/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/111214.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, December 14, 2011, Vol. 12, No. 247 Headlines A U S T R I A HYPO TIROL: Moody's Puts 'D' BFSR on Review for Downgrade G E R M A N Y LANTIQ: Moody's Lowers Corporate Family Rating to 'Caa1' I R E L A N D EIRCOM GROUP: STT Submits Balance Sheet Restructuring Proposal MICHAEL MCNAMARA: Receiver Realizes EUR3.1-Mil. From Asset Sale OPERA FINANCE: Fitch Affirms Rating on Class D Notes at 'Csf' SHELBOURNE DEVELOPMENTS: Bank of Scotland Appoints Receiver L A T V I A * LATVIA: Authorities Probe Rumors Behind Run on Swedish Banks N E T H E R L A N D S ING VERZEKERINGEN: Fitch Affirms 'BB+' Rating on Hybrid Capital PALLAS CDO: Fitch Raises Rating on Three Note Classes to 'CCsf' R O M A N I A ARMONIA BRAILA: Bucharest Court Approves Bankruptcy Proceedings S W E D E N SAAB AUTOMOBILE: Share Trading Halted; May File for Liquidation T U R K E Y T.C. ZIRAAT: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings U N I T E D K I N G D O M BATTERSEA POWER: Owners in Administration on Debt Default COSALT PLC: David Ross Urges Shareholders to Accept Bid GLASTONBURY FINANCE: Fitch Affirms 'C' Ratings on 3 Note Classes LUMINAR GROUP: Peter Marks Group Buys Firm Out of Administration ROYAL BANK: Ulster Bank Unit Incurred Losses Following Guarantee VON ESSEN: Private Investor Buys Firm Out of Administration X X X X X X X X * Eurozone Crisis May Spark New Wave of Shipping Insolvencies ********* ============= A U S T R I A ============= HYPO TIROL: Moody's Puts 'D' BFSR on Review for Downgrade --------------------------------------------------------- Moody's Investors Service has placed on review for downgrade Hypo Tirol Bank AG's standalone bank financial strength rating (BFSR) of D (mapping to Ba2 on the long-term scale), the A2 long-term debt and deposit ratings and the P-1 short-term rating. The (P)A3 subordinate MTN program rating remains on review for downgrade. The ratings for obligations that qualify for the grandfathering of "Ausfallbuergschaft" (a guarantee obligation from the Austrian Federal State of Tirol) remained unaffected by the rating action. The review for downgrade on the BFSR follows the bank's report of additional, large impairment charges in the order of EUR120 million that was incurred at its Italian subsidiary, Hypo Tirol Bank Italy. The charges were triggered by an investigation conducted by Hypo Tirol at its wholly-owned Italian subsidiary. Accordingly, the review will focus on Hypo Tirol's risk management, internal controls and -- given the size of the impairment charge -- the loss-absorption capacity including the bank's risk-adjusted profit generating capacity. The review for downgrade of the A2 long-term ratings follows the review on the BFSR. During the review, Moody's will also re- assess the external support assumptions that it applies to Hypo Tirol, which currently include six notches of rating uplift for the bank's long-term ratings. Consequently, the rating agency notes that a downgrade of the long-term debt and deposit ratings by more than one notch cannot be ruled out as part of the rating review. RATINGS RATIONALE The decision to review Hypo Tirol's BFSR for downgrade was prompted by Moody's concerns about the bank's capacity to absorb the additional impairment charges following an announcement on 2 December 2011 from the bank. The charges are considered large compared with the bank's underlying earnings capacity and in relation to its capital position; the charges also raise questions about Hypo Tirol's risk-management policies and internal controls. Moody's now expects that Hypo Tirol will most likely report a group-wide loss of between EUR100 million to EUR110 million for the full-year 2011 (based on IFRS accounting). This will cause its Tier 1 capital ratio to decline to approximately 5.8% by year-end 2011 -- as estimated and announced by the bank -- from 7.4% according to full-year 2010 results. Hypo Tirol's A2 long-term ratings currently benefit from very high support assumptions, which result in six notches of rating uplift from the bank's Ba2 standalone credit strength. Accordingly, during the review Moody's will re-assess its external support assumptions, which may be challenged in the context of a generally weakening support environment for banks across Europe. What Could Change the Rating Up/Down There is currently no upward rating pressure as expressed by the review for downgrade. In addition to the factors described above, the bank's BFSR could come under downward rating pressure due to further deterioration in either Hypo Tirol's revenue generation capacity or asset quality, beyond levels anticipated by Moody's. The bank's long-term ratings could come under downward pressure if its intrinsic financial strength weakens, or if Moody's revises downwards its local government and systemic support assumptions currently factored into Hypo Tirol's ratings. RATINGS AFFECTED Hypo Tirol Bank AG: These ratings are on review for downgrade: - D bank financial strength rating (mapping to Ba2) - A2 long-term bank deposit and senior unsecured debt ratings - Prime-1 short-term ratings PRINCIPAL METHODOLOGIES The methodologies used in this rating were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology published in March 2007. ============= G E R M A N Y ============= LANTIQ: Moody's Lowers Corporate Family Rating to 'Caa1' -------------------------------------------------------- Moody's Investors Service has downgraded to Caa1 from B3 the corporate family rating (CFR) of Lantiq as well as the group's bank loan rating. At the same time, the probability of default rating (PDR) was lowered to Caa3 from Caa2. The outlook on all ratings remains negative. Ratings Rationale The downgrade was prompted by the continued erosion in Lantiq's operating performance and cash flow generation in the current fiscal year, which was faster than we had anticipated in September 2011, Moody's says. "We are increasingly concerned that the company will not be able to stabilize revenues and earnings quickly enough to prevent a rescheduling of its debt installments under its syndicated loan facility in the short to medium term, which could be considered a distressed exchange, and hence a default under Moody's definition." The current two notch differential between the company's CFR of Caa1 and the PDR of Caa3 reflects Moody's expectation that a potential rescheduling of the quarterly amortization under its credit agreement will result only in a moderate loss for lenders. Downgrades: Issuer: Lantiq Deutschland GmbH Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa3 from Caa2 Senior Secured Bank Credit Facility, Downgraded to Caa1, LGD2 - 22% from B3, LGD2 - 24% The Caa1 CFR is more commensurate with Lantiq's ongoing compression in operating margins and negative free cash flow generation, expected to result in depressed credit metrics at fiscal year-end 2011. On the back of weakening economic prospects which are expected to result in more subdued end-customer demand and ongoing restructuring expenses a return to positive operating profitability and free cash flow generation will likely take longer than initially expected. Lantiq's performance could see some uplift in the second half of its fiscal year 2012 when new product versions will have been launched and upon the completion of the ongoing restructuring program. However, we currently expect Lantiq to continue to operate at a net loss over the intermediate term. Given continued negative free cash flow generation and limited liquidity sources available the group's short-term liquidity profile is inadequate and therefore relies on the continued support of its major shareholder. This is a key factor to the current rating because it provides the company with some financial flexibility to contend with softer demand in its end- markets and until the full benefit of its restructuring activities will have been realized. The negative outlook reflects the risk that support of lenders or shareholders could evaporate before a turnaround of the company's performance can be achieved. Moody's could lower Lantiq's ratings further if support from lenders or shareholders would evaporate, resulting in substantial stress on the company's liquidity profile and financial flexibility. This would likely trigger also a realignment of the company's CFR with its PDR due to a lower expected recovery rate on the syndicated term loan facilities in such a scenario. Rating upward pressure is currently limited but an improved liquidity profile supported by solid free cash flow generation and positive operating margins could result in positive rating actions. The principal methodology used in rating Lantiq was the Global Semiconductor Industry Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June. Lantiq Deutschland GmbH, headquartered in Neubiberg (Munich, Germany), is a leading designer of communications semiconductors deployed by major carriers in traditional voice and broadband access networks around the world. Lantiq generated revenues of around US$339 million in the first nine months of fiscal year ending September 30, 2011. ============= I R E L A N D ============= EIRCOM GROUP: STT Submits Balance Sheet Restructuring Proposal -------------------------------------------------------------- Colm Keena at The Irish Times reports that Singapore-based majority shareholder in Eircom, ST Telemedia (STT), has made a balance sheet restructuring proposal to the independent directors of the debt-riddled company. The Irish Times notes that earlier this month, STT surprised many observers of Eircom's fortunes when it said it would not be submitting a proposal "owing to the continuing macro-economic uncertainty in the euro zone". The announcement by the Singapore fund came as Eircom's syndicate of first-lien lenders were to meet to discuss their coordinating committee's proposal to take over the heavily indebted business, the Irish Times relates. Eircom has net debt of EUR3.7 billion and has breached its lending convenants, the Irish Times discloses. The company on briefed lenders about its October trading performance, the Irish Times recounts. While a spokesman would not disclose what was said, it was expected that the lenders would be told that trading conditions remain difficult, according to the Irish Times. Eircom's desire for a further extension to the waiver it has on its covenant breach was also on Monday's agenda, the Irish Times says. The current waiver expires tomorrow, the Irish Times discloses. On Monday, ST Telemedia, as cited by the Irish Times, said that while it was difficult to comprehensively assess the impact on Eircom of possible changes within the euro zone, it had decided to submit a balance sheet restructuring proposal. Independent directors of Eircom have already received two proposals for restructuring its massive debt, including a suggestion from its first lien lenders, who are owed EUR2.4 billion, that they take full control of the business, the Irish Times discloses. Eircom's independent directors are due to assess the proposals that have been submitted before taking the matter to a meeting of the full board, the Irish Times states. Any solution to the company's difficulties would also have to be negotiated with the first lien lenders, the Irish Times notes. Headquartered in Dublin, Ireland, Eircom Group -- http://www.eircom.ie/-- is an Irish telecommunications company, and former state-owned incumbent. It is currently the largest telecommunications operator in the Republic of Ireland and operates primarily on the island of Ireland, with a point of presence in Great Britain. MICHAEL MCNAMARA: Receiver Realizes EUR3.1-Mil. From Asset Sale --------------------------------------------------------------- Gordon Deegan at Irish Examiner reports that a receiver appointed to Michael McNamara & Co. has realised over EUR3.1 million from the sale of assets of the company. In November 2010, the National Asset Management Agency (NAMA) moved to appoint Declan Taite of RSM Farrell Grant Sparks as receiver to Michael McNamara & Co., Irish Examiner recounts. Mr. Taite was appointed statutory receiver after NAMA rejected the company's business plan, Irish Examiner discloses. Eight months earlier, in an interview, owner Bernard McNamara admitted he was broke. This month, it was reported the Co Clare man, whose companies have debts of EUR1.5 billion, sold Mr. McNamara's home on Dublin's Ailesbury Road, Irish Examiner discloses. After being appointed receiver, Mr. Taite shut down the company's sites and laid off half of its 110 staff, Irish Examiner relates. A receiver's extract lodged with the Companies Office shows EUR3.15 million was realised from the sale of assets along with EUR472,497 secured through tax refunds and rebates, Irish Examiner notes. It is the first receiver's extract lodged concerning the company and it covers the period from November 12, 2010, to May 11 of this year, Irish Examiner states. Michael McNamara & Co. is the former flagship firm of property development firm Bernard McNamara. OPERA FINANCE: Fitch Affirms Rating on Class D Notes at 'Csf' ------------------------------------------------------------- Fitch Ratings has affirmed Opera Finance (CMH)'s notes and removed the Class A notes from Rating Watch Negative (RWN) as follows: -- EUR250m Class A (ISIN: XS0241931442): affirmed at 'BBBsf'; removed from RWN; Outlook Negative -- EUR50m Class B (ISIN: XS0241934628): affirmed at 'CCCsf'; Recovery Estimate (RE) 70% -- EUR40m Class C (ISIN: XS0241935195): affirmed at 'CCsf'; (RE) 0% -- EUR35m Class D (ISIN: XS0241935609): affirmed at 'Csf'; (RE) 0% The rating actions follow the Irish Government's decision not to pursue the removal of upward-only rent reviews (UORR) on existing business leases. The decision not to proceed with the amendment to the Landlord and Tenant (Business Leases Review) Bill was due to the vulnerability to legal challenges stemming from conflicts with the Irish Constitution. Although the decision clarifies one of Fitch's concerns about the portfolio's performance, the Negative Outlook on the class A notes reflects the agency's continuing concerns about the state of the fragile Irish property market. Investors and commercial landlords can now be more confident that the cash flows generated from existing Irish commercial property leases will not be modified. The uncertainty created from the proposed bill was widely believed to be one of the main contributing factors to the lack of commercial property transactions over the past 12 months. Fitch believes that this decision is likely to lead to an increase in the number of property transactions in Ireland in 2012. The recent reduction in stamp duty should also incentivize prospective buyers. Although the news was met negatively by occupiers, and in particular retail tenants, it is good news for Irish commercial property owners. The National Asset Management Agency (NAMA) is now Ireland's largest landlord and property owner. Fitch believes the shelving of the UORR removal will be positive for their asset values, and other, Irish portfolios. However, Fitch still expects full losses on the Opera Finance CMH EUR85 million junior loan, which was transferred to NAMA in 2010. Prime yields for retail and office properties remain at 10-year highs but based on low investment activity. Fitch believes that the continued yield softening should now begin to stabilize. The current passing rent is EUR26.5 million versus an ERV of EUR21.8. If the removal of UORR had been retrospective, it would have had a negative impact on the value of the underlying assets and ultimately the rating of the notes. Fitch's opinion on the value of the CMH portfolio remains relatively unchanged. The Fitch securitized loan-to-value ratio (LTV) is 132% and the agency expects partial losses on the class B notes and full losses on the class C and D notes. The portfolio was re-valued by DTZ in February 2011 (reporting a 13% decline from a February 2010 valuation). The reported value is now 54% below DTZ's October 2008 peak valuation. The reported securitized / whole loan LTVs are now 129% and 158%, respectively. Opera Finance (CMH) plc is a single-borrower securitization that closed in February 2006. The EUR375 million interest-only loan is secured over 16 properties located in Ireland, with an initial aggregate market value (MV) of EUR570 million. Expected maturity is in January 2013, while legal final maturity is in January 2015. SHELBOURNE DEVELOPMENTS: Bank of Scotland Appoints Receiver ----------------------------------------------------------- Barry O'Halloran at The Irish Times reports that Shelbourne Developments has confirmed that Bank of Scotland has appointed a receiver to some of its assets and subsidiaries at the property company's own request. According to the Irish Times, the group said in a statement that it invited Bank of Scotland to appoint Michael McAteer of Grant Thornton as receiver over "select subsidiaries and assets of the group" and of its owner Garrett Kelleher. "The properties in question are 75 St Stephen's Green, 46 St Stephen's Green, Moore Street Plaza, and an Andree Putman- designed penthouse apartment on Aston Quay, all city centre properties developed by Shelbourne over the last 15 years," the Irish Times quotes the statement as saying. Shelbourne is believed to owe the bank in the region of EUR200 million, the Irish Times discloses. The group retains control of its other Irish properties, largely made up of commercial premises around Dublin city and county and Cratloe Wood student village in Limerick, the Irish Times notes. Shelbourne Developments is a property developer. =========== L A T V I A =========== * LATVIA: Authorities Probe Rumors Behind Run on Swedish Banks -------------------------------------------------------------- Gustav Sandstrom at Dow Jones Newswires reports that Latvian authorities Monday said that a run on Swedish banks in Latvia was started by false rumors aimed at destabilizing the country, and that its police forces were investigating the matter. According to Dow Jones, Communications Director Thomas Backteman at Swedish lender Swedbank AB said Monday that Latvians during the weekend withdrew unusually large amounts of cash from Swedish banks' cash machines in the country, following rumors that Swedish banks could be in trouble. Swedbank, as cited by Dow Jones, said that the rumors, circulating in social media such as Twitter, include unfounded claims that ATMs in Sweden have been shut down, that Swedbank's operations in Estonia have closed, and that the bank's Latvian chief executive has been arrested. Dow Jones relates that Latvian Prime Minister Valdis Dombrovskis said that the rumor-spreading was done "in an effort to destabilize the situation Latvia". Martins Panke, the prime minister's spokesman, said that police were working on several scenarios as to who might be responsible for the rumor-spreading but that they have yet to name any suspects, Dow Jones discloses. The rumors began about two weeks ago when Latvian authorities took over Latvian bank Krajbanka and they intensified Friday, Mr. Backteman said, but he added that they were completely groundless, Dow Jones relates. The weekend's cash machine withdrawals were seven times higher than during a normal weekend, at around LVL15 million (US$29 million), Mr. Backteman, as cited by Dow Jones, said, adding that around a third of Swedbank's Latvian cash machines were empty by 2000 GMT Sunday. He said Swedbank, which is the largest bank in Latvia, doesn't expect the cash withdrawals to result in any liquidity problems, Dow Jones notes. Latvia's financial regulator, the Financial and Capital Markets Commission, is investigating the origin of the rumors together with the police, spokeswoman Agnese Licite told Dow Jones Newswires. She said the Latvian financial sector is "very healthy" and banks there meet the requirements for capital and liquidity, Dow Jones relates. ===================== N E T H E R L A N D S ===================== ING VERZEKERINGEN: Fitch Affirms 'BB+' Rating on Hybrid Capital --------------------------------------------------------------- Fitch Ratings has maintained ING Verzekeringen N.V and its subsidiaries on Rating Watch Negative (RWN). Fitch's action follows ING Group's recently announced EUR0.9 billion to EUR1.1 billion 4Q charge on ING US's EUR30 billion closed block variable annuity business and the ING Group's plan to provide a contingent funding facility of approximately EUR1.1 billion to ING US. Although Fitch views the announcement as unfavorable, the agency does not expect ING Verzekeringen to inject further capital in ING US's insurance operation as a consequence of the charge and believes the Insurance Groups Directive (IGD) regulatory solvency ratio will remain in line with the current rating at 230%. ING Verzekeringen and its subsidiaries' ratings continue to reflect the uncertainty with its future ownership structure following ING Group's announcement that it intends to dispose its insurance operations by end-2013. The RWN also reflects the uncertainties that the sale will generate with respect to ING insurance operations' franchise and business position. Following the sale, the insurance operations will no longer benefit from being part of a large bank-insurance organization and, as such, will see reduced diversification of risk and business as well as less financial flexibility. Fitch will resolve the RWN once the disposal is finalized and ING Verzekeringen's new shareholding structure has been put in place. Nonetheless, ING Verzekeringen's ratings continue to reflect its strong business positions and geographic diversification. Capital adequacy is in line with the current ratings and Fitch expects the high debt leverage to reduce in the near future due to accumulated earnings and the proceeds from the disposal of Latin American insurance operations which are both expected to be retained by ING Verzekeringen. The rating actions are as follows: ING Verzekeringen N.V. -- Long-term IDR: 'A-'; maintained on RWN -- Short-term IDR: 'F2', maintained on RWN -- Senior unsecured rating: 'BBB+' and 'F2'; maintained on RWN -- Subordinated debt: 'BBB'; maintained on RWN -- Hybrid capital affirmed at 'BB+' ING America Insurance Holdings Inc -- Commercial paper guaranteed by ING Verzekeringen N.V.: 'F2'; maintained on RWN Lion Connecticut Holdings -- Senior unsecured notes, guaranteed by ING Group affirmed at 'A' PALLAS CDO: Fitch Raises Rating on Three Note Classes to 'CCsf' --------------------------------------------------------------- Fitch Ratings has upgraded Pallas CDO II B.V. (Pallas CDO II), a cash flow securitization of structured finance assets, as follows. -- Class A-1-a (XS0268818209): upgraded to 'BBB-sf' from 'BBsf'; Stable Outlook -- Class A-1-d (XS0271520669): upgraded to 'BBB-sf' from 'BBsf'; Stable Outlook -- Class A-2 (XS0268904546): upgraded to 'B+sf' from 'CCCsf'; Stable Outlook -- Class B (XS0268818548): upgraded to 'B-sf' from 'CCsf'; Stable Outlook -- Class C (XS0268818894): upgraded to 'CCCsf' from 'Csf' -- Class D-1-a (XS0268819199): upgraded to 'CCsf' from 'Csf' -- Class D-1-b (XS0268819272): upgraded to 'CCsf' from 'Csf' The upgrades reflect the sustained improvement in the portfolio's credit quality since the notes were downgraded in December 2009. Since the last review in January 2011 when the notes were affirmed, the 'CCCsf' and below bucket has fallen to 2.5% of the portfolio from 11.9%, while current defaults have decreased to EUR1.9 million from EUR3.8 million. The two largest industry sectors are RMBS at 58% of the portfolio and CMBS at 28%. All the over-collateralization (OC) and interest coverage (IC) tests are currently passing their trigger levels. The OC tests have demonstrated significant improvement since their lowest point in May 2010. Since the credit crisis, the portfolio manager has tried to build par by repurchasing EUR12 million of senior notes and buying discounted assets. This has helped mitigate some of the defaults and portfolio deterioration sustained since close, and the performing portfolio and principal cash currently stands at EUR418 million compared to a total liabilities balance of EUR420 million. The transaction exited its reinvestment period in October this year. However, the portfolio manager has the discretion to continue to reinvest certain principal proceeds including unscheduled principal proceeds, and sales proceeds from credit improved and credit impaired assets subject to compliance with certain conditions. Since the last review in January, Fitch notes that the portfolio manager has traded into higher-rated assets, which has improved the portfolio credit quality and the OC tests, the latter by reducing the ratings-based haircuts. The manager has also traded out of UK assets into Spanish assets, particularly into Spanish prime RMBS, which now makes up 25% of the portfolio. Of this, 5.6% of the portfolio comprises 2006-2007 vintage Spanish prime RMBS assets. Fitch observes that the assets from the peripheral eurozone countries (i.e. Spain, Portugal, Italy and Greece) have increased to 47% of the portfolio compared to 29% in December 2009 when the notes were last downgraded. In Fitch's view, the portfolio is exposed to the performance of securitizations from those jurisdictions, and the agency will closely monitor the impact of the sovereign pressures in the peripheral eurozone countries on the transaction. Fitch believes that a material risk for the transaction is that the portfolio's underlying structured finance assets' maturity may extend beyond their reported weighted average expected life. This was taken into account in the agency's portfolio analysis. Pallas CDO II has an event of default (EoD) trigger if the senior tranches become under-collateralized. The agency estimated from the May 2010 report that there was only a 2.7% of OC buffer above the EoD trigger remaining. This cushion has since improved and now stands at a relatively healthy 14%, as estimated from the October 2011 report. If the portfolio experiences further negative credit migration such that the senior tranches become under-collateralized, the EoD trigger could present an additional pressure point for the transaction, where the senior noteholders could vote to liquidate the transaction, potentially at a loss to one or more classes of noteholders. ============= R O M A N I A ============= ARMONIA BRAILA: Bucharest Court Approves Bankruptcy Proceedings --------------------------------------------------------------- Irina Popescu at Romania Business Insider reports that the Bucharest court approved bankruptcy proceedings for the Armonia Braila shopping center at the beginning of December The shopping center was closed down in August 2009, soon after opening, due to low visitor numbers and weak sales recorded by the main tenant, a Carrefour hypermarket, Romania Business Insider recounts. The investment for Armonia Braila amounted to around EUR45 million, and the shopping center had a rentable area of 29,000 square meters, according to Romania Business Insider discloses. The main creditor was Volksbank, and the total value of the debt reaches around EUR35 million, Romania Business Insider says. Casa de Insolventa Transilvania is the judiciary administrator of the shopping center and the assets' sale process will begin next spring, Romania Business Insider notes. The Armonia Braila shopping center is owned by Red Project, a company founded by businessman Andrew Stear and investment funds Warburg Pincus and GED. =========== S W E D E N =========== SAAB AUTOMOBILE: Share Trading Halted; May File for Liquidation --------------------------------------------------------------- The Associated Press reports that the Dutch financial market regulator on Monday halted trading in shares of Swedish carmaker Saab's parent company until further notice. The Netherlands' Financial Market Authority did not specify a reason for halting trade in the stock of Swedish Automobile N.V., the AP says. According to the AP, prominent Swedish newspaper Dagens Industri reported earlier in the day without naming any sources that the company's chief executive Victor Muller was preparing to file for liquidation. Saab could not be reached for comment. The company's most recent public statement is that it is continuing to seek new financing, the AP notes. As reported by the Troubled Company Reporter-Europe on Dec. 9, 2011, Bloomberg News related that Mr. Muller said that the company is in discussions with Zhejiang Youngman Lotus Automobile and a Chinese bank to secure loans that it needs in a "very few days" to avert bankruptcy. Mr. Muller, as cited by Bloomberg, said that unlike Saab's earlier agreements with Youngman, this deal wouldn't involve the Chinese manufacturer taking a stake in Saab, which would allow the transaction to proceed without the approval of former owner General Motors Co. GM, which licenses technology to Saab, has disapproved of previous proposals in which Youngman would take ownership, Bloomberg noted. Pang Da agreed in October to buy a 40% stake in Saab, and that deal collapsed when GM objected, Bloomberg recounted. Bloomberg noted that Mr. Muller said the Vaenersborg District Court in southwestern Sweden is likely to rule this week on the application by the administrator to end Saab's court-administered reorganization. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. =========== T U R K E Y =========== T.C. ZIRAAT: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed four Turkish state-owned or state- controlled banks' Viability Ratings (VR) and Issuer Default Ratings (IDR). The banks are T.C. Ziraat Bankasi A.S. (Ziraat), Turkiye Halk Bankasi A.S. (Halkbank), Turkiye Vakiflar Bankasi T.A.O. (Vakifbank) and Turkiye Kalkinma Bankasi A.S. (TKB). On November 28, 2011, Fitch revised these banks' Outlooks to Stable from Positive. These banks' IDRs and Support Rating Floors are equalized with the Turkish sovereign's Long-Term IDRs reflecting Fitch's view that the state authorities would seek to support the banks if required. This is based on the state's majority ownership and/or control of the banks. Fitch considers the authorities' ability to provide such support is moderate given Turkey's sovereign rating of 'BB+'. Ziraat's 'bb+' VR reflects the bank's extensive franchise, especially in terms of retail and agricultural banking, its strong funding profile, stemming from its core deposit base, sound asset quality and healthy capitalization. It also reflects its declining but still high volume of government securities. Ziraat is the largest bank in Turkey by branch network and total unconsolidated assets with market share of 14.2% at end-Q311 and is fully owned by the Turkish Treasury. Halkbank's 'bb+' VR reflects its competitive position given its long track record of managing its core small enterprises (SME) business and improving its retail lending franchise as well as funding through well-diversified stable retail deposits and adequate capitalization. Profitability is still strong, albeit declining, and asset quality is improving as its non-performing loans (NPL) ratio converges to the sector average. Halkbank has a strong presence in rural areas and it is expanding in large cities with a greater contribution to GDP. Halkbank is the sixth largest bank in Turkey by unconsolidated assets with a market share of 7.8% at end-Q311 and is 75% owned by the Turkish Treasury, with the remainder being free-float. Vakifbank's 'bb+' VR reflects the bank's strong deposit franchise, solid liquidity and consistent performance as well as the risks from the above market growth in higher risk SME segments. Vakifbank is 58.5% owned by the General Directorate of Foundations (GDF), which is fully-controlled and managed by the Turkish state, 16.1% by the employee pension fund and 25.2% free float. Vakifbank is the seventh-largest bank in Turkey by unconsolidated assets, with a market share of 7.7% at end-Q311. TKB's Long-Term IDRs reflect the strong likelihood that its 99% shareholder, the Under-Secretariat of the Turkish Treasury, would seek to support the bank, if needed. In line with Fitch's policies with regards to development banks a VR has not been assigned to the bank. TKB is a small non-deposit-taking development and investment bank, focusing on providing medium- and long-term project finance and working capital loans in geographical areas that have been identified by the government as high priority. 88% of the bank's total funding provided by international financial institutions was guaranteed by the Turkish Treasury at end-Q311. The rating actions are as follows: Ziraat, Halkbank, Vakifbank: -- Long-term foreign and local currency IDR: affirmed at 'BB+'; Outlook Stable -- Short-term foreign and local currency IDR: affirmed at 'B' -- VR: affirmed at 'bb+' -- Individual Rating: affirmed at 'C/D' -- Support Rating: affirmed at '3' -- Support Rating Floor: affirmed at 'BB+' -- National Long-term Rating: affirmed at 'AA+(tur)'; Outlook Stable TKB: -- Long-term foreign and local currency IDR: affirmed at 'BB+'; Outlook Stable -- Short-term foreign and local currency IDR: affirmed at 'B' -- Individual Rating: affirmed at 'D' -- Support Rating: affirmed at '3' -- Support Rating Floor: affirmed at 'BB+' -- National Long-term Rating: affirmed at 'AA+(tur)'; Outlook Stable =========================== U N I T E D K I N G D O M =========================== BATTERSEA POWER: Owners in Administration on Debt Default --------------------------------------------------------- Chris Spillane and Neil Callanan at Bloomberg News report that the owner of Battersea Power Station, the London landmark idled for the past 28 years, was put into administration by U.K. Judge Geoffrey Charles Vos after its owners failed to repay senior lenders owed more than GBP500 million (US$781 million). Judge Vos granted a request by creditors led by Lloyds Banking Group Plc and Ireland's National Asset Management Agency to appoint an administrator to sell the site, according to Bloomberg. Bloomberg notes that the creditors will try to recover the entire 502 million pounds owed by the project's owners by selling the site or the debt, two people familiar with the matter said earlier this month. Ernst & Young was appointed as the administrator for investment companies of Real Estate Opportunities Plc including REO Power Station Ltd. and REO Site Assembly Ltd. Bloomberg notes that the 38-acre (15-hectare) site was valued at 500 million pounds, controlling shareholder Real Estate Opportunities said on Oct. 26. REO was given planning consent a year ago for a GBP5.5 billion redevelopment of the site, which is 2.2 miles (3.5 kilometers) by car from the Houses of Parliament. On Nov. 29, the creditors called in loans to the project's owner, Battersea Power Station Shareholder Vehicle Ltd, Bloomberg recalls. REO said it was still in talks to sell its 54% stake, Bloomberg relates. Battersea Power Station, with four 350-foot-high smokestacks, is Europe's largest brick building. COSALT PLC: David Ross Urges Shareholders to Accept Bid ------------------------------------------------------- Simon Mundy at The Financial Times reports that David Ross, chairman of the Cosalt plc, warned shareholders on Monday that the group faces collapse if they do not accept his bid. Mr. Ross, co-founder of the Carphone Warehouse, last month made an offer for the 85% of Cosalt's equity that he does not own, the FT recounts. At 0.1p a share, the bid values the company at GBP400,000 -- a fraction of the GBP93 million market capitalization it enjoyed in 2007, the FT discloses. "I do not wish to dwell on the reasons that have led to this unhappy position, but want to emphasize to you that the reason behind my [bid] is to secure the future of the company and the positions of all stakeholders . . . particularly its many employees," the FT quotes Mr. Ross as saying. "If my offer is not accepted by shareholders, then unless any other offers of finance are provided to the Company in the meantime, I do not believe the Company has the ability to continue as a going concern." According to the FT, some shareholders have argued that Mr. Ross's offer is unjustly low, and that he contributed to the current situation by overseeing steps such as a heavily dilutive equity raising in 2009. Shareholders have until December 20 to respond to the offer, the FT notes. Shares in Cosalt have fallen more than 90% since October, when the company warned that a delay in the sale of its marine division would hurt its full-year revenues, the FT states. The management has been battling to deal with debt incurred during an aggressive acquisition drive in the years before the 2008 credit crisis, the FT relates. Cosalt plc -- http://www.cosalt.com/-- is engaged in the provision of safety products and services for marine industry and offshore oil and gas industry. GLASTONBURY FINANCE: Fitch Affirms 'C' Ratings on 3 Note Classes ---------------------------------------------------------------- Fitch Ratings has affirmed Glastonbury Finance 2007-1 P.L.C.'s notes, as follows: -- GBP1.8m class X (XS0292542734): affirmed at 'AAAsf', Outlook Stable -- EUR129.1m class A1 EUR (no ISIN): affirmed at 'BBBsf', Outlook Negative -- GBP56.7m class A1 GBP (no ISIN): affirmed at 'BBBsf', Outlook Negative -- GBP33.0m class A2 (XS0292543039): affirmed at 'Bsf', Outlook Negative -- GBP32.8m class B (XS0292543112): affirmed at 'CCCsf' -- GBP32.1m class C (XS0292543468): affirmed at 'CCsf' -- GBP16.8m class D (XS0292543542): affirmed at 'Csf' -- GBP11.0m class E (XS0292543898): affirmed at 'Csf' -- GBP4.5m class F (XS0292543971): affirmed at 'Csf' The affirmations reflect the portfolio's stable performance. The 'CCCsf' and below bucket has declined to 11.8% of the portfolio notional, compared to 14.8% one year ago. CMBS represents 82% of the portfolio with whole business securitizations (WBS) making up the remainder. Fitch believes that a material risk for the transaction is that the underlying structured finance assets' maturity may extend beyond their reported weighted average life. Fitch incorporated this extension risk into its analysis of the portfolio. All the over-collateralization (OC) tests are failing, although there has been a gradual improvement since the end of the reinvestment period in May 2010. According to the transaction documents, the collateral manager may continue to sell defaulted or credit-risk assets after the reinvestment period, but may no longer reinvest any principal proceeds. The Negative Outlook on the class A1 and A2 notes reflects their sensitivity to the idiosyncratic risk of default of any individual obligor. The largest obligor in the portfolio represents 11.8% of the notional and the top five assets account for 48.3%. Fitch expects the obligor concentration in the portfolio to increase further as new assets are no longer introduced into the portfolio due to the end of the reinvestment period. Glastonbury Finance 2007-1 P.L.C. is a managed cash arbitrage securitization of CMBS and WBS assets. The issuer has been incorporated as a special-purpose vehicle (SPV) to issue approximately GBP354 million of floating-rate and subordinated notes. The collateral is actively managed by Palatium Investment Management. Since the end of the reinvestment period, any amortization and sales proceeds are used to sequentially repay the outstanding notes. LUMINAR GROUP: Peter Marks Group Buys Firm Out of Administration ---------------------------------------------------------------- Mark Wingett at Big Hospitality reports that a new group led by industry veteran Peter Marks has completed the acquisition of Luminar Group Holdings plc for GBP45 million. Mr. Marks, a former Luminar managing director, has linked up with Ice Planet's Alex Geffert, who formely headed up Whitbread's nightclub division, and entrepreneur and nightclub owner Joe Heanen, to rescue the company, which fell into administration with debts of around GBP85 million in October, according to Bug Hospitality. The report relates that the deal is expected to save up to 3,000 jobs. Bug Hospitality notes that the group, which is believed to be backed by two high-net worth Irish individuals, said that they were committed to further investment in the company and to refreshing and developing its core brands such as Oceana and Lava & Ignite. The report notes that the sale price of $45 million is believed to be well above the GBP30 million bids that were previously thought to be on the table for Luminar Group, especially as the company is understood to have reported a sales decline of close to 20% in November. "I'd be amazed if the cash price was much higher than GBP20 million. If the GBP45 million is correct, the rest must be in the form of deferred consideration or some sort of performance- related earn out," the report quoted an unnamed analyst as saying. As reported in the Troubled Company Reporter on Oct. 28, 2011, MK News said that Luminar Group has gone into administration, saying it cannot meet its banking obligations. Luminar Group said it could not pay back debts to Lloyds TSB Bank, Barclays Bank and the Royal Bank of Scotland which due to be repaid on Oct. 26, according to MK News. The report related that the company's shares were temporarily suspended from trading when the news was announced. About Luminar Group Based in Milton Keynes, United Kingdom, Luminar Group Holdings plc -- http://www.luminar.co.uk/-- is engaged in the ownership, development and operation of nightclubs and themed bars. Its main branded venues are Oceana, Liquid, and Lava & Ignite. The Company's product brands include Big Night Out, Vibe, Red Carpet Moments and UK Club Culture (UKCC). Oceana has five bars, two clubs, and one amazing night. * * * As reported in the Troubled Company Reporter on Oct. 28, 2011, MK News said that Luminar Group has gone into administration, saying it cannot meet its banking obligations. Luminar Group said it could not pay back debts to Lloyds TSB Bank, Barclays Bank and the Royal Bank of Scotland which due to be repaid on Oct. 26, according to MK News. The report related that the company's shares were temporarily suspended from trading when the news was announced. ROYAL BANK: Ulster Bank Unit Incurred Losses Following Guarantee ---------------------------------------------------------------- Simon Carswell at The Irish Times reports that Ulster Bank, a subsidiary of Royal Bank of Scotland, lost GBP732 million (EUR864.9 million) in deposits in the four days after the Government introduced the bank guarantee in September 2008. A report by the Financial Services Authority into the failure of the nationalized British bank said the guarantee, which did not cover Ulster Bank as it was foreign-owned, "further intensified pressure on RBS's liquidity position following the failure of Lehman Brothers". Seven days after the guarantee, RBS began borrowing emergency funding from the Bank of England and eight days later, was recapitalized by the British government with GBP20 billion (EUR23.6 billion) to prevent its collapse, the Irish Times relates. The report showed Ulster Bank had bad debts of GBP4.4 billion (EUR5.2 billion) between 2008 and 2010 on loans of GBP19 billion (EUR22.4 billion) on property loans, including commercial investment and residential development, the Irish Times discloses. The total loan impairments increased from GBP275 million (EUR325 million) in 2008 to GBP1.3 billion (EUR1.5 billion) in 2009 and GBP2.7bn (EUR3.2 billion) the following year, according to the Irish Times. The FSA found it "seems likely" RBS senior management and its board were not sufficiently aware of the total exposure to commercial property across its divisions, including Ulster Bank, the Irish Times notes. The FSA report found the impairments on the Ulster Bank loans amounting to 7.5% of the bank's end-of-2008 loans was the highest of any division at RBS, the Irish Times states. The report found that bad loans within Ulster Bank's commercial and development property loans, at 22.15%, amounted to the second highest at RBS by category, the Irish Times says. According to the Irish Times, the report said that the cumulative losses reflected "the scale of poor corporate property lending in Ireland, in which RBS participated". About RBS The Royal Bank of Scotland Group plc (NYSE:RBS) -- http://www.rbs.com/-- is a holding company of The Royal Bank of Scotland plc (Royal Bank) and National Westminster Bank Plc (NatWest), which are United Kingdom-based clearing banks. The company's activities are organized in six business divisions: Corporate Markets (comprising Global Banking and Markets and United Kingdom Corporate Banking), Retail Markets (comprising Retail and Wealth Management), Ulster Bank, Citizens, RBS Insurance and Manufacturing. On October 17, 2007, RFS Holdings B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V., Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and controlled by RBS, completed the acquisition of ABN AMRO Holding N.V. (ABN AMRO). In July 2008, the company disposed of its entire interest in Global Voice Group Ltd. VON ESSEN: Private Investor Buys Firm Out of Administration ----------------------------------------------------------- Emma Eversam at Big Hospitality reports that Hotel Verta has been acquired out of administration by a private investor for approximately GBP20 million. The latest development is expected to save 75 jobs, according to Big Hospitality. The report notes that the Hotel Verta, which remained owned by former Von Essen Managing Director Andrew Davis after the rest of hotel chain went into administration, was placed into administration itself at the end of July. Hotel Verta has been run by administrators for Ernst & Young while property agents Christie & Co searched for new owner, Big Hospitality discloses. von Essen hotel chain owns 28 luxury hotels in the UK and France. * * * As reported in the Troubled Company Reporter-Europe on April 25, 2011, BBC News said the holding company of the von Essen hotel chain has appointed accountants Ernst & Young as administrators. SoGlos.com related that von Essen is reported to have debts of more than GBP25 million. SoGlos.com noted that while administrators have been appointed and the portfolio of hotels are expected to be sold off either as a group or as individual properties, the hotels are all expected to continue to trade as usual. =============== X X X X X X X X =============== * Eurozone Crisis May Spark New Wave of Shipping Insolvencies ------------------------------------------------------------- Robert Wright at The Financial Times reports that fears are mounting that the eurozone financial crisis could spark a fresh wave of shipping insolvencies, after funding problems at many leading European banks accelerated falls in vessel values, triggered by the worst conditions in some shipping markets in 25 years. Several of the world's most important shipping financiers have told the FT that liquidity problems are putting banks off financing potential purchases of ships that come up for sale, pushing down the values they achieve. That is prompting banks to worry about the value of similar ships pledged as collateral on their loans, the FT notes. According to the FT, a downward spiral in values is developing as falling values prompt banks to pressurize owners to sell off further ships. The warnings come at the end of a year so grim for some of the most important shipping segments that many involved are already comparing conditions to the prolonged slump in the mid-1980s, the FT relates. ********* 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, Psyche A. Castillon, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2011. 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 * * *