/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010426.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, April 26, 2001, Vol. 2, No. 82 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Korean Unit Files Petition for Bankruptcy * B U L G A R I A * BALKAN AIRLINES: Hopes to Resume London Flights * C Z E C H R E P U B L I C * ZETOR: Tractor Maker Receives Six Bids * F R A N C E * TITUS INTERACTIVE: Posts Net Loss of 22.6 Million Euros * G E R M A N Y * DEUTSCHE TELEKOM: Narrows Losses to 400 Million Euros EM.TV: FIA Confirms Rights Deal With Kirch and EM.TV EM.TV: Write-offs to Drag Media Group Deep Into Red TELDAFAX AG: Unaffected by World Access Insolvency TELDAFAX AG: World Access Files for Chapter 11 * G R E E C E * OLYMPIC AIRWAYS: Greece Extends Deadline for Airline Bid * I T A L Y * ALITALIA-LINEE: Pretax Loss in Line With Last Year ALITALIA-LINEE: Undersec Denies Imminent Alitalia-Air France Deal GRUPPO EDITORIALE: Posts 14.2 Billion Lire Net Loss * N E T H E R L A N D S * AND INTERNATIONAL PUBLISHERS: Shareholders Approve Rescue Plan * R U S S I A * MEDIA-MOST: Russians Seek Gusinsky's Arrest * S P A I N * TERRA LYCOS: Directors Resign From Terra * S W E D E N * FRAMFAB AB: Boss to Step Down LM ERICSSON: Creates Crisis Committee * S W I T Z E R L A N D * SAIRGROUP: Ex-Chief Gets Settlement SAIRGROUP: May Inject $68.2 Million Into French Airlines * U N I T E D K I N G D O M * CAMMELL LAIRD: Venture Capitalist Expresses Interest in Cammell DONSIDE PAPER: Managers Rescue Donside LUCENT TECHNOLOGIES: Cuts Jobs in UK MARKS & SPENCER: Denies Split Over Chief's Bonus MARKS & SPENCER: Unions Attack Staff Councils ============= B E L G I U M ============= LERNOUT & HAUSPIE: Korean Unit Files Petition for Bankruptcy ------------------------------------------------------------ Lernout & Hauspie Speech Products NV, a world leader in speech and language technology, products and services, announced that its wholly-owned subsidiary L&H Korea Co., Ltd. (LHK) has voluntarily filed a petition for bankruptcy protection under the Bankruptcy Act of Korea. The bankruptcy filing was made on Tuesday in Seoul, Korea, Business Wire reported. Concurrently, L&H and LHK filed with the Seoul Prosecutors Office a criminal complaint against former LHK president Ju Chul Seo (also known as John Seo). The complaint requests a thorough investigation into Seo's activities as an officer of LHK between September 1999 and November 2000. The company believes that certain actions by Seo amount to criminal fraud and breach of trust in office, among other criminal activities. Other defendants named in the complaint, who L&H believes abetted these activities include former LHK employees Sam Cho, Henry Oh and J.H. Kim, as well as current and former officials of ChoHung Bank, Hana Bank, Hanvit Bank, and Shinhan Bank. =============== B U L G A R I A =============== BALKAN AIRLINES: Hopes to Resume London Flights ----------------------------------------------- Balkan Airlines seeks to resume regular flights to London from next Wednesday to help the airline keep its slots at some international airports, the April 23 edition of Reuters said. Balkan's main creditors believe that keeping major international slots is vital for Bulgaria's flag carrier to repay outstanding debts. To recall, the airline's majority owner, Israel's Zeevi Holdings, grounded Balkan Airline on February 13 after a row with the government. =========================== C Z E C H R E P U B L I C ============================ ZETOR: Tractor Maker Receives Six Bids -------------------------------------- Odien Restructuring Services has received six bids for a majority share in tractor maker Zetor, Czech News Agency & World Reporter in its April 20 edition said. Odien representative and Zetor supervisory board chairman Alice Undusova declined to name the bidders. Preliminary bids will now be assessed according to pre-negotiated criteria. The bidders that will comply with the criteria will be allowed to perform a due diligence process. Due to production problems, Zetor has launched a restructuring process. Its creditors on April 4 approved a settlement process to save the company from bankruptcy. =========== F R A N C E =========== TITUS INTERACTIVE: Posts Net Loss of 22.6 Million Euros ------------------------------------------------------- Video game editor Titus Interactive reported a net loss of 22.6 million euros for the first half of its financial year ending June 30, 2001, Dow Jones in its April 24 edition said. This is compared to a loss of 12.5 million euros in the same period last year. The net loss includes an exceptional loss of 18.9 million euro due to the slowdown in the videogame market at the end of 2000, with the delays in the launch of video game platforms PlayStation II and Xbox. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: Narrows Losses to 400 Million Euros ----------------------------------------------------- Deutsche Telekom has reported a first-quarter net loss of 400 million euros ($359 million or 249 million pounds), down from a one billion euro loss in the fourth quarter of 2000, according to BBC News in its April 24 report. Like its French and UK rivals, DT has decided to shift its focus from acquiring new mobile phone customers to making more money from existing users and to find ways of reducing 29 billion euros off its 56 billion euro debt load by the end of this year without destroying shareholder value. On Tuesday, Deutsche Telekom said debt had increased to 57.1 billion euros by the end of March. EM.TV: FIA Confirms Rights Deal With Kirch and EM.TV ---------------------------------------------------- The motor sport's governing body International Automobile Federation (FIA), has confirmed a 100-year deal for the commercial rights of SLEC's holding company Formula One with media companies KirchGruppe AG and EM.TV & Merchandising AG, the Associated Press in its April 24 edition said. The deal prompted fears that Kirch would shift the widely watched racing series to his pay television outlet, but FIA said Kirch and SLEC confirmed that the races would remain on free TV. SLEC paid $309 million for the commercial rights. EM.TV: Write-offs to Drag Media Group Deep Into Red --------------------------------------------------- Media group EM.TV & Merchandising is expected to post at least $500 million net loss for 2000 as it writes off acquisitions last year, Reuters on April 23 reported. EM.TV, rescued in February by media giant Kirch, is expected to write off $500 million on its stake in Formula One holding company SLEC. Some analysts expect EM.TV will also be forced to depreciate a big chunk of Muppets creator The Jim Henson Co, for which it paid $680 million. EM.TV may also sell its 45% stake in TeleMuenchen. It paid 409 million euros in October last year for the film rights dealer. EM.TV missed the March deadline set by Deutsche Boerse to present 2000 results. The stock exchange operator had given the media group an extension until April 30. TELDAFAX AG: Unaffected by World Access Insolvency -------------------------------------------------- The recent news that majority shareholder World Access was filing for Chapter 11 has no influence on Teldafax's own insolvency proceedings, the April 24 edition of Dow Jones said, citing Teldefax spokesman Marcus Hoffman. The company is continuing to conduct intensified discussions with other interested buyers. At present, potential buyers are limiting their interest strictly either to individual operating units or to one of its three subsidiaries. "There is no buyer interested in taking over the company as a whole," Hoffmann added. World Access' planned takeover of Teldafax had to be given up following news that World Access was not granted a listing on the Frankurt Stock Exchange. Teldafax declared insolvency on April 2 to prevent Deutsche Telekom from cutting its lines, owing to unpaid bills. TELDAFAX AG: World Access Files for Chapter 11 ---------------------------------------------- The Board of Directors of World Access, Inc has approved the filing of voluntary petitions for Chapter 11 relief in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division, the April 24 edition of PR Newswire said. As previously announced, early this month, three holders of World Access' 13.25% Senior Notes due 2008 commenced an involuntary bankruptcy case against the company, and the company has been in discussions with the noteholders regarding a possible restructuring of the company's obligations since before that filing. In addition, Deutsche Telekom disconnected circuits used by TelDaFax AG, which is 33% owned by World Access, effectively cutting off service to most of TelDaFax's German customers. Although service was subsequently restored, World Access' management concluded that great harm had been caused to the commercial prospects of TelDaFax. In light of the loss of TelDaFax's commercial prospects and the inability to reach a resolution with the noteholders that does not involve remaining in bankruptcy, the Chapter 11 filing is being made in cooperation with the noteholders and effectively converts the involuntary case into a structure in which the company's management will work with the noteholders to finalize a plan for the sale of the company's operations. World Access has engaged UBS Warburg to assist it in evaluating potential acquirers of the company's various business units. =========== G R E E C E =========== OLYMPIC AIRWAYS: Greece Extends Deadline for Airline Bid -------------------------------------------------------- Following specific requests for an extension of the deadline for the submission of binding offers for up to 65% stake in Olympic Airways, Greece will extend the April 20 deadline to May 14, Dow Jones in its April 24 edition said, citing advisor Credit Suisse First Boston. On the non-binding round, Axon Airlines, part of Axon Holdings, and the Restis group have submitted offers, while press reports have indicated that Cyprus Airways Consortium, Australia's Integrated Airline Solutions had withdrawn. Press reports also said that efforts by Axon Airlines and Restis Group to form a consortium to meet the cost of purchasing the ailing airline have failed. The debt of the Greek flag carrier is estimated at around 117 million euro. ========= I T A L Y ========= ALITALIA-LINEE: Pretax Loss in Line With Last Year -------------------------------------------------- Alitalia expected its first quarter pretax loss to be in line with the first three months of last year when it recorded a loss of 192.1 million euros ($172.9 billion), the April 24 edition of Reuters said. Consensus forecasts compiled by pollsters Barra Global Estimates indicate that Alitalia will make a net loss of 7.3 million euros in the full year 2001 before breaking into profit in 2002. ALITALIA-LINEE: Undersec Denies Imminent Alitalia-Air France Deal ----------------------------------------------------------------- Enrico Micheli, the undersecretary to Prime Minister Giuliano Amato, has denied he told La Repubblica newspaper that an alliance between Alitalia SpA and Air France SA is almost complete, according to the April 24 edition of Dow Jones. The undersecretary's statements have been misinterpreted when he told the newspaper that "talks are going forward," Micheli's spokesman Mario Avagliano said. The treasury owns 53% of Alitalia, whose shares were down 1.59% at 1.73 euro on hopes of an alliance with Air France. GRUPPO EDITORIALE: Posts 14.2 Billion Lire Net Loss --------------------------------------------------- Gruppo Editoriale L'Espresso SpA has registered a net loss of 14.2 billion lire in the first quarter, compared to a net loss of 4.4 billion in the same period a year earlier, AFX in its April 24 report said. The decline in the net result, according to the company, was due to a slow down in advertising revenue and a first quarter net loss of 22.6 billion lire posted by its Kataweb Internet unit. Higher paper costs and charges linked to some new initiatives by the company, like its DJ TV television project, also contributed to the decline in the net result. ===================== N E T H E R L A N D S ===================== AND INTERNATIONAL PUBLISHERS: Shareholders Approve Rescue Plan -------------------------------------------------------------- During the shareholders' meeting, shareholders of AND International Publishers have approved a final rescue plan for the market fund, which is under suspension of payment, Het Financieele Dagblad & World Reporter reportred in its April 21 edition. The approval means that the company's largest creditors, the holders of convertible bonds, can exchange their bonds for shares in the company at extremely favorable conditions. After the re-start of the company, shareholders will be left with a stake that is no larger than 5%. The approval of the plan was the only way for shareholders to make something out of their shares because the other option was insolvency. =========== R U S S I A =========== MEDIA-MOST: Russians Seek Gusinsky's Arrest ------------------------------------------- The Prosecutor General's Office has sent a new arrest warrant to the Interpol police agency for Russia's media tycoon Vladimir Gusinsky, six days after a Spanish court rejected a similar request, the Associated Press in its April 24 edition said. The warrant contains new charges against the exiled mogul. On Sunday, prosecutors accused him of laundering $970,000. Yuri Vasilchenko of the Prosecutor General's Office refused to give any further details of the charges, but he is confident that they would make the Spanish court change its mind. Gusinsky's Spanish attorney, Domingo Plazas, said on Monday that there was no evidence supporting the new charge. Russia at first accused Gusinsky of misrepresenting the assets of his Media-Most holding company to obtain a $262 million loan from gas monopoly Gazprom. But a Spanish court last week refused Russia's request to extradite Gusinsky to face those charges, saying Russia's grounds for the case would not amount to a crime in Spain. ========= S P A I N ========= TERRA LYCOS: Directors Resign From Terra ---------------------------------------- Board directors Alberto Cortina de Alcocer and Jose Maria Mas Millet have resigned from Terra Lycos, the April 24 edition of Dow Jones said. Jose Francisco Mateu Isturiz will replace Mas Millet as secretary of the board. Terra Lycos, which provides services through the Internet, has paid no dividends during the last 12 months. The company has also reported losses before extraordinary items for each of the past 3 years. In 2000, earnings before extraordinary items at Terra were - 555.00 million Euro, or -105.4% of sales. =========== S W E D E N =========== FRAMFAB AB: Boss to Step Down ----------------------------- Carl Ros is resigning as board chairman of Swedish Internet consultancy Framtidsfabriken AB, Dow Jones in its April 24 edition said. According to Ros, his resignation from Framfab, which has been hit hard by the dot-com downturn, was natural following all of the turbulence and in light of Framfab's new alliance with US- based Electronic Data Systems (EDS). LM ERICSSON: Creates Crisis Committee ------------------------------------- LM Ericsson has created a crisis committee of top officials to oversee its restructuring efforts, the Associated Press in its April 23 edition said. The committee consists of Ericsson chairman Lars Ramqvist and board members, as well as Swedish business leaders Eckhard Pfeiffer, Sverker Martin-Loof and Goeran Lindahl. They will offer expertise to a separate task force charged with implementing the restructuring, spokeswoman Aase Lindskog said. Ericsson, the world leader in providing equipment for mobile phone systems, is divesting itself of other holdings, transferring its mobile phone production to Flextronics International of Singapore and slashing more the 15,000 jobs after its profits declined partly because of a global economic slowdown and an ailing handset division. ===================== S W I T Z E R L A N D ===================== SAIRGROUP: Ex-Chief Gets Settlement ----------------------------------- Former SAirGroup AG chairman and interim chief executive Eric Honegger backed down from his demand for full pay through 2005 and accepted CHF500,000 in compensation, the April 24 edition of Dow Jones said. His demand rested on his argument that he was ousted, but the company made the case that he resigned. SAIRGROUP: May Inject $68.2 Million Into French Airlines ---------------------------------------------------------- SAirGroup could inject 500 million French francs (76.2 million euros or $68.2 million) into French regional airlines AOM and Air Liberte, the Wall Street Journal reported yesterday According to chief executive Ernest-Antoine Seilliere of Marine- Wendel SA, the majority shareholder of the troubled French operations, he hopes that after the catastrophe, for which Swissair is responsible, they will come up with the necessary financial support. A SAirGroup spokesman declined to comment on Seilliere's remarks. =========================== U N I T E D K I N G D O M =========================== CAMMELL LAIRD: Venture Capitalist Expresses Interest in Cammell --------------------------------------------------------------- Venture capitalist Patron Capital has approached Price Waterhouse Coopers, the receivers of Cammell Laird, about buying parts of the failed shipbuilder at an undisclosed amount, according to the April 23 edition of The Daily Telegraph. The shipbuilder would fit with Patron's strategy of buying asset- based businesses in industrial sectors. The venture capitalist has already tried to make an impression in the UK ports sector with a 75p-a-share approach in January to Simon Group. DONSIDE PAPER: Managers Rescue Donside -------------------------------------- Receivers PriceWaterhouseCoopers and the MBO team, led by managing director Mike Duckett, have signed a management buy-out deal to rescue Donside Paper out of receivership, according to The Scotsman newspaper in its April 21 edition. The receivers hope to finalize the transaction on May. Donside is one of three paper mills in the north-east of Scotland that crashed in December, with 30 million pounds of debt. LUCENT TECHNOLOGIES: Cuts Jobs in UK ------------------------------------ Troubled American telecom equipment provider Lucent Technologies said that an unspecified number of jobs are going at its operations in Swindon, Britain, where the company employs about 3000 people, the April 24 edition of This Is London reported. The job losses, where the bulk of the redundancies are expected to come from Wiltshire facilities, are part of plans to cut about 6% of its 17,000 European workforce. The group has unveiled a startling $3.7 billion (2.56 billion pounds) loss in the three months to 31 March on sales down 17% to $5.9 billion. MARKS & SPENCER: Denies Split Over Chief's Bonus ------------------------------------------------ Marks & Spencer denied that the board was split over the proposed 810,000-pound bonus for executive chairman Luc Vandevelde, the April 23 edition of Namnews reported. The remuneration committee would meet twice before May 22 to discuss Vandevelde's bonus and other issues that has caused further bad publicity for M&S, a company spokesman said. MARKS & SPENCER: Unions Attack Staff Councils --------------------------------------------- Union Network International, one of Europe's largest union organizations, criticizes staff councils of Marks & Spencer as being bogus, according to The Times' report yesterday. Union Network argued that the councils were invalid because management, rather than staff, established them. "These are not works councils. It is not for the company to choose the organizations which represent the workers. It is for the staff," UNI spokesman Jan Furstenborg said. French, Belgian and Spanish unions met in Brussels yesterday to discuss whether to take their protest against M&S's decision to shut its European operation to the streets of London. The unions have considered a demonstration in London in early May, which is expected to be supported by British unions. 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 * * *