/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/120307.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, March 7, 2012, Vol. 13, No. 48 Headlines A U S T R I A * AUSTRIA: Expects to Present Bank Insolvency Law by "Summer" C Z E C H R E P U B L I C CZECH CONNECT: Put Into Bankruptcy by Ostrava Court * CZECH REPUBLIC: Company Insolvency Proposals Up 14% in February * CZECH REPUBLIC: Corporate Bankruptcies Hit Record High in Feb. D E N M A R K * DENMARK: 5th Bank Rescue Package Won't Avert Insolvency Crisis G E R M A N Y ADAM OPEL: Boss Vows to Return Profitability GENERAL MOTORS: Says Its New Alliance With Peugeot Has Merit KIRCHMEDIA: Deutsche Bank Declines US$1-Bil. Kirch Settlement G R E E C E * GREECE: 12 Financial Institutions Agree to Voluntary Debt Swap * Swiss Law-Governed Bondholders Invited to Join Ad Hoc Group I R E L A N D HARBOURMASTER CLO: Fitch Junks Ratings on Four Note Classes N E T H E R L A N D S ZIGGO BOND: Moody's Puts Ba2 CFR for Possible Upgrade Over IPO R U S S I A AVTOVAZ JSC: Fitch Affirms 'B- Long-Term Issuer Default Ratings U N I T E D K I N G D O M FOUR SEASONS: Healthcare Expects to Repay Debt by Deadline PORTSMOUTH FOOTBALL: Ex-Owner Prepared to Prevent Liquidation RANGERS FOOTBALL: SPL Mulls Penalties, Points Deductions X X X X X X X X * Sovereign Downgrades Key to European Bond Rating Migration ********* ============= A U S T R I A ============= * AUSTRIA: Expects to Present Bank Insolvency Law by "Summer" ------------------------------------------------------------- Zoe Schneeweiss at Bloomberg News reports that Finance Minister Maria Fekter said Austria's government will present rules for banks going insolvent to lawmakers by "summer". "We've agreed that the insolvency law for banks will be in parliament by summer," Bloomberg quotes Ms. Fekter as saying in Vienna on Tuesday. This includes the enforcement directive for "financial police". =========================== C Z E C H R E P U B L I C =========================== CZECH CONNECT: Put Into Bankruptcy by Ostrava Court --------------------------------------------------- CTK, citing data in the insolvency register, reports that the Regional Court in Ostrava has sent Czech Connect Airlines (CCA) into bankruptcy. CCA filed an insolvency petition itself because of excessive debts and inability to repay them, CTK relates. According to the petition, CCA has almost 300 creditors, among whom are 80 current and former employees to whom the company owes CZK3.4 million in total, CTK discloses. Claims of the other creditors amount to almost CZK219 million, CTK notes. CCA is based at the Leos Janacek Airport in Ostrava, northern Moravia. * CZECH REPUBLIC: Company Insolvency Proposals Up 14% in February ----------------------------------------------------------------- CTK reports that Creditreform on Monday said the number of insolvency proposals for Czech companies rose by 14% to 687 in February against January. According to CTK, the number of insolvency proposals for individuals grew also by 14% to 1,913. Working day adjusted, the number of the proposals increased by 21% in both groups, CTK notes. The figures are at their peak, also compared with the whole of last year, and their fall can hardly be expected, CTK states. * CZECH REPUBLIC: Corporate Bankruptcies Hit Record High in Feb. ---------------------------------------------------------------- CTK, citing Czech Credit Bureau, reports that a total of 287 bankruptcies of companies were declared in the Czech Republic in February, the highest number since January 2008 when the new insolvency law came into force and a quarter higher than this January. According to CTK, the number of personal bankruptcies fell by 7% from January to 1,217. The share of bankruptcies of self employed in corporate bankruptcies grew to 56%, CTK notes. ============= D E N M A R K ============= * DENMARK: 5th Bank Rescue Package Won't Avert Insolvency Crisis ---------------------------------------------------------------- Frances Schwartzkopff at Bloomberg News reports that Denmark's fifth bank rescue package since 2008 won't help lenders struggling with insolvency. Lawmakers agreed last week to allow banks, including FIH Erhvervsbank A/S, to transfer agricultural and property loans to state agencies in an effort to bring to an end a credit dearth that's squeezing businesses and farms and threatening the economy, Bloomberg recounts. According to Bloomberg, Henrik Bjerre-Nielsen, chief executive officer of Financial Stability Co., said that while the package should help stabilize businesses and some lenders it won't help banks at the edge of insolvency. "This is applicable only for well-capitalized banks facing potential liquidity problems," Bloomberg quotes Mr. Bjerre- Nielsen as saying in a March 2 telephone interview. The government also said last week it would provide at least DKK36 billion (US$6.2 billion) in loans and guarantees to businesses, Bloomberg relates. The Nordic country is struggling with a worsening banking crisis as the fallout from a burst housing bubble deepens, depressing spending and souring farm and business loans, Bloomberg discloses. Depositors are fleeing regional banks for larger lenders including Sydbank A/S, Bloomberg states. At the same time, regulators are pushing for tougher capital requirements and the banks need to repay about DKK30 billion in state-backed debt by 2013, Bloomberg notes. "If we hadn't done this transaction, they would have been forced to cut down on their credit exposure on small and medium-sized enterprises," Bloomberg quotes Mr. Bjerre-Nielsen as saying. Still, "this is definitely not something that can be used by a bank that is facing solvency problems". The agency has said that the group of banks under intensified scrutiny by the Financial Services Authority because of potential insolvency problems represents about 3% of the industry, Bloomberg relates. Most of Denmark's 120 banks were locked out of funding markets after the collapse last year of Amagerbanken A/S triggered Europe's first senior creditor losses under a government resolution framework, Bloomberg recounts. ============= G E R M A N Y ============= ADAM OPEL: Boss Vows to Return Profitability -------------------------------------------- BBC News reports that the boss of carmakers Opel and Vauxhall has vowed to "work aggressively" to make the brands profitable. "We are talking to every stakeholder right now to improve the business in order to provide sustainable profitability," chief executive Karl Stracke told BBC. Fears are growing that his cost-cutting plan will involve the closure of at least one factory in Europe, BBC states. He declined to offer any assurance to workers in the UK or Germany, BBC notes. According to BBC, industry observers have said Vauxhall's Ellesmere Port factory in the UK and Opel's Bochum factory in Germany are likely candidates if Mr. Stracke decides to close one plant. The fears grew after last month's revelation that Opel/Vauxhall suffered massive losses last year, BBC recounts. Mr. Stracke was eager to stress that some EUR11 billion (US$14.5 billion; GBP9.2 billion) is being invested in new products, with some 30 new Opel and Vauxhall models scheduled for launch over the next three years, BBC discloses. Mr. Stracke, as cited by BBC, said this should help the company gain market share and grow, he said. Opel and its UK subsidiary Vauxhall are owned by General Motors. As reported by the Troubled Company Reporter-Europe on March 2, 2012, Bloomberg News related that GM and PSA Peugeot Citroen (UG) announced a broad alliance that will include joint purchasing and vehicle development in an effort to revitalize their European operations. The automakers said in a joint statement on Wednesday that GM will buy 7% of the French carmaker to become the second-largest shareholder after the Peugeot family, Bloomberg disclosed. Peugeot will sell new shares in a EUR1 billion (US$1.34 billion) rights offering, Bloomberg said. Bloomberg noted that a person familiar said the partnership also includes a restructuring at both GM and Peugeot that will result in plant closures and job cuts. Adam Opel GmbH -- http://www.opel.com/-- is General Motors Corp.'s German wholly owned subsidiary. Opel started making cars in 1899. Opel makes passenger cars (including the Astra, Corsa, and Vectra) and light commercial vehicles (Combo and Movano). Its high-performance VXR range includes souped-up versions of Opel models like the Meriva minivan, the Corsa hatchback, and the Astra sports compact. Opel is GM's largest subsidiary outside North America. GENERAL MOTORS: Says Its New Alliance With Peugeot Has Merit ------------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that General Motors Co. is moving to blunt heavy skepticism of its newly minted alliance with France's PSA Peugeot Citroen, saying the deal may be the start of a potentially broader alliance that could help its struggling European operations. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. On Nov. 1, 2011, Moody's Investors Service raised New GM's Corporate Family Rating and Probability of Default Rating to Ba1 from Ba2, and its secured credit facility rating to Baa2 from Baa3. Moody's also raised the Corporate Family Rating of GM's financial services subsidiary -- GM Financial -- to Ba3 from B1. On Oct. 7, 2011, Fitch Ratings upgraded the Issuer Default Ratings of New GM, General Motors Holdings LLC, and General Motors Financial Company Inc., to 'BB' from 'BB-'. On Oct. 3, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on New GM to 'BB+' from 'BB-'; and revised the rating outlook to stable from positive. "We also raised our issue-level rating on GM's debt to 'BBB' from 'BB+'; the recovery rating remains at '1'," S&P said. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. KIRCHMEDIA: Deutsche Bank Declines US$1-Bil. Kirch Settlement ------------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reports that Deutsche Bank AG on Thursday rejected a reported EUR800 million (US$1.06 billion) deal to end litigation brought by now-deceased German media mogul Leo Kirch and his associates, who accused the bank's onetime CEO of triggering the collapse of Kirch's conglomerate. According to Law360, the bank said in a statement that its management board had thoroughly reviewed the proposal with the aid of internal and external legal advice and declined to accept it without dissent. About KirchMedia Headquartered in Ismaning, Germany, KirchMedia GmbH -- http://www.kirchmedia.de/-- was the country's second largest media company prior to its insolvency filing in June 2002. The firm's collapse, caused by a US$5.7 billion debt incurred during an expansion drive, was Germany's biggest since World War II. Taurus Holding is the former holding company for the Kirch group. The case is docketed under Case No. 14 HK O 1877/07 at the Regional Court of Munich. =========== G R E E C E =========== * GREECE: 12 Financial Institutions Agree to Voluntary Debt Swap ---------------------------------------------------------------- According to Dow Jones Newswires' Matina Stevis, the Institute of International Finance said in a statement on Monday that twelve financial institutions representing a significant chunk of outstanding Greek bonds held by private lenders have agreed to participate in the voluntary Greek debt swap set to conclude Thursday. The banks and funds all sit on the steering committee that negotiated the terms of the Greek debt restructuring under the auspices of the IIF, which represents some 450 financial institutions, Dow Jones recounts. The institutions that indicated Monday they'd participate are: Allianz SE , Alpha Bank AE, AXA SA, BNP Paribas SA, CNP Assurances, Commerzbank AG, Deutsche Bank AG, Eurobank EFG, Greylock Capital Management, ING Bank, Intesa Sanpaolo SpA and National Bank of Greece SA, Dow Jones discloses. Based on available disclosures from most of these institutions, they held Greek bonds with a total nominal value of at least EUR40 billion (US$52.8 billion) as of the end of 2011, although positions may have changed since then, Dow Jones says. As part of a second bailout package for Greece, private-sector investors are being asked to take a 53.5% loss on their principal, and then to swap their old Greek bonds with new bonds that have longer maturities and lower coupons, Dow Jones states. "Completion of the approval processes is still underway for a few steering committee member firms," Dow Jones quotes the statement as saying. The only steering committee member not mentioned in the IIF statement is Landesbank Baden-Wurttemberg, Dow Jones notes. These institutions, including the sole hedge fund represented in the committee, Greylock Capital Management, will participate voluntarily in the bond exchange of their holdings of Greek government bonds, Dow Jones relates. According to Dow Jones, an LBBW spokesman said the bank, which according to its own disclosures from September 2011 held EUR628 million in Greek government bonds, is still considering the bond-swap offer on the table. * Swiss Law-Governed Bondholders Invited to Join Ad Hoc Group ------------------------------------------------------------- Holders of the 2 1/8% Bonds 2005-2013 of CHF650,000,000 issued by The Hellenic Republic have formed an Ad Hoc Group in response to the Republic's recent Solicitation of Consents. The Group's members hold a material portion of the Bonds. The Group is concerned by the terms proposed in the Solicitation, and the Group is exploring means to address its concerns and to protect the rights of holders of the Bonds. Interested holders of the Bonds are invited to contact the Group before acting on the Solicitation, through the Group's legal advisor Bingham McCutchen LLP. Given that March 8 is the deadline for submitting a Participation Instruction, holders are urged to contact the Group's legal advisor quickly. Contact details are: Bingham McCutchen LLP 399 Park Avenue New York NY 10022 Attn: Tim DeSieno E-mail: tim.desieno@bingham.com Telephone: +1 212 705 7426 Bingham -- http://www.bingham.com-- offers a broad range of market-leading practices focused on global financial services firms and Fortune 100 companies. The firm has more than 1,000 lawyers in 14 locations in the United States, Europe and Asia. ============= I R E L A N D ============= HARBOURMASTER CLO: Fitch Junks Ratings on Four Note Classes ----------------------------------------------------------- Fitch Ratings has downgraded Harbourmaster CLO 3 Limited's notes, as follows: -- EUR282.0m class A (ISIN XS0152283692): downgraded to 'CCCsf' from 'BB-sf'; Recovery Estimate 95% -- EUR21.0m class B-1 (ISIN XS0152285630): downgraded to 'CCsf' from 'CCCsf'; Recovery Estimate 0% -- EUR5.0m class B-2 (ISIN XS0152285804): downgraded to 'CCsf' from 'CCCsf'; Recovery Estimate 0% -- EUR8.0m class C (ISIN XS0152286281): affirmed at 'CCsf'; Recovery Estimate 0% Fitch has downgraded the class A, B-1 and B-2 notes due to an increasing exposure to lower credit quality assets as the portfolio decreases in size and due to the presence of a significant long dated bucket of assets which may have to be sold in advance of the maturity of the transaction. Despite the increase in lower credit quality assets the over- collateralization (OC) tests are still passing, reflecting the fact that the tests do not make adjustments for 'CCC' and below assets. The weighted average life of the portfolio is currently 2.79 years with 2.40 years left until maturity. 47% of the aggregate principal balance of the assets under management has a maturity later than the legal final maturity of the transaction in July 2014 necessitating some sort of liquidation prior to maturity. The Weighted Average Fitch Factor test has deteriorated driven by an increase in assets rated 'CCC' and below by Fitch. This bucket currently stands at 17%. OC tests have been passing since September 2010. Given the short remaining life of the transaction it is unlikely that significant spread can be diverted to repay senior notes should defaults increase and the OC tests fail. The Recovery Estimate represents Fitch's calculation of expected principal recoveries, as a percentage of current note principal outstanding. In this instance Fitch feels that the expected recovery on the class A notes would be 95% given the occurrence of an expected default and liquidation scenario. Fitch would expect the class B-1, B-2 and C notes to recover 0% in the same scenario. Harbourmaster CLO 3 Limited is a securitization of mainly European senior secured loans and structured finance securities. At closing a total note issuance of EUR438 million was used to invest in a target portfolio of EUR430 million. The portfolio is actively managed by Harbourmaster Capital Ltd. ===================== N E T H E R L A N D S ===================== ZIGGO BOND: Moody's Puts Ba2 CFR for Possible Upgrade Over IPO --------------------------------------------------------------- Moody's Investors Service placed the ratings for Ziggo Bond Company B.V. ("Ziggo"; CFR at Ba2) under review for possible upgrade following the company's announcement that it intends to launch an initial public offering on Amsterdam's Euronext NYSE exchange. The review reflects the company's associated announcement of an intended financial policy of maintaining Net Debt/ EBITDA at 3.5x, while accommodating dividend outflows in line with its contemplated progressive dividend policy. Moody's expects to conclude its review following the completion of the IPO as currently envisaged. Moody's currently anticipate that the CFR will be upgraded by one notch, with the upgrade of debt instruments following in line with the loss given default model. Ratings Rationale The intended IPO will involve a secondary sale of a portion of Ziggo's ordinary shares held by its founding shareholders including affiliates of Cinven and Warburg Pincus, and is therefore leverage neutral. The company's financial policy of maintaining reported Net Debt/ EBITDA at 3.5x in the long-term, on the other hand, reinforces its focus on near-term de- leveraging. The company's reported Net Debt/ EBITDA stood at 3.9x as of December 31, 2011 and Moody's adjusted Gross Debt/ EBITDA stood broadly at the same level. Ziggo plans to pay EUR220 million in dividends in 2012 and intends to maintain a pay-out policy of distributing at least 50% of its 'free cash flow to equity' in dividends, going forward. This implies that company's free cash flow / debt (as calculated by Moody's) will concurrently weaken to accommodate the dividends from the ~9% level at the end of 2011. Nevertheless, going forward Moody's would expect the company to gradually de-leverage to 3.5x Net Debt/ EBITDA and continue to generate positive free cash flow post dividends. Ziggo's business and proposed financial profile is likely to be in line with Moody's expectations for a Ba1 CFR, once the IPO completes, with the company's new financial policy. During 2011, Ziggo's revenues continued to grow solidly (7% on an organic basis) to EUR1.48 billion. Its EBITDA margin remained strong at 56.5%. Following the growth in revenue generating units ('RGUs') and bundled subscribers, triple play penetration of home passed reached 30%. Broadband and telephony penetration reached around 40% and 32% respectively. Moody's believes there remains room for Ziggo to continue to grow by pursuing the current bundling strategy and increasing broadband market share. In addition, as of December 2011 around two thirds of total TV subscribers had activated digital smart cards with 31% signing up for digital pay TV packages. Although Moody's notes that some lower ARPU analogue TV subscribers may not all transition to Ziggo's digital offering, Moody's expects to see further contribution to revenue and EBITDA from the uptake of digital and wider penetration of interactive services as well as new growth opportunities like 'TV Everywhere' and B2B broadband and telephony services. Ziggo operates a state-of-the-art network, fully DOCSIS3.0 enabled and offers high broadband speeds up to 120 Mbps across its geographic market. Moody's believes that the company remains well positioned to grow in its major product lines, supported by its established infrastructure. Ziggo's liquidity profile is acceptable for its needs. Ziggo had approximately EUR113 million of cash at December 30, 2011. Under the Senior Credit Facility agreement, expiring in September 2017, the Company has an uncommitted revolving credit facility of EUR150 million which is covered by a committed bilateral ancillary facility of EUR50.0 million by one of the lenders, expiring in September 2014, and an uncommitted capital expenditure restructuring facility of EUR250.0 million expiring in September 2017. The principal methodology used in rating Ziggo was the Global Telecommunications Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ziggo, with central offices in Utrecht, is the largest cable operator in the Netherlands. For FY2011, the company reported approximately EUR1.48 billion in revenue and EUR835 million in reported EBITDA. =========== R U S S I A =========== AVTOVAZ JSC: Fitch Affirms 'B- Long-Term Issuer Default Ratings --------------------------------------------------------------- Fitch Ratings has affirmed JSC AvtoVAZ's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'B-'. The agency has also affirmed AvtoVAZ's Short-term foreign and local currency IDRs at 'B' and National Long-term rating at 'BB(rus)'. Fitch has upgraded the foreign and local currency senior unsecured rating to 'B-' Recovery Rating 'RR4', from 'CCC', Recovery Rating 'RR5'. The Outlooks on the Long-term ratings are Stable. Fitch notes AvtoVAZ's operational results continued to improve in 2011 alongside with the strong ca. 40% Russian car market growth in 2011. AvtoVAZ's sales in 2010-2011 strongly benefited from governmental measures to support the local car market, including scrapping incentives for old cars and subsidizing of interest rates under car loans, which lasted until late 2011. Fitch assesses the medium-term outlook for Russian car market positively, supported by relatively low passenger cars per capita compared with developed economies, expected 2012-2014 Russian GDP growth above the global average as well as further development of the car loan market. Russia's accession to WTO would have a limited impact on local car producers due to the relatively small immediate import duties decrease until 2015 and intensified competition between local car producers. The ratings are underpinned by direct governmental support, which remains crucial for AvtoVAZ, whose standalone credit profile is extremely weak. Throughout H209-2010 AvtoVAZ has obtained RUR75bn of interest-free loans from Russian Technologies (RT, not rated), a Russian state corporation. In mid-2010, RT, Renault ('BB+'/Stable) and Nissan ('BBB-'/Stable) principally agreed to jointly contribute to the issuer's capital. So far, RT contributed RUR12.6bn via debt-to-equity swap while Renault and Nissan transferred RUR4.4bn in capex and technologies. Further contributions could occur in 2012. Fitch believes that AvtoVAZ will further benefit from increased cooperation with Renault, which currently owns 25% of the company's share capital, and Nissan. AvtoVAZ's upgrade of its model range is on track, with a new Granta model launched in November 2011 and other models based on Renault's 'B0' platform to be launched in 2012-2013. Other areas of cooperation include joint purchasing and quality check. AvtoVAZ's production capacity should also benefit from the acquisition of the former IzhAvto plant in Q411 for RUR1.7 billion, but the impact on AvtoVAZ's profitability will be moderate and take time to accrue. The plant already produces AvtoVAZ's 'Classic' models and should assemble other models from AvtoVAZ, Renault and Nissan once the plant is upgraded accordingly. Fitch expects revenue to grow by ca. 30% in 2011 but to decrease by about 5% in 2012 due to the payback effect of governmental industry stimulating programs ending in 2011. Throughout 2012- 2015, Fitch expects AvtoVAZ to show moderate one-digit EBITDAR and CFO margins. Fitch expects FCF margins to remain negative due to significant investment activities. Deleveraging in 2012 as a result of the continued equity contribution would be followed by leveraging in further two years, with net adjusted debt to EBITDAR being above 4.0x until 2014. The two members of the Renault-Nissan alliance have announced that they will increase their combined stake in AvtoVAZ to a majority one in H112. This should enable further cooperation between AvtoVAZ and the Renault/Nissan alliance, ultimately strengthening AvtoVAZ's industrial process, capacity utilization and profitability in the long term. A positive rating action could be driven by a sustained improvement in profitability and FCF generation. The acquisition of a controlling stake in the company by Renault and Nissan could also have a positive effect on AvtoVAZ's credit profile, although it may not lead to an immediate positive rating action, as benefits could take time to accrue. A lower level of direct and/or indirect support from either the Russian government or Renault and Nissan could result in a negative rating action. =========================== U N I T E D K I N G D O M =========================== FOUR SEASONS: Healthcare Expects to Repay Debt by Deadline ---------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Four Seasons Healthcare, the U.K.'s largest care-home operator, said it was confident of concluding a deal that would see existing debt holders repaid in full by a September deadline. Four Seasons Health Care -- http://www.fshc.co.uk/-- is one of the largest care home (nursing home) operators in the UK. The company runs some 300 nursing homes, and its Huntercombe division operates about eight specialized health care centers (which provide mental health and rehabilitation services) in England, Scotland, North Ireland, and the Isle of Man. Allianz Capital Partners, the private equity arm of Allianz Group, acquired the company from Alchemy Partners for GBP775 million in 2004. PORTSMOUTH FOOTBALL: Ex-Owner Prepared to Prevent Liquidation ------------------------------------------------------------- Pascal Lemesre at Sports Mole reports that former Portsmouth Football Club owner Balu Chainrai has said that he is prepared to take up ownership of the club again if it prevents liquidation. The club, also known as Pompey, is in danger of extinction but Mr. Chainrai, who sold the South Coast club to Convers Sports Initiatives (CSI) last year, is ready to meet administrator Trevor Birch for crisis talks, says Sports Mole. "I will definitely make efforts to become a reluctant owner, again, until a proper owner can be found," the Hong Kong-based businessman told Sky Sports News, according to Sports Mole. "I will do my best not to allow him (Birch) to liquidate the club." "I have to sit down and see if the administrator is going to contact me and tell me how much money is required for me to make my calculations to see whether I would be prepared to put in what is required," Mr. Chainrai, as cited by Sports Mole, added. Sports Mole relates that Mr. Birch, in response to Mr. Chainrai's comments, said that he would be "more than happy" to meet the 52- year-old and he was "working day and night" to save Portsmouth. As reported in the Troubled Company Reporter-Europe on Jan. 26, 2012, The Financial Times related that Portsmouth Football Club has been issued a winding-up order by Revenue & Customs over an unpaid GBP1.6 million tax bill. The move plunges the Championship side into a fresh survival battle, two years after it became the first Premier League club to go into administration, according to FT. Portsmouth FC's future fell into uncertainty when owner Vladimir Antonov, a Russian businessman with banking assets, was arrested in November in central London at the request of Lithuanian authorities investigating fraud and money laundering, FT noted. About Portsmouth Football Portsmouth Football Club Ltd. -- http://www.portsmouthfc.co.uk/ -- operated Portsmouth FC, a professional soccer team that plays in the English Premier League. Established in 1898, the club boasted two FA Cups, its last in 2008, and two first division championships. Portsmouth FC's home ground is at Fratton Park; the football team is known to supporters as Pompey. Dubai businessman Sulaiman Al-Fahim purchased the club from Alexandre Gaydamak in 2009. A French businessman of Russian decent, Gaydamak had controlled Portsmouth Football Club since 2006. RANGERS FOOTBALL: SPL Mulls Penalties, Points Deductions -------------------------------------------------------- Mark Guidi at DailyRecord.co.uk reports that Scottish Premiere League (SPL) clubs are drawing up a blueprint of financial penalties and points deductions for Rangers Football Club should the club shut down and reform as a new company. DailyRecord.co.uk notes that with the Rangers having to save GBP1 million a month to stay afloat, there is growing concern inside Ibrox that liquidation is edging closer. If the club go bust but start up again under a name such as Rangers 2012, the newco would need to acquire the SPL license from the administrators, according to the report. A new Rangers would also need the SPL's approval to get back into the top flight, the report relates. That decision would be down to the six-man SPL board of Ralph Topping (chairman), Neil Doncaster (chief executive), Eric Riley (Celtic), Derek Weir (Motherwell), Steven Brown (St Johnstone) and Stephen Thompson (Dundee United). All of them, apart from Doncaster, are due to stand down in July but can be re-elected, DailyRecord.co.uk reports. As reported by the Troubled Company Reporter-Europe, BBC News related that Rangers appointed administrators on Feb. 14, with Her Majesty's Revenue and Customs pursuing an unpaid GBP9 million tax bill accrued since owner Craig Whyte assumed control at Ibrox last May. About Rangers Football Club Rangers Football Club PLC -- http://www.rangers.premiumtv.co.uk/ -- is a United Kingdom-based company engaged in the operation of a professional football club. The Company has launched its own Internet television station, RANGERSTV.tv. The station combines the use of Internet television programming alongside traditional Web-based services. Services offered include the streaming of home matches and on-demand streaming of domestic and European games, which include dedicated pre-match, half-time and post- match commentary. The Company will produce dedicated news magazine and feature programs, while the fans can also access a library of classic European, Old Firm and Scottish Premier League (SPL) action. Its own dedicated television studio at Ibrox provides onsite production, editing and encoding facilities to produce content for distribution on all media platforms. =============== X X X X X X X X =============== * Sovereign Downgrades Key to European Bond Rating Migration ------------------------------------------------------------ Over the last four years, sovereign downgrades have been the principal driver of covered bond rating actions in Europe, says Moody's Investors Service in a new Special Comment published on March 5, 2012, with covered bond ratings downgraded by over four notches, on average, in downgraded sovereigns. "In contrast to the performance of covered bond ratings in downgraded sovereigns, bond ratings in sovereigns whose ratings have remained stable have experienced an equivalent migration that is less than half a rating notch," says Volker Gulde, a Moody's Vice President and senior analyst. "Sovereign downgrades may affect covered bond ratings both directly and indirectly. The direct relationship acts to lower the TPIs, thereby limiting the uplift from which a covered bond rating may benefit, over and above the issuer rating; whereas, indirectly, sovereign downgrades typically lead to issuer downgrades," explains Mr. Gulde. Moody's notes that a weaker sovereign implies that the government and financial institutions of that country may be less able and/or willing to provide or obtain funds to support the refinancing of covered bonds after an issuer default. This report covers the universe of covered bond programs that Moody's rates (as of the start of 2008). For these programs, the rating agency measured the rating migration of the covered bonds, their issuers, and the sovereigns in which the issuers are located. The report covers rating migration between January 1, 2008 up to February 6, 2012. Over that timeframe, the rating migration of covered bonds issued in sovereigns with stable ratings has been limited to less than half a rating notch, on average. However, the ratings of the issuers supporting the covered bonds were downgraded by more than two notches, on average. In sharp contrast, Moody's says that the ratings of covered bonds in downgraded sovereigns have been downgraded by an average of just over four notches. Overall, covered bond and issuer rating migration is more closely aligned in downgraded sovereigns than in sovereigns with stable ratings. Moody's says that the percentage of downgraded covered bonds in downgraded sovereigns is 65%, significantly higher than the 22% of covered bonds downgraded in sovereigns with stable ratings. Moody's report, entitled "European Covered Bonds: Sovereign Downgrades Key to Bond Rating Migration", is available on www.moodys.com. ********* 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, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2012. 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 Peter Chapman at 240/629-3300. * * * End of Transmission * * *