/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101124.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, November 24, 2010, Vol. 11, No. 232 Headlines A U S T R I A A-TEC INDUSTRIES: Vitkovice Asks for AE&E Sale Documentation I C E L A N D KAUPTHING BANK: Formally Enters Winding-Up Procedures I R E L A N D ANGLO IRISH: Has Debt Buyback Deal With Subordinated Bondholders ANGLO IRISH: Loses EUR13 Billion in Deposits This Year DECO 10: Fitch Affirms Rating on Class D Notes at 'CCCsf' SEA FORT: S&P Raises Rating on Class E Notes to 'BB+ (sf)' TAURUS CMBS:: Fitch Affirms Rating on Class D Notes at 'Bsf' L U X E M B O U R G TELENET FINANCE: Moody's Assigns (P)'Ba3' Rating to Senior Notes N E T H E R L A N D S DSB BANK: Loan Investors to Decide on Settlement of Client Claims R U S S I A TMK OAO: S&P Changes Outlook to Stable; Affirms 'B' Rating * Fitch Affirms Yaroslavl Region's 'BB-' LT Currency Ratings U N I T E D K I N G D O M CATTLES PLC: Welcome Financial Creditors Back Debt Compromise CHEMTURA CORP: Hearing on UK Pension Deal Set for Nov. 30 COMPANY CLASSWARE: To Be Placed Into Administration HOWES AND SONS: Goes Into Administration LONDON TOWN: GRS Inns to Compensate Tenants at Pub ROK PLC: Mansell to Finish Housing Projects in Somerset TARGETFOLLOW: Administrator to Include Centre Point Tower in Sale ULYSSES PLC: Fitch Affirms Rating on Class E Notes at 'CCC' ********* ============= A U S T R I A ============= A-TEC INDUSTRIES: Vitkovice Asks for AE&E Sale Documentation ------------------------------------------------------------ Vitkovice Heavy Machinery AS has asked for official documentation about the sale of the AE&E unit owned by A-Tec Industries AG, Lenka Ponikelska at Bloomberg News reports, citing a spokeswoman. Bloomberg relates Eva Kijonkova said in a phone interview on Monday the Ostrava, Czech Republic-based engineering company, is waiting to receive the materials before making further decisions about the process. Meanwhile, Zoe Schneeweiss at Bloomberg News reports that Deloitte said a valuation of A-Tec is due in December, rejecting reports of a Nov. 21 deadline. According to Bloomberg, Deloitte said in an e-mailed statement on Monday that the auditor also rejected media reports that it may have valued A-Tec's AE&E unit at EUR900 million. As reported by the Troubled Company Reporter-Europe on Nov. 23, 2010, Hans-Georg Kantner, the spokesman of A-Tec's creditor committee, as cited by Bloomberg News, said talks to sell the AE&E unit are continuing. Austrian daily newspaper Wiener Zeitung had earlier reported that Mass Financial Corp had pulled out of talks to buy the unit, while magazine Format said talks with Austrian investor Ronny Pecik had failed, according to Bloomberg. As reported by the Troubled Company Reporter-Europe on Nov. 5, 2010, Bloomberg News said the AE&E unit, which builds power plants for clients such as utilities or steel makers, is A-Tec's biggest unit with 60% of the group's revenue and 83% of pretax profit in 2009. Bloomberg noted failure to keep it afloat would diminish the funds for creditors. On Oct. 22, 2010, the Troubled Company Reporter-Europe, citing Bloomberg News, reported that A-Tec sought court clearance to reorganize debt after losing access to its line of credit because of an Australian power-station project's financial difficulties. Bloomberg disclosed A-Tec said in a statement on Oct. 20 that the company filed for self-administered reorganization proceedings at the Vienna Commercial Court and appointed trustees for bondholders. Bloomberg said A-Tec has 90 days under Austrian law to seek an agreement with lenders, after which it can seek full protection from creditors. The company has a EUR798 million (US$1.11 billion) revolving credit facility and EUR302 million of outstanding bonds, according to Bloomberg data. A-Tec Industries AG is an engineering company based in Vienna, Austria. ============= I C E L A N D ============= KAUPTHING BANK: Formally Enters Winding-Up Procedures ----------------------------------------------------- Kaupthing Bank hf's resolution committee, citing a ruling by the District Court of Reykjavik, said in an e-mailed statement on Monday that the bank formally entered winding-up procedures, Omar R. Valdimarsson at Bloomberg News reports. "Icelandic law provides for the automatic end of the moratorium period upon entering into a winding-up procedure," the bank's resolution committee said in the statement, according to Bloomberg. Bloomberg notes the committee said the move won't impact the bank's ability to hold its assets until maturity "if deemed beneficial rather than disposing of them immediately." According to Bloomberg, the committee said it will continue to be responsible for the claims process. About Kaupthing Bank Headquartered in Reykjavik, Kaupthing Bank -- http://www.kaupthing.com/-- is Iceland's largest bank and among the Nordic region's 10 largest banking groups. With operations in more than a dozen countries, the bank offers a range of services including retail banking, corporate finance, asset management, brokerage, private banking, treasury, and private wealth management. Kaupthing was created by the 2003 merger of Bunadarbanki and Kaupthing Bank. In October 2008 the Icelandic government assumed control of Kaupthing Bank after taking similar measures with rivals Landsbanki and Glitnir. As reported by the Troubled Company Reporter on Nov. 30, 2008, Olafur Gardasson, assistant for Kaupthing Bank hf., in a proceeding under Act No. 21/1991, pending before the Reykjavik District Court, and foreign representative of the Debtor, filed a petition under chapter 15 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York commencing the Debtor's chapter 15 case ancillary to the Icelandic Proceeding and seeking recognition for the Icelandic Proceeding as a "foreign main proceeding" under the Bankruptcy Code and relief in aid of the Icelandic Proceeding. ============= I R E L A N D ============= ANGLO IRISH: Has Debt Buyback Deal With Subordinated Bondholders ---------------------------------------------------------------- Simon Carswell at The Irish Times reports that Anglo Irish Bank has cleared the first hurdle in securing a deal with investors in the bank's subordinated bonds, netting a gain by offering the investors just 20% of the face value of their debt. The Irish Times relates in a closely watched debt exchange to share Anglo losses with the bondholders, the bank secured the agreement of 92% of the investors holding loan notes of EUR750 million due in 2017. According to The Irish Times, the bank has made the same offer to provide new bonds at a value of 20% of the original value of the debt to investors in two of Anglo's other subordinated bonds due in 2014 and 2016. The Irish Times says investors who decline the offer will only receive one cent for every EUR1,000 of debt they owe in a proposal that was described by analysts as tantamount to default. Bondholders with about EUR690 million of the 2017 notes, or 92% of the debt, agreed to the bank's offer, The Irish Times discloses. The vote brings the bank a gain of about EUR560 million, The Irish Times notes. Anglo will hold two more votes on the same 20-cent-in-the-euro exchange on a EUR325 million 2014 bond and a EUR500 million 2016 bond next month, according to The Irish Times. The bank stands to make a gain of EUR1.6 billion if all the offers are accepted, The Irish Times says. A final vote on the 2014 and 2016 notes will be held on December 22 in an exchange that is seen as a bellwether for a similar burden-sharing move at Irish Nationwide Building Society, The Irish Times states. About Anglo Irish Bank Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury and private banking. The Bank's non-retail business is made up of more than 11,000 commercial depositors spanning commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. The Company's retail deposits comprise demand, notice and fixed term deposit accounts from personal savers with maturities of up to two years. Non-retail deposits are sourced from commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. In addition, at Sept. 30, 2008, its non-retail deposits included deposits from Irish Life Assurance plc. The Private Bank offers tailored products and solutions for high net worth clients and operates the Bank's lending business in Ireland and the United Kingdom. * * * As reported by the Troubled Company Reporter-Europe on Oct. 29, 2010, 2010, Standard & Poor's Ratings Services lowered its rating on Anglo Irish Bank Corp. Ltd.'s nondeferrable dated subordinated debt (lower Tier 2) securities to 'D' from 'CCC'. The downgrade of the lower Tier 2 debt rating reflects S&P's opinion that the bank's exchange offer is a "distressed exchange" and tantamount to default in accordance with its criteria. ANGLO IRISH: Loses EUR13 Billion in Deposits This Year ------------------------------------------------------ Laura Noonan at Irish Independent reports that Anglo Irish Bank Chairman Alan Dukes on Monday admitted that the bank has lost EUR13 billion in deposits this year and "could" need further state support as part of the banking bailout. According to Irish Independent, Mr. Dukes called on the government to take "decisive action" and put more money into the banks rather than establishing a contingency fund that could be accessed later. Anglo's deposit base fell by just EUR4 billion in the first half of the year, but Mr. Dukes on Monday told the Irish Independent year-to-date losses were now running at EUR13 billion. Most of the withdrawals are understood to be corporate, with money flowing out after Anglo's ratings downgrades, Irish Independent notes. Irish Independent relates Mr. Dukes said Anglo "could" end up getting fresh money as part of the banking bailout, a development that would push Anglo's total taxpayer costs above the EUR29 billion-EUR34 billion already penciled in. About Anglo Irish Bank Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/-- operates in three core areas: business lending, treasury and private banking. The Bank's non-retail business is made up of more than 11,000 commercial depositors spanning commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. The Company's retail deposits comprise demand, notice and fixed term deposit accounts from personal savers with maturities of up to two years. Non-retail deposits are sourced from commercial entities, charities, public sector bodies, pension funds, credit unions and other non-bank financial institutions. In addition, at Sept. 30, 2008, its non-retail deposits included deposits from Irish Life Assurance plc. The Private Bank offers tailored products and solutions for high net worth clients and operates the Bank's lending business in Ireland and the United Kingdom. * * * As reported by the Troubled Company Reporter-Europe on Oct. 29, 2010, 2010, Standard & Poor's Ratings Services lowered its rating on Anglo Irish Bank Corp. Ltd.'s nondeferrable dated subordinated debt (lower Tier 2) securities to 'D' from 'CCC'. The downgrade of the lower Tier 2 debt rating reflects S&P's opinion that the bank's exchange offer is a "distressed exchange" and tantamount to default in accordance with its criteria. DECO 10: Fitch Affirms Rating on Class D Notes at 'CCCsf' --------------------------------------------------------- Fitch Ratings has affirmed DECO 10 - Pan Europe 4 p.l.c, a commercial mortgage-backed securitization. The rating actions are; -- EUR251.2m class A1 due October 2019 (XS0276266888) affirmed at 'AAAsf'; Outlook Stable -- EUR276.8m class A2 due October 2019 (XS0276271375) affirmed at 'Asf'; Outlook Negative -- EUR31.9m class B due October 2019 (XS0276272001) affirmed at 'BBB-sf'; Outlook Negative -- EUR31.9m class C due October 2019 (XS0276273074) affirmed at 'Bsf'; Outlook Negative -- EUR19m class D due October 2019 (XS0276273660) affirmed at 'CCCsf'; assigned Recovery Rating 'RR6' The affirmation reflects the stable collateral performance over the past 12 months. While the second largest loan (Treveria II) continues to suffer from cash flow issues, this is in line with Fitch's expectations. The portfolio benefits from above-average interest coverage: the weighted-average A-note interest coverage ratio has improved to 2.5x currently from 2.2x at closing in December 2006. The Negative Outlook on the class A2, B and C notes is driven by continued balloon risk. Approximately 70% of the portfolio is due to mature in 2013, leaving the transaction exposed to refinancing conditions at that point. In addition, five of the 10 loans have a Fitch A-note loan-to-value in excess of 100%. The presence of B-notes in three of the loans further increases leverage. The Dresdner Portfolio loan (the largest at 34.8% of the portfolio) has experienced stable performance since closing, mainly as a result of the length of in-place leases. However, approximately 14% of rent is subject to possible lease termination this year, with a further 25% at risk before the end of 2012, making ongoing falls in income likely. The servicer reports that many of the expiring leases are under negotiation for renewal. However, Fitch believes that any re-lettings are likely to incorporate rent-free periods or other tenant incentives and therefore offer no immediate benefit to cash flow. The balance of the interest-only loan has decreased by almost 50% since closing due to substantial asset disposals; this has benefited the class A1 notes as all proceeds are applied sequentially. However, the loan leverage has not seen a corresponding improvement: over the past year, the LTV has only fallen to 46.9% from 47.2% despite the sale of 17 assets. The Treveria II loan (17.6%) has continued to suffer from falls in income due to the loss of tenants; this led to a breach of the debt service coverage ratio trigger in July 2009 and a subsequent restructure of the loan. In return for equity injections to help with the running costs of the portfolio, the servicer waived the DSCR and LTV covenants until February 2011. The portfolio will be revalued in December 2010; should the value have continued to deteriorate since the last valuation in July 2010, the sponsor will be required to inject a further EUR1.5m to allow for an additional extension to the covenants. Given the upcoming maturity in July 2011, Fitch does not expect the restructure to significantly improve the loan's exit position. SEA FORT: S&P Raises Rating on Class E Notes to 'BB+ (sf)' ---------------------------------------------------------- Standard & Poor's Ratings Services raised its credit ratings on SEA FORT Securities PLC's class B, C, D, and E notes. At the same time, S&P affirmed the rating on the class A notes. Since closing in July 2006, the transaction has amortized significantly and now has a pool factor of 17%. As a result, credit enhancement has increased across the capital structure. The portfolio underlying the transaction has experienced very limited defaults, and currently no losses have been allocated to the notes. S&P's analysis indicates that while 3.3% of the reference portfolio is classified as defaulted according to Danske Bank's internal credit rating system, losses that may arise from these obligations are unlikely to exceed the subordination provided by the class F notes. The pool is significantly more concentrated than at closing, with the top 10 obligors currently accounting for 37% of the portfolio. This high level of concentration risk provides a limiting factor on the extent of S&P's upgrades. SEA FORT Securities is a partially-funded balance sheet collateralized loan obligation, referencing a portfolio of loans granted by Sampo Bank PLC to Finnish SMEs and corporate clients. Danske Bank Group acquired Sampo Bank in 2007. Ratings List SEA FORT Securities PLC EUR145 Million Secured Floating-Rate Credit-Linked Notes Ratings Raised Rating ------ Class To From ----- -- ---- B AA+ (sf) AA (sf) C A+ (sf) A (sf) D BBB+ (sf) BBB (sf) E BB+ (sf) BB (sf) Rating Affirmed Class Ratings ----- ------- A AAA (sf) TAURUS CMBS:: Fitch Affirms Rating on Class D Notes at 'Bsf' ------------------------------------------------------------ Fitch Ratings has upgraded Taurus CMBS (Pan-Europe) 2006-3 plc's class A floating-rate notes, due May 2015, and revised the Rating Outlook on the class B, C and D notes: -- EUR119.9m class A due May 2015 (XS0274566420) upgraded to 'AAAsf' from 'AAsf'; Outlook Stable -- EUR31.2m class B due May 2015 (XS0274569523) affirmed at 'BBBsf'; Outlook revised to Stable from Negative -- EUR11.1m class C due May 2015 (XS0274570372) affirmed at 'BBsf'; Outlook revised to Stable from Negative -- EUR5.4m class D due May 2015 (XS0274570703) affirmed at 'Bsf'; Outlook revised to Stable from Negative The rating actions reflect the increased credit enhancement following the repayment of three loans during 2010 and the improved refinancing prospects of the remaining Swiss loans in the portfolio. Taurus CMBS (Pan Europe) 2006-3 PLC is a securitization currently comprising three commercial mortgage loans originated by subsidiaries of Merrill Lynch & Co. ('A+'/RWN/'F1+'), which closed in November 2006. Between July and November 2010 the Phone, Vich/Brig and Trafalgar loans were fully repaid and the Epic loan was partially repaid, leaving the loan pool with a current balance of EUR109.4 million. Redemption proceeds from the Phone, Vich/Brig and Epic facilities have already been applied to the notes, while the repayment of the Trafalgar loan will be reflected at the next payment date. Of the remaining loans, one is scheduled to mature in January 2011, and two in 2013. While all are currently performing, Fitch's weighted average loan-to-value ratio of 94% is considerably higher than the reported WA LTV of 68%. The reported LTVs are based on valuations conducted in December 2009 and February 2009 for the Epic and Triumph loans, respectively, and prior to closing for the K-Berg facility. The MZ-Triumph loan is the largest exposure in the portfolio, with a current outstanding balance of EUR52.8 million, and is the A- note of a larger whole loan. It is secured by secondary retail properties in north Berlin that have seen stable income performance since closing. Fitch estimates the current LTV of the A-note to be 96%, implying a market value decline of 29% versus the reported valuation as at February 2009. The loan is scheduled to mature in April 2013. The K-Berg loan has a current outstanding balance of CHF37.4 million and is also the A-note of a larger whole loan. It is secured by a campus of industrial and office properties located 20km outside Zurich and is fully let to Soudronic AG on a lease with over 10 years remaining. Should the current tenant experience financial difficulties, it may be difficult to find a replacement tenant for the property due to its out-of-town location. The current Fitch LTV of the loan is 92%, implying an MVD of 26% versus the reported valuation as at February 2006. The loan is scheduled to mature in April 2013. After the partial repayments seen during this year, the Epic loan is now secured by a single retail asset in Switzerland anchored by Coop. Investment liquidity for this type of asset remains strong in Switzerland, and Fitch expects the last asset to be refinanced at, or shortly after, the extended loan maturity in January 2011. =================== L U X E M B O U R G =================== TELENET FINANCE: Moody's Assigns (P)'Ba3' Rating to Senior Notes ---------------------------------------------------------------- Moody's Investors Service assigned a (P) Ba3 rating to the EUR100 million senior secured notes due 2016 to be issued by Telenet Finance Luxembourg II S.A. Telenet intends to use proceeds for general corporate purposes which may include shareholder disbursements in 2011, in the absence of material debt-financed acquisitions. The (P)Ba3 rating on the notes reflects the fact that the debt issuance does not change Telenet's Ba3 CFR; and that the notes are effectively pari-passu with Telenet's senior secured 2020 bonds and bank debt. Ratings Rationale Telenet Finance II is incorporated in Luxembourg as a special purpose vehicle created solely to issue the proposed senior secured notes to finance a EUR100 million term loan facility to Telenet International Finance S.a r.l. (formerly Telenet International Finance S.A.). The terms of the Proceeds loan will be recorded in the Facility N Accession Agreement under the Telenet Senior Credit Facility. Moody's understands that Telenet Finance II is unable to issue additional debt. Noteholders indirectly benefit from the terms (including maintenance financial covenants) of the Senior Credit Facility, plus incurrence covenants within the Facility N Accession Agreement. They also have security over the Issuer's shares and over its assets, including its rights to and benefit in the Proceeds loan. However, Moody's notes that the holders of the notes will have only indirect recourse to Telenet International so that in an enforcement scenario they would have to enforce the security interest in the Proceeds loan, and subsequently enforce the collateral granted in favor of the Proceeds loan. The Ba3 corporate family rating reflects Telenet's continued solid operational performance supported by the company's multi-play strategy. However, the rating also takes into account (i) the intensive competition that Telenet faces particularly from incumbent operator, Belgacom, and also from mobile operators such as Mobistar; (ii) the company's limited size of operations compared with global peers; and (iii) the expectation that Telenet in future will continue to pay out (at least) all of the internally generated free cash flow (as defined by Telenet) in shareholder disbursements (in the absence of suitable acquisition opportunities); implying that the company will be relying largely on EBITDA growth for operating within its own leverage target parameters (see below). Moody's notes that Telenet intends to increase its net senior leverage ratio (calculated as per its Senior Credit Facility definition -- excluding the capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases) to 3.5x (which implies a reported net total debt leverage of around 4.0x) by the end of 2011. This is likely to be executed entirely via shareholder disbursements should acquisitions not materialize during the year. The agency notes that Telenet remains committed towards maintaining its net reported total leverage between 3x-4x prior to any debt-financed acquisitions which could take leverage outside this range. At 30 June 2010, the company's reported last twelve months net total debt leverage was 3.6x pro-forma the shareholder distribution of approximately EUR250 million on August 2, 2010. This was equivalent to Moody's adjusted Gross Debt-to-EBITDA of 4.0x. Moody's notes that at September 30, 2010, the company's reported last twelve months net total debt leverage has further reduced to 3.3x. Despite relatively modest leverage for the rating category, Telenet's CFR at Ba3 currently remains constrained by the expected increase in leverage from current levels in 2011 combined with the uncertainty regarding debt- financed acquisitions. In this regard, Moody's also incorporates the fact that Telenet is majority-owned by Liberty Global (rated Ba3, negative outlook). Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction only. Upon a conclusive review of the final documentation, Moody's will endeavor to assign a definitive rating to the Notes. A definitive rating may differ from a provisional rating. What Could Change the Rating - Up Upward rating pressure would develop if, inter alia, the company demonstrates clear commitment to maintain its gross debt to EBITDA solidly below 4.5x (as calculated by Moody's) on a sustained basis. A move to positive free cash flow generation (as defined by Moody's -- post capex and dividends) would also be a positive factor. What Could Change the Rating - Down An increase in leverage at or above 5.5x Gross Debt/ EBITDA (as adjusted by Moody's) resulting from significant debt-financed M&A activity and/ or aggressive shareholder remuneration together with sustained negative free cash flow (as calculated by Moody's) would exert downward pressure on the rating. Headquartered in Mechelen, Belgium, Telenet Group Holding NV is the largest provider of cable services in Belgium. Currently, US-based Liberty Global Consortium (rated Ba3/Negative) owns approximately 50.3% of Telenet. For the financial year ending December 31, 2009, Telenet reported revenues of EUR1.2 billion with 50.7% Adjusted EBITDA margin (as calculated by the company). ===================== N E T H E R L A N D S ===================== DSB BANK: Loan Investors to Decide on Settlement of Client Claims ----------------------------------------------------------------- Jurjen van de Pol at Bloomberg News reports that investors in EUR3.12 billion (US$4.28 billion) of securitized consumer loans sold by DSB Bank NV have to decide whether they will allow the lender's administrator to settle claims from customers. According to Bloomberg, the notes, backed by consumer loans and mortgages, were issued by four special-purpose vehicles, including Monastery 2006-I BV and Chapel 2003-I BV. A meeting of noteholders is scheduled for Dec. 7, Bloomberg says, citing an e-mailed statement Monday from ATC Capital Markets, manager of the vehicles. "The bankruptcy receiver already has a mandate to negotiate a possible settlement with customers whose loans weren't securitized, now we ask noteholders to grant him such a mandate for the securitized loans," Bloomberg quote Ello Dusee of ATC in Amsterdam as saying by telephone. DSB's bankruptcy receiver got almost 8,000 complaints from clients, most of whom say the bank failed to meet its duty of care toward customers, Bloomberg notes. Almost 3,000 clients plan to deduct a possible claim from their outstanding loans, Bloomberg states. "I still expect noteholders in aggregate to get back a material part of the principal," Mr. Dusee, as cited by Bloomberg, said. "Were such a settlement mandate not being approved and thus not being given to the bankruptcy receivers, I would expect losses on those loans also to be incurred, only after several years of arduous court cases with individual borrowers." As reported by the Troubled Company Reporter-Europe on Oct. 20, 2009, Bloomberg News said that the Amsterdam court on Oct. 19 declared DSB bankrupt after its owner failed to find a buyer. Bloomberg disclosed the Dutch central bank took control of DSB on Oct. 12 as an outflow of capital threatened the company's existence. DSB Bank -- http://www.dsbbank.com/-- is a fully licensed bank in the Netherlands, providing mortgages, consumer loans, savings and insurance products to retail clients. The bank has a leading market share in the Dutch market for consumer loans. DSB Bank also has operations in Belgium and Germany. DSB Bank, established in 1975, is privately owned by Dirk Scheringa, currently CEO of DSB Bank, Chairman of the Executive Management Board. Mr. Scheringa is also 100% owner of AZ Alkmaar football club, which plays in the Dutch Premier League and president of the Scheringa Museum for Magic Realism, an international collection of more than 500 works of art. =========== R U S S I A =========== TMK OAO: S&P Changes Outlook to Stable; Affirms 'B' Rating ---------------------------------------------------------- Standard & Poor's Ratings Services said that it had revised its outlook on Russia-based pipe manufacturer OAO TMK to stable from negative and affirmed its long-term corporate credit rating on TMK at 'B'. At the same time, the Russia national scale rating was raised to 'ruA-' from 'ruBBB+'. The outlook is now stable. "The outlook revision, the raising of the national scale rating, and the affirmation of the long-term rating reflect the improvement in TMK's liquidity, as well as a stabilization in its operating and financial performance," said Standard & Poor's credit analyst Andrey Nikolaev. The stable outlook reflects S&P's expectation of stable operating and financial performance in 2011 and gradually improving credit metrics. "The ratings could come under pressure if liquidity deteriorates again as 2012 maturities approach, unless the company refinances them proactively," said Mr. Nikolaev. "A new downturn in the pipe market could also pressure the ratings." Ratings upside could follow further important improvements in liquidity and positive FOCF generation leading to debt reduction and stronger credit metrics. The fully adjusted ratio of funds from operations to debt at about 15%-20% would be commensurate with the 'B+' rating. * Fitch Affirms Yaroslavl Region's 'BB-' LT Currency Ratings ------------------------------------------------------------ Fitch Ratings has revised the Russian Yaroslavl Region's Outlooks to Positive from Stable and affirmed the region's Long-term foreign and local currency ratings at 'BB-' respectively. Its other ratings have been affirmed at Short-term foreign currency 'B' and National Long-term 'A+(rus)'. The revision of the Outlook reflects Fitch's expectation that Yaroslavl Region will benefit from the improved macro-economic environment in Russia in 2010 and over the medium term, which will support its tax revenue and provide greater flexibility in refinancing maturing debt obligations. The ratings reflect the region's sound budgetary performance, stabilized debt and adequate liquidity. The ratings also consider the exposure of its tax-base to business cycles in the industrial sector and its short-term debt profile with considerable amount of maturities over the next 12 months. The ratings could be upgraded if the region's budgetary performance remains sound with sustained margins of around 15% and if the debt profile maturity is lengthened over the medium term. Yaroslavl's operating margin increased to 19.9% in 2009 from 13.4% in 2008, underpinned by ad-hoc federal current transfers. The region posted a surplus before debt variation at RUB2.7 billion in 2009 after a RUB3.2 billion deficit in 2008. Fitch expects the region's budgetary performance to be supported by sustainable improvement of tax revenue in 2010-2012 leading to a full-year operating margin of about 14%-15% by the year-end and 15%-16% in 2011-2012. The region's direct risk decreased to 32.6% of current revenue in 2009 (2008: 41.1%), or at RUB10.1 billion (2008: RUB9.9 billion). The direct risk payback ratio decreased to two years of the current balance in 2009 from four years in 2008. The direct risk profile of the region is short-term, with significant exposure to refinancing risk. Immediate refinancing needs on loans amortizing by end-Q410 are fully covered by cash reserves, which increased to RUB2.6 billion in 2009 (2008: RUB1.1 billion). In 2011 the region will have to refinance RUB6.4 billion worth of maturing loans and bonds; Fitch expects the region to manage the refinancing pressure and protect its direct risk and direct risk payback ratios on safe level. The local economy was boosted by the celebration of the City of Yaroslavl's 1,000th anniversary in 2010, as the region's capex on cultural heritage restoration and infrastructure projects increased substantially in 2008-2010. Yaroslavl's socio-economic profile is sound with above-national-average wealth indicators; local administration expects GRP to grow 2.4% yoy in 2010 and 3%- 4% in 2011-2012 due to recovering business activity. The Yaroslavl region is located in the northern part of European Russia and accounted for 0.9% of the national population. Its GRP represented 0.6% of the national GDP in 2008. =========================== U N I T E D K I N G D O M =========================== CATTLES PLC: Welcome Financial Creditors Back Debt Compromise ------------------------------------------------------------- Ben Livesey at Bloomberg News reports that Cattles Plc said certain financial creditors of Welcome Financial Services Ltd. will continue to support proposals for a consensual restructuring including a compromise of Cattles' subordinated intercompany claims against WFSL and other subsidiaries in the group for an amount which may be less than GBP39 million. According to Bloomberg, Cattles said it had agreed to compromise its claims for not less than GBP39 million. As reported by the Troubled Company Reporter-Europe on Oct. 25, 2010, Cattles, as cited by Bloomberg News, said creditors would lose GBP1 billion (US$1.6 billion) as it continues talks to restructure the company. Bloomberg disclosed trading in the company's stock was suspended in April last year after the company failed to provision sufficiently for bad debts and breached covenants with its banks. Cattles said the lender would announce a significant loss when it announces 2009 audited results in the "near future," according to Bloomberg. Cattles plc -- http://www.cattles.co.uk/-- is a financial services company engaged in providing consumer credit to non- standard customers in the United Kingdom and the provision of debt recovery services to external clients and the Company's consumer credit business. Cattles also provides working capital finance for small and medium size businesses. * * * As reported by the Troubled Company Reporter-Europe on Aug. 9, 2010, Fitch Ratings revised Cattles Plc's senior unsecured bonds' Recovery Rating to 'RR6' from 'RR5'. At the same time, Fitch affirmed Cattles' Long-term Issuer Default rating at 'C', Short- term IDR at 'C' and senior unsecured bonds (ISIN XS0181857847 and XS0308397149) at Long-term 'C'. CHEMTURA CORP: Hearing on UK Pension Deal Set for Nov. 30 --------------------------------------------------------- Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on November 30, 2010, at 9:45 a.m. (ET), to consider approval of the stipulation entered by Chemtura Corporation, et al., and the Trustees of the Great Lakes UK Pension Plan. Objections, if any, were due 4:00 p.m., Tuesday, November 23. The Debtors asked the Bankruptcy Court to approve a stipulation regarding certain proofs of claim filed by the UK Pension Trustees. In October 2009, the UK Pension Trustees filed 27 contingent, unliquidated proofs of claim in each of the Debtors' Chapter 11 cases asserting, among other things, that the Debtors may at some time owe obligations on account of the UK Pension Plan as a result of hypothetical future enforcement action by the UK Pensions Regulator. The stipulation is intended to resolve the Debtors' objection to the Trustees of the Great Lakes UK Pension Plan's Proofs of Claim and for the withdrawal of the UK Pension Trustees' proofs of claim. The stipulation provides for resolution of the UK Pension Claims in a non-bankruptcy forum -- the Reorganized Debtors do not believe that the Court is the proper forum to adjudicate liability on account of foreign pension obligations. In light of the full payment contemplated under the Debtors' Plan of Reorganization to all creditors and the unique circumstances involved in the adjudication of pension claims, the Reorganized Debtors agreed to resolve the UK Pension Claims in the applicable non-bankruptcy forum. The Debtors added that the stipulation does not result in an admission or a waiver of any right of any Debtor or Reorganized Debtor or non-Debtor to contest the UK Pension Claims on any ground, except no party may assert that UK Pension Claims were discharged pursuant to the Debtors' plan of reorganization. About Chemtura Corp. Based in Middlebury, Connecticut, Chemtura Corporation (CEM) -- http://www.chemtura.com/-- with 2008 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection products, and pool, spa and home care products. Chemtura Corporation and 26 of its U.S. affiliates filed voluntary petitions for relief under Chapter 11 on March 18, 2009 (Bankr. S.D.N.Y. Case No. 09-11233). M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, serves as bankruptcy counsel. Wolfblock LLP serves as the Debtors' special counsel. The Debtors' auditors and accountant are KPMG LLP; their investment bankers are Lazard Freres & Co.; their strategic communications advisors are Joele Frank, Wilkinson Brimmer Katcher; their business advisors are Alvarez & Marsal LLC and Ray Dombrowski serves as their chief restructuring officer; and their claims and noticing agent is Kurtzman Carson Consultants LLC. As of December 31, 2008, the Debtors had total assets of $3.06 billion and total debts of $1.02 billion. COMPANY CLASSWARE: To Be Placed Into Administration --------------------------------------------------- Company Classwear owner Andrew Spooner said that the business had ceased trading and was due to be placed into administration, BBC News reports. According to BBC News, Wendy Hocking, manager of Holmhirst Preschool in Woodseats, said that many parents had outstanding paid orders. BBC News relates that Mr. Spooner said all orders of clothes already paid for would be honored. Mr. Spooner apologized on behalf of the company and said parents would receive their orders or a refund, BBC News adds. Headquartered in Bolsterstone, Company Classwear makes school uniforms. HOWES AND SONS: Goes Into Administration ---------------------------------------- Howes and Sons Ltd., trading as Howes of Fakenham, has gone into administration. James Batchelor at Car Dealer Magazine reports that the Peugeot dealer had an annual turnover of GBP3 million. According to Car Dealer Magazine, the joint administrators, Julian Pitts and David Wilson of Begbies Traynor in Leeds, will continue to trade the business as normal while a new owner is sought. No immediate redundancies of the 13 staff are currently planned, Car Dealer Magazine relates. Car Dealer Magazine notes Mr. Pitts said: "The directors and shareholders of the company very much regret that they have had to come to the decision to place the company in administration. Following the sad deaths of two long-serving employees and the imminent retirement of its managing director there is no natural successor to what has hitherto been a family run company. The company is also facing a substantial, albeit disputed, liability to make up an alleged deficit in its part of the Motor Industry Pension Fund following re-assessments of the pension fund's requirements. These circumstances have led to the need for an orderly disposal of the company's business and assets." Howes and Sons Ltd, which can trace its routes back to 1784, has been has been selling cars in the area for 50 years. LONDON TOWN: GRS Inns to Compensate Tenants at Pub -------------------------------------------------- John Harrington at Morning Advertiser reports that GRS Inns said it will compensate tenants at a pub that can't sell alcohol after the license lapsed when London Town went into administration. As reported in the Troubled Company Reporter-Europe on February 23, 2010, David Chubb and Mike Jervis of PricewaterhouseCoopers LLP were appointed as joint administrators to London Town Plc and one of its subsidiaries, GRS Inns Limited, on February 19, 2010, as part of a financial restructuring. In common with other companies in this sector, the business has experienced difficult trading conditions and has been unable to meet its debt covenants and other obligations. As a result the Company was placed into administration as part of a financial restructuring of the group. According to Morning Advertiser, customers have been bringing their own alcohol to the Fox Inn at Souldern, Oxfordshire, which faces being 'dry' until mid-December. The report relates GRS Inns took control of the pub after London Town went into administration. Morning Advertiser notes that joint tenant Alistair Tuffin said his council called him to say the premises license had lapsed after London Town, the named premises license holder, folded. GRS Inns has applied for a new premises license but this won't arrive until December 13, Morning Advertiser says. In the meantime the tenants are not allowed to sell alcohol, accept by the limited number of Temporary Events Notices that are available, Morning Advertiser discloses. The report notes that Mr. Tuffin said: "We will have been at the Fox for three years on November 23, 2010, and have slowly built up a reputation that is now in jeopardy of being destroyed. As you can imagine, not being able to sell alcohol has already affected the business. Fortunately our clientele is very understanding and have been bringing a bottle when they come to dine with us. This, however, does not help with the run up to one of our busiest times of the year, or with paying suppliers in already hard times." GRS, Morning Advertiser relates, has paid the tenants GBP2,000 in initial compensation and they are to meet next Tuesday to discuss full remuneration. Rent is not being charged while the pub is unlicensed. GRS operations director Russell Cowtheray said solicitors were employed to transfer the premises licenses across the estate after London Town went into administration, the report adds. London Town Plc is the holding company of a pub group which operates approximately 350 pubs either under lease and tenancy agreements or through the direct management of pubs. ROK PLC: Mansell to Finish Housing Projects in Somerset ------------------------------------------------------- Two affordable housing developments in Somerset which were being built by Rok PLC are to be finished, BBC News reports. As reported by the Troubled Company Reporter-Europe on Nov. 10, 2010, Wiltshire Times said Rok plc and Rok Building Limited went into administration and Robert Hunt, Michael Jarvis, and Robert Lewis and Jeremy Webb, all of PwC, were appointed as joint administrators. According to BBC News, the company was building 40 homes at Copse Lane, Ilton, and 39 at Hillcrest in Templecombe for Yarlington Housing Group. BBC News relates that Rok PLC's interests in south-west England have now been acquired by Mansell Construction Services. A spokesman from Yarlington Housing Group said it had entered negotiations with the company to complete the contracts, BBC News noted. The work would be finished by March 2011 upon agreement of the terms, the spokesman added. ROK Plc -- http://www.rokgroup.com/-- is a holding company of a group of companies providing response maintenance, planned repairs and refurbishment and new build services in the United Kingdom. The Company operates in three segments: response maintenance; planned repairs and refurbishment, and new build. Rok Plc provides a range of plumbing, heating and electrical (PHE) services. The Company's wholly owned subsidiaries include Rok Building Limited, Rok Development Limited, Richardson Projects Limited, LAS Plant Limited, Rok Civil Engineering Limited and Tulloch Transport Limited. TARGETFOLLOW: Administrator to Include Centre Point Tower in Sale ----------------------------------------------------------------- Hanna Sharpe at Business Sale reports that following Targetfollow's administration, its assets are being marketed for sale. According to Business Sale, administrators Deloitte have kick- started the sales process, which includes finding a buyer for some of the company's best-known assets, including London's Centre Point Tower. Lloyds, Business Sale notes, forced Targetfollow into administration over debts of GBP700 million. The creditor has now valued the company's assets at just GBP450 million, although its founder, Ardeshir Naghshineh, claims the figure is more like GBP680 million, Business Sale relates. Potential buyers have been sent details of the Targetfollow portfolio and a fierce bidding war is expected to kick off, with most interest coming from private companies and private equity groups, Business Sale says. "The administrators are currently assessing market appetite for the assets either individually or as a group," the report quoted an unnamed Deloitte spokesman as saying. Selling agents have not yet been appointed by Deloitte, Business Sale adds. Targetfollow is a property developer based in the United Kingdom. ULYSSES PLC: Fitch Affirms Rating on Class E Notes at 'CCC' ----------------------------------------------------------- Fitch Ratings has affirmed Ulysses (European Loan Conduit No. 27) Plc's CMBS notes: -- GBP290m class A (XS0308745107) affirmed at 'AA'; Outlook revised to Stable from Negative -- GBP76m class B (XS0308747657) affirmed at 'BBB'; Outlook revised to Stable from Negative -- GBP48m class C (XS0308748200) affirmed at 'B'; Outlook revised to Stable from Negative -- GBP45m class D (XS0308748622) affirmed at 'CCC'; assigned a Recovery Rating of 'RR3' -- GBP11m class E (XS0308749356) affirmed at 'CCC'; assigned 'RR6' The affirmation of all classes of notes results from the stable performance of the transaction over the past year, in line with Fitch's expectations. The agency expects this trend to continue, which has driven the revision of the Outlooks on the class A, B and C notes to Stable. Servicer reporting on the loan relies upon valuations carried out at closing (2007). The loan has a reported A-note and whole loan loan-to-value ratio of 65.0% and 81.1%, respectively. This compares to the A-note and whole loan Fitch LTV of 110% and 137%, respectively, both unchanged since the last review (December 2009). The Fitch LTV implies a market value decline of approximately 40% since closing. The loan does not include an LTV covenant. The securitized and whole interest coverage ratios stand at 1.24x and 0.96x, respectively, broadly unchanged since the last review and closing. The sponsor guarantor, a limited partnership managed by the loan sponsor (Beacon Capital Partners), has topped up the difference between net rental income and interest due since closing. The sponsor guarantee terminates if, at any time after 1 January 2010, the projected loan ICR exceeds 1.25x. From January 2011, the guarantee is subject to a maximum aggregate payment of GBP5m for the remaining life of the loan. Without an increase in rental income, the loan would default in the event of non-payment under the sponsor guarantee. Fitch believes the transaction will continue to rely upon interest top-ups by the sponsor until loan maturity. Rental income would need to increase by GBP1.5m in order for the whole loan coverage to reach 1x. However, this is considered unlikely given that the 2010 rent reviews, which affected approximately 70% of passing rent, resulted in limited, if any, rental uplifts on all leases. Only a small proportion of the leases are scheduled for review in 2011 (11%). ********* 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. 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 * * *