/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010206.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 Tuesday, February 06, 2001, Vol. 2, No. 26 Headlines B E L G I U M SABENA AIRLINES: Audit Reveals Management Faults SABENA AIRLINES: Audit Confirms Huge Losses for Airline G E R M A N Y ADVANCED MEDIEN: Media Firm Posts 10 Million Loss EM.TV: Kirch to Ink Deal by End-Feb PHILIP HOLZMANN: To Sees Loss for 2000 G R E E C E OLYMPIC AIRWAYS: Cyprus Air Denies Talks with KLM I T A L Y ALITALIA: Ministers Discuss Future of Alitalia FILA HOLDINGS: Fila Sees Up to 140 Billion Lire Loss N E T H E R L A N D S RECIPEWEB: Investors Declare Recipeweb Insolvent R U S S I A MEDIA-MOST: Government Investigators Seize More Documents U N I T E D K I N G D O M ALCAT LTD: Notice Of Creditors Meeting AMAZON.COM UK: Cost Cutting May Mean 800 Job Cuts ASHWOOD INTERNATIONAL: Notice Of Creditors Meeting AUTOMATED DIAMOND: Notice Of Creditors Meeting BUD & JET: Notice Of Creditors Meeting CORAL GROUP: Works on Refinancing Package with Bankers DANKA BUSINESS: Negotiates for Repayment Extension EQUITABLE LIFE: GE Capital Bids 1.2 Billion Pounds for Insurer EQUITABLE LIFE: Halifax Takes Control Over Life Insurer FUTURE MEDIA: Notice Of Creditors Meeting GAMEPLAY PLC: Game Retailer Restructures to Speed Profits GAMEPLAY PLC: To Cut Staff, Close Offices MILLENIUM DOME: Sir Stuart Emerges as New Dome Bidder POWERNET TELECOM: Notice Of Creditors Meeting SCOTIA HOLDINGS: Norwegian Group Considers Scotia Bid SCOTIA HOLDINGS: US, Canadian Banks may Rescue Biotech Group WILLIAM BARLOW: Notice Of Creditors Meeting ============= B E L G I U M ============= SABENA AIRLINES: Audit Reveals Management Faults ------------------------------------------------- An audit of Sabena SA conducted by the International Pilot Services Corporation has revealed management mistakes that directly led to the airline's cash flow problems, Dow Jones said in its February 1 report. The faults cited are Sabena's 20 percent annual expansion over the past five years while the government has lacked the interest in and fiscal responsibility for the airline's management. According to Joel Gans, a member of the Belgian Cockpit Association, the Union will use the audit's results during talks about a restructuring plan with Sabena in the next few weeks. The talks will focus on a EUR750 million rescue plan that may involve up to 700 employee layoffs as well as the Belgian government pumping EUR100 million of fresh capital into Sabena and EUR150 million from SAirGroup AG. Sabena is expecting an operating loss of BEF15.7 billion this year unless unions approve a restructuring plan. For 2000, the group has predicted an operating loss of 8 billion Belgian francs (EUR1=BEF40.3399), compared with an operating profit of BEF597 million in 1999. SABENA AIRLINES: Audit Confirms Huge Losses for Airline -------------------------------------------------------- President and chief executive Christoph Mueller of Belgian air carrier Sabena SA said that an audit conducted by union group International Pilot Services Corp. has confirmed that Sabena is facing significant losses and will soon run out of cash. According to a Dow Jones report, the audit findings on February 1 reveal that Sabena is confronting significant losses for 2000 and 2001 and that the company will run out of cash by the end of February if nothing is done soon. ============= G E R M A N Y ============= ADVANCED MEDIEN: Media Firm Posts 10 Million Loss -------------------------------------------------- Media firm Advanced Medien posted a net loss of at least 10 million marks last year as sales failed to meet expectations, FT MarketWatch reported in its February 2 edition. The group attributes the failure to reach sales and earnings goals to problems in television licensing for the German-speaking market. These problems have led Advanced Medien to a difficult cash situation. EM.TV: Kirch to Ink Deal by End-Feb ------------------------------------ KirchGruppe will buy 16.74 percent of EM.TV Merchandising AG, probably by the end of February, a top-level Kirch official told the Sunday newspaper Welt am Sonntag. Under the agreement, Kirch will take a minority stake in EM.TV with 16.74 percent of its shares and 25 percent of voting rights. The company will also buy a 25 percent stake in SLEC, the holding company for Formula One motor racing, for US$550 million. At the end of 1999, EM.TV had a negative working capital. Its current liabilities were 197.00 million Euros, while total current assets were only 139.35 million Euros. PHILIP HOLZMANN: To Sees Loss for 2000 --------------------------------------- A spokeswoman for construction group Philip Holzmann AG said the company expects to post losses for 2000, according to Handelsblatt in its February 4 edition. In 1999, Holzmann suffered a financial crisis as a result of the detection of previously unknown losses. It had a negative working capital, as current liabilities were 5.56 billion Euros while total current assets were only 5.50 billion Euros. Last year, Holzmann's construction output totaled DM13 billion. The group plans to dispose of all of its road construction activities including the Deutsche Asphalt unit and Held & Francke. With these disposals, Holzmann will reduce its total construction output by DM1 billion. =========== G R E E C E =========== OLYMPIC AIRWAYS: Cyprus Air Denies Talks with KLM -------------------------------------------------- Cyprus Airways has denied speculation it was in talks with Dutch carrier KLM on a consortium bid for the controlling stake in Olympic Airways, according to Reuters in its February 2 edition. "We deny KLM was in talks with us or that there was ever such an issue," Cyprus Airways spokesman Tassos Angelis told Reuters. Cyprus Airways is the only international carrier that has publicly confirmed that it is interested in taking a majority stake in Olympic Airways. The ailing Greek carrier has not turned a profit in years and is earmarked for privatization by the first half of this year. Other bidders for Olympic are Greek airline Axon, Australia's Integrated Airline Solutions, U.S. company Chrysler Aviation, Greek shipowner Stamatis Restis and Japan's Sanwa Bank. ========= I T A L Y ========= ALITALIA: Ministers Discuss Future of Alitalia ----------------------------------------------- Italian Prime Minster Giuliano Amato had a scheduled meeting with Treasury Minister Vincenzo Visco and Transport Minister Pierluigi Bersani on Monday on the future of Alitalia, following an unsuccessful search for an international partner, Reuters said in its February 4 report. The Treasury owns 53 percent of Alitalia, which has a long-term debt of 315.89 million Euros and total liabilities of 2.27 billion Euros as of December 1999. Alitalia has already talked with Air France and Swissair, while Dutch carrier KLM came under the spotlight last week. Negotiations between KLM and Alitalia broke down last year but there have been reports that the Italian government was talking to the Dutch government on possible ways of rekindling the romance between the two groups. FILA HOLDINGS: Fila Sees Up to 140 Billion Lire Loss ----------------------------------------------------- In its February 3 edition, the daily La Republica reported that Fila Holding SpA said in New York that it expects to post a net loss of 130 to 140 billion lire for 2000. To recall, Fila reported a 113 billion loss for 1999. ===================== N E T H E R L A N D S ===================== RECIPEWEB: Investors Declare Recipeweb Insolvent ------------------------------------------------- Internet site Recipeweb was declared insolvent on Thursday after it went into liquidation, according to Het Financieele Dagblad & World Reporter's February 2 report. Investors lost their appetite for the Web site that supplies recipes and food information to Dutch supermarket chain Ahold and Internet providers America Online and Freeserve. For six months, Recipeweb has been seeking a capital injection of 2.5 million euros but has not managed to raise the amount. Almost 40 staff members have been made redundant. Recipeweb is supported by Dutch investment company Nesbic (Fl 6.5 million) and government investment company Twinning (Fl 2.5 million), while founder Oscar van Dijk invested Fl 1 million. All three investors have lost their money. =========== R U S S I A =========== MEDIA-MOST: Government Investigators Seize More Documents ---------------------------------------------------------- Investigators of the Russian Prosecutor-General's Office have seized more documents in the office of Mikhail Kalashnikov, Media-Most news holding's chief accountant on Thursday, Itar-Tass said in its February 1 report. They are looking for material on Media-Most's loans and operations with promissory notes. On January 12, the Prosecutor-General's Office formally charged Yury Korostelev, chief of the financial department of the Moscow city government, with negligence. The charges were related to the government's disbursing money to Most-Bank. Proceedings against Korostelev are part of the case on media tycoon and Media-Most chief Vladimir Gusinsky. =========================== U N I T E D K I N G D O M =========================== ALCAT LTD: Notice Of Creditors Meeting --------------------------------------- Company Name: Alcat Ltd IA 1986 Section: 98 Creditors Meeting Time: 11.00 am Meeting date: 04/01/01 Meeting address: Beaufort House 94-96 Newhall Street Meeting City Code: Birmingham B3 1PB Authorised by: B Gibbons Director 12/12/00 Firm Name: Moore Stephens Booth White Address: Beaufort House 94-96 Newhall Street Birmingham B3 1PB AMAZON.COM UK: Cost Cutting May Mean 800 Job Cuts -------------------------------------------------- The British unit of American online retailer Amazon.com Inc. will cut costs in a restructuring that may result in 800 jobs being cut, the newspaper Sunday Business said, citing company officials and analysts. According to U.K. managing director Steve Frazier, Amazon.com is working on plans to develop its business to meet profit targets. The subsidiary is expected to bear the cost-cutting plan of its U.S. parent. Amazon.com last week said its fourth-quarter loss widened to $545.1 million. ASHWOOD INTERNATIONAL: Notice Of Creditors Meeting --------------------------------------------------- Company Name: Ashwood International Ltd IA 1986 Section: 98 Creditors Meeting Time: 11.00 am Meeting date: 04/01/01 Meeting address: Kings House 14 Orchard Street Meeting City Code: Bristol BS1 5EH Authorised by: M Reay Director 11/11/00 Last day for proxy: 03/01/01 Proxy address: Kings House 14 Orchard Street Bristol BS1 5EH Firm Name: BKR Haines Watts Address: Kings House 14 Orchard Street Bristol BS1 5EH AUTOMATED DIAMOND: Notice Of Creditors Meeting ----------------------------------------------- Company Name: Automated Diamond Products Ltd IA 1986 Section: 98 Creditors Meeting Time: 12.00 pm Meeting date: 04/01/01 Meeting address: 4 Dancastle Court 14 Arcadia Avenue Meeting City Code: London N3 2HS Authorised by: J Bishop Director 27/11/00 Firm Name: Valentine & Co Address: 4 Dancastle Court 14 Arcadia Avenue London N3 2HS BUD & JET: Notice Of Creditors Meeting --------------------------------------- Company Name: Bud & Jet Ltd IA 1986 Section: 98 Creditors Meeting Time: 11.00 am Meeting date: 04/01/01 Meeting address: Elliot House 151 Deansgate Meeting City Code: Manchester M3 3BP Authorised by: M A Wilcox Director 12/12/00 Last day for proxy: 03/01/01 Proxy address: Eliott House 151 Deansgate Manchester M3 3BP Firm Name: Begbies Traynor Address: Eliott House 151 Deansgate Manchester M3 3BP CORAL GROUP: Works on Refinancing Package with Bankers ------------------------------------------------------- Bookmaker Coral Group was forced to seek for a 10 million pounds injection of capital from its owner, Deutsche Bank, after breaching a covenant on its loans, Scotsman Online said in its February 5 report. In 1998, Coral was bought by London-based Morgan Grenfell Private Equity arm for 395 million pounds, but has come under heavy pressure due to the costs involved in expending its Internet betting arm Eurobet. The group had a planned 1 billion pounds flotation last year, but was cancelled due to volatile markets. Filings with the Securities and Exchange Commission in New York show that Coral made operating losses of 4.2 million pounds in 2000, while interest payments on debt have raised the total losses to 52.5 million pounds. Coral's total debts now add up to just short of 500 million pounds. Stanley Leisure, which is understood to be interested only in its shops, not Eurobet, and Rank, which is known to want to build a gaming business, are among the potential buyers for Coral. DANKA BUSINESS: Negotiates for Repayment Extension --------------------------------------------------- Danka Business Systems is negotiating with its bankers for another extension of its waiver on debt repayments as it had suffered another quarter of dwindling sales and the costs of laying off 1,200 people, according to a February 2 edition of This Is London. The pre-tax losses of Danka Business, one of the world's largest suppliers of office copiers and printers, for the quarter were 17.5 million pounds. Over the nine months to December 31, losses were 47.8 million pounds against a 32.5 million pounds profit last time. EQUITABLE LIFE: GE Capital Bids 1.2 Billion Pounds for Insurer --------------------------------------------------------------- US financial services giant GE Capital offered 1.2 billion pounds on Friday to buy embattled mutual life insurer Equitable Life, according to Scotsman Online yesterday. The bid was understood to include an 800 million pounds loans and reinsurance package that would enable Equitable to offer a one- off settlement to its 90,000 pension fund policyholders with guaranteed annuity rates. This package, which comprises loans and reinsurance support, was the first offer of extra capital for Equitable's pension fund investors. In return, the pension fund investors would have to give up their rights to the guaranteed level of pension to which they are currently legally entitled. GE Capital has also offered a basic 400 million pounds for Equitable Life's sales team of around 400 people, its administration and computer systems and its investment management operations. However, the GE offer is 100 million pounds less than the 500 million pounds unconditional offer made by Halifax, understood not to be prepared to offer additional loan capital to meet Equitable Life's GAR liabilities. EQUITABLE LIFE: Halifax Takes Control Over Life Insurer -------------------------------------------------------- Halifax revealed yesterday that it has struck a deal worth up to 1 billion pounds to buy Equitable Life, according to The Times. The agreement is believed to involve a 500 million pounds deal from Halifax for the troubled mutual life insurer's asset management business, administration systems and sales force, and a further 500 million pounds to be injected into Equitable's with-profits fund. The deal was done after Equitable rejected a 1.2 billion pounds takeover offer from GE Capital. The offer was said to be made up of a 400 million pounds up-front payment with a conditional 850 million pounds loan or reinsurance facility designed to boost Equitable's financial strength, which did not offer inherent value to policyholders. Equitable was forced to close to new business after the House of Lords said its decision to cut pension bonuses to holders of guaranteed annuity rate (GAR) policyholders was unlawful. The judgment left Equitable with a 1.5 billion pounds bill. FUTURE MEDIA: Notice Of Creditors Meeting ------------------------------------------ Company Name: Future Media Europe Ltd IA 1986 Section: 98 Creditors Meeting Time: 11.00 am Meeting date: 04/01/01 Meeting address: 12 Victoria Road Meeting City Code: Barnsley S70 2BB Authorised by: P Spencer Director 19/12/00 Firm Name: Gibson Booth Address: 12 Victoria Road Barnsley S70 2BB GAMEPLAY PLC: Game Retailer Restructures to Speed Profits ---------------------------------------------------------- Gameplay Plc has announced a group restructuring designed to speed up profitability, Reuters reported on February 2. Under the restructuring, the online games retailer said it would divide the company into a Technology Division and a Boxed Games division. Non-core businesses would be sold off or closed, with the company shutting down six operational sites in Europe and resulting in 275 job losses. According to Gameplay Chairman Mark Strachan, the company hopes to achieve annual cost-savings of 12.5 million pounds through the restructuring, but declined to comment on how much the company hoped to raise through the sale of non-core operations. In October, Gameplay reported a full year operating loss before goodwill and depreciation of 23 million pounds ($34 million). GAMEPLAY PLC: To Cut Staff, Close Offices ------------------------------------------ Gameplay Plc, an unprofitable seller of video games, said it will cut 275 of its staff, close all its U.K. shops and shut down Web sites and offices on continental Europe as it tries to reach profitability, Bloomberg said on February 2. The London-based company expects to save at least 12 million pounds ($17.8 million) per year. Its estimated revenue for the six months ended January 31 was more than 43 million pounds. Investors, who are reluctant to put money into companies with little prospect of turning a profit, have prompted Gameplay to sell its game development unit, Neo Software Produktions GMBH. "We concentrate on what we are doing well -- we are not good at developing software," Chairman Mark Strachan said. MILLENIUM DOME: Sir Stuart Emerges as New Dome Bidder ------------------------------------------------------ A senior paid adviser to ministers, Sir Stuart Lipton, has emerged as a new bidder for the Millennium Dome, The Times said in its February 5 edition. His involvement has prompted a conflict of interest with Chris Smith, the Culture, Media and Sport Secretary who is responsible for the Dome. A source close to Smith's Department said that if Lipton becomes part of a consortium bidding for the Dome, he will either have to stand down from the Commission for Architecture and the Built Environment, or the Secretary of State will have to absent himself from the negotiations. It was Smith who appointed Sir Stuart as chairman of CABE. Robert Bourne's Legacy consortium, the present frontrunner in the bid, has been given until February 15 to prove that it has sustainable plans for a high-tech venture park at the Dome site. POWERNET TELECOM: Notice Of Creditors Meeting ---------------------------------------------- SCompany Name: Powernet Telecom Plc IA 1986 Section: 23 Creditors Meeting Time: 11.00 am Meeting date: 04/01/01 Meeting address: Jarvis Piccadilly Hotel Piccadilly Plaza Meeting City Code: Manchester M60 1QR Authorised by: S Allport Joint Administrator Last day for proxy: 03/01/01 Proxy address: Bank House 9 Charlotte Street Manchester M1 4EU Firm Name: Arthur Andersen Address: Bank House 9 Charlotte Street Manchester M1 4EU SCOTIA HOLDINGS: Norwegian Group Considers Scotia Bid ------------------------------------------------------ Biotechnology group Photocure has confirmed that is considering a bid for the assets of Scotia Holdings, which is close to running out of money, The Times said in its February 5 edition. According to a source at PhotoCure, the company is also interested in buying Scotia's other photodynamic products, including Foscan, which has failed to win approval in the US and Europe. The Norwegian group pointed out that it would depend on the assets being offered for sale, the price and its conditions. Administrators from Ernst & Young still have to decide whether to sell Scotia's assets or to try to refinance the company, which has a balance sheet dominated by a 50 million pounds convertible bond. SCOTIA HOLDINGS: US, Canadian Banks may Rescue Biotech Group ------------------------------------------------------------- A consortium of American and Canadian private banks is understood to have been approached about a rescue package for troubled biotech group Scotia Holdings, according to Scotsman Online yesterday. Scotia refused to comment on the talks, but it is believed that the group has asked broker Bruce Blackburn to supply the details of Scotia. Blackburn is uncertain as to whether a deal will come off, since investors are looking for companies with good business propositions and that Scotia is presently in a difficult position. Scotia Holdings has failed to get approval from both the US Food and Drug Administration and European ruling bodies for Foscan, and it is running out of money. Anyone interested in bailing the company will have to consider the 50 million pounds convertible bond that is due to be repaid next year. WILLIAM BARLOW: Notice Of Creditors Meeting -------------------------------------------- Company Name: William Barlow & Sons Ltd IA 1986 Section: 98 Creditors Meeting Time: 11.30 am Meeting date: 04/01/01 Meeting address: Express by Holiday Inn Wynard Park Services Coal Lane Meeting City Code: Stockton-on-Tees TS22 5PZ Authorised by: Mr Douglas Director 06/12/00 Firm Name: Grant Thornton Address: Higham House Higham Place Newcastle-u-Tyne NE1 8EE 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., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Lexy Mueller, Salve M. Mordeno and Cristina Pernites, Editors. Copyright 2001. 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 $575 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 $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *