/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/230309.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, March 9, 2023, Vol. 24, No. 50 Headlines C Y P R U S HELLENIC BANK: Fitch Gives B(EXP) Rating on New EUR200MM Sub. Notes C Z E C H R E P U B L I C ALLWYN INTERNATIONAL: Fitch Alters Outlook on 'BB-' IDR to Positive I R E L A N D ALME LOAN V: Moody's Affirms B1 Rating on EUR10.6MM Class F Notes BLUEMOUNTAIN FUJI II: Moody's Affirms B1 Rating on Class F Notes K A Z A K H S T A N FREEDOM HOLDING CORP: S&P Affirms 'B-' LT ICR, Outlook Stable R O M A N I A MINTIA TPP: Mass Group to Invest Over EUR1 Billion in Business VIVRE DECO: Enters Insolvency Due to Financial Difficulties U N I T E D K I N G D O M AV BROWNE: Enters Administration, Halts Operations BRITISHVOLT: Administration Cost Ashtead GBP35 Million INEOS ENTERPRISES: S&P Affirms 'BB' ICR on Announced Acquisition LONDON WALL 2021-01: Moody's Ups Rating on Class X Notes From Ba1 MONKS & CRANE: Goes Into Administration, Operations Continue SKYLAB: Expected to Owe HMRC GBP651,746.69 VALE OF MOWBRAY: Former Site, Machinery Sold After Collapse - - - - - =========== C Y P R U S =========== HELLENIC BANK: Fitch Gives B(EXP) Rating on New EUR200MM Sub. Notes ------------------------------------------------------------------- Fitch Ratings has assigned Hellenic Bank Public Company Limited's (HB) upcoming EUR200 million subordinated notes due June 2033 an expected long-term rating of 'B(EXP)'. The notes will be issued under HB's EUR1.5 billion euro medium-term note programme and are expected to qualify as Tier 2 regulatory capital. The assignment of the final rating is contingent on the receipt of final documents conforming to information already reviewed. All other issuer and debt ratings are unaffected. KEY RATING DRIVERS The notes will constitute direct, unsecured and subordinated obligations of HB. The rating of the notes is notched off twice from HB's 'bb-' Viability Rating (VR) for loss severity, to reflect their poor recovery prospects in a non-viability event given their junior ranking. No notching is applied for incremental non-performance risk because write-down of the notes will only occur once the point of non-viability is reached and there is no coupon flexibility before non-viability. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: The notes' rating would be downgraded if HB's VR was downgraded. Factors that could, individually or collectively, lead to positive rating action/upgrade: The notes' rating would be upgraded if HB's VR was upgraded. 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 ----------- ------ Hellenic Bank Public Company Limited Subordinated LT B(EXP) Expected Rating =========================== C Z E C H R E P U B L I C =========================== ALLWYN INTERNATIONAL: Fitch Alters Outlook on 'BB-' IDR to Positive ------------------------------------------------------------------- Fitch Ratings has revised Allwyn International a.s.'s (Allwyn, formerly SAZKA Group) Outlook to Positive from Stable and affirmed its Long-Term Issuer Default Rating (IDR) of at 'BB-'. The Positive Outlook reflects ongoing improvement in Allwyn's business profile, through enhanced geographic diversification and increased deleveraging prospects after 2023. The 'BB-' IDR is balanced by residual complexity of the group structure, with the majority of consolidated revenue generated by operating companies (opcos) that are not fully owned. Fitch has also changed its rating sensitivities to fully consolidated leverage and coverage metrics to reflect Allwyn's equity stake in its Greek subsidiary OPAP, which now exceeds 50%. KEY RATING DRIVERS Business Diversification Improvement: The recent award of the UK National Lottery's (UKNL) fourth operator license will allow Allwyn to materially strengthen its business profile by entering Europe's largest gaming market, and Fitch expects that its acquisition of Camelot UK will positively affect the period of transition between license holders and reduce execution risk. Its forecast assumes that the UK segment will generate at least 20% of Allwyn's consolidated net gaming revenue (NGR) by 2025. US Exposure to Remain Low: The acquisition of Camelot will result in some exposure to the gaming market in the US (Illinois lottery in particular), but Fitch does not include in its forecasts growth within the US market for Allwyn outside of its existing contracts. Overall, Fitch projects US revenues and EBITDA to contribute low-single percentage shares to Allwyn's consolidated figures. At the same time, Fitch does not expect the acquired US business to be capital-intensive and incorporate only marginal increases in capex in its forecasts. Sizeable Minority Interest in OpCos: The rating reflects some retained group structure complexity with only the business in Czech Republic (and the UK going forward) being fully owned by Allwyn. Operations in Austria and Greece/Cyprus have a significant share owned by minority shareholders, and the business in Italy is an equity investment. As a result of sizeable forecast cash dividend distribution in 2023, EBITDA margins of over 36% in 2023 will translate into low double-digit funds flow from operations (FFO) margins under the Fitch base case before rising to over 15% in 2024. Fitch forecasts that Allwyn will be able to generate healthy positive free cash flow (FCF) over the four-year forecast horizon, except for capex-intensive 2023. Healthy Deleveraging Pace: Strong FCF generation will allow Allwyn to deleverage swiftly, with healthy dividend stream from opcos to service debt at holding company (holdco) level even after accounting for dividends to minority shareholders. Its base case assumes that EBITDAR leverage will fall below 3.0x in 2024 on a ramp-up of UK operations and gradual repayment of debt at opcos. FCF Still Driven by OPAP: OPAP pays materially lower cash taxes on a major part of its gross gaming revenue (GGR) since October 2020, due to a sizeable prepayment of gaming taxes when it extended one of its licenses until 2030. Fitch estimates these savings at EUR200 million a year over the four-year forecast horizon, allowing Allwyn to reach double-digit FCF margins by 2024-2025 when its UKNL operations commence. However, a review of eligibility of the majority of OPAP's revenue for tax prepayment would be an event risk. Resilient Lottery Business Performance: Allwyn demonstrated resilience during the pandemic, with NGR recovering to pre-Covid-19 levels throughout 2021 in all markets, followed by healthy performance in 2022. Fitch forecasts healthy mid-single-digit organic growth for Allwyn's business in its core markets, reflecting anticipated lower regulatory pressure on the lottery business in the EU than on other forms of gaming, and the potential for further lottery business digitalisation that should help offset traditional market decline from an ageing core audience. Expansionary Business Growth to Continue: Given the moderate growth of lottery markets compared with other gaming segments', Fitch expects Allwyn will continue increasing its scale primarily through M&A. Fitch includes in its forecast bolt-on acquisitions of EUR150 million p.a.. Growth of Allwyn's existing business growth ahead of the market will come from enlarged online operations. Taking into account the ramp-up of UKNL operations in 2024, Fitch forecasts group consolidated revenues (NGR + non-gaming revenue) to exceed EUR4 billion in that year. DERIVATION SUMMARY Allwyn's EBITDA and EBITDAR margins are strong relative to that of gaming peers, such as Flutter Entertainment plc (BBB-/Negative), Entain plc (BB/Stable) and 888 Holdings plc (BB-/Negative), which are the largest sportsbook operators in Europe. Allwyn has high concentration on lottery revenue, which is less volatile and less exposed to regulatory risks, and displays good geographical diversification across Europe with businesses in the Czech Republic, Austria, Greece, Cyprus, Italy and the UK, albeit weaker than the multi-regional revenue base of Flutter and Entain. It continues to lag both companies in scale and retains a more complex group structure with a high share of not fully owned assets. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Revenue growth of 24.3% in 2022 on post-pandemic openings, strong online growth, low base effects (still some restrictions in 2021) and land-based venues enjoying pent-up demand - Revenue growth in 2023-2024 on increased online volume in core markets (Czech Republic, Greece and Austria), to varying degrees by country, depending on local platform strength. Revenue growth in 2024 on contribution from the fourth UKNL license - Consolidated EBITDA margin stable at 36.5% over 2022-2023, followed by around 30% to 2026 on contribution from the less profitable UK - Dividend distribution from all opcos remaining stable compared with historical trend - M&A-related cash outflows averaging EUR400 million p.a., including EUR150 million in bolt-on acquisitions at an enterprise value (EV)/EBITDA multiple of 10x RATING SENSITIVITIES Factors that could, individually or collectively, lead to an upgrade: - Further strengthening of operations combined with increased access to respective cash flows and debt structure simplification - Sound financial discipline leading to EBITDAR leverage trending below 3.5x - EBITDAR fixed charge cover above 3.0x and gross dividend/gross interest at holdco above 2.5x on a sustained basis Factors that could, individually or collectively, lead to a revision of Outlook to Stable - Sustained operating underperformance in one or several markets leading to EBITDA margin consistently below 30% - No visibility over deleveraging to below 4.0x EBITDAR by 2024 Factors that could, individually or collectively, lead to a downgrade: - Deterioration of operating performance leading to consolidated EBITDA margin below 25% on a sustained basis - More aggressive financial policy as reflected in EBITDAR leverage consistently above 4.5x - EBITDAR fixed charge cover below 2.5x and gross dividend/interest at holdco of less than 2.0x on a sustained basis - Raising considerable, structurally senior debt at intermediate holdco or at subsidiary levels could lead to notching down the senior secured debt rating from the IDR LIQUIDITY AND DEBT STRUCTURE Financial Flexibility Remains Solid: Fitch estimates end-2022 consolidated liquidity of over EUR1 billion, although not all of it immediately available for debt service at holdco level as the majority of this cash is located at Austrian and Greek opcos. At the same time, Allwyn has access to a EUR300 million revolving credit facility that was undrawn as of September 2022. Positive FCF forecast at all opcos to 2026 further supports liquidity. Allwyn's ebt structure has improved materially in recent years, with midco debt no longer present in the debt structure. Opco debt is still material but Fitch expects its share in total debt to gradually reduce from an estimated 25% at end-2022. ISSUER PROFILE Allwyn is the largest European private lottery operator and remains the only leader in lotteries in Austria, the Czech Republic, and Greece and the only provider of fixed-odds numerical lotteries in Italy. 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 ----------- ------ -------- ----- Allwyn International a.s. LT IDR BB- Affirmed BB- senior secured LT BB- Affirmed RR4 BB- Allwyn Entertainment Financing (UK) plc senior secured LT BB- Affirmed RR4 BB- ============= I R E L A N D ============= ALME LOAN V: Moody's Affirms B1 Rating on EUR10.6MM Class F Notes ----------------------------------------------------------------- Moody's Investors Service has upgraded the ratings on the following notes issued by ALME Loan Funding V DAC: EUR47,947,000 Class B-1 Senior Secured Floating Rate Notes due 2031, Upgraded to Aaa (sf); previously on Oct 5, 2022 Upgraded to Aa1 (sf) EUR21,053,000 Class B-2 Senior Secured Floating Rate Notes due 2031, Upgraded to Aaa (sf); previously on Oct 5, 2022 Upgraded to Aa1 (sf) EUR15,526,000 Class C-1 Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to A1 (sf); previously on Oct 5, 2022 Affirmed A2 (sf) EUR9,474,000 Class C-2 Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to A1 (sf); previously on Oct 5, 2022 Affirmed A2 (sf) Moody's has also affirmed the ratings on the following notes: EUR223,000,000 (Current outstanding amount EUR191,623,632) Class A Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Oct 5, 2022 Affirmed Aaa (sf) EUR19,700,000 Class D Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed Baa2 (sf); previously on Oct 5, 2022 Affirmed Baa2 (sf) EUR22,700,000 Class E Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed Ba2 (sf); previously on Oct 5, 2022 Affirmed Ba2 (sf) EUR10,600,000 Class F Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed B1 (sf); previously on Oct 5, 2022 Upgraded to B1 (sf) ALME Loan Funding V DAC, issued in June 2016 and refinanced in July 2018, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Apollo Management International LLP. The transaction's reinvestment period ended in July 2022. RATINGS RATIONALE The rating upgrades on Class B-1, B-2, C-1 and C-2 notes are primarily due to the deleveraging of the Class A notes following amortisation of the underlying portfolio since the last rating action in October 2022. The Class A notes have paid down by approximately EUR31.4 million since the last rating action in October 2022 (EUR17.4m/7.8% in October 2022 and EUR 15.1m/6.8% in January 2023 respectively of the Class A tranche). As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated February 2023 [1] the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 141.3%, 128.9%, 120.6%, 112.3% and 108.8% compared to September 2022 [2] levels of 137.3%, 126.5%, 119.1%, 111.6% and 108.4%, respectively. In light of reinvestment restrictions during the amortisation period, and therefore the limited ability to effect significant changes to the current collateral pool, Moody's analysed the deal assuming a higher likelihood that the collateral pool characteristics would maintain an adequate buffer relative to certain covenant requirements. In particular, Moody's assumed that the deal will benefit from a shorter amortisation profile and it had assumed at closing. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR368.24 million Diversity Score: 50 Weighted Average Rating Factor (WARF): 2839 Weighted Average Life (WAL): 4.20 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.59% Weighted Average Coupon (WAC): 3.86% Weighted Average Recovery Rate (WARR): 45.35% The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in December 2021. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank and swap provider, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance" published in June 2022. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: Portfolio amortisation: Once reaching the end of the reinvestment period in July 2022, the main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. Weighted average life: The notes' ratings are sensitive to the weighted average life assumption of the portfolio, which could lengthen as a result of the manager's decision to reinvest in new issue loans or other loans with longer maturities, or participate in amend-to-extend offerings. The effect on the ratings of extending the portfolio's weighted average life can be positive or negative depending on the notes' seniority. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. BLUEMOUNTAIN FUJI II: Moody's Affirms B1 Rating on Class F Notes ---------------------------------------------------------------- Moody's Investors Service has upgraded the ratings on the following notes issued by BlueMountain Fuji EUR CLO II Designated Activity Company: EUR20,600,000 Class C Deferrable Mezzanine Floating Rate Notes due 2030, Upgraded to Aa2 (sf); previously on May 27, 2022 Upgraded to Aa3 (sf) EUR17,500,000 Class D Deferrable Mezzanine Floating Rate Notes due 2030, Upgraded to A3 (sf); previously on May 27, 2022 Affirmed Baa1 (sf) Moody's has also affirmed the ratings on the following notes: EUR207,800,000 (Current outstanding amount EUR152,884,945) Class A Senior Secured Floating Rate Notes due 2030, Affirmed Aaa (sf); previously on May 27, 2022 Affirmed Aaa (sf) EUR44,700,000 Class B Senior Secured Floating Rate Notes due 2030, Affirmed Aaa (sf); previously on May 27, 2022 Upgraded to Aaa (sf) EUR22,500,000 Class E Deferrable Junior Floating Rate Notes due 2030, Affirmed Ba2 (sf); previously on May 27, 2022 Affirmed Ba2 (sf) EUR9,800,000 Class F Deferrable Junior Floating Rate Notes due 2030, Affirmed B1 (sf); previously on May 27, 2022 Affirmed B1 (sf) BlueMountain Fuji EUR CLO II Designated Activity Company, issued in June 2017 and refinanced in February 2021, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by BlueMountain Fuji Management, LLC. The transaction's reinvestment period ended in July 2021. RATINGS RATIONALE The rating upgrades on the Class C and Class D notes are primarily a result of the deleveraging of the Class A notes following amortisation of the underlying portfolio since the last rating action in May 2022. The Class A notes have paid down by approximately EUR26.13 million (12.6%) since the last rating action in May 2022 and EUR54.92 million (26.4%) since closing. As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated February 2023 [1] the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 148.77%, 134.72%, 124.72%, 113.85% and 109.69% compared to April 2022 [2] levels of 141.57%, 130.04%, 121.62%, 112.28% and 108.65%, respectively. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR284.76m Defaulted Securities: none Diversity Score: 52 Weighted Average Rating Factor (WARF): 2960 Weighted Average Life (WAL): 3.79 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.54% Weighted Average Coupon (WAC): 3.97% Weighted Average Recovery Rate (WARR): 45.19% Par haircut in OC tests and interest diversion test: none The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in December 2021. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance" published in June 2022. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. =================== K A Z A K H S T A N =================== FREEDOM HOLDING CORP: S&P Affirms 'B-' LT ICR, Outlook Stable ------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit ratings on Freedom Finance JSC, Freedom Finance Europe Ltd., Freedom Finance Global PLC, and Bank Freedom Finance Kazakhstan to 'B' from 'B-'. At the same time, S&P Global Ratings affirmed its 'B-' long-term ratings on Freedom Holding Corp. 'B-'. The outlooks are stable. S&P said, "In addition, we affirmed our 'B' short-term issuer credit rating on the group's operating subsidiaries. We also raised our Kazakh national scale ratings on Freedom Finance JSC and Bank Freedom Finance Kazakhstan to 'kzBB+' from 'kzBB'. "We believe that FRHC's sanction-related risks have somewhat decreased following the sale of its Russian subsidiaries. At the same time, the group has resumed relations with key clients on Freedom Finance Global PLC, its broker in the Astana International Financial Centre in Kazakhstan. As a result, it maintained positive balance accounts at approximately 196,000 as of Dec. 31, 2022, compared with 225,000 as of March 31, 2022, which we see as an only modest decline. Overall, FRHC retained robust profitability, with a return on equity of over 30% for the nine months ended Dec. 31." On Feb. 27, 2023, Freedom Holding Corp. (FRHC) announced it sold its Russian operations to management following the Russian Central Bank's approval. FRHC will likely maintain adequate capital levels despite M&A activity. S&P said, "The announced acquisition of U.S.-based investment bank Maxim Group, which FRHC expects to finalize in second-half 2023 subject to regulatory approvals, will put pressure on capital levels, mostly because of sizable goodwill we expect the company to recognize upon acquisition. Nevertheless, we expect the group's pro forma risk-adjusted capital (RAC) ratio to bottom out at 7.0%-7.5%. We also expect FRHC to maintain exemplary profitability with core earnings exceeding 200 basis points of our risk-weighted assets by a wide margin." The faster-than-expected expansion of Bank Freedom Finance Kazakhstan's balance sheet puts pressure on its capital adequacy and stand-alone credit quality. S&P said, "As result of faster-than-anticipated credit growth and rapid buildup of the bond portfolio, largely funded through a repurchase agreement, we now expect this subsidiary's RAC ratio in the 4.75%-5.25% range, from 7.0%-7.5% previously. This is despite our expectations that credit growth could cool a bit in 2023-2024 owing to a lower origination of government-subsidized mortgages." S&P said, "Our ratings on Freedom Finance Insurance and Freedom Finance Life are unaffected by this rating action. We continue to rate both insurance subsidiaries above the 'b' group credit profile because we see them as inherently more creditworthy and somewhat insulated from the broader group. "The stable outlooks on FRHC, Freedom Finance JSC, Freedom Finance Global PLC, Freedom Finance Europe Ltd., and Bank Freedom Finance Kazakhstan reflect our expectation that, over the next 12-18 months, the group will retain its strong earnings capacity and at least adequate capital while navigating the acquisition of new subsidiaries. "We could lower the ratings on the operating subsidiaries and, although less likely, the holding company if we believe the group might fail to maintain at least adequate capital. This could be due to further acquisitions, a buildup of a large proprietary position in bonds or equities, or a faster-than-expected expansion of client operations on the group's balance sheet. A negative rating action could also follow if the process of transferring customers to domestic jurisdictions stops or reverses, or compliance risks rise. "In addition, we could downgrade an operating subsidiary if it became materially less important to the group strategy, or we were less confident that it would receive group support. "A positive rating action on the operating companies would arise only from us taking a more positive view of the group's creditworthiness. This could come if the group transfers its clients under the umbrella of Freedom Holding, maintains a RAC ratio comfortably above 7%, and integrates its planned U.S. acquisition, widening its geographic footprint and sources of revenue. A positive rating action on FRHC itself appears unlikely over our outlook horizon." ESG credit indicators (Bank Freedom Finance Kazakhstan): E-2, S-2, G-4 ============= R O M A N I A ============= MINTIA TPP: Mass Group to Invest Over EUR1 Billion in Business -------------------------------------------------------------- Razvan Timpescu at SeeNews reports that Iraq's Mass Group Holding intends to invest over EUR1 billion (US$1.06 billion) in transforming Romania's Mintia thermal power plant (TPP) into the largest natural gas-fired electricity production facility in the European Union, the Romanian government said. The first stage of the investment will last 24 months, while the entire project will be completed within 36 months, the government said in a press release issued after a meeting between prime minister Nicolae Ciuca and representatives of the Iraqi holding on March 6, SeeNews relates. Mass Group Holding bought the insolvent Mintia TPP at the end of last year for EUR91.2 million, SeeNews recounts. The power plant is located nine km from the city of Deva, in central western Romania. Established in 1995, Mass Group Holding is an Iraqi company registered in the Cayman Islands/UK with its head office in Amman, Jordan. The holding is focused on power generation and production of cement, iron and steel. It is present in Romania through Mass Global Energy Rom. VIVRE DECO: Enters Insolvency Due to Financial Difficulties ----------------------------------------------------------- Iulian Ernst at Romania-Insider.com reports that Vivre Deco, one of the online retailers of home & deco active in Central and Eastern Europe (CEE) until recently under pre-insolvency procedures due to financial difficulties, entered insolvency on March 6, at its own request. Vivre raised some EUR10 million with two bond issues listed at Bucharest Stock Exchange (BVB), Romania-Insider.com discloses. All partner banks were instructed not to operate payments from Vivre's accounts without an order from the syndic judge, Romania-Insider.com relays, citing Profit.ro. Calin Fusu, the president of the board of directors and majority shareholder through the Neogen investment fund, will continue to act as general manager but under the patronage of the consortium of insolvency practitioners Infinexa Restructuring SPRL and Continuum SPRL, according to Ziarul Financiar, Romania-Insider.com notes. On November 7, 2022, Vivre filed the Initial Recovery Plan, which provided for the payment of 4.2% of the money invested in the two bond issues by the 500 bondholders, Romania-Insider.com recounts. As a result of the debtor's negotiations with the creditors, the company modified the restructuring plan, proposing 15% back to the bondholders over four years, Romania-Insider.com states. =========================== U N I T E D K I N G D O M =========================== AV BROWNE: Enters Administration, Halts Operations -------------------------------------------------- John Campbell at BBC News reports that AV Browne, the Belfast-based advertising agency, has been placed into administration and has stopped trading. According to BBC, the administrators said the firm had faced a "challenging period" and had been impacted "by a number of external factors". It is still possible that a buyer could emerge for some or all of the business, BBC states The administrators, James Neill and John Donaldson from financial advisors HNH, said they were "currently conducting an appraisal of the business with a view to establishing its viability", BBC relates. They added: "This may involve a sale of the business and any parties with an interest should make contact immediately." The administrators said their immediate priority is to communicate with employees, creditors, customers and landlords, BBC notes. BRITISHVOLT: Administration Cost Ashtead GBP35 Million ------------------------------------------------------ Grant Prior at Construction Enquirer reports that plant hire giant Ashtead has confirmed a GBP35 million hit following the collapse of car battery firm Britishvolt. The equipment rental business -- which trades as Sunbelt and was formerly known as A-Plant in the UK -- was a major investor in Britishvolt which had plans to build a GBP300 million gigafactory in Northumberland before it went into administration in January, Construction Enquirer discloses. According to Construction Enquirer, in its latest results Ashtead said "During the period, the Group made one new investment, namely Britishvolt (US$42 million), a UK company involved in the development of electric vehicle battery technology. "In January 2023, Britishvolt entered administration following failure to secure additional funding and as a result, the Group has estimated the fair value of its investment as $nil." Other firms who invested in the failed business included NG Bailey, mining giant Glencore and Norwegian based Carbon Transition ASA, Construction Enquirer notes. Australian firm Recharge Industries has sealed the deal to buy car battery firm Britishvolt out of administration, Construction Enquirer relates. INEOS ENTERPRISES: S&P Affirms 'BB' ICR on Announced Acquisition ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB' long-term issuer credit and issue ratings on U.K.-headquartered chemicals producer Ineos Enterprises Holdings Ltd. and its dual tranche senior secured term loan B debt facilities due 2026. At the same time, S&P assigned its 'BB' issue rating with a recovery rating of '3' (65%) to the new euro and U.S. dollar senior secured term loans due 2030. The stable outlook reflects S&P's expectation that Ineos Enterprises' credit metrics will absorb the impact of the acquisition and that the company will maintain adjusted debt to EBITDA below 4.0x in fiscal year ending Dec. 31, 2023, on a pro forma basis. Ineos Enterprises' acquisition of MBCC's admixture assets from Sika AG will see ratings headroom exhausted in 2023, before it strengthens in 2024. Ineos Enterprises has agreed with Sika AG to acquire MBCC's admixture assets in North America and Europe and its operations in Australia and New Zealand for a cash consideration of EUR720 million. Pro forma the full-year contribution from the acquisition, S&P forecasts S&P Global Ratings-adjusted debt to EBITDA could increase to 3.7x-3.9x in 2023, which offers limited rating headroom, before strengthening to 3.0x-3.3x in 2024. Its forecast factors in the debt-funded nature of the transaction, which will be financed with a new EUR820 million-equivalent senior secured term loan. Part of the proceeds will be utilized for the repayment of the securitization facility, under which EUR70 million was drawn at 2022 year-end, thereby improving its liquidity. S&P said, "The forecast leverage is at the higher end of the 3.0x-4.0x threshold that we view as commensurate with the 'BB' rating. Therefore, there is limited cushion under leverage metrics to offset some of the volatility in earnings inherent in the industry. Everything else being equal, we estimate that if EBITDA declined by approximately EUR40 million in 2023, which corresponds to a 100-basis-point reduction in EBITDA margin relative to our expectations, adjusted debt to EBITDA would increase by about 0.4x to exceed 4.0x. We forecast that this ratio will improve to 3.0x–3.3x in 2024, thereby offering comfortable rating headroom. "We project credit metrics to recover to 3.0x-3.3x in 2024 as cost savings are realized and demand for key segments such as solvents and pigments gradually improves. Deleveraging is further supported by the company's ability to generate positive free operating cash flow (FOCF), thanks to the business' asset-light nature needing limited capital expenditure (capex). Importantly, the admixture business has a similar capital-light profile, with maintenance capex requirements at approximately 3% of sales. Therefore, we forecast that Ineos Enterprises will generate EUR175 million-EUR190 million FOCF in 2023 (on a pro forma basis), improving to EUR210 million-EUR230 million in 2024. "In our view, the acquisition of MBCC assets is consistent with Ineos Enterprises' strategy and will enhance its business.The management's acquisition criteria include investment in high quality assets at attractive valuation, which offer scope for cost reductions and allow the company to enter markets that display favorable fundamentals and rational demand and supply dynamics. The admixture business is a carve-out from MBCC Group (the former construction chemicals division of BASF Group) and a leader in the relatively concentrated admixtures market." The demand for its products benefits from favorable trends--notably sustainability, urbanization, infrastructure programs aiming to stimulate economies, and the reshoring of production, mainly in North America--which could underpin above-GDP growth. Specifically, admixture products can enhance the sustainability performance of Ineos Enterprises' clients and enable cost savings through solutions that reduce cement use and require less water and fewer raw materials, thereby leading to lower carbon dioxide emissions, while improving the performance of concrete by adding durability and strength. S&P said, "We think that the acquisition will strengthen Ineos Enterprises' product diversification, leading to a more balanced business mix. In our view, this diversity helps offset risks related to disruptions in the supply and demand of any single product or end market, thereby improving the quality of earnings. That said, we believe that there is a degree of correlation between certain segments such as pigments, admixtures, and composites for which construction is an important end-market. The acquired assets offer a complementary geographic exposure to Europe (44% of fiscal 2022 sales), North America (48%), and Australia and New Zealand (9%). The admixture business' global footprint is supported by 35 production sites and over 80 warehouses and distribution centers in 36 countries, ensuring proximity to customers and reliability and speed of supply, which is a source of competitive advantage and underpins long-standing customer relationships. Ineos Enterprises' management has considerable experience in the integration of acquisitions and realization of cost savings. This was demonstrated by the seamless assimilation of the acquisitions completed in 2018 and 2019, namely the acquisitions of Ashland Global Holdings Inc.'s composites business, Flint Hills Resources' chemical intermediates business, and the Ashtabula titanium dioxide complex from Tronox. As part of these transactions, the company delivered cost savings of about EUR90 million in early 2021, ahead of the original plan of EUR60 million by 2022. The realization of the identified cost-saving opportunities could lead to meaningful EBITDA margin expansion. While the acquisition is initially margin-dilutive for Ineos Enterprises, management anticipates cost savings of about EUR60 million will be fully realized by 2026, at a cost of about EUR40 million over the next three years. This should include savings from the implementation of Ineos Enterprises' disciplined fixed-cost framework, in-sourcing of support functions, and economies of scale in procurement, among others. S&P said, "Specifically, we anticipate that a successful realization of synergies, on time and on budget, will close the margin gap between the admixture business and peers such as Compagnie de Saint-Gobain and Sika. We estimate that in 2022, the EBITDA margin for the admixture business (including management's estimate of stand-alone costs) was about 9%, compared with the adjusted EBITDA margins for Sika and Compagnie de Saint-Gobain at about 17% and 14%, respectively. We forecast that the admixture business will achieve EBITDA margins of 14% or better by 2025, as cost savings are realized." S&P said, "We understand that the new business will be managed in line with Ineos Enterprises' federal structure, limiting integration risks. Still, given the size of the new business, there will be execution risks related to the realization of cost savings and the alignment of corporate cultures, which will require significant management resources and attention. Importantly, innovation capabilities are critical to meet evolving customer needs and stay ahead of the competition. Therefore, we expect management to balance its cost-saving plans with the need to maintain strong research and development (R&D) capabilities. "The stable outlook reflects our view that Ineos Enterprises' credit metrics will absorb the impact of the acquisition of MBCC's admixture assets in North America, Europe, Australia, and New Zealand. In our base-case scenario, we anticipate that adjusted debt to EBITDA will increase to 3.7x-3.9x in 2023, which is within the 3.0x-4.0x adjusted leverage range we consider commensurate with the 'bb' stand-alone credit profile (SACP). We forecast leverage to reduce to 3.0x-3.3x in 2024, owing to Ineos Enterprises' strong cash generation, with weighted-average FOCF to debt remaining within the rating-commensurate 10%-15% range. The outlook also factors in our expectation that the company will manage its growth plans, financial policies, and dividends to maintain adjusted leverage below 4.0x throughout the cycle. "We could lower the rating if our view of the credit quality of the wider Ineos group worsens. We could also lower the rating if a less-than-supportive market environment hampers demand and prices for the company's products, or if pressure from energy and raw materials results in margin dilution and lower-than-anticipated FOCF, leading to adjusted debt to EBITDA of more than 4.0x and FOCF to debt of below 10% without clear prospects of recovery. Furthermore, rating pressure could arise if Ineos Enterprises pursues material debt-financed acquisitions or aggressive distributions to shareholders. "Upside rating potential for Ineos Enterprises is constrained by our view of the credit quality of the wider Ineos group. However, we could revise the SACP assessment on Ineos Enterprises if its adjusted debt-to-EBITDA ratio improves sustainably to below 3.0x and FOCF to debt remains at about 15%-25%. "In addition, we could consider a stronger business risk assessment if the company realized cost savings in line with its plan, absorbing the initially margin-dilutive impact of the transaction and leading to a sustainable adjusted EBITDA margin of about 16%." An upgrade would also hinge on a supportive financial policy and strong commitment from management to maintaining credit metrics commensurate with a higher rating throughout the cycle. ESG credit indicators: E-3, S-2, G-3 LONDON WALL 2021-01: Moody's Ups Rating on Class X Notes From Ba1 ----------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of one note in Molineux RMBS 2016-1 plc, one note in Atlas Funding 2021-1 PLC and four notes in London Wall Mortgage Capital plc: Series Fleet 2021-01. The rating action reflects better than expected collateral performance as well as increased levels of credit enhancement for the affected notes. Moody's affirmed the ratings of the notes that had sufficient credit enhancement to maintain their current ratings. Issuer: Atlas Funding 2021-1 PLC GBP250.4M Class A Notes, Affirmed Aaa (sf); previously on Feb 1, 2021 Definitive Rating Assigned Aaa (sf) GBP20.9M Class B Notes, Affirmed Aa1 (sf); previously on Feb 1, 2021 Definitive Rating Assigned Aa1 (sf) GBP11.2M Class C Notes, Upgraded to Aa2 (sf); previously on Feb 1, 2021 Definitive Rating Assigned Aa3 (sf) GBP7.5M Class D Notes, Affirmed A2 (sf); previously on Feb 1, 2021 Definitive Rating Assigned A2 (sf) GBP4.5M Class E Notes, Affirmed Baa3 (sf); previously on Feb 1, 2021 Definitive Rating Assigned Baa3 (sf) Issuer: London Wall Mortgage Capital plc: Series Fleet 2021-01 GBP276.7M Class A Notes, Affirmed Aaa (sf); previously on May 17, 2021 Definitive Rating Assigned Aaa (sf) GBP15.5M Class B Notes, Upgraded to Aaa (sf); previously on May 17, 2021 Definitive Rating Assigned Aa1 (sf) GBP4.6M Class C Notes, Affirmed Aa1 (sf); previously on May 17, 2021 Definitive Rating Assigned Aa1 (sf) GBP20.1M Class X Notes, Upgraded to Baa3 (sf); previously on May 17, 2021 Assigned Ba1 (sf) GBP6.2M Class Z1 Notes, Upgraded to Aa2 (sf); previously on May 17, 2021 Definitive Rating Assigned Aa3 (sf) GBP6.2M Class Z2 Notes, Upgraded to Aa3 (sf); previously on May 17, 2021 Definitive Rating Assigned A1 (sf) Issuer: Molineux RMBS 2016-1 plc GBP1209.6M Class A2 Notes, Affirmed Aaa (sf); previously on Mar 24, 2022 Affirmed Aaa (sf) GBP127.6M Class B Notes, Affirmed Aaa (sf); previously on Mar 24, 2022 Affirmed Aaa (sf) GBP87M Class C Notes, Affirmed Aaa (sf); previously on Mar 24, 2022 Upgraded to Aaa (sf) GBP75.4M Class D Notes, Upgraded to Aaa (sf); previously on Mar 24, 2022 Upgraded to Aa1 (sf) RATINGS RATIONALE The rating action is prompted by decreased key collateral assumptions, namely the portfolio Expected Loss (EL) assumption due to better than expected collateral performance and an increase in credit enhancement for the affected tranches. Revision of Key Collateral Assumptions: As part of the rating action, Moody's reassessed its lifetime loss expectation for the portfolio reflecting the collateral performance to date. The performance of the transactions has been better than expected since the last rating actions with 90 days plus arrears currently standing at 0.39% of current pool balance for Molineux RMBS 2016-1 plc and 0% for Atlas Funding 2021-1 PLC and London Wall Mortgage Capital plc: Series Fleet 2021-01. Cumulative losses currently stand at 0% of original pool balance for all three transactions. Moody's decreased the expected loss assumption to 1.1% as a percentage of current pool balance from 1.37% for Molineux RMBS 2016-1 plc, to 3% from 3.62% for Atlas Funding 2021-1 PLC and to 1.25% from 1.56% for London Wall Mortgage Capital plc: Series Fleet 2021-01 due to the better than expected collateral performance. The revised expected loss assumption corresponds to 0.27%, 2.49% and 1% for Molineux RMBS 2016-1 plc, Atlas Funding 2021-1 PLC, and London Wall Mortgage Capital plc: Series Fleet 2021-01 respectively as a percentage of original pool balance. Moody's has also assessed loan-by-loan information as a part of its detailed transaction review to determine the credit support consistent with target rating levels and the volatility of future losses. As a result, Moody's has maintained the MILAN CE assumption at 10% for Molineux RMBS 2016-1 plc, at 18% for Atlas Funding 2021-1 PLC and at 12% for London Wall Mortgage Capital plc: Series Fleet 2021-01. Increase in Available Credit Enhancement Sequential amortization and the non-amortizing reserve funds led to the increase in the credit enhancement available in the transactions. For Molineux RMBS 2016-1 plc, the credit enhancement for the Class D affected by the rating action increased to 16.9% from 15.4% since the last rating action. For Atlas Funding 2021-1 PLC, the credit enhancement for the Class C affected by the rating action increased to 9.59% from 7.96% since closing. For London Wall Mortgage Capital plc: Series Fleet 2021-01, the credit enhancement for the Classes B, Z1 and Z2 affected by the rating action increased to 8.09%, 3.74% and 1.25% from 6.5%, 3% and 1% since closing respectively. The principal methodology used in these ratings was "Moody's Approach to Rating RMBS Using the MILAN Framework" published in July 2022. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expected, (2) an increase in available credit enhancement and (3) improvements in the credit quality of the transaction counterparties. Factors or circumstances that could lead to a downgrade of the ratings include (1) an increase in sovereign risk, (2) performance of the underlying collateral that is worse than Moody's expected, (3) deterioration in the notes' available credit enhancement and (4) deterioration in the credit quality of the transaction counterparties. MONKS & CRANE: Goes Into Administration, Operations Continue ------------------------------------------------------------ William Telford at PlymouthLive reports that Monks & Crane Industrial Group Ltd which has a key base in Plymouth and deals with Princess Yachts has collapsed into administration. The industrial supplies company is headquartered in the Midlands but has several large regional bases including at Plympton. The company, which can trace its history back to 1862, supplies maintenance products, hand and power tools, safety equipment and protective clothing to sectors including aerospace, oil and gas, and marine. Plymouth's is one of 13 regional bases and in total the company has more than 200 employees. It called in administrators from London-based RSM UK Restructuring Advisory LLP at the end of February but all its outlets, including in Plymouth, are continuing to trade while in administration, PlymouthLive relates. PlymouthLive has approached the administrators for comment. Monks & Crane's accounts should have been filed at Companies House by the end of 2022 but are overdue, PlymouthLive notes. The most recent published records, for the year to the end of 2020, revealed it has been badly hit by the Covid pandemic and had taken out a GBP750,000 Coronavirus Business Interruption Loan Scheme (CBILS) loan, PlymouthLive relays. Turnover dropped from GBP48 million in 2019 to GBP39 million in 2020 and the company reported an operating loss of GBP3 million, PlymouthLive discloses. SKYLAB: Expected to Owe HMRC GBP651,746.69 ------------------------------------------ Chris Newbould at Prolific North reports that the administrator of sports data company Skylab has written to the secretary of state for business voicing concerns that directors "may be unfit to be involved with managing the affairs of a company in the future." Marco Piacquadio of FTS Recovery, which is handling the administration of digital agency Skylab, confirmed the report to the secretary of state has been made in a filing to Companies House, although the details of the report remain confidential, Prolific North relates. Skylab entered administration in August 2022 after being acquired by Inc & Co in a distressed sale in May 2020, Prolific North recounts. According to Prolific North, the filing adds that Skylab, which went into administration in August 2022, is expected to owe HMRC GBP651,746.69 in deductions from employees' wages and outstanding VAT, and is consequently "unlikely" to make any payments to secondary creditors. Skylab previously counted Manchester Utd, Manchester City, Formula 1 teams, Henley Regatta and the International Olympics Committee among its clients, Prolific North notes. VALE OF MOWBRAY: Former Site, Machinery Sold After Collapse ----------------------------------------------------------- Tom Keighley at BusinessLive reports that the former site and machinery of historic pie maker Vale of Mowbray has been sold to two businesses, five months after firm collapsed with the loss of 200 jobs. Administrators of the closed food firm, which had operated since 1928, said Dutch warehousing and cold chain logistics firm NewCold had purchased the Leeming Bar site where 200 people had worked before it went into administration last October, BusinessLive relates. Meanwhile rival Compleat Foods, the makers of Classic Pork Pies and Melton Mowbray Pies, has bought the plant and machinery, some of which had been part of a GBP4 million investment made as recently as 2021, to start production of scotch eggs, BusinessLive discloses. The GBP24 million turnover North Yorkshire business had supplied large retailers and some local independents until it ran into difficulties in the face of rising raw materials and energy costs, as well as problems recruiting caused by Brexit's curtailing of available labour from EU countries, BusinessLive recounts. According to BusinessLive, administrators at FRP said there had been attempts to attract new investment, and there had been an offer made for the business which included new funding to support a turnaround but that was later withdrawn. Loss making Vale of Mowbray had owed some GBP11.9 million at the point administrators prepared a report on the business in November, BusinessLive states. The most recent accounts available show the firm suffered an operating loss of GBP1.16 million in 2020, but generated an operating profit of GBP77,315 in 2021, BusinessLive relays. Turnover had increased to GBP24.2 million in 2021 from GBP23.1 million, BusinessLive notes. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. 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