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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

          Wednesday, April 20, 2022, Vol. 23, No. 73

                           Headlines



R O M A N I A

EAST CHAMPION: Farmer Acquires Mushroom Compost Plant


R U S S I A

[*] RUSSIA: Canada Sanctions Central Bank Governor, 13 Associates


S E R B I A

ROMULIJANA: Put Up for Sale for RSD103.2 Million


T U R K E Y

PEGASUS HAVA: Fitch Cuts IDRs to B+, Outlook Remains Negative


U N I T E D   K I N G D O M

BULB ENERGY: Boss Faces Criticism Over GBP250,000 Salary
FLYBE: Administration Period Extended Until March 2024
SHABBY STORE: Relaunches Under New Ownership Following Collapse

                           - - - - -


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R O M A N I A
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EAST CHAMPION: Farmer Acquires Mushroom Compost Plant
-----------------------------------------------------
Nicoleta Banila at SeeNews reports that Romanian farmer Puiu Ilisei
bought local bankrupt mushroom compost plant East Champion Union
and plans to invest in its refurbishment, targeting annual sales of
EUR10 million (US$10.8 million) and regional expansion, the
court-appointed administrator CITR said on April 19.

CITR said in a press release the entrepreneur bought the plant for
EUR840,000, which will be distributed to creditors, SeeNews
relates.

"In the following period we will invest in upgrading the factory
and growing the team.  We will recruit a specialized technologist
and create 30 new jobs," SeeNews quotes Pilis Food founder and
administrator Puiu Ilisei, as saying.  "Our expectations are that
after we resume the production of compost in September, several
mushroom farms that have left the market because they had to import
compost and thus produce mushrooms at a very high cost, will
reappear in the area.  We aim for a turnover of 10 million euros
per year and even to expand regionally."




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R U S S I A
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[*] RUSSIA: Canada Sanctions Central Bank Governor, 13 Associates
-----------------------------------------------------------------
Brian Platt at Bloomberg News reports that Canada sanctioned
Russian central bank Governor Elvira Nabiullina and 13 other "close
associates of the Russian regime" in a fresh round of penalties
related to the war in Ukraine.

It marks one of the first instances where Ms. Nabiullina has shown
up on a country's sanctions list since Russia's invasion of its
neighbor in February, Bloomberg notes.  Australia previously
sanctioned her and the central bank itself has been sanctioned,
Bloomberg states.

Ms. Nabiullina had sought to resign after Russian President
Vladimir Putin ordered the invasion, only to be told by the
president to stay, Bloomberg reported last month.

Putin's daughters, Katerina Tikhonova and Maria Vorontsova, are
also on the expanded list of Canadian sanctions, as is energy
tycoon Igor Makarov, whose companies are a major shareholder in
Calgary-based energy producer Spartan Delta Corp., according to
Bloomberg.

The measures were announced in a news release on April 19 and
appear on the Canadian government's website of sanctions related to
the invasion, Bloomberg relates.

Russia, Bloomberg says, has been stung by soaring inflation and a
plunge in output as trade sanctions batter its economy.  Hundreds
of foreign companies have curtailed operations or left the country
entirely in response to the war, Bloomberg relays.

Tough capital controls and plentiful sales of oil and gas have
helped the ruble rebound from massive declines, according to
Bloomberg.




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S E R B I A
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ROMULIJANA: Put Up for Sale for RSD103.2 Million
------------------------------------------------
Branislav Urosevic at SeeNews reports that bankrupt Serbian hotel
and spa services company Romulijana has been put up for sale at a
starting price of RSD103.2 million (US$947,000/EUR876,900), the
country's Deposit Insurance Agency said.

According to SeeNews, the agency said in a statement on April 19
the main assets of the company offered for sale include 12 hotel
buildings with an aggregate area of 5,163.5 square meters.

Other assets include 33 more buildings for various purposes, sports
fields, a healthcare center, a bakery, and 555 pieces of equipment,
SeeNews discloses.

The auction will take place on May 18, SeeNews states.

Romulijana, founded in 1990, was declared bankrupt in 2016, SeeNews
recounts.




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T U R K E Y
===========

PEGASUS HAVA: Fitch Cuts IDRs to B+, Outlook Remains Negative
-------------------------------------------------------------
Fitch Ratings has downgraded Turkey's Pegasus Hava Tasimaciligi
A.S. (Pegasus) Foreign- and Local-Currency Long-Term Issuer Default
Ratings (IDR) to 'B+' from 'BB-'. The Outlook on the IDRs remains
Negative. Fitch said, "We have affirmed its USD375 million senior
unsecured bonds rating at 'BB-'/'RR3'. We have affirmed its
National Long-Term Rating at 'AA(tur)', reflecting the
recalibration of Turkey National Rating Scale following Fitch's
downgrade of Turkey's sovereign rating to 'B+' from 'BB-' on 11
February 2022."

The IDR downgrade reflects Fitch's expectation of Pegasus's delayed
deleveraging on the back of a weaker operating environment for both
international and domestic businesses. The Negative Outlook
reflects potential further macroeconomic instability due to
prolongation of the Russia-Ukraine war or a volatile Turkish
economy, which may pose further risk to our forecasts and the
sector recovery. Fitch may revise the Outlook to Stable if the
current positive trends in operations including ancillary business
continue despite higher cost pressures.

The 'B+' ratings reflect Pegasus' strong domestic position in
Turkey with strong growth prospects on both international and
domestic routes, an industry-leading cost base with a young and
fuel-efficient fleet and readily accessible hard-currency
liquidity. The rating also reflects high execution risk inherent in
its aggressive growth strategy, a weak operating environment with
foreign-exchange (FX) and geopolitical risks, weak leverage and
coverage metrics and smaller scale than many peers'.

KEY RATING DRIVERS

Deleveraging Delayed: Fitch said, "We expect total adjusted net
debt/EBITDAR to recover by 2024 to below 4.4x, our negative
sensitivity at 'B+' rating, which is one year later than our
expectations last year. Our view is supported by the worsening
macroeconomic outlook that will hit the industry as a whole with
higher cost and weaker pricing power. While Pegasus' expansion plan
should further lower its unit cost base, we believe it would weaken
its deleveraging ability given growing lease debt and heightened
execution risk in managing excess capacity as the industry recovers
from the pandemic."

Ramp-up on Track, Weak Margin: In 2020-2021, Pegasus has been
successful in capacity ramp-up but recovery of yield, load factor
and profitability were slower than our expectation. Its domestic
capacity, measured by available seat kilometres (ASK), remained
resilient throughout the pandemic and exceeded its pre-pandemic
level in 3Q21, before significantly underperforming from 4Q21 as
its focus moved to international. International ASK benefited from
lifting of travel restrictions by EU member states and the
devaluation of lira. Pegasus expects over 50 new aircraft
deliveries in 2022-2025, all A321Neos, which are more
fuel-efficient and have larger capacity (50+ seats vs A320Neo), but
also pose challenge to load -factor management.

Fuel Cost Hits Industry: Fitch expects higher fuel costs to weaken
both margins and cash flows to levels below our previous forecasts.
Fuel cost constitutes around 30% or more of Pegasus' total
operating cost, similar to other ultra-low-cost carriers'.
Fitch said, "We view Pegasus' competitive position on fuel price as
neutral as it has around 46% and 29% of expected fuel consumption
hedged for 2022 and 2023 respectively, broadly similar to its
biggest competitor, Turkish Airlines (B/Stable), or other airlines
in the region. However, the Russia/Ukraine war has increased the
risk of a prolonged fuel spike and, consequently, adverse
macroeconomic impact."

Inflation Adds Pressure: Fitch said, "In addition to increased
commodity price, we envisage inflationary pressure in Turkey and
broader European region will dampen Pegasus' growth. While
depreciating lira has been a strong draw for foreign tourist
demand, inflation in Turkey will not only gradually offset tourist
demand growth but also undermine domestic traffic growth, in our
view. We anticipate the potential global economic slowdown, coupled
with high inflation in Europe, will reduce consumers' real incomes
and demand and therefore airlines' pricing power in the midst of
sector recovery."

Competitive Cost Position: Pegasus' cost base is comparable to
other leading low-cost carriers' (LCC), and lower than that of
major rivals in the markets in which they compete. Its cost
advantage should help withstand fierce competition and provide a
foundation for sustainable growth. Its cost position is underpinned
by low labour costs (in dollar terms), high aircraft utilisation,
and a young and fuel-efficient fleet with higher seat density than
its peers'. We expect deliveries of new and larger aircraft and an
increase in scale to further strengthen its cost advantage. Pegasus
operates a fleet with an average age of five years at end-2021,
mainly A320/A321Neos.

Manageable FX Risk Exposure: All sales on international routes,
which accounted for over 70% of total revenue in 2021, are set in
hard currencies, with the remainder collected in Turkish lira.
Currency mix between hard currencies and lira in costs is similar,
mitigating Pegasus's exposure to FX risks. As part of its FX
hedging policy, up to 25% domestic ticket revenue received in lira
is exchanged to US dollars on spot rates. Despite well-managed FX
risk due to a geographically diversified revenue stream, a volatile
lira adds to demand volatility.

Country Ceiling: Pegasus's senior unsecured instrument rating of
'BB-' is capped at a maximum one-notch above Turkey's (B+/Negative)
Country Ceiling of 'B+', given its high share of revenue from
international routes in accordance with Fitch's Non-Financial
Corporates Exceeding the Country Ceiling Rating Criteria. This
reflects the company's high hard-currency revenue and readily
accessible hard- currency liquidity, which would enable it to
service hard-currency debt for at least one year. Further
deterioration in Turkey's sovereign credit profile would therefore
not lead to an immediate downgrade of Pegasus' IDR but instrument
rating.

Majority Shareholder Supportive of Growth: Key shareholders are
supportive of the airline's organic growth over the long term as
they did not extract dividends in recent years, which we assume
will remain unchanged in the near term. We view Pegasus' corporate
governance as effective and adequate, despite the airline being
majority-owned by the Sevket Sabanci family - mostly indirectly
through ESAS Holding, which the family owns. Pegasus is effectively
65.5%-owned by a single shareholder while the rest is listed on
Borsa Istanbul.

DERIVATION SUMMARY

Pegasus competes directly with Turkish Airlines. Its financial
profile is stronger than that of Turkish Airlines on the back of
lower leverage, a more competitive cost base and higher funds from
operations (FFO) margin. Nevertheless, we view its debt capacity at
a given rating as lower than Turkish Airlines' as its strengths are
more than offset by its smaller scale, a less diversified network
and weaker market position than Turkish Airlines'.

Pegasus' unit cost base and liquidity position are very strong and
comparable to those of leading LCCs such as Ryanair Holding Plc
(RYA, BBB/Stable) and Wizz Air Holding Plc (Wizz, BBB-/Stable).
However, the company has significantly higher leverage and weaker
fixed charge coverage and also is much smaller and more exposed to
weak and volatile operating environment with high execution risk.

KEY ASSUMPTIONS

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

- Annual decline in ASKof just 2% in 2022 compared with 2019,
   followed by double-digit yoy growth from 2023 as the airline
   continues growing its fleet and maintains high capex

- Load factor of 80% in 2022 (2021: 75%) and a gradual recovery
   to 84% by 2024

- Oil price of USD100 a barrel in 2022 and USD85/bbl thereafter
   (fuel-hedging is accounted for)

- USD/TRY at 16 in 2022 and 17.8 in 2023-2025, USD/EUR at 0.9 in
   2022-2025

- Slower fleet expansion than management's expectation to 2024

- No dividends

KEY RECOVERY RATING ASSUMPTIONS

- The recovery analysis assumes that Pegasus would be reorganised

   as a going-concern (GC) in bankruptcy rather than liquidated

- A 10% administrative claim

- GC EBITDA of TRY 2,066 million assumes a significant downturn
   in the industry where Pegasus' utilisation per aircraft remains

   subdued and is roughly 30% lower than estimated 2023 EBITDA

- Fitch applies a distressed enterprise value (EV)/EBITDA
   multiple of 4.5x to calculate a GC EV, reflecting volatile
   operating environment in which it operates.

- The waterfall analysis output percentage on current metrics and

   assumptions was 96%, commensurate with Recovery Rating of
   'RR1'. However, the Recovery Rating is capped at 'RR3' in
   accordance with our Non-Financial Corporates Exceeding the
   Country Ceiling Rating Criteria.

RATING SENSITIVITIES

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

- Upgrade is unlikely given the Negative Outlook on the IDR

- Total adjusted net debt/EBITDAR below 3.7x and/or total adjusted
gross debt/EBITDAR below 4.8x on a sustained basis and offshore
structural enhancements cover at least 12 months of hard-currency
external debt service may lead to an upgrade. Ratings will be
capped at one notch above Turkey's Country Ceiling.

Factors that could, individually or collectively, lead to
downgrade:

- Total adjusted net debt/EBITDAR above 4.4x and/or total adjusted
gross debt/EBITDAR above 5.5x on a sustained basis

- FFO fixed charge cover below 1.5x

- A downgrade of Turkey's Country Ceiling may be negative for the
airline's ratings

Fitch said, "We have switched our monitoring leverage ratio from
FFO adjusted gross leverage to total adjusted debt/EBITDAR."

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

Manageable Liquidity: Pegasus' unrestricted cash position of
TRY7,263 million at end- 2021 is close to its short-term debt
obligation (including lease) of TRY7,766 million. In addition, it
has access to an TRY2.5 billion local bond programme, only TRY260
million of which was issued. Fitch expects free cash flow (FCF)
during 2022-2025 to be consistently positive and deleveraging to
continue. According to management operating cash burn eased to
EUR12 million per month in 4Q21. It stood at around EUR17.2
million/month during 2Q20-4Q20.

ISSUER PROFILE

Pegasus is a leading LLC in Turkey with a fleet size of 90 aircraft
at end-2021. It served 120 destinations in 44 countries and carried
20.2 million passengers in 2021 and, prior to the pandemic, 30.8
million in 2019.

Pegasus Hava Tasimaciligi A.S.  
                              Rating                   Prior
                              ------                   -----
                    LT IDR      B+       Downgrade     BB-
                    LC LT IDR   B+       Downgrade     BB-  
                    Natl LT     AA(tur)  Affirmed      AA(tur)
senior unsecured   LT          BB-      Affirmed  RR3 BB-




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U N I T E D   K I N G D O M
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BULB ENERGY: Boss Faces Criticism Over GBP250,000 Salary
--------------------------------------------------------
Jane Clinton at The Guardian reports that the boss of collapsed
company Bulb Energy has been criticised for continuing to draw a
GBP250,000 salary, funded by UK taxpayers.

Once the seventh-biggest energy supplier, Bulb was effectively
nationalised in November 2021 after collapsing amid the surge in
global energy prices, the Guardian recounts.  That left the
taxpayer with a potential bill of up to GBP3 billion, making it the
biggest state bailout since the collapse of the Royal Bank of
Scotland in 2008, the Guardian notes.

According to the Guardian, speaking at a hearing before MPs, the
chief executive and co-founder Hayden Wood apologised for the "way
things turned out with Bulb".  Bulb was placed into a rare "special
administration", giving it access to government funds to keep it
supplying gas and electricity to its 1.7 million household
customers.

Mr. Wood, who had provided management consultancy to the energy
sector before he co-founded Bulb Energy, as cited by the Guardian,
said: "My salary now in the last year is GBP250,000 a year."

He added that the administrators for "both Bulb and Simple [Bulb's
parent company] asked me to stay on to help.  The reason I stayed
on was because we wanted to support customers [and] have a smooth
transition into special administration.

"The things we are doing within the company is to try and minimise
costs for consumers, minimise costs for taxpayers, and hopefully
effect a sale of the company out of special administration to again
reduce costs for government."

Labour MP Andy McDonald, a member of the business select committee,
told the Guardian: "It is staggering that the chief executive of
Bulb Energy continues to receive a salary of GBP250,000 a year at
the taxpayers' expense.

"There is no justification for Hayden Wood drawing such an enormous
salary, particularly given the disastrous mismanagement of the
company, which has led to the government bringing the company into
public ownership, and is set to cost of the taxpayer as much as
GBP3 billion.

"The secretary of state for business, energy and industrial
strategy must step in and put an end to this outrageous case of
corporate welfare."

"Bulb's administrators have agreed to keep Mr. Wood temporarily in
place to ensure a smooth handover and sales process," the Guardian
quotes a BEIS spokesperson as saying.

"Mr. Wood is paid for this work under his employment contract with
Simple Energy, the parent company of Bulb, in a separate
administration process over which the government has no influence.

"The special administrator of Bulb remains legally obligated to
keep costs of the administration process as low as possible.  The
government will seek to recoup costs at a later date, ensuring that
we get maximum value for money for taxpayers."


FLYBE: Administration Period Extended Until March 2024
------------------------------------------------------
Turnaround, Restructuring and Insolvency News reports that the
administrators of the old Flybe business, which was rebranded FBE
Realisations after the firm's assets were sold, are looking to
claim cash from the new company.

According to TRI News, in a progress report, its administrators
EY-Parthenon said money could still be claimed from the new firm,
if it turns out to be a success.  And, while the conditions that
give rise to deferred consideration being paid by the purchaser
remain "confidential", they are linked to the future performance of
the new "Flybe" business.

The original Flybe business fell into administration at the
beginning of March, TRI News recounts.  In a statement made at the
time, EY, as cited by TRI News, said "added pressures" as a result
of Covid on the travel industry had made the airline's precarious
financial situation worse.

Just over a year later, the company's business and assets were
purchased by Thyme Opco, which is linked with US hedge fund Cyrus
Capital.  Thyme Opco was subsequently rebranded Flybe Limited, TRI
News recounts.

Its planes returned to the skies April 13, with the inaugural
flight taking off from Birmingham Airport bound for Belfast City
Airport, TRI News discloses.

According to TRI News, in its latest progress report, EY said an
extension to the administration of FBE Realisations had been
granted to the High Court, lasting until March 2024.  The firm also
revealed up to GBP650 million is being claimed by more than 900,000
unsecured creditors --- however there's no cash to pay them.

It estimates these claims will be worth between GBP550 million and
GBP650 million -- which includes accruals and provisions in the
directors' statement of affairs, TRI News states.  It says this
figure could be "materially higher" "once all claims have been
received and an adjudication process is complete."

EY has made an application to the High Court for an order not to
make a distribution of cash to these creditors as it says it would
not be cost effective, TRI News recounts.

Of the unsecured creditors, the largest claim comes from pension
trustees the BRAL Trustees, which is owed GBP96.5 million,
according to TRI News.  Other major claimants NAC Aviation, as well
as German commercial bank Norddeutsche Landesbank Girozentrale, TRI
News states.


SHABBY STORE: Relaunches Under New Ownership Following Collapse
---------------------------------------------------------------
James Cook at Business Leader reports that homeware brand Shabby
Store (Shabby.co.uk) has relaunched under new ownership after the
business went into administration in February 2022.

According to Business Leader, its new owner Daniel Prendergast, who
has grown TheRugSeller.co.uk into a successful GBP9 million
turnover business, is now looking to expand Shabby's appeal beyond
its loyal following that was boosted by becoming a furniture store
favoured by Instagram powerhouses Mrs Hinch and Billie Faiers.

Shabby.co.uk offers a wide range of high-end homeware products
including bar stools, dining chairs, mirrors, lighting and
accessories and has amassed a massive half a million social media
followers.  It's famed for its modern take on classic looks and its
popularity with homeowners who favour an interior palette of grey,
white and silver to achieve a fresh, clean and modern shabby chic
look in the home.




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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
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