/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/240104.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, January 4, 2024, Vol. 25, No. 4 Headlines G E R M A N Y GIGASET AG: Muenster Court Opens Insolvency Proceedings SIGNA GROUP: Schoenhauser Alle Berline Site Among Assets Held N E T H E R L A N D S EBN FINANCE: Fitch Keeps 'B-' Sr. Unsec. Debt Rating on Watch Neg. U N I T E D K I N G D O M ALPHA NURSERIES: Enters Liquidation, Halts Operations CUBE MANAGEMENT: Administrators Prepare for Asset Sale FARFETCH LIMITED: Fitch Lowers LongTerm IDR to 'CC' FLAMINGO GROUP: Fitch Assigns 'B-' First-Time IDR, Outlook Stable FLAMINGO GROUP: Moody's Affirms Caa1 CFR, Alters Outlook to Stable LENDY: Administrator Racks Up More Than GBP6.2 Million in Fees MCLAREN HOLDINGS: Fitch Puts 'B-' LT IDR on Rating Watch Evolving WESTMINSTER WORK: Bought Out of Administration by Torsion Group - - - - - ============= G E R M A N Y ============= GIGASET AG: Muenster Court Opens Insolvency Proceedings ------------------------------------------------------- dpa-AFX reports that the Local Court of Muenster has opened regular insolvency proceedings for the assets of Gigaset AG. The communications technology provider published a corresponding announcement on its website on Jan. 2, dpa-AFX notes. Markus Wischemeyer was appointed insolvency administrator, dpa-AFX discloses. Gigaset AG had filed for insolvency in September and is insolvent according to its own statements, dpa-AFX recounts. The main reason for this was an unexpected and significant decline in revenue in the second half of 2023 and a business performance that was significantly below plan, dpa-AFX states. In addition, demand for Gigaset products remains weak and is worsening, as well as a reluctance to buy in Germany and Europe, dpa-AFX notes. An application for the opening of insolvency proceedings under self-administration had been filed for Gigaset Communications GmbH, dpa-AFX relates. According to the company, development, production and sales activities for DECT cordless phones were continued and unchanged. According to Gigaset, the search for investors has been underway since the end of October, dpa-AFX relays. The aim is to restructure the company's operations on a sustainable basis, dpa-AFX says. SIGNA GROUP: Schoenhauser Alle Berline Site Among Assets Held ------------------------------------------------------------- Laura Malsch and Libby Cherry at Bloomberg News report that a 16th-century building in Munich, a luxury Berlin office development and the headquarters of department store Galeria Karstadt Kaufhof are among assets held by Signa property companies forced into insolvency in the last week. Torsten Martini, an insolvency administrator at law firm Goerg, is in talks with creditor banks of a Berlin site at Schoenhauser Allee 9 to see if construction may be able to resume, Bloomberg relays, citing a spokesperson. Mr. Martini, who has been appointed to handle Signa units that have filed in Germany, is still getting his "first overview" of the other sites, Bloomberg notes. The filings show how even Signa's flagship assets are vulnerable to the threat of insolvency, Bloomberg states. According to Bloomberg, each of Signa's property companies, based in countries including Germany, Italy and the UK, are at different stages of development, with diverse liquidity needs and creditors. The insolvent companies hold assets including a property in Essen, which has tenants such as Galeria, and the partially-completed renovation of Hamburg's Flueggerhoefe, purchased by Signa in 2019, according to filings, Bloomberg notes. Signa Prime Selection and Signa Development Selection, which own the bulk of Signa's real estate assets, filed for insolvency procedures in Austria last week, Bloomberg recounts. The units' plan is to stabilize the projects they control, with the aim of avoiding a fire sale that could further jeopardize promised returns to creditors, according to insolvency filings seen by Bloomberg. The units have said they would give creditors 30% of what they are owed, the legal minimum under Austrian insolvency rules for this form of debt restructuring, payable within two years after the restructuring plan has been agreed, according to Bloomberg. The insolvency procedures relating to the German projects in some cases follow months of paused construction as Signa attempted to conserve cash in the face of difficulty refinancing maturing debt and a surge in the cost of materials and labor, Bloomberg recounts. The site at Schoenhauser Allee has seen construction halted since November, Bloomberg notes. ===================== N E T H E R L A N D S ===================== EBN FINANCE: Fitch Keeps 'B-' Sr. Unsec. Debt Rating on Watch Neg. ------------------------------------------------------------------ Fitch Ratings has maintained Ecobank Nigeria Limited's (ENG) Issuer Default Ratings (IDRs), Viability Rating (VR) and National Ratings on Rating Watch Negative (RWN). Fitch has simultaneously affirmed ENG's Shareholder Support Rating (SSR) at 'ccc+' and removed it from RWN. The RWN continues to reflect Fitch's view that, while maintaining compliance with a 10% minimum regulatory requirement for total capital adequacy ratio (CAR; 12.0% at end-3Q23) following the devaluation of the naira in June, the risk of a breach remains. This considers that buffers over this requirement remain thin in view of the risk of a further material naira devaluation. The RWN also reflects risks to ENG's business profile and foreign-currency (FC) liquidity that may stem from a breach, including the accelerated repayment of its USD300 million Eurobond. The RWN no longer reflects the appealed High Court judgment in July that ENG should pay large damages (NGN72.2 billion; 24% of total equity at end-3Q23) to one of its customers. This considers the view that the appeal is likely to take several years to determine and is therefore unlikely to be a near-term risk to capital. The affirmation of ENG's SSR at 'ccc+' and its removal from RWN follow the similar action on its Togo-based parent (see: Fitch Affirms Ecobank Transnational Incorporated at 'B-'; Off Rating Watch Negative). KEY RATING DRIVERS ENG's IDRs are driven by its standalone creditworthiness, as expressed by its 'b-' VR. The VR reflects the concentration of ENG's operations in Nigeria's challenging operating environment, high credit concentrations and exposure to market and legal risks, asset-quality issues, weak profitability and modest capitalisation. ENG's National Ratings reflect the bank's creditworthiness relative to that of other issuers in Nigeria and are among the lowest of all Nigerian banks under Fitch's coverage, primarily reflecting its weak earnings and modest capitalisation. Fast Pace of Reforms: The recently elected President Bola Tinubu has pursued key reforms faster than Fitch expected, completely removing fuel subsidy and allowing the Nigerian naira to devalue within weeks of his inauguration. These reforms overall are positive for the sovereign's credit profile but pose near-term challenges including adding to inflationary pressures and the risk of social unrest. The sharp depreciation of the naira will exert negative pressure on banks' capital ratios. Subsidiary of Pan-African Group: ENG has moderate market shares of domestic banking-system assets. However, its franchise benefits from being a subsidiary of Ecobank Transnational Incorporated (ETI; B-/Stable), a large pan-African banking group with operations spanning 33 countries across sub-Saharan Africa (SSA). High Sovereign Exposure: Single-borrower credit concentration is very high, with the 20 largest loans representing 64% of gross loans and 271% of Fitch core capital (FCC) at end-2022. Oil and gas exposure (end-2022: 38% of gross loans) and FC lending (end-3Q23: 65% of net loans) are among the highest in Nigeria's banking system. Sovereign exposure via securities and Central Bank of Nigeria (CBN) cash reserves is high relative to FCC (end-2022: over 425%). High Stage 2 Loans: ENG's impaired loans (Stage 3 loans under IFRS 9) ratio increased to 9% at end-3Q23 (end-2022: 6%), on the back of the naira depreciation. Specific loan loss allowance coverage of impaired loans was 31% at end-3Q23 (end-2022: 35%). Stage 2 loans at 30% of gross loans at end-3Q23 (concentrated within the oil and gas sector and largely US dollar-denominated) remain high, and a key risk to further asset-quality deterioration. Fitch expects the impaired loans ratio to increase in the near-term. Weak Core Profitability: ENG's operating profit improved to 0.8% of risk-weighted assets (RWAs) in 9M23 (2022: 0.4%), supported by a large one-off gain (about USD20 million) relating to loans sold to Asset Management Corporation of Nigeria. However, ENG has notably weaker core profitability than other commercial banks due to a particularly narrow net interest margin and high loan-impairment charges that have accompanied asset-quality issues in recent years. Fitch expects profitability to remain weaker than peers' in the near term. Thin Regulatory Capital Buffers: ENG's CAR had a thin buffer (200bp) over its minimum requirement of 10% at end-3Q23 in view of its high loan book dollarisation and the risk of a further material devaluation of the naira, with the parallel market rate currently at about 1,200 per US dollar (the official exchange rate was 770 per US dollar at end-3Q23). The recent judgement by the High Court represents a long-term risk to capital if upheld, as the damages under the claim accounted for 24% of total equity at end-3Q23. Potential FC Debt Acceleration: Deposit concentration is fairly high, with the 20 largest deposits representing 21% of customer deposits at end-2022. ENG has modest holdings of FC liquid assets relative to peers but benefits from ordinary FC liquidity support from the group. If not addressed in a timely manner, a CAR breach would trigger acceleration of payments on ENG's outstanding USD300 million Eurobonds and significantly put pressure on the bank's FC liquidity. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of Nigeria could result in a downgrade of ENG's IDRs and VRs if Fitch believes that the direct and indirect effects of a sovereign default would likely erode capitalisation and FC liquidity insofar as to undermine its viability. Absent a sovereign downgrade, ENG's VR and IDRs could be downgraded (and potentially removed from RWN) if ENG breaches its minimum CAR requirement without near-term prospects for recovery. This may result from the combination of the naira devaluation and a marked increase in the impaired loans ratio. The VR and IDRs could also be downgraded if ENG is required to pay sizeable damages in respect of the High Court judgment that materially weaken its solvency or negatively affects its standalone creditworthiness. A downgrade of ENG's National Ratings would result from a weakening in its creditworthiness relative to other Nigerian issuers'. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade ENG's VR and IDRs would be affirmed (and removed from RWN) if Fitch determines that the bank will remain compliant with its minimum CAR requirement, with sufficient buffers to accommodate asset-quality risks. An upgrade of ENG's National Ratings would result from a strengthening of its creditworthiness relative to other Nigerian issuers' OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Senior unsecured debt issued through EBN Finance Company B.V. is rated at the same level as ENG's Long-Term IDR, reflecting Fitch's view that the likelihood of default on these obligations is the same as that of the bank. The Recovery Rating of these notes is 'RR4', indicating average recovery prospects in the event of default. The RWN on EBN Finance's senior unsecured debt reflects that on ENG's Long-Term IDR. The SSR of 'ccc+ captures ETI's high propensity to provide support to ENG but also its constrained ability to do so due to ENG's large size. Fitch sees a high propensity to provide support given ENG's importance to the parent's pan-African strategy as its largest subsidiary (end-3Q23: 19% of consolidated group assets) and also because it operates in SSA's largest economy. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES ENG's senior unsecured debt ratings are sensitive to changes in its Long-Term IDRs. A change in ETI's ability or propensity to provide support would lead to a change of the SSR. A change in ETI's ability to provide support would most likely be indicated by a change in its Long-Term IDR. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- EBN Finance Company B.V. senior unsecured LT B- Rating Watch Maintained RR4 B- Ecobank Nigeria Limited LT IDR B- Rating Watch Maintained B- ST IDR B Rating Watch Maintained B Natl LT BBB(nga)Rating Watch Maintained BBB(nga) Natl ST F2(nga) Rating Watch Maintained F2(nga) Viability b- Rating Watch Maintained b- Shareholder Support ccc+ Affirmed ccc+ =========================== U N I T E D K I N G D O M =========================== ALPHA NURSERIES: Enters Liquidation, Halts Operations ----------------------------------------------------- Duncan Browne at LincsOnline reports that a company that runs nurseries in Lincolnshire has closed suddenly, leaving parents scrambling to find childcare places and staff without jobs. According to LincsOnline, Alpha Nurseries -- which operates in Boston, Grantham and Kirton -- told parents it has gone into liquidation. ABC Day Nursery (Boston), Newton House Day Nursery (Grantham) and Middlecott House (Kirton) are three of 30 nursery and after-school care services run by the company across seven counties. "It is with great sadness that we are writing to inform you that the directors of Alpha Nurseries Ltd (and all subsidiary companies) have regretfully had to make the decision to cease trading with effect from December 29, 2023, due to its financial position" an email shown to LincsOnline by one parent read. CUBE MANAGEMENT: Administrators Prepare for Asset Sale ------------------------------------------------------ Business Sale reports that administrators are preparing for an asset sale following the collapse of a pair of companies that provided infrastructure for sports industry events. Cube Management (UK) Ltd and Cube Modular Ltd, part of the Cube International Group, had suffered from cash flow difficulties as a result of delays to global sporting events following the COVID-19 pandemic, Business Sale relates. Joph Young and Conrad Beighton of Leonard Curtis were appointed as joint administrators to the companies, which are based in Worcester, on Thursday, December 21, 2023, Business Sale discloses. According to Business Sale, Leonard Curtis had been engaged to initiate a structured sale process in an effort to identify any parties interested in acquiring the group or its business and assets. However, this could not be achieved and all staff at the firm were made redundant prior to the appointment of the joint administrators, Business Sale notes. The administrators will now begin a sale process for the company's assets, Business Sale states. According to Business Sale, a statement read: "While considerable interest was generated, unfortunately a sale has not been possible. The administrators are now focused on the realisation of assets following their appointment." The companies provided bespoke modular infrastructure for a range of events in the sports industry. This included ticket offices, temporary accommodation and office spaces, fan zones and pop-up retail stores. FARFETCH LIMITED: Fitch Lowers LongTerm IDR to 'CC' --------------------------------------------------- Fitch Ratings has downgraded Farfetch Limited's Long-Term Issuer Default Rating (IDR) to 'CC' from 'B-' and senior secured term loan (TLB) rating to 'CCC-' from 'BB-' and removed them from Rating Watch Negative (RWN). The Recovery Rating on the TLB has been revised to 'RR3' from 'RR1'. The downgrade reflects a significant deterioration in Farfetch's liquidity position as Fitch believes the company is de-facto insolvent and can avoid liquidity crisis only with third-party support. Should the intended acquisition structured through an English-law pre-pack administration fail to close by end-April 2024, Fitch would see a TLB default as inevitable. Fitch would consider downgrading the rating to 'D' once Farfetch's subsidiary Farfetch Holding plc enters into administration and restructure its liabilities, which would result in zero recovery for its convertible notes holders. Fitch would subsequently re-rate the company once administration is completed. KEY RATING DRIVERS Going-Concern Risk: Farfetch's ability to operate as a going concern (GC) is reliant on it being acquired by Coupang Inc. through an English-law pre-pack administration process and the timing of acquisition. Fitch believes that acquisition by a strategic investor is the only way for Farfetch to avoid a liquidity crisis and insolvency. Should the acquisition fail to close by end-April 2024, Fitch would view a TLB default and a restructuring of its capital structure as inevitable. Acquisition Through Pre-Pack Administration: Farfetch's business is expected to be sold to South-Korean ecommerce group Coupang through a pre-pack administration process should no competing transaction be signed. The presence of a strategic investor is positive for Farfetch's credit profile but Fitch believes Coupang lacks expertise in the luxury sector and Farfetch's main markets. The acquisition is subject to regulatory approval and the absence of competing buyers for the company's assets but Fitch believes such risks are limited. New Funds to Shore up Liquidity: Farfetch received a USD500 million bridge loan provided by an entity owned by Coupang and funds managed and/or advised by Greenoaks Capital Partners LLC to shore up its liquidity. Fitch believes its liquidity buffer, which Fitch estimates at USD634 million at end-June 2023 (pro-forma for net proceeds from an TLB add-on), was substantially eroded by negative free cash flow (FCF). In its view, the company would not be able to continue operations and debt service if this funding was not provided. Business Plan to be Devised: After withdrawing its guidance in November 2023, Farfetch has not shared any updated business plan and Fitch assumes this could be done only after the completion of the administration process. Fitch believes that under the current business set-up, Farfetch will continue to make losses and burn cash and a turnaround strategy is necessary to build a path to profitability. Uncertain Parent-Subsidiary Linkage: Fitch sees uncertainty around Farfetch's legal, strategic and operational ties with Coupang after its business is acquired. Fitch would assess incentives for Coupang to support its new subsidiary once Fitch has the relevant information. Tight links, including the provision of guarantees for Farfetch's debt, fully integrated management and treasury functions, may lead to an equalisation of credit profiles. Conversely, Fitch may considers rating Farfetch on a standalone basis if it is ring-fenced from the rest of the group and has limited strategic and operational importance for Coupang. ESG - Management Strategy: The rating is negatively affected by its assessment of Farfetch's management strategy. Fitch views the strategy as ineffective and poorly executed, which has undermined the issuer's capacity to remain a GC. ESG - Financial Transparency: The rating is negatively affected by its assessment of Farfetch's quality and timing of financial disclosure due to missed quarterly reporting not allowing investors to assess on a timely basis the company's financial position and the subsequent announcement of its imminent administration. DERIVATION SUMMARY Farfetch is the leading global platform for the luxury fashion industry and shares some traits with consumer goods and non-food retail companies as it sells products online and through directly operated retail stores. Fitch does not rate direct competitors of Farfetch. However, Fitch has considered companies such as Golden Goose S.p.A. (B+/Stable) and Birkenstock Financing S.a.r.l (BB/Stable) in the luxury shoes/sneakers space (versus Farfetch's Stadium Goods), Levi Strauss & Co. (BB+/Stable) and Capri Holdings Limited (BBB-/RWN) in the branded apparel space (versus Farfetch's New Guards, Browns) and Amazon.com, Inc (AA-/Stable) in the e-commerce space (versus Farfetch Marketplace) for its analysis. All these are more mature businesses with proven EBITDA and cash flow generation. KEY ASSUMPTIONS Fitch will update its key assumptions after the completion of the administration process. RECOVERY ANALYSIS The recovery analysis continues to assume that Farfetch would be reorganised as a GC in bankruptcy rather than liquidated. Fitch continues to estimate Farfetch's GC enterprise value at USD720 million, which is conservative relative to Farfetch's valuation in its deal with Coupang. Farfetch's USD600 million TLB, issued by Farfetch US Holdings, Inc. ranks equally with the USD500 million bridge loan provided by the entity owned by Coupang and funds managed and/or advised by Greenoaks Capital Partners LLC. After deducting 10% for administrative claims, its principal waterfall analysis generates a ranked recovery for the senior secured debt in the 'RR3' category, leading to a 'CCC-' rating for the TLB, one notch above the IDR. The waterfall analysis output percentage based on metrics and assumptions is 59%. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - No positive rating action is anticipated as Farfetch will be sold through pre-pack administration process. Factors that Could, Individually or Collectively, Lead to Downgrade Fitch would downgrade ratings to 'D' once Farfetch Holding plc enters into administration and would re-assess all ratings once the administration is completed LIQUIDITY AND DEBT STRUCTURE Liquidity Reliant on Strategic Investor: The provision of the USD500 million bridge loan is critical for maintaining Farfetch as a GC and avoiding a liquidity crisis before the acquisition is completed. Fitch believes that medium-term liquidity would also rely on support from Coupang, while Farfetch's path to profitability and internal cash flow generation is uncertain and subject to a turnaround plan. ISSUER PROFILE Farfetch is the global leading marketplace for personal luxury fashion, including clothes and accessories, with an annual gross merchandise value of USD4.1 billion in 2022. ESG CONSIDERATIONS Farfetch has an ESG Relevance Score of '5' for 'Management Strategy' due to the ineffective and poorly executed corporate strategy, which has resulted in risks to the company's capacity in remaining as a GC. This has a negative impact on the credit profile, is highly relevant to the rating, and has resulted in the downgrade to 'CC'. Farfetch has an ESG Relevance score of '5' for 'Financial Transparency' due to missed quarterly reporting not allowing investors to assess on a timely basis the company's financial position and the subsequent announcement of its imminent administration This has a negative impact on the credit profile, is highly relevant to the rating, and has resulted in the downgrade to 'CC'. Farfetch has an ESG Relevance Score of '4' for 'Governance Structure' due to key-man risk associated with the founder's close involvement in the company's operations and strategy, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Farfetch Limited LT IDR CC Downgrade B- Farfetch US Holdings, Inc. senior secured LT CCC- Downgrade RR3 BB- FLAMINGO GROUP: Fitch Assigns 'B-' First-Time IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has assigned Flamingo Group International Limited (Flamingo) a first-time Long-Term Issuer Default Rating (IDR) of 'B-'. The Outlook is Stable. Fitch has also assigned a senior secured debt rating of 'B' with a Recovery Rating 'RR3' to the company's EUR237 million term loan B (TLB) and EUR15 million revolving credit facility (RCF). The 'B-' rating reflects Flamingo's modest EBITDA in a highly fragmented agriculture-like floriculture market with a concentrated customer base and limited expected free cash flow (FCF) generation for 2023-2027. This is balanced by its low-cost production location and cost-optimisation measures supporting a durable profitability recovery amid expected consistent market growth post Covid-related demand volatility. The Stable Outlook reflects its expectation of gradual EBITDA expansion that will help turn FCF positive, albeit mildly, after 2024, which will be sufficient for business needs, and of leverage being sustained at or below 4.0x in the medium term. KEY RATING DRIVERS High Inherent Business Risks: The rating reflects high inherent business risks of operating in the agriculture market. Fitch therefore assesses Flamingo's debt capacity as being fundamentally lower than the broader consumer products sector's. Flamingo's operating risk profile shares the characteristics of a crop breeder with long product cycles subject to varying crop productivity and climate event risk. It also has consumer product characteristics such as volume volatility driven by customer demand and changing preferences, and to a much lesser extent, price fluctuations. Complex Supply Chain: Fitch sees the complexity of the supply chain for cut flowers as a higher-risk operating factor. This is because Flamingo fulfils different functions along the value chain and is exposed to multiple third-party risks with producers, breeders, wholesalers and retailers. Meaningful Execution Risk: Fitch sees meaningful execution risk with Flamingo's strategy to regain sustainable profitability. While Fitch believes operational improvement through recouping cost inflation is achievable, with some turnaround actions already taken during 2023, Fitch sees more challenges with increasing the share of own grown products, especially in the highly competitive UK flower market. Intense competition is underlined by the recent loss of flower contracts, although these were partly mitigated by retention of non-flower contracts with the same account and an increased share of business with another longstanding key account. Fitch also sees inherent sector-specific uncertainty on yield output and cost control, which could lead to larger waste or production shortfalls, in turn affecting earnings and margins. UK Grocers Concentration: Flamingo's highly concentrated customer base has resulted in limited bargaining power for the company, especially in its core market, the UK. The UK represents above 70% of the company's revenues for flowers, plants and premium packed vegetable offering, with supermarkets accounting for most of its client base. While strong partnership and market share with major UK retailers have helped Flamingo drive volumes and gain support for their innovation, thin margins from supplying third-party products significantly weigh on its profitability. Third-party products make up about 65% of Flamingo's total volumes sold in the UK. Vertical Integration Supports Profitability: Most of Flamingo's EBITDA is derived from the sales of their own grown products. Its asset location, with lower-cost rose production and sizeable market share of the east African flower supply support the stronger margins of Flamingo's own-grown flowers and produce. Fitch therefore sees Flamingo's strategy to further increase its vertical integration as credit positive by supporting profitability improvement in the medium term. In addition, supplementary packed-at-source and transportation solutions such as sea freight also contribute to added value, enhancing profitability. Limited but Sufficient Liquidity: Flamingo's liquidity headroom is limited but sufficient for its business needs. The tight liquidity headroom is due to high business seasonality, expected mildly negative FCF generation in the next 18 month and the small RCF of EUR15 million from end-February 2024 following an amend-and-extend (A&E) transaction, which Fitch projects will remain partially drawn in 2024. However, the company's recent supply chain finance agreement with some customers is an additional source of liquidity given the importance of trading volumes with these accounts, and alleviating seasonal pressure on Flamingo's intra-year working-capital requirements. However, usage of this additional liquidity source depends on continued volumes with these specific customers and drawdowns can be limited, depending on invoice timing. Prospect of Positive FCF: Flamingo's ratings are contingent of FCF turning positive from 2025 on the back of organic EBITDA expansion. Consequently, persisting operational challenges leading to sustained negative FCF would put Flamingo's ratings under pressure. Deleveraging Capacity: Fitch projects EBITDA leverage will reduce towards 4x in 2024 from its peak of 5.6x in 2022, as Flamingo restores some of its lost margins. Fitch views EBITDA leverage above 5.0x for this business and sector as high, which would make the next round of refinancing more challenging, as the company will be heavily reliant on debt market conditions at that time. DERIVATION SUMMARY The 'B-' IDR of Flamingo reflects its small scale and limited geographic and portfolio diversification, considerable seasonality, and susceptibility to weather conditions, all of which results in performance volatility. These weaknesses are balanced by conservative leverage, with leverage reducing towards 4x in 2024. Dutch-based flower breeding and propagation company, Casper Debtco B.V., has tighter liquidity and higher leverage than Flamingo. However, it is more diversified geographically as well as in the number of crops covered in the cut flowers and plants segment. It is at the front end of the flower supply chain, covering breeding and propagation that commands a high importance in R&D and thus leading to a higher intangible value. However, it shares the operating risk of consumer product manufacturers, given its exposure to volume risk, driven by customer demand and changing consumer preferences. The higher rating of fully vertically integrated agro-industrial business Camposol Holding PLC (B/Negative) is supported by higher profitability, with Fitch's projection of an EBITDA recovery towards USD100 million in 2023, and by its leading position in Peru. Camposol's Negative Outlook reflects its over-reliance on short-term debt and volatile performance due to climatic events. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Revenue to decrease 7% in 2023, reflecting mostly the loss of contracts in the UK grocer segment. This is followed by revenue growth of 2%-3% a year to 2027 - EBITDA margin to improve to 7.9% in 2023 from 7.2% in 2022, further to 9.4% in 2024 and towards 10% during 2025-2027 - Capex at around EUR20 million a year to 2027 - Trade working-capital outflow at around EUR4 million a year in 2023-2026 - Supply-chain finance agreement provided by some of Flamingo's clients estimated to be used at around GBP15 million in 2024, with continued small increases in annual utilisations. Fitch treats this financing as factoring in accordance with Fitch's criteria -Partial repayment of the RCF in 2024 of GBP10 million and full repayment in 2025 - No M&As to 2027 - Restricted cash of GBP10 million as minimum cash required for operating purposes RECOVERY ANALYSIS The recovery analysis assumes that Flamingo would be reorganised as a going concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Its GC EBITDA assumption of GBP35 million reflects Fitch's view of a sustainable, post-reorganisation EBITDA level on which Fitch bases the enterprise valuation (EV). This level reflects a loss of key customers, adverse contract changes, or climate-related events eroding yields at Flamingo's African farms. A multiple of 5.0x EBITDA is applied to the GC EBITDA to calculate a post-reorganisation EV. The multiple is in the mid-range for the sector and is supported by modest but stable long-term growth prospects for the floriculture sector, and by the company's asset location in east Africa underpinning its strong market position as European importer of roses. This is in line with the multiples used for Casper Debtco B.V., and the Peruvian-based Camposol. Fitch assumes the local operating company debt of around GBP8 million is structurally prior-ranking, followed by the senior secured TLB and RCF, the latter two ranking equally among themselves. In addition, Fitch has included GBP30 million of supply-chain finance provided by some of Flamingo's clients, which Fitch considers to be the average amount available and treat as factoring. Fitch assumes this facility would remain partly available during and post-distress, given an expected drastic reduction in contract size in the event of financial distress. Based on these assumptions, its waterfall analysis generates a ranked recovery for the senior secured debt in the Recovery Rating 'RR3' band, leading to a senior secured rating of 'B' with a waterfall-generated recovery computation of 64%. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Well-executed business strategy supporting EBITDA at or above GBP60 million with margins around 10% on a sustained basis - Positive FCF margins towards low-to-mid-single digits - Liquidity headroom of GBP30 million including internal cash generation and committed external financing lines (excluding GBP10 million as restricted) - EBITDA leverage sustained below 4x - EBITDA interest cover sustained above 2.5x Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Deteriorating liquidity that leads to additional cash requirements to fund operations - Operational challenges leading to declining EBITDA margins - Negative FCF - EBITDA leverage consistently above 5.5x - EBITDA interest cover sustained below 2.0x LIQUIDITY AND DEBT STRUCTURE Limited Liquidity: Fitch estimates a freely available cash balance of GBP18 million at end-2023 (after restricting GBP10 million for ongoing operational needs, which Fitch assumes will not be available for debt service). Fitch expects liquidity to be affected by temporarily reduced profitability, high interest payments and increased capex needs that would lead to mildly negative FCF generation in the next 18 months. In addition, Fitch forecasts the RCF to be drawn at GBP15 million at end-2023. The company has access to the supply-chain finance agreement provided by certain clients, supporting its liquidity needs, but it is subject to continued volumes with these accounts. The A&E has extended Flamingo's debt maturities to August 2027 for its RCF and August 2028 for its TLB. ESG CONSIDERATIONS Flamingo has an ESG Relevance Score of '4' for Exposure to Environmental Impacts due to the influence of climate change and extreme weather conditions on its assets, productivity and operating performance, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- Flamingo Group International Limited LT IDR B- New Rating senior secured LT B New Rating RR3 FLAMINGO GROUP: Moody's Affirms Caa1 CFR, Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service has affirmed the ratings of Flamingo Group International Limited's, including its corporate family rating at Caa1; its probability of default rating at Caa1-PD, and its backed senior secured bank credit facility rating at Caa1, following the company's recent closure of an amend and extend offer on its existing credit facilities. Concurrently, Moody's has assigned Caa1 instrument ratings to the new EUR15 million backed senior secured revolving credit facility (RCF) due August 2027 and the new EUR236 million backed senior secured term loan B due August 2028. The outlook was changed to stable from negative. Additionally, Moody's has appended a limited default designation ("/LD") to Flamingo's Caa1-PD probability of default rating as a result of the amend and extend transaction, which Moody's considers to be a distressed exchange and tantamount to a default under the rating agency's definition. The rating agency will remove the LD designation from the company's PDR after three business days. Governance considerations were a key driver of the rating actions, as the GBP50 million equity contribution by the company's shareholders agreed as part of the amend and extend transaction helped to remove the refinancing risk of the RCF and term loan B and allowed Flamingo's leverage to significantly improve. RATINGS RATIONALE On December 22, 2023, Flamingo announced the closure of an amend and extend transaction which included, amongst other factors: (i) 18% par repayment on the previously existing senior secured term loan B financed by a GBP50 million equity contribution from the company's shareholders; (ii) the extension of the maturity of the remaining outstanding EUR236 million to August 2028 from February 2025; (iii) the extension of EUR15 million commitments under the RCF to August 2027 from February 2024; (iv) the introduction of consent fee on extended term loan commitments paid in PIK format; and (v) the addition of an exit fee to be paid in the event of an exit or refinancing in full. The remainder of the commitments under the RCF facility, out of which approximately EUR4 million are drawn, continue to mature in February 2024. The change in outlook to stable from negative reflects (i) the removal of short term refinancing risk due to the extension of the RCF (partially) and the term loan B to August 2027 and August 2028, respectively; (ii) the improvement in Moody's-adjusted debt/EBITDA and EBITA/Interest Expense following the reduction in outstanding debt; and (iii) early signals of recovery in operating performance in recent months driven by pricing actions and several cost saving initiatives. Moody's forecasts that under the new capital structure, Flamingo's Moody's-adjusted debt/EBITDA at year-end 2023 will improve to around 5.1x from 5.9x in 2022, while EBITA/Interest will reach 1.3x proforma for the new capital structure. The rating agency also expects that Flamingo's credit metrics will continue to improve in 2024. However, next year's deleveraging trajectory remains uncertain because Moody's believes that disposable income will remain under pressure in Flamingo's major markets and because of the short track record to date of the new senior management in turning around the company's operating performance. In addition, Flamingo's vulnerability to weather and crop disease risk inherent in the industry present a risk to Moody's base case forecast. The Caa1 CFR is constrained by Flamingo's (i) limited product and customer diversification; (ii) political and social risk arising from operating in Ethiopia (Government of Ethiopia, Caa3 stable), and to a lesser extent in Kenya (Government of Kenya, B3 negative); (iii) exposure to demand volatility stemming from customer preferences, pressure on disposable income and retailer promotional activity; and (iv) potential margin volatility due to pricing pressure in UK retail and ability to pass through cost increases. The ratings are supported by the company's (i) strong market position within certain segments of the business, albeit in narrow product categories; (ii) long-standing relationships with retailers; and (iii) ability to complement its own production with third-party sourcing, although at the expense of profitability margins. LIQUIDITY Although the company's liquidity profile has improved given that the previous maturities of the RCF and term loan B were due within 18 months, Moody's still views Flamingo's liquidity as weak. This is because Moody's expects that the company's free cash flow generation will remain negative in 2023 and around breakeven in 2024. In addition, the company's RCF will reduce to EUR15 million from EUR30 million. Moody's assumes that Flamingo will have to rely on recently implemented uncommitted receivable-based financing facilities in order to maintain appropriate levels of cash throughout the next 12 to 18 months, with the availability under those facilities fluctuating due to sales seasonality patterns. According to the company's management at the end of November 2023 Flamingo had GBP28 million of cash on balance sheet, GBP14 million availability under the aforementioned receivable-based financing facilities and about EUR16 million drawn under the RCF. However, Moody's expects that the RCF will be fully repaid by the end of 2023 using factoring facilities and cash on the balance sheet. ESG CONSIDERATIONS Flamingo's CIS-5 indicates that the rating is lower than it would have been if ESG risk exposures did not exist and that the negative impact is more pronounced than for issuers scored CIS-4. The score reflects the company's concentrated ownership, internal controls weaknesses, accounting misstatements on the financial information provided to its lenders over the last two years and aggressive financial policy. Environmental risks such as physical climate risk due to its reliance on agriculture produce and concentration of sourcing from Kenya and Ethiopia could weaken credit quality. RATIONALE FOR THE STABLE OUTLOOK The stable outlook reflects the removal of the refinancing risk of the RCF and term loan B maturities and improvement in credit metrics as result of the amend and extend transaction. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the ratings if the company (i) operating performance improves such that Moody's-adjusted EBITDA generation approaches GBP55 million with sustained improved profitability; and (ii) achieves positive free cash flow generation; and (iii) EBITA/Interest coverage is sustainably above 1.0x; and (iv) achieves adequate liquidity. Conversely, the ratings could be downgraded if (i) revenue or profits return to decline; or (ii) free cash flow becomes materially negative; or (iii) the company's liquidity profile deteriorates. The principal methodology used in these ratings was Consumer Packaged Goods published in June 2022. COMPANY PROFILE Flamingo Group International Limited is a business combination created in February 2018 between Flamingo Horticulture Ltd (Flamingo UK), a leading supplier of cut flowers and premium vegetables to the UK premium and value retailers, and Afriflora, the world leader in sweetheart roses (according to third-party due diligence) supplying to major European retailers such as Lidl, Aldi and Edeka. The company runs farming operations primarily in Kenya and Ethiopia. In 2022 the combined entity generated revenues of GBP658 million and reported EBITDA of GBP46 million. Flamingo is owned by private equity funds managed and advised by Sun Capital Partners, Inc. and its affiliates. LENDY: Administrator Racks Up More Than GBP6.2 Million in Fees -------------------------------------------------------------- Suzie Neuwirth at Alternative Credit Investor reports that Lendy's administrator has racked up more than GBP6.2 million in fees since the property lending platform collapsed in 2019, with no end to the process in sight. Lendy fell into administration in May 2019 and RSM was appointed to oversee the process of unpicking the peer-to-peer lending platform's GBP160 million loan book, which included GBP90 million-worth of defaulted loans, Alternative Credit Investor recounts. The administration process has been extremely complex, due to extensive corporate governance issues, the nature of Lendy's business model and a number of court cases disputing the way realised funds should be distributed, Alternative Credit Investor notes. The latest report from RSM revealed that its fees totalled GBP382,622 during the six-month period to November 23, 2023, bringing the total time costs incurred since appointment to GBP6,271,344, Alternative Credit Investor states. Law firm Shoosmiths, which advised on a range of issues including defending against claims relating to security on loans and pursuing negligence claims against surveyors and solicitors, has incurred almost GBP4 million in time costs to date, Alternative Credit Investor discloses. The firm also has unbilled disbursements totalling GBP122,598, according to Alternative Credit Investor. Earlier this year, RSM successfully applied to the court to extend the administration process to May 23, 2025, Alternative Credit Investor recounts. "It is not possible to ascertain at present when the administration will end," Alternative Credit Investor quotes RSM as saying. "Further information will be provided in subsequent progress reports. "It is currently anticipated that the company will exit administration by way of Creditors Voluntary Liquidation." RSM's report also showed that there are currently seven live development finance loans (DFLs) with an outstanding value of GBP17 million, Alternative Credit Investor notes. It defines a live loan as any loan where the administrators are pursuing and expect further recoveries, either through asset realisations or claims. There were two realisations of DFLs in the reporting period, with GBP10.48 million put into the client account, Alternative Credit Investor discloses. MCLAREN HOLDINGS: Fitch Puts 'B-' LT IDR on Rating Watch Evolving ----------------------------------------------------------------- Fitch Ratings has placed McLaren Holdings Limited's (MHL) Long-Term Issuer Default Rating (IDR) of 'B-' and McLaren Finance plc's senior secured notes (SSN) rating of 'B' on Rating Watch Evolving (RWE). The SSN has a Recovery Rating of 'RR3'. The RWE reflects uncertainty over MHL's recapitalisation, which has been prolonged beyond its initial expectations to 2024. The change in capitalisation could drive a change in its parent and subsidiary linkage (PSL) assumptions, once its shareholder structure is simplified. Fitch also does not yet have clarity on the total recapitalisation amount, or whether it is sufficient to cover the group's long-term funding needs. Fitch would look to resolve the RWE once the recapitalisation is complete, and when the agency has gained clarity on the medium-term capital structure of MHL as it looks to refinance its bonds. An unsuccessful execution and weakening shareholder support may result in a rating downgrade. The extent of the downgrade would depend on its assessment of MHL's liquidity position, with more imminent liquidity risks leading to stronger rating pressure. McLaren's 'B-' IDR reflects continued support from McLaren's shareholders to fund short-term operational cash needs and help meet its financial liabilities. KEY RATING DRIVERS Ongoing Recapitalisation: MHL is in the process of a recapitalisation that would result in a simpler capital structure and fully fund its long-term product development strategy. Fitch expects the recapitalisation to involve equity injections with no impact on the rights of its bondholders, and MHL to continue servicing its liabilities with continued support from shareholders. Following the delay of recapitalisation completion into 2024 its timing and amount remain unclear. Fitch believes that prolonged uncertainty over its capital structure could cloud loan rollover discussions and affect the rights of its creditors. Liquidity Support from Shareholders: Fitch forecasts that MHL will still need additional cash injections totalling GBP250 million in 2024, despite gradually improving profitability with increasing deliveries of Artura and 750S. Shareholders have already provided MHL with GBP450 million of liquidity in 2023, adding to the GBP225 million support received in 2022. Current ratings do not imply a parent and subsidiary linkage consideration, but factor in the strong record of shareholder support. Instrument Rankings: The senior secured rating of 'B' currently reflects the notes' senior ranking to obligations raised at MHL by parent McLaren Group Limited (MGL) from the issuance of preference shares and convertible preference shares. As Fitch does not have clarity on the impact of the recapitalisation on the security pack for MHL's existing debt, Fitch has placed the notes on RWE. Operational Problems Persist: MHL has temporarily slowed down production of Artura to address quality control, with the aim of returning to near the levels achieved in the first half of the financial year to June 2023. This has resulted in lower deliveries than their historical average and negative EBITDA of GBP149 million for 3QFY23. Nevertheless, MHL's order book was around 1,500 units at end-3QFY23, providing some visibility into 2024 and supporting its assumption of increasing deliveries to around 2,700 units in 2024 as volumes increase with a broader product line-up on sale than in 2023. Solid Positioning: MHL has resilient pricing power at the high end of the market and a solid positioning in luxury super cars with top-three positions in the relevant sub-segments. The internal development of platform and powertrains weighs heavily on earnings and cash flows as they are not shared with, or supplied by, a partner, but they provide MHL with a distinctive selling point, compared with other brands that are part of larger automotive groups. Niche Luxury Manufacturer: With only a limited product portfolio and annual production capacity of about 5,000-6,000 units, MHL is small and not diversified. Despite the luxury segment's lower volatility than mass-market cars', external shocks can significantly affect sales. Wholesale volume have fallen to around 2,000 units per year since the pandemic although retail volumes were less affected because of destocking at dealers Limited Geographic Diversification: Sales are focused on Europe and north America, with only a modest presence in China. Chinese customers are less attracted to sport cars and prefer ultra-luxury limousines and SUVs. Furthermore, MHL has a significant mismatch between sales and production and material foreign-exchange exposure, given its production and R&D are exclusively in the UK, but with about 70% of total revenue denominated in non-sterling currencies. Electrification Transition Challenges Financial Profile: While not directly and immediately affected by all of the industry's structural trends, including connectivity, autonomous driving and electrification, MHL is gradually transitioning toward electric powertrains. Fitch forecasts that such long-term capex needs cannot be funded by internal cash generation, but will require additional shareholder support or external partnerships. DERIVATION SUMMARY MHL is a niche manufacturer, much smaller than other carmakers in the 'BB' and above rating categories. Its product range and overall diversification is weaker than larger peers'. Its brand value is strong, supported by its history and heritage, but not above that of leading and established car groups with a long history such as Toyota Motor Corporation (A+/Stable), Mercedes-Benz Group AG (A/Stable) and BMW AG. MHL's financial profile is at the low end of Fitch's portfolio of rated car manufacturers, with sustained free cash flow (FCF) losses and high leverage. Higher-rated carmakers typically report net cash positions through the cycle, in contrast to MHL, which has high leverage even after its continued shareholder injections. KEY ASSUMPTIONS - Revenue to rebound strongly in 2024 due to increased car production and a favourable model mix, before easing to 10% growth in 2025 and 2026 - EBITDA margins slightly negative in 2024 and returning to low single digits in 2025 and 2026 - Capex requirements at GBP200 million per year to 2026 - Large working-capital outflow in 2023 due to higher inventory levels in preparation for increased production in 2024 - No acquisitions or dividend payments to 2026 RECOVERY ANALYSIS The recovery analysis assumes that MHL would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. McLaren's GC EBITDA assumption includes adjustments for cash flows added via acquisition and/or reduced by asset disposals. Fitch includes (or exclude) a full year's run-rate EBITDA from acquisitions (disposals) in the last 12 months (LTM) EBITDA used as a reference point to compare with GC EBITDA. The difference between LTM EBITDA and GC EBITDA assumption is an output of the analysis, not a starting point or input that drives the GC assumption. The GC EBITDA of GBP105 million reflects Fitch's view of a sustainable, post-reorganisation EBITDA on which Fitch bases the enterprise valuation (EV). Its assumptions incorporate vulnerabilities and risks that are specific to MHL and its sector. An EV multiple of 4.5x EBITDA is applied to the GC EBITDA to calculate a post-reorganisation EV. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The ratings will be affirmed with the completion of the recapitalisation and clarity on the medium-term capital structure of MHL as it looks to refinance its bonds Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Missing a scheduled payment on its term loan or an amendment that Fitch may deem a distressed debt exchange - Signs of weakening shareholder support as underscored by deteriorating liquidity - Lack of progress in the recapitalisation within 12 months to its 2026 bond maturity LIQUIDITY AND DEBT STRUCTURE Weak Liquidity: MHL's liquidity at end-September 2023 was GBP55 million (comprising cash of GBP18.2 million and GBP37 million of a revolving credit facility) before the latest GBP80 million shareholder funding was received in November. Shareholders have provided MHL with GBP225 million of liquidity in 2022, and another EUR450 million so far in 2023. Fitch forecasts that available liquidity is insufficient to cover 2024 operating requirements, driven by negative FCF expectations on continued lower revenue, weak margins and high capex. Fitch expects MHL will remain reliant on shareholder support in the short-to-medium term. ISSUER PROFILE MHL is the intermediate holding of MGL. It owns 100% of McLaren Automotive, McLaren Services Limited and McLaren Finance Plc. McLaren Automotive is a manufacturer of luxury, high-performance sport cars and supercars. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' 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. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- McLaren Holdings Limited LT IDR B- Rating Watch On B- Mclaren Finance plc senior secured LT B Rating Watch On RR3 B WESTMINSTER WORK: Bought Out of Administration by Torsion Group --------------------------------------------------------------- Graham Norwood at Letting Agent Today reports that a Build To Rent scheme which fell into administration two years ago has been rescued by a property developer. Torsion Group has announced that it has secured Westminster Works, a 220 apartment BTR scheme in Birmingham, Letting Agent Today relates. According to Letting Agent Today, there has been no work on the Westminster Works scheme since it fell into administration but Torsion says it has used its expertise in developing part constructed schemes "to work through the challenging requirements of this project." The delivery arm of Torsion Group, Torsion Construction, has now commenced works on site with a projected completion date of early 2026, Letting Agent Today discloses. ********* 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 2024. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *