/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/220106.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 6, 2022, Vol. 23, No. -1 Headlines I T A L Y ALITALIA: Commissioners Invite Bids for Italia Loyalty Shares NEXI AND NETS: S&P Upgrades ICR to 'BB' Following Merger With SIA R U S S I A NCO PREMIUM: Bank of Russia Revokes Banking License U N I T E D K I N G D O M CLINTON CARDS: Unsecured Creditors Still Owed Millions GIEVES & HAWKES: Future Uncertain Following Owner's Liquidation [*] UK: Corporate Insolvencies Down Due to Gov't. Covid Supports X X X X X X X X [*] Chapter 11 Commercial Filings Up 56.1% in December 2021 [*] UK: Number of Distressed Companies Expected to Rise in 2022 - - - - - ========= I T A L Y ========= ALITALIA: Commissioners Invite Bids for Italia Loyalty Shares ------------------------------------------------------------- In accordance with the extraordinary administration procedure applying to Alitalia - Societa Aerea Italiana S.p.A. (hereafter the "Company under EA"), Avv. Gabriele Fava, Avv. Giuseppe Leogrande, Prof. Avv. Daniele Umberto Santosuosso, the Extraordinary Commissioners of the Company, intend to renew the procedure for the transfer of 100% of the shares of Italia Loyalty S.p.A. (formerly known as "Alitalia Loyalty S.p.A."), the company managing the "MilleMiglia" program, as better described and identified in the full version of the second call for submission of offer for the acquisition of Italia Loyalty S.p.A. (hereafter the "Second Call") published on the website https://www.amministrazionestraordinariaalitaliasai.com Therefore, by way of this notice (hereafter, the "Notice"), the Extraordinary Commissioners of the Company under EA invite the interested entities to submit their offer for the acquisition of "Italia Loyalty S.p.A." according to the terms, conditions and procedure set out in the full version of the Second Call. NEXI AND NETS: S&P Upgrades ICR to 'BB' Following Merger With SIA ----------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Nexi And Nets Topco 3 S.a.r.l. to 'BB' from 'BB-' and removed the ratings from CreditWatch, where they were placed with positive implications Nov. 24, 2020 (for Nets) and Oct. 8, 2020 (for Nexi). The positive outlook reflects the likelihood that S&P could raise the ratings if the integration of the acquired groups proceeds in line with the announcements. On Dec. 31, 2021, Nexi SpA closed its merger with SIA after receiving all pending regulatory approvals. The transaction follows the merger between Nexi and Nets Topco 3 S.a.r.l., which closed July 1, 2021. S&P views the resulting group as benefiting from an improved financial risk profile and better business diversification. S&P said, "We view positively the entrance of Cassa Depositi e Prestiti (CDP). Italian government-related entity CDP (BBB/Positive/A-2), former majority owner of SIA and now owner of about 17% of the Nexi Group, announced its intention to remain Nexi's anchor shareholder. We see this commitment as a positive rating factor, because we believe it could provide continuity to Nexi's long-term business strategy to strengthen its franchise while continuing to improve financial leverage. As a result, we also started calculating leverage on a net basis. "Leverage will improve, both upon the merger with SIA and thanks to the sound cash buffer. We now forecast S&P Global Ratings-adjusted net debt to EBITDA will average 3.5x-4.0x in 2021-2022 on the positive impact of SIA's better leverage and the netting of group cash balances because, under our forecast, we do not expect Nexi to pay dividends before 2023. The group's solid cash-generation capacity is further seen with S&P Global Ratings-adjusted funds from operations (FFO) to debt averaging 20%-25% in 2021-2022. Our debt calculation also includes the positive impact of about EUR65 million in one-off capital expenditure (capex) savings expected by 2022 from the integration with SIA. "We view the group commitment to extend the maturity profile positively. Nexi has no debt maturities in 2022 and 2023. The EUR2.1 billion notes issued to refinance Nets' debt will mature in 2026 and 2029, while the EUR1 billion zero-coupon convertible bond will mature in 2028. In addition, Nexi extended the maturity of the EUR1 billion term loan and EUR350 million revolving credit facility (which remains undrawn), both issued in 2019, from 2024 to 2026. We also note the improved refinancing rates. Yearly cash interest expense (excluding IFRS 16 and amortized cost) is estimated at EUR115 million, so we expect the group EBITDA to interest coverage ratio to comfortably exceed 10x in 2022." Nexi is a leading European player with significantly higher scale. With revenue that we forecast to be above EUR3 billion by end 2022, the group resulting from the mergers will be among the largest payment services providers operating in Europe. S&P believes the increased scale will help Nexi defending its strategic position and further expand its operations, either organically or via bolt-on acquisitions, amid increasing penetration of electronic payments in Europe. Concentration in a single market is less of a risk. Following the merger with Nets, the geographical diversification of the Nexi group (an otherwise domestically focused company) significantly increased. Nets is the leading player operating in the Nordics and, since merging with Concardis in 2019, holds good positioning in Germany, Austria, and Switzerland, markets with business prospects similar to Italy because they are characterized by substantial household spending but low penetration of electronic payments. Nets also operates in Poland, Greece, the Czech Republic, the Baltics, and Central and Southeastern Europe. Pro forma, 45% of the group's revenue will come from outside Italy. Also, Nexi will close in 2022 the acquisition of 51% of a merchant-acquiring joint venture with Greek Alpha Bank, which further confirms the company's European ambitions. Wider coverage across the payment ecosystem will result from the merger. While SIA remains primarily operating in Italy, the merger broadened the group's product offering across the payments value chain, with limited overlap. SIA is the biggest processor operating in the Italian market and provides payment solutions for corporate and public administrations. It also enjoys a leading position in the national debit scheme (PagoBancomat) and offers clearing and settlement services for central institutions. Nexi used to cover only a few of these segments, with limited service. S&P views the lower dependance on transaction volumes of SIA's revenue positively because we believe it adds to the group's revenue stability. The pandemic might accelerate the transition to electronic payments. Penetration of electronic payments in Italy, historically below the European average, continues to grow. It reached 27% in 2020 from 24% in 2019, and we believe it could further improve as households increasingly rely on contactless payments amid greater contagion concerns. Integration costs and challenges ahead, but long-term synergies represent a meaningful upside. S&P said, "We believe Nets remains at an earlier stage of corporate restructuring compared with Nexi and SIA. In addition, we consider that integrating two groups with such high business scales poses operational and executional challenges for Nexi. Nevertheless, the group forecasts it will generate significant cash synergies in the medium term--about EUR320 million. Around 75% of these are costs savings from IT and operational expense rationalization as well as capex savings from exploitation of economies of scale, with the rest stemming from revenue synergies. Nexi expects to achieve about 90% of costs savings by 2024 and deliver about EUR100 million of cash synergies in 2022. While we consider the announced synergies as ambitious, Nexi's management achieved previously announced synergies in line with the committed timeline." S&P said, "The positive outlook reflects the likelihood that we could raise the ratings on Nexi over the next 12 months if we concluded there is tangible evidence that the integration and synergies with Nets and SIA proceed as anticipated, while the group remains committed to maintaining S&P Global Ratings-adjusted net debt to EBITDA below 4x. "We could revise the outlook to stable if, in our view, the integration with Nets and SIA produced more risks than forecast. Although less likely, we could also revise the outlook to stable if we concluded Nexi's financial profile meaningfully deteriorated, likely seen with a forecast and consistent S&P Global Ratings-adjusted net debt to EBITDA and FFO to net debt above 4x and below 20%, respectively." This deterioration could follow significant cash- or debt-funded acquisitions whose impact on operations is not immediately reflected on the group EBITDA or unforeseen significant dividend distributions that could erode Nexi's cash balances. =========== R U S S I A =========== NCO PREMIUM: Bank of Russia Revokes Banking License --------------------------------------------------- The Bank of Russia, by virtue of its Order No. OD-2473, dated December 17, 2021, revoked the banking licence from the Moscow-based Non-bank credit organisation Premium (Limited liability company) or NCO Premium (LLC) (Registration No. 3514-К, hereinafter, NCO Premium). The credit institution ranked 359th by assets in the Russian banking system. NCO Premium is not a member of the deposit insurance system. The Bank of Russia made this decision in accordance with Clauses 6 and 6.1, Part 1, Article 20 of the Federal Law "On Banks and Banking Activities", based on the facts that NCO Premium: -- violated federal banking laws and Bank of Russia regulations, due to which the regulator repeatedly applied measures against it over the past 12 months; -- failed to comply with the anti-money laundering and counter-terrorist financing laws. NCO Premium conducted non-transparent transactions to enable payments between individuals and illegal online casinos and bookmakers. The Bank of Russia appointed a provisional administration3 to NCO Premium for the period until the appointment of a receiver or a liquidator. In accordance with federal laws, the powers of the credit institution's executive bodies were suspended. =========================== U N I T E D K I N G D O M =========================== CLINTON CARDS: Unsecured Creditors Still Owed Millions ------------------------------------------------------ Ashley Armstrong at The Times reports that unsecured creditors to Clinton Cards have received only GBP475,000 out of the GBP68.8 million they are owed from the sale of the greetings card chain back to its existing owners, new documents have shown. Clinton fell into administration for the second time in December 2019, resulting in a company connected to its owner, American Greetings, buying back its assets in a pre-pack deal, The Times relates. This allows the business to keep trading but often writes off debts owed to landlords, suppliers and, before changes were introduced last December, the taxman, The Times notes. Clinton Cards was founded in 1968 by Don Lewin, the son of a chimney sweep from east London. It has struggled with declining customer numbers and competition from Card Factory, its high street rival, and online, The Times discloses. GIEVES & HAWKES: Future Uncertain Following Owner's Liquidation --------------------------------------------------------------- Hannah Boland at The Telegraph reports that the future of Savile Row tailor Gieves & Hawkes has been thrown into doubt after its Chinese owner was put into liquidation. According to The Telegraph, Trinity, which also owns the Kent & Curwen brand, said this week that FTI Consulting and R&H Services had been appointed as joint liquidators. It said the liquidators were "considering the opportunity of a possible restructuring", The Telegraph notes. The business was placed into liquidation at the request of Standard Chartered following a failed attempt to find a buyer for the brands, The Telegraph relays, citing the Times It means Gieves & Hawkes, which has been trading for about 250 years, is at risk of permanent closure, The Telegraph states. Gieves & Hawkes has been owned by Trinity, itself controlled by Chinese textile giant Shandong Ruyi Technology Group, since 2012. Its takeover was part of a major push by Shandong Ruyi into Europe, also snapping up brands such as Sandro. In recent years, however, Trinity has struggled with debt levels and suffered a wave of staff departures, The Telegraph relates. The creative director of Kent & Curwen, Daniel Kearns, left last year, while brand partner David Beckham stepped back in 2020 after it emerged that Kent & Curwen had amassed GBP18 million in losses, The Telegraph discloses. According to the Times, Trinity still owes Mr. Beckham millions over a licensing deal with that brand, The Telegraph notes. The business has also reportedly defaulted on bond payments, The Telegraph says. It was dealt a winding-up order last year, which it had launched an appeal against, according to The Telegraph. Despite the appointment of joint liquidators, a rescue deal could still materialise to save Gieves & Hawkes, The Telegraph states. According to the Times, Marks & Spencer remains interested in a potential deal for the tailor, The Telegraph relates. [*] UK: Corporate Insolvencies Down Due to Gov't. Covid Supports ---------------------------------------------------------------- Niall Brady at The Times reports that corporate insolvencies have crashed to levels last seen during the Celtic Tiger with fewer than 400 companies going bust last year because so many ailing businesses are being propped up by the government's Covid supports. There were only 350 insolvent liquidations in 2021, according to latest estimates by PKF O'Connor, Leddy & Homes, the lowest tally since the height of the boom in 2007, The Times discloses. "The state can't support loss-making businesses forever," The Times quotes Declan de Lacy, restructuring partner at the accounting firm, as saying. "Keeping everyone afloat risks dragging down viable businesses because they are being forced to compete with insolvent companies that are being allowed to continue trading and obtaining credit." According to The Times, Deloitte estimated that there were 390 insolvencies in 2021, including receiverships and examinerships. =============== X X X X X X X X =============== [*] Chapter 11 Commercial Filings Up 56.1% in December 2021 ----------------------------------------------------------- Epiq, a global technology-enabled services leader to the legal services industry and corporations, released its December 2021 bankruptcy filing statistics from its Epiq Bankruptcy AACER Platform. Overall, December new filings were 27,957 across all chapters, down 4.7% from November 2021 which had 29,328 new filings. Total commercial filings across all chapters were 1,650, up 4.8% over November 2021, which had 1,575 new filings. Total new filings across all chapters for the full year 2021 were 401,398, down 24.2% over 2020, which had a total of 529,222. 2021 new filing metrics include a full year of impact from the COVID-19 global pandemic, while 2020 new filing metrics include pre-pandemic filing activity. Chapter 7 individual bankruptcies had 16,214 new filings in December, down 6.8% over November 2021, which had 17,395 new filings. For the full year, new Chapter 7 individual bankruptcy filings were 265,948, down 24.7% over the full year 2020, which had 352,978 new filings. In 2021, the top five states with new Chapter 7 filings were California (30,917), Florida (21,329), Ohio (15,956), Illinois (13,868), and Michigan (12,337). Chapter 13 individual bankruptcies had 10,024 new filings, down 2.7% over November 2021, which had 10,306. This is the second month where new Chapter 13 filings declined after the prior 6 months of incremental increases month-over-month. For the full year, Chapter 13 filings were 112,197, down 21.4% over 2020 which had a total of 142,659 new filings. In 2021, the U.S. Southeast region continued to lead new Chapter 13 filings with Georgia (10,556), Alabama (8,725), Florida (7,948), and Tennessee (7,372) leading the way as the states with the largest filing activity. Chapter 11 commercial filings, including Sub Chapter V, had a total of 309 new filings in December, a sharp increase of 56.1% over November which had 198. Of these, 70 were Sub Chapter V, down from 76 the prior month. The full year 2021 had 3,596 new Chapter 11 filings, including Sub Chapter V, down 46.6% over the full year 2020 which had 6,726 new filings. "December individual bankruptcy filing activity continued to trend down as has been the pattern since the COVID-19 global pandemic manifested in the U.S. in March 2020. Commercial filings spiked up sharply month-over-month, but levels continue to be way off pre-COVID-19 levels," said Chris Kruse, senior vice president of Epiq Bankruptcy Technology. About Epiq Bankruptcy Epiq Bankruptcy -- https://bankruptcy.epiqglobal.com/ -- is the largest provider of U.S. bankruptcy court data, technology and services, and a trusted partner to lenders, servicers, trustees, attorneys, investors, and other stakeholders operating in the business of bankruptcy. Epiq Bankruptcy solutions include comprehensive corporate restructuring, trustee case management, and access to the industry's most dynamic bankruptcy data and analytics. About Epiq Epiq, a global technology-enabled services leader to the legal services industry and corporations, takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at https://www.epiqglobal.com. [*] UK: Number of Distressed Companies Expected to Rise in 2022 --------------------------------------------------------------- Michael O'Dwyer at The Financial Times reports that insolvency practitioners are gearing up for a rise in the number of distressed UK companies in 2022 as businesses battle increasing costs, a supply chain squeeze, staff shortages and the threat of further coronavirus restrictions. The signs that companies were increasingly struggling as pandemic financial support measures tapered off were evident in November, when insolvencies in England and Wales hit their highest level since January 2019, the FT relays, citing government data. "The number of macro headwinds that are facing all sectors, but some in particular, are just extraordinary," the FT quotes Adam Gallagher, a restructuring partner at law firm Simpson Thacher & Bartlett, as saying. "They all point to inflation, be it energy, logistics, raw materials, freight, wages -- the list goes on." The number of companies falling into insolvency processes such as administration or liquidation plummeted after Covid-19 first struck last year, the FT discloses. Businesses were propped up by government support such as the furlough scheme and taxpayer-backed loans while private investors continued to pump cash into liquidity-starved companies, the FT relates. That has started to change with the withdrawal or reduction of government support schemes, repayments becoming due on government-backed pandemic loans and rising interest rates, the FT notes. "It has got busier over the past few weeks [and] it will continue to get busier. I cannot see [the government] coming back with the same support measures as we had [earlier in the pandemic]," the FT quotes Blair Nimmo, chief executive of Interpath Advisory, the restructuring advisory firm that was spun out of KPMG in May, as saying. But with access to relatively cheap private finance available, few experts believe next year will break any records. "Do I expect this big, massive wall of insolvencies? No, I don't think so," Mr. Nimmo, as cited by the FT, said. Atradius, a trade credit insurer, has predicted insolvencies will be 33% higher in 2022 than in 2019, the FT discloses. Much of the activity so far has been in the energy sector, where surging wholesale prices caused more than two dozen suppliers to collapse in the second half of 2021, the FT states. Rising fuel costs will have a knock-on impact in other sectors, particularly energy-intensive ones such as industrial manufacturing, the FT says. According to the FT, Kevin Ellis, UK chair and senior partner of PwC, said he also expected construction, hospitality and retail to be hit. Depending on the course of the pandemic in 2022, the travel industry could also be vulnerable, the FT states. Many sectors are struggling to find staff in a tight labour market. "We're running a number of care homes [and] we're having to run at 75 per cent occupancy because we can't get staff," said Geoff Rowley, chief executive of FRP Advisory, a corporate finance and restructuring firm. Rising costs are also affecting the construction sector, the FT says. While some builders have benefited from climbing house prices, others are locked into fixed price contracts as the cost of labour and materials increases, according to the FT. ********* 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 2022. 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. 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