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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

              Thursday, April 19, 2001, Vol. 2, No. 77


                            Headlines

* B E L G I U M *

LERNOUT & HAUSPIE: Faces Creditor Claims of 562.9 Million Euro
LERNOUT & HAUSPIE: MediaGold to Market L&H Software

* F R A N C E *

VALEO: Posts 179 Million Euro Loss in First Quarter

* G E R M A N Y *

DEUTSCHE TELEKOM: Faces Legal Action From Shareholders
LIBRO AG: Appoints Steinbauer As New CFO
SUNBURST MECHANDISING: Continues Bank Negotiations

* I R E L A N D *

EIRCOM PLC: CFO to Receive Bonus

* P O L A N D *

ELEKTRIM SA: Vivendi Struggles for Control of Assets R U S S I A

* R U S S I A *

MEDIA-MOST: Publishers Dismiss Staff
MEDIA-MOST: To Defend Itself in Court
NTV: Turner May Cancel Bid After Gazprom Takeover

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

INTERNATIONAL SPORTS MEDIA: Court Refuses to Delay Bankruptcy
INTERNATIONAL SPORTS MEDIA: FIFA to Discuss World Cup Rights
SAIRGROUP: Investors Fear AGM Next Week
ZURICH FINANCIAL: To Cut 500 UK Jobs

* U N I T E D   K I N G D O M *

BRITISH TELECOM: Equity Firms to Bid for Yell
BRITISH TELECOM: To Close $35.8 Billion Pension Plan
CAMMELL LAIRD: Alchemy May Look Again at Shipyard
DAEWOO MOTOR: Racing Car Maker Acquires UK Center
KALAMAZOO COMPUTER: Crushed by Difficult Trading
MG ROVER: Trims Pensions Benefits
POWERGEN PLC: In a $187 Million Deal With NRG


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


LERNOUT & HAUSPIE: Faces Creditor Claims of 562.9 Million Euro
--------------------------------------------------------------

Lernout & Hauspie NV faces claims of 562.9 million euro from 335
creditors after an Ypres commercial court ruling settling
contested creditor declarations, AFX in its April 17 edition
said.

The accepted creditors will be now allowed to vote at a hearing
on June 5 on whether to extend L&H's creditor protection.

The claims were set provisionally at one euro to ensure the
creditors can vote on June 5. No final decision has been made on
the levels of the claims.


LERNOUT & HAUSPIE: MediaGold to Market L&H Software
---------------------------------------------------

Business development company MediaGold has signed a republishing
agreement with leading speech and language company Lernout &
Hauspie (L&H) to produce, market and sell L&H's packaged software
marketed under the Dragon Naturally Speaking and Voice Xpress
brands for retail markets in the EMEA region, M2 Communications
Ltd in its April 17 report said.

The republishing agreement allows MediaGold to continue channel
distribution in supplying L&H Voice XpressTM Standard and
Professional, VoiceCommandsTM, SimplyTranslatingTM,
PowerTranslator(r) Pro, WebTranslatorTM, Talking MaxTM, as well
as Dragon Naturally Speaking(r) Essentials, Standard, Preferred
and Mobile.

As part of the agreement, MediaGold has implemented a new sales
support line and technical support number. Both new and existing
customers should now use +44 20 7221 4600 for Sales Enquiries and
+353 6170 2005 for Technical Support.


===========
F R A N C E
===========


VALEO: Posts 179 Million Euro Loss in First Quarter
---------------------------------------------------

Valeo announced a first-quarter net loss of 179 million euro
compared to a profit of 82 million last year after, including a
163 million financial provision relating mostly to restructuring
plans for its Rochester factory in the U.S., AFX in its April 17
edition said.

Automobile parts manufacturer Valeo further announced its
withdrawal from activities equivalent to around 10% of turnover.

Shares in Valeo were sharply lower in midday trading as the stock
lost favor with the worse-than-expected first quarter results.


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


DEUTSCHE TELEKOM: Faces Legal Action From Shareholders
------------------------------------------------------

Deutsche Telekom AG will face a lawsuit in a Frankfurt court
against its shareholders for providing insufficient information
in the prospectus connected to the issue of a third tranche of
shares and that the company gave false information about the
value of its real-estate holdings, the Wall Street Journal
reported yesterday.

According to the shareholders' lawyers from Tilp & Kaelberer, the
telecom group could be obliged to pay shareholders over one
billion euros ($890 million) if the claims are successful.

At the end of March, Deutsche Telekom rejected the law firm's
efforts to reach an out-of-court settlement. Because of the six-
month statute of limitations on lawsuits based on prospectus
information, it was necessary to file claims quickly, the Journal
added.

Deutsche Telekom executives, including Chief Executive Ron
Sommer, have been the subject of a preliminary investigation for
failing to inform the investors ahead of a share issue in June
that it would take a writedown on its real estate.


LIBRO AG: Appoints Steinbauer As New CFO
----------------------------------------

Werner Steinbauer will become Chief Financial Officer of LIBRO AG
effective May 1, 2001 to replace Johann Kn"bl, who will assume as
managing director in the group's German subsidiary, Frankfurt
Stock Exchange in its April 17 press release said.

In order to return LIBRO to profitability, the supervisory board
has instructed the board of directors to prepare a new strategic
plan.

Together with key managers and external consultants, the board of
directors has developed a new orientation for the LIBRO Group,
which is also reflected in the 2001/02 budget. This concept was
approved by the supervisory board, and examined by KPMG for
plausibility.


SUNBURST MECHANDISING: Continues Bank Negotiations
--------------------------------------------------

Sunburst Merchandising AG has entered into intense negotiations
with its accompanying banks to ensure continuing lines of credit
for the company, the Frankfurt Stock Exchange in its April 17
press release said.

If the talks fail, Sunburst could become the sixth company on the
Neuer Markt to file for insolvency. It posted a 6.1 million euros
loss for 2000 last month, caused by a dramatic loss at the
company's cinema shops and a plunge in the value of its Internet
commerce firm gotmerch.com.

German newspaper Handelsblatt reported earlier on Tuesday that
Sunburst shareholders had filed charges against the group's
management board alleging it had practiced insider trading and
published misleading statements.

The Sunburst spokesman told Reuters that no members of the
management board had sold shares ahead of the March results
statement. He said the company had not received any suit but was
ready to cooperate with any investigation.


=============
I R E L A N D
=============


EIRCOM PLC: CFO to Receive Bonus
--------------------------------

Eircom's chief financial officer Peter Lynch has been guaranteed
a bonus of about 70,000 euro (55,130 pounds) on top of his basic
annual salary of 279,400 euro for the year to the end of March
2002, according to The Irish Times' report yesterday.

Lynch is entitled to an annual bonus of 20% of his base salary
for the achievement of target performance and up to 30% of base
salary for the achievement of special or stretched targets.


===========
P O L A N D
===========


ELEKTRIM SA: Vivendi Struggles for Control of Assets
----------------------------------------------------

Vivendi Universal SA is making a supreme effort in its battle for
control of Elektrim SA's telecommunications assets, the Wall
Street Journal reported yesterday.

The French company and its allies will likely go ahead with a
shareholders' meeting on Friday, during which shareholders will
replace Elektrim's supervisory board. This move is despite
Elektrim's postponement of the meeting until May 14.

Vivendi is vying for control of Elektrim's telecom assets,
including a majority stake in mobile operator Polska Telefonia
Cyfrowa.



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


MEDIA-MOST: Publishers Dismiss Staff
------------------------------------

Publishers have dismissed the staff of news magazine Itogi and
closed daily newspaper Sevodnya, two pillars of Vladimir
Gusinsky's Media-Most empire, two weeks after the exiled media
magnate lost control of independent television network NTV to the
state-dominated gas monopoly OAO Gazprom, according to Wall
Street Journal's report yesterday.

Dmitry Biryukov, head of Itogi's publishing house Seven Days,
said he had sent all the magazine's staff on two months' paid
leave. He also fired editor-in-chief Sergei Parkhomenko over a
series of open letters he had run in the magazine accusing
Gazprom, one of Seven Days' shareholders, of exerting pressure on
staff.

Furthermore, Biryukov he had closed down Sevodnya, which had been
incurring annual losses of $3 million (3.4 million euros), and
transferred all ownership rights to its staff.


MEDIA-MOST: To Defend Itself in Court
-------------------------------------

Media-MOST has no intentions to surrender and will use all legal
methods to defend itself in court, RosBusiness Consulting
reported on Tuesday, citing Media-MOST representative Dmitry
Ostalsky.

Ostalsky believes that the Gazprom-Media haste is probably due to
the fact that both groups and the Kremlin would not like Media-
MOST to find other ways to repay its debt to Credit Suisse First
Boston than transferring its shares to Gazprom.


NTV: Turner May Cancel Bid After Gazprom Takeover
-------------------------------------------------

Investors led by Ted Turner may end negotiations to buy 30% of
Russia's independent television network NTV now that it was taken
over by Gazprom, a government-connected gas company, the
Associated Press on April 17 reported, citing spokesman Brian
Faw.

Gazprom was locked in a standoff with the network's journalists,
who have quit in protest of the takeover. Boris Jordan, an
American financier chosen by Gazprom to head the network, said
about 45 workers have left.

Turner has said his priority was to keep NTV an independent news
voice. NTV's assets also include a direct-to-home satellite
distribution system that covers Russia and parts of Europe and
the Middle East.


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


INTERNATIONAL SPORTS MEDIA: Court Refuses to Delay Bankruptcy
-------------------------------------------------------------

The Cantonal Court in Zug has refused to postpone its formal
bankruptcy proceeding for three months for International Sports
Media and Marketing, which owns sports marketing giant ISL
Worldwide, Ad Age's Daily World Wire in its April 17 edition
reported.

ISMM will immediately lodge an appeal saying it will do
everything possible to achieve the objective. However, local
analysts doubt the ailing sports company will succeed to avert
bankruptcy unless the company can find partner within a week.

Munich-based Kirch Group and the Interpublic Group of Companies-
owned Octagon Worldwide have denied they have any intentions to
emerge as a partner to keep ISMM afloat.


INTERNATIONAL SPORTS MEDIA: FIFA to Discuss World Cup Rights
------------------------------------------------------------

The International Football Association FIFA met yesterday to
discuss the World Cup's marketing and television rights, after
rights holder ISMM Group was declared bankrupt for cash flow
difficulties, AFX in its April 17 edition reported.

The TV rights to the 2002 World Cup deal was expected to give
FIFA US$382 million, while the 2006 World Cup was expected to
contribute 10% more.

FIFA now hopes to draw up a contingency plan, regardless of the
outcome of ISMM's liquidation procedure.


SAIRGROUP: Investors Fear AGM Next Week
---------------------------------------

Shares in SAirGroup AG plunged to 11.1% or 13.25 Swiss francs at
105.25 Swiss francs in morning trade, as investors fear next
week's AGM will see a continuation of the turbulence the company
has experienced for several months, AFX in its April 17 report
said.

Swiss President Moritz Leuenberger has supported the proposal for
an extraordinary audit of SAirGroup's accounts and the Federal
Government, which owns about 3% of SAirGroup, will probably
refuse to sign off the 2000 books. Recently the Cantons of Vaud
and Geneva said they also would not sign off on the 2000 books.

Zurich public prosecutor Hans-Peter Hirt also confirmed that
investigations are continuing regarding a possible lawsuit
against the SAirGroup board. It centers on SAirGroup's balance
sheet.


ZURICH FINANCIAL: To Cut 500 UK Jobs
------------------------------------

Zurich Financial Services will cut 500 jobs from its UK life arm
as part of a restructuring plan to achieve savings of 65 million
pounds annually, according to The Times' report yesterday. The
company said unions had been fully consulted about the cuts.

The majority of the jobs lost are to go by natural wastage but
there will be 170 redundancies at the group's Swindon
headquarters. Reducing its senior management and outsourcing a
variety of non-core activities such as fleet management will
effect the cuts.

ZFS will take a one-off charge of about 17 million pounds to deal
with the redundancies, but the restructuring plans are still
expected to save 50 million pounds in the first year.


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


BRITISH TELECOM: Equity Firms to Bid for Yell
---------------------------------------------

Private equity firms Apax Partners and Hicks, Muse Tate & Furst
are believed to be preferred bidders of the UK directory business
that British Telecom is hoping to sell at between 2.7 billion
pounds (4.3 billion euro) and 2.7 billion pounds, eFinancial News
in its April 16 edition reported.

Many leading banks have offered to manage the jumbo debt
financing behind the probable purchase of Yell but Merrill Lynch
and Morgan Stanley are the leading contenders.

Merrill Lynch is said to have a close relationship with Apax
Partners and is understood to have persuaded the firm to be its
official debt backer on this deal. Morgan Stanley, on the other
hand, is also said to be close to BT, having been its established
M&A adviser for the past two years. It has also managed bond
issues for the company.

Spokesmen at Morgan Stanley and Merrill Lynch declined to
comment.


BRITISH TELECOM: To Close $35.8 Billion Pension Plan
----------------------------------------------------

British Telecommunications PLC plans to close its 25 billion
pound ($35.8 billion or 40.53 billion euros) defined-benefit
pension plan to new employees, Wall Street Journal in its April
18 edition said.

Although the telecom group declined to comment on the reason for
its decision, some analysts said the concept of defined-benefit
plans is outdated, but added that they didn't think the move was
intended to reduce BT's debt burden.

Defined-benefit schemes guarantee returns for pensioners and are
seen as far more expensive for companies than defined-
contribution plans.


CAMMELL LAIRD: Alchemy May Look Again at Shipyard
-------------------------------------------------

Venture capital group Alchemy will look again at the books of
Cammell Laird if asked to do so by receivers
PriceWaterhouseCoopers, the April 18 edition of The Times said.

Alchemy already went through Cammell Laird's figures before it
went into receivership, but said at the weekend that it had
believed then that it was too late for its involvement in the
business.

Industry observers, however, believe that if the venture capital
group was interested before receivership, then it would be more
interested afterwards because the price of the yard will be
cheaper.


DAEWOO MOTOR: Racing Car Maker Acquires UK Center
-------------------------------------------------

Racing car and vehicle-making group TWR has bought Daewoo Motor's
UK technical center, according to The Times in its April 18
edition.

The future of the technical center has been in doubt since the
restructuring of the bankrupt Korean car company began last year.

"The facilities and resources at Worthing are complementary to
TWR and support our plans for a greater international profile,"
TWR managing director Craig Wilson said.


KALAMAZOO COMPUTER: Crushed by Difficult Trading
------------------------------------------------

Difficult trading conditions continued to hamper the efforts of
Kalamazoo Computer Group, the troubled computer services company
that is in the middle of a restructuring, to return to
profitability.

In a report dated April 18, The Times said that the company had
continued to incur operating losses in the second half but at a
greatly reduced level to the first half's operating loss of 1.7
million pounds, as the benefits of the restructuring became
apparent.

In its last full financial year Kalamazoo incurred pre-tax losses
of 6.9 million pounds on turnover of almost 63 million pounds.
The company last made a profit at the pre-tax level in 1997.


MG ROVER: Trims Pensions Benefits
---------------------------------

MG Rover will cut the pension benefits of its 5,500 workforce
because it cannot afford a more generous scheme, Mail on Sunday
reported.

Employees have to put extra cash into additional voluntary
contributions (AVCs). This means, they will have to contribute
5.6% of their pay, compared with 4.75% at present, and their
pensions could be more than 1,000 a year lower.

"It looks like we're having to contribute more for a smaller
pension. The unions are not causing a fuss because they think the
company cannot afford anything more. But many Rover workers are
going to be angry when they come to retire," a Rover worker said.


POWERGEN PLC: In a $187 Million Deal With NRG
---------------------------------------------

Powergen PLC has agreed to sell its mining and power-station
businesses in Germany and Hungary to US-based NRG Energy Inc. for
130 million pounds (US$187 million).

In a report dated April 18, the Wall Street Journal reported that
the restructuring deal is expected to achieve 1.37 billion pounds
in total debt reduction, exceeding an original target of 1
billion pounds.

The Powergen-NRG deal includes Powergen's wholly owned Hungarian
assets Csepel I and II, as well as its stake in Mibrag GmbH and
Saale Energie GmbH in Germany.



         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-
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USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
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Copyright 2001.  All rights reserved.  ISSN 1529-2754.

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