/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/100806.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, August 6, 2010, Vol. 11, No. 154 Headlines B E L G I U M LINOPAN: Insolvency Proceedings Extended to October 15 B U L G A R I A KREMIKOVTZI: Supreme Court Sides With Gov't. on BGN700MM Claim F R A N C E PAINDOR ROUSSEAU: Put Into Liquidation WORLDSPACE: Onde Numerique Buys Liquidated Assets I R E L A N D ALLIED IRISH: Posts EUR2.36 Billion Loss in First Half 2010 ALLIED IRISH: Director Wants Bank Guarantee Scheme Extended * IRELAND: Grant Thornton Appointed to Review Credit Unions N E T H E R L A N D S BUHRS: Administrator Still in Talks With Potential Buyers R O M A N I A * ROMANIA: To Get Third IMF Bailout Tranche if Arrears Paid S L O V A K R E P U B L I C * SLOVAKIA: Fitch Says Banks' Profitability Remains Challenged S P A I N IM CERES: Fitch Downgrades Rating on Class B Notes to 'BB' U N I T E D K I N G D O M ABBOT GROUP: S&P Keeps 'B-' Long-Term Corporate Credit Rating BROADGATE FINANCING: Fitch Affirms 'BB' Rating on Class D Notes COLOURWORLD WINCHESTER: Ceases Trading; Liquidation Likely EPIC PLC: S&P Affirms 'CCC-' Rating on CreditWatch Negative INTERNATIONAL CASINO: License Suspension Prompts Liquidation LIVERPOOL FOOTBALL: China Backs Kenny Huang's Takeover Bid LLOYDS BANKING: Posts GBP1.6BB Pre-Tax Profit in First Half 2010 MCCORMICK MACNAUGHTON: Finning Buys Assets for GBP3.1 Million MOUNTGRANGE CAPITAL: Caltongate Plans Collapse RICHMOND PRINTERS: In Administration; Ceases Trading ROYAL BANK: Has Deal to Sell 318 Branches to Santander X X X X X X X X * EUROPE: Member Clubs Need to Balance Books, UEFA Source Says * BOOK REVIEW: Beyond the Quick Fix: Managing Five Tracks To ********* ============= B E L G I U M ============= LINOPAN: Insolvency Proceedings Extended to October 15 ------------------------------------------------------ EUWID reports that the insolvency proceedings under Belgian law, which have been in progress at Linopan since October 15, 2009, were extended to October 15, 2010. By that latter date the restructuring plan submitted by the company together with the insolvency application must be concluded, the report says. According to the report, particleboard production had already been finally closed down in December 2009. However, the sale of the associated plant dragged on longer than expected, so that an extension of the insolvency proceedings became necessary, the report notes. Based in Wielsbeke, Belgium, Linopan produces chipboard and flaxboard for packing, worktops, building and furniture. =============== B U L G A R I A =============== KREMIKOVTZI: Supreme Court Sides With Gov't. on BGN700MM Claim -------------------------------------------------------------- Novinite.com reports that the Supreme Administrative Court has ruled in favor of the Bulgarian government with respect to state aid recognition claims for bankrupt Kremikovtzi. According to the report, Bulgaria's Ministry of Economy, Energy, and Tourism is demanding a total of BGN700 million from the steel factory. The sum in total was provided to Kremikovtzi in the form of canceling debts to state-owned companies as part of a program for the restructuring and recovery of the mill, the report notes. The report says as the management of Kremikovtzi failed to execute the recovery plan, the Bulgarian government is claiming back the BGN700 million in question. The ruling of the Supreme Administrative Court has in fact returned the case to the Sofia City Court, which had ruled against the claims of the state, the report discloses. "The Bulgarian state now has once again the chance to become the largest creditor of the metallurgical plant Kremikovtzi," the report quoted the Economy Ministry as saying in its statement Wednesday. If the BGN700 million in question is not recognized as state aid as part of the plan for the restructuring and recovery of the Kremikovtzi steel mill, the Bulgarian government risks being fined by the European Commission for illegal state aid to a private company, the report states. According to the report, the judges from the Sofia City Court are now obliged to take into account the obligatory directions issued by the Supreme Administrative Court which say that the Bulgarian government has the right to claim back the aid it provided to Kremikovtzi. If the Bulgarian court recognizes the claims of the government, Bulgaria will evade an infringement procedure of the European Commission for illegal state aid to a private company, the report notes. Auction As reported by the Troubled Company Reporter-Europe on July 29, 2010, Bloomberg News said Kremikovtzi will auction its assets on Sept. 13. Bloomberg disclosed receiver Tsvetan Bankov said the starting price for the steel mill's Soviet-era plant is set at BGN565.52 million (US$375 million). Assets total BGN840 million, while debt was estimated at BGN1.9 billion, Bloomberg said, citing a report from the receiver. Sealed bids, along with 10% deposits, are invited, according to Bloomberg. Bloomberg recalled the Sofia City Court declared Kremikovtzi bankrupt May 31. The Sofia-based plant was placed in receivership in 2008 after failing to pay suppliers and investors holding BGN325 million (US$422 million) of bonds, Bloomberg disclosed. Creditors rejected a restructuring plan in October 2009, opting to be repaid under insolvency laws, Bloomberg recounted. Bloomberg noted that of the total liabilities, 42% are owed to state-run power and gas utilities, the state railways and tax authorities. About Kremikovtzi Kremikovtzi AD Sofia -- http://www.kremikovtzi.com/-- is a Bulgaria-based company principally engaged in the steel industry. Its production capacity includes a complete steel production cycle, from ore mining to finished products, such as hot rolled and cold rolled products (coils, slabs, plates, blooms and billets), different thickness wire rods and tubes. The Company's product range also includes coke and chemical products, flat products, ferro-alloys and metallurgical lime, and other products. The Company operates through a number of subsidiaries, including Ferosplaven zavod EOOD, NLA 2000 EOOD, Kremikovtzi Rudodobiv AD, Metalresource OOD and others. The Company is 71%-owned by Finmetals Holding AD. =========== F R A N C E =========== PAINDOR ROUSSEAU: Put Into Liquidation -------------------------------------- Flexnews reports that Paindor Rousseau has been placed under liquidation. Citing French media reports, Flexnews relates the company stopped its business activity in late July. Flexnews says the company had been put under receivership in November 2009 after it registered a loss of EUR600,000 mainly due to the escalating price of its primary raw material flour. Based in Orleans, Paindor Rousseau is a bakery company. It employs 63 people, according to Flexnews. WORLDSPACE: Onde Numerique Buys Liquidated Assets ------------------------------------------------- Broadband TV News reports that French pay radio Onde Numerique has acquired some of the liquidated assets of the Worldspace organization. The report relates the company has picked up a number of regulatory, technological and marketing assets in a move that received the endorsement of the bankruptcy Court in Toulouse, France. It follows the January 2009 liquidation of Worldspace France and Worldspace Europe, the report notes. According to the report, the assets include the L-band MusicaA filing (1467-1492 MHz), filed by the French Administration in 2006 with the International Telecommunication Union (ITU), at the 21 degrees East orbital location. The report notes Worldspace filed for bankruptcy in October 2008. The bulk of its assets were acquired in June 2010 by Yazmi USA, a company backed by Worldspace founder Noah Samara, the report recounts. Worldspace provides digital satellite audio, data and multimedia services. ============= I R E L A N D ============= ALLIED IRISH: Posts EUR2.36 Billion Loss in First Half 2010 ----------------------------------------------------------- Eamon Quinn at The Financial Times reports that Allied Irish Bank posted a first-half loss of EUR2.36 billion (GBP1.95 billion) and impairment charge and loan loss provisions of EUR3.26 billion. According to the FT, analysts said the bank, which incurred a EUR707 million pre-tax loss in the first half a year ago, will continue to report loan impairments for some time as it transfers commercial property loans at large discounts to the government's National Asset Management Agency and covers losses on other property and corporate loans that will stay with the bank. The FT recalls AIB transferred loans of EUR3.3 billion in March and EUR2.7 billion late last month at average discounts of 42% and 48.5% respectively to Nama. The asset agency has said it expects to buy a total of EUR23 billion of property assets from AIB, the FT notes. The FT relates AIB said this year it would sell its 70% stake in Poland's Bank Zachodni WBK, its 22% stake in M&T Bank in the US and its AIB UK operation to contribute to the EUR7.4 billion in new capital that Ireland's financial regulator believes the bank will need by the end of the year. Allied Irish Banks, p.l.c., together with its subsidiaries -- http://www.aibgroup.com/-- conducts retail and commercial banking business in Ireland. It also provides corporate lending and capital markets activities from its head office at Bankcentre and from Dublin's International Financial Services Centre. The Group also has overseas branches in the United States, Germany, France and Australia, among other locations. The business of AIB Group is conducted through four operating divisions: AIB Bank Republic of Ireland division, Capital Markets division, AIB Bank UK division, and Central & Eastern Europe division. In February 2008, the Group acquired the AmCredit mortgage business in the Baltic states of Latvia, Lithuania and Estonia. In September 2008, the Group also acquired a 49.99% shareholding in BACB. * * * As reported by the Troubled Company Reporter-Europe on July 23, 2010, Moody's Investors Service affirmed AIB's long-term bank deposit and debt ratings. These are A1 for long-term bank deposits and senior debt, A2 for dated subordinated debt, Ba3 for undated subordinated debt, B1 for cumulative tier 1 securities and Caa1 for non-cumulative tier 1 securities. Moody's said the outlook on these ratings is stable. AIB's bank financial strength rating of D, which maps to Ba2 on the long term rating scale, with a positive outlook was unaffected by the rating action. ALLIED IRISH: Director Wants Bank Guarantee Scheme Extended ----------------------------------------------------------- BreakingNews.ie reports that Allied Irish Bank's managing director Colm O'Doherty believes the Irish government should extend the bank guarantee scheme for a further 12 months. The bank guarantee scheme is up for review in September, the report says. According to the report, Mr. O'Doherty believes it should be lengthened as markets are still "fragile". Allied Irish Banks, p.l.c., together with its subsidiaries -- http://www.aibgroup.com/-- conducts retail and commercial banking business in Ireland. It also provides corporate lending and capital markets activities from its head office at Bankcentre and from Dublin's International Financial Services Centre. The Group also has overseas branches in the United States, Germany, France and Australia, among other locations. The business of AIB Group is conducted through four operating divisions: AIB Bank Republic of Ireland division, Capital Markets division, AIB Bank UK division, and Central & Eastern Europe division. In February 2008, the Group acquired the AmCredit mortgage business in the Baltic states of Latvia, Lithuania and Estonia. In September 2008, the Group also acquired a 49.99% shareholding in BACB. * * * As reported by the Troubled Company Reporter-Europe on July 23, 2010, Moody's Investors Service affirmed AIB's long-term bank deposit and debt ratings. These are A1 for long-term bank deposits and senior debt, A2 for dated subordinated debt, Ba3 for undated subordinated debt, B1 for cumulative tier 1 securities and Caa1 for non-cumulative tier 1 securities. Moody's said the outlook on these ratings is stable. AIB's bank financial strength rating of D, which maps to Ba2 on the long term rating scale, with a positive outlook was unaffected by the rating action. * IRELAND: Grant Thornton Appointed to Review Credit Unions ----------------------------------------------------------- InsolvencyJournal.ie reports that the Financial Regulator has appointed independent consultants to review Ireland's credit unions in a bid to curtail rising bad debts and mounting losses in the sector. The report relates the move comes amid fears about the scale of bad debt in the sector after it was revealed earlier this year that a number of credit unions around the State face serious solvency issues. The report notes last week, the Central Bank and the regulator announced the appointment of Grant Thornton to carry out the large-scale review, which was requested by Minister for Finance, Brian Lenihan. The report says the firm will examine the financial soundness of the State's 419 credit unions and will focus on the fitness and qualifications of directors and the limits on commercial or non-consumer lending. ===================== N E T H E R L A N D S ===================== BUHRS: Administrator Still in Talks With Potential Buyers --------------------------------------------------------- Adam Hooker at PrintWeek reports that the administrator for Buhrs has said it is still negotiating with several parties over a sale of the business. Wladimir Schmidt, representing administrator Tager, told PrintWeek: "We are still talking to several parties. We are working as hard as we possibly can to conclude a deal and we hope to have it done soon." PrintWeek relates Buhrs went into administration with the Waalwijk-based lawyers in June, after its banking provider pulled the company's credit. PrintWeek notes Tager's Michel Moeijes, who is handling the administration, previously said that up to six companies could bid for the business. Buhrs is a finishing equipment manufacturer based in the Netherlands. ============= R O M A N I A ============= * ROMANIA: To Get Third IMF Bailout Tranche if Arrears Paid ----------------------------------------------------------- Irina Savu at Bloomberg News reports that an International Monetary Fund mission to Romania will recommend releasing the next tranche of the nation's EUR20 billion (US$26 billion) bailout if the government settles arrears to private companies. According to Bloomberg, Jeffrey Franks, head of the IMF mission to Bucharest, said the government must agree to pay RON2 billion (US$621 million) to settle the arrears. Romania has previously been given waivers over the arrears when earlier installments have been disbursed, Bloomberg notes. Bloomberg says the IMF may release an installment of about EUR900 million in September, pending the board's approval, after Romania's government had a first-half budget deficit of RON18.07 billion (US$5.6 billion), or 3.35% of gross domestic product, below the RON18.2 billion IMF-imposed target. Bloomberg notes the eastern European country turned to the IMF, European Union and other lenders for a bailout last year because of dwindling revenue and pressure on its currency. ============================= S L O V A K R E P U B L I C ============================= * SLOVAKIA: Fitch Says Banks' Profitability Remains Challenged -------------------------------------------------------------- Fitch Ratings says in a new report that the Slovakian banking sector faces no major structural imbalances, but profitability is likely to remain muted over the short- to medium-term. In particular and in contrast to many other eastern European banking sectors, the sector benefits from a strong and stable customer deposit funding base (loan/deposit ratio below 90%), which helped the system avert a liquidity squeeze and rising funding costs, and a low proportion of FX lending. Nevertheless, over the medium term, Fitch expects the banks' aggregated profitability to remain below previous highs. This is due to anticipated lower loan growth relative to 2006 and 2007, and the loss of foreign exchange-related income following the euro adoption in 2009 in Slovakia. Pressure on the banking sector's growth and asset quality may also result if Slovakia -- being a member of the European Monetary Union -- loses its competitiveness. In 2010 the Slovak banks are likely to face continued pressure from rising loan impairment charges, particularly in cyclical corporate segments, despite a pick-up of the economy. This may be mitigated through cost-cutting measures and improvements in interest margins. However, Fitch notes significant differences between individual banks. Last year, the banks' aggregated profit more than halved due to rising LICs in a weaker economic environment, with non-performing loans approaching 6% of total loans, and a reduction in trading and fee income following the euro introduction. Fitch further points out that none of the Slovakian banks has had to make use of state support measures since the onset of the global financial crisis. This underlines the system's solid customer deposit base and hence low dependence on wholesale funding, as well as overall adequate capitalization (regulatory capital adequacy ratio of 12.7% at end-March 2010). As most of the Slovakian banks are foreign-owned, mainly by large western European banking groups, Fitch would expect the banks to first look to their owners for support in case of need. The banks' Support Ratings reflect the agency's view that there is a high probability of support from their western European parent banks; their Issuer Default Ratings are based on institutional support. At end-May 2010, the Banking System Indicator for Slovakia was 'C', indicating that the sector has adequate strength and quality. As the Slovakian system is at the lower end of the 'C' range, and in light of persisting pressure on asset quality and hence profitability, there may be some downward pressure for the BSI (but not necessarily for individual banks that are performing relatively well). At the same time, the BSI is higher than that of many other eastern European banking systems, indicating lower risk. Fitch-rated Slovakian banks are Slovenska Sporitelna ('A'/Stable, Individual 'C/D'), Volksbank Slovensko a.s. ('BBB+'/Stable, Individual 'D') and Vseobecna Uverova Banka ('A+'/Stable). ========= S P A I N ========= IM CERES: Fitch Downgrades Rating on Class B Notes to 'BB' ---------------------------------------------------------- Fitch Ratings has downgraded IM Ceres 2 Cajamar, F.T.A.'s class B notes and affirmed the class A notes. The rating action reflects a change of the weighted average loan-to-value as reported by Titulizacion SGFT's (the Gestora) in the investor report. The rating actions are: -- EUR99,926,245.98 class A notes (ISIN: ES0347841001): affirmed at 'AA'; Outlook Stable, assigned Loss Severity Rating 'LS-1' -- EUR30,050,660.64 class B notes (ISIN: ES0347841019): downgraded to 'BB' from 'BBB'; Outlook Stable; assigned Loss Severity Rating 'LS-3' The transaction is a cash-flow securitisation of a static portfolio of loans to small- and medium-sized Spanish enterprises granted by Cajamar Caja Rural ('A'/Negative/'F1'), a rural savings bank. It contains 1,643 loans to obligors predominantly located in the region of Andalucia and Murcia (together 99.26%) who are engaged in farming and agricultural services, and food, beverage and tobacco production (together 95.78%). This extreme concentration exposes the transaction to the risk of systemic shocks. The agency reviewed the recovery assumptions for the transaction following a change of the Gestora's reporting of the weighted average LTV, which -- as a result of a revised calculation method -- increased to 61% from 33% in the April investor report. For the purpose of this review, Fitch received a portfolio with loan-by-loan information. Of the portfolio, 80% (by volume) is secured by first-ranking mortgages, mostly land. However, only 54% (by volume) of these first-ranking mortgages have been given an appraisal value. Based on the appraisal values, the weighted average current LTV of those loans is 45%. For loans that have not been appraised, the agency assumed an average LTV of 70%, provided the mortgages are of first rank. The agency is of the opinion that, based on these assumptions and a portfolio benchmark of 'B+', the credit enhancement of the class A notes is commensurate with an 'AA' rating and that the CE of the class B notes is commensurate with a 'BB' rating. In addition, given the uncertainty regarding the LTV for a great part of the portfolio and the class B note's vulnerability to shocks in the agricultural sector in Almeria and Murcia, the current credit enhancement of the class B notes is not commensurate with the previous rating. As of June 2010, the transaction's performance is currently stable with delinquencies above 90 days at 1.3% of the outstanding portfolio balance. In the last quarter, new defaults were limited (EUR0.351 million). The reserve fund has amortized to its required level of EUR13.16 million and has never been used to cover defaults. Currently, the reserve fund makes up 9.87% of the outstanding balance which is sufficient to cover the five largest obligors even in the event of little or no recoveries. The portfolio has amortized to 32.5% of its original balance, or EUR129.98 million. Unlike some other Spanish SME CDO transactions, this deal does not benefit from a guarantee from the Kingdom of Spain. Fitch has assigned an Issuer Report Grade of three stars ("satisfactory") to the publicly available reports on the transaction. The reporting is monthly and provides a variety of stratifications together with graphical presentations, including regional, industrial and borrower stratifications. The reporting of the weighted average LTV has now been amended. However, the structural test for the interest deferral mechanism is not provided. Furthermore, the information has to be gathered from several sources (pdf-files, Excel-files and the Gestora's webpage). =========================== U N I T E D K I N G D O M =========================== ABBOT GROUP: S&P Keeps 'B-' Long-Term Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that it is keeping its 'B-' long-term corporate credit ratings on U.K.-based oil services company Abbot Group Ltd. (intermediate holding company and owner of KCA Deutag Drilling Group Ltd.) and related entity Turbo Alpha Ltd. on CreditWatch, where they were placed with negative implications on Nov. 16, 2009, on concerns about ongoing covenant compliance. The 'B-' issue ratings on Turbo Alpha's senior secured bank facilities also remain on CreditWatch negative. The recovery ratings of '3' on these facilities are unchanged. At the same time, S&P assigned a 'CCC' issue rating to Abbot Group's proposed US$500 million senior unsecured notes due August 2018, to be issued by Turbo Beta PLC. The recovery rating on this instrument is '6', indicating S&P's expectation of negligible (0%- 10%) recovery prospects in the event of a payment default. "Abbot Group announced on July 26, 2010, that it is launching a US$500 million high-yield bond issue, which together with a US$103 million equity injection by its main shareholder, will be used to refinance the outstanding mezzanine facilities and pay related fees," said Standard & Poor's credit analyst Paul Watters. "If successful, this will enable the group's senior covenant amendment agreement to come into effect. The ongoing CreditWatch placement reflects S&P's view that Abbot Group's liquidity position remains unstable and covenant risk remains high until the amendment agreement becomes effective." In S&P's view, in the event that the amendment agreement is implemented prior to August 15, this would stabilize the liquidity position of Abbot Group and would most likely result in the rating being removed from CreditWatch and a stable outlook assigned. The rating on Abbot Group factors in S&P's assessment of the weak business risk profile of the group arising from the demonstrated cyclicality of the drilling and oil services industry. However, S&P notes that Abbot Group enjoys a stronger position relative to drilling contractors with North American exposure owing to the nature of its markets and contracts focused on the Eastern Hemisphere. The rating also takes into account S&P's view that the financial risk profile of the group will remain highly leveraged, even after the US$303 million equity injection from the shareholders. S&P aims to review the CreditWatch placement by Aug. 15, 2010, or when the final outcome of the covenant amendment process becomes clear. Should the amendment agreement become binding, S&P would likely remove the ratings from CreditWatch and assign a stable outlook. Completing the sale of the US$500 million senior unsecured notes, which, together with a US$103 million equity injection by Abbot Group's main shareholder, will be used to refinance the outstanding mezzanine facilities, would be one way of achieving this outcome. However, if, at this late stage, conditions precedent to making the amendment effective are not achieved prior to August 15, a multi-notch downgrade would likely result. BROADGATE FINANCING: Fitch Affirms 'BB' Rating on Class D Notes --------------------------------------------------------------- Fitch Ratings has affirmed Broadgate Financing PLC's CMBS notes. Fitch has simultaneously revised the Outlooks of the class C1, C2 and D notes to Stable from Negative. The rating actions are: -- GBP225.0m class A1 due January 2032 (XS0213092066) affirmed at 'AAA'; Outlook Stable -- GBP277.0m class A2 due April 2031 (XS0211897664) affirmed at 'AAA'; Outlook Stable -- GBP175.0m class A3 due April 2033 (XS0211897821) affirmed at 'AAA'; Outlook Stable -- GBP400.0m class A4 due July 2036 (XS0213092652) affirmed at 'AAA'; Outlook Stable -- GBP365.0m class B due October 2033 (XS0211898043) affirmed at 'AA'; Outlook Stable -- GBP186.0m class C1 due January 2022 (XS0213093031) affirmed at 'BBB-'; Outlook revised to Stable from Negative -- GBP215.0m class C2 due April 2035 (XS0211898126) affirmed at 'BBB-'; Outlook revised to Stable from Negative -- GBP84.8m class D due October 2025 (XS0213093627) affirmed at 'BB'; Outlook revised to Stable from Negative The rating affirmation and revision of the Outlooks reflects a substitution of assets within the transaction that was completed on July 30, 2010, by Bluebutton Properties (the 50:50 joint venture between British Land and Blackstone funds). This resulted in 3, 4 and 6 Broadgate, including the associated Henderson and AMBAC cash surrender collateral equating to GBP11 million and the GBP215 million Willis Building cash deposit being removed from the securitization, while 201 Bishopsgate and Broadgate Tower were added into the collateral portfolio. The total value of the assets added to the transaction is GBP565 million, compared to GBP336 million for those that were removed, based on a March 2010 valuation. This has resulted in an aggregate market value of GBP2,373 million and a reported loan-to- value ratio of 80.6%. By comparison, Fitch estimates the market value of the assets to be GBP2,351 million, which produces a Fitch LTV of 81.3%. The removal of 3, 4 and 6 Broadgate from the securitization is a result of an agreement to develop a new 700,000 sq ft building for UBS on the site of those assets. The agreement has resulted in certain lease extensions to UBS's currently occupied space. Fitch considers the new assets, 201 Bishopsgate and Broadgate Tower, to be of grade A quality, with a significantly more attractive offering than the assets they have replaced. They are currently 97% and 73% let by ERV, respectively. The attractiveness of the assets is highlighted by recent lettings to major international law firms and financial institutions: Mayer Brown, Reed Smith LLP, Henderson, Landesbank Baden-Wurttemburg and most recently the Bank of Nova Scotia. The replacement of assets exhibiting significant vacancy and requiring refurbishment with new assets that have seen recent lettings has greatly strengthened the transaction cashflow and allayed concerns of an income shortfall in the short- to medium- term. Moreover, the Willis cash deposit, which would have been depleted over the life of the deal, has been replaced by cashflow producing assets that will have significant residual value at maturity. Following the substitution, the debt service coverage ratio has risen to 1.2x, while the weighted average terms to lease break and expiry are 8.9 and 10.8 years, respectively, compared to 7.8 and 9.9 years before the substitution. Excluding the Willis cash deposit, the WA lease length to first break has been extended by 1.9 years. COLOURWORLD WINCHESTER: Ceases Trading; Liquidation Likely ---------------------------------------------------------- Adam Hooker at PrintWeek reports that Colourworld Winchester, which traded as Colourworld Print Solutions, has closed its doors after Lloyds Banking Group withdrew finance from the company on July 30. According to the report, a spokesman at insolvency practitioner Begbies Traynor said the company has now ceased trading. It is understood that more than 40 staff have lost their jobs following the closure, the report notes. Begbies is expected to be appointed as liquidator imminently, the report notes. The report relates Begbies said Colourworld Winchester's administration follows a reduction in the company's turnover, stemming from the recession, as well as a tightening of credit terms. Colourworld Winchester is a commercial printer based in Winchester. It made a turnover of GBP3.5 million for the year ended March 2010, according to PrintWeek. EPIC PLC: S&P Affirms 'CCC-' Rating on CreditWatch Negative ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed and removed from CreditWatch negative its 'CCC-' ratings on all classes of Epic (Industrious) PLC's notes. Epic (Industrious) is a synthetic CMBS transaction that closed in October 2006. It was arranged by The Royal Bank of Scotland PLC (RBS), which is the credit default swap counterparty, the servicer, and the special servicer. The notes were initially backed by one loan secured on industrial properties in the U.K. In 2008, a property valuation (which resulted in a 90.7% loan-to- value ratio for the securitized portion, compared with the LTV covenant of 75.0%) triggered a loan default. Thereafter, the borrower and its parent company entered insolvency proceedings, thereby triggering a credit event under the CDS. Between July and October 2009, all real estate assets securing the loan were sold, through a property auction or portfolio sale, for sales proceeds of approximately GBP263 million. The interest rate swap was closed out due to the insolvency event, and the borrower paid breakage fees in an amount of GBP33.8 million. This resulted in net recoveries that were lower than the class A note balance. S&P's ratings transitioned in parallel with these events and S&P lowered them to 'CCC-' in August 2009 to reflect S&P's expectation of principal losses on all classes of notes. S&P also placed the ratings on CreditWatch negative because S&P expected the loss to be applied to the notes within a short period of time. The transaction is structured to provide the originator (RBS) with protection against loan losses through protection payments under the CDS and a corresponding allocation of the loan losses to the notes. The transaction documents envisage that on the occurrence of a credit event, the calculation agent (RBS) will calculate the losses and appoint a verification agent to verify them. The issuer will then apply those losses to the notes in reverse sequential order by reimbursing RBS for the verified losses, using the note collateral, and applying the remaining collateral to repay the notes, starting with the class A notes. Since August 2009, according to investor reports, interest has continued to be paid to the notes on a timely basis. However, as confirmed by a notice issued by Epic (Industrious) on Aug. 3, the loss calculation process described above has not commenced and the verification agent has not been appointed. S&P continue to anticipate principal losses on all classes of notes and have therefore affirmed S&P's 'CCC-' ratings. CreditWatch placements focus on identifiable events and short-term trends, and, in the absence of any visibility as to the timing of completion of the loss allocation process, S&P considers that a CreditWatch placement is no longer applicable. S&P notes that all classes of notes continue to receive full and timely interest payments. This is a characteristic of most synthetic CMBS transactions, where the note interest payments do not directly depend on the income from the underlying reference loan or loans. Instead, the issuer uses funds generated by the note collateral and regular payments made by the CDS counterparty to make interest payments on the notes. Although this ensures timely interest payments even on the most junior classes of notes during an extended workout period, it can have a detrimental effect on the senior classes because the interest payments ultimately reduce the recovery amount. Ratings List Epic (Industrious) PLC GBP490 Million Commercial Mortgage-Backed Floating-Rate Notes Ratings Removed From CreditWatch Negative And Affirmed Class To From ----- -- ---- A CCC- CCC-/Watch Neg B CCC- CCC-/Watch Neg C CCC- CCC-/Watch Neg D CCC- CCC-/Watch Neg E CCC- CCC-/Watch Neg F CCC- CCC-/Watch Neg INTERNATIONAL CASINO: License Suspension Prompts Liquidation ------------------------------------------------------------ Casino City Times, citing The Evening Express, reports that Aberdeen's International Casino has gone into liquidation after its license was suspended. According to Casino City Times, the report said the casino had its license suspended by the Aberdeen licensing board. Casino City Times relates the owners, International Development Company, said they faced no choice but to go into liquidation. LIVERPOOL FOOTBALL: China Backs Kenny Huang's Takeover Bid ---------------------------------------------------------- Mail Online reports that the Chinese government's overseas investment arm China Investment Corporation is financing sports tycoon Kenny Huang's attempt to take over the Liverpool Football Club. The report says it means China could effectively have control over Liverpool if the bid, which values the club at between GBP300 million and GBP350 million, is successful. The report notes American owners, Tom Hicks and George Gillett, were forced to put the club up for sale in April after coming under pressure for owing its lender, Royal Bank of Scotland, GBP237 million. According to the report, the CIC-backed bid puts the Chinese in competition with at least two other suitors -- American private equity firm Rhone Capital and a wealthy Kuwaiti family. The winning bid will have to be approved by the Premier League, which is believed to have been in discussions with all three bidders, the report discloses. If the China-backed bid is successful, Liverpool manager Roy Hodgson would be given a transfer fund of around GBP150 million to spend on a clutch of high-profile players, the report notes. Liverpool Football Club and Athletic Grounds owns and operates one of the more popular and most successful franchises in the UK Premier League. Known as The Reds, Liverpool has won 18 first division titles and seven FA Cups since it was founded by John Houlding in 1892. In addition to the football club, the company owns and operates Anfield Stadium, Liverpool's home ground. The company generates revenue primarily through sponsorships, broadcasting fees, and ticket sales. The company was acquired by US businessmen George Gillett and Tom Hicks in 2007. LLOYDS BANKING: Posts GBP1.6BB Pre-Tax Profit in First Half 2010 ---------------------------------------------------------------- Sharlene Goff and Patrick Jenkins at The Financial Times report that Lloyds Banking Group made an underlying pre-tax profit of GBP1.6 billion for the first half following a sharp fall in bad debts and a rise in the profitability of its mortgage lending. A year ago Lloyds made GBP4 billion of pre-tax losses, the FT notes. According to the FT, a big factor in the first-half rebound, the first profit since Lloyds made its controversial acquisition of HBOS, was a fall in losses on loans to GBP6.55 billion from GBP13.4 billion a year earlier. The bank also enjoyed higher profits on mortgage lending as it charged wider margins on new loans and funding costs fell, the FT notes. About Lloyds Banking Group PLC Lloyds Banking Group PLC, formerly Lloyds TSB Group plc, (LON:LLOY) -- http://www.lloydsbankinggroup.com/-- is a United Kingdom-based financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers. The Company operates in three divisions: UK Retail Banking, Insurance and Investments, and Wholesale and International Banking. Its main business activities are retail, commercial and corporate banking, general insurance, and life, pensions and investment provision. The Company also operates an international banking business with a global footprint in 40 countries. Services are offered through a number of brands, including Lloyds TSB, Halifax, Bank of Scotland, Scottish Widows, Clerical Medical and Cheltenham & Gloucester. On January 16, 2009, Lloyds Banking Group plc acquired HBOS plc. * * * As reported by the Troubled Company Reporter-Europe on March 17, 2010, Standard & Poor's Ratings Services said that it lowered its rating on a GBP56.472 million 6.475% preference share issue by Lloyds Banking Group (A/Stable/A-1) to 'C' from 'CC' following the first missed coupon payment. The rating action was the first of S&P's forthcoming rating actions on over 40 hybrid instruments issued by Lloyds and related entities with discretionary coupon payments. According to S&P, each security would be lowered to 'C' from 'CC' on the date of the first coupon payment to be missed. MCCORMICK MACNAUGHTON: Finning Buys Assets for GBP3.1 Million ------------------------------------------------------------- BBC News reports that Finning International, the largest supplier of Caterpillar machinery in the world, has bought the assets of McCormick MacNaughton for GBP3.1 million, saving more than 50 jobs in Lisburn. Finning, BBC says, will take over from McCormick MacNaughton as the official supplier of Caterpillar equipment in Northern Ireland. BBC notes McCormick MacNaughton went into administration in June after suffering financial difficulties. As reported by the Troubled Company Reporter-Europe on June 17, 2010, Belfast Telegraph said difficulties in the company developed after a major expansion in the Republic of Ireland shortly before the massive downturn in construction. Belfast Telegraph disclosed the company's directors appointed PricewaterhouseCoopers as administrator. McCormick MacNaughton sells construction and marine equipment. It is based at Blaris Industrial Estate. MOUNTGRANGE CAPITAL: Caltongate Plans Collapse ---------------------------------------------- BBC News reports that Caltogate, the biggest development project in Edinburgh in a decade, has collapsed. The report notes the GBP300 million Caltongate plans were put on hold last year when the firm behind it, Mountgrange, went into administration after the Bank of Scotland pulled out its financial support. According to the report, the city council has said it is withdrawing its assets because the new owner, Lloyds Banking Group, has been involved in "protracted negotiations" which were "unlikely to be successful". "The council has worked for some time with the bank's administrator in order to assist it in realizing the potential of the site, but it is now apparent that the proposed development will not go ahead," the report quoted Councilor Tom Buchanan as saying. "As a result, we feel it is in the council's best interest to draw a line under this matter and exercise our right to formally terminate the sale agreement." The report relates the council has withdrawn its properties on the site -- the old Canongate School, the garage and arches on East Market Street and land off Cranston Street -- after Mountgrange failed to "obtain the other necessary consents". Mountgrange Capital plc was a privately owned property investment and development company. RICHMOND PRINTERS: In Administration; Ceases Trading ---------------------------------------------------- Adam Hooker at PrintWeek reports that Richmond Printers, which traded as Richmond Cavendish, has ceased trading after going into administration this week. The report relates Geoff Bouchier and Andrew Stoneman of insolvency practitioner MCR were appointed on Monday, August 2. Citing MCR's Kevin Buckett, the report says prior to the closure the practitioner investigated the possibility of a going concern sale but found that there was not much to market. The report notes Mr. Buckett said that the company had found life very difficult after the closure of its sister company Cavendish Press because a lot of suppliers treated them as one company and had refused to deal with Richmond Cavendish. Richmond Printers is a commercial printer based in Leicester. ROYAL BANK: Has Deal to Sell 318 Branches to Santander ------------------------------------------------------ BreakingNews.ie reports that Royal Bank of Scotland has reached a deal to sell 318 branches to Spanish banking giant Santander. The report says the sale comprises 311 RBS-branded branches in England and Wales and seven NatWest sites in Scotland. RBS -- 83% owned by the government -- is disposing of the assets in order to appease European competition concerns, the report notes. According to the report, the sale, which will take up to 18 months to complete, will see Santander pay a premium of GBP350 million (EUR421 million) on the value of the assets. About RBS The Royal Bank of Scotland Group plc (NYSE:RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed of its entire interest in Global Voice Group Ltd. * * * As reported by the Troubled Company Reporter-Europe on March 29, 2010, Standard & Poor's Ratings Services said that it lowered its ratings on "may pay" Tier 1 securities issued or guaranteed by The Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'. At the same time, the rating on the RBSG-related security issued by Argon Capital PLC was similarly lowered to 'C' from 'CC'. The counterparty credit ratings and stand-alone credit profiles of RBSG and subsidiaries, and the ratings on other debt securities issued by these entities, were unaffected. =============== X X X X X X X X =============== * EUROPE: Member Clubs Need to Balance Books, UEFA Source Says -------------------------------------------------------------- Goal.com reports that a source close to the Union of European Football Associations warned that member clubs face the risk of being banned from continental competition unless their books are balanced before president Michel Platini's new "Financial Fair Play" proposals are introduced by 2012. It is the duty of each national association and not UEFA to ensure clubs are fit to compete in UEFA competition, the report says. According to the report, there are a number of conditions to which clubs must adhere in the application process. The report notes the source explained: "There is a licensing committee in each country. The clubs that technically qualify are sent out forms and they have to fill those in. The licensing committee has to look at the financial situation. Those are the standards we set. When the licensing comes around, provided they [the clubs] meet certain criteria, and provided their financial situation is OK and their manager has UEFA badges, they can see everything they have to have in place. They have the books [of regulations]. Once they have that, they can be given the license from the association. The association then notifies UEFA." * BOOK REVIEW: Beyond the Quick Fix: Managing Five Tracks To Organizational Success ------------------------------------------------------------ Author: Ralph H. Kilmann Publisher: Beard Books Hardcover: 320 pages Listprice: US$34.95 Review by Henry Berry Every few years, a new approach is offered for unleashing the full potential of organized efforts. These are the quick fixes to which the title of this book refers. The jargon of the quick fix is familiar to any businessperson: decentralization, human resources, restructuring, mission statement, corporate strategy, corporate culture, and so on. These terms are all limited in scope or objective, and some are even irrelevant or misconceived with regard to the overall well-being and purpose of a corporation. With his extensive experience as a corporate consultant, author of numerous articles, and professor in business studies, Kilmann recognizes that each new idea for optimum performance and results is germane to some area of a corporation. However, he also recognizes that each new idea inevitably falls short in bringing positive change -- that is, a change that is spread throughout the corporation and is lasting. At best, when a corporation relies on an alluring, and sometimes little more than fashionable, idea, it is a wasteful distraction. At worst, it can skew a corporate organization and its operations, thereby allowing the corporation's true problems or weaknesses to grow until they become ruinous. As the author puts it, "Essentially, it is not the single approach of culture, strategy, or restructuring that is inherently ineffective. Rather, each is ineffective only if it is applied by itself -- as a "quick fix"." Kilmann tells corporate leaders how to break the cycle of embracing a quick fix, discarding it after it proves ineffective, and then turning to a newer and ostensibly better quick fix that soon proves to be equally ineffective. For a corporation to break this self-defeating cycle, the author offers a five-track program. The five tracks, or elements, of this program are corporate culture, management skills, team-building, strategy-structure, and reward system. These elements are interrelated. The virtue of Kilmann's multidimensional five-track program is that it addresses a corporation in its entirety, not simply parts of it. Kilmann's five tracks offer structural and operational aspects of a corporation that executives and managers will find familiar in their day-to-day leadership and strategic thinking. Thus, the author does not introduce any unfamiliar or radical perspectives or ideas, but rather advises readers on how to get all parts of a corporation involved in productive change by integrating the five tracks into "a carefully designed sequence of action: one by one, each track sets the stage for the next track." Kilmann does more, though, than bring all significant features of a modern corporation together in a five-track program and demonstrate the interrelation of its elements. His singularly pertinent and useful contribution is providing a sequence of steps to be implemented with respect to each track so that a corporation progresses toward its goals in an integrated way. Beyond the Quick Fix is a manual for implementing and evaluating the progress of a five-track program for corporate success. The book should be read by any corporate leader desiring to bring change to his or her organization. Ralph H. Kilmann has been connected with the University of Pittsburgh for 30 years. For a time, he was its George H. Love Professor of Organization and Management at its Katz Graduate School of Business. Additionally, he is president of a firm specializing in quantum transformations. ********* 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 * * *