/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/100714.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, July 14, 2010, Vol. 11, No. 137 Headlines E S T O N I A Q VARA: Declared Bankrupt by the Harju County Court F R A N C E PEUGEOT CITROEN: Inks EUR2.4BB Revolving Syndicated Credit Deal H U N G A R Y SZEVIEP: Has 13 Days to Reach Agreement with Creditors I R E L A N D ANGLO IRISH: Ex-Chief Sean FitzPatrick Declared Bankrupt FLEMING ENERGY: Opposes AIB Claim for EUR26MM Summary Judgment L U X E M B O U R G ORCO PROPERTY: Gets EUR6.7 Million Cash From Loan Restructuring R O M A N I A IMPACT DEVELOPER: Enters Insolvency Proceedings; Owes RON1.3MM R U S S I A ALROSA ZAO: May Buy Back Diamonds From Russian Government T U R K E Y KARYA TOUR: Declares Bankruptcy; Thousands of Tourists Stranded U K R A I N E NAFTOGAZ: Yanukovych's Explanations on Natural Gas Probe Sought * UKRAINE: To Help Kiev Repay Domestic, Foreign Debts This Year U N I T E D K I N G D O M ALEXANDRA PLC: In Administration; KPMG in Sale Talks MOSS END: Put Into Liquidation; Garden Center Has New Owner SLUMBERDOWN ENTERPRISES: In Administration; 60 Jobs at Risk * UK: PwC Says Long-Term Health of Pub Industry Still Uncertain X X X X X X X X * EUROPE: Banks Must Raise Money Before Seeking State Aid * EUROPE: Haircut Part of German Insolvency Plan, Spiegel Says * EUROPE: CEA Has Concerns Over EC Insurance Guarantee Schemes ********* ============= E S T O N I A ============= Q VARA: Declared Bankrupt by the Harju County Court --------------------------------------------------- Ott Ummelas at Bloomberg News reports that the Harju County Court on July 9 declared AS Q Vara bankrupt at the request of the tax and customs office. The tax office filed for Q Vara bankruptcy on May 25, the Bloomberg says, citing the court's website. Bloomberg recalls the company had a EUR5-million (US$6.3 million) bond delisted from Tallinn stock exchange last year, citing solvency issues. Bloomberg, citing the website of Krediidiinfo AS, notes Q Vara has a tax debt of ESK26.4 million (US$2.1 million) and interest debt of ESK951,486 as of July 12. AS Q Vara is an Estonian property developer. =========== F R A N C E =========== PEUGEOT CITROEN: Inks EUR2.4BB Revolving Syndicated Credit Deal --------------------------------------------------------------- Adam Mitchell at Dow Jones Newswires reports that PSA Peugeot Citroen said Monday it has signed a revolving syndicated credit deal with 21 banks for a sum of EUR2.4 billion. Peugeot has "anticipated refinancing deadlines in 2011, in favorable conditions, extending the average maturity of its debt and thus strengthening its balance sheet," Dow Jones quoted the company as saying in a statement. PSA Peugeot Citroen S.A. -- http://www.psa-peugeot-citroen.com/ -- is a France-based manufacturer of passenger cars and light commercial vehicles. It produces vehicles under the Peugeot and Citroen brands. In addition to its automobile division, the Company includes Banque PSA Finance, which supports the sale of Peugeot and Citroen vehicles by financing new vehicle and replacement parts inventory for dealers and offering financing and related services to car buyers; Faurecia, an automotive equipment manufacturer focused on four component families: seats, vehicle interior, front end and exhaust systems; Gefco, which offers logistics services covering the entire supply chain, including overland, sea and air transport, industrial logistics, container management, vehicle preparation and distribution, and customs and value added tax (VAT) representation, and Peugeot Motocycles, which manufactures scooters and motorcycles. In 2008, PSA Peugeot Citroen S.A. sold more than 3.2 million vehicles in 150 countries worldwide. * * * PSA Peugeot Citroen is rated BB+ by Standard & Poor's. ============= H U N G A R Y ============= SZEVIEP: Has 13 Days to Reach Agreement with Creditors ------------------------------------------------------ Szeviep, which has been under bankruptcy protection since April 29, has 13 days to reach an agreement with its creditors, MTI-Econews reports, citing chairman Sandor Baranyi. According to the report, Mr. Baranyi said most of the company's creditors want to reach an agreement on the company's debts, but two banks still want to make changes to "marginal questions" concerning the agreement. The report notes the company's chairman said if changes can be made that satisfy the banks, they will support the agreement. Szeviep is a construction company based in Hungary. ============= I R E L A N D ============= ANGLO IRISH: Ex-Chief Sean FitzPatrick Declared Bankrupt -------------------------------------------------------- Dearbhail McDonald and Emmet Oliver at Irish Independent report that former Anglo Irish Bank chief Sean FitzPatrick will be forced to rely on his wife's EUR3.6 million share of his property and pension assets after being declared bankrupt by the High Court. The report relates on Monday all of the ex-banker's assets and debts fell under the control of special court official Chris Lehane. He has the power to sell all of Mr FitzPatrick's assets, including his half-share of a EUR3.4 million pension, to his creditors including Anglo Irish Bank, the report says. Mr. FitzPatrick, who revealed in court papers that he has only EUR5,500 in hard cash available to him, will now be dependent on his wife for his future income, the report notes. He has has debts of almost EUR150 million, including EUR110 million to his former employers, the report discloses. The report recalls the former banker and chartered accountant devised a plan for his creditors that would include the sale of his half-share in his family home and pension to avoid bankruptcy. Several creditors spoke in favor of the proposals, but Anglo, which holds some 85% of his debts, denied that the proposed scheme of arrangement put to creditors by Mr. FitzPatrick would result in a more favorable outcome, the report discloses. Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury and private banking. The Bank's non-retail business is made up of more than 11,000 commercial depositors spanning commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. The Company's retail deposits comprise demand, notice and fixed term deposit accounts from personal savers with maturities of up to two years. Non-retail deposits are sourced from commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. In addition, at September 30, 2008, its non-retail deposits included deposits from Irish Life Assurance plc. The Private Bank offers tailored products and solutions for high net worth clients and operates the Bank's lending business in Ireland and the United Kingdom. * * * As reported by the Troubled Company Reporter-Europe on April 7, 2010, Fitch Ratings affirmed Anglo Irish Bank Corporation's lower Tier 2 subordinated debt downgraded to 'CCC' from 'BBB+'. Fitch affirmed the rating on the bank's Upper Tier 2 subordinated notes at 'CC'. It also affirmed the rating on the bank's Tier 1 notes at 'C'. FLEMING ENERGY: Opposes AIB Claim for EUR26MM Summary Judgment -------------------------------------------------------------- Mary Carolan at The Irish Times reports that the Commercial Court heard Friday that the John Fleming is opposing a claim by AIB for EUR26 million summary judgment orders against him over guarantees of loans to Fleming Energy to a buy a 51% shareholding in Plymouth Energy LLC, a company registered in the US and established to purchase and develop a 57-acre site in Iowa. According the report, AIB claims the guarantee was part of the security provided for credit facilities advanced to Fleming Energy. The report relates Sarah McKechnie, for Mr. Fleming, told Mr. Justice Peter Kelly her client wants to defend the claim on several grounds, including that he had borrowed as a consumer in the transaction and was entitled to the protections under the Consumer Credit Act. Mr. Fleming is alleging irregularities in relation to how the guarantee was executed, the report says. He claims he had agreements with the bank that certain assets of his would be protected, including his family home, the report discloses. According to the report, Dermot Cahill, for AIB, said none of the points advanced presented any defense. The bank would supply an affidavit concerning how the guarantee was provided, including that Mr. Fleming had been sent the guarantee by post and had returned it signed and witnessed, the report says. The report notes Mr. Justice Kelly said he had no idea if any of the grounds of defence advanced were valid but would give Mr. Fleming an opportunity to put matters on affidavit. He made directions for the exchange of affidavits between the sides and returned the summary judgment application to later this month, the report states. Fleming Energy is a renewable and alternative energy provider with registered offices at New Cork Road, Bandon, Co Cork. =================== L U X E M B O U R G =================== ORCO PROPERTY: Gets EUR6.7 Million Cash From Loan Restructuring --------------------------------------------------------------- Krystof Chamonikolas at Bloomberg News reports that Orco Property Group SA said Monday it completed the sale of a commercial development in Warsaw for EUR5.2 million and received EUR6.7 million in cash from a loan restructuring at a joint venture with AIG Global Real Estate Europe. "It is important that they managed to sell the Warsaw project as this shows some market activity and some demand," Bloomberg quoted analyst Miroslav Adamkovic at Komercni Banka AS as saying in Prague Monday. "Overall it's slightly positive news." Creditor Protection As reported by the Troubled Company Reporter-Europe, on May 19, Reuters' Jason Hovet said that a Paris court had approved a plan exiting Orco from its more than year-long creditor protection period. Reuters disclosed Orco said the plan includes the repayment of 100% of the company's admitted claims over 10 years. The court protection in place since March last year had protected EUR1.5 billion (US$1.9 billion) in bank debts and bonds, according to Reuters. Reuters said Orco proposed a 10 year rescheduling plan to restructure more than EUR400 million in debt held by bondholders through a scheme that looks to extend the average maturity of its bonds to eight years from three. Orco Property Group SA -- http://www.orcogroup.com/-- is a Luxembourg-based real estate company, specializing in the development, rental and management of properties in Central and Eastern Europe. Through its fully consolidated subsidiaries, Orco Property Group SA operates in several countries, including the Czech Republic, Slovakia, Germany, Hungary, Poland, Croatia and Russia. The Company rents and manages real estate and hotels properties composed of office buildings, apartments with services, luxury hotels and hotel residences; it also develops real estate projects as promoter. ============= R O M A N I A ============= IMPACT DEVELOPER: Enters Insolvency Proceedings; Owes RON1.3MM -------------------------------------------------------------- Cristi Moga at Ziarul Financiar reports that Impact Developer & Contractor has entered insolvency proceedings at the request of Ploiesti-based construction firm Romconstruct. According to the report, Romconstruct is demanding repayment of a RON1.3 million (EUR308,000) debt. The report relates the representatives of Impact have organized a press conference to announce they will challenge the ruling of the Bucharest Court of Law. Impact has the financial capability to pay the debt, the report says, citing the company's representatives. "I don't think we will get to the reorganization stage, and even if we do, the company's assets are worth around RON480 million, while the overall debts amount to just RON150 million," the report quoted Carmen Sandulescu, CFO and minority shareholder of Impact, as saying. Impact Developer & Contractor is a Romanian real estate developer. The company was founded in the early '90s by businessman Dan Ioan Popp. =========== R U S S I A =========== ALROSA ZAO: May Buy Back Diamonds From Russian Government --------------------------------------------------------- Ilya Khrennikov and Maria Kolesnikova at Bloomberg News report that ZAO Alrosa Chief Executive Officer Fyodor Andreev said that the company may buy back some gems that it sold to the government for US$1 billion last year as prices rebound. According to Bloomberg, Finance Minister Alexei Kudrin said at a meeting of the World Diamond Congress that Russia's government bought the diamonds from Alrosa last year to support the company. "The mechanism is now being discussed," Bloomberg quoted Mr. Andreev as saying. Mr. Andreev, as cited by Bloomberg, said diamond prices have rebounded and are back to "pre-crisis levels". Bloomberg recalls Russia's government bought the diamonds from Alrosa last year to support the company. Mr. Andreev, as cited by Bloomberg, said Gokhran, Russia's state repository, may choose to sell the diamonds on its own or offer Alrosa "some kind of swap". Bloomberg notes Mr. Andreev said in the interview that Alrosa may sell US$1 billion in 10-year eurobonds in October or November. About Alrosa ALROSA Company Ltd. -- http://eng.alrosa.ru/eng/-- is Russia's largest diamond company engaged in the exploration, mining, manufacture and sales of diamonds and one of the world's major rough diamond producers. ALROSA produces about 20% of the world's rough diamond output and accounts for almost 100% of all rough diamonds produced in Russia. * * * As reported by the Troubled Company Reporter-Europe on Feb. 4, 2010, Standard & Poor's Ratings Services said that it had reinstated its long-term corporate credit rating on Russian diamond miner ALROSA Co. Ltd. at 'B+' and the short-term rating at 'B'. S&P suspended the ratings on April 7, 2009. S&P said the outlook is positive. S&P also reinstated its 'B+' rating on Alrosa's US$500 million Eurobond and 'B' short-term rating on Alrosa's commercial paper program. The '4' recovery ratings on the Eurobond was also reinstated. The Eurobond and commercial paper program are issued by ALROSA Finance S.A. and guaranteed by Alrosa. "The 'B+' long-term rating is based on Alrosa's stand-alone credit profile, which S&P assesses at 'CCC+', as well as on S&P's opinion that there is a "high" likelihood that the government of the Russian Federation (foreign currency BBB/Stable/A-3, local currency BBB+/Stable/A-2; Russia national scale 'ruAAA') would provide timely and sufficient extraordinary support to Alrosa in the event of financial distress," said Standard & Poor's credit analyst Andrey Nikolaev. S&P's view of a 'CCC+' stand-alone credit profile is based on its assessment of Alrosa's business risk profile as "weak" and its financial risk profile as "highly leveraged". S&P said Alrosa's business risk profile is constrained by the commodity-type nature and capital-intensiveness of the diamond- mining industry. Business risk is further constrained by the harsh operating conditions in Yakutia, according to S&P. =========== T U R K E Y =========== KARYA TOUR: Declares Bankruptcy; Thousands of Tourists Stranded --------------------------------------------------------------- Hurriyet Daily News & Economic Review reports that Karya Tour declared bankruptcy Friday, leaving thousands of tourists stranded in the Mediterranean country. According to the report, nearly 3,600 tourists have come to Turkish tourism resorts from Slovakia, Poland, Hungary and Ukraine with Karya. "Tough market conditions and increasing competition have resulted in our bankruptcy," the report quoted Ozgur Ekinci, a partner of Karya Tour, as saying. "We could not fill the seats in airplanes we rented. We tried to resist and sold tickets at a loss. But we could not achieve the desired sales, and we have gone bankrupt." The report relates Mr. Ekinci said the main problem of the bankrupt company now is to find a solution for taking tourists back to their countries. "We are working with representatives of hotels and officials," Mr. Ekinci said, according to the report. "We are in contact with the provincial tourism directorate. We have been holding talks on the difficult situation of hotelkeepers also." Karya Tour is one of the biggest Turkish tour operators with affiliates in many countries worldwide. ============= U K R A I N E ============= NAFTOGAZ: Yanukovych's Explanations on Natural Gas Probe Sought --------------------------------------------------------------- Interfax-Ukraine reports that BYT leader Yulia Tymoshenko has asked the parliament commission investigating the adoption by the Stockholm Arbitration Tribunal of a ruling obliging Naftogaz to return 11 billion cubic meters of natural gas to RosUkrEnergo to invite Ukrainian President Viktor Yanukovych to a meeting to provide explanations. "I think it's necessary to invite President Viktor Yanukovych to provide explanations to the investigative commission," the report quoted Ms. Tymoshenk as saying on Monday. "If they are ready to testify, they will come and defend their position," Ms. Tymoshenko, as cited in the report, said, adding that a commission meeting should also be attended by everybody involved in the work of RosUkrEnergo, in particular, its co-owner Dmytro Firtash, the head of the Ukrainian presidential administration, Serhiy Liovochkin, Fuel and Energy Minister Yuriy Boiko and Naftogaz CEO Yevhen Bakulin. The report notes Ms. Tymoshenko said that current decisions by the authorities, which are trying to implement the ruling of the Stockholm Arbitration Tribunal, would try not only to return RosUkrEnergo's money, but also to bring Naftogaz Ukrainy to bankruptcy. About NJSC Naftogaz of Ukraine Headquartered in Kiev, Ukraine, NJSC Naftogaz of Ukraine -- http://www.naftogaz.com/-- is a vertically integrated oil and gas company engaged in full cycle of operations in gas and oil field exploration and development, production and exploratory drilling, gas and oil transport and storage, supply of natural gas and LPG to consumers. * * * As reported by the Troubled Company Reporter-Europe on July 9, 2010, Fitch Ratings affirmed Naftogaz of Ukraine's long-term foreign and local currency IDRs: affirmed at 'CCC'. The negative outlook on the ratings was withdrawn. Fitch also upgraded the company's senior unsecured rating to 'B' from 'B-', based on the unconditional and irrevocable guarantee from the government of Ukraine. The recovery rating is 'RR4'. * UKRAINE: To Help Kiev Repay Domestic, Foreign Debts This Year --------------------------------------------------------------- Ukraine's Finance Ministry said it will help the capital, Kiev, repay its domestic and foreign debt this year, Kateryna Choursina and Daryna Krasnolutska at Bloomberg News report, citing First Deputy Minister Vadym Kopylov. "Ukraine's Cabinet and the Kiev administration will further take steps to ensure Kiev city's budget has enough funds to hold an efficient debt policy," Bloomberg quoted Mr. Kopylov as saying in a statement, e-mailed by the ministry press office Monday. On July 7, 2010, the Troubled Company Reporter-Europe, citing Bloomberg News, reported that a person with knowledge of the matter in the Ukrainian capital city's administration said Kiev is likely to restructure its US$200 million of notes due 2011 and US$250 million of bonds due 2012, while continuing to meet interest payments. The person, as cited by Bloomberg, said Kiev will decide on the restructuring before mid-September to allow time for the city council and the Finance Ministry to approve it. Bloomberg disclosed Ukraine's biggest city has suffered dwindling revenues since the global credit crisis undermined investment and left about 20 banks reliant on state aid, forcing the country to turn to the International Monetary Fund for support in 2008. * * * Standard & Poor's raised Ukraine's credit ratings on May 17 to B from B- following an agreement with Russia on lower prices for imported natural gas, according to Bloomberg News. Kiev city bonds are rated B- by Fitch, Bloomberg notes. =========================== U N I T E D K I N G D O M =========================== ALEXANDRA PLC: In Administration; KPMG in Sale Talks ---------------------------------------------------- Rob Lewis, Rob Hunt and Derek Howell of PricewaterhouseCoopers LLP were appointed joint administrators of Alexandra PLC on July 12, 2010. The appointment was made by the directors of the company following their announcement on 9 July that the company no longer had sufficient funding to enable it to continue to trade. This was one of several issues faced by the company. The company is a supplier of work clothing to a broad range of industries including travel, hospitality, healthcare, industrial and retail. The company is based in Thornbury South Gloucestershire, and directly employs 484 people at locations including Thornbury, Bristol, Swindon, Langley, Edinburgh and Uddingston, near Glasgow. Until recently, the directors of the company had been pursuing an equity fund raising. Following recent discussions with a number of parties, however, the directors concluded that it would not be possible to deliver a successful fund raising and therefore the process was abandoned. Following the public announcement that the fund raising had been abandoned, pressures on the company's working capital requirements meant that the company could not continue to trade without the protection of an insolvency process. Following their appointment, the joint administrators are seeking to sell the business as a going concern, and the administrators are in discussions with a number of interested parties. The company's subsidiaries are not currently subject to insolvency procedures, although their affairs are being reviewed by the administrators. The subsidiaries employ 174 full time equivalent staff in Morocco, seven in the UK, eight in Southern Ireland and eight in Holland. Rob Lewis, joint administrator and partner at PricewaterhouseCoopers LLP said: "It is regrettable that the company was unable to complete the equity raising process. However, the Alexandra name is a strong one in the workwear market and the market share that the business has in the UK will make it an attractive prospect for interested parties. We are already in discussions with a significant number of interested parties, although inevitably those discussions will take some time to conclude. "In the meantime, the company will continue to trade and we are going to need the support of everyone associated with the business. We have already met with most of the company's employees and have been pleased with the level of commitment given to achieving a sale of the business, and initial conversations with customers and suppliers have also gone well." Prospective buyers should contact Roger Hale at: roger.hale@uk.pwc.com Alexandra Plc first started as a small shop in Bristol, in 1854. The company started to sell work wear in the 1950s and was first floated on the stock market in 1985. MOSS END: Put Into Liquidation; Garden Center Has New Owner ----------------------------------------------------------- Moss End Garden Centre has been put into liquidation, resulting in the loss of 16 jobs, getbracknell reports. The report relates the Tony and Vanessa Day, the company's owners, were forced to place it in liquidation last week after the recession, a tough winter and an ongoing planning wrangle took their toll on the business. According to the report, the garden center is still open because landlord Schyde Investments was quickly able to find a new owner to take it on. "The concession went into liquidation but the new guy was interested and we've managed to keep the center open. He was keen to get started straight away," the report quoted Mike Edmund, director of Schyde Investments, as saying. "He's kept a number of the staff and at the moment the center is still open but they're in the process of moving things around and giving it a fresh new look. "It is still called Moss End Garden Centre and it will remain open although there are signs up apologizing for any disturbance while they work on the interior of the center." Moss End Garden Centre is based in Warfield. SLUMBERDOWN ENTERPRISES: In Administration; 60 Jobs at Risk ----------------------------------------------------------- STV reports that Slumberdown Enterprises Ltd. has gone into administration, putting 60 jobs at risk. According to the report, Tony Trench, of the Unite union, said: "This is really disappointing news especially with the staff bending over backwards to help the firm. But they have been betrayed by the management who have failed to communicate with us despite constant requests." No-one from administrators Ernst & Young was available to comment on the Slumberdown situation, the report notes. Slumberdown Enterprises Ltd. is a bedding company based in Hawick. * UK: PwC Says Long-Term Health of Pub Industry Still Uncertain --------------------------------------------------------------- Pub company insolvencies are down a third from the peak of the recession but fears of further Government spending cuts, potential interest rate rises, and a reduction in discretionary spend could slow recovery -- causing a further wave of restructuring and insolvency. The insolvency rate appears to have peaked in the last quarter of 2009 when 88 pubs businesses failed. (The PricewaterhouseCoopers LLP insolvency statistics monitor pub companies as opposed to individual units.) The rate of failure has now (Q2 2010) dropped by 32 per cent. However, the level of collapse is still comparatively high -- nearly ten per cent up on just two years ago. In the first half of 2010 London based companies such as London Town, Capital City Brewing Company Ltd, and Globe pub management became insolvent, as did several large late night venues such as Fabric nightclub and the Budha Bar. David Chubb, partner, PricewaterhouseCoopers LLP, said: "Pub company insolvency rates have fallen from where we were a year ago -- but trading remains difficult and further failures are expected as lenders consolidate their positions. The insolvency stats do not fully illustrate the extent of the problems in the sector as much underlying restructuring activity continues. Even without entering insolvency creditors may still experience pain." Despite talks of public sector cuts and an uncertain unemployment market, 22 per cent of consumers polled anticipate having more disposable income over the next 12 months, up from 17 per cent a year ago. Economists are currently speculating that interest rates could be raised to 1.5% or even 2.5% by the end of the year. "Any interest rate rise this year will increase the cost of mortgage repayments, squeezing discretionary spend on leisure activities. Even the uncertainty around interest rates causes people to hold back," Mr. Chubb explained. The pub trade is still operating under duress and although the Coalition have scrapped the review of the smoking ban (which was thought to include plans to expand the law to cover beer gardens and other communal areas), alcohol consumption will remain on the public health agenda. Mr. Chubb continued, "we have just seen the first World Cup since the smoking ban came into force -- which might explain the high volumes of people who watched the England games (and other matches) at home." "Generally insolvency rates increase as an economy clambers out of recession -- due to working capital pressures. However, as pubs are not vulnerable to working capital any signs of a UK recovery, when they come, will be good news for the pub industry." Restaurant company insolvency levels in Q2 2010 are up five per cent on the first three months of the year, but down 30 per cent from their peak of 183 in Q1 2009. "While the propensity to dine out is still very much a part of UK culture, the pursuit of value for money by the consumer has led to even high end restaurants in London laying on fixed menus and other offers usually seen in casual dining." "Restaurants must use their customer data to analyze whether such offers are bringing new customers through the door or whether their regulars, who would dine regardless, are just doing so and paying less," he expanded. Such levels of discounting are unsustainable, another factor adding to the insolvency rate in this sector which is still 30 per cent higher than it was just two years ago. Mr. Chubb concluded: "While restaurant closures have slowed both regional and London eateries are still very reliant on promotions and as a result profit margins remain under pressure. Consumers are likely to demand even greater value for money in the coming months as the impact of higher taxes and interest rates take hold." About PricewaterhouseCoopers PricewaterhouseCoopers provides industry-focused assurance, tax and advisory services. =============== X X X X X X X X =============== * EUROPE: Banks Must Raise Money Before Seeking State Aid --------------------------------------------------------- Emma Ross-Thomas and Jurjen van de Pol at Bloomberg News report that European officials want banks to try to raise money themselves before seeking state support if stress tests by regulators reveal "vulnerabilities". "It is firstly up to the banks themselves," Bloomberg quoted Dutch Finance Minister Jan Kees de Jager as saying in Brussels Sunday after a meeting with euro-area counterparts. "They will get a certain period to refinance themselves in the market, but the countries will immediately announce that there is a certain backstop." Bloomberg relates European Union Economic and Monetary Affairs Commissioner Olli Rehn said banks should first look at "financing from the markets" to build up capital buffers. Bloomberg notes Mr. Rehn said if that fails, the "first public line of defense" will be national funds. "Vulnerabilities" will be examined "case by case," Mr. Rehn said, according to Bloomberg. EU regulators are examining the strength of 91 banks in an attempt to reassure investors about their resilience to potential losses as the debt crisis pummels the bonds of Greece, Spain and Portugal, Bloomberg discloses. The banks being tested account for 65% of Europe's banking industry, Bloomberg states. They include Deutsche Bank AG of Germany, France's BNP Paribas SA and ING Bank of the Netherlands, Bloomberg says, citing the Committee of European Banking Supervisors, which is organizing the tests. Separately, Niklas Magnusson at Bloomberg News reports that Credit Suisse Group AG said that Deutsche Postbank AG, Banca Monte dei Paschi di Siena SpA and most of Greece's largest lenders are the only publicly traded banks that may fail European stress tests and be forced to raise capital. According to Bloomberg, Credit Suisse analysts led by Daniel Davies wrote in a note to clients on July 8 that an economic downturn combined with losses on government bonds would force Deutsche Postbank to raise EUR1.36 billion (US$1.72 billion) in capital to meet Tier 1 capital requirements of 6%, while Banca Monte dei Paschi would need EUR592 million. Bloomberg relates Credit Suisse said National Bank of Greece SA, Piraeus Bank SA, Agricultural Bank of Greece SA and TT Hellenic Postbank SA would together need a total of EUR2.61 billion. Bloomberg notes Deutsche Bank AG analyst Matt Spick in London said a number of banks, including Allied Irish Banks Plc and Bank of Ireland Plc, Germany's Commerzbank AG, Greece's National Bank and Eurobank and Italy's Banca Monte dei Paschi die Siena and Banco Popolare SC may fail the European stress tests because they wouldn't meet the required Tier 1 ratio of 6%. * EUROPE: Haircut Part of German Insolvency Plan, Spiegel Says -------------------------------------------------------------- Tony Czuczka at Bloomberg News, citing German magazine Der Spiegel, reports that Germany's plan to allow the "orderly insolvency" of indebted euro-area countries would force bondholders to give up part of their claims. According to Bloomberg, the magazine reported in an e-mailed advance copy of an article for its July 12 edition that the proposal, drafted by the German Finance and Justice Ministries, calls for setting up a "Berlin Club" of governments to oversee such insolvencies. Bloomberg notes Spiegel said that holders of sovereign bonds, while taking a so-called haircut, would be guaranteed half the bond's face value as an incentive to take part in debt restructuring. * EUROPE: CEA Has Concerns Over EC Insurance Guarantee Schemes -------------------------------------------------------------- Jonathan Swift at Post Online reports that the CEA, the European insurance and reinsurance federation, has concerns over the European Commission's proposals for EU legislation to create guarantee schemes to fund potential insurer insolvencies. The report relates EC has published a white paper setting out a framework for EU action on insurance guarantee schemes. This proposes a Directive to ensure that all EU member states have an IGS that complies with a set of minimum requirements, the report notes. According to the report, the CEA questions pre-funding of IGS as suggested by the EC, and believes that the decision on how to fund schemes should be left to individual EU member states provided that equivalent protection is given to policyholders. The EC is running a consultation until November 30 and the CEA will be providing the Commission with detailed comments on its proposals, the report notes. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. 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/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Joy A. Agravante, Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2010. 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 * * *