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     T R O U B L E D   C O M P A N Y   R E P O R T E R     

                        E U R O P E

         Friday, December 22, 2000, Vol. 1, No. 161

                         Headlines


B E L G I U M

HEADTRICK: Media Group Files for Bankruptcy
LERNOUT & HAUSPIE: Auditor's Letter Reviewing L&H's Books
NORDIFA SA: To Restart Operations for Three Months
REAL SOFTWARE: Tumbles to Three-Year Low


B U L G A R I A

KAMBANA: Sunflower Oil Producer Faces Bankruptcy


C Z E C H   R E P U B L I C

KOMERCNI BANKA:  Government Opts for Guarantees
KOZELUZNY OTROKOVICE: Auction Unsuccessful


E S T O N I A

HANSAPANK AND HOIUPANGA: Strike Deal in Dispute on Shares


G E R M A N Y

DEGUSSA-HULS AG: To Close Production Plants
EM.TV:  Ecclestone Shows Interest in German TV


G R E E C E

OLYMPIC AIRWAYS:  DaimlerChrysler Unit Interested Airline


N E T H E R L A N D S

CETECO: Insolvent Dutch Retailer Sells Last Subsidiary


R U S S I A

MEDIA-MOST:  Tax Authority Offers to Settle Suit
NTV:  Court of Arbitration to Discuss Liquidation in January


S W I T Z E R L A N D

GRASSHOPPERS:  Shareholders Approve Grasshoppers Rescue Plan


U N I T E D   K I N G D O M

BRITISH TELECOM: Ordered to Offer Internet Access Lines to Rivals
EQUITABLE LIFE:  Watchdog to Investigate Scandal
EQUITABLE LIFE: May be Sold 'Substantially' in Whole or Parts
EQUITABLE LIFE: Sclater Quits As President


=============
B E L G I U M
=============

HEADTRICK: Media Group Files for Bankruptcy
-------------------------------------------
De Financieel Ekonomische Tijd & The World Reporter reports this
week that media group Headtrick, which makes TV programs for VTM
and VRT, has filed for bankruptcy. It has a loss of BFr 180
million. An administrator has yet to be appointed.


LERNOUT & HAUSPIE: Auditor's Letter Reviewing L&H's Books
---------------------------------------------------------
A letter from the auditing firm reviewing the books of troubled
speech technology software firm Lernout & Hauspie Speech Products
NV reportedly blasts the Belgian-American company's senior
executives, accusing them of conspiring to hide and falsify
information, overstating operating results and inflating stock
prices for personal benefit.

Newsbytes News Network reports this week that the blistering
letter from KPMG to L&H Chairman Roel Pieper accuses certain of
the company's former executives of concealing documents and
transaction details from KPMG auditors.

Reuters said that a separate, internal investigation, showed that
as much as $277 million or one-third of revenue over the past two
and a half years may have been improperly recorded. The figure is
much larger than previously suspected. The internal report also
recommends disciplinary action against Jo Lernout and Pol
Hauspie, former Chief Executive Gaston Bastiaens, and former
Vice-Chairman Nico Willaert.

The company has been delisted on both Nasdaq and European stock
exchanges, which are conducting investigations after L&H filed
for bankruptcy protection last month, admitting to accounting
irregularities including $100 million in missing cash, Newsbytes
News Network noted.


NORDIFA SA: To Restart Operations for Three Months
--------------------------------------------------
Nordifa SA (formerly Lainiere de Sclessin) reports it is unable
to avoid declaring its Belgian operations bankrupt. The textiles
company has been bankrupt since November 30. It intends to
restart operations for a period of three months. As a result of a
meeting with the banks, the trustees have obtained the funds to
allow the company to meet its orders. L'Echo & World Reporter
reported last week that 25 workers and nine managers have been
re-employed. It is possible that Nordifa SA could find a buyer.
Names that have been mentioned in this context include Induscom
of Antwerp.


REAL SOFTWARE: Tumbles to Three-Year Low
-----------------------------------------
Shares in Real Software fell for the sixth consecutive session,
losing over 11 percent to hit a new three-year low as investors
fretted over the Belgian IT services firm's financial position,
Reuters reports this week. Fund manager Koen Devos said: "The
firm has had debt problems in the past and these were fixed in
the short term but, together with other specific problems and
Nasdaq's losses, it just keeps falling."


===============
B U L G A R I A
===============

KAMBANA: Sunflower Oil Producer Faces Bankruptcy
------------------------------------------------
The parliamentary group of the Socialist Party has demanded the
government investigate the privatization deals for Bourgas-based
Kambana and Big Bulgarian Mills, MP Lyubomir Pantaleev announced
in Bourgas. The economy ministry says the buyer, Hellian
Commodities, is not fulfilling its investment program as included
in the contract for Kambana, nor its promises to preserve jobs in
the sunflower oil refinery, Pari Daily & World Reporter reports
this week.

The Dutch company acquired 68 percent of the enterprise in 1997.
According to the privatization contract Hellian Commodities had
to invest a total of USD 23 million in Kambana, the first USD 2
million of which had to be invested during the first year. Since
the investments failed to be made, the economy ministry imposed a
BGN 3 million forfeit on the buyer. Hellian Commodities also
failed to preserve the 580 jobs in the refinery, for which it was
fined BGN 2 million. The USD 6 million investments pledged for
1999 also failed to be made and the company assumed another USD
3.2 million fine and a forfeit of BGN 300,000 for laying off 90
workers.

All the sanctions imposed on Hellian Commodities amount to
Kambana's buy price. However, none of them has been paid so far.
At the same time, according to the contract with the
Privatization Agency, the deal can only be cancelled if the owner
fails to pay the majority package of shares.

The refinery is now facing bankruptcy because the Dutch company
is gradually syphoning the enterprise, Pantaleev says. According
to an inquiry to the ministry of agriculture, there are doubts
that the privatization provisions concerning Big Bulgarian Mills
have not been observed either. The very purchase of the
enterprise is somewhat unclear.


===========================
C Z E C H   R E P U B L I C
============================

KOMERCNI BANKA:  Government Opts for Guarantees
-----------------------------------------------
The Cabinet decided to provide up to Kc 20 bln in state
guarantees for bad and risky Komercni Banka loans in order to
ensure that the bank is privatized in the first half of next
year, Czech A.M. reports this week. Wood & Co. analyst Jiri
Stanik maintains that failure to grant guarantees would delay the
sale while the lower house's budgetary committee head Vlastimil
Tlusty (ODS) says they are needless as the KB sale will be
unprofitable in any form. The state has already provided more
than Kc 56 bln to stabilize the bank.


KOZELUZNY OTROKOVICE: Auction Unsuccessful
------------------------------------------
No bidder has shown interest in the Czech Otrokovice-based
tannery Kozeluzny at first public auction. The calling price made
Kcs 65 million. Kozeluzny was declared bankrupt in November 1999
and now, its property and equipment, which are not part of the
bankruptcy estate, are being sold in an auction. Another round of
the auction could now take place in February. The calling price
should remain at Kcs 65 million. The Italian company Arbapelli
has shown interest in Kozeluzny but was not prepared to take part
in the first auction, Hospodarske Noviny & World Reporter reports
this week.


=============
E S T O N I A
=============

HANSAPANK AND HOIUPANGA: Strike Deal in Dispute on Shares
---------------------------------------------------------
Hansapank and Hoiupanga Tootajate AS (HTAS, Hoiupank Employees
Limited Company) have reached an out-of-court settlement in a
dispute over 1.58 million Hansa shares inherited from the time
before the merger of Hoiupank and Hansapank, BNS & Euromoney
reports this week.

According to the deal, Hansapank will sell to an investor
represented by the Glikman & Glikman Law Office a bond issued to
Hoiupank by Coalgate Securities Ltd. on April 29, 1998, the bank
said on Monday. The investor will pay 56 millon kroons (USD 3.2
mln) for the bond. The bank said the proceeds from the deal would
be entered in the current year's income of Hansapank.

The acquisition value of the bond was 28.14 million German marks
or 225.1 million Estonian kroons. Hansapank at the same time will
abandon all claims for the 1.58 million of its shares held by
HTAS.

The settlement also stipulates that the parties will drop all
claims and lawsuits against each other and refrain from public
comment on the deals and proceedings that underlay their dispute.
The row between HTAS and Hansapank, which dates back to 1998, was
over ownership of Hoiupank shares subscribed by the bank's then
managers under HTAS' name in a public issue using a loan from
Daiwa bank.


=============
G E R M A N Y
=============

DEGUSSA-HULS AG: To Close Production Plants
---------------------------------------------
Degussa-Huls AG will withdraw from the production, research and
sales of zeolites, the company said. The withdrawal is due to
"major over-capacities in the market and a drastic price drop,"
the unit of E.On AG said. Degussa-Huls is closing its production
facilities in Wesseling, Germany, and Taipei. It is also pursuing
the sale of its Spanish site in Miranda del Ebro, as well as
production technology for specialty zeolites. Degussa-Huls said
it decided to shut down its zeolite production facilities in
Taipei and Wesseling after failing to sell its entire zeolite
business, Handelsblatt reports this week.

However, it's still possible that the specialty zeolite
technology package will be sold, the company said. The shutdowns
in Wesseling and Taipei affect 70 employees. The 40 employees at
the Wesseling plant will move into other areas, but it's unlikely
that the Taipei employees will be kept on.


EM.TV:  Ecclestone Shows Interest in German TV
----------------------------------------------
The Formula One auto racing personality Bernie Ecclestone is
interested in the German audiovisual rights company EM.TV. Agence
France-Presse reports this week that EM.TV, which is in severe
financial difficulties, was believed to have won support from
creditors. The price of shares in EM.TV surged by 15.09 percent
to 6.56 euros. EM.TV president Thomas Haffa had won backing from
about 40 representatives of creditors at a meeting in Munich,
south Germany, on Saturday.

Agence France-Presse noted that banks were believed to have
backed Haffa irrespective of the entry into the capital of German
television magnate Leo Kirch which was announced at the beginning
of December. EM.TV, which had bought 50 percent of the company
holding the rights to market Formula One, SLEC from Ecclestone in
March, was now of interest to Ecclestone who might acquire
capital in the media business. But since EM.TV was still in
exclusive negotiations with Kirch, Ecclestone would not be able
to move unless the agreement for Kirch to acquire 16.74 percent
of EM.TV, and 25 percent of the voting rights, fell through.


===========
G R E E C E
===========

OLYMPIC AIRWAYS:  DaimlerChrysler Unit Interested Airline
---------------------------------------------------------
Daimler Chrysler Aviation, the U.S.-based unit of DaimlerChrysler
AG, has expressed interest in purchasing a majority stake in the
Greek national airline Olympic Airways. Athens daily To Vima,
citing unnamed sources, reported Chrysler Aviation had officially
requested the prospectus of the company. To Vima also said
British Airways PLC is among companies thought to have expressed
interest in Olympic Airways. A Finance Ministry official told Dow
Jones Newswires that many companies, especially domestic
consortia, have responded to an invitation of interest,
Handelsblatt noted this week.

Handelsblatt reported that Greece is selling a 65 percent stake
in cash-strapped Olympic Airways and interested parties are to
express an interest by the end of the month, while binding bids
should be submitted by the end of January. British Airways this
summer refused to purchase a stake in Olympic Airways. Olympic
Airways had been operated for one year by Speed wing, a British
Airways subsidiary, but the company failed to exercise its option
to buy up to 20 percent of Olympic. Cyprus Airways is also among
potential bidders, since it expressed an interest in conjunction
with a group of investors, the company has said.


=====================
N E T H E R L A N D S
=====================

CETECO: Insolvent Dutch Retailer Sells Last Subsidiary
------------------------------------------------------
Ceteco, the last subsidiary of insolvent Dutch retailer CHM has
been sold. CHM in Suriname will disappear from the books as from
1 January 2001. In the third report (closed on 12 December), the
receivers of the group announced the sale of subsidiaries in
Florida, Costa Rica and Mexico. What remains are a number of
financial assets that will now have to be liquidated, De
Telegraaf & World Reporter reports this week. The receivers said
that the report is not meant to determine the rights or
obligations of parties or the value of the estate.


===========
R U S S I A
===========

MEDIA-MOST:  Tax Authority Offers to Settle Suit
---------------------------------------------------
Tax authorities said that their attempt to liquidate Media-MOST
and its subsidiaries was not politically motivated and offered to
settle out of court with Vladimir Gusinsky's independent media
holding company. "Liquidation of these companies is not the aim
of the tax inspectorate," Tatyana Luzhina, chief of the tax
inspectorate of Moscow's central district, told The Moscow Times
this week. Luzhina's inspectorate filed a package of suits with
the Moscow Arbitration Court earlier this month to liquidate
Media-MOST and several of its daughter companies.

The Moscow Times noted that the arbitration court is to begin
considering the suits Jan. 17. However, the tax inspectorate may
withdraw the suits if the companies bring their assets into line,
Luzhina said. Media-MOST spokesman Dmitry Ostalsky said, without
giving specifics, that the holding will try to bring its
financial structure into accordance with the law.

Luzhina confirmed that the liquidation suits against Media-MOST
are the first her inspectorate has filed against such a large
company. She denied, however, that they were motivated by
political factors. Tax Minister Gennady Bukayev backed her up,
telling reporters that Luzhina's inspectorate did not consult him
before filing the suits. Media-MOST has seen its offices raided
and faced several suits by creditors this year in what Gusinsky
believes to be a Kremlin-engineered campaign against his media
outlets, which have been critical of President Vladimir Putin and
his policies.

Gusinsky was arrested last week in Spain upon the request of the
Prosecutor General's Office, which has issued an arrest warrant
for the embattled media tycoon on fraud charges. Luzhina said the
suits were filed as soon as the violation was discovered.


NTV:  Court of Arbitration to Discuss Liquidation in January
------------------------------------------------------------
The Moscow Court of Arbitration has set a date for hearing the
claim on the liquidation of the NTV television company on January
17, Itar/Tass News Agency reports this week. Claims to the
central company of the Media-Most holding and the NTV-Plus stock
company will be heard on the same day, Alexander Remigailo, press
secretary of the Court of Arbitration told Tass.

The claims on the liquidation of companies of the media holding
were lodged on December 9 by the tax inspectorate of the Central
Administrative District of Moscow, because their debts exceeded
the charter capital, which ran counter to the law on stock
companies. Tatiana Luzhina, head of the tax inspectorate, said
that the matter could be settled before the court hearings,
because "the violation is easy to eliminate." In her opinion,
this would be preferable. Notifications were forwarded to the
companies on December 8, she added. Media-Most executives said
their lawyers were examining the claims of the tax inspectorate,
Itar/Tass News Agency noted.


=====================
S W I T Z E R L A N D
=====================

GRASSHOPPERS:  Shareholders approve Grasshoppers rescue plan
------------------------------------------------------------
Shareholders of the Grasshoppers football club have voted to
accept a financial rescue plan to stave off bankruptcy, officials
said Tuesday. Agence France-Presse reported the club recorded
losses totalling 21.9 million Swiss francs (12.8 million dollars)
for the year 1999 to June 2000. The club's management says the
club's woes have been caused by low attendance and skyrocketing
player salaries. AFP says Grasshoppers are the most successful
club in Switzerland.


===========================
U N I T E D   K I N G D O M
===========================

BRITISH TELECOM: Ordered to Offer Internet Access Lines to Rivals
-----------------------------------------------------------------
Telecoms regulator Oftel will require British Telecom to offer
voice and data lines for Internet access to rival operators to
bring prices down. A BT spokesman countered, saying the market
could provide choices to consumers without Oftel forcing measures
on it. By the end of January, Oftel will give BT two months to
issue proposed prices, along with any terms and conditions.

Oftel director general of telecommunication David Edmonds said:
"Greater competition in wholesale leased lines is vital to ensure
lower retail prices.


EQUITABLE LIFE:  Watchdog to Investigate Scandal
------------------------------------------------
Treasury Economic Secretary Melanie Johnson says the Financial
Services Authority will look at the events surrounding Equitable
Life's decision to close its doors to new business earlier this
month, Ananova reports this week.

Miss Johnson said: "The FSA Chairman will invite its board, when
it meets later this week, to put in hand a review of the events
leading to the Equitable's decision to close to new business. The
review will cover the FSA's actions both as a prudential
regulator and in carrying out its functions under the Financial
Services Act 1986.


EQUITABLE LIFE: May be Sold 'Substantially' in Whole or Parts
-------------------------------------------------------------
Equitable Life said it may be sold "substantially" as a whole or
in parts and that it is looking for new directors to serve on a
restructured board, Ananona noted this week. The insurer, which
has stopped taking on new business after the last bidder for the
company as a whole pulled out of a planned sale, said in a letter
to policyholders that its "immediate objective is to take every
step possible to safeguard value for members and to achieve the
best price for those of the Society's operations which can be
sold."

It said that "these steps may result in the sale of different
operations to different purchasers, or it may be that a single
buyer will wish to buy substantially the whole of the operation,
including policy administration and investment management.
"Whatever happens, it is our intention to maintain good customer
service," Equitable said.


EQUITABLE LIFE: Sclater Quits As President
------------------------------------------
Equitable Life president John Sclater has offered to resign over
criticism about the way he has handled the crisis at the troubled
life insurer. The other non-executive directors are also expected
to resign.

Policyholders and MPs have criticized Sclater, saying that in the
insurer's annual report, published just weeks before the House of
Lords judgment, he said the firm "was in a fine position to
continue its strong development".

In response to policyholders' concerns, MP Giles Radice says he
will hold a hearing early next year on the effect Equitable Life
will have on the entire life insurance industry.



S U B S C R I P T I O N   I N F O R M A T I O N

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