/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010410.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, April 10, 2001, Vol. 2, No. 70 Headlines * B E L G I U M * LERNOUT & HAUSPIE: CEO Sees Restructuring Plan Ready by May LERNOUT & HAUSPIE: Considers Declaring LHK Bankrupt LERNOUT & HAUSPIE: Fires CFO Dammekens LERNOUT & HAUSPIE: KPMG Files Suit in Ieper LERNOUT & HAUSPIE: Probe Finds Sales at L&H Unit Are Fake SABENA SA: Needs Fresh Funds to Meet Heavy Debt * F R A N C E * AUVERLAND: Granted Legal Protection * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Losses May Hit 1.5 Billion Euros BANKGESELLSCHAFT BERLIN: State May Sell Stake in Bank TELDAFAX AG: World Access Noteholders Approve Funding * I T A L Y * ALITALIA-LINEE: Strike Causes Flight Cancellations, Delays FREEDOMLAND-ITN: Web-TV Firm Seeks Partners * P O R T U G A L * JERONIMO MARTINS: Resolves Doubt With Ahold Alliance * R U S S I A * NTV: Staffers Resists New Boss Appointment NTV: Talks May Resume This Week * S P A I N * GRAND TIBIDABO: Creditors Approve Patsa Sale * S W I T Z E R L A N D * ISL WORLDWIDE: ISSM Faces Bankruptcy * U N I T E D K I N G D O M * BRITISH TELECOM: Nears Real Estate Sale BRITISH TELECOM: Postpones Debt Meeting to May CAMMELL LAIRD: Prepares Plans for Shakeup MARKS & SPENCER: Chief Visits Belgium Amid Controversy MARKS & SPENCER: Sales Drop Despite Rescue Package MARKS & SPENCER: Vandevelde Comments on French Shops Closure VAUXHALL: Faces Pressure to Reveal Luton Plans ============= B E L G I U M ============= LERNOUT & HAUSPIE: CEO Sees Restructuring Plan Ready by May ----------------------------------------------------------- Lernout & Hauspie expects to have a restructuring plan ready by the beginning of May in order to hold talks on it with creditors, AFX's Friday report said. According to CEO Philippe Bodson, it is too early to say what the restructuring plan will include, but they are analyzing other possibilities of selling other parts of the business. LERNOUT & HAUSPIE: Considers Declaring LHK Bankrupt --------------------------------------------------- Lernout & Hauspie Speech Products NV is considering declaring its South Korea unit bankrupt, according to the Wall Street Journal's Friday report. PricewaterhouseCoopers has conducted an internal probe for the Belgian software firm and has found that that most of the South Korean unit's sales were a deception. It said that L&H Korea created the appearance of valid agreements through various arrangements with customers in order to meet sales goals. Chief Executive Philippe Bodson said that L&H is likely to file suit against L&H Korea head Joo Chul Seo, which could also include the South Korean banks and other people connected to the fraud. Bodson said he was working to ensure that when L&H emerges from bankruptcy protection, it isn't faced with claims linked to the former management, including class-action lawsuits filed by shareholders in the U.S. LERNOUT & HAUSPIE: Fires CFO Dammekens -------------------------------------- Lernout & Hauspie Speech Products NV has fired former chief financial officer Carl Dammekens, Wall Street Journal said yesterday, citing Chief Executive Philippe Bodson. Specific reasons for why the company dismissed the official weren't specified. Dammekens, who worked closely with the company's founders Jo Lernout and Pol Hauspie, was the last senior manager in charge of the company when it admitted to accounting errors and other irregularities. Bodson said the company is in the process of recruiting Dammekens' successor. LERNOUT & HAUSPIE: KPMG Files Suit in Ieper ------------------------------------------- KPMG Belgium filed a civil lawsuit on Friday with the Ieper court of first instance against former officials of Lernout & Hauspie Speech Products NV for allegedly obstructing its efforts to audit the company, Dow Jones reported. On the advice of their lawyers, KPMG did not release the names to the press. KPMG said the suit is against all persons at the company who provided them with false, inaccurate or incomplete information about the existence of so-called side agreements and claims. Founders Jo Lernout and Pol Hauspie and former CEO Gaston Bastiaens weren't available for comment. LERNOUT & HAUSPIE: Probe Finds Sales at L&H Unit Are Fake --------------------------------------------------------- A PricewaterhouseCoopers investigation found that 70% of the nearly $160 million in sales booked by the Korean unit of Lernout & Hauspie Speech Products NV between September 1999 and June 2000 were fictitious, Wall Street Journal said yesterday. According to the probe, the Korean unit's managers used highly sophisticated schemes to fool L&H's regular auditor KPMG. To fool the auditors, Pricewaterhouse found that L&H Korea used two types of schemes. The first involved factoring unpaid receivables to banks to obtain cash up front. Side letters that were concealed from KPMG gave the banks the right to take the money back if they couldn't collect from L&H Korea's customers. The second, L&H Korea told customers to transfer their contracts to third parties. The third parties then took out bank loans, for which L&H Korea provided collateral, and then paid the overdue bills to L&H Korea using the borrowed money. A few hours before L&H chief executive Philippe Bodson released an abridged version of Pricewaterhouse's report, KPMG filed a lawsuit against L&H's former management in a Belgian court. The complaint alleges that former senior L&H executives deliberately provided false or incomplete information to KPMG and conspired to obstruct the firm's audits. SABENA SA: Needs Fresh Funds to Meet Heavy Debt ----------------------------------------------- Sabena airline urgently needs fresh funds to tackle 2.4 billion euros debts, Agence France-Presse reported on Friday. The 250 million euros injection two months ago just permitted payment of short-term loans, and Sabena's creditor banks were beginning to get impatient. A spokesman at the Belgian ministry for state participations said that working groups are currently analyzing the costs of bailing out Sabena, which confirmed a net consolidated loss of 325 million euros for 2000. =========== F R A N C E =========== AUVERLAND: Granted Legal Protection ----------------------------------- Auverland, which specializes in the design, manufacture and sale of light, civil and military cross-country vehicles, has been granted protection from its creditors by a court in Roanne, Le Monde in its April 6 edition said. A legal source puts the company's liabilities at FFr 47 million. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Losses May Hit 1.5 Billion Euros --------------------------------------------------------- Bankgesellschaft Berlin, which is 57% owned by the city-state of Berlin, may post losses of up to 1.5 billion euros from its 2000 business year, Reuters reported on Friday. Berlin finance minister Peter Kurth said that losses of 1 to 1.5 billion euros were realistic in 2000. He added that the city plans to bail out the bank but could not afford the bailout alone and would consider any solution to the funding problem. Five senior executives resigned from Bankgesellschaft last month, while banking watchdog BAKred voiced concern over the bank's management. BANKGESELLSCHAFT BERLIN: State May Sell Stake in Bank ----------------------------------------------------- The state of Berlin may partially sell its 56.6% stake in the troubled Bankgesellschaft Berlin AG, AFX on Friday reported. Berlin finance minister Peter Kurth said that there were many parties interested in buying a stake in the troubled bank but that Bankgesellschaft was not negotiating with any of them. Nord LB and Gothaer Versicherung are seen as being interested in the takeover of the bank. TELDAFAX AG: World Access Noteholders Approve Funding ----------------------------------------------------- World Access, Inc. announced on Friday that the holders of its 13.25% Senior Notes approved a funding plan to meet obligations of its subsidiary, TelDaFax AG, to Deutsche Telekom AG, in accordance with previously discussed terms, PR Newswire reported. The Company is still in discussions with DT to have circuits restored as soon as an agreement with DT can be reached. World Access is focused on being a leading provider of bundled voice, data and Internet services to small- to medium-sized business customers located throughout Europe. ========= I T A L Y ========= ALITALIA-LINEE: Strike Causes Flight Cancellations, Delays ---------------------------------------------------------- The 4-hour strike of Alitalia SpA's hostess and steward unions on Friday has caused the cancellation of 60 domestic flights and 12 international flights, AFX in its April 8 edition reported. The strike, which also caused the delay of 53 domestic flights, 62 international flights and 6 intercontinental flights, affected about 25,000 passengers. FREEDOMLAND-ITN: Web-TV Firm Seeks Partners ------------------------------------------- New investors in web-TV company Freedomland said they need several large business partners to transform the troubled venture into an interactive TV business, the Financial Times on Sunday reported. Four Italian investment groups, who acquired 29.9% from Freedomland founder Virgilio Degiovanni last week, are looking at interactive TV efforts from UK's Telewest and France's Canal Plus as models for the company. Freedomland ran into trouble last October when it admitted it was under investigation for allegedly inflating subscriber numbers before an initial public offering last April. =============== P O R T U G A L =============== JERONIMO MARTINS: Resolves Doubt With Ahold Alliance ---------------------------------------------------- Retailer Jeronimo Martins said doubts about the future of its alliance with Dutch firm Ahold have been resolved and the group sees scope to extend the partnership, Reuters on April 6 reported. According to chairman Alexandre Soares dos Santos, the alliance with the two groups is strategic and has advantages, and they could cooperate in the area of food services. The development of food services business in Portugal was a priority for Jeronimo Martins' cash-and-carry company Recheio. "hold has in the U.S. one of the world's leaders in food services and Recheio is more and more orientated towards this business. So there could be cooperation between Ahold and Recheio," Soares dos Santos added without giving details. =========== R U S S I A =========== NTV: Staffers Resists New Boss Appointment ------------------------------------------ Journalists at NTV are resisting state-owned natural gas monopoly OAP Gazprom's appointment of U.S. investment banker Boris Jordan as the television station's new general director, the Wall Street Journal on April 6 reported. Viktor Shenderovich, who writes the station's well-known satirical puppet program that pokes fun of the Kremlin, said that nobody is going to follow Jordan, a descendant of the Czarist- era. NTV: Talks May Resume This Week ------------------------------- More talks are expected this week between Ted Turner and OAO Gazprom on an agreement that would allow the media magnate to buy a 30% stake in NTV television channel, according to the Wall Street Journal yesterday. Last week, individuals familiar with the deal said that Turner had reached agreement with NTV founder Vladimir Gusinsky to buy 30% of the station, but it isn't clear whether Gazprom, with a 46% stake, will approve or block the transaction. It was also reported that the gas company's media branch ousted NTV's board and installed allies to run the network. Employees at the television station have refused to recognize the new managers, saying the board meeting was illegal. ========= S P A I N ========= GRAND TIBIDABO: Creditors Approve Patsa Sale -------------------------------------------- Twenty-nine of 30 creditors of amusement park company Grand Tibidabo has approved the sale of the assets of Tibidabo operator Patsa, Expansion & World Reporter in its April 4 edition reported. The judge who ordered that Grand Tibidabo be liquidated will issue a writ agreeing the sale. The Barcelona city council has presented the sole offer of 4.21 million euros for the park. ===================== S W I T Z E R L A N D ===================== ISL WORLDWIDE: ISSM Faces Bankruptcy ------------------------------------ ISMM, the company that owns sports marketing company ISL Worldwide, announced it was facing bankruptcy, the Financial Times reported on Friday. ISMM has filed a petition with the Cantonal Court in Zug, Switzerland, requesting that its bankruptcy be postponed for three months while it seeks an equity partner to bail it out. However, doubts remain over whether a savior will be found given the amount of money the company owes sports bodies. ISL is understood to owe European football's governing body Uefa SFr20 million from its contract to sell the marketing rights to last year's Euro 2000 Championships. The sports marketing company is also being sued by Championship Auto Racing Teams (Cart) for terminating its contract with the publicly-quoted US body ahead of schedule. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: Nears Real Estate Sale --------------------------------------- British Telecom Plc is close to selling 2.0 billion pounds ($2.87 billion) of real estate to UK property firm Land Securities as the telecom giant scrambles to defend its creditworthiness, Reuters reported on Sunday. The company has vowed to cut one-third of its 30 billion pounds debt in an effort to hold on to an "A" series grade, but S&P warned in February that it was highly likely to lower BT at least one notch to "A-". It left open the possibility of a two-notch cut to "BBB+". BT has reportedly been shedding around to free up cash. Last week, the group was said to be in talks with private equity groups over the sale of its yellow pages unit Yell for over 3.0 billion pounds. BRITISH TELECOM: Postpones Debt Meeting to May ---------------------------------------------- British Telecom's April meeting with international ratings agency Standard & Poor's has been postponed to May, according to BBC News' April 5 edition. BT has said that the meeting had to be in May because of diary conflicts, but no date in May has yet been set. A spokeswoman at S&P added there was nothing sinister in the postponement. The postponement by a month grants BT precious time to work on its 30 billion-pound debt-reduction program. Earlier this month, the telecom giant also cancelled a meeting with shareholders, who wanted to know how BT planned to turn around its finances. CAMMELL LAIRD: Prepares Plans for Shakeup ----------------------------------------- Cammell Laird advisers are preparing to publish plans to shake up the troubled company, the Daily Mail in its April 6 edition reported. Close Brothers' strategic review include raising fresh bank loans and converting debt into equity in the option. Laird's problems were triggered when Italy's Costa Crociere refused to accept delivery of a 51 million cruiser midsection. German shipyard Lloyd Werft is now expected to offer a knockdown price. MARKS & SPENCER: Chief Visits Belgium Amid Controversy ------------------------------------------------------ Chairman Luc Vandevelde of troubled retailer Marks & Spencer PLC, has flown to Belgium to meet angry workers at the four Belgian stores that are scheduled to close, The Sunday Telegraph reported. The visit comes amid controversy in the U.K. about the group's future and worries about plunging sales report that M&S has slashed its internal forecast for profits to GBP430 million from some GBP490 million three months earlier. Marks & Spencer officials could not be reached for comment. MARKS & SPENCER: Sales Drop Despite Rescue Package -------------------------------------------------- A leaked report has indicated that sales of ladieswear in Marks and Spencer slumped by about a quarter at the end of last year despite price cuts, BBC News reported on Sunday. An M&S spokesman acknowledged the report was accurate but said the sales figures were in line with market expectations and applied to the trading period to the end of December. The report forecast that the retailer would make 430 million pounds profit during the last financial year. During the previous period, it made a pre-tax profit of 418 million pounds. However, figures that relate to the first nine months of the 2000-2001 financial year, reveal its UK operating profit fell from 203 to 166 million pounds and M&S lost 109 million pounds in the annual winter sale. MARKS & SPENCER: Vandevelde Comments on French Shops Closure ------------------------------------------------------------ The decision to close the firm's shops in France was the only option, AFX in its Sunday edition reported, citing Marks and Spencer PLC chairman Luc Vandevelde. "In examining all the economic possibilities, the closure of all the stores is the only one which made any sense," he said. "All the French shops lose money." VAUXHALL: Faces Pressure to Reveal Luton Plans ---------------------------------------------- Vauxhall faces mounting pressure this week to set out its plans for the company's Luton car plant in England, according to The Times' report yesterday. The troubled General Motors European subsidiary is understood to have had met with union representatives to discuss building a replacement for the four-wheel-drive car at Luton. The meetings follow a pledge of government cash for the project from Trade and Industry Secretary Stephen Byers, who said that the Government would provide 50 million-pound aid for the plant. To recall, workers at two General Motors plants in Britain held a 24-hour strike on February to protest the firm's plans to shed 2,000 jobs when it stops making cars at its factory in Luton from 2002. 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. Kimberly MacAdam, 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 * * *