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       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, June 4, 2020, Vol. 21, No. 112

                           Headlines



A U S T R I A

AL ALPINE: S&P Puts 'B' Issuer Credit Rating on Watch Negative


G E R M A N Y

LUFTHANSA: To Implement Wide-Ranging Restructuring Amid Losses


I R E L A N D

AVOCA CLO XV: Fitch Alters Outlook on Class F-R Debt to Negative


U K R A I N E

FERREXPO PLC: S&P Lowers ICR to 'B-' on Governance Developments


U N I T E D   K I N G D O M

ANTIGUA BIDCO: Fitch Affirms B+ on Sr. Secured Debt, Outlook Stable
ODDBINS: Substantial Part of Business, Assets Sold; Jobs Saved
SEADRILL LTD: Writes Down Value of Oil Drilling Rigs by US$1.2BB
TRAVELODGE: Set to Launch CVA in Bid to End Rent Dispute
[*] UK: Ofgem Extends GBP350-Mil. Lifeline to Energy Suppliers


                           - - - - -


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A U S T R I A
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AL ALPINE: S&P Puts 'B' Issuer Credit Rating on Watch Negative
--------------------------------------------------------------
S&P Global Ratings placed its 'B' rating on Austrian distributed
power provider Al Alpine on CreditWatch negative. S&P also placed
its issue and recovery ratings on CreditWatch negative.

So far, Al Alpine has managed to operate with relatively little
friction at both its major sites, Jenbach (Austria) and Welland
(Canada).

The company has made upfront investments so as to maintain
inventory for six weeks. It had some difficulties obtaining certain
electronic parts from China as well as with some casting parts and
generators that come from India. S&P expects the business will feel
the main effects in the guise of reduced end-market demand.

The CreditWatch placement reflects that S&P could lower the rating
due to difficult industry conditions because of COVID-19 and weaker
commodity prices.

S&P said, "The CreditWatch follows a significant downward revision
in our macroeconomic expectations for 2020 because of the
coronavirus pandemic. We now expect U.S. and eurozone 2020 GDP to
decline by 5.2% and 7.3%, respectively, and Asia-Pacific (APAC) GDP
to increase by a mere 0.7%. If the virus is not contained soon, the
macroeconomic effects could be much more severe than we're
factoring into our 2020 assumptions. We expect the energy-related
markets will be particularly hard hit due to lower demand resulting
in lower commodity prices. We anticipate the material drop in oil
prices (we expect WTI prices of $25 per barrel in 2020) will
significantly affect the Waukesha business, which primarily serves
the North American market related to gas compression and oilfield
power generation. This recession follows leverage being elevated
due to the carve-out of the business in a leveraged buyout and
following shareholder distributions.

"We expect volumes to be affected in 2020 and partially in 2021 due
to adverse market conditions.

"We forecast that organic revenue to be lower in 2020, with a slow
recovery from the second half of 2021. We expect the Waukesha
branch to be affected more severely due to its exposure to gas
compression and oilfield power generation (22% of group EBITDA in
2019). We will see significant declines not only in original
equipment sales but also in services. We anticipate equipment sales
to decline by 50% and services by 25% in 2020 for the Waukesha
business. Jenbacher's sales will be less affected because its
products are used in system-relevant facilities such as hospitals.
Lower volumes will mainly stem from exposure to the textile
industry in several emerging markets, such as Bangladesh and
Pakistan, as well as lower energy consumption in Europe.

"We also expect that lower volumes and service revenues will weaken
profitability but this will be partially mitigated by cost-cutting
initiatives. We believe that the Waukesha business will require
operational restructuring to maintain profitability given that
volumes are not likely to pick up in the near term.

"Despite weaker operating performance, we expect free operating
cash flows (FOCF) will remain positive in 2020.

"We view as positive management's efforts to scale back capital
expenditure (capex), noting that Al Alpine has limited intra-year
working capital fluctuations. We also understand that inventory
levels are high at the moment and management has secured six weeks'
worth of supply to secure operations, which should limit working
capital investment. All this will support cash-flow generation in
2020. We foresee capex of EUR40 million-EUR45 million in 2020,
lower than the EUR79 million spent in 2019. Despite pressured
earnings performance, we believe the company will generate
moderately positive FOCF in 2020."

Liquidity remains adequate, supported by access to the committed
credit facility and no immediate debt maturities.

S&P foresees no liquidity-related risks for Al Alpine at this time.
Liquidity is supported by access to EUR200 million availability
under a revolving credit facility (RCF)/ancillary facility maturing
in 2024. As of April 1, 2020, available liquidity was around EUR150
million including cash and cash equivalents of EUR20 million and
the undrawn, respectively available RCF/ancillary facilities. The
company does not have any significant upcoming maturities until
December 2024. However, if economies remaining in prolonged
lockdown, liquidity could tighten. The RCF has a net senior debt to
EBITDA maintenance covenant. Al Alpine currently has comfortable
headroom in 2020 under the covenant.

S&P Global Ratings acknowledges a high degree of uncertainty about
the rate of spread and peak of the coronavirus outbreak.

S&P said, "Some government authorities estimate the pandemic will
peak about midyear, and we are using this assumption in assessing
the economic and credit implications. We believe the measures
adopted to contain COVID-19 have pushed the global economy into
recession. As the situation evolves, we will update our assumptions
and estimates accordingly."

S&P said, "The CreditWatch placement indicates that we would lower
the rating by one notch if over the next 90 days margins look
likely to deteriorate materially in 2020, below our previous
expectations of 16%-17% in 2020 and 2021. Because our updated base
case assumptions carry much uncertainty, we could also lower the
rating if we believe Al Alpine cannot recover FFO to cash interest
above 2.5x and FOCF above EUR100 million over the next 12 months.
Deteriorating liquidity would lead to further rating downside. We
expect to resolve the CreditWatch once we receive consolidated
annual accounts for 2019, the first quarter report for 2020, and we
conduct a detailed analysis of how current events are affecting the
company's operations and credit metrics in 2020 and 2021."




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G E R M A N Y
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LUFTHANSA: To Implement Wide-Ranging Restructuring Amid Losses
--------------------------------------------------------------
Ludwig Burger at Reuters reports that Lufthansa has pledged a
wide-ranging restructuring, from thousands of job cuts to asset
sales, as it seeks to repay a EUR9 billion (US$10.1 billion) state
bailout and navigate deepening losses in the face of the
coronavirus pandemic.

The pledged cost cuts came as the German carrier posted a
first-quarter net loss of EUR2.1 billion on June 3, only days after
securing the bailout that is intended to help the airline ride out
the crisis but will require it to cede some of its prized landing
slots to rivals, Reuters relates.

Job reductions would be "significantly more" than the 10,000
individuals flagged a few weeks ago, Lufthansa Chief Executive
Carsten Spohr added later on a call with analysts and journalists,
Reuters notes.

The company, as cited by Reuters, said the group, which includes
Swiss, Austrian Airlines and Brussels Airlines, is bracing for a
significant decline in 2020 earnings and has begun talks with
labour representatives over cutbacks.

The sale of non-core operations is also on the cards in the medium
term, the group said, having postponed the planned sale of parts of
airline caterer LSG in March, Reuters states.

According to Reuters, Lufthansa's first-quarter loss, which widened
from EUR342 million a year earlier, was driven by writedowns of
EUR266 million on its fleet.




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I R E L A N D
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AVOCA CLO XV: Fitch Alters Outlook on Class F-R Debt to Negative
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Fitch Ratings has revised the Outlook on two sub-investment grade
tranches from Avoca CLO XV DAC on to Negative from Stable.

Avoca CLO XV DAC

  - Class A-R XS1768030295; LT AAAsf; Affirmed

  - Class B-1-R XS1768030451; LT AAsf; Affirmed

  - Class B-2-R XS1768030618; LT AAsf; Affirmed

  - Class C-R XS1768030964; LT Asf; Affirmed

  - Class D-R XS1768031004; LT BBBsf; Affirmed

  - Class E-R XS1768031426; LT BBsf; Revision Outlook

  - Class F-R XS1768031772; LT B-sf; Revision Outlook

TRANSACTION SUMMARY

Avoca CLO XV DAC is a cash flow collateralised loan obligation
mostly comprising senior secured obligations. The portfolio is
still within its reinvestment period and is actively managed by by
KKR Credit Advisors (Ireland) Unlimited Company (formerly KKR
Credit Advisors (Ireland)).

KEY RATING DRIVERS

Coronavirus Baseline Sensitivity Analysis

The Outlook change to Negative is a result of a sensitivity
analysis Fitch ran in light of the coronavirus pandemic. The agency
has notched down the ratings for all underlying assets with
corporate issuers with a Negative Outlook regardless of the
sectors. The model-implied ratings for the affected tranches under
the coronavirus sensitivity test are below the current ratings. In
Fitch's view, tranches on Negative Outlook have a slightly higher
resilience than tranches on Rating Watch Negative.

The affirmations of the investment-grade tranches reflect its
analysis that the respective ratings can withstand the coronavirus
baseline sensitivity analysis with cushion. This supports the
Stable Outlook on these ratings.

'B'/'B-' Category Portfolio Credit Quality

Fitch assesses the average credit quality of obligors in the
'B'/'B-' category. The Fitch-weighted average rating factor (WARF)
of the current portfolio is 34.91. After applying the coronavirus
stress, the Fitch WARF would increase to 37.42.

High Recovery Expectations: At least 90% of the portfolios comprise
senior secured obligations. Fitch views the recovery prospects for
these assets as more favourable than for second-lien, unsecured and
mezzanine assets. The Fitch-weighted average recovery rate of the
current portfolio is 64.3%.

Portfolio Composition

The portfolio is well diversified across obligors, countries and
industries. The top-10 obligors represent 16.1%, and no obligor
represents more than 3% of the portfolio balance.

Cash Flow Analysis

Fitch used a customised proprietary cash flow model to replicate
the principal and interest waterfalls and the various structural
features of the transaction, as well as to assess their
effectiveness, including the structural protection provided by
excess spread diverted through the par value and interest coverage
tests. The transaction was modelled using the current portfolio and
the current portfolio with a coronavirus sensitivity analysis
applied. Fitch analysis was based on a stable interest-rate
scenario but includes the front-, mid- and back-loaded default
timing scenarios as outlined in Fitch's criteria.

When conducting cash flow analysis, Fitch's model first projects
the portfolio's scheduled amortisation proceeds and any prepayments
for each reporting period of the transaction life assuming no
defaults (and no voluntary terminations, when applicable). In each
rating stress scenario, such scheduled amortisation proceeds and
prepayments are then reduced by a scale factor equivalent to the
overall percentage of loans that are not assumed to default (or to
be voluntarily terminated, when applicable). This adjustment avoids
running out of performing collateral due to amortisation and
ensures all of the defaults projected to occur in each rating
stress are realised in a manner consistent with Fitch's published
default timing curve.

Portfolio Performance; Surveillance

The transaction is in its reinvestment period and the portfolio is
actively managed by the collateral manager. As per Fitch's
calculation, all collateral quality tests are passing. The
transactions does not currently have defaulted assets, but is
slightly below target par. Exposure to assets with a Fitch-derived
rating of 'CCC+' and below is 7.8% and would increase to 13.9%
after applying the coronavirus stress.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

At closing, Fitch used a standardised stress portfolio (Fitch's
Stress Portfolio) that is customised to the specific portfolio
limits for the transaction as specified in the transaction
documents. Even if the actual portfolio shows lower defaults and
smaller losses (at all rating levels) than Fitch's Stressed
Portfolio assumed at closing, an upgrade of the notes during the
reinvestment period is unlikely, given the portfolio's credit
quality may still deteriorate, not only by natural credit
migration, but also by reinvestments. After the end of the
reinvestment period, upgrades may occur in case of a
better-than-expected portfolio credit quality and deal performance,
leading to higher credit enhancement and excess spread available to
cover for losses in the remaining portfolio.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

Downgrades may occur if the build-up of credit enhancement
following amortisation does not compensate for a larger loss
expectation than initially assumed due to unexpectedly high default
and portfolio deterioration. As the disruptions to supply and
demand due to the coronavirus for other vulnerable sectors become
apparent, loan ratings in such sectors would also come under
pressure. In addition to the baseline scenario, Fitch has defined a
downside scenario for the current crisis, whereby all ratings in
the 'B' category would be downgraded by one notch and recoveries
would be lower by a haircut factor of 15%. For typical European
CLOs this scenario results in a category rating change for all
ratings.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

Most of the underlying assets or risk-presenting entities have
ratings or credit opinions from Fitch and/or other nationally
recognised statistical rating organisations and/or European
Securities and Markets Authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information.

Overall, Fitch's assessment of the asset pool information relied on
for its rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.




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U K R A I N E
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FERREXPO PLC: S&P Lowers ICR to 'B-' on Governance Developments
---------------------------------------------------------------
S&P Global Ratings lowered its long-term credit rating on Ukrainian
iron ore pellet producer Ferrexpo PLC to 'B-' from 'B' and affirmed
its short-term credit rating at 'B'.

The downgrade follows governance issues, such as board
restructuring and internal inquiries.  The most recent inquiry is
into the use of Ferrexpo's donations to a Ukrainian football club.
At the same time, it announced further changes to its management
structure, replacing the acting CEO (who was previously chief
financial officer [CFO] and had been serving as acting CEO since
October 2019) with the current chief operating officer (COO). More
recently, the chairman announced his departure. S&P continues to
assess the company's management and governance as weak under its
criteria.

In February 2019, the company formally initiated the first of its
internal inquiries, which was into its donations to a corporate
social responsibility program, Blooming Land. At the same time, the
company experienced a number of departures from the board. It
concluded the inquiry without any findings in August 2019.

S&P said, "At this stage, we have limited visibility as to the
potential reputational damage or adverse operational or financial
developments that the current governance issues could trigger. In
our view, even if the board's review concluded no wrongdoing, the
mere existence of such an issue--compounded with the one from last
year (Blooming Land)--casts a shadow over Ferrexpo's internal risk
monitoring and control mechanisms."

Moreover, despite the recent issues, we understand Ferrexpo is
unlikely to cease its philanthropic activities in Ukraine.

The misuse of donations, as well as changes in the board
composition and in management, could indicate weak corporate
governance and lack of adequate oversight.  In the 2019 audited
report, recently appointed auditors MHA MacIntyre Hudson revealed a
new issue related to third parties' use of Ferrexpo's donations.
The new issue relates to a $17 million loan granted by FC Vorskla
(the recipient of Ferrexpo's sponsorship support over the past
decade) to a construction entity under the control of Ferrexpo's
main shareholder, Mr. Zhevago. In 2019, Ferrexpo paid $10.8 million
to sponsor FC Vorskla and similar amounts in previous years. The
funds were meant to exclusively finance the football club's
ordinary business. S&P said, "We understand Ferrexpo has taken
steps to obtain further information in relation to FC Vorskla and
that the board was unable to conclude, at the date of approval of
the 2019 annual report, that the payments made to the football club
have been used in their entirety for legitimate purposes. We also
understand that Ferrexpo has ceased payments to FC Vorskla until
the conclusion of the board's enquiries."

Ferrexpo has also reported some changes to top management. It had
been operating with an acting CEO (who was previously the CFO)
since end-October 2019, after the former CEO and main shareholder
Kostyantin Zhevago stepped down temporarily for personal reasons.
Ferrexpo has now named its long-standing COO as the new acting CEO.
At this stage, it is unclear whether Mr. Zhevago will return and,
if he does not, what the permanent succession plan is.

S&P said, "We understand that the local authorities investigated
the Blooming Land case and found no evidence of wrongdoing. At the
same time, Ferrexpo's board completed its review and said it had
found no evidence of misappropriation of funds. However, we cannot
rule out the initiation of other investigations by Ukrainian or
other authorities (such as the Serious Fraud Office)."

It is currently difficult to assess the effectiveness of the new
board in eliminating similar cases in the future. The board now
comprises four independent non-executive directors including the
chairman (two of which joined in 2019 following the resignations of
half of the board members at the beginning of 2019 related to the
Blooming Land investigation), the main shareholder Mr. Zhevago, one
non-executive non-independent member, and the acting CEO. The
recently announced retirement of the chairman, along with issues
regarding the re-election of board member Mr. Lisovenko, cast
further uncertainty on board stability.

Having a majority shareholder who sits on the board and is also
normally the CEO raises similar governance questions to other
businesses that are controlled by one individual, notably around
his degree of influence in the decision-making process. S&P
understands that Mr. Zhevago continues to advise Ferrexpo and
remains its driving force.

S&P said, "On a stand-alone basis, we are revising up Ferrexpo's
anchor to 'bb-' from 'b+', following our upward revision of
Ukraine's country risk.  Our recent revision of Ukraine's country
risk to high from very high reflects the authorities' improved
macroeconomic management and legislative efforts to improve the
business environment." This has resulted in a higher business risk
assessment for Ferrexpo. The 'bb-' anchor is also supported by the
company's financial risk profile, characterized by low leverage and
healthy profitability.

Environmental, social, and governance (ESG) factors relevant to the
rating action:

-- Governance

The negative outlook indicates the potential for adverse
developments arising from the pending donation issue, especially if
the authorities (local or international) initiate their own
investigations. This could increase reputational risk and affect
the company's ability to operate without interference. While
management is convinced that the issues are behind them, and should
be regarded as one-offs, S&P maintains a more prudent approach
given that it has limited insight into the full nature of these
past issues and the potential new cases that could arise.

Under S&P's base case, it assumes S&P Global Ratings-adjusted
EBITDA of $375 million-$425 million in 2020. This translates into
adjusted debt to EBITDA comfortably around 1.0x. This is well below
the 2.0x that it considers commensurate with the current rating.

Actions that could cause S&P to lower the rating include:

-- Local or international authorities initiating an investigation
that would have a material financial impact or adverse consequences
for operations.

-- Pre-export finance (PXF) lenders deciding to accelerate
amortization of outstanding debt, while the company is unable to
access capital markets. This risk is becoming more manageable as
the company continues to reduce its gross debt.

-- At this stage, with S&P's current assumptions for iron ore and
pellet prices, it sees a scenario of an unsustainable capital
structure, leading to a downgrade, as being remote.

S&P said, "We could revise the outlook to stable once gain more
clarity about the pending issues and potential risks such that we
feel those risks have dissipated. We will also continue to monitor
any further changes in the company's management and board
structures, as well as the board's effectiveness."




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U N I T E D   K I N G D O M
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ANTIGUA BIDCO: Fitch Affirms B+ on Sr. Secured Debt, Outlook Stable
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Fitch Ratings has affirmed Antigua Bidco Limited's senior secured
debt at 'B+' with a Recovery Rating of 'RR4'. Atnahs' Long-Term
Issuer Default Rating is also affirmed at 'B+' with Stable
Outlook.

The rating affirmation follows an increase of Atnah's revolving
credit facility to EUR105 million from EUR75 million.

The 'B+' IDR continues to be constrained by limited scale and
diversification. It also reflects Atnahs' strong operating
profitability, high free cash flow and reasonable leverage. Its
ratings assume a continuation of its acquisitive growth to scale up
operations, which Fitch expects to be rating-neutral. This is based
on its assumed funding mix of FCF, incremental debt, and possibly
equity preventing leverage increase and ensuring manageable
execution risks.

The Stable Outlook reflects its view that Atnahs will be able to
manage structurally declining assets and sustain its business model
through organic and acquisitive product portfolio development
translating into continuously strong cash flows and adequate credit
metrics for the rating. Atnahs focuses on mature branded medicines
mainly used for chronic treatments, and Fitch therefore does not
expect significant disruption in demand for individual drugs and
supply chain issues linked to COVID-19.

KEY RATING DRIVERS

Solid Operating Profitability: Fitch considers Atnahs'
profitability as strong compared with other small to mid-cap sector
peers', and in the context of the global pharmaceutical market.
Atnahs' business model focuses on active brand management of
off-patent branded drugs with asset-light scalable operations and
benefits from sustainably high EBITDA margins of around 50%.
Operating margin resilience is further reinforced by the company's
predominantly flexible cost base.

Low Impact from COVID-19: Its rating case for Atnahs shows limited
immediate impact from COVID-19 while incorporating a modest adverse
effect on sales of its non-steroidal anti-inflammatory drugs
(NSAIDs, 15% of financial year to March 2019 sales) due to
temporarily voiced concerns that their use may aggravate the course
of COVID-19 on patients. Fitch regards the risk as medium to low
given on one hand the lack of long-term observation data and on the
other hand the statement issued by the World Health Organisation on
use of USAIDs in COVID-19 patients, which finds no evidence of
severe adverse impact on COVID patients' health.

Fitch expects overall unchanged demand for chronic treatments,
which account for most of Atnahs' products, with demand for drugs
supporting elective treatments being delayed. Fitch also sees
little supply disruption as delays caused by temporarily reduced
capacity at contract manufacturing organisations are mitigated by
Atnahs's policy of holding of up to six months of finished products
at its warehouse, as well as distributors and wholesalers.

Increased Execution Risks: Fitch views rising execution risks as a
result of the transformational product acquisitions, but still
manageable, given an asset-light business model and the company's
performance having been in line with its expectations since Fitch
assigned the rating in August 2019. The recent pace of business
expansion puts a greater emphasis on execution, integration, and
scaling of the business, particularly in light of the current
COVID-19 disruption. For FY21 Fitch expects a period of asset
consolidation with a more balanced approach to integrating recently
acquired products and future external growth.

Strong FCF: The combination of high and stable operating margins
with low maintenance capex translates into strong free cash flow,
which Fitch forecasts at GBP30 million-GBP70 million a year, and
FCF margins of around 25%. Fitch estimates that FCF will be
reinvested in product additions and portfolio expansion as
shareholders pursue their asset development strategy, rather than
deploying funds towards debt prepayment. However, Fitch views
positively Atnahs' strong internal liquidity, allowing the company
to self-fund much of its growth to sustain operating cash flows as
well as maintain adequate financial flexibility.

Constrained by Scale and Concentration: Despite the completed
product additions, Atnahs' rating remains confined to the 'B'
rating category until the business has materially gained scale (for
example with sales in excess of GBP1 billion). Consequently, Fitch
does not expect an upgrade over the rating horizon to FY23. It also
views the company's still narrow product portfolio as a rating
constraint, although Fitch expects this to ease, particularly if
the company undertakes a series of mid-sized to large
acquisitions.

Product Additions to Sustain Operations: Fitch expects FY21 to be
focused on the consolidation of recent product acquisitions, but
the timing and magnitude of future product additions are difficult
to predict. These will be necessary to sustain growth of the
company, given the structurally eroding revenue performance of its
legacy drugs. Its rating case estimates that Atnahs will use all
internally generated cash over the rating horizon and some
financial flexibility available under its RCF for new drug
acquisitions, increasing operating cash flows, as well as
maintaining an adequate financial risk profile and comfortable cash
reserves.

Leverage Aligned with IDR: The ratings are supported by its
expectation of financial leverage not exceeding 5.5x on a funds
from operations gross basis (5.0x net of readily available cash).
Fitch does not view the recently completed acquisitions as having
an impact on the ratings, given the around EUR140 million equity
contribution for its part-funding and the discipline in terms of
acquisition multiples. Fitch views this indebtedness level as one
of Atnahs' key rating drivers. Failure to maintain this financial
risk profile will likely put the ratings under pressure.

Disciplined Approach to M&A: Fitch expects the company will remain
committed to its established acquisition policies to ensure a
sustainably credit-accretive impact of new product additions.
Rigorous deal-screening and diligence process, a disciplined
approach to acquisition economics, and product integration into
Atnahs' manufacturing and distribution networks, are essential for
the 'B+' IDR.

DERIVATION SUMMARY

Fitch rates Atnahs based on and conducts peer analysis with its
global navigator framework for innovative pharmaceutical companies.
Fitch considers Atnahs' 'B+' rating against other asset-light
scalable niche pharmaceutical companies such as Cheplapharm
Arzneimittel GmbH (B+/Stable) and IWH UK Finco Ltd (Theramex,
B/Stable) and Nidda Bondco GmbH (B/Stable). Lack of business scale
and a concentrated brand portfolio, albeit benefiting from growing
product and wide geographic diversification within each brand, will
constrain the IDR to the 'B' rating category. Atnahs and
Cheplapharm have nearly equally high and stable operating and cash
flow margins, reflecting similarities in their business models and
approach to product selection and brand management. They are also
closely positioned in their financial risk profiles at 5.0x-5.5x on
a FFO-adjusted gross basis, translating into 'B+' IDRs.

In contrast, Atnahs has stronger operating profitability than
Theramex, whose business model is more marketing-intensive. Atnahs
has stronger FCF along with lower FFO- adjusted gross leverage at
5.0x-5.5x against Theramex's above 5.5x, warranting the one-notch
rating difference between the two companies.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within its Rating Case for the Issuer

  - Sales of legacy and new products to decline 5%-6% per year up
to FY23;

  - Recent M&A transaction to have started contributing to sales
and earnings for FY20;

  - Sales of in-house developed products to increase to GBP20
million by FY23 from around GBP7 million in FY19, supported by
product extensions and launches in new markets;

  - Based on strong pipeline of off-patent drugs coming to the
market and opportunistic buy-and-build business strategy pursued by
Atnahs, Fitch assumes M&A of GBP30 million in FY21 and a further
GBP100 million a year in FY22 and FY23. Fitch assumes bolt-on
acquisitions at average enterprise value (EV)/sales acquisition
multiple of 3.5x with 5% projected annual sales decline for the
acquired businesses;

  - M&A to be financed entirely from internal cash flows and
remaining EUR85 million currently available under the EUR105
million RCF;

  - EBITDA margin remaining at 50% up to FY23;

  - Trade working capital outflows estimated at average GBP10
million-GBP45 million a year up to FY23, reflecting growing stock
levels with addition of new products and higher trading volumes;
and

  - Maintenance capex estimated at 2%-5% of sales per year, which
includes support for product technical transfers and earn-out
compensation agreed with drug IP sellers; and

  - No dividends.

Recovery Assumptions:

Atnahs' recovery analysis is based on a going-concern approach.
This reflects the company's asset-light business model supporting
higher realisable values in a distressed scenario compared with
balance- sheet liquidation.

Fitch estimates that potential distress could arise primarily from
material revenue contraction following volume losses and price
pressure given Atnahs' exposure to generic pharmaceutical risks,
possibly also in combination with inability to manage the cost base
of a rapidly growing business.

For the going-concern analysis EV calculation, Fitch estimates an
EBITDA of GBP70 million as the minimum level required for the
company to generate FCF of GBP20million - GBP30 million a year,
which would in its view be necessary to sustain its operations via
new drug IP additions and therefore keep the company as a going
concern.

This going-concern EBITDA represents a discount of around 35% to
Fitch's estimated FY20 EBITDA of around GBP110m; the discount also
reflects a concentrated portfolio with top three products projected
at around 35% of Atnah's pro-forma drug portfolio;

Fitch has applied a 5.0x distressed EV/EBITDA multiple in line with
Atnahs' estimated threshold for drug acquisitions, which would
appropriately reflect its minimum valuation multiple before
considering value added through brand management.

After deducting 10% for administrative claims, its principal
waterfall analysis generated a ranked recovery in the 'RR4' band
for the all-senior secured capital structure, comprising the
increased senior secured debt of EUR614 million and the EUR105
million RCF assumed to be fully drawn prior to distress, and
ranking equally among themselves;

This indicates a 'B+'/'RR4' instrument rating for the senior
secured debt with an output percentage based on current metrics and
assumptions at 48%.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - An upgrade to the 'BB' rating category is not envisaged in the
medium term until Atnahs reaches a more sector-critical size with
revenue in excess of GBP1 billion combined with conservative FFO
gross leverage at around 4.0x and FCF remaining strong.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - Unsuccessful management of individual pharmaceutical IP rights
leading to permanent material loss of revenue and EBITDA, with
EBITDA margins declining below 45%;

  - (Cash flow from operations - capex) / total net debt falling
below 5%; and

  - FFO gross leverage sustainably above 5.5x, or net leverage
above 5.0x, signalling a more aggressive financial policy,
departure from current acquisition principles or operational
challenges.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: The EUR105 million RCF is currently drawn at
EUR20 million (GBP17 million), leaving around EUR85 million of RCF
headroom. Together with the FCF projected at GBP30 million Fitch
estimates liquidity will remain comfortable.

Fitch regards refinancing risk as limited given long-dated debt
maturities with the company's term loan B not due until 2026.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).


ODDBINS: Substantial Part of Business, Assets Sold; Jobs Saved
--------------------------------------------------------------
Business Sale reports that more than half of off-license retailer
Oddbins' stores will remain open after it was bought out of
administration by an unnamed buyer.

Administrators Duff & Phelps announced the sale, saying the buyer
had acquired a "substantial part of the business and assets" of
Whittalls Wine Merchants and associated companies, which traded as
Oddbins, Business Sale relates.

Joint administrators Philip Duffy and Matthew Ingram added that
"the sale was achieved despite the current financial situation and
secured the jobs people employed in 28 stores", Business Sale
discloses.  Shoosmiths LLP acted as legal advisers on the
transaction, which saw 26 stores permanently close, Business Sale
states.  No further details on the buyer or how many jobs will be
saved have been given, Business Sale notes.

Oddbins entered administration in January 2019 citing Brexit
uncertainty and tough trading conditions on the British high
street, Business Sale recounts.  It was later revealed that it had
also suffered as a result of HMRC revoking the excise approvals of
European Food Brokers Limited, its parent company and chief
supplier, Business Sale relays.


SEADRILL LTD: Writes Down Value of Oil Drilling Rigs by US$1.2BB
----------------------------------------------------------------
Nerijus Adomaitis at Reuters reports that Seadrill said it has
written down the value of its oil drilling rigs by US$1.2 billion
and hired bankers and lawyers to evaluate a financial restructuring
that could allow the company to reduce its US$7.4 billion debt.

The company on June 1 announced its intention to delist from the
New York Stock Exchange later this month, while maintaining its
Oslo Bourse listing, Reuters relates.

Seadrill, controlled by Norwegian-born shipping tycoon John
Fredriksen, had been struggling even before the COVID-19 pandemic
hit oil prices and dented demand for drilling rigs, Reuters notes.

Following the impairment, the company reported a net loss of
US$1.57 billion for the first quarter, an increase from a loss of
US$295 million during the same quarter a year ago, Reuters
discloses.

                       About Seadrill Ltd.

Seadrill Limited is a deepwater drilling contractor providing
drilling services to the oil and gas industry.  It is incorporated
in Bermuda and managed from London.  Seadrill and its affiliates
own or lease 51 drilling rigs, which represents more than 6% of the
world fleet.

On Sept. 12, 2017, Seadrill Limited and 85 affiliated debtors each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
17-60079) after reaching terms of a reorganization plan that would
restructure $8 billion of funded debt.

Together with the chapter 11 proceedings, Seadrill, North Atlantic
Drilling Limited ("NADL") and Sevan Drilling Limited ("Sevan")
commenced liquidation proceedings in Bermuda to appoint
joint provisional liquidators and facilitate recognition and
implementation of the transactions contemplated by the RSA and
Investment Agreement.

On July 2, 2018, Seadrill emerged from U.S. Chapter 11 bankruptcy
protection. Seadrill also commenced dissolution proceedings in
Bermuda in accordance with the confirmed Chapter 11 Plan.


TRAVELODGE: Set to Launch CVA in Bid to End Rent Dispute
--------------------------------------------------------
Alice Hancock and George Hammond at the Financial Times report that
Travelodge is set to launch last-resort bankruptcy proceedings that
will legally allow it to slash rents in an attempt to end a
fractious dispute between the hotel chain and its landlords.

According to the FT, the company was set to file documents for a
company voluntary arrangement, a restructuring measure increasingly
used by ailing retail and leisure operators, yesterday, June 3.
Unlike standard CVAs, Travelodge will not shut any of its 564 sites
or permanently cut rents, the FT notes.

Instead it plans to pay landlords GBP230 million in rent for this
year and next -- roughly half of its annual bill, the FT states.

The budget hotel operator has been in a tit-for-tat dispute with
its landlords since it refused to pay rent for the second quarter
at the end of March, the FT relays.

Landlords claimed that the hotel chain, which is backed by the New
York hedge funds, Golden Tree Asset Management and Avenue Capital
and the investment bank Goldman Sachs, was taking advantage of the
pandemic to cut bills that it could afford to pay, the FT
discloses.

The landlords previously offered to write off one quarter's rent
and allow Travelodge to reduce its bill by 20% for the rest of the
year, adding that if the company did not agree to the terms, they
would forfeit the leases as soon as they were legally allowed to
and replace Travelodge with a new budget hotel brand, the FT
recounts.

Viv Watts, who is representing a group of around 150 landlords, has
lined up the designers of Travelodge's own signage to create
"Travelodge 2.0", the FT relates.

Under the CVA proposals, Travelodge's shareholders have agreed to
inject GBP40 million cash into the business and make a GBP100
million available in additional reserves, according to the FT.  The
company would start paying full rents again at the beginning of
2022, the FT notes.

The plans are subject to the agreement of 75% of the chain's
creditors by value of the debt owed to them, most of whom are its
landlords, the FT says.


[*] UK: Ofgem Extends GBP350-Mil. Lifeline to Energy Suppliers
--------------------------------------------------------------
Ed Clowes at The Telegraph reports that energy watchdog Ofgem has
extended a GBP350 million lifeline to struggling suppliers in a bid
to avoid a wave of bankruptcies among struggling firms.

According to The Telegraph, experts said the move is likely to
leave customers paying higher bills next year to cover the costs of
the bailout.

Ofgem said the scheme, aimed at suppliers such as Bulb Energy that
are unable to get a credit rating, would allow companies to defer
network payments until March 2021, The Telegraph relates.

The mechanism, which Ofgem said should be considered a "last
resort", will not place undue pressure on the network operators,
The Telegraph notes.



                           *********


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.
Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

Copyright 2020.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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