/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101008.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, October 8, 2010, Vol. 11, No. 199 Headlines F R A N C E REXEL SA: S&P Puts 'B+' Corp. Rating on CreditWatch Positive G E R M A N Y CONTINENTAL AG: Moody's Assigns 'B1' Rating on Secured Notes I R E L A N D ALLIED IRISH: Sale of 22.4% Stake in M&T to Raise US$2 Billion ALLIED IRISH: Robert Wilmers Resigns From Board I T A L Y PROGRAMMA DINAMICO: Fitch Affirms Ratings on Notes at 'Csf' WIND TELECOMUNICAZIONI: Fitch Puts Low-B Ratings on Positive Watch L U X E M B O U R G KERNEL HOLDING: Fitch Assigns 'B' LT Issuer Default Ratings N E T H E R L A N D S SIRENS BV: Fitch Affirms 'Bsf' Ratings on Four Tranches R U S S I A VIMPELCOM OJSC: Weather Deal Cues Moody's Review on 'Ba2' Ratings * Fitch Assigns 'BB' Rating on Russian City of Krasnoyarsk S P A I N AYT COLATERALES: Moody's Puts (P) C (sf) Rating on Class D Notes T U R K E Y * Moody's Gives Positive Outlook on Istanbul's 'Ba2' Rating * Moody's Gives Positive Outlook on Turkey's 'Ba2' Rating U N I T E D K I N G D O M BGROUP: Goes Into Liquidation as Revenues Continue to Drop BMI BRITISH: Going Concern Doubt Remains; Losses Widen in 2009 BRITISH AIRWAYS: Passenger Traffic Up 1.3% in September 2010 CROWN CURRENCY: MoneySavingExpert.com Hires Insolvency Expert CRU INVESTMENT: CISX Freezes 11 Arch Cru Sub-Funds FLOOKS HAULAGE: In Liquidation; Purnells Appointed as Liquidators LIVERPOOL FOOTBALL: Board Willing to Sell Club for GBP300 Million TUI AG: TUI Travel's Holiday Bookings Back on Track * BOOK REVIEW: Dangerous Dreamers - The Financial Innovators ********* =========== F R A N C E =========== REXEL SA: S&P Puts 'B+' Corp. Rating on CreditWatch Positive ------------------------------------------------------------ Standard & Poor's Ratings Services said that it has placed its 'B+' long-term corporate credit rating on France-based electrical parts distributor Rexel S.A. on CreditWatch with positive implications. The recovery rating remains unchanged at '4'. The 'B' short-term corporate credit rating was affirmed. "The CreditWatch placement reflects Rexel's operating performance for the first half of 2010 -- which was somewhat more resilient than S&P had anticipated -- and its expectations that Rexel should sustainably be able to meet credit metrics compatible with a rating above its current 'B+'," said Standard & Poor's credit analyst Eric Tanguy. For the first six months of 2010, the company achieved operating income of EUR214 million, representing a 3.7% margin on sales, a noticeable improvement against the relatively low 2.8% reported in 2009. EBITA margin for first-half 2010 strengthened to 4.5%, from 4.2% in 2009. The company reported gross debt of EUR2.8 billion at end-June 2010. Credit metrics on a net basis improved in first-half 2010, reflecting the relative upturn in profitability measures. S&P's adjusted debt to EBITDA for the company declined to 5.0x, from 5.6x at year-end 2009; adjusted funds from operations to debt reached 11.6%. At this stage, S&P anticipates key credit measures to continue strengthening slightly this year. S&P aims to resolve the CreditWatch placement before the year end, after further discussion with Rexel's management. S&P's assessment will reconsider primarily the financial risk profile of the company in light of its expectations about future performance and Rexel's financial policy. S&P will assess whether S&P thinks Rexel can sustainably maintain credit metrics commensurate with a rating in the 'BB' category--most likely in the lower part of the category. ============= G E R M A N Y ============= CONTINENTAL AG: Moody's Assigns 'B1' Rating on Secured Notes ------------------------------------------------------------ Following the review of final documentation Moody's Investors Service has assigned a definite B1 rating to Continental's both tranches of secured notes of EUR625 million each maturing 2016 and 2018 issued by Conti-Gummi Finance B.V. guaranteed by Continental AG and certain subsidiaries of Continental AG. The corporate family rating of Conti remains at B1 with a stable outlook. Ratings Rationale Proceeds of the notes issuance will be used to refinance part of the outstanding pro-forma debt of EUR6.0 billion (as per June 30, 2010 taking into account the impact of the usage of the net proceeds from the issuance of the EUR750 million notes issued in July 2010 and the EUR1 billion notes issued in September 2010) drawn under the company's syndicated credit facilities due August 2012. Given the maturity of 6- and 8-years the notes further lengthen the uneven debt structure of Conti as well as further reduce the still high reliance on bank financing. Conti's short term liquidity is good reflecting limited debt maturities for the next 12 months, a sizable cash position (more than EUR1.2 billion as of June 30, 2010) and notable availability under its revolving credit facility as well as cash outflows for capital expenditure. The headroom under the company's covenant test is comfortable following the successful rights issue which was used to reduce indebtedness and the re-setting agreed with its lending banks in December 2009. Both secured senior notes will benefit from the same security package as the currently outstanding secured bonds and the existing syndicated credit facility and rank effectively pari passu with this debt. All this debt will benefit from guarantees of subsidiaries of Continental AG representing more than 75% of consolidated revenues, assets and EBITDA. Moreover, the notes will also be secured by shares of operating subsidiaries. Under Moody's Loss Given Default Methodology this results in the provisional B1 rating for senior secured notes which is at the same level as the existing bond rating as well as the corporate family rating of Conti. Assignments: Issuer: Conti-Gummi Finance BV -- Senior Secured Regular Bond/Debenture, Assigned 51 - LGD4 to B1 Regulatory Disclosures Information sources used to prepare the credit rating are these: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service's information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating. The rating has been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. ============= I R E L A N D ============= ALLIED IRISH: Sale of 22.4% Stake in M&T to Raise US$2 Billion -------------------------------------------------------------- Joe Brennan at Bloomberg News reports that Allied Irish Banks Plc, the lender being taken over by Ireland's government, said it will raise about US$2 billion from the sale of its 22.4% stake in U.S. lender M&T Bank Corp. to meet stricter capital requirements. Bloomberg relates the Dublin-based bank said in a statement late Tuesday it will offer 26.7 million notes at US$77.50 apiece that will be exchanged for shares in M&T by Nov. 15. It plans to hold a meeting of shareholders on Nov. 1 to seek their approval, Bloomberg discloses. The government said last week it would take majority ownership of Allied Irish, which has been directed by the nation's financial regulator to raise EUR10.4 billion by the year-end to meet new capital standards, Bloomberg recounts. According to Bloomberg, the bank said exchange of the notes, consisting of Allied Irish debt, into Buffalo, New York-based M&T shares will be mandatory. The proposed disposal is expected to generate about EUR900 million of "equivalent equity capital," the bank, as cited by Bloomberg, said. Morgan Stanley and Citigroup Inc. are underwriters for the notes offering, Bloomberg discloses. Allied Irish Banks, p.l.c., together with its subsidiaries -- <http://www.aibgroup.com/>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: Robert Wilmers Resigns From Board ----------------------------------------------- Bloomberg News reports that Allied Irish Banks Plc said Robert Wilmers resigned from the board, effective immediately. According to Bloomberg, Kieran Crowley also indicated his intention to resign from the board on Oct. 13. Allied Irish Banks, p.l.c., together with its subsidiaries -- <http://www.aibgroup.com/>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. ========= I T A L Y ========= PROGRAMMA DINAMICO: Fitch Affirms Ratings on Notes at 'Csf' ----------------------------------------------------------- Fitch Ratings has affirmed Programma Dinamico S.p.A.'s notes, due May 14, 2012, and assigned a Recovery Rating: -- EUR4,542,000, Programma Dinamico S.p.A.'s (CSFB PV2) notes, due 14 May 2012, (ISIN IT0003288120): affirmed at 'Csf'; assigned a recovery rating of 'RR2'. Following the default of two of the transaction's three charged assets, Eolo 2006-2 and Eolo 2006-3, on 24 September 2009, Fitch views a default of the transaction as inevitable (as per Fitch's first dollar of loss rating definition). The charged assets were purchased with the initial proceeds from the transaction's issuance. Losses have been realized on the charged assets; therefore, regardless of how the credit default swap portfolio performs, a loss on the rated note at maturity seems inevitable. The remaining charged asset is rated 'AAA' by Fitch. The vast majority of rated notes have been redeemed at the option of the noteholders. Approximately EUR4.5 million of the initial EUR230 million of notes is currently outstanding. The remaining total amount of charged assets, EUR3.4 million, is currently sufficient to redeem approximately 75% of the remaining par amount of EUR4.5 million. Further credit losses on the credit default swap or a loss on the remaining charged asset could push the recovery lower. The charged assets are supplemented by an equity option that has been disregarded in Fitch's analysis. Programma Dinamico S.p.A. is a joint stock company with limited liability incorporated under the laws of Italy. At close in May 2002, it issued EUR230 million credit-linked notes due 2012. It used the proceeds to collateralize a credit default swap with Credit Suisse International. The swap initially referenced an equally weighted reference portfolio of 284 corporate reference entities. Fitch has assigned an Issuer Report Grade of 'One Star' to the issuer to reflect its poor investor reporting. Fitch does not receive any regular reporting for this transaction. It only receives ad hoc notifications such as buyback notices and information on charged assets upon request. WIND TELECOMUNICAZIONI: Fitch Puts Low-B Ratings on Positive Watch ------------------------------------------------------------------ Fitch Ratings has placed Wind Telecomunicazioni Spa on Rating Watch Positive. Debt issued by Wind Finance SL S.A, Wind Acquisition Finance S.A and Wind Acquisition Holdings Finance Spa have also been put on RWP. This follows VimpelCom's announced plan to acquire Weather Investments, which is a 100% shareholder in Wind. A full breakdown of ratings is provided at the end of this commentary. VimpelCom Ltd., a telecoms company primarily operating in Russia and CIS, will acquire Weather Investments except some minor assets that are to be spun off. As a result of this transaction, VimpelCom will acquire full control over Wind. VimpelCom is seeking to turn itself into an integrated international telecoms operator which makes Wind - the third largest mobile operator and the largest fixed-line alternative operator in Italy - a strategic asset for VimpelCom. VimpelCom estimates that pro-forma leverage, as of end-June 2010, would have risen to 2.3x-2.5x net debt/EBITDA. Notwithstanding the acquisition VimpelCom will remain strongly free cash flow- generative, retaining substantial flexibility to deleverage to its target below 2x net debt/EBITDA. VimpelCom's credit profile is also likely to remain significantly stronger than that of Wind. Wind creditors will be entitled to a change of control put option if the transaction proceeds as planned. However, in view of VimpelCom's stronger credit quality than that of Wind stand-alone, creditors may economically benefit if they do not exercise, mitigating refinancing risks for VimpelCom. VimpelCom and Weather Investment will be seeking waivers from Wind creditors in the coming weeks. Wind will remain a partially ring-fenced entity protecting creditors from excessive shareholder distributions but also limiting VimpelCom's access to Wind's cash flows which, Fitch believes, VimpelCom is likely to be interested in changing. VimpelCom did not disclose its strategy regarding debt at Wind level. However, given Wind's strategic importance to VimpelCom and likely cross-default provisions in VimpelCom's debt (Wind will be consolidated into VimpelCom's accounts), VimpelCom is likely to help address refinancing issues at Wind level and at some point may engineer a switch to funding at the parent level as it seeks to reduce interest payments across the group. The transaction is subject to regulatory approvals, and both VimpelCom and Weather Investments shareholders can abandon this deal at no penalty. Fitch will resolve the watch once the transaction is finalized and there is more information on VimpelCom's strategy regarding Wind's debt and how much debt has been accelerated due to change of control provisions. These ratings have been put on RWP: -- Wind Telecomunicazioni Spa's Long-term Issuer Default Rating 'BB-', Short-term IDR 'B', senior secured facilities 'BB+' -- Wind Finance SL S.A's second lien facilities 'BB+' -- Wind Acquisition Finance S.A's senior notes 'B+' -- Wind Acquisition Holdings Finance S.A.'s senior PIK notes 'B' =================== L U X E M B O U R G =================== KERNEL HOLDING: Fitch Assigns 'B' LT Issuer Default Ratings ----------------------------------------------------------- Fitch Ratings has assigned Luxembourg-incorporated agricultural commodity producer and exporter Kernel Holding S.A. Long-term foreign and local currency Issuer Default Ratings of 'B' and 'B+', respectively. Fitch has also assigned Kernel a National Long-term rating of 'AA+'(ukr). The Outlooks for the Long-term IDRs and National Long-term rating are Stable. The Long-term IDRs reflect the vertically integrated nature of the company, its conservative approach to trading market risk, as well as its track record of maintaining stable operating profit margins of approximately 16-17% in the past three financial years despite swings in market prices over the period FY07-FY09. Additionally, leadership market positions in the Ukraine in the concentrated industries of grain procurement and export, bottled sunflower oil sold domestically and exported bulk oil; a well balanced position between cash flow and debt by currency; as well as adequate liquidity to deal with seasonal working capital peaks, support the rating. Conversely, the ratings also take into account the high reliance of Kernel's sales on a limited number of large customers, high seasonal peaks for working capital and the company's growth ambitions, which could cause an increase of debt. Also, given its reliance on sourcing products in a single country, the company's profits are vulnerable in the event of a very weak harvest for grains and sunflower seed in the Ukraine, and are also vulnerable to a drop in international prices of grains and sunflower oil. Since 2006, the company has successfully grown the scale of its business by adding to its grain trading businesses an important network of silos in the fertile central-eastern part of Ukraine and two port facilities with direct access to the Black Sea. This infrastructure enables Kernel to better control both the procurement of grain and sunflower seed in the country as well as the export of grains and sunflower oil. Kernel is by far the largest producer of sunflower oil in the country, as it is close to reaching 2.3 million tonnes of sunflower seed annual crushing capacity in 2011. This manufacturing capacity, which operates for the export market of bulk product and for the local distribution of bottled oil for family consumption, gives the company pricing power and stability on profits. With FY10 (ending 30 June 2010) net lease adjusted leverage of 1.8x, Op. EBITDAR to fixed charges of 5.4x and an expected improvement in these metrics during FY11, the group's financial risk is considered average for its ratings. FY11 Op. EBITDAR should benefit from the first time full consolidation of the acquisition of Allseeds (completed in March 2010) and the gradual coming on-stream of the Bandurka crushing plant, thus potentially raising Op. EBITDAR to around US$230-US$250m (FY10: US$190m). The ratings assigned incorporate headroom for moderate acquisition spending and for the seasonal working capital peaks that the company typically experiences in December and March due to the build-up of sunflower seed inventories. Fitch calculates that the effect of working capital on debt at these dates can be as much as 1.0x annual EBITDA higher than fiscal year-end levels. In assessing the effect of these seasonal debt requirements on Kernel's leverage, the agency takes some comfort from the company's practice of signing a large proportion of annual oil sales contracts in conjunction with its oilseed purchases taking place between September and March. The Long-term foreign and local currency IDRs could benefit from a permanent reduction of gross lease adjusted leverage below 1.0x (excluding seasonal working capital-related debt peaks), maintenance of the current integrated business profile, reassurance that the company can maintain a good degree of positive annual FCF generation despite capex plans. A negative rating action could follow if gross lease adjusted leverage rises above 2.5x, as a result of debt-funded acquisition activity or, above 3.5x if calculated during the company's seasonal inventory peaks. Alternatively, a similar increase of leverage derived from a shock in the commodity markets and not normalizing back to credit metrics commensurate with the current 'B+' in the following 12 months, or a shortage of liquidity with respect to the company's projected peak requirements of working capital could also lead to a downgrade. ===================== N E T H E R L A N D S ===================== SIRENS BV: Fitch Affirms 'Bsf' Ratings on Four Tranches ------------------------------------------------------- Fitch Ratings has affirmed all outstanding tranches of SIRENS B.V. Series 2007-2, (Cargo II) notes as listed below. The transactions are commodities-linked credit obligations referencing 17 diverse commodities through a portfolio of 100 long and 100 short trigger swaps. -- AUD4 million class B1.a due 2012: affirmed at 'Bsf'; 'LS-5' -- US$31.5 million class B1.c due 2012: affirmed at 'Bsf'; 'LS-5' -- EUR50,000 class B1.d due 2012: affirmed at 'Bsf'; 'LS-5' -- EUR5 million class B1.e due 2012: affirmed at 'Bsf'; 'LS-5' The affirmation follows the stable performance of the transaction. Although none of the triggers are currently in breach, extreme price movements on just one commodity could cause the transaction to underperform. There is significant exposure to base metals in this transaction and they have not performed very well in the recent past. Base metals such as copper (11 long triggers in this transaction), lead (14 long triggers), nickel (15 long triggers), tin (13 long triggers) and zinc (14 long triggers) fell to their lowest levels (since deal closing) in Q4 2008 to Q1 2009. Prices of these base metals have since somewhat recovered; however, with 1.5 years remaining to maturity, a significant number of triggers could be in breach if prices were to fall back to similar levels. At closing, the issuer entered into commodities-linked trigger swaps with the swap counterparty, Credit Suisse International (CSI, 'AA-'/Outlook Stable/'F1+'), based on the provisions of the 2005 ISDA commodity definitions. Each trigger swap references a specific percentage of the closing price level of a single commodity, as specified in the documentation. The trigger swap portfolio comprises: (i) 100 European-style trigger swaps, for which the issuer sold protection to CSI (the long portfolio); and (ii) 100 European-style trigger swaps, for which the issuer bought protection from CSI (the short portfolio). Interest on the notes is derived from swap payments made by CSI under the agreement of the portfolio commodities swap. Investors are exposed to the risk of large negative price movements on the reference commodities with long triggers. The ratings address the payment of timely interest and ultimate repayment of principal by final maturity, according to the transaction documentation. Fitch has assigned an Issuer Report Grade of 'One Star' to the issuer to reflect its poor investor reporting. Fitch does not receive any regular reporting for this transaction. It only receives information from the arranger on redemptions and charged assets upon request. =========== R U S S I A =========== VIMPELCOM OJSC: Weather Deal Cues Moody's Review on 'Ba2' Ratings ----------------------------------------------------------------- Moody's Investors Service has placed the Ba2 ratings of VimpelCom OJSC on review for possible downgrade in response to the recent announcement about the merger between VimpelCom Limited (which owns VimpelCom OJSC) and Weather Investments SpA (not rated) to create the world's fifth-largest mobile telecoms company by number of subscribers. At the same time, Moody's has also taken these rating actions on the rated subsidiaries of Weather: the B2 rating of Orascom Telecom Holdings s.a.e. has been placed on review with direction uncertain, having previously been on review for downgrade; and the outlook on the Ba3 rating of Wind Telecomunicazioni SpA has been changed to developing from negative. Under the terms of the transaction with Weather, VimpelCom Limited will own 51.7% of Orascom Telecom and 100% of Wind in exchange for a cash consideration of US$1.8 billion and a 20% economic interest in the enlarged VimpelCom group. The cash considerations will be financed from VimpelCom's existing cash and new debt. A number of assets -- including the 35% stake in ECMS (Egypt), 75% stake in Koryolink (North Korea) and some of Orascom Telecom's sub-sea cable and internet portal assets, also including the Libero internet portal, Wind International Services, and one of Wind's sub-sea cable operation -- will be de-merged after the transaction has closed. Although the financing structures at Wind and Orascom Telecom have not yet been clearly defined, Moody's notes that the merger announcement stipulates the retention of existing ring-fencing structures as well as the refinancing of certain debt within the Weather group. Specifically, VimpelCom plans to refinance part of Orascom Telecom's holding company debt with an Intercompany loan. In addition, Moody's understands that the transaction will trigger certain change of control provisions over existing debt within the Weather group and that waivers will consequently be sought. The companies expect the transaction to be completed in Q1 2011, and the de-merger of Orascom Telecom and Wind assets to be finalized by Q3 2011. Moody's review for the possible downgrade of VimpelCom's ratings will focus on the extent to which the numerous benefits of the deal for VimpelCom will offset the potentially higher business risk associated with some of Weather's assets, as well as the financial implications for VimpelCom OJSC of the funding and future cash flow needs within the group structure. The merger will be positive for VimpelCom in terms of the enhancement of the scale and scope of the combined operations, the exposure of VimpelCom to an international footprint and the potential synergies and deleveraging to be achieved. Moreover, Moody's also notes that the transaction is priced at relatively moderate multiples compared with recent industry deals. Moody's decision to change the outlook on Wind's ratings to developing from negative reflects the potential benefits that Wind will derive from being part of a more stable and financially sound telecoms group. The developing outlook also reflects the company's continued limited financial flexibility and headroom within the existing rating category. Moody's has decided not to place the group on review at this stage in light of the announcement that the existing financial arrangements (and ring- fencing) within Wind will be retained. Moody's will continue to closely monitor the operating performance of the company going forward and will resolve the outlook once there is sufficient clarity on the progress of the transaction. Moody's decision to change Orascom Telecom's status from being on review for possible downgrade to being on review with direction uncertain reflects the potential for wider rating changes compared to Wind. Orascom Telecom's previous status of review for possible downgrade was based on concerns about the immediate parent's (OTH) liquidity profile, but the change in the review status indicates that these concerns could potentially be alleviated upon the completion of the transaction and associated refinancing initiatives at the Orascom Telecom level. Should the deal fail to succeed or completion be materially delayed, then Moody's believes that the existing liquidity pressures on Orascom Telecom's ratings would likely result in a downgrade. The review process will focus on (i) the implications of the transaction on Orascom Telecom's standalone financial risk profile following the refinancing of Orascom Telecom's existing debt and the disposal of assets -- the proceeds of which will flow out of the group -- and (ii) the impact of the ring-fencing from VimpelCom. The rating review process will also closely monitor the consent/waiver process that will need to be resolved with the Weather Group's existing creditors as a result of the trigger of the change in the control clauses. Moody's says that there could potentially be further rating actions as further clarity on the transaction materializes, particularly with regard to financial policies or the assumptions made in these actions. Headquartered in Moscow, Russia, VimpelCom OJSC is a leading Russian telecommunications operator, providing voice and data services through a range of wireless, fixed and broadband technologies. VimpelCom is the second-largest mobile operator in Russia, a leading operator in Kazakhstan and has a presence in Ukraine, Uzbekistan, Tajikistan, Armenia and Georgia. In 2009, the company launched operations in Vietnam and Cambodia. Following the acquisition of the leading Russian altnet, Golden Telecom, in early 2008, VimpelCom became one of Russia's largest integrated nationwide telecommunications providers. In 2009, VimpelCom OJSC generated approximately US$8.7 billion in revenues and US$4.3 billion in reported EBITDA. Based in Italy, Wind Telecomunicazioni S.p.A is the country's leading integrated telecoms operator, active in the wireless market, the fixed-line voice, broadband and data services markets and the internet services market, including narrowband and portal services. The company's mobile business is the third-largest in Italy based on the number of subscribers. Wind is Italy's second- largest fixed-line operator in terms of revenue, and the country's second largest broadband provider, ranking behind Telecom Italia. In 2009, Wind generated approximately EUR5.7 billion in revenues EUR2.1 billion in EBITDA. Orascom Telecom Holding S.A.E. is a holding company with controlling interests in leading GSM mobile telecoms operations in Algeria, Egypt, Pakistan, Tunisia, Bangladesh, North Korea, and Africa (i.e. Zimbabwe, Burundi, the Central African Republic and Namibia). In addition, Orascom Telecom indirectly owns equity in Globalive Wireless, a Canadian entity that launched operations in December 2009. In 2009, Orascom Telecom generated approximately US$5.1 billion in revenues and US$2.2 billion in reported EBITDA. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. * Fitch Assigns 'BB' Rating on Russian City of Krasnoyarsk ---------------------------------------------------------- Fitch Ratings has assigned the Russian City of Krasnoyarsk's Long- term foreign and local currency ratings of 'BB', a Short-term foreign currency rating of 'B' and a National Long-term rating of 'AA-(rus)'. The Outlooks for the Long-term ratings are Stable. The ratings reflect the strong economy of Krasnoyarsk, its sound budgetary performance, relatively high capital expenditure and potential financial support from the Krasnoyarsk region ('BB+'/Stable). However, they also factor in the temporary deterioration in budgetary performance in 2009 and short-term direct risk. Continuous deterioration in budgetary performance and/or a significant weakening of debt coverage would be negative for the ratings. On the other hand, stabilization of budgetary performance at operating margins above 15%, coupled with manageable debt levels, would be positive for the ratings. Krasnoyarsk recorded sound, albeit volatile, budgetary performance with operating margin averaging 17.8% in 2005-2008. Declining tax revenue in 2009, due to a weaker economy, caused the operating balance to shrink to RUB1.7 billion from RUB3.8 billion a year earlier. However, the city still recorded a robust 9.2% operating margin in 2009. Fitch expects the city to restore its operating margin to 13%-14% in 2010 and further improve it to 15% over the 2011-2012 as the economy improves. The city recorded high capital expenditure in 2007-2008, which was partially funded by capital transfers from the regional budget. This helped to mitigate the negative revenue shock of 2009, although the city's capex cut by 35% during the same period helped contain further debt increase. Nevertheless, capex accounted for a still high 23.8% of total expenditure in 2009. Rigid expenditure items (staff costs and social subsidies) totaled 64% of operating expenditure in 2009, which was partly offset by the earmarked grants from the Krasnoyarsk region. The city's direct risk increased since 2008 but remained manageable at 23% of current revenue at end-2009. The city managed to reduce debt during Q1-Q310 to RUB3.1 billion, down from RUB4.1 billion at the beginning of 2010. Most of its liabilities consist of budget loans from the Krasnoyarsk region, which bear low interest. The majority of its debt matures within 18 months although the city has a RUB3.6 billion unused bank credit line, mitigating refinancing risk. Fitch expects Krasnoyarsk's direct risk to amount to about 25% of current revenue in 2010 and to gradually decline to 22% over the next three years. Krasnoyarsk is located in eastern Siberia on the Yenisei River. The city is the capital of the of Krasnoyarsk region, one of the top 10 Russian regions by gross regional product and the second- largest Russian region by area. With a population about 964,700 the City of Krasnoyarsk is one of the largest in the eastern part of Russian Federation. ========= S P A I N ========= AYT COLATERALES: Moody's Puts (P) C (sf) Rating on Class D Notes ---------------------------------------------------------------- Moody's Investors Service has assigned provisional credit ratings to these classes of notes issued by AyT Colaterales Global Hipotecario Caja Vital I, FTA: -- (P) Aaa (sf) to the euro 175,300,000 Class A Mortgage Backed Floating Rate Notes due 2047 -- (P) Ba3 (sf) to the euro 12,600,000 Class B Mortgage Backed Floating Rate Notes due 2047 -- (P) B3 (sf) to the euro 8,200,000 Class C Mortgage Backed Floating Rate Notes due 2047 -- (P) C (sf) to the euro 3,800,000 Class D Mortgage Backed Floating Rate Notes due 2047 Ratings Rationale The ratings of the notes takes into account the credit quality of the underlying mortgage loan pool, from which Moody's determined the MILAN Aaa Credit Enhancement and the portfolio expected loss, as well as the transaction structure and any legal considerations as assessed in Moody's cash flow analysis. The expected portfolio loss of 3.50% and the MILAN Aaa required Credit Enhancement of 14.00% served as input parameters for Moody's cash flow model, which is based on a probabilistic lognormal distribution as described in the report "The Lognormal Method Applied to ABS Analysis", published in September 2000. The key drivers for the MILAN Aaa Credit Enhancement number, which is lower than other prime Spanish RMBS deals with High Loan to Value (HLTV) ratios, are (i) the weighted-average current LTV of 83.14%, with 67.86% of loans above 80% LTV and 21.93% of loans above 90% LTV (no loans above 100% LTV), (ii) the relatively high borrower concentration (top 20 represents 4.53%) and geographical concentration (Basque Country represents 56.92%) and (iii) the weighted average seasoning of 5.13 years. The key drivers for the expected loss are (i) the already available performance for this very same transaction, which is better than the average reported in the Spain index, (ii) the static historical information on delinquencies and recoveries received from the originator for its global mortgage book and (iii) the weak economic conditions in Spain. Given the historical performance of the transaction and the originator's mortgage book, Moody's believes the assumed expected loss is appropriate for this transaction. The strengths of the structure are (i) a reserve fund fully funded upfront equal to 1.57% of the initial notes balance (it currently represents 1.79% of the outstanding balance of the notes) to cover potential shortfall in interest and principal, and (ii) a strong interest rate swap in place which provides a guaranteed excess spread (0.50%) above Euribor to the transaction. The rating addresses the expected loss posed to investors by the legal final maturity of the notes. In Moody's opinion, the structure allows for timely payment of interest and principal with respect of the classes of notes A, B and C by the legal final maturity, and payment of interest and principal with respect of the class of notes D by the legal final maturity. Moody's ratings only address the credit risk associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. The transaction closed in July 2007 and was initially not rated by Moody's. The initial notes balance issued at closing (shown above next to the assigned rating)) amounted to EUR199 million. The outstanding notes balance as of the last payment date in May 2010 amounts to EUR175 million. Moody's rating analysis of the notes is based on the transaction structure after the last payment date in May 2010. The next payment date will take place in November 2010. The V Score for this transaction is Medium, which is in line with the V score assigned for the Spanish RMBS sector. Only three sub components underlying the V Score deviate from the average for the Spanish RMBS sector. Issuer/Sponsor/Originator's Historical Performance Variability is Low/Medium, which is lower than the Medium V score assigned for the Spanish RMBS sector for this sub component because the performance is better than the average reported in the Spain index. The Sector's Historical Downgrade Rate and Transaction Complexity are assessed as Medium, which are higher than the Low/Medium V score assigned for the Spanish RMBS sector for those sub components. This is due to the exposure of the transaction to HLTV's which have suffered more downgrades than traditional mortgages pools in recent years and because HLTV loans are more exposed to house price declines. V-Scores are a relative assessment of the quality of available credit information and of the degree of dependence on various assumptions used in determining the rating. High variability in key assumptions could expose a rating to more likelihood of rating changes. The V-Score has been assigned accordingly to the report "V-Scores and Parameter Sensitivities in the Major EMEA RMBS Sectors" published in April 2009. Moody's Parameter Sensitivities: the model output indicated that Class A would have achieved Aaa even if expected loss was as high as 10.5% (3.0x base case) assuming Milan Aaa CE at 14.0% (base case) and all other factors remained the same. Classes B, C and D would have achieved The model output further indicated that the Class A would not have achieved Aaa with Milan Aaa CE of 16.8% (1.2x base case), and expected loss of 3.5% (base case). Classes B, C and D would have achieved Ba3, B3 and Moody's Parameter Sensitivities provide a quantitative/model- indicated calculation of the number of rating notches that a Moody's structured finance security may vary if certain input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged and is not intended to measure how the rating of the security might migrate over time, but rather how the initial rating of the security might have differed if key rating input parameters were varied. Parameter Sensitivities for the typical EMEA RMBS transaction are calculated by stressing key variable inputs in Moody's primary rating model. Moody's Investors Service received and took into account a third party due diligence report on the underlying assets or financial instruments in this transaction and the due diligence reports had a neutral impact on the rating. Regulatory Disclosures The rating has been disclosed to the rated entity or its designated agents and issued with no amendment resulting from that disclosure. Information sources used to prepare the credit rating are these: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information. Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating. Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. =========== T U R K E Y =========== * Moody's Gives Positive Outlook on Istanbul's 'Ba2' Rating ----------------------------------------------------------- Moody's Investors Service has changed the outlook on the Ba2 issuer rating of Istanbul Metropolitan Municipality to positive from stable. At the same time, Moody's has also changed the outlook on the Ba2/A3.tr issuer ratings of Turkey's Housing Development Administration (Toplu Konut Idaresi Baskanligi) to positive from stable. The rating action follows the recent decision of Moody's Sovereign Risk Group to change the outlook on Turkey's sovereign rating of Ba2 to positive from stable. "The action on Turkey's sovereign rating impacts the ratings of both Istanbul and TOKI, because they display close operating and financial links with the Turkish government" says Francesco Soldi, Moody's sub-sovereign analyst. Istanbul's rating reflects its strategic role in the national economy, its active fiscal management and some fiscal flexibility, mainly on the capital side of its budget. Furthermore, Istanbul has a robust balance sheet, including valuable real and financial assets. Growing state resources and the active management of municipal-related companies have so far helped Istanbul to manage expenditure pressures and to consolidate robust operating surpluses. Notwithstanding the large operating surpluses, the implementation of its large investment program has led to a high and rapidly growing debt burden (both direct and indirect). At year-end 2009, Istanbul direct debt amounted to US$2.1 billion, equivalent to approximately 80% of operating revenue for the year. TOKI is a not-for-profit public sector entity that operates under a mandate from the central government and direction of the prime minister's office. TOKI's ratings are underpinned by its public status and strategic role in executing the government's housing policies. Furthermore, the current ratings reflect the positive financial results recorded in the past few years, which were supported by the substantial expansion of the company's assets. Cash reserves have been partially reconstituted in 2009, following a recent depletion, and the company has been able to contain its borrowing requirements. Going forward, Moody's expects that TOKI will manage the execution of its large investment program and the projected increase in leverage without significantly impairing its finances, in a context of a stable legal framework and continued sponsorship and oversight by the central government. Moody's last rating action on Istanbul was implemented on January 8, 2010, when the rating agency upgraded the issuer rating to Ba2 from Ba3, with a stable outlook. Moody's last rating action for TOKI was also implemented on January 8, 2010, when its issuer ratings were upgraded to Ba2/A3.tr from Ba3/Baa1.tr, with stable outlook. * Moody's Gives Positive Outlook on Turkey's 'Ba2' Rating --------------------------------------------------------- Moody's Investors Service has changed the outlook on Turkey's Ba2 local and foreign currency government bond ratings to positive from stable. Moody's decision to change the outlook was prompted by improvements in the country's economic and fiscal resilience, relative to when the rating agency last upgraded Turkey's rating in January 2010. In a related action, Moody's has also changed the outlooks on Turkey's Ba1 foreign currency bond ceiling and the Ba3 foreign currency deposit ceiling to positive from stable. The foreign currency bond and deposit ceilings are the highest possible ratings that may be assigned to Turkish foreign currency bonds and deposits, respectively. Rationale for Outlook Change "Turkey's economy has proven to be unexpectedly robust and has recovered to pre-crisis levels," says Sarah Carlson, Moody's Vice President - Senior Analyst and lead sovereign analyst for Turkey. "Moody's is revising upwards its forecasts for real GDP growth to 6.5% this year and 5% in 2011." Accordingly, the country's deficit and debt levels have improved beyond the targets set in the government's 2010-12 Medium-Term Plan. Ms. Carlson explains that a potential upgrade to Ba1 is contingent upon a further strengthening of Turkey's fiscal fundamentals, particularly in light of the country's significant external vulnerabilities, such as its large current account deficit and its reliance on portfolio investment flows, rather than foreign direct investment, to fund the current account deficit. "The challenge now is for Turkey to once again register larger primary surpluses and continue to reduce its debt levels in order to further bolster its resilience to external shocks," says Ms. Carlson. Moody's last rating action on Turkey was implemented on January 8, 2010, when the rating agency upgraded Turkey's government bond rating to Ba2 from Ba3, the foreign currency bank deposit ceiling was raised to Ba3 from B1, and the outlook on all the ratings and ceilings was changed to stable from positive. Prior to that, Moody's last rating action on Turkey was implemented on September 18, 2009, when the rating agency assigned a positive outlook to the Turkish government's Ba3 foreign and local currency ratings and the B1 country ceiling for foreign currency bank deposits. =========================== U N I T E D K I N G D O M =========================== BGROUP: Goes Into Liquidation as Revenues Continue to Drop ---------------------------------------------------------- Peter McCusker at The Journal reports that creative and marketing agency the bgroup has been placed into voluntary liquidation amid plummeting revenues. The Journal says the Newcastle office of business recovery experts Begbies Traynor is handling the insolvency with owner Si Bales saying it has no "massive debts" and its largest creditor is owed "around GBP5,000". "I have had the agency for ten years and we continued to grow as the public sector grew. However, the massive cuts in the public sector have presented severe challenges to the business," The Journal quoted Ms. Bales as saying. "At our peak we employed over 20 people but numbers have gradually declined and the liquidation saw four people made redundant," Ms. Bales added. The Journal relates Andrew Haslam, North East partner at Begbies Traynor, said it will be holding a creditors meeting in the coming weeks. According to the Journal, bgroup's sister company bdaily, which operates a business events Web site, continues to trade after moving into new offices. Bgroup is a Newcastle-based creative and marketing agency. BMI BRITISH: Going Concern Doubt Remains; Losses Widen in 2009 -------------------------------------------------------------- BMI British Midland Airways has warned there are still doubts about whether it can continue as a going concern after it reported losses had widened to just under GBP200 million (US$317 million), Pilita Clark writes for The Financial Times. According to the FT, previously unpublished accounts released on Wednesday showed that the Lufthansa-owned airline made a pre-tax loss of GBP198 million in the year to the end of December 2009, compared with a GBP181 million loss in 2008. The airline issued a similar warning about its ability to continue when it reported its 2008 annual results, the FT notes. As reported by the Troubled Company Reporter-Europe on April 15, 2010, The Financial Times said speculation that loss-making BMI might be dismembered or sold off rose last year after its auditors cast doubt on its ability to continue as a going concern. The FT disclosed Wolfgang Prock-Schauer, the new chief executive of BMI British Midland, said he could not rule out a possible sale of BMI at some point in the future, given the constantly changing state of the aviation industry. The FT noted Mr. Prock-Schauer confirmed that, as part of its recovery plans, BMI had sold a number of slots to other airlines in the Lufthansa group, which recently acquired Brussels Airlines and Austrian Airlines, having taken over Swiss in 2005. Mr. Prock-Schauer, as cited by the FT, said BMI is focusing on a GBP100 million (US$154 million) restructuring plan aimed at turning the carrier round after it suffered a GBP156 million loss in 2008 and an even worse deficit in 2009. The plan involves 800 redundancies, cutting the aircraft fleet by 10 and eliminating unprofitable routes, according to the FT. British Midland Airways, which does business as bmi, -- <http://www.iflybritishmidland.com/>http://www.iflybritishmidland.com/-- carries passengers to some 30 countries, mainly in the UK but also in continental Europe, the Middle East, Asia, and Africa. It operates a fleet of about 50 jets, including Airbus and Embraer models. Low-fare subsidiary bmibaby serves about 30 destinations in Europe with a fleet of about 20 Boeing 737s. bmi is a member of the Star Alliance global marketing group, which includes UAL's United Airlines, Air Canada, and Singapore Airlines. In mid-2009, fellow Star Alliance member and global airline giant Lufthansa acquired majority ownership of bmi. BRITISH AIRWAYS: Passenger Traffic Up 1.3% in September 2010 ------------------------------------------------------------ British Airways reported some of its strongest passenger numbers since 2008, Pilita Clark writes for The Financial Times. According to the FT, overall passenger traffic as measured by revenue passenger kilometer, or the number of fare-paying passengers multiplied by the distances they fly, rose 1.3% in September compared with a year earlier. More importantly for investors, there was a 4.3% increase in BA?s profitable first and business class traffic, which make up about 13% of all passengers but more than 40% of revenues, the FT says. The FT notes analysts noted that these premium traffic figures were always expected to be strong because they were being compared with a weak month last year. About British Airways Headquartered in Harmondsworth, England, British Airways Plc, along with its subsidiaries, (LON:BAY) -- <http://www.ba.com/>http://www.ba.com/-- is engaged in the operation of international and domestic scheduled air services for the carriage of passengers, freight and mail and the provision of ancillary services. The Company's principal place of business is Heathrow. It also operates a worldwide air cargo business, in conjunction with its scheduled passenger services. The Company operates international scheduled airline route networks together with its codeshare and franchise partners, and flies to more than 300 destinations worldwide. During the fiscal year ended March 31, 2009 (fiscal 2009), the Company carried more than 33 million passengers. It carried 777,000 tons of cargo to destinations in Europe, the Americas and throughout the world. In July 2008, the Company's subsidiary, BA European Limited (trading as OpenSkies), acquired the French airline, L'Avion. * * * As reported in the Troubled Company Reporter-Europe on March 19, 2010, Moody's Investors Service lowered to B1 from Ba3 the Corporate Family and Probability of Default Ratings of British Airways plc; and the senior unsecured and subordinate ratings to B2 and B3, respectively. Moody's said the outlook is stable. This concludes the review that was initiated on November 10, 2009. The rating action reflects Moody's view that credit metrics will not be commensurate with the previous rating category in the medium term. Moody's expect furthermore that metrics will be burdened in the foreseeable future by the company's significant pension deficit, which was at GBP2.6 billion for the APS and NAPS schemes combined as of September 2009 (under IAS). Moody's nevertheless understand that under the current agreement with the trade unions, the cash contributions to these deficits will be frozen at GBP330 million per year for three years, subject to approval by the Pensions Regulator and the trustees. CROWN CURRENCY: MoneySavingExpert.com Hires Insolvency Expert ------------------------------------------------------------- MoneySavingExpert.com has hired an insolvency expert to help victims of the collapsed Crown Currency Exchange fight for their GBP20 million back, Guy Anker at MoneySavingExpert.com reports. "Our move is a result of swathes of worried customers asking for help on our forum as the sector is unregulated and there is no compensation scheme to refund victims," MoneySavingExpert.com said. "There is also no chance of refunds via card companies as Crown only accepted payment by bank transfer, cash or cheque." According to MoneySavingExpert.com, the joint administrators, MCR and SPW, will place consumers among those at the bottom of the list of creditors when the companies' assets are dished out by a liquidator (normally the same firm doing the administration). The process of distributing those assets could take more than six months, MoneySavingExpert.com says. MoneySavingExpert.com said: "Preliminary findings suggest the chances of increasing that payout via our action are limited but our aim is to ensure no stone is left unturned in the pursuit of refunds." "David Kaye, from insolvency firm Crawfords, will produce an independent report for us, which we will publish on this site, within the next two weeks," MoneySavingExpert.com added. As reported in the Troubled Company Reporter-Europe on Oct. 6, 2010, BBC News said thousands of people face uncertainty over travel money after Crown Currency Exchange went into administration. Crown Currency blamed the downturn in the travel market. Administrators from MCR and SPW were appointed on Oct. 4, 2010. Administrators MCR said that an estimated 13,000 consumers would be directly affected. The administrators said that these people should not expect an early resolution in the case and a quick return of money. About Crown Currency Headquartered in Hayle, Cornwall, Crown Currency Exchange is one of the UK's biggest foreign exchange websites. The business was established by husband and wife Peter and Susan Benstead five years ago. CRU INVESTMENT: CISX Freezes 11 Arch Cru Sub-Funds -------------------------------------------------- John Kenchington at MoneyMarketing reports that the administrators of Arch Cru fund, marketed by Cru Investment Management, are furious after the Channel Islands Stock Exchange froze trading in 11 sub-funds, throwing plans to recover UK investors' savings into chaos. MoneyMarketing says the suspensions -- announced on October 5 -- have derailed tender processes to sell the funds' assets off that have been worked on over a number of months. According to MoneyMarketing, sources said the administrators were on the brink of tendering the assets of five of the 11 funds in a move that would have returned as much as GBP18 million to Arch Cru investors. MoneyMarketing relates the share freeze also makes it difficult for the administrators to engineer tender offers to liquidate the other six funds, as such work requires the funds to be actively trading. MoneyMarketing discloses that the suspension came after Ernst & Young issued a report and accounts for the year to March 30, 2010, for the sub-funds on September 30. The accountancy firm, according to MoneyMarketing, said it was confident of its valuation of the assets as at March 30, 2010, but qualified that it could not be confident of previous work carried out for year to March 30, 2009. This triggered the alarm at the CISX which suspended the funds on October 5 despite frantic talks with the Arch Cru board who insisted the 2009 accounts are no longer relevant, MoneyMarketing notes. MoneyMarketing discloses that investors placed GBP400 million in the Arch Cru fund range, which was invested in questionable assets including ships, property and private equity via a series of sub- funds listed on the CISX. However, MoneyMarketing relates, the funds were suspended by their administrator Capita in 2009 amid a lack of liquidity. According to MoneyMarketing, some of the funds have now been liquidated by administrators but it is thought it could now take months to sell off the remaining 11 now they have been suspended. As reported in the Troubled Company Reporter-Europe in March 12, 2010, Cru Investment Management has been wound up in the High Court. The court decided to subject the firm to a creditors voluntary liquidation order. Investec Asset Finance asked to withdraw a winding-up petition it filed against Cru because it was advised that the company had filed for voluntary liquidation on February 12. Had Investec not withdrawn the request, an official receiver would have been appointed and the government would have taken a 17% cut of any assets realized from the company. FLOOKS HAULAGE: In Liquidation; Purnells Appointed as Liquidators ----------------------------------------------------------------- Joanna Bourke at Roadtransport.com reports that Flooks Haulage has entered into liquidation with a total deficiency of GBP138,073, after suffering a slump in work. The Company appointed Leigh-Jane Homes and Susan Purnell of Purnells as joint liquidators of the business on September 23. Roadtransport.com, citing the Flooks Haulage's statement of affairs filed at Companies House, discloses that just GBP1,877 in assets were available for preferential creditors. "The main reason for us going under was a dramatic decline in work available to us. Sadly all nine employees were made redundant," a spokesman for Flooks Haulage told Roadtransport.com. Blaenavon-based Flooks Haulage -- <http://www.flookshaulage.co.uk/>http://www.flookshaulage.co.uk/ -- offers nationwide distribution and both same day and next day courier services throughout the UK. LIVERPOOL FOOTBALL: Board Willing to Sell Club for GBP300 Million ----------------------------------------------------------------- Tariq Panja at Bloomberg News reports that Liverpool Football Club's board agreed to sell the soccer club to John W. Henry's Boston Red Sox holding company over the objections of owners Tom Hicks and George Gillett, who vowed to resist an offer they said is too low. Bloomberg relates the board reviewed two offers on Wednesday, and accepted the one from New England Sports Ventures. It will pay about GBP300 million (US$476 million) for the club, Liverpool Chairman Martin Broughton said in an interview, adding he expected to deal to be completed in about a week, according to Bloomberg. Bloomberg says the sale is subject to Premier League approval and a legal challenge from Messrs. Hicks and Gillett. The owners said earlier on Wednesday that the offers "dramatically undervalue the club" and they will "resist any attempt" to sell without their agreement. Bloomberg notes Liverpool said NESV's offer wipes out the acquisition debt. In April that figure was GBP237 million and had ballooned to GBP280 million because of penalty fees linked to an extension granted to the owners by Royal Bank of Scotland Group, Bloomberg states. NESV will pay down all the GBP200 million Messrs. Hicks and Gillett raised from RBS to buy the club, Bloomberg discloses. The remaining GBP37 million will remain on the bank's books in ongoing credit facilities, Bloomberg says. Messrs. Hicks and Gillett remain liable for the GBP40 million in penalty fees and it's unclear what will happen to the GBP144.4 million loaned to the club by its current owners, Bloomberg discloses. Messrs. Hicks and Gillett, who said they've invested US$270 million in cash since buying the club, face a mid-October deadline to sell or refinance their GBP280 million debt to RBS, Bloomberg relates. The government-controlled lender could have taken control of the club had a sale agreement not been reached, Bloomberg notes. About Liverpool Football 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. TUI AG: TUI Travel's Holiday Bookings Back on Track --------------------------------------------------- BBC News reports that TUI Travel, a unit of TUI AG, has said that holiday bookings are back on track, thanks to poor north European weather and the failure of rivals. According to BBC, the travel firm has seen particularly strong growth in Scandinavia, with bookings up 17% on a year ago. In the UK, bookings are up 5%, with Brits tending to leave booking their holidays until later in the year, BBC says. BBC notes TUI said the majority of its programs were now almost fully sold and it was confident of hitting year-end targets. As reported by the Company Reporter-Europe on Sept. 3, 2010, Bloomberg News, citing Financial Times Deutschland, said that TUI AG is weighing the purchase of the shares it doesn't already own in TUI Travel. Bloomberg disclosed FTD said TUI Travel is on the agenda for a Sept. 9 board meeting of TUI, where directors of the German company will also discuss options for the possible sale of TUI's stake in the Hapag-Lloyd container line. TUI owns about 55% of the Crawley, England-based travel company, Bloomberg noted. TUI AG -- <http://www.tui-group.com/en/>http://www.tui-group.com/en/-- is a Germany-based company mainly engaged in the tourism sector, focusing on the markets of Central, Northern and Western Europe. TUI owns a network of travel agencies and tour operators, including air tours, Thomson, First Choice and TUI Deutschland. It also operates several airlines, including Corsairfly, Thomsonfly and First Choice Airways, among others. The Company is structured into three segments: TUI Travel, TUI Hotels and Resorts, and Cruises. TUI Travel comprises the Company's distribution, tour operating, airline and incoming activities and services over 30 million customers in 180 countries. The TUI Hotels and Resorts division offers a portfolio of 238 hotels, located in Spain, Greece, Egypt, France, Turkey, Tunisia, the Balearics and the Caribbean, among others. The Cruises sector comprises Hapag-Lloyd Kreuzfahrten GmbH and TUI Cruises which provide luxury cruises, and cruises within the German-speaking countries, respectively. * * * As reported by the Troubled Company Reporter-Europe on Sept. 29, 2010, Moody's Investors Service affirmed the Corporate Family Rating and Probability of Default Rating of TUI AG at Caa1; the unsecured rating and the subordinated ratings are also affirmed at Caa2 and Caa3, respectively. Moody's said the outlook is changed to stable from negative. * BOOK REVIEW: Dangerous Dreamers - The Financial Innovators ------------------------------------------------------------ Author: Robert Sobel Publisher: Beard Books, Washington, D.C. 2001 (reprint of book first published by John Wiley in 1993). Pages: 260+xi Price: US$34.95 trade paper ISBN 1-58798-029-0 "For the rest of his life, Milken will be accused of crimes for which he was not charged and to which he did not plead guilty." The Milken is -- as anyone familiar with "junk bonds" and the scandals surrounding them in the 1980s knows -- Michael Milken of the Drexel Burnham banking and investment firm. So does the noted business writer Robert Sobel (d. 1999) analyze and in so doing clarify not only the Milken criminal case, but also many other phenomena of the period laying the basis for the modern-day financial industry. Mr. Sobels' perspective is broader than the sensationalistic excesses and purported crimes of Mr. Milken and the like. He's interested as well in individuals and businesses that introduced and developed financial concepts, vehicles, and transactions which secured and increased the wealth of millions of average persons. Mr. Sobel's topic of financial innovation is necessarily ambivalent, as is any which concerns historical and economic change. For a perspective on the relatively recent phase of financial innovation Milken was involved in, he brings up previous such phases as the Gilded Age of the latter 1800s/early 1900s. This was a time when as Jim Fisk, Jay Gould, and others were making fortunes through skulduggery and manipulations in the financial markets, Cornelius Vanderbilt and others were building the "world's finest railroad system." Similarly, in the "Junk Decade of the 1980s," as Ivan Boesky and others were arrogantly reaping fortunes on "dubious" transactions, financial firms such as Forstmann Little and Kohlberg Kravis Roberts "played major positive roles in the largest restructuring of American industry since the turn of the century." The analysis is done and subsequent picture formed through the author's protrayals of the activities of individuals and particular companies within the larger framework of the overall financial industry of the time. While Mr. dSobel does not try to defend the excesses, liberties, and illegalties of individuals and companies, basically he sees Mr. Milken, Mr. Boesky, and ones like them and many companies in diverse sectors as "vehicles through which the phenomena of junk finance and leveraged buyouts played themselves out." This was the "Conglomerate Era." Mergers and acquisitions were at the center of financial and economic activity, and CEOs at major corporations were in competition to grow their corporations in this way. Mr. Milken, Mr. Boesky, and such were originally seen as providing ideas and means for this phenomena to corporate CEOs and others in the highest levels of big business. Mr. Milken, etc., did not originate the mergers and acquisition phenomenon. At first, Mr. Milken, etc., were much appreciated by the major corporations and the financial industry. In 1989, the Wall Street Journal saw Mr. Milken as the financier who had the greatest influence on Wall Street since J.P. Morgan. In leading the financial innovation of the time, which entails introducing the new, often unproven, and taking risks, Milken left himself vulnerable. Thus he was a prime target for Federal prosecutors when the downside of the mergers and acquisitions came about. He and his banking and investment company Drexel Burnham took the brunt of government, business, and public indignation and search for villains when their dreams did not pan out just as envisioned. Mr. Sobel follows the transition of perspective on and behavior of many companies as well as many individuals during this period. Such transition with respect to Mr. Milken, for example, cannot be unraveled from that of a company such as Beatrice. Starting in 1960, the food company Beatrice started making large-scale acquisitions. Beatrice corporation heads succeeding the CEO Williams Karnes who "ran a tight, lean ship, with a small office staff" brought in corporate jets and limousines, greatly increased staff, and moved to regal office space. James Dutt of Beatrice is pointed out as symptomatic of the heedless, dazzled mindset which crept into corporate America in the 1980's age of mergers-and- acquisitions. Mr. Sobol's renders the complexities and ambivalence of this transitional period comprehensible by memorable portraits of key players and companies. In so doing, he demonstrates once more why he has long been recognized as one of the country's most important business writers. Robert Sobol (1931-99) was an author or editor of more than 50 books and hundreds of articles. For more than 40 years, he was a professor of business history at Hofstra University. ********* 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/books>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. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, 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 * * *