/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/131219.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, December 19, 2013, Vol. 14, No. 251 Headlines B E L G I U M DEXIA CREDIOP: S&P Withdraws 'BB-' Rating on Class A Notes F I N L A N D TALVIVAARA MINING: Wins Court Approval to Renegotiate Debt G E R M A N Y KUKA AG: S&P Revises Outlook to Positive & Affirms 'BB-' CCR H U N G A R Y E-STAR ALTERNATIVE: Changes Name to ENEFI Energiahatekonysagi I R E L A N D FINGLAS MOTORS: High Court Appoints Provisional Liquidator INDEPENDENT NEWS: Mulls More Job Cuts Amid Finc'l Restructuring IRISH BANK: McKillen Seeks Loan Portfolio Sale Restraining Orders I T A L Y ASTALDI SPA: S&P Assigns 'B+' Corp. Credit Rating; Outlook Stable COGEMAT SPA: S&P Withdraws Preliminary 'B' CCR; Outlook Stable N E T H E R L A N D S EURO-GALAXY III: S&P Assigns 'BB' Rating to Class E Notes N O R W A Y SONGA OFFSHORE: Private Placement, Bond Issue Conditions Met R O M A N I A * ROMANIA: Food Producers Most Exposed to Insolvency in 2014 S P A I N REAL MADRID: Among Clubs Under Probe Over Illegal State Aid U K R A I N E UKRAINE: Signs Russian Aid Agreement to Avoid Bankruptcy U N I T E D K I N G D O M BARRATTS SHOES: Pavers Makes GBP5 Million Bid for Retailer CO-OPERATIVE BANK: Bondholders Support GBP1.5BB Recapitalization EX EVENTS: Burnbrae Acquires Firm Out of Administration HAPPY PEOPLE: Goes Into Administration KAUPTHING: Liquidation Going Well, Teare Says LONDON & REGIONAL: S&P Lowers Rating on Class B Notes to BB LONDON BRONCOS: Continue at New Ground MAGYAR TELECOM: English Court Sanctions Scheme of Arrangement RADIO THEATRE: Theatre Producer Enters Liquidation VELTI PLC: GSO Is Winning Bidder for Mobile Marketing Business X X X X X X X X * Insolvencies 24% Higher in 2014, Euler Hermes Reports ********* ============= B E L G I U M ============= DEXIA CREDIOP: S&P Withdraws 'BB-' Rating on Class A Notes ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB- (sf)' credit rating on the class A notes DCC - Dexia Crediop per la Cartolarizzazione S.r.l.'s series 2004-1. S&P has withdrawn its rating on the class A notes because the transaction has been unwound. DCC - Dexia Crediop per la Cartolarizzazione's series 2004-1 is a European collateralized debt obligation (CDO) repack transaction, which closed in May 2004. ============= F I N L A N D ============= TALVIVAARA MINING: Wins Court Approval to Renegotiate Debt ---------------------------------------------------------- Ritsuko Ando and Jussi Rosendahl at Reuters report that Talvivaara Mining has won court approval to renegotiate its debt, allowing the company to continue production and avoid the immediate risk of bankruptcy. According to Reuters, while the news sent its shares up almost 20% on Dec. 17, analysts said the firm's future was still in doubt due to hefty liabilities, uncertainty over talks with creditors and production problems at its only mine in Sotkamo, north Finland. "This news can be seen as diminishing their immediate risk of bankruptcy. But it is difficult to understand these share price moves. This is not that positive," Reuters quotes Inderes Equity Research analyst Antti Viljakainen as saying. "They will need new financing anyway. I don't believe they have enough cash for the whole first quarter, I think they will be pretty dry by mid-February." Hurt by falling nickel prices and repeated production disruptions, Talvivaara sought a court-led reorganization in November as it ran low on funds, Reuters recounts. It has been waiting for court approval to include the debt of a subsidiary, Talvivaara Sotkamo, in its reorganization plans, Reuters notes. "With the reorganization process now beginning, we can also continue our metals production, which re-commenced last week after a one month stoppage of our metals recovery plant," Chief Executive Pekka Pera, as cited by Reuters, said in a statement. According to Reuters, analysts said the reorganization could involve creditors swapping some of their debt for equity, and that Talvivaara would also need to raise more money. The company has said only that it has enough cash for the first quarter of 2014, Reuters relays. Including loans and upfront payments from zinc producer Nyrstar and Canada-based uranium miner Cameco Corp., Talvivaara ended the third quarter with EUR865.6 million (US$1.2 billion) in total liabilities, Reuters discloses. Nyrstar, Reuters says, is Talvivaara's top creditor after paying EUR232 million in advance for zinc deliveries. On Monday, Nyrstar reinstated support for the reorganization after previously withdrawing it due to uncertainty over the process, Reuters relates. Talvivaara Mining Co. Ltd. is a Finnish nickel producer. ============= G E R M A N Y ============= KUKA AG: S&P Revises Outlook to Positive & Affirms 'BB-' CCR ------------------------------------------------------------ Standard & Poor's Rating Services revised its outlook on Germany-based industrial automation and robotics manufacturer KUKA AG to positive from stable. At the same time, S&P affirmed its 'BB-' long-term corporate credit rating on KUKA. In addition, S&P affirmed its 'B+' issue rating on KUKA's 8.75% notes due 2017. The recovery rating on this debt instrument is '5' indicating S&P's expectation of modest (10%-30%) recovery prospects in the event of a default. The outlook revision reflects S&P's view that KUKA is very likely to redeem its 8.75% notes early, as of their first call date on Nov. 15, 2014. As a result, S&P nets current surplus cash of EUR160 million from our calculation of KUKA's Standard & Poor's-adjusted debt, which leads to stronger credit metrics under S&P's criteria than it had calculated before. "We base our assumption that KUKA will redeem the notes early on KUKA's completion of the recent refinancing of its bank debt, resulting in all of its debt having unsecured status including the 8.75% notes. We also take into account KUKA's continuous purchases of the 8.75% notes in the secondary market during the second half of 2013," S&P said. Likewise, S&P acknowledges a stable order intake and consistent earnings growth in the past few quarters, which have been important factors in the improvement of KUKA's credit measures, in S&P's view. S&P believes that the order book of more than EUR1 billion reported as of Sept. 30, 2013, provides good visibility of stable future earnings. "We assess KUKA's business risk profile as "weak," incorporating our view of the global capital goods industry's "intermediate" risk and "low" country risk. KUKA sells more than one-half of its products to manufacturers based in Germany and other European countries. We assess KUKA's competitive position as "weak," reflecting both its exposure to cyclical automotive end markets and weak operating efficiency with an inherently high fixed-cost base, which makes it difficult to absorb operating costs when revenues decline in a downturn," S&P added. KUKA's strong market positions in its niche segments, long- standing relationships with its customers, and its track record of improving operating performance over the past three years mitigate these weaknesses to some extent. S&P's assessment of KUKA's financial risk profile as "significant" is based on the company's sound financial risk management, relatively high interest burden, and reliance on material amounts of guarantee lines to operate its business. S&P's base case for KUKA assumes: -- Global GDP growth of 2.6% this year and 3.5% in 2014, bearing in mind diverging macroeconomic conditions between regions--positive growth in China and North America will compensate for a sluggish environment in Western Europe. -- Specific industry conditions such as major automakers new model introduction schedules and a global drive for automation required to offset increasing labor costs, leading to EBITDA growth of about 3% in 2013 and again in 2014. -- Solid cash flow generation, with free operating cash flow (FOCF) before S&P's adjustments of about EUR20 million- EUR30 million each year. This incorporates S&P's expectation of capital expenditures (capex) of EUR45 million-EUR50 million per year, and a projected increase in research and development (R&D) expenses in line with management guidance. -- No major acquisitions, divestitures, or increases in shareholder payments. Based on these assumptions, S&P arrives at the following credit measures: -- Funds from operations (FFO) to debt of 30%-35% in 2013 and 2014, compared with 31% in 2012, reaching more than 40% by 2015; -- Debt to EBITDA of 1.5x-2.0x in 2013-2015, compared with about 2x last year; and -- EBITDA-to-interest coverage of 4.5x-5.0x in 2013 and 2014 rising to 10x in 2015 once the 8.75% notes are redeemed. The positive outlook reflects S&P's view that there is a one-in- three chance of S&P taking a positive rating action in the next 12 months. "We would raise the rating on KUKA if its performance does not materially diverge from our expectation of largely flat year-on- year earnings in 2014, as we believe that KUKA's expanding geographic footprint and strong customer relationships will continue to offset intensifying competitive pressure in some of its markets. We would consider a FFO-to-debt ratio of at least 30% and an EBITDA-to-interest coverage ratio of at least 5x as commensurate with a higher rating. We consider that early redemption of the 8.75% notes in November 2014 and an uninterrupted track record of steady operating performance, with an EBITDA margin of around 8%, will be important drivers for a future upgrade," S&P said. S&P would revise the outlook back to stable if KUKA does not redeem the 8.75% notes in November 2014 as per S&P's expectations. If redemption does not occur KUKA is unlikely to achieve stronger credit measures in the near term, and in particular an EBITDA-to-interest coverage ratio that is commensurate with a higher rating. Other factors, which could prevent S&P from raising the rating are a material deterioration in trading conditions leading to the EBITDA-to-interest coverage ratio declining to below 5x and/or negative free cash flow generation. Likewise, if KUKA takes on any large debt-funded acquisitions, S&P could revise the outlook back to stable. -- The recovery rating on the EUR202 million notes due 2017 is '5' reflecting the notes' structurally subordinated position in the waterfall of payments to the newly raised EUR160 million bank facility due 2018 at a hypothetical point of default. This is because the bank lenders benefit from the guarantees provided by KUKA's operating subsidiaries that generate at least 65% of consolidated earnings. The noteholders lack such protection. -- S&P believes that the release of the guarantee and collateral package provided to the noteholders as part of the initial financing results in the noteholders' pari passu status with other unsecured debtholders. S&P believes that this class of creditors, apart from the rated 8.75% noteholders, includes the senior unsecured convertible noteholders and the providers of the bilateral unsecured guarantee lines to the extent granted to KUKA and not its operating subsidiaries. The senior unsecured debt issued by KUKA in S&P's opinion ranks behind the bank and bilateral lines, which are either borrowed directly by KUKA's operating subsidiaries or benefit from their guarantees. -- S&P has valued the company on a going-concern basis, using a 5x multiple of its projected emergence EBITDA. S&P's valuation is based on its anticipation that the company would reorganize in the event of a default, with some of its less-competitive segments being liquidated. -- S&P's simulated default scenario contemplates a default in 2017 as a result of weak demand arising from soft market conditions, low profitability due to pricing pressure from competition, and pressure on working capital. -- S&P estimates that, for the company to default, EBITDA would need to decline significantly, representing a material deterioration from the current state of its business. -- The recovery rating on the notes of '5' and S&P's expectation for modest (10%-30%) recovery in the event of a payment default, assume 85% cash collateralization on all of the guarantee lines and asset-backed securities being drawn to 80% of its total commitment. ============= H U N G A R Y ============= E-STAR ALTERNATIVE: Changes Name to ENEFI Energiahatekonysagi ------------------------------------------------------------- MTI-Econews reports that E-Star Alternative officially changed its name to ENEFI Energiahatekonysagi Nyrt effective Tuesday. The company, which filed for bankruptcy protection in December 2012, is a Standard-category issuer at the Budapest Stock Exchange. As reported by the Trobuled Company Reporter-Europe on July 20, 2013, MTI-Econews related that E-Star Alernative appealed against a decision of the Budapest Municipal Court rejecting a request to approve an agreement the company reached with its creditors and ending its bankruptcy protection. E-Star's latest report showed that the company had total assets of EUR57.5 million on March 31, MTI-Econews disclosed. Liabilities came to EUR57.8 million, MTI-Econews noted. E-Star Alternative is a Hungarian energy services company. ============= I R E L A N D ============= FINGLAS MOTORS: High Court Appoints Provisional Liquidator ---------------------------------------------------------- Independent.ie reports that Finglas Motors, Ireland's second largest Ford dealership, has had a provisional liquidator appointed to it by the High Court after a judge was told it was insolvent and unable to pay its debts. Finglas Motors has assets, including its freehold premises on the North Road, Finglas, Dublin, worth EUR5.5 million and has debts of EUR11.5 million, Rossa Fanning, a barrister acting for the firm told the court on Dec. 17, Independent.ie relates. According to Independent.ie, Ms. Fanning said the directors had brought the court application seeking the appointment of a provisional liquidator so that efforts could be made to market the business as a going concern and save as many of the jobs as possible. Finglas Motors, along with its Blanchardstown Ford Centre, employs 70 people. INDEPENDENT NEWS: Mulls More Job Cuts Amid Finc'l Restructuring --------------------------------------------------------------- Geoff Percival at Irish Examiner reports that further job cuts are pending at Independent News & Media, with the group set to continue to reduce costs in the wake of it successfully completing its financial restructuring program. INM's shareholders met in Dublin on Monday to approve the group's plans to raise EUR43 million from a complex share placement round; the last aspect of a multi-layered restructuring which will lower the group's debt from EUR440 million to EUR118 million, Irish Examiner relates. Asked, after the meeting, about prospects of a slimming down of the group, INM's chief executive, Vincent Crowley, as cited by Irish Examiner, said cost control was always being looked at and operational costs would be lowered further. He declined to give a target figure for cost savings, apart from saying the sum would be "reasonably substantial", but admitted further jobs would be shed, Irish Examiner notes. Regarding the capital raise -- which was set to formally happen yesterday -- Mr. Crowley said he was not surprised at the high level of approval (all resolutions were unanimously passed), saying it was "a sensible thing to approve" and would help make INM's debt levels sustainable, Irish Examiner relays. He added that the participation of key shareholders -- Dermot Desmond's INM stake, via his IIU investment vehicle, post share offer, will increase from around 6.4% to 15% -- was key in attracting new investment, Irish Examiner notes. The group's financial restructuring drive has already seen it agree terms with its lenders over a write-down of a proportion of debt; restructure its pension deficit and sell its South African print assets, Irish Examiner discloses. About Independent News & Media Headquartered in Dublin, Ireland, Independent News & Media PLC (ISE:IPD) -- http://www.inmplc.com/-- is engaged in printing and publishing of metropolitan, national, provincial and regional newspapers in Australia, India, Ireland, New Zealand, South Africa and the United Kingdom. It also has radio operations in Australia and New Zealand, and outdoor advertising operations in Australia, New Zealand, South-East Asia and across Africa. The Company also has online operations across each of its principal markets. The Company has three business segments: printing, publishing, online and distribution of newspapers and magazines and commercial printing; radio, and outdoor advertising. INM publishes over 200 newspaper and magazine titles, delivering a combined weekly circulation of over 32 million copies with a weekly audience of over 100 million consumers. In March 2008, it acquired The Sligo Champion. During the year ended December 31, 2007, the Company acquired the remaining 50% interest in Toowoomba Newspapers Pty Ltd. IRISH BANK: McKillen Seeks Loan Portfolio Sale Restraining Orders ----------------------------------------------------------------- The Irish Times reports that property investor Paddy McKillen will ask the High Court this week for orders restraining Irish Bank Resolution Corporation selling certain parts of his loan portfolio with the liquidated bank to the Barclay brothers. According to The Irish Times, in an affidavit, the Belfast businessman said it was necessary to bring legal proceedings here "to protect my commercial interests and my constitutional rights relating to property". Mr. McKillen last month lost the final stage of his GBP20 million London court battle against the billionaire Barclay brothers over control of three of the city's finest luxury hotels -- Claridge's, the Connaught and the Berkeley, The Irish Times recounts. Mr. Justice Paul Gilligan on Monday granted an ex parte application by Michael Cush SC, for Mr. McKillen, for leave to bring proceedings against IBRC over the proposed sale of some EUR246 million in loans of Mr. McKillen, The Irish Times relates. The judge, as cited by The Irish Times, said it was "fair and right" that Mr. McKillen should be permitted to bring that challenge. Mr. Cush said the purpose of those proceedings was not to stop the sale of the EUR246 million personal loans tranche but rather to ensure whoever took on those loans did so on the basis of the renegotiated terms and conditions related to those loans, The Irish Times relays. The judge also permitted counsel to serve short notice on IBRC of his intention to apply on Tuesday for an injunction restraining IBRC selling loans to the Barclay brothers, The Irish Times discloses. Mr. McKillen contends a good faith provision in the shareholders' agreement of the London hotels' holding company -- Coroin Ltd. -- means he is entitled to stop the IBRC liquidator accepting an offer from the Barclays, The Irish Times relates. In an affidavit, Mr. McKillen said he wanted an order preventing IBRC treating the personal loans tranche as anything other than loans of a fixed three-year period from December 2012, The Irish Times recounts. Any transfer of the loans must reflect that, The Irish Times notes. About Irish Bank Resolution Irish Bank Resolution Corp., the liquidation vehicle for what was once one of Ireland's largest banks, filed a Chapter 15 petition (Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect U.S. assets of the former Anglo Irish Bank Corp. from being seized by creditors. Irish Bank Resolution sought assistance from the U.S. court in liquidating Anglo Irish Bank Corp. and Irish Nationwide Building Society. The two banks failed and were merged into IBRC in July 2011. IBRC is tasked with winding them down and liquidating their assets. In February, when Irish lawmakers adopted the Irish Bank Resolution Corp., IBRC was placed into a special liquidation in the Irish High Court to complete liquidation and distribution of the two banks' assets. IBRC's principal asset as of June 2012 was a loan portfolio valued at some EUR25 billion (US$33.5 billion). About 70 percent of the loans were to Irish borrowers. Some 5 percent of the portfolio was under U.S. law, according to a court filing. Total liabilities in June 2012 were about EUR50 billion, according to a court filing. Most assets in the U.S. have been sold already. IBRC is involved in lawsuits in the U.S. The IBRC liquidators want the U.S. bankruptcy judge to rule that Ireland is home to the so-called foreign main bankruptcy proceeding. If the judge agrees and determines that IBRC otherwise qualifies, creditor actions in the U.S. will halt automatically. ========= I T A L Y ========= ASTALDI SPA: S&P Assigns 'B+' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services said it had assigned its 'B+' long-term corporate credit rating to Astaldi SpA, the parent company of Italy-incorporated civil engineering and construction group Astaldi. The outlook is stable. At the same time, S&P assigned its 'B+' issue rating to Astaldi's EUR600 million senior unsecured notes, with a recovery rating of '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. The ratings on Astaldi reflect S&P's view of the company's "fair" business risk profile and "highly leveraged" financial risk profile, as S&P's criteria define these terms. S&P rates Astaldi one notch above its 'b' anchor score for the company, owing to its comparable rating analysis. This reflects that S&P assess Astaldi's business risk and financial risk profiles at the upper end of its "fair" and "highly leveraged" categories, respectively. S&P believes Astaldi's financial risk profile is broadly unchanged under its final capital structure after the group increased its planned EUR400 million bond to a final amount of EUR600 million. The overall proceeds from the notes were used to redeem outstanding debt, leaving the group's credit metrics unchanged. Astaldi used the seven-year senior unsecured notes' proceeds to redeem EUR196.3 million of its outstanding short-term debt, repay a EUR125 million term loan facility, and, through the redemption of a EUR265 million drawdown, fully restore the available amount under the its EUR325 million revolving credit facility (RCF). In S&P's opinion, the company's business risk profile is constrained by the above-average risk profile of the engineering and construction industry. Fixed-price contracts, representing about two-thirds of Astaldi's EUR6.9 billion construction backlog at end-September 2013, can lead to cost overruns if project expenses or timing are misjudged. The stable outlook reflects S&P's view that Astaldi's credit ratios in the coming 12 months should remain commensurate with the rating, such as adjusted FFO to debt above 10% and debt to EBITDA below 6.0x. The existing backlog and generally solid market positions in transportation infrastructure, including outside Italy, should enable the company's profit measures to remain resilient this year and next. S&P also expects the company to report limited negative free operating cash flow over 2013-2014, despite an increase in capital expenditures, and to maintain "adequate" liquidity. COGEMAT SPA: S&P Withdraws Preliminary 'B' CCR; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its preliminary 'B' corporate credit rating on Italian gaming company Cogemat SpA. At the time of the withdrawal, the outlook was stable. At the same time, S&P withdrew its preliminary 'B' issue rating and '3' recovery rating on Cogemat's proposed senior secured bonds. S&P is withdrawing the preliminary ratings because Cogemat is no longer pursuing its previously planned financing transaction. The preliminary ratings had been outstanding for over 90 days and were subject to the proposed issuance of EUR165 million senior secured bonds. Cogemat has not proceeded with this issuance as the company is pursuing alternative sources of financing for its capital structure. ===================== N E T H E R L A N D S ===================== EURO-GALAXY III: S&P Assigns 'BB' Rating to Class E Notes --------------------------------------------------------- Standard & Poor's Ratings Services assigned its credit ratings to Euro-Galaxy III CLO B.V.'s class A-1, A-2, B-1, B-2, C-1, C-2, D- 1, D-2, and E notes, as well as the A-1R variable funding notes (VFN). At closing, Euro-Galaxy III also issued an unrated subordinated class of notes. S&P's ratings reflect its assessment of the collateral portfolio's credit quality. S&P considers that the portfolio at closing was diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. S&P's ratings also reflect the available credit enhancement for the rated notes through the subordination of payable cash flow to the rated 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 S&P's 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. At closing, S&P considers that the transaction's legal structure is bankruptcy-remote, in accordance with S&P's European legal criteria. Euro-Galaxy III is a European cash flow corporate loan collateralized loan obligation (CLO) securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by European borrowers. PineBridge Investments Europe Ltd. is the collateral manager. RATINGS LIST Euro-Galaxy III CLO B.V. EUR335 Million VFN and Fixed- And Floating-Rate Notes Class Rating Amount (mil. EUR) A-1R AAA (sf) 67.00 A-1 AAA (sf) 94.00 A-2 AAA (sf) 40.00 B-1 AA (sf) 19.00 B-2 AA (sf) 22.25 C-1 A (sf) 7.75 C-2 A (sf) 11.25 D-1 BBB (sf) 6.75 D-2 BBB (sf) 7.75 E BB (sf) 20.75 Subordinated NR 38.50 NR--Not rated. =========== N O R W A Y =========== SONGA OFFSHORE: Private Placement, Bond Issue Conditions Met ------------------------------------------------------------ Songa Offshore SE provided an update regarding its private placement of shares with gross proceeds of approximately US$250 million and convertible bond issue with gross proceeds of US$150 million. As stated in previous announcements, the transactions were conditional upon (a) amendments to the existing CAT-D charter contracts, (b) waivers and amendment agreements with the Company's bondholders as well as (c) amended agreements for the Company's syndicated bank facility. Following the bondholders meeting held on December 11, 2013 and agreement with Statoil and its license partners as well as the bank syndicate, these conditions have now been fulfilled. The private placement and the convertible bond issue (and the effectiveness of the above agreed amendments) remain subject to approval by the Company's extraordinary general meeting to be held on December 18, 2013. About Songa Offshore Songa Offshore SE is a Norwegian-Cypriot offshore drilling contractor founded in 2005 with offices in Cyprus, Stavanger, Oslo, Houston, Kuala Lumpur and Singapore. * * * As reported by the Troubled Company Reporter-Europe on Dec. 2, 2013, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Cyprus-domiciled drilling company Songa Offshore S.E. to 'CC' from 'B-'. S&P said the outlook is negative. As reported by the Troubled Company Reporter-Europe on Dec.2, 2013, Moody's Investors Service downgraded Songa Offshore SE's probability of default rating (PDR) to Ca-PD from Caa1-PD. Concurrently, the rating agency affirmed the Caa1 corporate family rating (CFR) and revised the outlook to negative. ============= R O M A N I A ============= * ROMANIA: Food Producers Most Exposed to Insolvency in 2014 ------------------------------------------------------------ Romanian Business News - ACTMedia reports that the insolvency market has structured in 2013 and its maturing created a framework for restructuring, is the opinion of specialists from Transylvania Insolvency House. According to their provisions, 2014 will be another difficult year for many economic sectors, as a result of low consumption, difficult access to financing and secondary effects generated by Basel III regulations referring to liquidity indicators of the banking sector, ACTMedia relates. ACTMedia notes that after 5 years of crisis it is more difficult to identify sectors in favorable moments. According to the report, Rudolf Vizental, associate coordinator of Transylvania Insolvency House, said that without a liquidity infusion which should defrost consumption we should not hope for re-launching. Credits reported to BNR are at a minimum level for the last two years, while that of debts is at maximum level of over 15%. Most probably we are in the middle of crisis, he said. At the end of October 2013, the level of company credits was EUR26.65 billion in October 2012. Credits dropped on conditions in which the share of debts grew from 12.10% to 15.11%. ACTMedia reports that specialists at Transylvania Insolvency House said producers in the food sector will be most exposed, next to subvention or rent beneficiaries who will be confronted with insolvency situations next year. In the food sector producing companies are caught between cereal suppliers and key accounts, being the weak link in both relations. For the acquisition part business stability and predictability are seriously affected, the report relays. In the sales sector rigid contracts and many taxes take commercial levels to negative areas. In these conditions high debts specific to investing producers is managed by installments, ACTMedia notes. According to ACTMedia, the most affected companies will be those which obtain incomes from rentals: commercial areas (malls) industrial buildings, office areas. The report says most projects were developed in conditions of real estate boom with high costs and credits, with previsions about future incomes (rents), which are no longer realistic today. ========= S P A I N ========= REAL MADRID: Among Clubs Under Probe Over Illegal State Aid ----------------------------------------------------------- BBC News reports that Real Madrid and Barcelona are among seven Spanish clubs to be investigated over alleged illegal state aid. The Spanish foreign ministry announced that the European Commission will also begin proceedings against Osasuna, Athletic Bilbao, Valencia and Elche, BBC discloses. Hercules, who plays in the second tier, is also under investigation, BBC notes. "The government will fight to defend Spanish clubs because they're also part of the Spanish brand," BBC quotes foreign minister Jose Manuel Garcia Margallo as saying. Mr. Margallo, who denied the clubs had broken EU rules, said the proceedings could take months to conclude, BBC relates. He said Barcelona, Real Madrid, Osasuna and Athletic Bilbao are accused of contravening European Union rules because they are still owned by their members and had benefited from favorable tax treatment, BBC relays. Mr. Margallo, as cited by BBC, said the Commission was also probing Real over their training facilities and Bilbao over aid they received for the construction of their new stadium, which opened this season. Valencia, Elche and Hercules were being investigated because of help the three clubs received from the regional government in the form of loans and bank guarantees, according to BBC. Real Madrid Club de Futbol, commonly known as Real Madrid, is a professional football club based in Madrid, Spain. It was founded in 1902 as Madrid Football Club. ============= U K R A I N E ============= UKRAINE: Signs Russian Aid Agreement to Avoid Bankruptcy -------------------------------------------------------- BBC News reports that Ukraine's decision to suspend a deal on closer EU ties and sign a Russian aid agreement instead has helped avoid bankruptcy, Prime Minister Mykola Azarov has told ministers in Kiev. Russian President Vladimir Putin has agreed to buy US$15 billion (GBP9.2 billion, EUR11 billion) of Ukrainian government bonds and slash the price of Russian gas, BBC relates. According to BBC, Mr. Azarov said the package would protect financial stability. But the opposition has demanded to know what was offered to Russia in return, BBC notes. The government's surprise U-turn on an EU association agreement last month sparked mass demonstrations, BBC recounts. Mr. Azarov defended the deal with Russia in a government meeting on Wednesday, BBC relates. Ukraine's Prime Minister Mykola Azarov Ukraine's Prime Minister Mykola Azarov said the deal could restore stability, BBC relays. "What would have awaited Ukraine? The answer is clear -- bankruptcy and social collapse," BBC quotes Mr. Azarov as saying. "What a present for New Year that would be for the people of Ukraine. "The agreements between the Ukrainian and Russian presidents allow us to plan the years to come as years of development and people's confidence about their stable lives." He said a pact to lower gas prices by about a third would allow for "a revival of economic growth". Mr. Azarov, as cited by BBC, said that there was no way Ukraine could have signed the EU agreement as Kiev would have had to accept unfeasibly stringent IMF conditions for economic reform, BBC. "[Tues]day was a historic event," Russia's Interfax news agency quoted Mr. Azarov as saying. According to BBC, Russian Foreign Minister Sergei Lavrov criticized the West on Wednesday for exerting pressure on Ukraine to choose closer EU ties, and said the deal with Moscow was "mutually beneficial." Much of the detail of the agreement remains unclear, BBC notes. Ukraine urgently needs to cover an external funding gap of up to US$17 billion (GBP10.4 billion; EUR12.3 billion) next year to avoid defaulting on its debts, BBC discloses. =========================== U N I T E D K I N G D O M =========================== BARRATTS SHOES: Pavers Makes GBP5 Million Bid for Retailer ---------------------------------------------------------- InsolvencyNews reports that Barratts Shoes may have found a Christmas savior, as it has received a last ditch offer for the business. InsolvencyNews, citing a report by The Telegraph, relates that York-based Pavers, also a shoe retailer, has stepped in with a GBP5 million offer to take control of Barratts. The company entered formal administration after a previously planned GBP5 million investment package fell through, the report notes. Barratts Shoes, run by Michael Ziff, had 75 stores and 23 concessions across the UK and Ireland. It employed 1,035 staff, half of who are part-time. Philip Duffy -- philip.duffy.whitehouse@duffandphelps.com -- and David Whitehouse -- david.whitehouse@duffandphelps.com -- of Duff & Phelps were appointed joint administrators to Barratts Trading Limited on Nov. 8, 2013. The retailer previously entered administration in December 2011, trading as Barratts Priceless Ltd, resulting in the loss of approximately 2,500 jobs and over 100 store closures. It first entered insolvency in 2009. CO-OPERATIVE BANK: Bondholders Support GBP1.5BB Recapitalization ---------------------------------------------------------------- Harry Wilson at The Telegraph reports that The Co-operative Bank's GBP1.5 billion emergency recapitalization has passed its final investor hurdle as the lender received the support of bondholders for the deal. The Telegraph relates that the struggling lender said it had won 97.6% support from its debt investors for the so-called "liability management exercise" that will see the Co-op Group cede control of the bank to its bondholders. The bank had needed at least 75% of its bondholders to support the deal for it to be approved, The Telegraph notes. According to the Telegraph, the scheme was expected to receive court approval yesterday ahead of an end-of-year deadline to complete the capital raising, which if not met would likely result in the Co-op Bank being wound up by the Bank of England. Bondholders, including several major US hedge funds, will take a 70% holding in Co-op Bank once the capital raising is complete in return for exchanging GBP1 billion of bonds for new shares in the lender, the Telegraph states. The Co-op Group will retain a 30% stake, making it the bank's largest individual shareholder, and will also retain operational control, The Telegraph says. The recapitalization of the bank followed the discovery of a capital shortfall that has largely been blamed on the 2009 merger with the Britannia Building Society, The Telegraph states. About Co-operative Bank 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. * * * The Troubled Company Reporter-Europe on Nov. 14 and 18, 2013 has reported that Moody's Investors Service has affirmed The Co-operative Bank's Caa1 senior unsecured debt and deposit ratings, and changed the outlook on the rating to negative from developing, and Fitch Ratings has downgraded the company's Issuer Default Rating to 'B' from 'BB-' and placed it on Rating Watch Negative. EX EVENTS: Burnbrae Acquires Firm Out of Administration ------------------------------------------------------- Event Magazine reports that Ex Events has been unhitched from parent company Rivington Street Ventures (RSV) and sold to Burnbrae Events as part of an administration deal. The changes follow a demand from Ex Events' parent company to pay an 'inter-company loan' of GBP429,598, as RSV was taken into administration on December 4, according to Event Magazine. The report relates that Ex Events is now owned by Burnbrae Events, via administrators Resolve. The report notes that a total of 13 interested investors led to two offers for the business, with Burnbrae securing a deal for �40,000. Ex Events was incorporated in 2010 as a wholly-owned subsidiary of Rivington Street Ventures, with initial working capital loaned from that group. HAPPY PEOPLE: Goes Into Administration -------------------------------------- Insolvency News reports that the Happy People Corporation Ltd, a corporate events group which traded as The Alternative, has gone into administration. Employing 12 staff, the firm had a turnover in the area of GBP3 million, according to Insolvency News. The report notes that Tim Ball, restructuring services partner at Mazars, was appointed administrator to The Alternative, and is aiming to save employee jobs while continuing to provide services to clients of the company. The report relates that Mr. Ball said: "We shall be trading on and are in negotiations with potential interested parties to sell the business as a going concern." The London-based Happy People Corporation Ltd specialized in brand engagement, handling global project, campaigns and events on behalf of a prestigious client base. Having traded for 17 years, the corporate events groups worked with the likes of the BBC, Samsung, Nokia, Sainsbury, Orange, American Express and T- Mobile. KAUPTHING: Liquidation Going Well, Teare Says --------------------------------------------- Manx Radio at isleofman.com reports that Treasury Minister Eddie Teare said the liquidation of Kaupthing, Singer and Friedlander Isle of Man is continuing to go well. Mr. Teare has been speaking in the wake of the news four former bosses of Icelandic bank Kaupthing have been given prison sentences of between five and three years, according to isleofman.com. The report relates that they were charged with hiding the fact a Qatari investor bought a 5% stake in the firm with money lent -- illegally -- by the bank itself. It was seen as a confidence-boosting move, just weeks before 2008's global credit crunch hit, which led to the bank's collapse, the report notes. LONDON & REGIONAL: S&P Lowers Rating on Class B Notes to BB ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on London & Regional Debt Securitisation No. 1 PLC's class A and B notes. S&P has subsequently withdrawn its ratings on these classes of notes at the issuer's request. The rating actions follows S&P's review of the transaction's performance and the application of our European commercial mortgage-backed securities (CMBS) criteria. London & Regional Debt Securitisation No. 1 is a secured loan U.K. CMBS transaction backed by three U.K. office properties. The transaction closed in 2005 and has a legal final maturity date in October 2017. The securitized loan balance is GBP135.2 million. There is a fully subordinated B-loan outside of the securitization. The wholeloan maturity date was initially scheduled for October 2012. However, last year the noteholders agreed to extend this to October 2015, subject to certain conditions. In October 2013, the issuer reported a securitized loan-to-value ratio of 63.4% (including swap breakage costs) and a securitized loan interest cover ratio (ICR) of 1.60x. S&P has assumed no losses in its base case scenario. S&P's analysis shows that the available credit enhancement for the class A and B notes is no longer sufficient to cover its principal loss expectations under their current rating scenarios. The analysis also reflects the declining securitized loan ICR as a result of earlier property sales and the greater concentration on assets requiring lease renewals in the medium term. S&P has therefore lowered its ratings on the class A and B notes to 'BB+ (sf)' from 'BBB (sf)' and to 'BB (sf)' from 'BBB- (sf)', respectively. Subsequently, S&P has withdrawn its ratings at the issuer's request. RATINGS LIST London & Regional Debt Securitisation No. 1 PLC GBP234.2 Million Commercial Mortgage-Backed Floating-Rate Notes Class Rating To From A BB+ (sf) BBB (sf) NR BB+ (sf) B BB (sf) BBB- (sf) NR BB (sf) NR--Not rated. LONDON BRONCOS: Continue at New Ground -------------------------------------- AAP News reports that troubled Super League club London Broncos secured their future after signing a ground-share deal with non- league football team Barnet. London Broncos were homeless after leaving the Twickenham Stoop at the end of last season and reportedly faced going into administration due to their financial difficulties, according to AAP News. However, the report notes that their agreement to play at The Hive, Barnet's newly-built stadium in north London, ensures they will fulfil their fixtures for the 2014 Super League season. The announcement, which covers the 2014 and 2015 seasons, is the culmination of six months of talks amid speculation that Broncos' long-term chairman and benefactor David Hughes was looking to wind down his commitment, the report notes. Hughes is set to remain in charge of the Londoners during the 2014 season, with Barnet chairman Tony Kleanthous expected to assume control for 2015. In addition to playing their home games at The Hive, the Broncos will switch their training to Barnet's former stadium at Underhill, the report relates. "Over the last 10 days, we have worked closely with the Rugby Football League and Barnet chairman Tony Kleanthous to avoid administration and secure the future of the Broncos. . . . I believe this is the right decision, not only for the club, but also for the future of rugby league in London," the report quoted Mr. Hughes as saying. MAGYAR TELECOM: English Court Sanctions Scheme of Arrangement ------------------------------------------------------------- Clifford Chance LLP disclosed that on Dec. 3, the English Court sanctioned a scheme of arrangement in respect of a non-UK company in the case of Re Magyar Telecom B.V. [2013] EWHC 3800 (Ch). The case is of particular interest as it confirms that the English Court is willing to approve schemes which (1) compromise NY law governed bonds and (2) vary/release rights against third parties. It also confirms that schemes should benefit from recognition in Europe under the Judgments Regulation. In addition, on Dec. 11, the New York Bankruptcy Court recognized the English scheme in respect of Magyar under Chapter 15 of the US Bankruptcy Code as a foreign main proceeding providing for related relief and giving full force and effect to the scheme and related documents in the US. About Magyar Telecom B.V. Magyar Telecom B.V. is a private company with limited liability incorporated in the Netherlands and registered at the Chamber of Commerce (Kamer van Koophandel) for Amsterdam with number 33286951 and registered as an overseas company at Companies House in the UK with UK establishment number BR016577 and its address at 6 St Andrew Street, London EC4A 3AE, United Kingdom (telephone: +44(0)207-832-8936, Fax: +44(0)207-832-8950). Magyar Telecom BV, owner of Hungarian telecommunications provider Invitel, commenced proceedings in the United Kingdom on Oct. 21, 2013, to carry out a scheme of arrangement to reduce debt. Under the scheme to be implemented through the High Court of Justice of England and Wales,, EUR350 million (US$481 million) in 9.5% secured notes will be reduced to EUR155 million. The company has the support of holders of 70% of the notes. On Oct. 28, the U.K. judge authorized holding a creditors' meeting on Nov. 27 to approve the scheme, Bloomberg News relates. Magyar filed a petition in New York under Chapter 15 (Bankr. S.D.N.Y. Case No. 13-bk-13508) on Oct. 29, 2013, to assist a court in the U.K. in carrying out the scheme. RADIO THEATRE: Theatre Producer Enters Liquidation -------------------------------------------------- InsolvencyNews reports that the performing arts company responsible for 'The Hitchhiker's Guide to the Galaxy Radio Show Live!' has entered liquidation, cancelling the show midway through its 2013 tour. InsolvencyNews relates that the Radio Theatre Company Ltd had produced the smash hit UK tour in 2012 but had "been subject to extreme economic pressures" this year. Myles Jacobson from Streets SPW Plc, was appointed liquidator to the company on Dec. 2, 2013, according to InsolvencyNews. Featuring a different guest star playing the narrator role at each performance, an ensemble cast would bring the radio scripts to life on stage. Jacobson said: "Hitchhiker's Live has been subject to the same extreme economic pressures as many productions touring the UK this autumn. Ticket sales across the board have been lower than average and have not escaped this trend." "A difficult financial environment for such a large and technical show means that covering operating costs has become impossible. As a result the decision was taken in October to cancel the remaining dates of the tour." VELTI PLC: GSO Is Winning Bidder for Mobile Marketing Business -------------------------------------------------------------- Velti plc on Dec. 17 disclosed that the stalking horse bid submitted by affiliates of GSO Capital Partners LP, the credit division of Blackstone, will be the bid presented to the U.S. Bankruptcy Court for approval of the sale of the Company's mobile marketing business. No other qualified bids were received. The proposed transaction includes the sale of business lines operated by Velti Inc. and Air2Web Inc. in the U.S., Air2Web India, Velti DR Limited and Mobile Interactive Group, Ltd. in the U.K., and Velti Netherlands B.V. in the Netherlands. All operations included in the proposed sale agreement are continuing as normal throughout the sale process. A hearing to approve the sale to the winning bidder is set for December 20, 2013. The proposed sale is expected to close shortly. About Velti Inc. Velti Inc., a provider of technology for marketing on mobile devices, sought Chapter 11 protection (Bankr. D. Del. Case No. 13-12878) on Nov. 4, 2013. Velti Inc., a San Francisco-based unit of Velti Plc, listed assets of as much US$50 million and debt of as much as US$100 million. Its Air2Web Inc. unit, based in Atlanta, also sought creditor protection. The parent, Dublin, Ireland-based Velti Plc, which trades on the Nasdaq Stock Market, isn't part of the bankruptcy process. Operations in the U.K., Greece, India, China, Brazil, Russia, the United Arab Emirates and elsewhere outside the U.S. didn't seek protection and business there will continue as usual. The Debtors are represented by attorneys Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Matthew M. Murphy, Esq., and Chun I. Jang, Esq., at DLA Piper LLP (US), in Chicago, Illinois. The Debtors have also tapped Jefferies LLC as investment banker, Sitrick Brincko Group LLC, as corporate communications consultants, and BMC Group, Inc., as claims and noticing agent. U.S. Bank, National Association, as administrative agent for GSO Credit-A Partners, LP, GSO Palmetto Opportunistic Investment Partners LP and GSO Coastline Partners LP, extended US$25 million of postpetition financing to the Debtors. The DIP Lenders, which are also the Prepetition Lenders, are represented by Sandy Qusba, Esq., and Hyang-Sook Lee, Esq., at Simpson Thacher & Bartlett LLP, in New York. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. The Committee has tapped McGuireWoods LLP as lead counsel and Morris, Nichols, Arsht & Tunnell LLP as Delaware co-counsel. Asgaard Capital LLC serves as financial advisor to the Committee. Capstone Advisory Group LLC serves as consultant. =============== X X X X X X X X =============== * Insolvencies 24% Higher in 2014, Euler Hermes Reports ------------------------------------------------------- Euler Hermes, the global leader in trade credit insurance, has published its latest research on global business insolvencies: * In 2013, global insolvencies are projected to rise by 2% * Euler Hermes forecasts a slight improvement in 2014 (-1%), with the exception of Europe, where the recovery is too slow to have much impact * However, by volume, the total number of 2014 insolvencies is expected to be 24% higher vs. the pre-crisis (2000-2007) average. Renewed rise in insolvencies to +2% in 2013: a wide disparity between regions "For the full year 2013 we expect a renewed rise in our Global Insolvency Index, due to the prolonged global economic slowdown and corporate insolvencies remaining at a historically high level," explained Wilfried Verstraete, chairman of the Board of Management of Euler Hermes. This increase in insolvencies nevertheless masks two contrasting trends: * The continued rise of insolvencies in three main regions: Latin America (+10%), in the wake of weaker economic growth, particularly in Brazil Central and Eastern Europe (+6%), which is dependent on and reflects sluggis Western Europe growth, Western Europe (+9%), where insolvencies are still on the rise in all countries except Germany and the U.K. * The continued decline in insolvencies in the North American region (-11%) due to GDP growth in the U.S. picking up slightly, and in the Asia-Pacific region (-4%) where intra- regional prospects have offered a cushion to the private sector. 2014: More favorable outlook for insolvencies (-1%), except in Europe "We forecast a modest global economic recovery in 2014 at +3%, with brighter prospects in all regions" said Ludovic Subran, chief economist at Euler Hermes. "As a consequence, most countries should see a drop in the number of insolvencies, although the decline will nevertheless remain limited at -1%, as measured by our Global Insolvency Index." * The North American economies are expected to experience higher growth rates in 2014 (+2.9% in the United States, +2.5% in Canada) compared to 2013, which should contribute to a continuing trend of declining insolvencies in the region (-5%). * The Asia-Pacific region, where economic activity is expected to gather momentum in 2014 due to exports, should remain the second region to record a decline in insolvencies. However the rate will be less significant (-1%) as necessary economic consolidation is underway, especially in China. * For the other regions, with the exception of Africa and the Middle East, the trend is merely less unfavorable than in 2013. In Latin America, the slight economic recovery expected in 2014, tempered by persistent financial vulnerabilities, is only expected to see stabilization in the number of insolvencies (0%). Central and Eastern Europe will continue to suffer (+3%), notably from an insufficiently robust recovery in Western Europe, where insolvencies will increase slightly (+1%) given the still- challenging environment in several major countries (Belgium, Italy, Spain, The Netherlands). "In spite of the slight improvement in our insolvency outlook, the total number of insolvencies will still be 24% higher in 2014 than during pre-crisis years," concluded Wilfried Verstraete. ********* 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 * * *