/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/130905.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 Thursday, September 5, 2013, Vol. 14, No. 176 Headlines A U S T R I A HYPO ALPE-ADRIA: EC OKs Austria's Plan to Sell Parts of Business C R O A T I A CROATIA AIRLINES: Croatia to Open Tender by September 15 F R A N C E ALCATEL-LUCENT: S&P Raises Sr. Unsecured Notes Rating to 'CCC+' CGG: S&P Assigns 'BB' Rating to Senior Secured Credit Facilities G E R M A N Y Q-CELLS SE: Creditors Approve Insolvency Plan REUTAX AG: U.S. Court Issues TRO, Ch. 15 Hearing on Sept. 4 I R E L A N D ACORN CORPORATE: Placed Into Voluntary Liquidation AVOCA CLO VII: S&P Raises Ratings on Two Note Classes to 'BB' L U X E M B O U R G AVONDALE SECURITIES: S&P Affirms 'BB+' Ratings on 2 Note Classes N E T H E R L A N D S ARES EUROPEAN CLO VI: S&P Assigns 'BB' Rating to Class E Notes MARFRIG HOLDINGS: Fitch Rates Proposed US$600MM Sr. Notes 'B' P O L A N D PBG SA: Wisniewski's Stake Down to 23.5% Following Creditor Deal R O M A N I A * ROMANIA: More Than 9K Firms Go Insolvent in First 7Mos. of 2013 U N I T E D K I N G D O M ABERDEEN ASSET: Fined GBP7.2MM For Putting Investor Money at Risk CO-OPERATIVE BANK: Bondholders Say New Rules May Ease Burden NEWGATE CONCISE: Bailey Ahmad Appointed as Liquidators ORTAK: Launches Autumn-Winter Collection Despite Administration STANBRIDGE EARLS: Taps Smith and Williamson as Administrators SUPERGLASS: Launches Search for New Chief Financial Officer X X X X X X X X * Upcoming Meetings, Conferences and Seminars ********* ============= A U S T R I A ============= HYPO ALPE-ADRIA: EC OKs Austria's Plan to Sell Parts of Business ---------------------------------------------------------------- BNA reports that the European Commission approved on Sept. 3 the Austrian government's plan to sell off parts of the bankrupt Austrian bank, Hypo Group Alpe Adria, and wind down the rest of the group. The decision puts an end to the longest-running state aid case in the European Union with origins in the financial crisis that started in 2008, Bloomberg notes. The commission and the Austrian government have wrangled for years over how the bank should be cleaned up after it was first rescued in 2008 and then nationalized completely in 2009, Bloomberg recounts. According to Bloomberg, the commission's Sept. 3 approval was conditional on Hypo selling its Balkan banking network by June 30, 2015, at the latest. The winding-down process has started in several countries, both in the Balkans and in Italy, Bloomberg states. Until the sales are completed, the banking group is subject to several restrictions for new business, "in particular relating to risk control, thus ensuring that the marketability of the subsidiaries is enhanced and that competition distortions are kept to a minimum," Bloomberg quotes the commission as saying in a statement. The commission decision cleared past and future Austrian state aid to the banking group, Bloomberg notes. The commission, as cited by Bloomberg, said that in the past, the bank received EUR2.85 billion (US$3.75 billion) in capital or capital guarantees, EUR300 million (US$395 million) in guarantees on assets and EUR1.35 billion (US$1.78 billion) in refinancing guarantees. However, the commission declined to say what future state aid may amount to under the plan, Bloomberg notes. The commission said that at the end of 2012, Hypo Group Alpe Adria had an overall balance sheet of EUR33.8 billion and risk-weighted assets of about EUR21 billion, Bloomberg relates. Hypo Alpe-Adria International AG is a subsidiary of BayernLB. It is active in banking and leasing. In banking, HGAA serves both corporate and retail customers and offers services ranging from traditional lending through savings and deposits to complex investment products and asset management services. ============= C R O A T I A ============= CROATIA AIRLINES: Croatia to Open Tender by September 15 -------------------------------------------------------- Jasmina Kuzmanovic at Bloomberg News reports that Croatia will open a tender to sell unprofitable Croatia Airlines d.d. by Sept. 15 and plans to pick a winner by year's end from international bidders from as faraway as Asia. According to Bloomberg, Croatian Transport Minister Sinisa Hajdas Doncic said in an interview on Tuesday in Zagreb that the government may either offer existing state shares, limiting ownership to 49% for buyers outside the European Union, or sell new stock by raising the carrier's capital. The ministry estimates the airline to be worth about HRK350 million (US$61 million), Bloomberg discloses. "The interest is big as companies from Turkey to China have expressed interest, and we expect to pick a partner by the year's end," Bloomberg quotes Mr. Hajdas Doncic as saying. He said that a call for non-binding bids will come a later date, Bloomberg notes. Zagreb-based Croatia Airlines was founded in 1990 as the former Yugoslavia was breaking apart, Bloomberg recounts. Its routes are limited to European cities, with code-sharing agreements to four U.S. destinations, Bloomberg states. The company posted a net loss of HRK475 million in 2012, Bloomberg relates. Croatia Airlines d.d. is the national airline and flag carrier of the Republic of Croatia. =========== F R A N C E =========== ALCATEL-LUCENT: S&P Raises Sr. Unsecured Notes Rating to 'CCC+' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it raised to 'CCC+' from 'CCC' its issue ratings on the senior unsecured notes issued by French telecommunications equipment supplier Alcatel-Lucent, and its U.S. subsidiary Alcatel-Lucent USA Inc. At the same time, S&P removed the ratings on the senior unsecured notes from CreditWatch, where they were placed with positive implications on July 31, 2013. In addition, S&P raised the recovery ratings on these notes to '5' from '6', indicating its view of modest (10%-30%) recovery prospects for noteholders in the event of a payment default. RATIONALE The rating action reflects S&P's view that the recovery prospects for the notes' holders have improved, following the repayment of US$500 million of first-lien debt, which ranked ahead of the senior unsecured notes. S&P understands that the repayment of its US$500 million asset sale facility, maturing in 2016, was facilitated by the successful issuance of US$500 million 8.875% unsecured notes due 2020. Furthermore, S&P has incorporated the repricing of the group's remaining first-lien debt facilities into its recovery analysis. RECOVERY ANALYSIS To determine recoveries, S&P simulates a hypothetical default scenario. In this scenario, S&P assumes that the group uses its cash balances to offset high operating losses in a continually weak operating environment. Such weakness is reflected in the constrained capital expenditure budgets of telecoms carriers and increased competition among telecom network equipment providers. In addition, S&P assumes that Alcatel-Lucent's research and development costs remain significant, as it continues to develop products to remain competitive. S&P also assumes that the group will not make asset disposals or realize meaningful proceeds from its patent portfolio to repay the senior secured facilities. S&P believes that under these circumstances, the group could file for bankruptcy in 2015, to facilitate restructuring while it still has meaningful cash on its balance sheet. S&P estimates the group's stressed enterprise value at the hypothetical point of default in 2015 at about EUR3.3 billion. S&P deducts about EUR300 million of enforcement costs and about EUR980 million of priority liabilities, predominately related to discounted receivables of approximately EUR750 million. This leaves a net value of about EUR2 billion for lenders. S&P envisages EUR1.7 billion of senior secured debt outstanding at default, including six months' prepetition interest. S&P do not assume any additional repayments from asset disposals. S&P also assumes that about EUR2.9 billion of senior unsecured notes would be outstanding at its hypothetical point of default. S&P sees sufficient value remaining for senior unsecured noteholders to secure a "modest" (10%-30%) recovery. Although S&P values Alcatel-Lucent as a going concern, it do not see a meaningful difference in recovery prospects when using a discrete asset valuation. CGG: S&P Assigns 'BB' Rating to Senior Secured Credit Facilities ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB' issue rating to France-based provider of oil and gas seismic data acquisition services CGG's new senior secured credit facilities. The recovery rating on this debt is '2' At the same time, the issue ratings on CGG's unsecured notes, including US$350 million (outstanding US$225 million) 9.5% notes due 2016, US$400 million 7.75% callable notes due 2017, and $650 million 6.5% notes due 2021, are unchanged at 'BB-', and S&P is lowering the recovery rating on them to '4' from '3'. S&P is also affirming its 'BB-' long-term corporate credit rating on CGG. The outlook is stable. The ratings reflect S&P's assessment of the group's business risk profile as "weak" financial risk profile as "aggressive." Key business risk factors include the intense and competitive nature of the seismic industry, which S&P views as highly cyclical, notably in the capital-intensive offshore marine segment. This results in highly volatile profit generation. Key business strengths include CGG's leading global position, and the diversity coming from its exposure to land, marine, and imaging seismic services, and seismic equipment manufacturing. On the back of S&P's assumption that industry conditions will improve in the next few quarters, S&P believes that CGG will achieve funds from operations (FFO) to debt of 20%-22% and debt to Standard & Poor's-adjusted EBITDA of between 3.4x-3.8x in 2013, which it believes to be commensurate with the current rating. S&P notes, however, that these credit metrics are at the lower end of its guidance for the rating, taking into consideration the high volatility of cash flows inherent in the industry. S&P anticipates that unadjusted debt will remain high in 2013 at about US$2.5 billion (its adjustments include about US$0.9 billion related to operating leases and pensions). S&P forecasts that annual investments will increase to about US$850 million in 2013 and 2014, with both multi-client and industrial capital expenditure (capex) above US$400 million for the next couple of years. S&P expects no major changes in free operating cash flow (FOCF) in the next few years, however, due to high investment levels and despite its expectations that operating performance will improve. S&P anticipates that FOCF will remain modestly positive in 2013 and 2014, resulting in limited deleveraging capacities. The outlook is stable, reflecting S&P's view that credit metrics in 2013 and 2014 will be consistent with its guidance for the ratings, that is FFO/debt of between 20% and 30% and debt/EBITDA between 3x-4x. Despite S&P's anticipation that CGG's performance in the second half of 2013 will be stronger than in the first half, it notes, however, that the company should be at the low end of these ranges and will have limited headroom to deviate from its base-case scenario. This assumes that CGG will be able to generate moderate positive FOCF and that liquidity will be at least "adequate." S&P might consider a negative rating action if FFO to debt fell below 20%, debt to EBITDA rose above 4x, or if FOCF turned negative. This could come from unfavorable developments in the seismic market or operational issues, for example. S&P could lower the rating if CGG's already substantial debt increased further as a result of substantial new vessel orders. The likelihood of a positive rating action is remote, as it would require significant debt reduction and improved FOCF, which S&P do not anticipate in its base-case scenario. ============= G E R M A N Y ============= Q-CELLS SE: Creditors Approve Insolvency Plan --------------------------------------------- Sandra Enkhardt and Shamsiah Ali-Oettinger at pv-magazine.com reports that the creditors of Q-Cells SE, now renamed Global PVQ SE, have approved with a majority the procedural insolvency plan submitted by insolvency administrator Henning Schorisch. The report notes that the first payout rate for this year has been set at 8.5%. The process should hence be concluded by end of 2015. The business and the brand Q-Cells had already been taken over by the Korean company Hanwha Chemicals last year, the report relates. According to the report, the creditors of Global PVQ SE, founded after the sale of the Q-Cells brand and the business operations to Hanwha Chemicals, have now approved the bankruptcy plan with a large majority. Hence it is expected that the company will have a faster payout rate, Mr. Schorisch. The insolvency plan stipulates that this year the payout rate will be 8.5%. "The rate will reach a total high that is well above the average in German insolvency proceedings," Schorisch explained. Hence the process can be completed as quickly as possible. Schorisch expects it to take about three years. The norm is ten years. pv-magazine.com relates that most of Global PVQ SE's assets have been liquidated with the transfer to Hanwha Q.Cells GmbH. The purchase price that was paid by Hanwha Chemicals is now part of the funds available for payout. Liquidation of the remaining assets, for instance remaining properties or corporate investments, and the realisation of a number of claims are expected to take several years to complete. These will then also be distributed to the creditors at the end of the process. pv-magazine.com says Mr. Schorisch also presented the preliminary interim status of the debt. The updated opening statement as of June 30, 2013, lists total assets amounting to about EUR286 million compared to EUR371 million in the opening statement as of July 1, 2012, the report relays. Cash and liquid funds stand at about EUR211.5 million from the previous EUR139 million thanks to the liquidation measures undertaken. With regards to liabilities, insolvency claims have been reduced to about EUR1.6 billion from EUR1.9 billion. Liabilities to preferential creditors amount to EUR50 million, almost half of what it used to be. Q-Cells SE is a German solar-panel maker. In April 2012, Q-Cells filed a request to open insolvency proceedings at the competent District Court in Dessau. The competent Insolvency Court in Dessau has appointed Mr. Henning Schorisch, hww wienberg wilhelm Insolvenzverwalter, Halle/Saale, as preliminary insolvency administrator. REUTAX AG: U.S. Court Issues TRO, Ch. 15 Hearing on Sept. 4 ----------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware issued a temporary restraining order to aid the orderly determination of claims and the fair distribution of assets in the insolvency proceeding of Reutax AG under the German Insolvency Code, pending before the lower court of Heidelberg, in Germany, File No. 51 IE 2/13. The TRO bars proceedings, suits, complaints, actions, arbitrations, applications, enforcements, processes, rights or remedies, whether judicial or non-judicial, statutory or non- statutory, other than the German insolvency proceeding, against the Chapter 15 Debtor. Judge Walrath will convene a hearing on Sept. 4, 2013, at 12:00 p.m., for parties to show cause why a provisional order should not be granted and thereby extending the stay relief granted by the TRO. About Reutax AG Reutax began German bankruptcy proceedings in March and founder Soheyl Ghaemian, who resigned soon after, was arrested in Germany in June on charges of fraud, embezzlement and breach of fiduciary duties, according to court documents, the report related. Heidelberg, Germany-based Reutax AG provides information technology services to clients, using free-lance information technology experts. The Debtor was 60% owned by Contreg AG, an entity owned by the Debtor's founder, Soheyl Ghaemian. Hans- Peter Wild, through an entity called Casun Invest AG, held a 40% equity stake in exchange for a US$40 million investment. Faced with a liquidity squeeze, as well as EUR10 million in liabilities to its IT consultants, the Debtor halted operations and on March 20, 2013, filed a petition to open insolvency proceedings over its assets. Tobias Wahl was appointed the insolvency administrator in June 2013. He filed a Chapter 15 petition for Reutax (Bankr. D. Del. Case No. 13-12135) on Aug. 21, 2013. The Debtor is estimated to have assets and debt of US$10 million to US$50 million. Michael Joseph Custer, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, serves as counsel to the foreign representative and insolvency administrator for Reutax. Bankruptcy Judge Mary F. Walrath presides over the case. Mr. Wahl filed a motion for a Rule 2004 examination. ============= I R E L A N D ============= ACORN CORPORATE: Placed Into Voluntary Liquidation -------------------------------------------------- Ray Managh at Irish Examiner reports that the man who promoted himself as the "financial doctor who engineers successful outcomes to difficult financial situations" is liquidating his company, the High Court heard on August 30. Mr. Justice Paul McDermott heard that St John Culligan had put Acorn Corporate Services Ltd into voluntary liquidation, the report relates. According to Irish Examiner, Barrister Mark O'Mahony told Judge McDermott that he represented the Collector General, Michael Gladney, who had brought a petition to court for the winding-up of Mr. Culligan's company. "We do not now need to go ahead with that petition since the company went into voluntary liquidation on August 30," the report quotes Mr. O'Mahony as saying. Documents showed that Acorn Corporate Services owed the Collector General more than EUR152,000 in unpaid VAT and PAYE/PRSI taxes, the report notes. Irish Examiner relates that Mr. Gladney, Sarsfield House, Francis St, Limerick, said the company, registered at An Leacht, Memberton, Whitegate, Co Cork, had been served with a demand for the tax arrears last March but they had not been paid. He said the company was unable to pay its debts and should be wound up, the report relays. Mr. Gladney told the court that Acorn Corporate Services had been established in 2001 as expert consultants to provide financial advice and management services relating to the organisation of industry and business, adds Irish Examiner. AVOCA CLO VII: S&P Raises Ratings on Two Note Classes to 'BB' ------------------------------------------------------------- Standard & Poor's Ratings Services took various credit rating actions on all classes of Avoca CLO VII PLC's notes. Specifically, S&P: -- Raised its rating on the class A1, A2, A3, B def, C1 def, and C2 def notes, and the class R, T, and V combination notes; -- Affirmed its ratings on the D1 def, D2 def, E1 def, E2 def, and F def notes, and the class S combination notes; and -- Withdrawn its rating on the class K combination notes. The rating actions follow S&P's assessment of the transaction's performance, using data from the June 28, 2013 trustee report, and by applying its relevant criteria. Since S&P's Feb. 13, 2012 review, it has observed an increase in the weighted-average spread earned on the collateral pool to 4.01% from 3.15%. The transaction's weighted-average life has increased to 4.99 years from 4.71 years, over the same period. S&P has also observed an improvement in the pool's credit quality. The proportion of assets that S&P considers to be rated in the 'CCC' category ('CCC+', 'CCC', or 'CCC-') and assets that it considers to be defaulted (assets rated 'CC', 'C', 'SD' [selective default], and 'D') have decreased in notional and percentage terms. Currently, the par value tests for all classes of notes are complying with the required triggers under the transaction documents. As of S&P's February 2012 review, the par value tests for the class E and F notes were below the required levels. At that time, the par value tests for the other classes of notes complied with the levels required under the transaction documents. S&P has observed a decrease in the available credit enhancement for all classes of notes. In S&P's view, this is a result of the reduced aggregate collateral balance. The aggregate collateral balance has decreased to EUR683.614 million from EUR684.349 million since S&P's February 2012 review. This reduction is greater than the partial amortization of the class A1 and A3 notes. Since S&P's 2012 review, the outstanding aggregate balance of the class A1 and A3 notes is 99.97% of its original balance and their individual balances have decreased by EUR89,616 and EUR37,502, respectively. Interest proceeds were used to partially amortize the class A1 and A3 notes after the par value test of the most subordinated class was breached on the May 2012 payment date. In S&P's analysis, it has also considered that Avoca CLO VII is still in its reinvestment period, which will end in May 2014. S&P has subjected the capital structure to its cash flow analysis, by applying its 2009 corporate cash flow collateralized debt obligation (CDO) criteria, to determine the break-even default rate (BDR) at each rating level. S&P used the reported portfolio balance that it considered to be performing, the principal cash balance, the weighted-average spread, and the weighted-average recovery rates that it considered to be appropriate. S&P incorporated various cash flow stress scenarios, using various default patterns, levels, and timings for each liability rating category, in conjunction with different interest rate stress scenarios. To help assess the collateral pool's credit risk, S&P used CDO Evaluator 6.0.1 to generate scenario default rates (SDRs) at each rating level. S&P then compared these SDRs with their respective BDRs. Taking into account S&P's observations outlined above, it considers the available credit enhancement for the class R and T combination notes to be commensurate with higher ratings. S&P has therefore raised to 'BB (sf)' from 'B (sf)' its ratings on class R and T combination notes. At the same time, S&P considers the available credit enhancement for the class S combination notes to be commensurate with our current 'CCC+ (sf) 'rating. S&P has therefore affirmed its 'CCC+ (sf) 'rating on the class S combination notes. S&P's ratings on the class B def, C1 def, C2 def, D1 def, D2 def, E1 def, E2 def, and F def notes are constrained by the application of the largest obligor test, a supplemental stress test that S&P introduced in its 2009 corporate cash flow CDO criteria. This test addresses event and model risk that might be present in the transaction and assesses whether a CDO tranche has sufficient credit enhancement (not including excess spread) to withstand specified combinations of underlying asset defaults based on the ratings on the underlying assets, with a flat recovery of 5%. Although the results of S&P's cash flow analysis suggest higher ratings for these classes of notes, the largest obligor test results constrain S&P's ratings on the notes. S&P has therefore affirmed its 'BB+ (sf)' ratings on the class D1 def and D2 def notes, its 'CCC+ (sf)' ratings on the class E1 def and E2 def notes, and its 'CCC- (sf)' rating on the class F. At the same time, S&P has raised to 'A+ (sf)' from 'A (sf)' its rating on the class B def notes and to 'BBB+ (sf)' from 'BBB- (sf)' its ratings on the class C1 def and C2 def notes. Based on S&P's counterparty analysis, it has concluded that the transaction documents for the derivative counterparties--Citibank N.A. (A/Stable/A-1), JP Morgan Chase Bank N.A. (A+/Stable/A-1), and Credit Suisse International (A/Stable/A-1)--do not fully comply with S&P's current counterparty criteria. As a result, S&P's current counterparty criteria constrain its maximum potential ratings in this transaction to one notch above its long-term issuer credit ratings on the derivative counterparties. However, this does not apply if the available credit enhancement for the class of notes in question is sufficient to support higher ratings, after adjusting the pool balance in accordance with S&P's current counterparty criteria. S&P's ratings on the class A1, A2, and A3 notes reflects its opinion of the available credit enhancement for these classes of notes after its adjusted the aggregate pool balance in accordance with its current counterparty criteria, and conducted its credit and cash flow analysis. In S&P's opinion, the available credit enhancement for the class A1, A2, and A3 notes now supports higher ratings than previously assigned. S&P has therefore raised to 'AAA (sf)' from 'AA+ (sf)' its rating on the class A1 notes and to 'AA+ (sf)' from 'AA (sf)' its ratings on the class A2 and A3 notes. Since S&P's previous review of this transaction in February 2012, the class K combination notes have decoupled into their component parts in April 2012. Therefore, S&P has withdrawn its 'BBB- (sf)' rating on the class K combination notes. Avoca CLO VII is a cash flow corporate loan collateralized loan obligation (CLO) transaction that securitizes loans to primarily speculative-grade corporate firms. The transaction closed in April 2007. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011. If applicable, the Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at: http://standardandpoorsdisclosure-17g7.com RATINGS LIST Class Rating To From Avoca CLO VII PLC EUR788 Million Floating-Rate Notes Ratings Raised A1 AAA (sf) AA+ (sf) A2 AA+ (sf) AA (sf) A3 AA+ (sf) AA (sf) B A+ (sf) A (sf) C1 def BBB+ (sf) BBB- (sf) C2 def BBB+ (sf) BBB- (sf) R Combo BB (sf) B (sf) T Combo BB (sf) B (sf) V Combo AA+ (sf) AA (sf) Ratings Affirmed D1 def BB+ (sf) D2 def BB+ (sf) E1 def CCC+ (sf) E2 def CCC+ (sf) F def CCC- (sf) S Combo CCC+ (sf) Rating Withdrawn K Combo NR (sf) BBB- (sf) Combo-Combination. NR-Not rated. =================== L U X E M B O U R G =================== AVONDALE SECURITIES: S&P Affirms 'BB+' Ratings on 2 Note Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed and removed from CreditWatch negative its 'BB+ (sf)' credit ratings on Avondale Securities S.A.'s class A-1 and A-2 notes. This follows the same action taken on the support sponsor, Bank of Ireland (BOI), on Jan. 20, 2012. S&P's ratings on Avondale Securities' class A-1 and A-2 notes are weak-linked to our long-term rating on BOI due to a support agreement. This agreement obligates BOI to meet, under certain conditions, payments due on the notes, and potential tax liabilities, as well as its servicing of the policies. On Jan. 20, 2012, S&P affirmed and removed from CreditWatch negative its 'BB+' long-term counterparty credit rating on BOI. Due to an error, S&P did not affirm and remove from CreditWatch negative its ratings on Avondale Securities' class A1 and A2 notes following its corresponding rating actions on BOI. S&P has corrected this error by affirming and removing from CreditWatch negative its 'BB+ (sf)' ratings on Avondale Securities' class A1 and A2 notes, which are now in line with its long-term rating on BOI. RATINGS LIST Avondale Securities S.A. EUR400 Million Floating-Rate Emergence Offset Notes Class Rating To From Ratings Affirmed And Removed From CreditWatch Negative A-1 BB+ (sf) BB+ (sf)/Watch Neg BB+ (sf) (SPUR) BB+ (sf)/Watch Neg (SPUR) A-2 BB+ (sf) BB+ (sf)/Watch Neg SPUR-Standard & Poor's Underlying Rating. ===================== N E T H E R L A N D S ===================== ARES EUROPEAN CLO VI: S&P Assigns 'BB' Rating to Class E Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its credit ratings to Ares European CLO VI B.V.'s floating-rate class A, B, C, D, and E notes. At closing, Ares European CLO VI also issued an unrated subordinated class of notes. S&P's ratings reflect its assessment of the collateral portfolio's credit quality. As of closing, the portfolio is diversified, primarily comprising broadly syndicated speculative- grade senior secured term loans and senior secured bonds. S&P's ratings also reflect the credit enhancement available to the rated notes through the subordination of cash flows payable to the subordinated notes. S&P subjected the capital structure to a cash flow analysis to determine the break-even default rate (BDR) for each rated class of notes. To determine the BDR for each rated class, S&P used the target par amount, the covenanted weighted-average spread, the covenanted weighted-average coupon, and the covenanted weighted- average recovery rates. S&P applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. S&P's ratings are commensurate with its assessment of available credit enhancement following its credit and cash flow analysis. S&P's analysis shows that the available credit enhancement for each class of notes was sufficient to withstand the defaults that S&P applied in its supplemental tests (not counting excess spread) outlined in its corporate collateralized debt obligation (CDO) criteria. Following the application of S&P's nonsovereign ratings criteria, it considers that the transaction's exposure to country risk is sufficiently mitigated at the assigned rating levels. This is because the concentration of the pool comprising assets in countries rated lower than 'A-' is limited to 10% of the aggregate collateral balance. The transaction's legal structure is bankruptcy-remote, in accordance with S&P's European legal criteria. Ares European CLO VI is a European cash flow corporate loan collateralized loan obligation (CLO) securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds. Ares Management Ltd. is the collateral manager. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at: http://standardandpoorsdisclosure-17g7.com/1670.pdf RATINGS LIST Ares European CLO VI B.V. EUR310.5 Million Floating-Rate Notes, Including EUR46 Million Subordinated Notes Class Rating Amount (mil. EUR) A AAA (sf) 177.0 B AA (sf) 28.0 C A (sf) 25.0 D BBB (sf) 15.5 E BB (sf) 19.0 Subordinated NR 46.0 NR-Not rated. MARFRIG HOLDINGS: Fitch Rates Proposed US$600MM Sr. Notes 'B' ------------------------------------------------------------- Fitch Ratings has assigned a rating of 'B/RR4' on Rating Watch Negative to Marfrig Holdings (Europe) B.V.'s (Marfrig) proposed approximately US$600 million senior notes issuance due 2021. The notes are unconditionally and irrevocably guaranteed by Marfrig Alimentos S.A. and Marfrig Overseas Limited, currently rated at the same level. Proceeds are expected to be used to refinance debt maturities and extend debt maturity schedule. Marfrig's ratings take into consideration the company's aggressive capital structure combined with a challenging operational environment. The company's operations are exposed to the volatility of protein prices and profit margins due to factors beyond the company's control. Positive considerations include Marfrig's strong business position as one of the largest producers and exporters of beef and with prominent positions in the poultry and pork industries worldwide. Key Rating Drivers Rating Watch Status Marfrig's ratings were placed on Ratings Watch Negative in June of 2013, reflecting negative free cash flow and higher leverage, and prior to the announced sale of assets to JBS S.A. Shortly thereafter, Marfrig announced the sale certain of Seara assets to JBS S.A. (JBS) for the assumption of BRL5.85 billion (US$2.9 billion) of Marfrig's bank debt with maturities between 2013 and 2017; the transaction is subject to the approval of CADE, the Brazilian antitrust authority. The asset sale is positive for Marfrig Alimento S.A.'s (Marfrig) and it is likely that the closing of the transaction would result in the stabilization of Marfrig's ratings at the 'B' category and the removal of its ratings from Rating Watch Negative. Pro forma for the sale, Marfrig's net debt-to-EBITDA ratio should decline to about 3.5x from its current level of 5.1x as of June 30, 2013. While Marfrig will have lower leverage, it would also have significantly less product diversification in Brazil. As a result, Marfrig's exposure to more volatile protein business would increase. Marfrig purchased Seara from Cargill in 2009 for US$900 million. Marfrig had more than tripled Seara's business, from US$1.7 billion in revenues and US$76 million of EBITDA in 2009 to about US$4.5 billion in revenue and estimated pro forma EBITDA of US$300 million in 2012. The addition of some assets from BRF S.A. (BRF) in the middle of 2012 was also important to this growth, as it more than doubled Seara's production capacity. Significant Leverage Decline Post Asset Sale As of June 30, 2013 LTM, Marfrig's total debt reached BRL11.2 billion; including BRL3 billion of Seara's debt that should be transferred to JBS, as a result of the asset sales. Disregarding this amount, pro forma net debt-to-EBITDA was 3.4x, a significant improvement from 4.9x reported in 2012. Concerns regarding leverage remain, as the company has the challenge to improve its cash flow generation in order to keep leverage in line with the 'B' category. Marfrig's ability to maintain a sustainable capital structure will depend on its ability to start generating positive free cash flow, which in turn hinges upon the company's success in executing its strategy to realign business priorities, reduce costs, improve logistics, and establish itself as a viable niche player in the segments it operates. Operating Results Remain Challenged Marfrig operating results remain challenged. As of June 30, 2013 LTM, consolidated net revenues declined to BRL21.5 billion, from BRL23.7 billion, in 2012, as a result of the disposal of Seara and Zenda's assets in June 2013. The remaining businesses presented increasing revenues in the second quarter. However, despite the increasing revenues of the remaining business, the EBITDA of these operations during the second quarter of the year was negatively impacted by the pricing environment of the beef segment in Brazil, Argentina and Uruguay. The beef business represents about 38% of Marfrig's net revenues. The high cost of cattle in the region, coupled with the challenges to push higher beef prices through to the consumer, resulted in a decline of Marfrig's beef EBITDA to BRL145 million in the 2Q2013, compared with BRL225 million in the 2Q2012. In additional to the revenue and EBITDA contraction, cash flow generation has been pressured by higher working capital needs. As of June 30, 2013 LTM, cash flow from operation (CFFO) was negative at BRL280 million, impacted by BRL1.1 billion of working capital needs. These results combined with capex of BRL747 billion, resulted in negative FCF of BRL1 billion during the period. Marfrig's negative FCF over the last year has resulted in continued high leverage on its balance sheet. Business Portfolio Will Change While Marfrig's divestiture will lower leverage, the transaction will somewhat reduce the company's diversification. Marfrig's remaining business portfolio includes strong brands and performers such as Key Stone, Moy Park in the UK and its Brazilian beef business. The company acquired some of those assets in a series of acquisitions that resulted in both product and geographic diversification which is positive for the ratings but also led to highly levered capital structure. Marfrig's strategy for managing and growing its remaining businesses in a profitable fashion are key factors to the company's long-term credit quality. Rating Sensitivities Marfrig's inability to start generating positive FCF and consequently keep leverage below 4.0x on a sustainable basis could result in a downgrade. An upgrade of Marfrig's ratings is over the medium term is plausible should the company and new management be able to overcome the several challenges facing the company on both a financial and operational level. The company's capital structure is expected to continue to be highly leveraged after asset sales. Fitch currently rates Marfrig as follows: Marfrig Alimentos S.A. -- Local currency Issuer Default Rating (IDR) 'B'; -- Foreign currency IDR 'B'; -- National scale rating 'BBB(bra)'; -- BRL 300 million 3rd debentures issue (1st tranche) 'BBB(bra)'; -- BRL 300 million 3rd debentures issue (2nd tranche) 'BBB(bra)'. Marfrig Overseas Ltd -- Foreign currency IDR 'B'; -- US$375 million senior unsecured notes due 2016 'B/RR4'; -- US$500 million senior unsecured notes due 2020 'B/RR4'. Marfrig Holdings (Europe) B.V. -- Foreign currency IDR 'B'; -- US$600 million senior unsecured notes due 2017 'B/RR4'; -- US$750 million senior unsecured notes due 2018 'B/RR4'. The ratings are on Rating Watch Negative. The ratings are informed by 'Fitch Parent and Subsidiary Linkage Criteria'. =========== P O L A N D =========== PBG SA: Wisniewski's Stake Down to 23.5% Following Creditor Deal ---------------------------------------------------------------- Marta Waldoch and Maciej Martewicz at Bloomberg News report that PBG SA, which on Tuesday approved a draft offer for its creditors, said in a regulatory statement Jerzy Wisniewski's stake in the company will drop to 23.5% after deal from 36.8%. According to Bloomberg, other shareholders will hold a 1.46% stake in the company after the deal. PBG, Bloomberg says, offers to pay back 8%-20% of liabilities in installments. The company will cover the liabilities of "significant" owners in shares, not cash, Bloomberg notes. PBG will need about PLN250 million in new financing and offers to pay back extra cash to creditors providing it, Bloomberg discloses. Extra payments won't exceed PLN400 million, Bloomberg states. PBG SA is Poland's third largest builder. PBG secured court bankruptcy protection for debt restructuring proceedings in June 2012, after signing a stand-down agreement with its banking creditors in May. ============= R O M A N I A ============= * ROMANIA: More Than 9K Firms Go Insolvent in First 7Mos. of 2013 ----------------------------------------------------------------- Irina Popescu at Romania-Insider.com reports that a total of 9,655 companies in Romania went insolvent in the first seven months of this year, a year-on-year decrease of 5.4 percent, according to recent data from the National Trade Registry (ONRC). The number is at least 500 less than the same period last year when more than 10,200 companies went bankrupt between January and July, Romania-Insider.com discloses. The report says Romania's Dolj county recorded the highest number of insolvencies in the first seven months of this year -- 934, a year-on-year increase of 27.4 percent. Next, following closely, was Brasov county with 933 insolvent companies -- up 48 percent compared to the same period last year and Bucharest with 712 insolvency cases, down 6.9 percent compared to January-July 2012, Romania-Insider.com relays. Romania-Insider.com adds that Calarasi county recorded the lowest number of insolvency cases in the first seven months, namely 23, followed by Harghita county, which had 33, and Tulcea county with 43 insolvent companies. Most of the companies facing financial problems were those in the trade sector, followed by companies in manufacturing and construction, Romania-Insider.com reports. =========================== U N I T E D K I N G D O M =========================== ABERDEEN ASSET: Fined GBP7.2MM For Putting Investor Money at Risk ----------------------------------------------------------------- Kyle Caldwell at The Telegraph reports that the Financial Conduct Authority (FCA) fined Aberdeen Asset Managers and Aberdeen Fund Management GBP7.2 million for insufficiently protecting client money with third party banks between September 2008 and August 2011. The Telegraph relates that the FCA said a total of GBP685 million was put at risk. According to the report, the FCA's client money rules state if a firm falls on hard times and becomes insolvent, the money held on behalf of its clients must be clearly identified, protected and returned as soon as possible. However, Aberdeen incorrectly determined that the money involved was not subject to these rules, the report relays. It failed to obtain the correct documentation from third party banks when setting up the affected accounts. There appears to have been uncertainty over which clients were protected and by how much. These failures put clients at risk of delays in having their money returned if Aberdeen became insolvent, adds The Telegraph. Aberdeen Asset Manager is a specialist emerging markets fund manager. It runs several highly regarded funds, such as the Aberdeen Asia Pacific, overseen by veteran manger Hugh Young. CO-OPERATIVE BANK: Bondholders Say New Rules May Ease Burden ------------------------------------------------------------ John Glover and Howard Mustoe at Bloomberg News report that Co-operative Bank Plc bondholders say new legislation designed to make holding companies more responsible for their financial businesses could save them from being forced to bear the brunt of the lender's bailout. Under rules that came into force in April, the Prudential Regulatory Authority can direct a parent company to raise new capital, reorganize its financial unit and fire executives, Mark Taber, a Bristol, England-based organizer of a group of bondholders who wants the PRA to review the proposed rescue, as cited by Bloomberg, said. Mr. Taber said that could weaken the threat by Euan Sutherland, chief executive officer of parent company Co-operative Group Ltd. to wind up the lender if bond investors refuse to accept losses, Bloomberg relates. Co-op Bank must raise GBP1.5 billion (US$2.3 billion) to plug a capital hole after losses incurred following its acquisition of Britannia Building Society in 2009, Bloomberg discloses. The lender plans to raise GBP500 million by exchanging subordinated debt for equity and another GBP500 million from the sale of senior debt issued by the member-owned parent company, which has interests from retail to funeral homes, Bloomberg says. Co-operative Group plans to put in another GBP500 million from the sale of insurance interests, Bloomberg notes. "The potential brand damage for putting the bank into administration would be pretty cataclysmic," Bloomberg quotes Gary Greenwood, a banking analyst at Shore Capital in Liverpool, England, as saying in a telephone interview on Tuesday. Co-op Bank is a public limited company owned through Co-Operative Banking Group Ltd., a unit of Co-Operative Group Ltd., Bloomberg discloses. The parent also owns its insurance businesses through the Banking Group. It sold Co-Operative Insurance Society Ltd., its asset management and life insurance business, this year and now owns a general insurer alongside the bank, Bloomberg recounts. The PRA's powers "are not applicable to the Co-Operative Group following the completion of the disposal of CIS on July 31," Manchester-based Co-op, as cited by Bloomberg, said in an e-mailed statement on Tuesday, declining to say why the rules don't apply. According to a policy document published by the Bank of England in April, "in general, the PRA would consider action to be most effective when taken in relation to the ultimate parent undertaking at the head of the ownership chain, as that is usually where most of the power to direct and control the group resides," Bloomberg discloses. The regulator's powers are "very broad," Bloomberg quotes Steven McEwan, a partner at Hogan Lovells International LLP in London, as saying in a telephone interview on Tuesday. "The practical question would be whether they will engage with the parent company taking into account what is realistic, or use the power to impose onerous requirements that the parent company cannot realistically achieve." "The PRA has the power to force them to put the money down," Mr. Taber, who coordinated a bondholder campaign against individual investors being forced to take losses following the restructuring of Bank of Ireland, as cited by Bloomberg, said. Co-op Bank -- part of the mutually owned food-to-funerals conglomerate Co-operative Group -- traces its history back to 1872. The bank gained prominence for specializing in ethical investment. It refuses to lend to companies that test their products on animals, and its headquarters in Manchester is powered by rapeseed oil grown on Co-operative Group farms. Founded in 1863, the Co-op Group has more than six million members, employs more than 100,000 people, and has turnover of more than GBP13 billion. * * * As reported by the Troubled Company Reporter-Europe on May 13, 2013, Moody's Investors Service downgraded the deposit and senior debt ratings of Co-operative Bank plc to Ba3/Not Prime from A3/Prime 2, following its lowering of the bank's baseline credit assessment (BCA) to b1 from baa1. The equivalent standalone bank financial strength rating (BFSR) is now E+ from C- previously. NEWGATE CONCISE: Bailey Ahmad Appointed as Liquidators ------------------------------------------------------ Hannah Jordan at PrintWeek reports that South East London commercial printer Newgate Concise has appointed liquidators Bailey Ahmad after suddenly closing its doors in mid-August. PrintWeek relates that a meeting of creditors took place on August 30 with the liquidator's report to be published within 28 days. One of the main factors behind the firm's closure is understood to be a forced move after the firm's landlord's decided to not renew the company's lease, according to the report. PrintWeek says the company tried to find alternative premises, but lack of suitable premises nearby and associated relocation costs, such as dilapidation fees on the old premises and upgrading new premises, led the directors to close the business and place it in voluntary liquidation. The business, which was initially shortlisted in the PrintWeek Awards 2013 but subsequently withdrawn, was owned by holding company Polarview. Originally founded as Newgate Press in 1946, the litho printer split into two with Concise Cover Printers specialising in paperback book cover printing. The two businesses amalgamated in 2004 to become Newgate Concise, which until last month employed around 12 members of staff. ORTAK: Launches Autumn-Winter Collection Despite Administration --------------------------------------------------------------- Peter Ranscombe at The Scotsman reports that model Tara Nowy on Tuesday launched the autumn-winter collection from Ortak, despite the company still being in administration. The firm fell into the hands of administrators from accountancy firm BDO in March, amid soaring gold and silver prices and the effect of the recession on high street shopping, The Scotsman relates. Three stores have been closed -- in Edinburgh, Glasgow and Stirling -- and 40 jobs have been axed, taking its headcount down to 127, The Scotsman discloses. "We have been overwhelmed by support for Ortak over the past few months and the clear affection that many customers have for the brand, Alistair Gray," The Scotsman quotes managing director at Ortak as saying. "Investment in new designs has always been the lifeblood of Ortak and we are delighted to launch our new collections despite this difficult time." According to the Scotsman, James Stephen, a partner at BDO, said: "Following the restructuring implemented, Ortak now has a profitable business model that would be attractive to investors and could be enhanced by further planning." Ortak is an Orkney-based jeweller. STANBRIDGE EARLS: Taps Smith and Williamson as Administrators ------------------------------------------------------------- BBC News reports that Stanbridge Earls School, a Hampshire school criticised for its handling of a pupil's rape claim, has called in administrators. The move follows an announcement last month that Stanbridge Earls School near Romsey was to close after not enough pupils registered for the new term, the report relays. Insolvency firm Smith and Williamson LLP are to be appointed administrators of the scandal-hit school, BBC Says. BBC News relates that in a letter to parents on behalf of the board of trustees, David Du Croz, called the move a "very sad outcome." He added that it was a "tragic end to a once great school," BBC reports. According to the report, two proposed takeovers of the school recently fell through -- one amid concerns over pupil numbers after a tribunal in January found the school failed to protect a "vulnerable" pupil. SUPERGLASS: Launches Search for New Chief Financial Officer ----------------------------------------------------------- Gareth Mackie at The Scotsman reports that Superglass yesterday launched the search for a new chief financial officer after Allan Clow said he was resigning "for personal reasons" after a year in the role. Mr. Clow, who was previously finance director at the interiors division of Dalgety Bay-based shopfitter Havelock Europa, joined Superglass on August 28, 2012, and his departure date is yet to be decided, The Scotsman discloses. The company moved to the junior Alternative Investment Market in June after completing a make-or-break GBP12.2 million fundraising to cuts its debts, The Scotsman recounts. The refinancing deal also saw lender Clydesdale Bank convert some of its debt into equity, The Scotsman relates. According to The Scotsman, Superglass said yesterday that trading in the year to end of August has been in line with City forecasts, and it ended the year with a better-than-expected net cash balance of GBP5.5 million. However, sales volumes were described as "volatile", with "very low" take-up of insulation work under the UK government's Green Deal scheme, The Scotsman notes. Superglass is due to publish its annual results on November 19, The Scotsman states. Superglass is a Stirling-based insulation materials company. =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ ********* 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., Washington, D.C., 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 2013. 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$775 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 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *