/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010523.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 Wednesday, May 23, 2001, Vol. 2, No. 101 Headlines * F R A N C E * BULL SA: To Sell Tech Services for $264 Million SAMES SA: To File for Bankruptcy Protection * G E R M A N Y * BROKAT: Seeks Partner to Secure Funding EM.TV: Kirch May Increase Stake in Formula 1 PHILIPP HOLZMANN: Regains Competitiveness After Restructuring * I R E L A N D * W&R MORROGH: Court Winds Up Broker * I T A L Y * ALITALIA-LINEE: Cancels Flights Over Strike * N O R W A Y * BRAATHENS ASA: Trade Suspended as Net Loss Widens to 156 MM Krone * P O L A N D * DAEWOO-FSO: Sales Fall to 70%, Down 49% ELEKTRIM SA: To Pay PenneCom US$23 Million for Breach of Contract STATE RAILWAYS: Announces Restructuring Plan * S W I T Z E R L A N D * ISMM GROUP: Court Declares Sports Rights Firm Bankrupt BRITISH TELECOM: German Mobile Unit Chief Steps Down BRITISH TELECOM: Starts Trade of Discounted Share Rights EQUITABLE LIFE: Faces Criticism at AGM EWS INTERNATIONAL: Warns of Insolvency MARKS & SPENCER: Chief Faces Pressure for Luxurious Lifestyle MARKS & SPENCER: To Cut Head Office Staff =========== F R A N C E =========== AIR LIBERTE: Plans to Axe 1,328 Jobs ------------------------------------ Cash-strapped Air Liberte AOM announced plans to cut 1,328 jobs, or about 22% of its work force, as part of the airline operator's restructuring plan, according to a Wall Street Journal report on Tuesday. Union leaders had been expecting as many as 1,500 job cuts. With a loss of 2.4 billion francs ($321 million or 364.4 million euros) last year, Air Liberte AOM said it also plans to reduce its fleet of planes to 27 from 50. The company said that next month, it would halt service to southern French cities of Bordeaux, Marseille and Montpellier, where it has faced competition from Air France and France's high- speed train, the TGV. Air Liberte AOM predicted the plan would return the company to profitability by 2004. BULL SA: To Sell Tech Services for $264 Million ----------------------------------------------- Cie. Des Machines Bull SA was in exclusive talks to sell its technology-services activities to French services company Groupe Steria SCA and a consortium backed by Axa Private Equity for about 300 million euros ($264 million). The electronic data processing systems producer has struggled with profitability in recent years. Last November, it unveiled a restructuring plan involving sales of assets valued at least 400 million euros and a 10% reduction in its work force. Bull disposed of 361 million euros in assets, including its smart-card unit earlier this year. A Bull spokeswoman said the company was still looking for investors for its hardware activities. Credit Commercial de France, a unit of HSBC Holdings PLC, represents Bull in the discussions. SAMES SA: To File for Bankruptcy Protection ------------------------------------------- Sames S.A. will file for bankruptcy protection under French law due to severe cash flow problems and lack of liquidity, according to Dow Jones' Monday report. Meanwhile, Sames S.A. managing director Philippe Vuillerme reportedly resigned from the company's board. U.S.-based Sames Corporation, which designs and makes spray finishing and coating application equipment, said it is continuing talks with another multinational company that had expressed interest in buying its French unit, following the withdrawal of talks from a potential buyer. It is unclear if the new buyer will still be interested in light of the bankruptcy filing. Sames last distributed a dividend in 1997, when it paid $0.30 per share. In 2000, earnings before extraordinary items were -$8.73 million, or -10.8% of sales. The company has also reported losses before extraordinary items for each of the past five years. As of December 2000, the company's long-term debt was $2.96 million and total liabilities were $54.17 million. ============= G E R M A N Y ============= BROKAT: Seeks Partner to Secure Funding --------------------------------------- E-business software company Brokat is seeking external investors to secure funding for 2002 and beyond, the Financial Times reported Tuesday. Brokat has been burdened by high costs since it expanded product offerings and spent heavily on the $800-million all-share deal last year for US companies Gemstone Systems and Blaze Software. The company, which held 89 million euros ($78 million) in cash at the end of the first quarter, vowed to cut costs and shed jobs to bring operating expenses down by 15 million euros in the fourth quarter. Analysts warned that Brokat would face a liquidity crisis if costs were not rapidly controlled. EM.TV: Kirch May Increase Stake in Formula 1 -------------------------------------------- KirchGruppe may exercise its option to buy from EM.TV & Merchandising AG a majority stake in Formula 1, AFX News reported Monday. According to Dieter Hahn, deputy chairman of KirchGruppe unit Kirch Holding GmbH & Co KG, the option is possible since it is not very likely that EM.TV will be able to pay its loans in Speed, which holds 75% in Formula 1 holding company SLEC. EM.TV holds a 51% stake in Speed, while KirchGruppe owns 49%. PHILIPP HOLZMANN: Regains Competitiveness After Restructuring ------------------------------------------------------------- Philipp Holzmann reported in its May 17 press release that it has successfully completed its financial and organizational restructuring. According to Chairman of the Board Prof. Konrad Hinrichs, the company now has modern, high-performing and efficient structures. He further emphasized that capacities are now adjusted to market requirements and costs have been reduced to a competitive level. "We have regained the confidence of our customers and the competitiveness of our company. We succeeded in substantially reducing our company's indebtedness," Although the 2000 financial statements show a net loss of DM156 million at Group level and of DM92 million for the AG, the results from operating business and in particular the figures for the first quarter of fiscal 2001 indicate an upward trend for the company, even in Germany. Abroad, especially in the USA, the Group managed to further strengthen its position and achieve a positive result, while simultaneously increasing the share of international business in the Group output to about 60%. ============= I R E L A N D ============= W&R MORROGH: Court Winds Up Broker ---------------------------------- The High Court on Monday wound up stock brokerage firm W&R Morrogh despite an injection of 2.4 million pounds by the partners, the Irish Independent reported yesterday. Justice Mella Carroll also issued an order for the dissolution of the firm. In April, accountant Tom Grace of PricewaterhouseCoopers was appointed as receiver, following a claim by Alexander Morrogh, the senior partner of W&R Morrogh, that Stephen Pearson, the junior partner, defrauded the firm through his involvement in gambling activities and options. Pearson said he was involved in the activity on his own and no other partner or staff members were involved or aware of what he was doing. ========= I T A L Y ========= ALITALIA-LINEE: Cancels Flights Over Strike ------------------------------------------- Strikes by Alitalia pilots, flight attendants and ground workers on Monday forced the cancellation of hundreds of flights across Italy, the Associated Press in its Monday edition reported. Alitalia refused to say how many flights were canceled or delayed. In Rome, nearly 250 flights were canceled, while others faced delays. In Malpensa, Italy, 144 flights coming or going were canceled, while about 60 flights faced cancellation in Linate airport. Airports in Florence, Pisa and Bologna all had to cancel dozens of flights. Alitalia pilots refused to fly for twelve hours, while the flight attendants struck for 24 hours and the ground workers struck for four. Earlier this month, the Italian airline reported a first-quarter net loss of 387 billion lire, which comes on the heels of a 364 billion loss last year. =========== N O R W A Y =========== BRAATHENS ASA: Trade Suspended as Net Loss Widens to 156 MM Krone ----------------------------------------------------------------- Shares in Braathens SAFE ASA have been suspended from trade in Oslo Stock Exchange, AFX News reported in its Monday edition, after Braathens SAFE ASA posted a net loss of 156 million Norwegian krone for the first quarter to March 31, compared with a loss of 45 million Norwegian krone for the same period a year ago. The suspension was in accordance with a request from the company. Founded in 1946, Braathens' core activity is passenger air traffic and related services on domestic and international operations. =========== P O L A N D =========== DAEWOO-FSO: Sales Fall to 70%, Down 49% --------------------------------------- Sales of Daewoo Motor Co in Poland fell 70% or down to 2,903 cars year-on-year, while its sales for the first four months of the year were down 49%, the Monday edition of AFX News said. According to Daewoo-FSO spokeswoman Krystyna Danilczyk, the plunge in April sales was due to a lack of promotions and continued concern over Daewoo's future. ELEKTRIM SA: To Pay PenneCom US$23 Million for Breach of Contract ----------------------------------------------------------------- An arbitration court ordered Elektrim SA to pay Dutch company PenneCom US$23 million for breaking a contract and another US$3 million to cover legal costs, the Monday edition of AFX News said. Elektrim partly lost an arbitration case in Paris' International Chamber of Commerce, under which PenneCom was seeking US$150 million in damages after Elektrim in 1999 backed out to buy Telefonia Pilicka for US$140 million. Elektrim said its lawyers are studying the decision. STATE RAILWAYS: Announces Restructuring Plan -------------------------------------------- Polish State Railways (PKP) said that it would create one regional transportation company, which will receive property of 948 million zloty ($237 million), as part of its restructuring, the Warsaw Business Journal on Monday reported. According to PKP chairman Krzysztof Celiski, the move would facilitate the flow of funds from state coffers and the railway budget. ===================== S W I T Z E R L A N D ===================== ISMM GROUP: Court Declares Sports Rights Firm Bankrupt ------------------------------------------------------ A court in the Swiss town of Zug on Monday declared ISMM (International Sports Media and Marketing) Group-ISL Worldwide officially bankrupt, because no other rescue bidders remain in sight, Reuters on Monday reported. Vivendi wanted to acquire the company for its Canal Plus pay- television unit but drew back at the price. The collapse of ISMM-ISL, which was the marketing agent for the 2002 World Cup finals, was one of the reasons why the International Football Association Federation (FIFA) postponed the world club championship finals to 2003. The main creditors of ISMM are Swiss bank UBS AG and France's BNP-Paribas. ISMM, which employed 600 people, fell into financial difficulties when it moved away from its core activities and become involved in Brazilian football clubs and sports other than soccer. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: German Mobile Unit Chief Steps Down ---------------------------------------------------- Chief Executive Maximilian Ardelt and Chief Operating Officer Hans Burghardt Zierman have resigned from Viag Interkom on the first day of a 5.9-billion-pound ($8.5 billion or 9.65 billion euro) share sale, reported the Wall Street Journal in its Tuesday edition . British Telecom declined to comment on reports of disagreements between the company and Viag over strategy, saying only that the two executives made the decision after discussions about how to make the best way forward. Ardelt and Zierman declined to comment. Viag, a unit of BT Wireless, is Germany's fourth-largest mobile group. It is the key to BT's strategy of de-merging its wireless division as part of its debt reduction plans. BT took control of Viag earlier this year. BRITISH TELECOM: Starts Trade of Discounted Share Rights -------------------------------------------------------- Shareholders in British Telecom on Monday began selling or taking up their right to buy discounted new shares worth a total of 5.9 billion pounds ($8.48 billion) to help the company reduce its estimated 30-billion-pound debt, BBC News on Monday reported. By June 14, shareholders have to decide whether to sell, take up or give up those rights to buy three new shares at a discounted 3 pounds apiece, for every ten shares they already own. Analysts, however, do not expect all of BT's small investors to take up their rights. ING Barings telecom analyst Kevin Lapwood estimates that one third of the BT's 1.7 million small investors will choose to sell or give up their rights. Shareholders have seen the value of their investments tumble, with BT shares sliding from about 15 pounds to less than 5 pounds. EQUITABLE LIFE: Faces Criticism at AGM -------------------------------------- Troubled life assurance group Equitable Life faces a fresh barrage of criticism from angry policyholders at its annual general meeting today, the Independent reported on Monday. Paul Braithwaite, an independent candidate standing for a non- executive position, and 10 other policyholders planning to attack the society for failing to communicate effectively with policyholders are unlikely to be successful. Equitable Life chairman Vanni Treves has asked members to back the election of six other candidates. Equitable said that the liability to cover payments to policyholders with guaranteed annuities has risen from the 1.5 billion pounds it quoted last year, but has yet to give any indication of the new cost. EWS INTERNATIONAL: Warns of Insolvency -------------------------------------- Rail freight operator EWS International warned that it faces insolvency as a result of the Home Office penalty and Channel Tunnel toll charges, the Independent in its May 20 edition said. Based on the Home Office rule, it will fine EWS 2,000 pounds for each immigrant found on a freight operator's train. It resulted in a 5-million-pound penalty, but EWS threatened to fight the fines in court. The other headache facing EWS is its future access charges to the Channel Tunnel. EWS said that unless Eurotunnel reduces its toll charges, it may be forced to scrap its Channel Tunnel services altogether. MARKS & SPENCER: Chief Faces Pressure for Luxurious Lifestyle ------------------------------------------------------------- Marks and Spencer chief executive Luc Vandevelde came under more pressure after it emerged he and his wife are living in a 50,000 pounds per year luxury flat, according to The Scotsman newspaper's Monday report. The flat, paid for by the retailer, is thought to be worth as much as 500,000 pounds. MARKS & SPENCER: To Cut Head Office Staff ----------------------------------------- Marks & Spencer is set to cut half of its head office staff when it moves into a new headquarters building at Paddington Basin in West London in 2003, according to The Times' report yesterday. The Paddington office is expected to become home to just 1,600 of M&S' employees, while the present headquarters at Baker Street employs 3,500 people. The retailer's decision to move in to Paddington will cost them at least 10 million pounds a year in rent. ************** 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 Ma. Cristina D. 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. 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