q4 and FY 2006. Expansion X5 Retail Group N.V. has successfully completed its 2006 store opening program gaining additional net selling space of approximately 59,000 square meters in Q4 2006. Over the FY 2006, X5 Retail Group N.V. gained additional net selling space of approximately 126,000 square meters (of which approximately 68,000 square meters for Perekriostok chain, and approximately 58,000 square meters for Pyaterochka chain), thus outstripping its FY2006 store opening target to add approximately 120,000 square meters. As of Dec. 31, 2006, X5 Retail Group N.V. operated approximately 466,000 square meters of net selling space. In terms of numbers of stores, the Group opened 33 new Pyaterochka soft-discount stores and 27 new Perekrestok supermarkets during Q4 2006. As of Dec. 31, 2006, X5 Retail Group N.V. operated 451 company-managed Pyaterochka soft- discount stores and 168 Perekrestok stores, including 12 hypermarkets. Moscow In Moscow, Pyaterochka chain gained additional net selling space of approximately 13,000 square meters during Q4 2006, implying a total of approximately 35,000 square meters gained in 2006. As of Dec. 31, 2006, Pyaterochka chain operated a total of approximately 135,000 square meters of net selling space in the Moscow area. Perekrestok chain gained additional net selling space of approximately 20,000 square meters during Q4 2006, implying a total of approximately 30,000 square meters gained in 2006. As of Dec. 31, 2006, Perekrestok chain operated a total of approximately 111,000 square meters of net selling space in the Moscow area. In terms of numbers of stores, as of Dec. 31, 2006, the Group operated in the Moscow area 222 Pyaterochka soft discount stores and 100 Perekrestok stores including 3 hypermarkets. St. Petersburg In St. Petersburg, Pyaterochka chain gained additional net selling space of approximately 2,000 square meters during Q4 2006, implying a total of approximately 19,000 square meters gained in 2006. As of Dec. 31, 2006, Pyaterochka chain operated a total of approximately 114,000 square meters of net selling space in the St. Petersburg area. Perekrestok chain gained additional net selling space of approximately 2,000 square meters during Q4 2006, implying a total of approximately 10,000 square meters gained in 2006. As of Dec. 31, 2006, Perekrestok chain operated a total of approximately 20,000 square meters of net selling space in the St. Petersburg area. In terms of numbers of stores, as of Dec. 31, 2006, the Group operated in the St. Petersburg area 204 soft discount Pyaterochka stores and 17 Perekrestok stores. Russian Regions, Ukraine and Kazakhstan In the regions outside of Moscow and St. Petersburg, Perekrestok chain gained additional net selling space of approximately 20,000 square meters during Q4 2006, implying a total of approximately 29,000 square meters gained in 2006. As of Dec. 31, 2006, Perekrestok chain operated a total of approximately 78,000 square meters of net selling space in the regions. In Yekaterinburg, Pyaterochka chain gained additional net selling space of approximately 2,000 square meters during Q4 2006, implying a total of approximately 4,000 square meters gained in 2006. As of Dec. 31, 2006, Pyaterochka chain operated a total of approximately 9,000 square meters of net selling space in Yekaterinburg. In terms of numbers of stores, as of Dec. 31, 2006, in the regions outside of Moscow and St. Petersburg the Group operated 25 Pyaterochka stores and 51 Perekrestok stores, including 9 hypermarkets. Pyaterochka's franchisees also continued to expand rapidly, opening 66 new stores operating under the Pyaterochka brand during Q4 2006. As of Dec. 31, 2006, Pyaterochka's franchisees operated 605 stores across Russia, in Ukraine and Kazakhstan. Perekrestok had 10 stores operated by franchisees in the Moscow area. Store Operations Over the year of 2006, X5 Retail Group N.V. not only outstripped its store opening target but also experienced strong Like-for- Like sales(1) trends across both chains, demonstrating the strongest performance in Q4 2006 (+13%). In Q4 the Group maintained the positive Like-for-Like sales trends of the previous quarters in Moscow, and showed continued improvement of Payterochka Like-for-Like sales performance in St. Petersburg. Group During Q4 2006, Group LFL sales performance (including both chains) reached +13%, composed of traffic of +8% and basket growth of +5%. For FY 2006, the group experienced LFL sales of +11%, composed of traffic of +3% and basket growth of +8%. The Pyaterochka chain experienced overall LFL sales performance of +11% during Q4 2006 (traffic +3%, basket growth of 8%), and 9% for FY 2006 (traffic 0%, basket growth of +9%). The Perekrestok chain experienced overall LFL sales performance of +15% during Q4 2006 (traffic +13%, basket growth of +2%), and +14% for FY 2006 (traffic +8%, basket growth of 6%). Moscow LFL sales at Moscow area Pyaterochka stores reached +14% during Q4 2006, composed of traffic of +7% and an increase in the average basket of +7%. Over FY 2006, the Pyaterochka stores in Moscow experienced LFL sales performance of +13%, composed of traffic of +3% and basket growth of +10%. LFL sales at Moscow area Perekrestok stores reached +18% during Q4 2006, on the basis of traffic of +15% and basket growth of +3%. During FY 2006, the Perekrestok stores in Moscow experienced LFL sales performance of +16%, composed of traffic of +10% and basket growth of +6%. St. Petersburg LFL sales at St. Petersburg area Pyaterochka stores reached +7% during Q4 2006, composed of traffic of -1% and basket growth of +8%. During FY 2006, the Pyaterochka stores in St. Petersburg experienced LFL sales performance of +3%, composed of traffic of -4% and basket growth of +7%. LFL sales at St. Petersburg area Perekrestok stores reached 10% during Q4 2006, on the basis of traffic of +14% and basket of - 4%. During FY 2006, the Perekrestok stores in St. Petersburg experienced LFL sales performance of +8%, composed of traffic of +10% and basket of -2%. Regions LFL sales at Perekrestok stores in the regions outside of Moscow and St. Petersburg reached +7% during Q4 2006, composed of traffic of +5% and basket growth of +2%. For FY 2006 these stores experienced LFL sales of + 11%, based on traffic of +5% and basket growth of +6%. About Pyaterochka Holding Headquartered in the Netherlands, Pyaterochka Holding N.V. (nka X5 Retail Group N.V.) (LSE: FIVE) -- http://www.5chka.com/-- operates a large store network largely covering the Moscow region and St. Petersburg but also has a good presence in other Russian regions through its franchise operations. The company has recently acquired two of its successful regional franchise operations -- in Yekaterinburg and Chelyabinsk. Pyaterochka's 2004 net revenues were US$1.1 billion. The company has reported unaudited net revenues of US$1.4 billion for 2005. * * * As reported in the TCR-Europe on Aug. 29, 2006, Moody's Investors Service downgraded the corporate family rating of Pyaterochka Holding N.V. to B1 from Ba3. Moody's said the outlook for the rating is stable. Standard & Poor's Services affirmed its 'BB-' long-term corporate credit rating on Pyaterochka Holding N.V., the owner of Russia's largest grocery retail network. At the same time, Standard & Poor's affirmed its 'BB-' long-term corporate credit and 'ruAA-' Russia national scale on Pyaterochka's guaranteed operating subsidiary OOO Agrotorg. The 'ruAA-' Russia national scale on the senior unsecured and senior secured debt issued by related entity Pyaterochka Finance have also been affirmed. All were removed from CreditWatch with negative implications, where they had been placed on April 12, following Pyaterochka's announced acquisition of Russia's leading supermarket chain Perekrestok. S&P said the outlook is negative. =========== N O R W A Y =========== KONINKLIJKE AHOLD: Names Trond Kongrod as COO for ICA Norge Unit ---------------------------------------------------------------- Trond Kongrod has been appointed new chief operating officer of ICA Norge, a unit of Koninklijke Ahold N.V. He was most recently format director for the Norwegian ICA formats. As COO for ICA Norge, Mr. Kongrod will be part of ICA AB's Executive Board and report to ICA's president Kenneth Bengtsson. Trond Kongrod takes over after Erland Bjorn. Erland Bjorn will remain in ICA AB's Executive Board and moves on to work with strategic assignments for the ICA group. ICA Norge has been involved in a significant change process. Erland Bjorn has lead and managed this work during a build-up phase for three years. ICA Norge is now entering a new phase. Therefore, Erland's assignment in ICA Norge has been completed. "I am very pleased that Trond has accepted this challenge. He is an enthusiastic and energetic leader with a strong sales focus. A profile which is an excellent fit for ICA," Kenneth Bengtsson, CEO and President ICA AB, said. About Ahold Headquartered in Amsterdam, Koninklijke Ahold N.V. -- http://www.ahold.com/-- retails food through supermarkets, hypermarkets and discount stores in North and South America, Europe. The company's chain stores include Stop & Shop, Giant, TOPS, Albert Heijn and Bompreco. Ahold also supplies food to restaurants, hotels, healthcare institutions, government facilities, universities, stadiums, and caterers. * * * As reported in the TCR-Europe on Dec. 22, 2006, Standard & Poor's Ratings Services revised its outlook on the Dutch food retailer and food service distributor Koninklijke Ahold N.V. to positive from stable. At the same time, the 'BB+/B' long- and short-term corporate credit ratings were affirmed. Moody's Investors Service and Standard and Poor's has assigned low-B ratings to the company's 5.625% senior notes due 2007. Also, the company's 5.875% senior unsubordinated notes due 2008 and 6.375% senior unsubordinated notes due 2007 carry Moody's, S&P's and Fitch's low-B ratings. =========== P O L A N D =========== ZLOMREX SA: Moody's Puts B2 Corporate Family Rating --------------------------------------------------- Moody's Investors Service assigned a B2 foreign currency corporate family rating to Zlomrex S.A., the largest Polish steel scrap provider and a leading producer and distributor of high-grade long steel products in the domestic market. It also assigned a (P)Caa1 senior secured rating to the EUR170 million notes issued by Zlomrex International Finance S.A. The rating outlook is stable. This is the first time Moody's has assigned ratings to Zlomrex. Moody's issues provisional ratings in advance of the final sale of securities, and these ratings only represent Moody's opinion on the draft documentation of the notes received at the time of the press release. Upon a conclusive review of the transaction and associated documentation, Moody's will endeavour to assign a definitive rating to the securities. A definitive rating may differ from a provisional rating. Zlomrex is in the process of acquiring voestalpine Stahlhandel GmbH, the steel distribution arm of Austrian steel producer voestalpine AG. Under Moody's rating methodology for the global steel industry, Zlomrex's corporate family rating -- based on pro-forma last-twelve-month figures as at September 2006 including voestalpine Stahlhandel and the effects from the debt- financed acquisition -- would map to a Ba2. The actual assigned rating of B2, three notches below the indicated rating under the methodology, reflects Moody's concerns with regard to the company's trailing performance and its exposure to cyclical demand patterns, which means that its resilience in terms of profitability and cash generation has yet to be tested through a prolonged weakness in the pricing/demand environment. "Zlomrex's B2 rating additionally factors in (i) the company's comparatively small size, (ii) its dependence on regional steel markets (Central and Eastern Europe in general but the Polish construction market in particular), (iii) the limited corporate history in the current form, (iv) the significant level of additional debt relating to the voestalpine acquisition, (v) risks arising from the integration of the voestalpine business, and (vi) Moody's expectation of continued external and debt- financed growth, which may not allow for any significant improvement in the company's credit metrics in the short to medium term," said Matthias Hellstern, Moody's lead analyst for Zlomrex. These risks are, however, partially mitigated by: (i) the company's strong position in niche markets, (ii) the positive market dynamics currently seen in Poland and other Central and Eastern European countries and (iii) Zlomrex's comparatively flexible cost structure, which should allow it to at least partially offset any negative swings in operating results with a negative swing in either revenues or costs. The rating of the EUR170 million notes has been notched down to (P)Caa1 in light of their contractual subordination to existing secured term bank debt. Headquartered in Poraj, Poland, Zlomrex S.A. is the largest trader of steel scrap and one of the leading producers and distributors of high-grade long steel products in its domestic market. Founded in 1990 as a pure scrap trader, the company has transformed itself into a fully integrated producer of steel products through a range of acquisitions in the long steel production and distribution business. ZLOMREX SA: S&P Puts B+ Long-Term Corporate Credit Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term and 'B' short-term corporate credit ratings to Poland-based integrated steel group Zlomrex S.A. The outlook is stable. At the same time, Standard & Poor's assigned its preliminary 'B' senior secured debt rating to the proposed EUR170 million notes due 2014 to be issued by subsidiary Zlomrex International Finance S.A. (Zlomrex Finance), guaranteed by Zlomrex and certain subsidiaries. The notes will be used to finance the sizable acquisition of a 74.9% stake in steel distribution business voestalpine Stahlhandel GmbH (VA Stahl), refinance debt, and for general corporate purposes. "The ratings reflect Zlomrex's vulnerable business risk profile characterized by management's ambitious growth strategy; short track record; and the group's small size relative to peers," said Standard & Poor's credit analyst Alex Herbert. "This is even allowing for significantly increased revenues after the closing of the group's acquisition of VA Stahl from voestalpine AG, which is active mostly in Austria." The ratings are also constrained by Zlomrex's still limited diversity and volatile margins in a cyclical, volatile, and competitive steel sector. The ratings are further constrained by the group's aggressive financial risk profile, as demonstrated by the wholly debt-financed nature of the VA Stahl acquisition, and volatile cash flows. Supporting the ratings are Zlomrex's integrated steel operations including steel scrap, production, and distribution, which will be enhanced by the VA Stahl acquisition; moderate leverage even after the purchase; and minimal debt maturities in the medium term. "Standard & Poor's expects Zlomrex to succeed in closing and integrating the acquisition of VA Stahl," Mr. Herbert added. "The ratings assume that the enlarged group will generate free operating cash flows, although these are likely to remain volatile." To maintain the ratings, S&P expects Zlomrex to have credit protection ratios of funds from operations to adjusted debt of 15%-20% and adjusted debt to EBITDA of below 3.5x over the cycle. No further material debt-financed acquisitions are factored into the ratings, although S&P expected Zlomrex to use cash flows to purchase the remaining 25.1% stake in VA Stahl in 2009 or 2010. Upside rating potential is limited by the group's business risk. Downside rating pressure could develop if management follows a more aggressive financial policy, or if there is a marked downturn in the steel sector. =============== P O R T U G A L =============== * Moody's Sees More SME Deals for Portuguese Securitizations ------------------------------------------------------------ The Portuguese structured finance market was virtually unchanged in 2006 compared with the preceding year, against a background of an improving -- albeit still fragile -- domestic economy. Securitization volume experienced a further slowdown in 2006 whereas in terms of the number of deals, the market remained almost unchanged. This stagnant trend was partly attributed to the anticipated finalization of the Portuguese Covered Bond Act in 2006, says Moody's Investors Service in its "2006 Review & 2007 Outlook" report on the Portuguese structured finance market." The rating agency expects the level of activity in 2007 to be either similar or slower to that of 2006, although the ABS asset class is expected to gain ground. Total volume outstanding in the Portuguese securitization market remained flat in 2006, amounting to EUR5 billion, and there was a similar number of deals. "The Portuguese market saw a total of seven issuances in 2006 of which four were ABS transactions: -- BMORE finance No.4; -- LTR Finance No.6; -- LUSITANO SME No.1; and -- CHAVES SME Clo No.1. "Meanwhile, RMBS accounted for the remaining three: -- MAGELLAN MORTGAGES No.4, -- LUSITANO MORTGAGES No.5, and -- DOURO MORTGAGES No. 2. "Notably, the RMBS deals were all recurrent issuances whereas ABS issuances were, in most cases, new launches," says Sandie Arlene Fernandez, a Moody's Assistant Vice President and co- author of this report. Moody's expects that Portuguese RMBS will follow the same path as witnessed in previous years (i.e. constant or declining number of issuances) influenced by developments in the domestic mortgage market as well as the economy. However, ongoing structural issues like weak competitive position and high household indebtedness will drive market activity. Moreover, the ongoing fiscal consolidation process could further restrain growth. "In contrast, ABS will probably see several SME transactions in 2007, repeating the trend established in 2006, and possibly the asset type with attracting increasing interest in 2007 would be covered bonds," Ms. Fernandez adds. In the covered bonds sub-segment, Caixa Geral de Depositos, S.A. (GGD) launched an inaugural Jumbo Covered Bond (EUR2 billion issuance), thereby becoming the first originator to issue mortgage covered bonds ("Obrigacoes hipotecarias" or OHs) in accordance with the terms of new Portuguese Covered Bonds Act -- enacted in March 2006, and complemented by secondary legislation issued by the Bank of Portugal in October 2006. Moody's rated CGD's mortgage covered bond program Aaa in December 2006. The rating was in accordance with the Moody's Covered Bond Rating Methodology (published in 2005). The agency notes that whilst it is too early to determine whether other entities will issue more covered bond programs, the CDG launch has created considerable interest and Moody's believes that further transactions will likely be brought to market in 2007. Additionally, Moody's expects possible repackaging of several Portuguese notes from previously closed deals in order to create a new transaction, and such structures would likely emerge in 2007, thus repeating another key feature of the Portuguese structured finance market witnessed throughout 2006, which saw the demand for ratings of previously non-rated transactions, i.e. deals that have already closed but without a Moody's ratings. =========== R U S S I A =========== ALATYRSKIY FEED: Claims Filing Deadline Set Feb. 23 --------------------------------------------------- Creditors of LLC Alatyrskiy Feed Mill have until Feb. 23 to submit written proofs of claim to: V. Sokolov, Insolvency Manager Nikolaeva Str. 11 Tsivirsk Chuvashiya Republic Russia The Arbitration Court of Chuvashiya Republic commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A79-6071/2006. The Debtor can be reached at: LLC Alatyrskiy Feed Mill Alatyr Chuvashiya Republic Russia DALI CJSC: Claims Filing Deadline Set Feb. 23 --------------------------------------------- Creditors of CJSC Company Dali have until Feb. 23 their proofs of claim to: E. Safonova, Insolvency Manager Office 2 Kubano-Naberezhnaya Str. 100 350063 Krasnodar Region Russia Tel: (861) 262-97-27 The Arbitration Court of Krasnodar Region commenced bankruptcy proceedings against the company after finding it insolvent. The case was docketed under Case No. A-32-12063/2006-46/788-B. The Arbitration Court of Krasnodar Region is located at: Krasnaya Str. 6 Krasnodar Region Russia The Debtor can be reached at: CJSC Company Dali Rashpilevskaya Str. 53 350000 Krasnodar Region Russia DYURTYULINSKOYE FEED: Claims Filing Deadline Set Feb. 23 -------------------------------------------------------- Creditors of OJSC Dyurtyulinskoye Feed Mill have until Feb. 23 to submit written proofs of claim to: N. Mutallapov, Insolvency Manager Post User Box 56 Ufa 450009 Bashkortostan Republic Russia The Arbitration Court of Bashkortostan Republic commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A07-18644/06-G- GRA. The Arbitration Court of Bashkortostan Republic is located at: Oktyabrskoy Revolyutsii Str. 63a Ufa Bashkortostan Republic Russia The Debtor can be reached at: OJSC Dyurtyulinskoye Feed Mill Internatsionalnaya Str. 4/1 Dyurtyuli 452320 Bashkortostan Republic Russia GORNOMARIYSKIY LLC: Claims Filing Deadline Set Feb. 23 ------------------------------------------------------ Creditors of LLC Meat Combine Gornomariyskiy have until Feb. 23 to submit written proofs of claim to: Mr. N. Smyshlyaev, Insolvency Manager Post User Box 75. Yoskar-Ola 424007 Mariy El Republic Russia The Arbitration Court of Mariy El Republic commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A-38-2086-11/164-2006. The Debtor can be reached at: LLC Meat Combine Gornomariyskiy Chekeevo. Gornomariyskiy Region Mariy El Republic Russia GORNYJ CJSC: Claims Filing Deadline Set Jan. 23 ----------------------------------------------- Creditors of CJSC Gornyj have until Jan. 23 to submit written proofs of claim to: S. Spirin, Insolvency Manager Stalerov Str. 94-85 454038 Chelyabinsk Region Russia The Arbitration Court of Chelyabinsk Region commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A76-8509/2006-34-60. The Arbitration Court of Chelyabinsk Region is located at: Vorovskogo Str. 2 454091 Chelyabinsk Region Russia The Debtor can be reached at: CJSC Gornyj Profsoyuznaya Str. Svetlogorsk Agapovskiy Region 457418 Chelyabinsk Region Russia GRANITE LLC: Claims Filing Deadline Set Jan. 23 ----------------------------------------------- Creditors of LLC Granite have until Jan. 23 to submit written proofs of claim to: D. Pimenov, Insolvency Manager Lunacharskogo Str. 53 440061 Penza Region Russia The Arbitration Court of Penza Region commenced bankruptcy proceedings against the company after finding it insolvent. The case was docketed under Case No. A49-6292/2006-526b/26. The Arbitration Court of Penza Region is located at: Belinskogo Str. 2 440600 Penza Region Russia The Debtor can be reached at: LLC Granite Gorodishe Gorodishenskiy Region Fabrichnaya Str. 45. Penza Region Russia MONOLITH GROUP: Bankruptcy Hearing Slated for March 29 ------------------------------------------------------ The Arbitration Court of Moscow will convene to hear bankruptcy supervision procedure on OJSC Monolith Group at 2:30 p.m. on March 29 at: The Arbitration Court of Moscow Novaya Basmannaya Str. 10 Moscow Region Russia Creditors have until Jan. 23 to submit written proofs of claim to: O. Andreenko, Temporary Insolvency Manager Office 215 Building 3 Petrovka Str. 26 127051 Moscow Russia Tel. 686-00-15 The case is docketed under Case No. A40-72034/06-123-1140B. The Debtor can be reached at: OJSC Monolith Group Sadovnicheskaya Str. 32-34/25. 113035 Moscow Russia MOSCOW MORTGAGE: Global Default Cues Moody's Ba2 Rating ------------------------------------------------------- Moody's Investors Service has assigned global scale ratings with a stable outlook to Moscow Mortgage Agency: -- Ba2 long-term and Not Prime short-term foreign and local currency deposit ratings and an E+ financial strength rating. At the same time, Moody's Interfax Rating Agency has affirmed the bank's Aa2.ru long-term national scale credit rating. Moscow-based Moody's Interfax is majority-owned by Moody's. According to Moody's and Moody's Interfax, the Ba2/NP/E+ global scale ratings reflect MMA's global default and loss expectation, while the Aa2.ru national scale rating reflects the standing of the bank's credit quality relative to its domestic peers. MMA's Ba2/NP long- and short-term foreign currency deposit ratings are based on Moody's assessment that support, would be extended to the bank in the event of need by its 100% owner the City of Moscow (Baa1/Stable); hence the assigned long-term rating incorporates a multi-notch uplift from MMA's standalone rating of B3. Such support is confirmed by successive capital injections from the city government since the bank's inception in 2000 and by the presence of high-ranking Moscow officials on the bank's supervisory board. However, there remains some uncertainty with regard to the scope and timeliness of any such support given that the bank has no systemic value to the City of Moscow (unlike Bank of Moscow). The FSR of E+ takes account of MMA's significant position in corporate mortgage lending in Moscow and its strong capitalization. It also factors in the bank's potential for building up a niche franchise in mortgage lending to individuals through participation in projects implemented by the City of Moscow. However, the FSR is also constrained by: (i) the challenges posed by the operating and regulatory environment in Russia, which, despite being systemic factors common to all banks in the country, exert negative pressure on MMA's rating; (ii) the bank's modest core profitability; (iii) the high single-party concentration in the loan book, and (iv) the possibility of deteriorating asset quality due to high risks intrinsic to corporate mortgage lending in Russia. Moscow Mortgage Agency is headquartered in Moscow, Russian Federation. As at year-end 2005, the bank reported consolidated total assets of US$124 million under IFRS. MMA ranked 183rd by assets and 160th by regulatory capital among Russian banks as of Sept. 30, 2006, according to Interfax. NIVA OJSC: Claims Filing Deadline Set Jan. 23 --------------------------------------------- Creditors of OJSC Niva have until Jan. 23 to submit written proofs of claim to: R. Galimov, Insolvency Manager Chishminskaya Str. 6 Davlekanovo 453400 Orel Region Russia The Arbitration Court of Orel Region commenced bankruptcy proceedings against the company after finding it insolvent. The case was docketed under Case No. A47-5912/2006-14GK. The Arbitration Court of Orel Region is located at: Gorkogo Str. 42 302000 Orel Region Russia The Debtor can be reached at: OJSC Niva Grachevka Grachevskiy Region Orel Region Russia OBININSKIY PLYWOOD: Claims Filing Deadline Set Feb. 23 ------------------------------------------------------ Creditors of CJSC Obininskiy Plywood Manufacturing Plant have until Feb. 23 to submit written proofs of claim to: A. Mikhalevym, Insolvency Manager Okruzhnaya 8-18 248021 Kaluga Region Russia The Arbitration Court of Kaluga Region commenced bankruptcy proceedings against the company after finding it insolvent. The case was docketed under Case No. A 23-3131/06B-10-180. The Arbitration Court of Kaluga Region is located at: Staryj Torg Square 4 Kaluga Region Russia The Debtor can be reached at: CJSC Obininskiy Plywood Manufacturing Plant Kievskaya Str. 57. Obninsk Kaluga Region Russia PERMSKIY WOOD-PROM-KHOZ: Creditors Must File Claims by Jan. 23 -------------------------------------------------------------- Creditors of LLC Permskiy Wood-Prom-Khoz have until Jan. 23 to submit written proofs of claim to: I. Gaysin, Temporary Insolvency Manager Apartment 77 Sotsialisticheskaya Str. 64b Neftekamsk 452688 Bashkortostan Republic Russia The Arbitration Court of Perm Region commenced bankruptcy supervision procedure on the company. The case is docketed under Case No. A50-18038/2006-B. The Debtor can be reached at: LLC Permskiy Wood-Prom-Khoz Suvorova Str. 84 Yugo-Kamskiy 614526 Perm Region Russia ROS-INVEST CJSC: Creditors Must File Claims by Jan. 23 ------------------------------------------------------ Creditors of CJSC Ros-Invest have until Jan. 23 to submit written proofs of claim to: E. Kuznetsov, Temporary Insolvency Manager Post User Box 14449 443084 Samara-84 Russia The Arbitration Court of Samara Region commenced bankruptcy supervision procedure on the company. The case is docketed under Case No. A55-16229/2006-36. The Debtor can be reached at: CJSC Ros-Invest Kirova Pr. 2A Samara Russia ROSNEFT OIL: Names Sergey Makarov as Financial Chief ---------------------------------------------------- OAO Rosneft Oil Co. disclosed of staff changes aimed at strengthening the company's financial division in connection with the increased scale of its operations. Peter O'Brien, vice president and head of the group of financial advisers to the president of Rosneft, will concentrate largely on strategy and development prospects for the Company, growth in capitalization, acquisition of new assets, restructuring issues, as well as mergers and acquisitions. Rosneft has appointed Sergey Makarov as vice president of financial issues. Mr. Makarov has 12 years of experience in corporate finance. Born in Moscow in 1963, Mr. Makarov is a graduate of the Moscow Aviation Institute and also of the London School of Business Administration. In the late 1990s and early 2000s, Mr. Makarov worked in Britain at a number of financial and commercial organizations. In 2003, he began working at the Oboronpom group, first as head of the financial department at Unified Industrial Corp. Oboronprom and later as chairman of the board of directors at Oboronpromlizing (one of the structures comprising Oboronprom). At Rosneft, the new vice president will oversee the Company's financial service, which will cover issues of increasing the effectiveness of the Company's internal financial operations, as well as budgeting questions. About Rosneft Headquartered in Moscow, Russia, OAO Rosneft Oil Co. -- http://ns.roilcom.ru/english/-- produces and markets petroleum products. The Company explores for, extracts, refines and markets oil and natural gas. Rosneft produces oil in Western Siberia, Sakhalin, the North Caucasus and the Arctic regions of Russia. * * * In a TCR-Europe report on Jan. 16, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Russian OJSC Oil Company Rosneft to 'BB+' from 'BB' and removed it from CreditWatch, where it had been placed with positive implications on Nov. 15, 2006. S&P said the outlook is developing. As reported in the TCR-Europe on Jan. 2, Fitch Ratings placed OJSC Rosneft Oil's foreign and local currency Issuer Default ratings of BB+ on Rating Watch Positive following the company's announcement of strong financial results for the first nine months of 2006. ROSNEFT OIL: Looks on Contractor to Build New Tuapse Refinery ------------------------------------------------------------- OAO Rosneft Oil will hold a tender to select a general contractor to construct a new oil refinery on the territory of the current Tuapse Oil Refinery. The new refinery will have a capacity of 12 million tons per year. Plans envision the construction of a turnkey refinery. A detailed project design, facilities installation, construction, assembly, as well as balancing and commissioning are all planned. Rosneft will finance the refinery's construction through company funds. Documents for participation in the tender will be accepted until Jan. 31, 2007. The Company plans to begin construction of the new refinery during the third quarter of 2007, with a target finish date after 42 months. The refinery will produce oil products that meet international Euro-4 and Euro-5 standards. Refining depth should reach 95%. Rosneft has already completed license agreements and contracts for base engineering of the main production technologies envisioned in the new refinery's design. UOP (isomerization and catalytic reforming of gasoline fractions), Chevron LG (hydrocracking combined with hydrotreating of diesel fuel) and Technip (hydrogen production) have all been selected as licensors. Large companies like Toyo Engineering Corp. and Chiyoda Corp. (Japan), Poon Lim Industrial (Korea), Lurgi AG and Technip (Germany), Snamprogetty (Italy) and Foster Wheeler, Parsons Corp., ABB Lummus Global and Bechtel Corp. (United States) have all been invited to participate in the tender. The construction of the new refinery is a unique project not only for Rosneft but also for Russia's entire oil industry. Its completion will inaugurate the end of the first stage of the Tuapse Refinery's reconstruction, which, owing to its integration with another of Rosneft's subsidiaries -- Tuapsenefteprodukt -- will allow for the creation of a single high-capacity channel for production and export of high-quality oil products to Mediterranean markets. About Rosneft Headquartered in Moscow, Russia, OAO Rosneft Oil Co. -- http://ns.roilcom.ru/english/-- produces and markets petroleum products. The Company explores for, extracts, refines and markets oil and natural gas. Rosneft produces oil in Western Siberia, Sakhalin, the North Caucasus and the Arctic regions of Russia. * * * In a TCR-Europe report on Jan. 16, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Russian OJSC Oil Company Rosneft to 'BB+' from 'BB' and removed it from CreditWatch, where it had been placed with positive implications on Nov. 15, 2006. The outlook is developing. As reported in the TCR-Europe on Jan. 2, Fitch Ratings placed OJSC Rosneft Oil's foreign and local currency Issuer Default ratings of BB+ on Rating Watch Positive following the company's announcement of strong financial results for the first nine months of 2006. SADOVOYE CJSC: Claims Filing Deadline Set Jan. 23 ------------------------------------------------- Creditors of CJSC Sadovoye have until Jan. 23 to submit written proofs of claim to: A. Vasilyev, Insolvency Manager Apartment 1b Volskaya Str. 11a Saratov Region Russia The Arbitration Court of Saratov Region commenced bankruptcy proceedings against the company after finding it insolvent. The case was docketed under Case No. A-57-439B/06-23. The Arbitration Court of Saratov Region is located at: Babushkin Vvoz 1 Saratov Region Russia The Debtor can be reached at: CJSC Sadovoye Podshibalovka Krasnopartizanskiy Region Saratov Region Russia SHAKHTA-TRANSTPORT OJSC Claims Filing Deadline Set Feb. 23 ---------------------------------------------------------- The Arbitration Court of Rostov Region commenced bankruptcy proceedings against the company after finding it insolvent. The case was docketed under Case No. A53-16879/2006-S2-33. Creditors of OJSC Shakhta-Transtport have until Jan. 23 to submit written proofs of claim to: A. Afanasyeva, Insolvency Manager Voroshilova Str. 5 Shakhty 346527 Rostov Region Russia The Debtor can be reached at: OJSC Shakhta-Transtport Pereulka Cherenkova Tupik Shakhty 346500 Rostov Region Russia SIBACADEMBANK: Merger Cues Moody's to Lift UVTB's Rating to B1 -------------------------------------------------------------- Moody's Investors Service has upgraded the long-term foreign currency deposit rating of Russia's Uralvneshtorgbank to B1 from B2. At the same time, Moody's Interfax Rating Agency has upgraded UVTB's long-term national scale rating to A1.ru from A3.ru. Moscow-based Moody's Interfax is majority-owned by Moody's, a leading global rating agency. The upgrades conclude the review for possible upgrade initiated on Oct. 3, 2006, and reflect UVTB's merger with the financially stronger institution URSA-Bank (formerly SibAcademBank, rated B1/NP/E+ with positive outlook), which was finalized at the end of 2006. UVTB's Not Prime short-term foreign currency deposit rating and E+ financial strength rating have been affirmed. The outlook on the B1/E+ ratings is stable. Moody's note that the ratings of UVTB will be withdrawn as it has ceased to exist as an independent legal entity following the merger. Headquartered in Yekaterinburg, Russia, UVTB reported consolidated total assets of US$679 million and shareholders' equity of US$73 million under IFRS as at 30 June 2006. TURQUOISE CJSC: Creditors Must File Claims by Jan. 23 ----------------------------------------------------- Creditors of CJSC Turquoise have until Jan. 23 to submit written proofs of claim to: A. Makarov, Temporary Insolvency Manager Office 500 Krasina Str. 7a 625003 Tyumen Region Russia The Arbitration Court of Tyumen Region commenced bankruptcy supervision procedure on the company. The case is docketed under Case No. A-70-8712/3-06. The Arbitration Court of Tyumen Region is located at: Khokhryakova Str. 77 627000 Tyumen Region Russia The Debtor can be reached at: CJSC Turquoise Znamenskaya Str. 56a 626150 Tyumen Region Tobolsk Russia URALVNESHTORGBANK: Merger Cues Moody's to Lift Rating to B1 ----------------------------------------------------------- Moody's Investors Service has upgraded the long-term foreign currency deposit rating of Russia's Uralvneshtorgbank to B1 from B2. At the same time, Moody's Interfax Rating Agency has upgraded UVTB's long-term national scale rating to A1.ru from A3.ru. Moscow-based Moody's Interfax is majority-owned by Moody's, a leading global rating agency. The upgrades conclude the review for possible upgrade initiated on Oct. 3, 2006, and reflect UVTB's merger with the financially stronger institution URSA-Bank (formerly SibAcademBank, rated B1/NP/E+ with positive outlook), which was finalized at the end of 2006. UVTB's Not Prime short-term foreign currency deposit rating and E+ financial strength rating have been affirmed. The outlook on the B1/E+ ratings is stable. Moody's note that the ratings of UVTB will shortly be withdrawn as it has ceased to exist as an independent legal entity following the merger. Headquartered in Yekaterinburg, Russia, UVTB reported consolidated total assets of US$679 million and shareholders' equity of US$73 million under IFRS as at June 30, 2006. URALVNESHTORGBANK: Moody's Withdraws Rating After Merger Closing ---------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings of Uralvneshtorgbank, which has ceased to exist as an independent legal entity following its merger with URSA-Bank (formerly SibAkademBank) at the end of 2006. These ratings were withdrawn: -- Financial Strength Rating: E+ -- Long-term foreign currency deposit rating: B1 -- Short-term foreign currency deposit rating: Not Prime -- National scale rating: A1.ru Uralvneshtorgbank was based in Yekaterinburg, Russia, and reported consolidated total assets of US$679 million under IFRS as at June 30, 2006. PYATEROCHKA HOLDING: Q4 2006 Like-For-Like Group Sales Up 13% ------------------------------------------------------------- Pyaterochka Holding N.V. (nka X5 Retail Group N.V.) provided a trading update including store opening data and like-for-like sales trends for the Pyaterochka and Perekrestok chains for Q4 and FY 2006. Expansion X5 Retail Group N.V. has successfully completed its 2006 store opening program gaining additional net selling space of approximately 59,000 square meters in Q4 2006. Over the FY 2006, X5 Retail Group N.V. gained additional net selling space of approximately 126,000 square meters (of which approximately 68,000 square meters for Perekriostok chain, and approximately 58,000 square meters for Pyaterochka chain), thus outstripping its FY2006 store opening target to add approximately 120,000 square meters. As of Dec. 31, 2006, X5 Retail Group N.V. operated approximately 466,000 square meters of net selling space. In terms of numbers of stores, the Group opened 33 new Pyaterochka soft-discount stores and 27 new Perekrestok supermarkets during Q4 2006. As of Dec. 31, 2006, X5 Retail Group N.V. operated 451 company-managed Pyaterochka soft- discount stores and 168 Perekrestok stores, including 12 hypermarkets. Moscow In Moscow, Pyaterochka chain gained additional net selling space of approximately 13,000 square meters during Q4 2006, implying a total of approximately 35,000 square meters gained in 2006. As of Dec. 31, 2006, Pyaterochka chain operated a total of approximately 135,000 square meters of net selling space in the Moscow area. Perekrestok chain gained additional net selling space of approximately 20,000 square meters during Q4 2006, implying a total of approximately 30,000 square meters gained in 2006. As of Dec. 31, 2006, Perekrestok chain operated a total of approximately 111,000 square meters of net selling space in the Moscow area. In terms of numbers of stores, as of Dec. 31, 2006, the Group operated in the Moscow area 222 Pyaterochka soft discount stores and 100 Perekrestok stores including 3 hypermarkets. St. Petersburg In St. Petersburg, Pyaterochka chain gained additional net selling space of approximately 2,000 square meters during Q4 2006, implying a total of approximately 19,000 square meters gained in 2006. As of Dec. 31, 2006, Pyaterochka chain operated a total of approximately 114,000 square meters of net selling space in the St. Petersburg area. Perekrestok chain gained additional net selling space of approximately 2,000 square meters during Q4 2006, implying a total of approximately 10,000 square meters gained in 2006. As of Dec. 31, 2006, Perekrestok chain operated a total of approximately 20,000 square meters of net selling space in the St. Petersburg area. In terms of numbers of stores, as of Dec. 31, 2006, the Group operated in the St. Petersburg area 204 soft discount Pyaterochka stores and 17 Perekrestok stores. Russian Regions, Ukraine and Kazakhstan In the regions outside of Moscow and St. Petersburg, Perekrestok chain gained additional net selling space of approximately 20,000 square meters during Q4 2006, implying a total of approximately 29,000 square meters gained in 2006. As of Dec. 31, 2006, Perekrestok chain operated a total of approximately 78,000 square meters of net selling space in the regions. In Yekaterinburg, Pyaterochka chain gained additional net selling space of approximately 2,000 square meters during Q4 2006, implying a total of approximately 4,000 square meters gained in 2006. As of Dec. 31, 2006, Pyaterochka chain operated a total of approximately 9,000 square meters of net selling space in Yekaterinburg. In terms of numbers of stores, as of Dec. 31, 2006, in the regions outside of Moscow and St. Petersburg the Group operated 25 Pyaterochka stores and 51 Perekrestok stores, including 9 hypermarkets. Pyaterochka's franchisees also continued to expand rapidly, opening 66 new stores operating under the Pyaterochka brand during Q4 2006. As of Dec. 31, 2006, Pyaterochka's franchisees operated 605 stores across Russia, in Ukraine and Kazakhstan. Perekrestok had 10 stores operated by franchisees in the Moscow area. Store Operations Over the year of 2006, X5 Retail Group N.V. not only outstripped its store opening target but also experienced strong Like-for- Like sales(1) trends across both chains, demonstrating the strongest performance in Q4 2006 (+13%). In Q4 the Group maintained the positive Like-for-Like sales trends of the previous quarters in Moscow, and showed continued improvement of Payterochka Like-for-Like sales performance in St. Petersburg. Group During Q4 2006, Group LFL sales performance (including both chains) reached +13%, composed of traffic of +8% and basket growth of +5%. For FY 2006, the group experienced LFL sales of +11%, composed of traffic of +3% and basket growth of +8%. The Pyaterochka chain experienced overall LFL sales performance of +11% during Q4 2006 (traffic +3%, basket growth of 8%), and 9% for FY 2006 (traffic 0%, basket growth of +9%). The Perekrestok chain experienced overall LFL sales performance of +15% during Q4 2006 (traffic +13%, basket growth of +2%), and +14% for FY 2006 (traffic +8%, basket growth of 6%). Moscow LFL sales at Moscow area Pyaterochka stores reached +14% during Q4 2006, composed of traffic of +7% and an increase in the average basket of +7%. Over FY 2006, the Pyaterochka stores in Moscow experienced LFL sales performance of +13%, composed of traffic of +3% and basket growth of +10%. LFL sales at Moscow area Perekrestok stores reached +18% during Q4 2006, on the basis of traffic of +15% and basket growth of +3%. During FY 2006, the Perekrestok stores in Moscow experienced LFL sales performance of +16%, composed of traffic of +10% and basket growth of +6%. St. Petersburg LFL sales at St. Petersburg area Pyaterochka stores reached +7% during Q4 2006, composed of traffic of -1% and basket growth of +8%. During FY 2006, the Pyaterochka stores in St. Petersburg experienced LFL sales performance of +3%, composed of traffic of -4% and basket growth of +7%. LFL sales at St. Petersburg area Perekrestok stores reached 10% during Q4 2006, on the basis of traffic of +14% and basket of - 4%. During FY 2006, the Perekrestok stores in St. Petersburg experienced LFL sales performance of +8%, composed of traffic of +10% and basket of -2%. Regions LFL sales at Perekrestok stores in the regions outside of Moscow and St. Petersburg reached +7% during Q4 2006, composed of traffic of +5% and basket growth of +2%. For FY 2006 these stores experienced LFL sales of + 11%, based on traffic of +5% and basket growth of +6%. About Pyaterochka Holding Headquartered in the Netherlands, Pyaterochka Holding N.V. (nka X5 Retail Group N.V.) (LSE: FIVE) -- http://www.5chka.com/-- operates a large store network largely covering the Moscow region and St. Petersburg but also has a good presence in other Russian regions through its franchise operations. The company has recently acquired two of its successful regional franchise operations -- in Yekaterinburg and Chelyabinsk. Pyaterochka's 2004 net revenues were US$1.1 billion. The company has reported unaudited net revenues of US$1.4 billion for 2005. * * * As reported in the TCR-Europe on Aug. 29, 2006, Moody's Investors Service downgraded the corporate family rating of Pyaterochka Holding N.V. to B1 from Ba3. Moody's said the outlook for the rating is stable. Standard & Poor's Services affirmed its 'BB-' long-term corporate credit rating on Pyaterochka Holding N.V., the owner of Russia's largest grocery retail network. At the same time, Standard & Poor's affirmed its 'BB-' long-term corporate credit and 'ruAA-' Russia national scale on Pyaterochka's guaranteed operating subsidiary OOO Agrotorg. The 'ruAA-' Russia national scale on the senior unsecured and senior secured debt issued by related entity Pyaterochka Finance have also been affirmed. All were removed from CreditWatch with negative implications, where they had been placed on April 12, following Pyaterochka's announced acquisition of Russia's leading supermarket chain Perekrestok. S&P said the outlook is negative. ===================================== S E R B I A & M O N T E N E G R O ===================================== * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness --------------------------------------------------------------- Standard & Poor's Ratings Services expects 2007 to be a positive year for economic growth but a mixed one for sovereign creditworthiness in Europe, with fewer ratings changes than in 2006. This separation between economic conditions and potential ratings changes in the European region is one of the key trends for 2007 and beyond, but there are also a number of country- specific developments that could affect sovereign ratings. As of Jan. 17, 2007, European sovereign ratings show: European Sovereign Ratings List Foreign Currency Local Currency Sovereign Ratings Ratings --------- ---------------- -------------- Andorra (Principality of) AA/Stable/A-1+ AA/Stable/A-1+ Austria (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Belgium (Kingdom of) AA+/Stable/A-1+ AA+/Stable/A-1+ Bulgaria (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Croatia (Republic of) BBB/Stable/A-3 BBB+/Stable/A-2 Cyprus (Republic of) A/Stable/A-1 A/Stable/A-1 Czech Republic A-/Positive/A-2 A/Positive/A-1 Denmark (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Estonia (Republic of) A/Stable/A-1 A/Stable/A-1 Finland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ France (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Georgia (Government of) B+/Stable/B B+/Stable/B Germany (Federal Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Hellenic Republic (Greece) A/Stable/A-1 A/Stable/A-1 Hungary (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Iceland (Republic of) A+/Stable/A-1 AA/Stable/A-1+ Ireland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Isle of Man AAA/Stable/A-1+ AAA/Stable/A-1+ Italy (Republic of) A+/Stable/A-1+ A+/Stable/A-1+ Latvia (Republic of) A-/Stable/A-2 A-/Stable/A-2 Liechtenstein (Principality of) AAA/Stable/A-1+ AAA/Stable/A-1+ Lithuania (Republic of) A/Stable/A-1 A/Stable/A-1 Luxembourg (Grand Duchy of) AAA/Stable/A-1+ AAA/Stable/A-1+ Macedonia (Republic of) BB+/Stable/B BBB-/Stable/A-3 Malta (Republic of) A/Stable/A-1 A/Stable/A-1 Montenegro (Republic of) BB/Positive/B BB/Positive/B Netherlands (State of The) AAA/Stable/A-1+ AAA/Stable/A-1+ Norway (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Poland (Republic of) BBB+/Stable/A-2 A-/Stable/A-2 Portugal (Republic of) AA-/Stable/A-1+ AA-/Stable/A-1+ Romania (Republic of) BBB-/Stable/A-3 BBB/Stable/A-3 Russian Federation (The) BBB+/Stable/A-2 A-/Stable/A-2 Serbia (Republic of) BB-/Positive/B BB-/Positive/B Slovak Republic A/Stable/A-1 A/Stable/A-1 Slovenia (Republic of) AA/Stable/A-1+ AA/Stable/A-1+ Spain (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Sweden (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Swiss Confederation (Switzerland) AAA/Stable/A-1+ AAA/Stable/A-1+ Turkey (Republic of) BB-/Stable/B BB/Stable/B Ukraine BB-/Stable/B BB/Stable/B United Kingdom AAA/Stable/A-1+ AAA/Stable/A-1+ ===================== S W I T Z E R L A N D ===================== ACM METALL: Zug Court Starts Bankruptcy Proceedings --------------------------------------------------- The Bankruptcy Court of Zug commenced bankruptcy proceedings against JSC acm metall on Dec. 5, 2006. The Debtor can be reached at: JSC acm metall Birkenstrasse 51 6343 Rotkreuz Switzerland The Bankruptcy Service of Zug can be reached at: Bankruptcy Service of Zug 6300 Zug Switzerland ALMAK JSC: Lucerne Court Suspends Bankruptcy Proceedings -------------------------------------------------------- The Bankruptcy Court of Lucerne suspended the bankruptcy proceedings of JSC Almak on Dec. 21, 2006, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF5,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on April 26, 2006, can be reached at: JSC Almak 38 6002 Lucerne Switzerland The Bankruptcy Service of Lucerne-Stadt can be reached at: Bankruptcy Service of Lucerne-Stadt 6000 Lucern 5 Switzerland BATIX LLC: Lucerne Court Suspends Bankruptcy Proceedings -------------------------------------------------------- The Bankruptcy Court of Lucerne suspended the bankruptcy proceedings of LLC Batix on Dec. 21, 2006, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF5,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on May 17, 2006, can be reached at: LLC Batix 6000 Lucerne Switzerland The Bankruptcy Service of Lucerne-Stadt can be reached at: Bankruptcy Service of Lucerne-Stadt 6000 Lucern 5 Switzerland EMBLI LLC: Lucerne Court Suspends Bankruptcy Proceedings -------------------------------------------------------- The Bankruptcy Court of Lucerne suspended the bankruptcy proceedings of LLC Embli on Dec. 11, 2006, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Sept. 27, 2006, can be reached at: LLC Embli Muhleweg 8 6010 Kriens Switzerland The Bankruptcy Service of Lucerne-Land can be reached at: Bankruptcy Service of Lucerne-Land 6011 Kriens Lucerne Switzerland PRO-HEALTH JSC: Davos Court Starts Bankruptcy Proceedings --------------------------------------------------------- The Bankruptcy Court of Davos in Graubunden commenced bankruptcy proceedings against JSC Pro-Health on Nov. 2, 2006. The Debtor can be reached at: JSC Pro-Health 7270 Davos Platz Switzerland The Bankruptcy Service of Davos can be reached at: Bankruptcy Service of Davos 7270 Davos Platz Switzerland R. + J. LLC: Lucerne Court Suspends Bankruptcy Proceedings ---------------------------------------------------------- The Bankruptcy Court of Lucerne suspended the bankruptcy proceedings of LLC R. + J. on Dec. 11, 2006, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,500 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Nov. 8, 2006, can be reached at: LLC R. + J. Rengglochstrasse 25 6012 Obernau Switzerland The Bankruptcy Service of Lucerne-Land can be reached at: Bankruptcy Service of Lucerne-Land 6011 Kriens Lucerne Switzerland RISTORANTE - BAR UPS!: Lucerne Court Closes Bankruptcy Process -------------------------------------------------------------- The Bankruptcy Court of Lucerne entered Dec. 6, 2006, an order closing the bankruptcy proceedings of LLC Ristorante-Bar ups!. The Debtor can be reached at: LLC Ristorante-Bar ups! Obernauerstrasse 86 6012 Obernau Switzerland The Bankruptcy Service of Lucerne-Land can be reached at: Bankruptcy Service of Lucerne-Land 6011 Kriens Switzerland TURM-GARAGE JSC: Willisau Court Starts Bankruptcy Proceedings ------------------------------------------------------------- The Bankruptcy Court of Willisau in Lucerne commenced bankruptcy proceedings against JSC Turm-Garage on Dec. 11, 2006. The Debtor can be reached at: JSC Turm-Garage Hauptstrasse 5 6260 Reiden Switzerland The Bankruptcy Service of Willisau can be reached at: Bankruptcy Service of Willisau 6130 Willisau Switzerland WINDIRECT JSC: Lucerne Court Suspends Bankruptcy Proceedings ------------------------------------------------------------ The Bankruptcy Court of Lucerne suspended the bankruptcy proceedings of JSC Windirect on Dec. 18, 2006, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,500 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Nov. 15, 2006, can be reached at: JSC Windirect Gampi 10 6043 Adligenswil Switzerland The Bankruptcy Service of Lucerne-Land can be reached at: Bankruptcy Service of Lucerne-Land 6011 Kriens Switzerland XENAPRISE LLC: Lucerne Court Starts Bankruptcy Proceedings ---------------------------------------------------------- The Bankruptcy Court of Lucerne commenced bankruptcy proceedings against LLC Xenaprise on Nov. 15, 2006. The Debtor can be reached at: LLC Xenaprise St. Karli-Quai 9 6002 Lucerne Switzerland The Bankruptcy Service of Lucerne can be reached at: Bankruptcy Service of Lucerne 6000 Lucerne 5 Switzerland =========== T U R K E Y =========== * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness --------------------------------------------------------------- Standard & Poor's Ratings Services expects 2007 to be a positive year for economic growth but a mixed one for sovereign creditworthiness in Europe, with fewer ratings changes than in 2006. This separation between economic conditions and potential ratings changes in the European region is one of the key trends for 2007 and beyond, but there are also a number of country- specific developments that could affect sovereign ratings. As of Jan. 17, 2007, European sovereign ratings show: European Sovereign Ratings List Foreign Currency Local Currency Sovereign Ratings Ratings --------- ---------------- -------------- Andorra (Principality of) AA/Stable/A-1+ AA/Stable/A-1+ Austria (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Belgium (Kingdom of) AA+/Stable/A-1+ AA+/Stable/A-1+ Bulgaria (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Croatia (Republic of) BBB/Stable/A-3 BBB+/Stable/A-2 Cyprus (Republic of) A/Stable/A-1 A/Stable/A-1 Czech Republic A-/Positive/A-2 A/Positive/A-1 Denmark (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Estonia (Republic of) A/Stable/A-1 A/Stable/A-1 Finland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ France (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Georgia (Government of) B+/Stable/B B+/Stable/B Germany (Federal Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Hellenic Republic (Greece) A/Stable/A-1 A/Stable/A-1 Hungary (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Iceland (Republic of) A+/Stable/A-1 AA/Stable/A-1+ Ireland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Isle of Man AAA/Stable/A-1+ AAA/Stable/A-1+ Italy (Republic of) A+/Stable/A-1+ A+/Stable/A-1+ Latvia (Republic of) A-/Stable/A-2 A-/Stable/A-2 Liechtenstein (Principality of) AAA/Stable/A-1+ AAA/Stable/A-1+ Lithuania (Republic of) A/Stable/A-1 A/Stable/A-1 Luxembourg (Grand Duchy of) AAA/Stable/A-1+ AAA/Stable/A-1+ Macedonia (Republic of) BB+/Stable/B BBB-/Stable/A-3 Malta (Republic of) A/Stable/A-1 A/Stable/A-1 Montenegro (Republic of) BB/Positive/B BB/Positive/B Netherlands (State of The) AAA/Stable/A-1+ AAA/Stable/A-1+ Norway (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Poland (Republic of) BBB+/Stable/A-2 A-/Stable/A-2 Portugal (Republic of) AA-/Stable/A-1+ AA-/Stable/A-1+ Romania (Republic of) BBB-/Stable/A-3 BBB/Stable/A-3 Russian Federation (The) BBB+/Stable/A-2 A-/Stable/A-2 Serbia (Republic of) BB-/Positive/B BB-/Positive/B Slovak Republic A/Stable/A-1 A/Stable/A-1 Slovenia (Republic of) AA/Stable/A-1+ AA/Stable/A-1+ Spain (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Sweden (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Swiss Confederation (Switzerland) AAA/Stable/A-1+ AAA/Stable/A-1+ Turkey (Republic of) BB-/Stable/B BB/Stable/B Ukraine BB-/Stable/B BB/Stable/B United Kingdom AAA/Stable/A-1+ AAA/Stable/A-1+ ============= U K R A I N E ============= * S&P Sees Mixed Growth for Europe's Sovereign Creditworthiness --------------------------------------------------------------- Standard & Poor's Ratings Services expects 2007 to be a positive year for economic growth but a mixed one for sovereign creditworthiness in Europe, with fewer ratings changes than in 2006. This separation between economic conditions and potential ratings changes in the European region is one of the key trends for 2007 and beyond, but there are also a number of country- specific developments that could affect sovereign ratings. As of Jan. 17, 2007, European sovereign ratings show: European Sovereign Ratings List Foreign Currency Local Currency Sovereign Ratings Ratings --------- ---------------- -------------- Andorra (Principality of) AA/Stable/A-1+ AA/Stable/A-1+ Austria (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Belgium (Kingdom of) AA+/Stable/A-1+ AA+/Stable/A-1+ Bulgaria (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Croatia (Republic of) BBB/Stable/A-3 BBB+/Stable/A-2 Cyprus (Republic of) A/Stable/A-1 A/Stable/A-1 Czech Republic A-/Positive/A-2 A/Positive/A-1 Denmark (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Estonia (Republic of) A/Stable/A-1 A/Stable/A-1 Finland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ France (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Georgia (Government of) B+/Stable/B B+/Stable/B Germany (Federal Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Hellenic Republic (Greece) A/Stable/A-1 A/Stable/A-1 Hungary (Republic of) BBB+/Stable/A-2 BBB+/Stable/A-2 Iceland (Republic of) A+/Stable/A-1 AA/Stable/A-1+ Ireland (Republic of) AAA/Stable/A-1+ AAA/Stable/A-1+ Isle of Man AAA/Stable/A-1+ AAA/Stable/A-1+ Italy (Republic of) A+/Stable/A-1+ A+/Stable/A-1+ Latvia (Republic of) A-/Stable/A-2 A-/Stable/A-2 Liechtenstein (Principality of) AAA/Stable/A-1+ AAA/Stable/A-1+ Lithuania (Republic of) A/Stable/A-1 A/Stable/A-1 Luxembourg (Grand Duchy of) AAA/Stable/A-1+ AAA/Stable/A-1+ Macedonia (Republic of) BB+/Stable/B BBB-/Stable/A-3 Malta (Republic of) A/Stable/A-1 A/Stable/A-1 Montenegro (Republic of) BB/Positive/B BB/Positive/B Netherlands (State of The) AAA/Stable/A-1+ AAA/Stable/A-1+ Norway (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Poland (Republic of) BBB+/Stable/A-2 A-/Stable/A-2 Portugal (Republic of) AA-/Stable/A-1+ AA-/Stable/A-1+ Romania (Republic of) BBB-/Stable/A-3 BBB/Stable/A-3 Russian Federation (The) BBB+/Stable/A-2 A-/Stable/A-2 Serbia (Republic of) BB-/Positive/B BB-/Positive/B Slovak Republic A/Stable/A-1 A/Stable/A-1 Slovenia (Republic of) AA/Stable/A-1+ AA/Stable/A-1+ Spain (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Sweden (Kingdom of) AAA/Stable/A-1+ AAA/Stable/A-1+ Swiss Confederation (Switzerland) AAA/Stable/A-1+ AAA/Stable/A-1+ Turkey (Republic of) BB-/Stable/B BB/Stable/B Ukraine BB-/Stable/B BB/Stable/B United Kingdom AAA/Stable/A-1+ AAA/Stable/A-1+ =========================== U N I T E D K I N G D O M =========================== ADVANCED MARKETING: Court Approves Securities Suit Settlement ------------------------------------------------------------- The U.S. District Court for the Southern District of California entered the Order of Final Judgment and Dismissal of the Action with Prejudice and granted final approval of the Settlement, the Plan of Allocation of Settlement Proceeds and the Request for Attorneys' Fees and Reimbursement of Expenses in the suit "In re Advanced Marketing Services, Inc. Securities Litigation, Case No. 04-CV-00121 RTB (AJB)." The case was filed on behalf of purchasers of Advance Marketing common stock from Jan. 16, 1999, to Jan. 13, 2004, inclusive. The lawsuit arose out of AMS's announcement on Jan. 14, 2004, that it would restate its previously filed financial statements for the prior five fiscal years. The planned restatement resulted from the company's ongoing review of its cooperative advertising practices and related accounting, and relates primarily to the timing and quantification of recognition of revenue and reversal of accrued liabilities. Following the announcement of the restatement, the price of AMS's stock fell 15.2% from US$11.97 to US$10.15 per share. Afterwards, Advanced Marketing and certain of its officers and directors were named as defendants in these federal securities class actions in the U.S. District Court for the Southern District of California in: -- "Eastside Investors, LLP v. Advanced Marketing Services, Inc., et al., Case No. 04-CV-00121 JM (AJB);" -- "Bowen v. Advanced Marketing Services, Inc., et al., Case No. 04-CV-00139 H (JMA);" and -- "Anderson v. Advanced Marketing Services, Inc., et al., Case No. 04-CV-00324 WQH (AJB)." The lawsuits alleged that Advanced Marketing and the individual defendants either knowingly or recklessly made misstatements concerning the company's reported financial results to artificially inflate the price of AMS common stock. On Feb. 24, 2004, the court consolidated the federal securities actions into a single case. On May 4, 2004, the court appointed Detroit P&F, a public pension fund organized for the benefit of current and retired police and fire personnel from the city of Detroit, as lead plaintiff, and approved Detroit P&F's selection of Bernstein Litowitz as lead counsel. In August 2005, the parties participated in a settlement mediation session with the assistance of retired California Court of Appeal Justice Charles S. Vogel. Following this mediation session, counsel for the parties continued to discuss settlement. In February 2006, the parties reached agreement on the terms of settlement and executed a Memorandum of Understanding. On Oct. 16, 2006, the court entered the Order of Final Judgment and Dismissal of the Action with Prejudice and granted final approval of the Settlement, the Plan of Allocation of Settlement Proceeds and the Request for Attorneys' Fees and Reimbursement of Expenses. About Advanced Marketing Based in San Diego, California, Advanced Marketing Services Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for Chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than US$100 million. The Debtors' exclusive period to file a Chapter 11 plan expires on Apr. 28. (Class Action Reporter January 18, Vol. 9, No. 13) BAA PLC: Parent Making Progress on Refinancing Plans ---------------------------------------------------- Airport Development and Investment Ltd., parent company of BAA Plc, made good progress on refinancing the airport operator's GBP5-billion debt, Reuters reports. ADI reaffirmed its plans to refinance BAA's sterling and euro bonds with "a longer-term financing structure based upon proven techniques adopted by other regulated companies." "ADI's intention is to migrate existing bondholders into an investment grade ring-fenced entity backed by regulated assets of BAA," the Gruppo Ferrovial-led consortium said. ADI said it would require a restructuring to segregate BAA's regulated and non-regulated assets, Reuters reports. ADI will resume the development of its plans in the next few months and intends to consult major bondholders via the Association of British Insurers. Reuters suggests that ADI might employ the regulated asset base financing, a form of fundraising pioneered by British water utilities such as Glas Cymru and Anglian Water. According to Reuters, RAB is a form of "whole business securitization," that entails splitting off assets that regulators allow to make a given return from non-regulated assets. The method has been used to raise investment-grade debt worth up to 85% of the asset base, Reuters cites an RBS research. About BAA Plc Headquartered in London, United Kingdom, BAA plc -- http://www.baa.com/-- owns and operates seven airports in the United Kingdom, including Healthrow, the world's busiest international airport, and Budapest Airport, serving 700 destination by around 300 airlines. Its U.K. airports handled over 117 million international passenger during the 12 months up to October 2005. International passengers make up 81% of its total U.K. airport traffic. BAA had total assets of GBP15.2 billion and pre-tax profits of GBP757 million for the year ended March 31, 2006. * * * As reported in the TCR-Europe on June 9, 2006, Moody's Investors Service downgraded to Ba1 from Baa3 the issuer rating of BAA Plc as well as the ratings for: -- GBP425 million convertible bonds due August 2009; -- GBP424 million convertible bonds due April 2008; and -- GBP200 million 7.875% bonds due February 2007. BAA's short-term rating was also downgraded to Not Prime from Prime-3. All other long-term debt ratings remain at Baa2. All long-term ratings remain on review for further downgrade. CHESBEE CELEBRATIONS: Taps Andrew Rosler to Liquidate Assets ------------------------------------------------------------ Andrew Rosler of Ideal Corporate Solutions Ltd. was appointed Liquidator of Chesbee Celebrations Ltd. on Dec. 20, 2006, for the creditors' voluntary winding-up proceeding. The company can be reached at: Chesbee Celebrations Ltd. Bolholt Industrial Park Walshaw Road Bury Lancashire BL8 1PL England Tel: 0870 240 4230 Fax: 0870 240 4231 CHILTERN INVADEX: Taps KPMG Restructuring as Administrators ----------------------------------------------------------- Allan Watson Graham and Mark Jeremy Orton of KPMG Restructuring were appointed joint administrators of Chiltern Invadex Ltd. (Company Number 01182024) on Jan. 4. Headquartered in Birmingham, England, KPMG LLP -- http://www.kpmg.co.uk/-- offers accounting, audit, and tax- related services to customers in such target industries as banking, media and entertainment, consumer products, health care providers, insurance, and pharmaceuticals. Headquartered in Bicester, England, Chiltern Invadex Ltd. manufactures medical care products. CITY PLACEMENT: Nominates Liquidators from Abbot Fielding --------------------------------------------------------- Nedim Ailyan and Hasan Mirza of Abbot Fielding were nominated Joint Liquidator s of City Placement Ltd. on Dec. 14, 2006, for the creditors' voluntary winding-up procedure. The company can be reached at: City Placement Ltd. Bury House 33 Bury Street City of Westminster London SW1Y6AU England Tel: 020 7925 1517 COMMCARE LTD: Joint Liquidators Take Over Operations ---------------------------------------------------- Nedim Ailyan and Andrew Tate of Abbott Fielding were nominated Joint Liquidators of Commcare Ltd. on Dec. 19, 2006, for the creditors' voluntary winding-up procedure. The company can be reached at: Commcare Ltd. Unit P Orchard Business Centre St. Barnabas Close Allington Maidstone Kent ME160JZ England Tel: 01622 688 444 Fax: 01622 688 906 COMPLETE BUILDING: Names Sabia Sahota Liquidator ------------------------------------------------ Sabia Sahota of BBK Partnership was appointed Liquidator of Complete Building Solutions Ltd. on Dec. 19, 2006, for the creditors' voluntary winding-up procedure. The company can be reached at: Complete Building Solutions Ltd. Oakhanger Boughton Hall Avenue Send Woking Surrey GU237DF England Tel: 01483 831 164 DURA AUTOMOTIVE: Inks Pact with American Electric and NITCo ----------------------------------------------------------- DURA Automotive Systems Inc. and its debtor affiliates entered into agreements with American Electric Power, et al., and Northern Indiana Trading Co. to resolve the utility companies' objections to the Debtors' adequate assurance procedures. As reported in the Troubled Company Reporter on Jan. 5, 2007, Quest Energy, LLC, Northern Indiana Trading Co., American Electric, et al., Lawrenceburg Utility and Upper Cumberland Electric filed their objections to the adequate assurance procedures of DURA Automotive Systems Inc. and its debtor affiliates. Stipulations with Utilities (a) AEP, et al. As previously reported, American Electric Power, Duke Energy Indiana, Inc., Exelon Energy Company, The Detroit Edison Company, and the Michigan Consolidated Gas Company objected to the Debtors' Utility Motion. After negotiations, the parties have reached an agreement. Pursuant to a Court approved stipulation, the Debtors will pay AEP and Exelon a one-month payment in advance each month under these terms and conditions: a. commencing in December 2006, the Debtors will tender these payments to AEP and Exelon on or before the first business day of each month: i. AEP -- US$175,000 ii. Exelon -- US$63,000, consisting US$37,000 for electric and US$26,000 for gas. b. if payment is not timely received by AEP and Exelon, they can terminate service to the Debtors after providing the Debtors and their counsel with email and facsimile notice of the default and 5 days to cure the default. The Debtors, and Duke and Detroit Edison/MCG agree that: (1) the Debtors will pay Duke a one-month deposit for US$10,000 as adequate assurance of payment. As Duke has received a US$6,525 deposit payment from the Debtors, Duke can apply the US$6,525 toward the US$10,000 deposit and the Debtors have to pay the remaining $3,475 on or before Nov. 22, 2006; (2) the Debtors will pay Detroit Edison/MCG a one-month deposit in the amount of US$31,000. As Detroit Edison/MC0 has received a US$11,250 deposit payment from the Debtors, Detroit Edison/MCG can apply the US$11,250 to the US$31,000 deposit. The Debtors have to pay the remaining US$19,750 on or before Nov. 22, 2006; and (3) the Debtors will pay all future bills from Duke and Detroit Edison/MCG by the applicable due date. The Utilities agree to promptly provide the Debtors with the amounts of their prepetition claims once they have those figures. (b) NITCo On Nov. 19, 1991, Northern Indiana Trading Company entered into a contract regarding the purchase of natural gas on behalf of Dura Automotive Systems, Inc., and Universal Tool & Stamping for their Sutler, Indiana, facility. Pursuant to the Contract, NITCo is obligated to attempt to purchase, at Universal's request and as Universal's agent, natural gas from natural gas producers on Universal's behalf. Following the purchase, NITCo arranges for the transportation of purchased natural gas to Universal's plant in Butler, Indiana, Each month, NITCo arranges, on Universal's behalf, for the sale of any excess gas purchased by Universal. As compensation for these services, Universal pays NITCo an "agency fee" each month. To provide adequate assurance of payment to NITCo for the Debtors' continued use of its services, the parties had agreed to these terms: 1. on or before 4:00 p.m. (Eastern Time) on Dec. 1, 2006, the Debtors will pay NITCo, via wire transfer, these amounts: i. a security deposit of US$11,734 for postpetition services; and ii. charges for postpetition utility services that have accrued but have not been paid as of Dec. 1, 2006, in an amount to be identified in writing by NITCo by the close of business on Nov. 30, 2006, and agreed upon by the Debtors; 2. commencing on Dec. 10, 2006, on or before 4:00 p.m. (Eastern Time) and continuing monthly on the 10th day of each calendar month, NITCo will send the Debtors, via facsimile, an invoice for the Debtors' estimated usage for the following month based upon Debtors' historical usage for that month; 3. commencing on Dec. 20, 2006, on or before 4:00 p.m. (Eastern Time) and continuing monthly on the 20th day of each calendar month, the Debtors will pay NITCo the Prepayment Amount, via wire transfer, as payment in advance for service to be rendered during the following month; and 4. if the Debtors fail to make any of the agreed payments when due, NITCo may provide notice of default to the Debtors. If the Debtors fail to cure the specified default within five days after the effective date of the notice, NITCo will be authorized to suspend or terminate all services as of the close of business on the last day of the month in which the default occurs. Headquartered in Rochester Hills, Mich., DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EUROTUNNEL GROUP: Posts GBP568 Million in Revenues for 2006 ----------------------------------------------------------- Eurotunnel Group recorded revenues of GBP568 million in 2006 compared with GBP542 million revenues in 2005. The growth resulted from Eurotunnel's Passenger and Truck Shuttle activities that increased 7% to GBP318 million. "Eurotunnel has seen a significant growth in revenue from the now mature cross-Channel market, for the second year in a row. These excellent results are ahead of the business plan which has served as the foundation for the company's financial restructuring and are an encouraging indicator for the success of the safeguard plan," Jacques Gounon, Eurotunnel's chairman and CEO disclosed. Total revenue for Eurotunnel, which included transport and non- transport activities, has reached GBP568 million in 2006. At constant exchange rates, this equates to an increase of 5% when compared to the previous year. It rose by 1% between 2004 and 2005. The Shuttle services linking Folkestone to Coquelles, carrying trucks or passenger vehicles are the main driver for this growth: their revenues have grown by 7% to GBP318 million. Revenues from the Railways posted GBP240 million for 2006. This included payments due under the minimum usage charge of GBP65 million for the 11-months of 2006. The ending of this arrangement deprived Eurotunnel GBP6 million of revenue compared with 2005. About Eurotunnel Headquartered in Folkestone, United Kingdom and Calais, France, Eurotunnel Group -- http://www.eurotunnel.co.uk/-- operates a fleet of 25 shuttle trains, which carry cars, coaches and trucks. It manages the infrastructure of the Channel Tunnel and receives toll revenues from train operating companies whose trains pass through the Tunnel. The British and French governments have granted Eurotunnel a concession to operate the Channel Tunnel until 2086. Eurotunnel Group files reports in the U.S. Securities and Exchange Commission under the names of Eurotunnel PLC (ETNUF.PK) and Eurotunnel SA (ETTFF.PK). Company Crisis Eurotunnel's crisis began when costs to build the tunnels that connect U.K. and France started to overrun before it opened in 1994. The Iraq war followed, which didn't help as tourist traffic fell. In May 2004, Eurotunnel appointed Lazard (global coordinator) and Lehman Brothers as bank advisors, and Dresdner Kleinwort Wasserstein as restructuring adviser. In July 2004, auditor KPMG Audit Plc said the company faced uncertainty after 2005. The firm's survival is dependent upon its ability to put in place a refinancing plan or, if not, to obtain an agreement with the lenders under the existing Credit Agreement within the next two years, the auditor said. Eurotunnel obtained Aug. 2 an order placing the channel operator under the protection of the Court pursuant to the new safeguard legislation (Procedure de sauvegarde). On Jan. 15, the Court approved Eurotunnel's safeguard plan, backed by the court-appointed representatives to the company and to the creditors. GAP INC: Credit Quality Declines Amid Rumors of Sale or Spin-off ---------------------------------------------------------------- Following speculations that Gap Inc. could be acquired in a leveraged buyout, its credit-default swaps based on US$10 million of Gap bonds jumped 27% to US$167,000 from US$132,000, suggesting a decline in the perception of credit quality, Bloomberg News reports. According to sources familiar with the matter, Gap hired Goldman Sachs Group Inc. to examine strategic alternatives, which may include a sale or a spin-off of one of Gap's units, Bloomberg News states. Gap spokesman Greg Rossiter, reacting on the matter, said the company has been working with Goldman Sachs since 1995 and it doesn't comment on "rumors and speculation". The company disclosed on Jan. 4 that net sales declined in 28 of the past 31 months and dropped 8% in December 2006, prompting its board to review strategies for the Gap and Old Navy chains. The company will release the board's review before March 1. CEO Paul Pressler slashed prices at its stores in the wake of disappointing sales during the holidays, Bloomberg News relates. "He'll not be the leader of the company six months from now," said Matrix Asset Advisors' David Katz, who helps manage 2.3 million Gap shares. "The critical piece for Gap's success has been the right merchandise. He's not been able to do that. He did a great job getting the finances under control. He's not the right person now." Mr. Pressler, hired in 2002 from Walt Disney Co., has appointed new executives, including heads for the Gap and Old Navy chains, in an effort to boost flagging sales. His five-year contract ends in September. At least eight top executives deserted the company as revenue plummeted, Bloomberg News states. According to the report, Mr. Pressler received US$17 million in total compensation in fiscal 2005, including US$1.5 million in salary and stock options worth US$15.2 million, but didn't get a bonus after failing to meet the company's financial goals. Gap has a stock market value of US$16.4 billion as of Jan. 16 and is worth US$24 to US$27 a share. It had US$513 million of debt at the end of October 2006, Bloomberg News reports. Same-store sales at Gap in North America slid 9%, while Old Navy fell 10%. Banana Republic sales increased 2%, exceeding estimates for a 0.2% gain, Bloomberg News said. Moody's Investors Service said it may cut Gap's credit ratings from the current level of Baa3, the lowest investment-grade ranking, Bloomberg News relates. About Gap Inc. Gap Inc. (NYSE: GPS) -- http://www.gapinc.com/-- is an international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy, Forth & Towne and Piperlime brand names. Gap Inc. operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Ireland and Japan. In addition, Gap Inc. is expanding its international presence with franchise agreements for Gap and Banana Republic in Southeast Asia and the Middle East. * * * As reported in the Troubled Company Reporter on Nov. 21, 2006, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured ratings on San Francisco-based The Gap Inc. to 'BB+' from 'BBB-'. S&P said the outlook is stable. In a TCR-Europe report published Jan. 15, Fitch has downgraded Gap Inc.'s Issuer Default Rating to BB+ from BBB- and its Senior Unsecured Notes to BB+ from BBB-. H. PLUMB: Closes Eight Stores as Administrators Take Helm --------------------------------------------------------- David Swaden and Dermot Justin Power of BDO Stoy Hayward were appointed joint administrators of H. Plumb & Son Ltd., a Wigan- based television retailer, on Jan. 2. According to Wigan Today, 76 employees went jobless and eight stores have closed following the 70 year-old company's breakdown. "It is all very sad. So many specialist high street retailers have already foundered because they cannot compete with Internet purchasing and pressures from others who have encroached into their space," Dermot Power told Wigan Today. "Plumb's has been a Wigan name for 70 years and the demise of its retail side is all the sadder because after years of ownership by the founder and his son, Mr. Plumb Jr. passed the business into an employees' benefit trust," Mr. Power added. "We are working to secure a sale of the rental side of the business which already has over 10,000 customers and further potential for growth." According to Mr. Power, if the rental division can be sold as a going concern, it could save the jobs of around 25 workers. BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business assurance (audit), corporate advisory, tax, and investment management services, specializing in such industries as charities, educational institutions, family businesses, financial services, leisure, and hospitality. The company is the U.K. arm of BDO International and has offices in more than 15 cities throughout the U.K. H. Plumb & Son Ltd. can be reached at: 48-50 Standishgate Wigan Lancashire WN1 1RQ United Kingdom Tel: 01942 244 442 HIGHLANDER EURO II: Moody's Rates Cayman Unit's EUR24.5-Mln Debt ---------------------------------------------------------------- Moody's Investors Service assigned long-term ratings to the notes issued by Highlander Euro CDO II B.V. on Dec. 14, 2006, a special purpose vehicle incorporated in The Netherlands: -- Aaa to the EUR479.5 million Class A Primary Senior Secured Floating Rate Notes due 2022; -- Aa2 to the EUR56 million Class B Primary Senior Secured Floating Rate Notes due 2022; -- A3 to the EUR42 million Class C Primary Senior Secured Deferrable Floating Rate Notes due 2022; and -- Baa3 to the EUR28 million Class D Primary Senior Secured Deferrable Floating Rate Notes due 2022. The Primary Issuer has also issued EUR58.8 million Class M Primary Mezzanine Secured Notes due 2022 and EUR35.7 million Class F-2 Primary Subordinated Notes due 2022* which are not rated by Moody's. Highlander Euro CDO II (Cayman) Ltd., an SPV incorporated in Cayman Islands, will acquire the unrated Class M Primary Mezzanine Notes directly from the Primary Issuer. It will be re-issued in a split form into a EUR24.5 million Class E Secondary Senior Secured Deferrable Floating Rate Notes due 2022* and a EUR34.3 million Class F-1 Secondary Mandatorily Redeemable Preferred Securities. The Class F-1 Secondary Mandatorily Redeemable Preferred Securities effectively rank pari passu to the Class F-2 Primary Subordinated Notes due 2022. The Secondary Issuer will also purchase EUR3 million of the Class C Primary Senior Secured Deferrable Floating Rate Notes and EUR2.5 million Class D Primary Senior Secured Deferrable Floating Rate Notes which will be re-issued and included in the Class X Secondary Combination Securities together with EUR1.5 million Class F-1 Secondary Mandatorily Redeemable Preferred Securities. These ratings are assigned to the notes to be issued by Highlander Euro CDO II (Cayman) Ltd.: -- A3 to the EUR3 million Class C Secondary Senior Secured Deferrable Floating Rate Notes due 2022; -- Baa3 to the EUR2.5 million Class D Secondary Senior Secured Deferrable Floating Rate Notes due 2022; -- Ba3 to the EUR24.5 million Class E Secondary Senior Secured Deferrable Floating Rate Notes due 2022; and -- Baa1 to the EUR7 million Class X Secondary Combination Securities due 2022. These ratings address the expected loss of noteholders by the legal final maturity date in December 2022. The rating assigned to the Class X Secondary Combination Securities addresses the expected loss on such securities as a portion of the Rated Balance and the payments of interest thereon at a Rated Coupon of 0.25% per annum, where the Rated Balance is defined at any time as the initial principal amount of such securities on the Closing Date, less all payments made in respect of such securities in excess of the Rated Coupon (including, for the avoidance of doubt, any allocation of principal, interest in excess of the Rated Coupon and dividends) at such time. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks, such as those associated with the timing of principal prepayments and other market risks, have not been addressed and may have a significant effect on yield to investors. These ratings are based upon: 1. an assessment of the credit quality and of the diversification of the assets to be included in the portfolio; 2. an assessment of the eligibility criteria, reinvestment criteria and portfolio limits applicable to the future additions to the portfolio; 3. the protection against losses through the subordination of the more junior classes of notes to the more senior classes of notes; 4. the expertise of Highland Capital Management Europe, Ltd. in the management of loans portfolios; and 5. the legal and structural integrity of the transaction. This transaction is a high yield collateralized loan obligation related to a portfolio of EUR686 million comprised of senior loans, mezzanine loans and high-yield bonds. The portfolio is dynamic and Highland Capital Management Europe, Ltd. will provide investment advice to the Primary Issuer in respect thereof. The portfolio is around 90% ramped-up at closing, and is expected to be fully ramped-up within six months after closing, subject to compliance with the eligibility criteria and portfolio guidelines (including, amongst other tests, the diversity score, the weighted average rating factor, the weighted average recovery rate, the weighted average spread and the weighted average life of the assets in the portfolio). This transaction was arranged by Goldman Sachs International and managed by Highland Capital Management Europe, Ltd. LANDESBANK BERLIN: Moody's Assigns D+ Financial Strength Rating --------------------------------------------------------------- Moody's Investors Service assigned an A1 Issuer Rating to Landesbank Berlin and affirmed the existing A1 Deposit, P-1 Short-term Deposit and D+ Financial Strength Ratings for the bank. The Issuer Rating has been assigned at the request of Landesbank Berlin. Issuer Ratings are opinions of the ability of entities to honor senior unsecured financial obligations and contracts. Moody's rating symbols for Issuer Ratings are identical to those used to indicate the credit quality of long-term obligations. The A1 Issuer rating is consistent with the existing A1/P-1 Deposit Ratings for Landesbank Berlin and reflect the bank's current majority ownership by the City of Berlin (rated Aa1). Domiciled in Berlin, Germany, Landesbank Berlin reported total assets of EUR144.4 billion and interim operating income of EUR216 million as of end-September 2006. LC REALISATIONS: Brings In Administrators from PwC -------------------------------------------------- Ian David Stokoe, Ian David Green and Stephen Andrew Ellis of PricewaterhouseCoopers LLP were appointed joint administrators of LC Realisations Ltd. (Company Number 5464770) and The People's Restaurant Group Ltd. (Company Number 5429724) on Jan. 3. PricewaterhouseCoopers LLP -- http://www.pwcglobal.com/-- provides auditing services, accounting advice, tax compliance and consulting, financial consulting and advisory services to clients in a variety of industries. Headquartered in Sheffield, England, The People's Restaurant Group Ltd. and LC Realisations Ltd. -- http://www.littlechef.co.uk/-- operates 193 Little Chef restaurants from Scotland to Cornwall. MMS ELECTRICAL: Names Jeremy Nicholas Bleazard as Administrator --------------------------------------------------------------- Jeremy Nicholas Bleazard of XL Business Solutions Ltd. was named administrator of MMS Electrical Contractors Ltd. (Company Number 04559408) on Jan. 2. The administrator can be reached at: Jeremy Nicholas B leazard XL Business Solutions Ltd. 1st Floor 2-4 Market Street Cleckheaton BD19 5AJ United Kingdom Fax: 01274 870606 Tel: 01274 870101 E-mail: enquiries@xlbs.co.uk jbleazard@xlbs.co.uk MMS Electrical Contractors Ltd. can be reached at: The Stables 225A Handsworth Road Handsworth Sheffield South Yorkshire S13 9BH United Kingdom Tel: 0114 242 2255 Fax: 0114 242 2255 Web site: http://www.mmselectrical.co.uk/ MISYS PLC: Earns GBP22.8 Million in Six Months to Nov. 30, 2006 --------------------------------------------------------------- Misys plc released its unaudited interim results for the six months ended Nov. 30, 2006. Misys posted a GBP22.8 million net profit on GBP468.2 million of revenues for the six months ended Nov. 30, 2006, compared with a GBP20.2 million net profit on GBP464.5 million of revenues for the six months ended Nov. 30, 2005. At Nov. 30, 2006, the Company's balance sheet showed a positive stockholders' equity of GBP11.6 million, compared with a GBP155.6 million deficit at Nov. 30, 2005. The Company's Nov. 30 balance sheet also showed strained liquidity with GBP266.5 million in total current assets available to pay GBP331.9 million in total current liabilities. Mike Lawrie, Misys chief executive, commented, "Our Treasury & Capital Markets business is growing well as a result of its revamped product portfolio and Core Banking is making some progress. However, in Healthcare, our performance was unacceptable and we have taken action to address this - early indications are positive and we will take further action if necessary. "It is clear to me since joining Misys that given not only the growth opportunities in the core markets in which we operate, but also internal initiatives we can pursue, we have the potential to deliver much greater performance. As I outlined in December, we are in the process of developing a full turnaround plan for Misys to deliver value for our customers, employees and shareholders. I'll be saying more about our plans in early March." Headquartered in the United Kingdom, Misys PLC -- http://www.misys.com/-- provides industry-specific software serving the international banking and healthcare industries and the U.K. general insurance industry. NASDAQ STOCK: LSE Reiterates Call for Rejection of Final Offer -------------------------------------------------------------- The Board of London Stock Exchange Group plc is posting its second shareholder circular in response to the final offer posted by Nasdaq on Dec. 12, 2006. The Circular highlights the excellent prospects of the Exchange Group which are underpinned by its global leadership position for listings, the continuing structural shift to higher volumes of trading driven by declining transaction costs, increasingly fast and efficient technology and the growing demand for data products. The Circular includes the Exchange's SETS forecast for financial year 2008 of at least 480,000 average trades per day, an increase of at least 180%. As evidence of the Board's confidence in the Exchange Group's growth prospects, the Board also announces an increase of up to GBP250 million in its existing share buyback program, underlining its commitment to continue its proactive approach to capital management. Over the last two and a half years, the Exchange Group has returned or announced a commitment to return up to GBP974 million, 35% of its current market capitalization. Furthermore, the Circular illustrates the Exchange Group's long culture of competing successfully for liquidity against a number of trading platforms in the UK and, with MiFID, the opportunity for the Exchange Group to extend its successful franchise in an increasingly pan-European market. The Circular sets out the Board's continuing view that the Exchange Group should be valued against a much broader group of global exchanges which is supported by financial experts in recent precedent exchange transactions. Nasdaq's offer of 24.4x is far below the trading P/E multiples for the 12 months to Dec. 31, 2006 of virtually all other major listed exchanges. The Board of the Exchange Group continues to recommend strongly that Exchange Group shareholders reject Nasdaq's wholly inadequate offer and take no action in respect of their shareholdings. "[Thurs]day's revised SETS forecast, together with the recently announced tariff changes, support a compelling value creation story for the Exchange Group. The Exchange is an increasingly attractive strategic asset in the rapidly evolving global exchange sector," Clara Furse, Chief Executive Officer of the Exchange Group, commented. "The Board's confidence in the Exchange Group's growth prospects explains the focus on ensuring the standalone value of the Exchange Group is fully understood. Nasdaq's wholly inadequate offer persists in undervaluing the world's capital market. Your Board remains open to a strategic combination and the Circular explains that shareholders and customers would benefit from a transaction which properly recognizes the value of the Exchange Group and its markets. Shareholders should not be persuaded to sell their shares below their true value," Chris Gibson-Smith, Chairman of the Exchange Group, commented. The Board of Nasdaq earlier extended its Final Offers for LSE and will remain open for acceptance until 3:00 p.m. (London time) on Jan 26. As previously reported in the TCR-Europe on Dec. 15, 2006, Nasdaq Stock Market Inc. launched a fresh takeover bid for London Stock Exchange Plc, valuing the LSE at GBP2.7 billion (US$5.3 billion). As stated in NASDAQ's announcements on Nov. 20, 2006, and Dec. 19, 2006, the NASDAQ Board believes that its Ordinary Offer of 1,243 pence per LSE Ordinary Share is a full and fair price. The Nasdaq Stock Market Inc. -- http://www.nasdaq.com/-- is the largest electronic equity securities market in the United States with approximately 3,200 companies. * * * In December 2006, Standard & Poor's Rating Services lowered its long-term counterparty credit rating on The Nasdaq Stock Market Inc. to 'BB' from 'BB+'. The 'BB+' rating on Nasdaq's existing bank loan facility, which financed the initial 29% stake in the London Stock Exchange (LSE), is affirmed, while the Recovery Rating is revised to '1' from '2'. The ratings were removed from CreditWatch Negative where they were placed on Nov. 20, 2006. S&P said the outlook is stable. At the same time, Standard & Poor's has assigned our 'BB+' bank loan rating to the proposed USUS$750 million senior secured Term Loan B, USUS$2.0 billion senior secured Term Loan C, and USUS$75 million revolver to be issued by Nasdaq, as well as the USUS$500 million senior secured Term Loan C to be issued by Nightingale Acquisition Ltd., a U.K.-based subsidiary of Nasdaq. The rating agency has assigned a Recovery Rating of '1', which indicates full recovery of principal in the event of default. In addition, Standard & Poor's has assigned its 'B+' rating to the proposed USUS$1.75 billion senior unsecured bridge loan to be issued by Nasdaq and NAL. Moody's Investors Service assigned in April 2006 ratings to three new bank facilities of The Nasdaq Stock Market Inc.: a USUS$750 million Senior Secured Term Loan B, a USUS$1,100 million Secured Term Loan C, and a USUS$75 million Senior Secured Revolving Credit Facility. Moody's said each facility is rated Ba3 with a negative outlook. ORION LOCUMS: Appoints Joint Administrators from Leonard Curtis --------------------------------------------------------------- N. A. Bennett and K. D. Goodman of Leonard Curtis were appointed joint administrators of Orion Locums Ltd. (Company Number 4231383)on Dec. 12, 2006. DTE Leonard Curtis -- http://www.dtegroup.com/-- offers tax consultancy, company secretarial services, corporate finance, corporate recovery, turnaround, forensic accounting, financial services and insurance & risk management. Orion Locums Ltd. can be reached at: 15-16 Basildon Business Center Bentalls Basildon Essex SS14 3FT United Kingdom Tel: 01268 527 797 Fax: 01268 244 399 OWEN OWEN: HSBC Bank Taps Grant Thornton as Receivers ----------------------------------------------------- HSBC Bank Plc. appointed Leslie Ross and Keith Hinds of Grant Thornton U.K. LLP joint administrative receivers of Owen Owen (Wellingborough) Ltd. (Company Number 03890792) on Dec. 15, 2006. Grant Thornton U.K. LLP -- http://www.grant-thornton.co.uk/-- provides value-added professional services as assurance services, compensation and benefits, merger and acquisition transaction services, management advisory services, tax consulting and valuation services. Owen Owen (Wellingborough) Ltd. can be reached at: Irthlingborough Road Wellinborough Northamptonshire NN8 1RA United Kingdom Tel: 01933 223 212 Fax: 01933 440 150 PEEL FABRICATIONS: Taps Langley Group as Administrators ------------------------------------------------------- Alan Simon and Philip Simons of Langley Group LLP were appointed joint administrators of Peel Fabrications (Southampton) Ltd. (Company Number 0948518) on Dec. 29, 2006. The administrators can be reached at: Alan Simon and Philip Simons Langley Group LLP Langley House Park Road East Finchley London N2 8EX United Kingdom Tel: 020 8444 2000 Fax: 020 8444 3400 E-mail: philip.simons@langleypartners.co.uk Peel Fabrications (Southampton) Ltd. can be reached at: Unit 11 Solent Industrial Estate Shamblehurst Lane Hedge End Southampton Hampshire SO30 2FX United Kingdom Tel: 01489 782 262 Fax: 01489 781 822 SECURITY RESPONSE: Appoints Jonathan Lord as Liquidator ------------------------------------------------------- Jonathan Lord of Bridgestones was appointed Liquidator of Security Response Ltd. on Dec. 4, 2006, for the creditors' voluntary winding-up procedure. The Liquidator can be reached at: Bridgestones 125-127 Union Street Oldham OL1 1TE England SOLUTIA INC: Committee Wants to Intervene in Calpine Arbitration ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Solutia Inc. and its debtor-affiliates seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to intervene in the arbitration of the contested claims of Decatur Energy Center LLC, and Calpine Central L.P. pursuant to Rule 24(a)(2) of the Federal Rules of Bankruptcy Procedure, and Section 1109(b) of the Bankruptcy Code. Before it filed for bankruptcy, Solutia entered into a series of 20-year term contracts scheduled to commence in 2002, with Calpine Central, Calpine Power Services Company, and Decatur pursuant to which Calpine built a natural gas co-generation facility on land leased from Solutia at Solutia's plant in Decatur, Alabama. Calpine and Solutia, however, agreed to delay commencement of performance until June 1, 2004, because of the unanticipated increase in natural gas prices. In 2004, Solutia determined that the then-current and forecasted price of natural gas rendered it more cost-effective for Solutia to return to its historical practice of purchasing energy of the Decatur plant from the Tennessee Valley Authority and generating its own steam, rather than buying energy and steam from Calpine. On May 13, 2004, Solutia filed a motion seeking to reject certain Contracts. The Court entered a stipulated order on May 24, 2004, settling the motion and approving the rejection of certain Contracts. Calpine was permitted to submit proofs of claim for damages allegedly resulting from the rejection of the Contracts. Solutia objected to two of the three claims filed by Calpine for damages relating to the Rejected Contracts. Both claims aggregate US$382,717,333. The Court entered an order dated November 2005, compelling arbitration of the contested claims of Calpine Central and Decatur. The parties agreed to stay the Arbitration to conduct settlement negotiations; however, no resolution materialized between the parties and, consequently, the Arbitration will proceed. The Creditors Committee then sought and obtained approval, in August 2006, to retain conflicts counsel to represent the interests of unsecured creditors in the Arbitration. The Creditors Committee and the Debtors have consulted extensively about the merits of the Arbitration, and the Debtors have granted the Creditors Committee access to documents produced in the Arbitration. John J. Jerome, Esq., at Saul Ewing LLP, in Philadelphia, Pennsylvania, conflicts counsel to the Creditors Committee, tells the Court that the outcome of the Arbitration will affect the ultimate recoveries available to unsecured creditors, therefore, it is essential for the Creditors Committee to become a formal party to the Arbitration in order to assert and protect the interests of the unsecured creditors. The Creditors Committee's request to intervene is also timely as the Arbitration remains in the early stages -- fact discovery is ongoing and the deadline to disclose experts and exchange expert reports is in late March 2007. The Arbitration hearing is not until Aug. 27, Mr. Jerome notes. The Creditors Committee does not intend to raise new issues, assert new or different objections to the Calpine Claims, or take any other actions that would adversely affect the scheduling order entered by the Arbitration Panel in September 2006. Moreover, no party will be prejudiced by the intervention, Mr. Jerome maintains. He clarifies that the Committee merely seeks to ensure that its constituents' interests are represented. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed US$2,854,000,000 in assets and US$3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) STOCKLE COLOUR: Appoints Administrators from Baker Tilly --------------------------------------------------------- Adrian David Allen and Philip Edward Pierce of Baker Tilly were appointed joint administrators of Stockle Colour Printers Ltd. (Company Number 4548510) on Dec. 22, 2006. Baker Tilly -- http://www.bakertilly.co.uk/-- provides auditing and other services for mid-cap and smaller publicly listed companies and private companies, particularly those expanding into new foreign markets. Services include business and financial planning, tax-related services, corporate finance, litigation support, turnaround services, and technology consulting. Stockle Colour Printers Ltd. can be reached at: Linton Street Bradford West Yorkshire BD4 7EZ United Kingdom Tel: 01274 308 100 Fax: 01274 308 321 THPA FINANCE: Fitch Affirms B Rating on GBP30-Mln Class C Notes --------------------------------------------------------------- Fitch Ratings affirmed THPA Finance Ltd.'s notes: -- Class A2 GBP145 million secured 7.127% fixed-rate notes due 2024 at A; -- Class B GBP70 million secured 8.421% fixed-rate notes due 2028 at BBB; and -- Class C GBP30 million secured floating-rate notes due 2031 at BB. THPA is a securitization of the assets held and earnings generated by the PD Ports group, which owns the port of Tees & Hartlepool on the northeast coast of England. Babcock & Brown Infrastructure Ltd, an Australia-based infrastructure investment vehicle, acquired PD Ports in January 2006. This rating affirmation follows a review of the recent financial performance to September 2006, which reported the transaction's trailing 12-month EBITDA before exceptional items of GBP40.4 million, almost stable compared with the year before. The EBITDA debt service coverage ratio stands at 2x, ahead of its 1.25x default covenant. Fitch notes that following the full prepayment of the A1 tranche in September 2004, the current debt service requirement only consists of interest payments, which artificially improves the transaction's coverage ratio. Fitch views this prepayment as a credit negative as debt service requirements will markedly increase in 2011 when principal amortizations resume for the A2 tranche. Despite this concern, the annuity-based net cash flow DSCR adjusting for principal amortization holidays, stands at 1.59x as of September 2006, in line with a BB rating, compared with 1.19x at close. VOGUE CONTRACTS: Appoints Paul John Webb as Administrator --------------------------------------------------------- In the High Court of Justice (Chancery Division), Paul John Webb of Mayfields Insolvency Practitioners was appointed administrator of Vogue Contracts Ltd. (Company Number 05650685) on Dec. 21, 2006. The administrator can be reached at: Paul John Webb Mayfields Insolvency Practitioners Church Steps House Queensway Halesowen West Midlands B63 4AB United Kingdom Tel: 0121 550 0011 Vogue Contracts Ltd. can be reached at: 113 Hockley Street Birmingham West Midlands B19 3DP United Kingdom Tel: 0121 551 9949 Fax: 0121 551 9979 YOUR HEALTH: Appoints Zafar Igbal to Administer Assets ------------------------------------------------------ Zafar Iqbal of Cooper Young was appointed administrator of Your Health Plus Ltd. (Company Number 04973934) and Your Health Plus Insurance Services Ltd. (Company Number 04919218) on Dec. 28. The administrator can be reached at: Zafar Igbal Cooper Young Kirkdale House Kirkdale Road Leytonstone London E11 1HP United Kingdom Tel: 020 8539 0700 Your Health Plus Ltd. and Your Health Plus Insurance Services Ltd. can be reached at: Stylus House London Road Bracknell Berkshire RG12 2UT United Kingdom Tel: 01344 455 541 * BOOK REVIEW: Partners: Forming Strategic Alliances in Health Care ------------------------------------------------------- Authors: Arnold D. Kaluzny, Howard S. Zuckerman, and Thomas C. Ricketts III Publisher: Beard Books Paperback: 204 pages List Price: US$34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587981513/internetbankru pt From Henry Berry, Nightingale's Healthcare News, November 2006: The content of Partners: Forming Strategic Alliances in Health Care comes from a November 1993 conference in Chapel Hill, North Carolina, that was held in conjunction with the Clinton Administration's proposals for sweeping change in the nation's healthcare system. The conference was attended by 80 of the nation's top healthcare administrators, academicians, physicians, and lawyers. In a foreword to the book, which is a reprint of a 1995 publication, Kenneth F. Thorpe, Deputy Assistant Secretary for Health Policy at the Department of Health and Human Services at the time, conveys the Clinton Administration's position that strategic alliances are of particular value in healthcare. Not surprisingly, strategic alliances were to play an important role in the Administration's proposals for healthcare reform. The Administration's approach did not get far politically and thus did not bring reform. Nonetheless, the healthcare field has come to recognize the pertinence and value of strategic alliances, which have been embraced in business fields where change in consumer interests, technology, research, delivery systems, and other areas is ongoing. In sections that are well organized, both topically and with internal references, the fundamentals and benefits of strategic alliances are explained. The book also offers instructive experiences in forming and administering such alliances. Strategic alliances were not simply an approach touted by the Clinton Administration as a way of effecting healthcare reform. Nor were strategic alliances a theory arising from the business conditions and challenges at the time. Strategic alliances were, instead, a widespread arrangement to deal with the business environment of the early 1990s. This environment continues to this day, with no end in sight. For the most part, today's healthcare industry is characterized by new, often problematic, opportunities and challenges in greatly expanding markets that can be changed overnight by a financial report or research finding, new legislation and regulation, or the introduction of new technology. Howard Zuckerman, one of the editors, expresses it well, saying that the healthcare industry is a "turbulent environment [where] companies around the globe and across a multitude of industries are turning to alliances as a cooperative, inter-organizational mechanism for adaptation." Strategic alliances uniquely enable participating organizations to extend their operational reach and work toward desirable strategic ends. Strategic alliances have thus become more than an ad hoc arrangement to help healthcare organizations get through a tough stretch or resolve a pressing problem. Strategic alliances have been incorporated into the healthcare field as an ever-present operational and strategic consideration. In the contemporary environment of continual change and unpredictable developments, many organizations face circumstances where strategic alliance is necessary to stay timely and competitive. As Mr. Zuckerman notes, "Strategic alliances are designed to achieve strategic purposes not attainable by a single organization, providing flexibility and responsiveness while retaining the basic fabric of participating organizations." The rationale to form strategic alliances is the same for healthcare organizations as it is for other business entities. Organizations form strategic alliances because they recognize their value in engendering flexibility and bringing access to an ever-broadening array of resources and markets. As Barry Stein, president of Goodmeasure Inc. notes, these are not trivial benefits, but are essential considerations of any corporation that hopes to remain relevant and vibrant. Healthcare organizations of all sizes and in all markets can enjoy the benefits offered by strategic alliances. Says Mr. Stein, "Alliances tend to be particularly important in unfamiliar markets. "For larger organizations trying to enter local markets, it is sound practice to build local alliances because local knowledge and connections are valuable. "Smaller organizations in local markets can take advantage of network ties outside their traditional boundaries to tap broader or perhaps global sources of materials, capital, or expertise." While strategic alliances offer enhanced operational capabilities and higher strategic goals to practically every healthcare organization, such advantages are not gained automatically. Apart from whether strategic alliances prove fruitful, the inevitable management issues can be difficult to resolve. If an alliance is to be workable and beneficial, certain challenges have to be met by experienced, capable businesspersons. Some alliances come apart; and some do not fulfill their purposes. Even for strategic alliances that work, the management complexities are enormous. As one participant in the conference observed, the "rewards...must be incredible to justify all the extra short- term costs that go along with them." Partners: Forming Strategic Alliances in Health Care identifies the pros and cons of strategic alliances and offers advice and commentary on how to eliminate or minimize difficulties so healthcare organizations can partake of the rewards that strategic alliances singularly make possible. Arnold D. Kaluzny, Howard S. Zuckerman, and Thomas C. Ricketts III are all professors in university health policy and administration departments. Geoffrey B. Walton is a top executive with Strategic Integration and Practice Operations at Sun Health, an Arizona company. ********* 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. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ 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/books/to order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Jazel P. Laureno, Julybien Atadero, Carmel Zamesa Paderog, Joy Agravante, Zora Jayda Zerrudo Sala, and Kristina A. Godinez, Editors. Copyright 2007. 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$625 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 Christopher Beard at 240/629-3300. * * * End of Transmission * * *