/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/150115.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, January 15, 2015, Vol. 15, No. 10 Headlines F R A N C E HERACLES: Put Under Liquidation After Rescue Plan Fails G R E E C E FREESEAS INC: Issues US$500,000 Convertible Notes to Himmil L U X E M B O U R G LEHMAN BROTHERS: Claims Verification Scheduled for January 20 N E T H E R L A N D S EIGER ACQUISITIONS: S&P Assigns Prelim. 'B' CCR; Outlook Stable R O M A N I A SUCCES: Files for Insolvency; Court to Decide on Jan. 27 R U S S I A AMSTERDAM TRADE: Moody's Lowers Long Term Deposit Rating to Ba3 SUKHOI CIVIL: Fitch Lowers LT Issuer Default Ratings to 'BB-' S P A I N BARCLAYS BANK: S&P Raises Counterparty Rating From 'BB+' T U R K E Y JAMIE'S ITALIAN: Istanbul Unit Seeks Bankruptcy Protection U K R A I N E UKRAINE: EU Commission Proposes Third Bailout Program U N I T E D K I N G D O M ACISION BV: S&P Assigns 'B' CCR & Rates US$160MM Sr. Loan 'B+' CHAPTER EIGHT: In Administration, Cuts 18 Jobs CITY LINK: Inquiry on Firm Collapse Could Proceed DRIVE ASSIST: Debts of GB82 Mil. Force Firm Into Administration ISIS INVESTMENTS: Jan. 28 IOM Scheme Claims Bar Date Set VIRGIN MEDIA: Moody's Rates GBP300-Mil. Sr. Secured Notes 'Ba3' ********* =========== F R A N C E =========== HERACLES: Put Under Liquidation After Rescue Plan Fails ------------------------------------------------------- Jim Budd at Decanter.com reports that Heracles, formerly 1855.com, has been forced into liquidation after a major investor withdrew support for the troubled company's recovery plan. According to Decanter.com, the Tribunal de Commerce in Paris put Heracles into liquidation on Jan. 9, less than two months after it released the group from administration. Heracles, which included 1855, ChateauOnline (renamed Ares) and Cave Privee businesses, owed millions of euros to creditors and buyers who never received wines purchased en primeur, Decanter.com discloses. In late November 2014, the Paris court accepted a recovery plan put forward by Emeric Sauty de Chalon, the founder and president, and Fabien Hyon, managing director, Decanter.com recounts. But the deal collapsed when a Luxembourg-based investor called PLF1 withdrew its support at the beginning of December, Decanter.com relays. In July 2014, PLF1, as cited by Decanter.com, said it would pay EUR1 million to cover the group's debts and would invest another EUR1.5 million if the recovery plan was accepted. The public prosecutor was also appealing against the Tribunal's decision to accept the business recovery plan, Decanter.com notes. Around 11,000 creditors have submitted claims totaling more than EUR40 million against the Heracles group, Decanter.com discloses. Heracles is a French online wine merchant. =========== G R E E C E =========== FREESEAS INC: Issues US$500,000 Convertible Notes to Himmil ----------------------------------------------------------- FreeSeas Inc. has sold to Himmil Investments Ltd., a non-U.S. investor, a US$500,000 convertible promissory note, which matures a year from issuance and accrues interest at the rate of 8% per annum. The investor is entitled at any time to convert into common stock any portion of the outstanding and unpaid principal and accrued interest, provided that such conversion does not cause it to own more than 4.99% of the common stock of the Company, into shares of Common Stock. The conversion price is the lower of (i) $0.452 and (ii) 60% of the lowest daily VWAP on any trading day during the 21 consecutive trading days prior to conversion. Upon prior notice, the Company may prepay the Investor in cash, for 127.5% of any outstanding principal and interest remaining on the note. Mr. Ion G. Varouxakis, chairman, president and CEO said, "This investment strengthens the cash liquidity of the Company at a time when freight rates are depressed and opportunities flourish for vessel acquisitions at depressed values. We look forward to successfully leveraging our existing unencumbered assets in order to take advantage of emerging opportunities in the sector. The announced transaction is part of our strategy of bringing together the catalysts required for fleet growth, which will lead to improved earnings and eventually restoring shareholder value." About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. FreeSeas Inc. reported a net loss of US$48.7 million in 2013, a net loss of US$30.88 million in 2012 and a net loss of US$88.2 million in 2011. The Company's balance sheet at March 31, 2014, showed US$79.8 million in total assets, US$77.4 million in total liabilities, all current, and US$2.37 million in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions among others raise substantial doubt about the Company's ability to continue as a going concern. =================== L U X E M B O U R G =================== LEHMAN BROTHERS: Claims Verification Scheduled for January 20 ------------------------------------------------------------- Me Jacques DELVAUX & Me Laurent FISCH, trustee of Lehman Brothers (Luxembourg) Equity Finance S.A. (LBEF), in bankruptcy, disclosed that the procedure of the verification of claims of LBEF with registered office in L-2163 Luxembourg - 29, Avenue Monterey, in bankruptcy, RCSL number B101448 (LBEF) and the closure of the minutes of the verification of the claims of such liquidation will take place at a hearing on January 20, 2015 at 9:15 a.m. at the Luxembourg District Court, sitting in commercial matters, at Plateau du Saint-Esprit, 7, Rue du Saint Esprit, 1st Floor, Room C01.26. ===================== N E T H E R L A N D S ===================== EIGER ACQUISITIONS: S&P Assigns Prelim. 'B' CCR; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' long-term corporate credit rating to Netherlands-based software company Eiger Acquisitions B.V. (Exact). The outlook is stable. At the same time, S&P assigned its preliminary 'B' issue rating to Exact's proposed senior secured loans due 2022 and the RCF due 2020, with a preliminary recovery rating of '3' indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a default. S&P also assigned its preliminary 'CCC+' issue rating to the proposed senior unsecured loans due 2023, with a preliminary recovery rating of '6' indicating S&P's expectation of negligible (0-10%) recovery in the event of a default. The preliminary long-term corporate credit rating reflects S&P's assessment of Exact's business risk profile as "weak" and its financial risk profile as "highly leveraged." In S&P's view, Exact has a narrow product offering and is relatively small, and the industry shows only limited barriers to entry. Exact mainly provides accounting software and enterprise resource planning (ERP) solutions to small and midsize companies in The Netherlands, and to a lesser extent in Belgium. S&P considers its overall competitive position to be weaker than that of larger international competitors -- including Microsoft, SAP, and Oracle -- which however mainly target larger customers, and it is somewhat smaller than domestic players, including Unit 4. Other weaknesses include limited geographic diversification, despite a presence in North America where it generates about 25% of its revenues. S&P believes it could technically be rather simple for a customer to switch to an alternative software supplier, particularly for accounting solutions, despite the related costs. These weaknesses are partly offset by Exact's solid niche market positions in its main segments. According to Exact, it enjoys a market share of about 30% in online accounting software in the Netherlands, thanks to its relationships with 40% of the country's accountants. Exact also has a market share of about 15% in ERP business with midsize companies in The Netherlands. Other strengths include growth prospects in the Dutch cloud ERP market, supported by a solid economic environment and a moderately high average customer retention rate of about 92% on average in the Business and Specialized Solutions segments, which represent 85% of revenues. Moreover, Exact has a high proportion of recurring revenues, slightly more than 70%, which is likely to increase as business in the Cloud Solutions segment develops; a large and diversified customer base; and broadly average profitability despite some distortion caused by the carve-out of the Cloud Solutions International (CSI) segment, divestments, withdrawal of some older products, and restructuring. S&P's financial risk profile assessment primarily reflects Exact's high leverage. At year-end 2015, S&P forecasts a gross adjusted debt-to-EBITDA ratio of 6.7x (S&P's adjusted EBITDA measure is after capitalized development costs, in line with S&P's methodology) and funds from operations to debt of 7.7%. S&P's calculations are based on its understanding that all the sponsor's financial contributions will be equity. These weaknesses are partly offset by EBITDA cash interest coverage of about 2.5x -- including S&P's understanding that floating interest rates will be fully hedged -- and S&P's anticipation of stable free operating cash flow (FOCF) generation resulting in FOCF to debt exceeding 5% in 2015. The stable outlook reflects S&P's anticipation of modestly increasing revenues at Exact, with a Standard & Poor's-adjusted EBITDA margin of about 30%, positive FOCF, and adequate liquidity. S&P could lower the rating if FOCF were at breakeven (for instance because investments in CSI materially exceed our projections, there is weaker-than-expected revenue growth, and additional restructuring costs) and EBITDA cash interest coverage were at about 2x, or if Exact's liquidity weakened to "less than adequate." S&P thinks ratings upside is limited over the next 12 months because it does not expect the adjusted debt-to-EBITDA ratio to fall below 5x. ============= R O M A N I A ============= SUCCES: Files for Insolvency; Court to Decide on Jan. 27 -------------------------------------------------------- Romania Insider reports that Succes, owned by the businessman Nicolae Sarcina, recently filed for insolvency. According to Romania Insider, Ziarul Financiar reported that the company which posted a EUR350 million turnover in 2013 will receive the court decision on its insolvency request on Jan. 27. Profi and Mega Image, two of the largest supermarket chains in Romania, are interested in taking over Succes stores, Romania Insider discloses. Belgian Mega Image is after the ten Succes stores in Bucharest, while Profi, owned by the Polish investment fund Enterprise Investors, wants to buy more Succes stores in Bucharest and in the rest of the country, Romania Insider notes. Succes' owner Nicolae Sarcina is under investigation for tax evasion, Romania Insider says, citing the local media. Succes is a Romanian retailer. The company has 1,600 employees. =========== R U S S I A =========== AMSTERDAM TRADE: Moody's Lowers Long Term Deposit Rating to Ba3 --------------------------------------------------------------- Moody's Investors Service has downgraded Amsterdam Trade Bank NV's local- and foreign-currency long-term deposit ratings to Ba3 from Ba2, as well as the bank's standalone bank financial strength rating (BFSR) to D- (equivalent to a baseline credit assessment (BCA) of ba3) from D (ba2). The long-term ratings and standalone BFSR were also placed on review for further downgrade. The Not-Prime local- and foreign-currency short-term deposit ratings are unaffected by the actions. Ratings Rationale The downgrade of Amsterdam Trade Bank's BFSR to D- reflects the likelihood of asset quality deterioration resulting from the bank's substantial exposures to Ukraine and Russia against the backdrop of increased geopolitical and economic tensions. At year-end 2013, Amsterdam Trade Bank reported total exposures to Ukraine of EUR444 million, which included bank exposures totalling EUR206 million mainly in the form of pledged deposits, and a small exposure to Alfa-Bank Ukraine (unrated, a subsidiary of the bank's parent). As at the same date, the credit exposure to Ukraine represented approximately 79% of Tier 1 capital. The bank's exposure to Russia was EUR259 million at year-end 2013, or 86% of Tier 1 capital. By end-November, Moody's understand that credit exposures to Ukraine had diminished by 15%, thanks to the relatively short-term nature of lending and the discontinuation of lending activity in the country. Nonetheless, Moody's believes that the balance of risks for Amsterdam Trade Bank's asset quality has shifted to the downside because of still high political tensions in Ukraine, compounded with an economic contraction in Russia. The significant borrower concentrations in the bank's loan book and the uncertainty surrounding the quality and availability of collateral in regions experiencing material stress entails significant negative pressure on asset quality. In addition, although Moody's understands that Amsterdam Trade Bank is not affected by sanctions imposed by the US Treasury on Russian entities and individuals, the rating agency believes that the threat of EU and further US sanctions pose additional risks to the region, including an exacerbation of the current economic slowdown. The downgrade of Amsterdam Trade Bank's deposit ratings to Ba3 is driven by the corresponding downgrade of the bank's BFSR. Moody's assessment of the likelihood of support from Amsterdam Trade Bank's Russian parent, Alfa-Bank (deposits Ba1 on review for downgrade, BFSR D/BCA ba2 on review for downgrade) results in a moderate probability of parental support. However, the support assumptions do not provide for any rating uplift for the bank's long-term deposit ratings. Moody's does not assume any systemic support from the Dutch government (Aaa stable) in Amsterdam Trade Bank's long-term deposit ratings. Factors to be Considered in the Continuing Rating Review Amsterdam Trade Bank's long-term deposit ratings and standalone BFSR remain on review for downgrade in view of the significant uncertainties around the unfolding of events in Ukraine in 2015. The review also reflects the severe and rapid deterioration in the operating environment in Russia and the heightened risk of a more prolonged and acute economic downturn than originally anticipated. The review for downgrade of the bank's ratings will be carried out alongside the review for downgrade of the long- term ratings and BFSR of the bank's Russian parent Alfa-Bank initiated on December 23, 2014. Considering the adverse changes to the operating environment of Amsterdam Trade Bank, Moody's review will focus on (1) the implications of any further volatility in the bank's operating environment in Ukraine and Russia; (2) the severity of asset quality deterioration and its consequences on the bank's financial metrics, as well as the bank's capacity to absorb negative shocks; and (3) any actions the bank's parent Alfa-Bank may decide to enhance its subsidiary's ability to absorb further shocks. Moody's will also monitor the current financial difficulties faced by the Ukrainian government since its default could cause severe credit losses, notably because one third of the bank's Ukrainian exposures are linked to energy-related issuers that have close ties to the government. In addition, currency controls from Russia or Ukraine involving strict restrictions on local- currency conversion into US dollar and euro as well as US/EU sanctions could severely impair the bank's ability to receive payments on its loans originated in the region. What Could Change The Rating Up/Down A lowering of Amsterdam Trade Bank's BCA could be triggered by (1) any scenarios that lead to a lowering of parent Alfa-Bank's BCA below ba3; and (2) a weakening of the bank's financial fundamentals due to asset quality deterioration, which may materialize as a consequence of further deterioration the Ukrainian/Russian crisis. A lowering of Amsterdam Trade Bank's BCA will likely result in a downgrade of the bank's long-term ratings. Conversely, stabilization of the Ukrainian geopolitical situation, improvement in Russia's economic growth prospects and renewed support of Alfa-Bank in favor of its subsidiary could stabilize ratings at their current levels. Given the ongoing review for downgrade, Moody's considers that upward pressure on the long-term deposit ratings and BFSR of Amsterdam Trade Bank is unlikely in the near term. SUKHOI CIVIL: Fitch Lowers LT Issuer Default Ratings to 'BB-' ------------------------------------------------------------- Fitch Ratings has taken rating actions on 13 Russian companies, following Fitch's downgrade of the Russian sovereign. On Jan. 9, 2015, Fitch downgraded Russia's Long-term foreign and local currency Issuer Default Ratings (IDR) to 'BBB-' from 'BBB'. The issue ratings on Russia's senior unsecured foreign and local currency bonds were also downgraded to 'BBB-' from 'BBB'. The Outlooks on the Long-term IDRs are Negative. The Country Ceiling was lowered to 'BBB-'from 'BBB'. The Short-term foreign currency IDR was affirmed at 'F3'. The rating actions reflect Fitch's view that these entities' ratings are now constrained by the sovereign Rating and Outlook, and have been revised to reflect this. This rating view is consistent with the lowering of the Russian Country Ceiling to 'BBB-'. State-owned issuers notched down from the sovereign IDR on the basis of Fitch's 'Parent and Subsidiary Rating Linkage' criteria have also been downgraded to maintain the respective rating differentials. Fitch expects to publish a further rating action commentary in the near future summarizing non-financial corporate Russian National Scale ratings. The rating actions are: JSC Atomic Energy Power Corporation (Atomenergoprom) Long-term local currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Short-Term Local Currency IDR affirmed at 'F3' Long-term foreign currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Short term foreign currency IDR; affirmed at 'F3' OAO Gazprom Long-term local currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Short-term IDR: affirmed at 'F3' Long-term foreign currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Senior unsecured rating: downgraded to 'BBB-' from 'BBB' Senior unsecured rating for OOO Gazprom Capital: downgraded to 'BBB-' from 'BBB' Short-term Commercial Paper Rating from Gazprom ECP SA: affirmed at F3. JSC Gazprom Neft Long-term local currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Long-term foreign currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Foreign currency senior unsecured rating: downgraded to 'BBB-' from 'BBB' Short-term IDR affirmed at 'F3' Senior unsecured rating for GPN Capital SA: downgraded to 'BBB-' from 'BBB' The rating actions on Gazprom Neft and GPN Capital SA applies to all debt issued prior to August 2014. OAO LUKOIL Long-term local currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Long-term foreign currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Short term IDR affirmed at F3 Foreign currency senior unsecured rating: downgraded to 'BBB-' from 'BBB' Senior unsecured rating for LUKOIL International Finance BV: downgraded to 'BBB-' from 'BBB' OAO Novatek Long-term local currency IDR: affirmed at BBB-; Outlook revised to Negative from Stable Long-term foreign currency IDR: affirmed at BBB-; Outlook revised to Negative from Stable Foreign currency senior unsecured rating: affirmed at 'BBB-' Senior unsecured rating for Novatek Finance Limited: affirmed at 'BBB-' The affirmation of OAO Novatek and Novatek Finance applies to all debt issued prior to 1 August 2014. Rating Drivers and Rating Sensitivities. JSC Russian Railways Long-term local currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Long-term foreign currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Local currency senior unsecured rating: downgraded to 'BBB-' from 'BBB' Short term foreign currency IDR affirmed at 'F3' Short-term local currency IDR affirmed at 'F3' RZD Capital PLC foreign currency senior unsecured rating: downgraded to 'BBB-' from 'BBB' JSC Federal Passenger Company Long-term local currency IDR: downgraded to 'BB+' from 'BBB-'; Outlook Negative Long-term foreign currency IDR: downgraded to 'BB+' from 'BBB-'; Outlook Negative Short term foreign currency IDR downgraded to 'B' from 'F3' Short-term local currency IDR downgraded to 'B' from 'F3' OJSC Federal Grid Company of Unified Energy System Long-term local currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Long-term foreign currency IDR: downgraded to 'BBB-' from 'BBB'; Outlook Negative Foreign currency senior unsecured rating: downgraded to 'BBB-' from 'BBB' Short-term foreign currency IDR affirmed at 'F3' Federal Grid Finance Limited local currency senior unsecured rating downgraded to 'BBB-' from 'BBB' Polyus Gold International Limited Long-term foreign currency IDR: affirmed at 'BBB-'; Outlook revised to Negative Foreign currency senior unsecured rating: affirmed at 'BBB-' Short-term IDR affirmed at 'F3' Rostelecom OJSC Long-term foreign currency IDR: affirmed at 'BBB-'; Outlook revised to Negative from Stable Foreign currency senior unsecured rating: affirmed at 'BBB-' Sukhoi Civil Aircraft Long-term local currency IDR: downgraded to 'BB-' from 'BB'; Outlook Negative Long-term foreign currency IDR: downgraded to 'BB-' from 'BB'; Outlook Negative Foreign currency senior unsecured rating: downgraded to 'BB-' from 'BB' Short-term IDR: affirmed at 'B' Local currency Short-term IDR: affirmed at 'B' Rating Drivers and Rating Sensitivities. OAO Tatneft Long-term foreign currency IDR: affirmed at 'BBB-'; Outlook revised to Negative from Stable Short-term IDR affirmed at 'F3' Uralkali Long-term foreign currency IDR: affirmed at 'BBB-'; Outlook revised to Negative from Stable Uralkali Finance Limited foreign currency senior unsecured rating: affirmed at 'BBB-' ========= S P A I N ========= BARCLAYS BANK: S&P Raises Counterparty Rating From 'BB+' -------------------------------------------------------- Standard & Poor's Ratings Services said that it raised to 'BBB/A- 2' from 'BB+/B' the long- and short-term counterparty credit ratings on Spain-based Barclays Bank S.A.U. (BBSAU). The outlook is stable. The upgrade follows the completion of the full acquisition of BBSAU by Spain-based Caixabank S.A., as announced by Caixabank on Jan. 2, 2015. S&P considers that BBSAU has become a core subsidiary of Caixabank, and S&P has therefore equalized the ratings on the subsidiary with those on the parent. S&P expects the legal merger of both entities to take place this year. Once the merger is completed and BBSAU ceases to exist, S&P will withdraw its ratings on BBSAU. S&P generally rates core subsidiaries at the same level as the group credit profile of the parent, which in this case is 'bbb'. Despite BBSAU being a newly acquired subsidiary, S&P considers it core to Caixabank based on S&P's expectation that it will be fully merged into the parent during 2015. Because S&P's ratings on BBSAU are now based on its core status for Caixabank, S&P no longer have a stand-alone credit profile (SACP) on the bank. The stable outlook mirrors that on Caixabank, as S&P expects the ratings on BBSAU to move in tandem with those on its parent. =========== T U R K E Y =========== JAMIE'S ITALIAN: Istanbul Unit Seeks Bankruptcy Protection ---------------------------------------------------------- Isobel Finkel at Bloomberg News reports that Jamie's Italian eatery in Istanbul, part of the restaurant chain established by British celebrity chef Jamie Oliver, filed for legal protection to overcome financial difficulties. The Istanbul outlet of Jamie's Italian opened 14 months ago at the new Zorlu Center mall, a shopping complex built by Zorlu Holding at a cost of US$2.5 billion, Bloomberg says, citing information on Zorlu Center's Web site. Hurriyet Daily News reported that the Istanbul location was unable to reach targets due to lower-than-forecast traffic to the Zorlu mall, Bloomberg relays. Hurriyet said the legal filing also cited lower prices required to compete in Istanbul, Bloomberg relates. According to Bloomberg, the company said in a statement that protection from bankruptcy is being sought for a short time only. It said the restaurant will continue operating and stakeholders and the landlord are expected to be supportive, Bloomberg notes. ============= U K R A I N E ============= UKRAINE: EU Commission Proposes Third Bailout Program ----------------------------------------------------- Peter Spiegel, Shawn Donnan, Neil Buckley and Elaine Moore at The Financial Times report Jean-Claude Juncker, the European Commission president, proposed a third EU bailout program for Ukraine on Jan. 8, urging approval of another EUR1.8 billion in aid. The package still needs the approval of EU member states, where willingness to loan Kiev additional funds has cooled amid concerns that the Ukrainian government has not lived up to its economic reform commitments, the FT notes. The news came as International Monetary Fund officials began talks on Jan. 8 with the new government in Kiev as part of a review of its existing program and Ukraine's reform agenda, over which there have been differences, the FT relays. Ukraine won agreement on a US$17 billion IMF bailout in April, topped up to US$27 billion including contributions from other donors, the FT discloses. But because of the country's weakening economy, a US$15 billion budget gap has opened up, prompting the fund to hold off distributing its latest aid tranche until it is filled, the FT states. According to the FT, the European Commission said if the EUR1.8 billion funds were approved, disbursement would be contingent on Kiev getting agreement on further tranches of its US$17 billion IMF bailout. =========================== U N I T E D K I N G D O M =========================== ACISION BV: S&P Assigns 'B' CCR & Rates US$160MM Sr. Loan 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to U.K.-based software firm Acision B.V. The outlook is positive. At the same time, S&P assigned its 'B+' issue rating to the company's US$160 million senior secured loan. The recovery rating is '2'. The rating reflects S&P's view of Acision's business risk profile as "weak" and its financial risk profile as "aggressive." Acision has completed the issuance of US$160 million of senior secured loans and will use the proceeds to refinance existing loans maturing in 2015. As part of this transaction, the company's investors are also amending existing shareholder loans to be subordinated to all the debt and to mature six months after the company's senior debt. Acision's business risk profile is constrained by its narrow product offering -- most of the company's products are related to short message service (SMS) or multimedia messaging service (MMS) and there are revenue pressures on the legacy messaging infrastructure products. S&P anticipates this trend will continue as the commoditization of SMS causes consumer SMS revenues in developed markets to shrink and usage of alternative "over-the-top" (OTT) messaging applications increases. That said, Acision has its own IP messaging solutions, which could partly offset some of these pressures. The business risk profile is further constrained by meaningful client concentration, as well as exposure to spending in the telecoms sector. In addition, Acision operates in a fragmented market and faces competition from both small and big telecom infrastructure providers. Its profitability is somewhat lower than average. "These factors are partially offset by Acision's relatively strong position in this niche market -- its software is embedded in many of the world's largest telecom carriers' mission-critical infrastructure. In our view, the company's long-term relationship with and access to the carriers' network could enable it to develop additional products and upsell new products to existing clients. New products include Collect SMS (a "receiver pays" model for SMS messaging), Internet Protocol (IP) messaging, and secured enterprise messaging. The business risk profile is further supported by recurring revenues from support (which comprises about 50% of revenues). Acision's support services have retention rates of over 90% because of high switching costs. Additionally, we consider that, given that SMS is the only messaging service that is embedded in virtually all mobile handsets, the company's products in messaging infrastructure are likely to continue to generate revenues over the long term," S&P said. "Our assessment of Acision's financial risk profile reflects our view that the company's adjusted leverage will be about 4x in 2014, following the refinancing, and that the company will start to generate solid free cash flow from 2014 onward, as its restructuring outflows are reducing meaningfully. Our adjusted debt calculation includes a provision for tax liability of about US$48 million. However, we understand that it is unlikely that the full amount will be paid in cash. Excluding the provision for tax liability, we forecast that leverage will reach about 3.1x-3.2x in 2014. We calculate adjusted EBITDA to include capitalized development costs and restructuring costs, in line with our criteria," S&P added. "The financial risk profile is further constrained by our view that the company's majority sponsor ownership could cause it to have more aggressive funding in the future. However, the sponsor's track record with Acision so far suggests that it is unlikely that the company will releverage to more than 5x adjusted debt/EBITDA. We expect credit ratios to experience some volatility based on exchange rates; Acision's debt will be entirely dollar-denominated. This might create mismatches with some of the currencies in which it bills customers. In addition, the largest staffing costs are in British pound sterling (31%), U.S. dollars (20%), and Czech koruna (17%), because Acision's employee base is predominantly located in the U.K., the U.S., and the Czech Republic," S&P noted. Because the company's profitability is lower than that of other rated software peers, it has a track record of meaningful restructuring, and it has seen continued decline in its core revenues, S&P adjusts the rating downward by one notch from its anchor of 'b+'. S&P's base case assumes: -- The 2014 numbers are pro forma for the full-year consolidation of recent acquisition MindMatics. -- Third-party and core messaging infrastructure will continue to decline, but more slowly, especially from 2015 onward, when the revenues will predominantly comprise support. -- Double-digit growth in new products. A revenue decline of about 1%-3% in 2014 and flattish revenues in 2015. -- Slightly lower margins in 2014 because expansion in the low-margin "rich enterprise" segment will have a meaningful effect on margins, which should stabilize in 2015 as lower- margin deployment declines and application-to-person (SMS messages sent between users and applications) profitability improves. Operating expenditure meaningfully down in 2014 as a result of further cost cuts, causing the adjusted EBITDA margin to improve to 25%-26%. -- Restructuring costs of about $4 million included in 2014 EBITDA. -- Limited maintenance capital expenditure (capex) of about $2 million-$3 million. -- No surplus cash adjustment because excess cash will likely be used to fund further acquisitions. Based on these assumptions, S&P arrives at these credit measures: -- EBITDA interest coverage of about 3x; -- Debt to EBITDA of about 4x in 2014, declining to about 3.5x in 2015; and -- Free operating cash flow (FOCF) to debt of about 13.5% in 2014, improving to about 15%-16% in 2015. The positive outlook reflects the potential for a one-notch upgrade if growth of new products offsets the continued decline in legacy messaging infrastructure, supporting further improvement in adjusted EBITDA margins. S&P could upgrade Acision to 'B+' if the company is successful in stabilizing its revenues, minimizing its restructuring costs, and generating meaningful free cash flows, in line with S&P's base- case scenario. S&P anticipates that a successful turnaround would position it more comfortably within the "weak" business risk profile and provide more certainty about its future performance. An upgrade would be subject to adjusted EBITDA margins improving to more than 25% and maintenance of adjusted leverage well below 4.5x. S&P could revise the outlook to stable if it sees continued pressure in the company's top-line performance, resulting in additional restructuring, and limited free cash flow generation. Failure to stabilize earnings with growth from new products may also cause S&P to revise the company's business risk profile to "vulnerable," limiting the potential for rating upside. CHAPTER EIGHT: In Administration, Cuts 18 Jobs ---------------------------------------------- Yorkshire Evening Post reports that Chapter Eight has entered administration, leading to 18 redundancies. Sue Laverick, financial director at Chapter Eight, confirmed the business ceased trading on January 9, according to Yorkshire Evening Post. "Unfortunately the board has taken steps today to put Chapter Eight into liquidation and will convene a meeting of creditors in due course," the report quoted Ms. Laverick as saying. "We have spent the day informing staff and clients of the decision. Creditors will be contacted once an administrator has been formally appointed," Ms. Laverick said, the report relates. "Our first priority has been informing our staff and ensuring they receive support," Ms. Laverick added. Members of the company's technical team have formed a business that will continue to run clients' websites in the short-term and has bought the necessary assets from the firm, Ms. Laverick said, the report notes. A total of 18 staff have been made redundant by the company, which was based at The Basilica on King Charles Street, the report relays. Founded in 2002 by managing director Mario Thomas, Chapter Eight provided web design, online retail and other software products to brands including Coca Cola, Aston Villa Football Club and Sock Shop. CITY LINK: Inquiry on Firm Collapse Could Proceed ------------------------------------------------- Coventry Telegraph reports that an inquiry into the collapse of delivery firm City Link could take place, Vince Cable has said. The Business Secretary said the decision to proceed with an investigation depends on the findings from the administrator, according to Coventry Telegraph. It comes after MPs and unions across the country criticized the behavior of City Link bosses, the report notes. The report discloses that the administrators at EY announced 2,356 redundancies on New Year's Eve, after talks with a potential buyer fell through. The report says that the news comes a day after administrators announced a further 230 redundancies, as 51 depots prepare to close by January 15. A total of 141 staff will remain at the Coventry headquarters, as well as across a number of other sites, to help wind the business down, the report adds. DRIVE ASSIST: Debts of GB82 Mil. Force Firm Into Administration --------------------------------------------------------------- Fleet News reports that Drive Assist UK, once one of Britain's leading non-fault accident vehicle replacement companies, and its two sister companies have collapsed owing more than GBP82 million. The accident management specialist and its Millennium Motor Group and Sol Car Rentals businesses went into administration following the loss of a major contract and an inability to raise GBP10 million to continue trading, according to Fleet News. The report notes that more than two months after administrators from Zolfo Cooper were appointed, the companies are now being wound down with thousands of cars being recovered and due to be sold. The collapse of the Tamworth-based company has also resulted in the loss of around 640 jobs, the report relates. The report says that its downfall comes after it reported profits of GBP32.6 million in 2007. At the time, Drive Assist UK operated a fleet of more than 14,000 cars and vans and had a turnover of above GBP100 million. The report says that the business continued to expand, but for the 12 months to May 31, 2011, accounts reveal that Drive Assist Holdings, the parent company, reported a pre-tax loss of GBP233.4 million on turnover of GBP107.2 million, compared with a loss of GBP24.9 million on a turnover of GBP157.2 million for the previous 12 months. Insurance Company Contract Loss TA Associates, a leading buyout and private equity firm, invested in Drive Assist in 2003, and four years later, realized a return of more than triple its investment through the $500 million (GBP322 million) sale of its stake to Charterhouse Capital Partners, another buy-out specialist and private equity firm, the report notes. The report relays that the creditors' report highlights that last year Drive Assist lost a major contract from an unnamed insurance company, although it is reported to have been the Peterborough- based BGL Group, that had historically accounted for an average of 30% of the company's annual revenues. When the administrators were appointed Drive Assist operated a fleet of 7,458 vehicles, the vast majority of which were acquired on short-term purchase and buy-back agreements from manufacturers, the report says. Most of the vehicles were funded by Lombard North Central, Fortis Lease UK and United Dominions Trust. The report notes that Millennium, which traded under the name Nottingham Autopark, was reliant on Drive Assist to provide vehicles, although it did acquire some from other sources via a separate stocking facility. Meanwhile, Sol was engaged in the short-term rental of vehicles to either individual or corporate customers, with around 900 on hire for durations ranging typically from between six and nine months, the report discloses. When the company entered administration, 215 of the vehicles were being used as company cars by Drive Assist employees, with the remainder on hire to third parties, the report relays. In Contravention of Financing Agreements However, the creditors' report says such lengthy hire periods appeared to be in direct contravention of financing agreements with funders, which prohibited hire periods of greater than 28 days, the report notes. As a result, Deloitte was asked to perform a review of certain aspects of the businesses, the report discloses. While that review was in progress, Zolfo Cooper was engaged by Drive Assist's syndicate of banks to perform a contingency planning exercise, while the directors explored further funding options, the report notes. The report relays that the creditors report said: "It became clear that the companies would not be able to continue to pay for the financing associated with its fleet and the associated operating costs. "As a result, the vehicle funders made it clear that they would require the immediate return of all funded vehicles as quickly as possible to preserve the residual value of the fleet and minimise the loss suffered." The report highlights that by January 25, about 4,797 vehicles had either been returned, or were in transit to the vehicle funders, with a further 1,060 available for collection either from Drive Assist's 13 depots, which are being closed, or end- users. Contracts Terminated on All Sol Cars As a result of the breach of the hire agreement, the vehicle funders requested that the contracts be terminated on all cars operated by Sol and the vehicles recovered, the report relates. The creditors' report reveals that to date, approximately 394 Sol vehicles have been returned to the vehicle funders, the report notes. The creditors' report also reveals that prior to the administrators' appointment, Drive Assist had received payments in relation to the sale of several hundred vehicles financed by the vehicle funders, the report notes. The creditors' report related: "All of these vehicles were subject to financing agreements with the vehicle funders and, as such, the proceeds of sale should have been paid directly into a separate designated account, charged to the vehicle funders. "However, these funds were paid directly into Drive Assist's main current account and some of the funds were subsequently used to provide additional working capital. The administrators, with the agreement of both the senior lenders and vehicle funders, took independent legal advice on this matter to determine how this should be dealt with. This legal advice is confidential but has been shared with the senior lenders and vehicle funders and discussions are in progress to resolve this matter," creditors' report added, the report says. ISIS INVESTMENTS: Jan. 28 IOM Scheme Claims Bar Date Set -------------------------------------------------------- Conditions to the proposed scheme of arrangement pursuant to section 152 of the Companies Act 1931 between Isis Investments Limited and its Scheme Creditors were satisfied on December 23, 2014, at which point the Isle of Man Scheme became effective in accordance with its terms. Accordingly, the Effective Date is December 23, 2014, and the Bar Date will be 5:00 p.m. (London time) on January 28, 2015. Scheme Creditors may request a Claim Form from the Scheme Supervisor using the contact details below. Any questions should be directed to Andrew Paul Shimmin, the Scheme Supervisor using the contact details below: 13-15 Hope Street Douglas, Isle of Man, IM1 1AQ FAO: Andrew Paul Shimmin Tel No: (+44)-01624-627744 Fax No: (+44)-01624-629666 E-mail: Paul@shimminwilson.com VIRGIN MEDIA: Moody's Rates GBP300-Mil. Sr. Secured Notes 'Ba3' --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed new GBP300 million senior secured notes due January 2025 to be issued by Virgin Media Secured Finance PLC and a B2 rating to the new GBP625 million equivalent senior notes to be issued by Virgin Media Finance PLC, both indirect subsidiaries of Virgin Media Inc. ("Virgin Media", or "the company"). Virgin Media's existing ratings, including the company's Ba3 Corporate Family Rating (CFR) remain unchanged and the outlook remains stable. Proceeds from the new issuance will be used for general purposes, including the funding of the planned acquisition of UPC Broadband Ireland Ltd. ("UPC Ireland") and its subsidiaries (the "UPC Ireland Group") for an undisclosed purchase price, distributions to parent companies or the refinancing of existing debt. The UPC Ireland Group provides digital cable, broadband internet and fixed-line telephony in five regional clusters in Ireland, including the cities of Dublin, Cork, Galway and Limerick to both residential and B2B customers. It generated revenue of GBP 215 million and OCF of GBP101 million for the nine months period to September 30, 2014. Ratings Rationale Virgin Media's Ba3 CFR reflects the resilient operating performance of the company's cable business considering the competitive nature of UK broadband and television markets, continued improvements in the quality of the broadband and digital TV offer supported by the capabilities of its DOCSIS 3.0 networks and evidenced by increased TiVo penetration and an improved broadband subscriber mix; and revenue growth opportunities offered by the company's mobile and B2B services. However, the rating remains constrained by the strong competition in the company's broadband and television markets evidenced by muted RGU net adds over recent quarters; (ii) Virgin Media's significant leverage of around 5.2x Debt/EBITDA (as adjusted by Moody's) on a last-twelve-months (LTM) to 30 September 2014 basis adjusted for the potential UPC Ireland acquisition; and (iii) a financial policy that is now aligned with Liberty Global plc's (Ba3, Stable) more leverage-tolerant stance. The potential UPC Ireland acquisition makes good strategic sense, has some potential for synergies for example from corporate overhead reduction and is, in conjunction with other potential uses of the issuance proceeds, only modestly leveraging. The stable outlook reflects Moody's expectation that Virgin Media's up-selling strategy and operating leverage will lead to some moderate growth in revenue and EBITDA going forward. What Could Change the Rating -- UP While positive ratings development is unlikely in the near term, strong operating performance and solid revenue growth along with leverage as measured by the Debt/EBITDA (as adjusted by Moody's) ratio falling sustainably below 4.5x. What Could Change the Rating -- DOWN Sustained weak operating performance or an increase in Debt/EBITDA (as adjusted by Moody's) above 5.5x could result in downward pressure. Furthermore weak liquidity would put downward pressure on the ratings. Moody's views Virgin Media's liquidity profile as solid. As of 30 September 2014 the company had GBP 34 million of cash on balance sheet (pro forma for its October 2014 refinancing) and GBP 660 million available under its unused revolving credit facility. Similar to other Liberty Global plc group companies, Virgin Media actively manages its debt obligations to optimize borrowing costs and extend maturities. As of the end of Q3 2014, around 96.1% of the company's debt (including capital leases and vendor financing, excluding premium and amounts representing interest) was scheduled to mature in 2019 and beyond. In Moody's view, internally generated cash flows together with cash in hand should provide Virgin Media with a good level of flexibility for its operational needs over the next 12 to 18 months. Subject to covenant compliance Moody's believe that any surplus liquidity will likely be up-streamed to Liberty Global from time to time. The principal methodology used in these ratings was Global Pay Television - Cable and Direct-to-Home Satellite Operators published in April 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Virgin Media Inc. is a cable communications company offering broadband internet, television, mobile telephony and fixed line telephony services to residential and commercial customers in the UK. The company generated LTM revenue of GBP4.2 billion for the period to September 30, 2014. Virgin Media is an indirectly wholly-owned subsidiary of Liberty Global plc. ********* 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. 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, and Peter A. Chapman, Editors. Copyright 2015. 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 202-362-8552. * * * End of Transmission * * *