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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, January 25, 2023, Vol. 24, No. 19

                           Headlines



F R A N C E

DEINOVE: Receivership Converted Into Judicial Liquidation
EDF SA: Minority Shareholders Drop Motion to Suspend Squeeze-Out


I R E L A N D

JAZZ PHARMACEUTICALS: Moody's Alters Outlook on 'Ba3' CFR to Pos.


N E T H E R L A N D S

E-MAC PROGRAM II: S&P Raises Class D Notes Rating to 'B(sf)'


U N I T E D   K I N G D O M

COOK & LUCAS: Goes Into Administration Following Closure
DELFT 2020 BV: DBRS Confirms BB(low) Rating on Class F Notes
MIDATECH PHARMA: Lacks Cash to Fund Operations Until Mid-March
SIG PLC: S&P Affirms 'B+' LT ICR & Alters Outlook to Positive
STONEGATE PUB: Fitch Affirms LongTerm IDR at 'B-', Outlook Negative

TOGETHER ENERGY: Warrington Council Exposure Likely at GBP18-Mil.
TRAIDCRAFT PLC: Enters Administration Amid Operational Challenges
[*] UK: Number of Cos. in Critical Financial Distress Up 36% in Q4

                           - - - - -


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F R A N C E
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DEINOVE: Receivership Converted Into Judicial Liquidation
---------------------------------------------------------
DEINOVE, a French biotech company, pioneer in the exploration and
exploitation of bacterial biodiversity to address the urgent,
global challenge of antibiotic resistance, disclosed that on
January 23, 2023, the Montpellier Commercial Court rendered a
judgment converting the receivership proceedings, initiated on
November 7, 2022, into a judicial liquidation proceedings
("procedure de liquidation judiciaire") and appointed Maître
Christine Dauverchain as judicial liquidator ("liquidateur
judiciaire").

No offer was submitted before the deadline for submitting offers to
the receiver, which had been set on January 9, 2023, at noon.

As a result, Deinove had asked Euronext to suspend the listing of
its shares (FR0010879056) on Euronext Growth from January 11, 2023,
pending the publication of a press release and until further
notice.

The listing of Deinove shares (FR0010879056) will remain suspended
until the end of the delisting procedure, which is expected to take
place shortly after consultation with Euronext Paris.

If the judicial liquidation proceedings does not result in the
distribution of a liquidation surplus to shareholders, Deinove will
inform its shareholders that their shares are worthless.

                          About Deinove

DEINOVE (Euronext Growth Paris: ALDEI) -- https://www.deinove.com/
-- is a French biotechnology company pioneering the exploration of
a new domain of life, unexplored at 99.9%: the "microbial dark
matter".  By revealing the metabolic potential of rare bacteria or
still classified as uncultivable, it tackles a global health and
economic challenge: antimicrobial resistance.

The new therapies discovered and developed by DEINOVE target
superbugs (microbes that have become resistant to one or more
antimicrobials) that cause life-threatening infections which are
now spreading at high speed.

This breakthrough approach gave rise to one of the world's first
specialized micro-biotechnology platforms and a unique collection
of nearly 10,000 rare strains and thousands of bacterial extracts.
Today, DEINOVE is conducting several development programs, of which
its first antibiotic candidate is currently evaluated in a Phase II
clinical trial in severe Clostridioides difficile infection, one of
the world's first emergencies.  The Company has also developed new
bacterial micro-factories that address the other issue in the race
against antimicrobial resistance: the industrial production of
these rare and low concentrated compounds with often too complex
chemical structures to be generated by chemical synthesis.

Located at the heart of the Euromedecine park in Montpellier,
DEINOVE has been listed on EURONEXT GROWTH(R) (ALDEI – code ISIN
FR0010879056) since 2010.  The Company has 45 employees and relies
on a network of world-class academic, technological, industrial and
institutional partners.


EDF SA: Minority Shareholders Drop Motion to Suspend Squeeze-Out
----------------------------------------------------------------
America Hernandez at Reuters reports that a court battle set for
today, Jan. 25, on whether to freeze the French government's forced
takeover of energy giant Electricite de France SA won't take place,
but the fight over the company's future is far from over.

According to Reuters, a group of minority shareholders that
appealed against the French state's full nationalisation of the
utility in November had sought a temporary court-ordered freeze on
any immediate forced share buyout, but on Jan. 24, announced they
were dropping the motion on the eve of the hearing.

They cited documents submitted to the court by France's financial
market authority (AMF) arguing any temporary freeze was
unnecessary, given the state's pledge not to force a takeover until
the Paris appeals court ruled on the merits of the overall legal
challenge, Reuters discloses.

The French state's shareholding agency confirmed in a statement it
had no plans to force a squeeze-out before that ruling, which must
come no later than May 2, Reuters notes.

France's economy ministry announced on Jan. 20 that the state had
acquired 90% of EDF's capital and voting rights, legally enabling
it to delist the company in pursuit of a full nationalisation,
Reuters relates.

The government had aimed to fully nationalise the nuclear group
last autumn, but the move is taking longer than planned as minority
shareholders contest the 12 euro-per-share offer price in court,
Reuters states.

The government is stumping up nearly EUR10 billion (US$11 billion)
to take full control of the debt-laden group as part of a long-term
nuclear energy strategy that will include building at least six new
reactions in the coming decades, according to Reuters.




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JAZZ PHARMACEUTICALS: Moody's Alters Outlook on 'Ba3' CFR to Pos.
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Jazz
Pharmaceuticals plc and related subsidiaries (collectively "Jazz"),
including the Ba3 Corporate Family Rating, the Ba3-PD Probability
of Default Rating, and the Ba2 senior secured rating. At the same
time, Moody's revised the outlook to positive from stable. The
Speculative Grade Liquidity Rating remains unchanged at SGL-1.

The revision in Jazz's outlook to positive from stable reflects the
potential for an upgrade if positive sales trends of Xywav,
Epidiolex and Zepzelca continue. Such trends would reduce the
impact of Jazz's exposure to generic competition for Xyrem, which
occurred in recent weeks with the launch of an authorized generic.
Strong growth in the newer products would leave Jazz with improved
diversity, moderate financial leverage and a solid growth outlook
after 2023. Key risks to the company's long-term growth include the
potential negative impact on Xywav sales caused by the introduction
of Xyrem generics, and recent patent challenges on Epidiolex.

Governance risk considerations are material to the outlook change,
with respect to financial strategy and risk management. Jazz's
track record of very rapid deleveraging following the 2021
acquisition of GW Pharmaceuticals improves the likelihood that any
future debt-financed acquisitions would also be followed by
deleveraging. Jazz reached its stated net debt/EBITDA target of
3.5x in 2Q'2022, six months ahead of its stated timeline. On a
Moody's adjusted basis, gross debt/EBITDA declined from over 6.5x
(pro forma) in May 2021 to 3.9x for the twelve months ended
September 30, 2022.

Affirmations:

Issuer: Jazz Pharmaceuticals plc

Corporate Family Rating, Affirmed Ba3

Probability of Default Rating, Affirmed Ba3-PD

Issuer: Jazz Financing Lux S.a.r.l.

Senior Secured Revolving Credit Facility, Affirmed Ba2 (LGD3)

Senior Secured Term Loan B, Affirmed Ba2 (LGD3)

Issuer: Jazz Securities Designated Activity Company

Backed Senior Secured Notes, Affirmed Ba2 (LGD3)

Outlook Actions:

Issuer: Jazz Pharmaceuticals plc

Outlook, Changed to Positive from Stable

Issuer: Jazz Financing Lux S.a.r.l.

Outlook, Changed to positive from Stable

Issuer: Jazz Securities Designated Activity Company

Outlook, Changed to Positive from Stable

RATINGS RATIONALE

Jazz's Ba3 rating reflects its position as a specialized
pharmaceutical company with over $3.5 billion of revenue. The
credit profile reflects Jazz's strong presence in sleep disorder
drugs with the Xywav/Xyrem franchise, and a growing oncology
business anchored by Zepzelca and Rylaze and a pipeline opportunity
in zanidatamab. The 2021 acquisition of GW Pharmaceuticals
established Jazz as a leader in cannabinoids, with solid growth
prospects in Epidiolex for treating seizures.

These strengths are constrained by high revenue concentration in
Xyrem/Xywav, representing about half of revenue. Authorized generic
entry for Xyrem recently occurred, but the risk is mitigated by
rapid uptake of Xywav, a low-sodium product. The financial terms of
the Xyrem patent settlement are complex, and it is the subject of
class action lawsuits by healthcare payers. In addition, both Xywav
and Epidiolex face patent challenges. Moody's anticipates gross
debt/EBITDA of 3.5 - 4.0x over the next 12 months, with free cash
flow likely to be used for business development.

ESG considerations are material to the rating, with a Credit Impact
Score of CIS-3, Moderately Negative. Jazz faces highly negative
social risk exposures, reflected in the S-4 issuer profile score
(previously S-5, very highly negative). These are related to a
combination of industry-wide customer relations risks, responsible
production risks, and societal trends risks including drug pricing
policy changes. The recently passed US Inflation Reduction Act will
have a long-term negative impact on drug pricing. However, Jazz's
key products are unlikely to be significantly affected this decade,
and its overall Medicare exposure is modest, resulting in the
issuer profile score change to S-4 from S-5. Social risk exposures
related to responsible production include unresolved class action
lawsuits concerning Jazz's Xyrem patent settlements with generic
drug companies. Governance risk exposures are moderately negative,
G-3, related primarily to financial policies and risk management.
Jazz has demonstrated an appetite for high financial leverage to
support business development, with gross debt/EBITDA exceeding 6.5x
using Moody's calculations. However, this is partly mitigated by
the company's rapid pace of meeting publicly communicated
deleveraging targets.

Moody's anticipates very good liquidity, reflected in the SGL-1
Speculative Grade Liquidity Rating. This reflects high levels of
cash on hand, revolver availability and solid free cash flow
despite Xyrem generic risk.

The outlook is positive based on Moody's expectations for continued
strong growth in Xywav, Epidiolex and Zepzelca, resulting in a
stronger credit profile with reduced exposure to the financial
impact of Xyrem generics.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Factors that could lead to an upgrade include greater revenue
diversity arising from growth in key products, continuation of
patient transition from Xyrem to Xywav, and good pipeline
execution. Quantitatively, debt/EBITDA maintained below 4.0x would
support an upgrade.

Factors that could lead to a downgrade include weak sales trends in
Xywav, Epidiolex or Zepzelca, increased litigation exposures or
costs, or large debt-funded acquisitions. Quantitatively,
debt/EBITDA sustained above 5.0x could lead to a downgrade.

Jazz Pharmaceuticals plc is a global biopharmaceutical company with
a portfolio of products that treat patients with serious diseases
– often with limited or no therapeutic options. Reported revenues
for the 12 months ended September 30, 2022 totaled approximately
$3.6 billion.

The principal methodology used in these ratings was Pharmaceuticals
published in November 2021.




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E-MAC PROGRAM II: S&P Raises Class D Notes Rating to 'B(sf)'
------------------------------------------------------------
S&P Global Ratings raised its credit ratings on E-MAC Program II
B.V. Compartment NL 2008-IV's class A, B, and C notes to 'AA- (sf)'
from 'A+ (sf)', and class D notes to 'B (sf)' from 'B- (sf)'.

E-MAC Program II B.V. Compartment NL 2008-IV is a Dutch RMBS
transaction that closed in April 2008 and securitizes first-ranking
mortgage loans originated by CMIS Nederland (previously GMAC-RFC
Nederland).

The rating actions reflect its full analysis of the most recent
information it has and the transaction's current structural
features.

S&P said, "The transaction's portfolio collateral performance has
remained stable and in line with our expectations since our
previous review on July 30, 2019. As of the October 2022 investor
report, 1.44% of the pool is in arrears of 30 days or greater and
the reserve and liquidity facilities funds are both fully funded.
Credit enhancement is significantly built up across the capital
structure due to some sequential amortization in recent years.

"Our credit analysis shows a decrease in the weighted-average
foreclosure frequency (WAFF) and weighted-average loss severity
(WALS) since our previous full review in July 2019. The WAFF has
decreased mainly due to the loan-to-value (LTV) ratio we use, which
reflects 80% of the original LTV ratio and 20% of the current LTV
ratio. The current LTV has fallen to 59.10% from 74.81% in 2019 due
to house price appreciation in the Netherlands. The pool continues
to benefit from strong seasoning (180 months).

"Our WALS assumptions have decreased at all rating levels because
of higher property prices throughout the Netherlands, which
triggered a lower weighted-average current LTV ratio."

  Table 1

  Credit Analysis Results--October 2022 Pool

  RATING     WAFF (%)     WALS (%)

  AAA        14.68        32.30

  AA         10.35        25.84%

  A           8.06        16.21

  BBB         6.02        11.52

  BB          3.73         8.64

  B           3.22         6.40

  WAFF--Weighted-average foreclosure frequency.
  WALS--Weighted-average loss severity.

S&P said, "The current ratings assigned are lower than those
derived by our cash flow analysis as, if performance triggers are
not breached, this transaction can pay pro rata for extended
periods. Therefore, there is a risk that credit enhancement may not
build up over time for the higher rated notes, as would be the case
in a sequentially paying structure. Conversely, we also considered
that the transaction's amortization schedule could become
sequentially paying if a target amortization event occurs (namely,
if delinquent loans of greater than 60 days exceed 1.5% of the
total pool, or the reserve account falls below its target level).
This would lead to greater credit enhancement for the upgraded
notes. Our current rating actions consider the structure switching
to paying pro rata payments.

"In our analysis we also considered the small pool size and high
proportion of interest-only (IO) loans. Over 85% of the pool today
are long-term IO loans, with 96% of these maturing in 2037 and
2038. This leaves the transaction vulnerable to back-ended defaults
near the transaction's legal maturity date, when the pool factor is
extremely low."

NatWest Markets PLC is the swap counterparty. Under S&P's current
counterparty criteria, it assesses the collateral framework as
adequate. Based on the combination of the replacement commitment
and the collateral-posting framework, the maximum supported rating
for the class A, B, C, and D notes in this transaction is 'AA-'.




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U N I T E D   K I N G D O M
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COOK & LUCAS: Goes Into Administration Following Closure
--------------------------------------------------------
Interpath Advisory has been appointed administrator of Cook & Lucas
Frozen (UK), a UK whitefish processor, which Undercurrent News
revealed had abruptly closed earlier in January.


DELFT 2020 BV: DBRS Confirms BB(low) Rating on Class F Notes
------------------------------------------------------------
DBRS Ratings GmbH took the following rating actions on the notes
issued by Delft 2020 B.V. (Delft 2020 or the Issuer):

-- Class A confirmed at AAA (sf)
-- Class B upgraded to AAA (sf) from AA (high) (sf)
-- Class C upgraded to AA (high) (sf) from AA (sf)
-- Class D confirmed at A (sf)
-- Class E confirmed at BBB (sf)
-- Class F confirmed at BB (low) (sf)

The ratings on the Class A and Class B notes address the timely
payment of interest and the ultimate payment of principal on or
before the legal final maturity date in October 2042. The rating on
the Class C notes addresses the ultimate payment of interest and
principal on or before the legal final maturity date while junior,
and the timely payment of interest while it is the senior-most
class outstanding. The ratings on the Class D, Class E, and Class F
notes address the ultimate payment of interest and principal on or
before the legal final maturity date.

Accrued interest on the Class B to Class F notes is subject to a
net weighted-average coupon cap (NWC). DBRS Morningstar's ratings
do not address the payments of the NWC additional amounts, which
are the amounts accrued and become payable junior in the revenue
and principal waterfall if the coupon due on a series of notes
exceeds the applicable NWC.

The rating actions follow an annual review of the transaction and
are based on the following analytical considerations:

-- Portfolio performance, in terms of delinquencies, defaults, and
losses.

-- Portfolio default rate (PD), loss given default (LGD), and
expected loss assumptions on the remaining receivables.

-- Current available credit enhancement to the notes to cover the
expected losses at their respective rating levels.

Delft 2020 is a securitization of Dutch nonconforming mortgage
loans previously securitized in Delft 2017 B.V. and Delft 2019 B.V.
The mortgages were originated by ELQ Portefeuille 1 B.V. (ELQ) and
Quion 50 B.V. (Quion), which were subsidiaries of Lehman Brothers
through ELQ Hypotheken N.V. Adaxio B.V. services the portfolio,
with Intertrust Administrative Services B.V. acting as the backup
servicer facilitator.

PORTFOLIO PERFORMANCE

As of the October 2022 payment date, loans that were two to three
months in arrears represented 0.8% of the outstanding portfolio
balance. The 90+ delinquency ratio was 0.7% and the cumulative
default ratio was 0.9%.

PORTFOLIO ASSUMPTIONS AND KEY DRIVERS

DBRS Morningstar conducted a loan-by-loan analysis of the remaining
pool of receivables and has updated its base case PD and LGD
assumptions at the B (sf) rating level to 12.6% and 12.7%
respectively.

CREDIT ENHANCEMENT

As of the October 2022 payment date, the credit enhancements
available to the Class A, Class B, Class C, Class D, Class E, and
Class F notes were 37.8%, 25.9%, 19.1%, 12.8%, 7.2%, and 3.9%,
respectively, up from 30.9%, 21.1%, 15.6%, 10.4%, 5.8%, and 3.0%,
12 months earlier, respectively. Credit enhancement is provided by
the subordination of the junior classes and the nonliquidity
reserve fund.

The transaction benefits from a non-amortizing reserve fund of EUR
5.1 million, equal to 2.0% of the initial balance of the Class A to
Class Z notes, and split into a liquidity reserve fund and a
nonliquidity reserve fund. The liquidity reserve fund is equal to
2.0% of the outstanding balance of the Class A notes, subject to a
floor of 1.0% of the initial balance of the Class A notes, and is
available to cover senior fees and interest on the Class A notes.
The nonliquidity reserve fund is equal to the difference between
the total reserve fund and the liquidity reserve fund and is
available to cover senior fees, interest on the rated notes, and
principal on the rated notes via the principal deficiency ledgers.
As the liquidity reserve fund amortizes, excess amounts form part
of the available revenue funds and allow the nonliquidity reserve
fund to increase in size.

ABN AMRO Bank N.V. (ABN AMRO) acts as the account bank for the
transaction. Based on the account bank reference rating of ABN AMRO
at AA (low), which is one notch below the DBRS Morningstar public
Long-Term Critical Obligations Rating of AA, the downgrade
provisions outlined in the transaction documents, and other
mitigating factors inherent in the transaction structure, DBRS
Morningstar considers the risk arising from the exposure to the
account bank to be consistent with the rating assigned to the Class
A notes, as described in DBRS Morningstar's "Legal Criteria for
European Structured Finance Transactions" methodology.

Notes: All figures are in euros unless otherwise noted.


MIDATECH PHARMA: Lacks Cash to Fund Operations Until Mid-March
--------------------------------------------------------------
Michael Susin at The Wall Street Journal reports that Midatech
Pharma PLC said it may run out of funds from mid-March, and that
several resolutions weren't passed at the annual general meeting.

According to the Journal, the drug-delivery technology company,
which is listed in the U.K. and the U.S., said it has sufficient
cash resources to fund its operations until mid-March and that it
urgently needs further alternative funds.

"If alternative funding is not available, the directors believe
that it is likely that the company could be forced to enter into
administration," the Journal quotes the company as saying.

Midatech has appointed Quantuma Advisory Limited to undertake a
contingency plan and provide advice on appropriate actions, the
Journal relates.

The company also said the acquisition of Bioasis Technologies Inc.
and the change of the company's name to Biodexa Pharmaceuticals
PLC, among other resolutions, were disapproved by shareholders, the
Journal notes.

Cardiff-based Midatech Pharma -- https://www.midatechpharma.com/ --
is a drug delivery technology company focused on improving the
bio-delivery and bio-distribution of medicines.


SIG PLC: S&P Affirms 'B+' LT ICR & Alters Outlook to Positive
-------------------------------------------------------------
S&P Global Ratings revised its outlook on specialist building
materials distributor SIG PLC to positive from stable and affirmed
its 'B+' long-term issuer credit rating on the company.

The positive outlook reflects that S&P may raise the rating on SIG
in the next 12-18 months if its adjusted debt to EBITDA reduced
consistently below 4.0x, free operating cash flow (FOCF) remained
at more than £50 million, and adjusted EBITDA margins stayed
within 5%-6%.

SIG performed well in 2022, thanks to the delivery of its Return to
Growth strategy. The company's revenue increased to about £2.7
billion in 2022, about 20% year-on-year, including 17% on a
like-for-like basis. Acquisitions contributed about 4% of the total
growth, offset by about a 1% negative foreign exchange effect.
Revenue clearly benefited from consistent price increases to pass
on the input price inflation, notwithstanding the background of
softening market conditions, notably in the second half of 2022. In
particular, the U.K. interiors business expanded by a strong 23% as
SIG regained its market position, whereas sales in the EU business
(France, Germany, Poland, Benelux, and Ireland) grew by 18%,
reflecting strong trading. Profitability also improved, to an
S&P-estimated adjusted EBITDA margin of 5.6%-5.8% in 2022 from 4.5%
in 2021, benefiting from continued execution of commercial strategy
and ongoing cost pass through.

S&P said, "After a strong 2022, we foresee sales growth moderating
in 2023. Household investment decisions are typically positively
correlated with consumer confidence and economic growth. On Nov.
30, 2022, we revised our estimate of yearly GDP growth in the U.K.
to -1.0% in 2023; 0.6% lower than our previous estimate. We
anticipate a GDP contraction of 0.5% in Germany and growth of only
0.2% in France. In addition, high inflationary pressures and rising
interest rates erode consumers' purchasing power, deteriorating
consumer sentiment. For example, in September 2022, GfK's U.K.
consumer confidence index dropped to its lowest level since records
began in 1974. Consumer climate indicators in Germany and France
similarly point to a prolonged weakness in consumer confidence
levels. In this context, we anticipate that households could
curtail or postpone discretionary spending on things like home
improvements, leading to pressure on SIG's sales growth. Repair,
maintenance, and improvement (RMI) sales, which account for about
50% of the company sales, are more sensitive to consumer
sentiment--particularly the renovation and improvement segments
that display higher demand elasticity. As a result, we forecast
revenue growth of about 3.0%-4.0% in 2023, driven primarily by the
inflation and the price pass through to customers, with volumes
flat to potentially negative.

"We forecast SIG's adjusted leverage will therefore stabilize at
about 4.0x in 2022-2023, moderating to 3.8x-4.0x in 2024. We base
these ratios on our adjusted EBITDA forecast of £150 million-£160
million in 2023 and £160 million-£165 million in 2024, versus the
£155 million-£158 million we estimate for 2022. This is because
we anticipate that SIG will continue benefiting from its commercial
and operational strategy, notwithstanding what we foresee to be a
challenging 2023. The company's strategy, as reformulated in 2020,
focuses on further strengthening the relationships with clients and
suppliers, investing in key systems such as customer relationship
management (CRM), continued use of pricing tools and controls to
protect margins, and extending and enhancing the branch network. We
also consider SIG's limited capital expenditure (capex) intensity
thanks to the asset-light nature of the business and
countercyclical working capital characteristics -- typically with a
release in a downturn--as supporting cash flow generation, and
therefore the credit profile.

"We do not deduct cash from debt in our calculations owing to our
assessment of SIG's business risk as weak, as per our criteria. Our
debt calculations for 2023 capture about £266 million of long-term
liabilities, £320 million of leases, £38 million of factoring,
and minor amounts for earn-outs and post retirement obligations, to
arrive at about £630 million in total.

"We anticipate that SIG will pursue bolt-on acquisitions over time.
Bolt-on acquisitions are the primary method for distributors to
deliver above-market revenue growth, and consolidation
opportunities are plentiful given the fragmented nature of the
industry. As such, we believe the company may look to play a
consolidating role. That said, we note SIG's clear capital
allocation priorities, which focus on deleveraging. We understand
that this will be achieved primarily through organic growth, and
that acquisitions will be financed prudently. SIG's financial
policy is conservative, with targeted debt to EBITDA, as defined by
management, of 2.5x on a post-International Financial Reporting
Standard (IFRS)-16 basis.

"The positive outlook reflects that we may raise the rating on SIG
in the next 12-18 months if its adjusted debt to EBITDA reduced
consistently below 4.0x, FOCF remained at more than £50 million,
and adjusted EBITDA margins were within 5%-6%."

Upside scenario

In addition to the above factors, S&P would consider an upgrade in
2024 if the company maintains its conservative financial policy,
balancing the growth strategy with its targeted debt to EBITDA of
2.5x, as defined by management, and on a post-IFRS-16 basis. S&P
considers adjusted debt to EBITDA within 3.0x-4.0x as consistent
with a higher rating.

Downside scenario

S&P said, "We could revise the outlook to stable if we no longer
believed that SIG's adjusted leverage will reduce consistently to
below 4.0x. This would likely happen if its profitability weakened
to below 5%, for example due to difficulties passing higher costs
to customers, or if it departed from its current financial policy
target. This could be illustrated by the company resuming dividends
at a higher level than we currently anticipate or pursuing sizable
debt-financed acquisitions."

-- Environmental, Social, And Governance (ESG)

ESG credit factors: E-2, S-2, G-2

S&P said, "ESG factors have an overall neutral influence on our
credit rating analysis for SIG. As a specialist building products
and solutions distributor, we view SIG's business as significantly
less affected by greenhouse gas emissions risks because it is not
as energy intensive as that of cement companies or other building
materials producers. We anticipate that SIG's growth prospects will
benefit from the increasing drive for sustainability in the
building materials industry, which is calling for better
insulation, solar panels, and roofing systems, among other
solutions, to preserve and generate green energy. The company
states that its products meet about 85% of insulation end-use
demand in the markets where it operates. SIG seeks to minimize the
environmental impact of its own operations by reducing energy,
fuel, and water consumption and minimizing waste."


STONEGATE PUB: Fitch Affirms LongTerm IDR at 'B-', Outlook Negative
-------------------------------------------------------------------
Fitch Ratings has affirmed Stonegate Pub Company Limited's
(Stonegate) Long-Term Issuer Default Rating (IDR) at 'B-' with a
Negative Outlook. Fitch has also affirmed Stonegate Pub Company
Financing 2019 PLC's senior secured instruments' senior secured
rating at 'B' with a Recovery Rating of 'RR3' and Stonegate Pub
Company Bidco Limited's subordinated rating at 'CCC' with 'RR6'

The Negative Outlook reflects the refinance risk of Stonegate's
secured debt maturing in mid-2025. It also includes Stonegate's
vulnerability to the UK consumer whose discretionary spend may
decrease wet sales despite the group's diverse portfolio of brands,
locations, and operating models. Although Stonegate's product offer
is not big-ticket, less frequency of visits and resistance to
premiumisation may result in lower sales, while operating-cost
increases persist. This would delay further the planned conversion
of pubs to fuel the group's future EBITDA growth, which would aid
its mid-2025 refinancing.

Leverage to financial year ended September 2022, reflecting
pandemic-disrupted periods, has yet to be published. Fitch expects
operational metrics to return to pre-pandemic levels and FY24 and
FY25 EBITDAR leverage to fall to 7.3x and 6.7x, respectively.

KEY RATING DRIVERS

Wet-Led, Lower-Risk, Portfolio Mix: The Stonegate portfolio is
drinks-led rather than food. The leased & tenanted (L&T) portfolio
constitutes over half of the group's pre-central costs EBITDAR
(3Q22), with half of this being property rent from publicans and
the remainder wet margin for tied beer sales. No L&T operational
staff costs are borne by Stonegate. Its managed and craft union
(operator-led) portfolio constitutes under half of EBITDAR, with
food at only around 18% of this division's gross turnover. It has
higher EBITDA/pub than L&T but including late-night clubs and
managed directly-operated city centre outlets, its profit is more
vulnerable to working-from-home trends, recent rail strikes, and
past pandemic operational restrictions.

Price Increases Partly Mitigate Inflation: Stonegate increased beer
prices in the L&T portfolio (April 2022: 7%) and the managed and
operator-led portfolio (FY22: 8% cumulatively). Food prices and
menu changes have partly reflected ingredients' cost increases and
VAT cessation. This has helped mitigate some inflationary costs,
borne by Stonegate mainly in the managed and operator-led
portfolio, including labour (living wage), delivery logistics, and
energy (the latter, now unhedged, increasing to around GBP70
million in FY23 from GBP35 million in FY22).

Revenue Growth on Track: Post-Easter 2022 results began to show a
quick rebound to 'normal' trading conditions, following weak
performance due to the pandemic and its operational restrictions
since early 2020. Its 2QFY22 (to April), 3QFY22 (to July) and
unpublished 4QFY22 EBITDAR were less affected by pandemic
conditions, and support management's guidance of a GBP441 million
run-rate group EBITDA including synergies. Management targets
future profits from pub conversions to add some GBP60 million
EBITDA, depending on capex and phasing.

Growth through Conversions: Given limited scope for more growth
from the existing managed portfolio, Stonegate is targeting some of
its 3,124 Enterprise Inn-acquired L&T units for conversion to
managed and operator-led. The conversions are investing in kitchen
and drink capacity, improving fixture and fittings, and
refurbishing these pubs, and, sometimes, changing its management,
to significantly increase EBITDA. Conversions are the key area of
profit growth (and re-investment) for Stonegate. The larger the
group, the greater the synergies (ie barrelage, sports subscription
costs and other coordinated central procurement - as seen during
the pandemic).

Focus on Run-Rate Group EBITDA: Rather than quote
quarter-on-quarter operational data, having seen the bounce back of
pubs to broadly pre-pandemic volumes and profits, Fitch has focused
on costs that would decrease future years' pre-conversion run-rate
EBITDA of GBP441 million and the limitations on increasing prices.
Significant amounts in FY23 will include additional energy costs
(GBP35 million), broadly neutral operational savings (including
labour) relative to likely beer price increases, and vulnerability
to shocks (rail strikes, city-centre activity) for the managed and
operator-led portfolio.

Sharp Spending Contraction Unlikely: Fitch does not expect pubs as
non-big ticket items to see a marked decrease in volumes and
spending in 2023, despite a more cautionary consumer environment.
Targeting different clientele across the portfolio's brands and
suburban locations, for example, Stonegate sees April 2023's UK
living wage increase as supporting patrons' spend capacity, rather
than penalising its own cost base's requirements.

Ringfenced Unique Pubs Debt: Fitch consolidates the Unique
portfolio, a sub-group of mainly L&T pubs, despite it having its
own whole business securitisation (WBS), covenanted financing as
Fitch views Unique and the remaining Stonegate as one economically
integrated group. Unique's debt, relative to its GBP110
million-GBP115 million EBITDA, has lower leverage at 4.5x than
Stonegate's and is set to decrease further after more scheduled
debt amortisations. The WBS onerous debt servicing constrains its
cashflow and could prompt Stonegate to provide liquidity which,
under WBS covenants, is difficult to subsequently repatriate.

During the pandemic, Unique used its own cash (instead of its
18-month debt service facility) to help meet debt servicing.
Fitch's recovery estimate for Stonegate's creditors only includes
the attributable equity of Unique (its ringfenced assets less its
debt liabilities).

Highly Leveraged Balance Sheet: Stonegate is highly leveraged
(GBP2.6 billion debt, plus GBP0.6 billion in Unique). Its cost of
debt averages above 8%. Its main debt maturities are in mid-2025.
Management's group run-rate EBITDA points to EBITDAR leverage of
around 6x and EBITDAR fixed charge coverage of 1.6x. Fitch's rating
case sees FYE24 and FYE25 leverage improving to 7.3x and 6.7x, with
coverage around 1.6x, which would be consistent with the 'B-' IDR.
Inherent positive free cash flow (FCF) plus any disposal proceeds
cover maintenance capex of around GBP60 million-GBP70 million with
the remainder balancing demands between conversion capex and debt
reduction.

DERIVATION SUMMARY

Fitch rates Stonegate under its Global Restaurants Navigator,
taking into account its predominantly wet-led operations, and a
significantly higher proportion of freehold property ownership,
which affects leverage.

Stonegate is rated in line with Punch Pubs Group Limited (IDR:
B-/Stable), which has a portfolio of 1,276 pubs versus Stonegate's
4,516. Both are predominantly wet-led estates. Punch's EBITDA/pub
in L&T is comparable with Stonegate's 2020 Enterprise Inn-acquired
L&T portfolio but Stonegate's managed portfolio yields higher
profits/pub than Punch's, reflecting the size of the average unit,
drink sales per pub, and the benefits of a bigger group's central
procurement.

Punch's managed portfolio is less town centre-based than
Stonegate's, whose city and late-night formats (which have also
been disrupted by pandemic restrictions) are more vulnerable to
cost pressures (labour, energy) in the current inflationary
environment. When less disrupted trading conditions resume,
Stonegate should benefit from higher profits from this segment of
its portfolio. Both companies' underlying strategy is to convert
L&T pubs within their respective portfolios by injecting new
management and capex to increase EBITDA/pub.

The difference in Outlook at the same 'B-' IDR reflects Punch's
stronger financial flexibility than Stonegate's, with less pressure
on liquidity, and the former's pub conversion programme
(part-equity funded) already underway before the pandemic.

Stonegate is rated one notch lower than the UK-weighted
PizzaExpress (Wheel Bidco Limited, IDR: B/Negative), which benefits
from stronger profitability and a more conservative financial
structure as Fitch expects PizzaExpress to deleverage to below 6.5x
by end-2024 on a total lease-adjusted debt/ EBITDAR basis versus
7.3x for Stonegate by FYE24. This is partly balanced by Stonegate's
stronger business profile with a larger size, better financial and
operational flexibility given its freehold property and group
operations that were less severely affected by Covid-19
restrictions.

UK pubs have recovered a lot quicker (volumes, visits, and
profitability) from the pandemic period of operational constraints
than other sectors such as hotels (reliant on tourists, holiday
season concentrations), and food-weighted restaurants (larger
ticket and less frequency of occasions).

KEY ASSUMPTIONS

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

- Fitch has used an estimated FY22 EBITDA of around GBP381 million
(based on 3Q22 actuals), which was partly disrupted by the
pandemic. This EBITDA is based on cash rents (rather than higher
IFRS 16 operating lease charges). FY23 group EBITDA reflects price
increases being largely mitigated by operational cost increases,
but not enough to cover estimated incremental energy costs of GBP35
million. Fitch has included some EBITDA recovery from pandemic
disruption. Therefore year-on-year FY23 EBITDA is broadly flat

- For FY24 and FY25, the main year-on-year EBITDA increase stems
from incremental EBITDA from pub conversions, which is a function
of capex dedicated to this expansion

- Group capex includes maintenance capex of around GBP65 million,
and conversion capex at around GBP25 million per year, creating
additional EBITDA

- Interest expense reflects existing largely fixed-rate interest
costs and higher Euribor for Stonegate's variable-rate second-lien.
From FY23, its EUR496 million/GBP452 million senior notes will be
unhedged and switch to higher variable rates at 4% plus margin

- Pub disposal proceeds of GBP35 million per year (3Q22: GBP20
million)

- Minimal additional drawdown of the group's revolving credit
facilities (RCFs) at year-ends

RECOVERY RATINGS ASSUMPTIONS

Its recovery analysis assumes that Stonegate would be liquidated
rather than restructured as a going concern in a default.

Recoveries are based on the mainly freehold value of the
consolidated group's assets, although bondholders' security is a
pledge over the equity shares in group entities. Its liquidation
approach uses management's latest valuations of the group's
freehold and long leasehold assets, which are frequently updated
based on third-party valuations. Fitch applies a standard 25%
discount to these valuations, which is comparable with the stress
experienced by industry peers during 2007 to 2011 on an EBITDA/pub
basis, replicating the 'fair maintainable trade' component of the
valuation. The total amount we assume available to creditors is
around GBP1.9 billion.

Fitch's recovery estimate for restricted group creditors also
includes a proxy for a discounted equity value from the ringfenced
Unique pub assets, net of its committed debt including its
currently undrawn liquidity facility, and estimated SPENs
(make-whole cost for prepaying fixed-rate debt). From this, we
estimate around GBP0.2 billion of residual value available to
Stonegate's restricted group creditors.

After deducting a standard 10% for administrative claims, Fitch has
assumed that Stonegate's GBP223 million of super-senior RCFs would
be fully drawn in a default.

Under Stonegate's existing debt, Fitch's principal waterfall
analysis generates a ranked recovery for senior secured loans of
'RR3' with a waterfall generated recovery computation output
percentage of 69% based on current metrics and assumptions. Given
the structural subordination, Fitch estimates a ranked recovery for
the second-lien in the 'RR6' band with 0% expected recoveries. The
'RR6' band indicates a 'CCC' instrument rating, two notches below
the IDR.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to revision
of the Outlook to Stable:

- Credible refinance solutions of the super-senior RCFs (mainly
maturing September 2024) and senior debt (July 2025) by end-2023

- Visibility that EBITDAR leverage is not exceeding the downgrade
rating sensitivities

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

- Sustained recovery returning volumes and profitability to
pre-pandemic levels, and providing clear visibility of consolidated
Fitch-defined EBITDA trending towards GBP400 million on a last
12-month basis

- EBITDAR leverage below 7.0x on a sustained basis

- EBITDAR fixed charge coverage above 1.6x on a sustained basis

- Positive FCF on a sustained basis

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

- Lack of credible refinance solutions for the RCF and senior debt
by end-2023

- Erosion of liquidity headroom and lack of positive
(post-maintenance capex) FCF

- EBITDAR leverage above 8.0x

- EBITDAR fixed charge coverage not improving above 1.3x

LIQUIDITY AND DEBT STRUCTURE

Constrained Liquidity: At end-3Q FY22, Stonegate (excluding Unique)
had cash of GBP58 million, a GBP175 million RCF (GBP40 million
drawn), an undrawn overdraft of GBP25 million (both maturing
September 2024), and an undrawn RCF of GBP23 million (July 2023),
as available liquidity. This liquidity profile should be buoyed by
the football World Cup during 1QFY23.

Stonegate has an inherently negative working capital position (cash
sale receipts before suppliers are paid). This has been less
evident over the past two years of pandemic-disrupted trading
conditions and Fitch does not expect material absorption of
resources from year-on-year working-capital movements.

The group's cashflow profile suffers from onerous amortisation
payments within the Unique WBS, without which around GBP100 million
would potentially be surplus operational cash profits up-streamed
from Unique to Stonegate.

Main Maturities in July 2025: Stonegate's main debt is scheduled to
mature in July 2025, followed by its second-lien in December 2027.
After September 2023 Stonegate's EUR496 million (GBP452 million)
debt becomes unhedged in currency and interest rates. Otherwise,
Stonegate's debt is largely fixed-rate, except for its GBP400
million second-lien that pays variable-rate Euribor.

Unique's bonds mature in March 2032 with less onerous scheduled
amortisations after July 2024.

Criteria Variation

Fitch's Corporate Rating Criteria guides analysts to use the income
statement rent charge (depreciation of leased assets plus interest
on leased liabilities) as the basis of its rent-multiple adjustment
(capitalising to create a debt-equivalent) in Fitch's
lease-adjusted ratios. However, Stonegate's IFRS 16 accounting rent
(GBP113 million) in its FY22 income statement is significantly
higher than the equivalent cash flow rent paid (GBP82 million), so
Fitch has applied an 8x debt multiple to the cash rent when
calculating the group's lease-adjusted debt.

There are various reasons for the difference in accounting rent
versus cash paid rent. Stonegate has some long-dated real estate
leases, which result in higher non-cash, straight-lined,
"depreciation" within accounting rent. In some other Fitch-rated
leveraged finance portfolio examples, the difference between
accounting and cash rents is not of the magnitude to justify this
switch to capitalise cash rents.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.

   Entity/Debt                Rating         Recovery   Prior
   -----------                ------         --------   -----
Stonegate Pub
Company Financing
2019 Plc

   senior secured       LT     B   Affirmed     RR3       B

Stonegate Pub
Company Limited         LT IDR B-  Affirmed               B-

Stonegate Pub
Company Bidco
Limited

   Senior Secured
   2nd Lien             LT     CCC Affirmed     RR6       CCC


TOGETHER ENERGY: Warrington Council Exposure Likely at GBP18-Mil.
-----------------------------------------------------------------
Aran Dhillon at Warrington Guardian reports that uncertainty
surrounds the fate of GBP18 million the council invested into an
energy firm which collapsed around one year ago.

Together Energy announced it was to cease trading immediately in
January last year, Warrington Guardian recounts.

The council owned a 50% stake in Together Energy after initially
investing GBP18 million in September 2019, Warrington Guardian
notes.  It had also given a loan to the company, Warrington
Guardian states.

It was reported in July that the "likely maximum exposure" to the
council following its failed investment into Together Energy is the
potential loss of GBP18 million, Warrington Guardian relays, citing
a council report.

The report to the audit and corporate governance committee said, at
the time of going into administration, the council faced a
potential liability of GBP66.17 million -- consisting of a GBP29.32
million Orsted guarantee, GBP18.85 million of loans and GBP18
million of preference share capital, Warrington Guardian notes.

It also stated that Together Energy Limited (TEL) was a "well
hedged" company.

"Following TEL liquidating its hedge position, it is forecast that
TEL will received a substantial net return after full repayment of
the Orsted liability over the period to October 2023," it added.

"The administrators have advised the council that based on current
information they anticipate that the council's loans (GBP18.850
million) will be repaid in full and there should be no call under
its guarantee to Orsted.

"However, the administrators cannot assess the potential level of
recovery, if any, against the equity investment.

"Therefore based on information available at this time, the likely
maximum exposure to WBC is the potential loss of the GBP18 million
equity investment."

The council now says it is important to allow the administrators to
complete their work to "ensure the maximum returns" for all of the
company's creditors, according to Warrington Guardian.


TRAIDCRAFT PLC: Enters Administration Amid Operational Challenges
-----------------------------------------------------------------
Hattie Williams at Church Times reports that the fairtrade company
Traidcraft PLC is going into administration, its board of directors
announced "with tremendous sadness" on Jan. 20.

According to Church Times, in a letter to its partners, the
directors write that a myriad of events during the past few years
had led to this decision.

"The business has been in a weak financial position for some years
and the Covid-19 pandemic presented a significant new set of
challenges," Church Times quotes the letter as saying.  "Just as we
were emerging from the pandemic, like many other retailers, we
faced the combined effects of the war in Ukraine, rising energy
prices, and increased transport costs."

Traidcraft PLC is the trading arm of the Traidcraft Foundation.  In
2020, the revenue of Traidcraft PLC was reported as GBP5.4 million
-- down from GBP8.1 million in 2019, Church Times notes.

Despite the "heroic efforts" of staff at its headquarters in
Gateshead, the directors write that "low consumer confidence during
the critical autumn trading period led to a sales result
significantly short of what was required to sustain the operation,
Church Times relates.  December sales were also negatively impacted
by the uncertainty created by Royal Mail strikes."

Administrators had been appointed as the "only honourable course of
action" -- and with haste -- to "minimise the impact on our
suppliers and creditors", Church Times discloses.


[*] UK: Number of Cos. in Critical Financial Distress Up 36% in Q4
------------------------------------------------------------------
BBC News reports that there are growing fears that 2023 could see a
wave of company collapses as the cost of living crisis continues.

According to BBC, the number of firms on the brink of going bust
jumped by more than a third at the end of last year, said
insolvency firm Begbies Traynor.

It expects this number to rise due to higher costs, firms repaying
Covid loans and consumers cutting back, BBC notes.

Julie Palmer, partner at Begbies Traynor, said it was receiving an
increasing number of calls from businesses owners like Mr Jones who
were concerned over whether they could carry on, BBC relates.

Begbies Traynor, asd cited by BBC, said the number of companies in
critical financial distress jumped by 36% in the last three months
of 2022.

A firm is in critical financial distress if it has more than
GBP5,000 in county court judgments or a winding up petition against
it, BBC discloses.

The number of county court judgments served against companies in
the same period jumped by 52% compared with 2021, BBC says.

Ms. Palmer said that up until now low interest rates and loans had
helped firms, according to BBC.  In the pandemic, Covid loans and a
longer time to pay taxes had meant that support had continued, BBC
states.

"[The support] all seems to be coming to an end at the same time,
with nothing really on the horizon in terms of what might replace
them," BBC quotes Ms. Palmer as saying.

A backlog in the insolvency courts due to Covid has also delayed
some company collapses, BBC notes.

"The courts were closed for business so nobody could take recovery
action against non-payers and we are beginning to see those cases
pushed through now," she said.



                           *********


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 2023.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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