/raid1/www/Hosts/bankrupt/TCREUR_Public/010529.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, May 29, 2001, Vol. 2, No. 104


                            Headlines


B E L G I U M

LERNOUT & HAUSPIE: Shareholders to Get 1.5% of Revenue
SABENA SA: Swissair Drops Restructuring Plan


F R A N C E

AIR LIBERTE: 525-Million-Euros Offered By Virgin Express
BULL SA: Union Questions Sale of Services Unit


G E R M A N Y

BANKGESELLSCHAFT BERLIN: Faces Pressure to Restructure


I R E L A N D

GLANBIA CO-OPERATIVE: Introduces Revolving Share Plan
IRISH ISPAT: Union Rejects Ispat Proposals


I T A L Y

ALITALIA-LINEE: Aims for Partnership by August
EPLANET: Slumps 5% Despite Investment Hopes


N E T H E R L A N D S

MANAGEMENT SHARE: Court Grants Suspension of Payment


P O L A N D

ELEKTRIM SA: Owes Pennecom $30 M for Breach of Contract


S W E D E N

LM ERICSSON: Secretary Byers to Save Jobs


U N I T E D   K I N G D O M

BRITISH TELECOM: Consortium Offers GBP2 Billion for Yell
BRITISH TELECOM: Demerger, Rename of Cellnet Offer Hope
CORUS GROUP: Shares Drop 4.35% on Poor Outlooks
ENODIS PLC: Suffers 40 Million Pound Loss
EQUITABLE LIFE: Rebels Fail to Get on Board
NTL INCORPORATED: Inks Outsourcing Deal With IBM
RAILTRACK GROUP: Needs Extra 3.6 Billion Pounds Funding
RAILTRACK GROUP: Posts 534-Million-Pound Loss

                           ********                       

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


LERNOUT & HAUSPIE: Shareholders to Get 1.5% of Revenue
------------------------------------------------------

The current shareholders of speech technology company Lernout &
Hauspie will only receive 1.5% of the revenue of an assisted
sell-out of the company, while small creditors will obtain 75% of
their claim, De Standaard & World Reporter said in its May 23
edition.

A liquidation specialist states that the recovery plan comprises
an assisted sell-out of all assets or a partial transfer of its
speech and language technology to a new partnership called Newco.

Furthermore, the proposed L&H schedule estimates the plan will be
completed within 24 months, but its Cerberus emergency financing
only runs for 13 months.


SABENA SA: Swissair Drops Restructuring Plan
--------------------------------------------

Sabena CEO Christophe Muller confirmed Swissair Group will not
increase its stake to 85% and will loosen its ties with Sabena,
Air Transport World on May 23 reported.

The Belgian ministry of government holdings, however, said it had
not yet received a formal notice from Swissair Group that it
would not keep its commitments to integrate the catering and
technical activities to Sabena in exchange for a further cash
injection.

It was assumed that Swissair Group, which currently holds 49.5%
of the troubled Belgian airline, would not make a decision on its
Belgian shareholding until later this summer.



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


AIR LIBERTE: 525-Million-Euros Offered By Virgin Express
--------------------------------------------------------

Virgin Express Holdings PLC has proposed to invest around 525
million euros and transform the troubled AOM-Air Liberte into a
low-cost airline, the May 24 edition of Dow Jones reported.
Virgin has refused to take on any of the company's debt.

London-based investment advisors AITI, which made the offer on
Virgin's behalf, contacted AOM-Air Liberte union representatives
CFDT to discuss the acquisition proposals.

Earlier, Virgin Express spokesman Yves Panneels denied a report
in French daily Liberation that the company has proposed to
invest in the troubled airline.


BULL SA: Union Questions Sale of Services Unit
----------------------------------------------

Union representatives dispute the restructuring plans of Bull SA,
following news that it hopes to sell most of its European
services unit to French I.T. services company Steria and
Caravelle and Axa Private Equity, Dow Jones in its May 24 edition
said.

In November, Bull unveiled a restructuring plan to sell assets
and reduce 10% of its work force. Earlier this year, Bull  
disposed of 361 million euros in assets, including its smart-card
unit.

Credit Commercial de France represents Bull in the discussions.



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


BANKGESELLSCHAFT BERLIN: Faces Pressure to Restructure
------------------------------------------------------

Bankgesellschaft Berlin is feeling pressure to simplify its
structure and abolish its combination of state and private-
investor ownership, Handelsblatt reported May 24.

The Berlin state government, which owns 57% of the bank, said BGB
needs between two billion euros and 2.5 billion euros in fresh
capital to prop up the bank's capital base. The exact sum
required will be known at the start of June.

The government has also called on its co-shareholders central
savings bank Norddeutsche Landesbank (NordLB) and insurance group
Parion to participate in the capital increase.



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


GLANBIA CO-OPERATIVE: Introduces Revolving Share Plan
-----------------------------------------------------

Glanbia Co-operative Society Limited has launched the 2001
Revolving Share Plan to reduce debt in the coming years, said the
Estockex on May 22.

The plan, open to milk suppliers, patrons and employees, offers a
growth of 50% on capital invested after five years.

According to Glanbia Chairman Tom Corcoran, the revolving share
plan provides attractive financial benefits to participants as
well as being designed to largely eliminate the 31 million Irish
pound debt over the next five years.

The introduction of the plan follows extensive consultation with
Society members. Milk suppliers will receive one unit of 1p
Convertible Loan Stock as part of the price paid per gallon of
milk. At the end of the financial year, suppliers will receive
notification of the number of units of Loan Stock issued to them.


IRISH ISPAT: Union Rejects Ispat Proposals
------------------------------------------

SIPTU (Services, Industrial, Professional & Technical Union)
official Cllr Dan Crowley rejected Irish Ispat plans to cut wages
by 10% and lay-off 50 of its 350 workers at the Haulbowline
Island plant as a breach of the PPF, The Irish Independent in its
Friday edition said.

In response to the steel mill's proposals, SIPTU claimed the move
was aimed at placing the blame for any closure of the plant on
the workforce. It also described the cost-cutting as unworkable
given the clear parameters of the Government's Program for
Prosperity and Fairness.

Aside from the wage and job cuts, the company also wants to
reduce paid leave, abolish free meals at the plant's canteen and
place strict restrictions on overtime work and rates.

An Irish Ispat spokesman was unavailable for comment.



=========
I T A L Y
=========


ALITALIA-LINEE: Aims for Partnership by August
----------------------------------------------

CEO Francesco Mengozzi of Italy's national airline Alitalia said
he aims to have an alliance with another international carrier by
August, according to M2 Communications' May 24 edition.

Mengozzi, however, warned that the carrier's problems would
continue to affect its performance in 2001. The problems include
unprofitable international and intercontinental routes, loss of
domestic market share, an inadequate fleet and problems with
Milan's Malpensa airport.

The TCR reported on Friday that Mengozzi is in alliance talks
with Air France. Talks are expected to conclude in mid-June.


EPLANET: Slumps 5% Despite Investment Hopes
-------------------------------------------

Shares in telecom and broadband company ePlanet fell 5.34% at
20.75 euros on Thursday despite hopes of securing a capital
injection soon, Reuters reported.

In a statement, EPlanet said it was in advanced talks with
prospective investors and aimed for an agreement by June 15. The
company, which reported 2000 net losses of 45.4 million euros,
needs between 60 million euros and 100 million euros.

EPlanet has hired Lazard as its adviser.



=====================
N E T H E R L A N D S
=====================


MANAGEMENT SHARE: Court Grants Suspension of Payment
----------------------------------------------------

The Amsterdam court has granted Management Share temporary
suspension of payment, according to the May 23 edition of De
Telegraaf & World Reporter. The ICT service provider filed for
suspension of payment after its attempts to find new investors
failed.

Management Share, which came into financial difficulties after
merger talks with rival SRC Caledon Business Technologies came to
nothing, tried to find fresh capital elsewhere, but has failed
either.

P. Schaink was appointed receiver of the company.



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


ELEKTRIM SA: Owes Pennecom $30 M for Breach of Contract
-------------------------------------------------------

An arbitration panel has ruled May 9 that Elektrim S.A. breached
its agreement with Pennecom B.V. regarding the sale of its Polish
subsidiary Pilicka Telefonia and ordered Elektrim to pay Pennecom
approximately $30 million in damages, interest and costs, the May
24 edition of Business Wire said.

The dispute arose in July 1999 when Elektrim refused to purchase
the stock of Pilicka under the terms of a stock purchase
agreement it had entered into with Pennecom. Elektrim had agreed
to pay $140 million in cash and notes for all of the outstanding
capital stock of Pilicka.

In August 1999, Pennecom requested arbitration of the dispute by
the International Court of Arbitration at the International
Chamber of Commerce. The arbitration panel appointed to
adjudicate the dispute completed its hearings in January 2001.

Pennecom is currently reviewing its legal options with respect to
the arbitration panel's ruling.



===========
S W E D E N
===========


LM ERICSSON: Secretary Byers to Save Jobs
-----------------------------------------

Trade and Industry Secretary Stephen Byers is trying to find a
buyer for Ericsson's factories in UK to save over 1,000 jobs,
Connecting Industry in its Friday edition said.

Ericsson is closing the plants in Carlton, Nottinghamshire and
Scunthorpe in March, while production will stop in September.



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


BRITISH TELECOM: Consortium Offers GBP2 Billion for Yell
--------------------------------------------------------

A consortium comprising Apax Capital and U.S. venture capitalist
Hicks, Muse, Tate & First has offered around GBP2 billion for
British Telecommunications PLC directories business Yell, Dow
Jones in its May 24 edition said.

The Yell sale is part of a wide-ranging restructuring aimed at
reducing BT's GBP28 billion debt mountain.

It is not yet clear whether the a consortium led by U.S. venture
capitalist Kohlberg Kravis Roberts will remain in the bidding.


BRITISH TELECOM: Demerger, Rename of Cellnet Offers Hope
--------------------------------------------------------

British Telecom admitted it is in talks to rename its mobile
phone units, including Britain's second most popular mobile
network BT Cellnet, as part of an ongoing attempt to reduce its
30 billion pound debt, the May 24 edition of BBC News said.

Earlier, BT said it plans to rebrand BT Cellnet's holding company
BT Wireless when it is floated as a separate operation. The
troubled telecom giant said it hopes to use the demerger of BT
Wireless as an opportunity to re-brand its local operations in
the UK, Ireland, Germany and the Netherlands.

When BT Wireless is demerged, the remainder of the company will
be renamed Future BT.


CORUS GROUP: Shares Drop 4.35% on Poor Outlooks
-----------------------------------------------

Shares in steel giant Corus Group Plc fell 3-1/2 pence, or 4.35%,
to 77 pence by 1530 GMT on Thursday following the negative
outlooks by Usinor and Aceralia, Reuters reported.

French steel group Usinor, which forecasted slightly lower
earnings for 2001 due to lower steel prices, caused its shares to
fall by around 6%, while Spanish steelmaker Aceralia also saw its
shares fall by around 5%.

Recently, steel stocks have slumped as demand for the product
weakens globally. Corus has also announced plans to cut over
6,000 jobs at its loss-making UK operations.


ENODIS PLC: Suffers 40 Million Pound Loss
-----------------------------------------

Catering equipment maker Enodis announced a 40 million pound
first-half loss after an unprecedented downturn in the United
States, which accounts for 80% of sales, the Friday edition of
Electronic Telegraph said.

Enodis also took a 46 million pound exceptional charge for
restructuring, expected to save 15 million pounds in the second
half and 30 million pounds next year, while interest payment on
debt rose 6 million pounds. The sale of kitchen furnishings
division Magnet, sold for 134 million pounds last month, should
reduce debt to a manageable 300 million pounds.

Chairman Peter Brooks admitted the results were very
disappointing, but added that significant progress had been made
to tackle the issues facing the group. A sale of the business is
a possibility.


EQUITABLE LIFE: Rebels Fail to Get on Board
-------------------------------------------

Eleven rebel policyholders of Equitable Life failed in their bid
to be elected to the board at the insurer's annual general
meeting in London as customers voted by a majority in favor of
the eight existing directors, The Scotsman newspaper said in its
May 24 edition. Vanni Treves was re-appointed chairman.

Equitable Members Action Group secretary Paul Braithwaite and
Adrian Howard-Jones were among the rebels defeated. Braithwaite
said his group would continue to fight for Equitable members that
have lost thousands from the society's collapse.

Braithwaite also called on Equitable chairman Vanni Treves to
appoint at least two of the rebels to the board. Treves told
policyholders he intended to press ahead with plans to negotiate
a compromise deal to cap the group's 1.5 billion pounds
liability.

In December, Equitable was forced to stop selling policies after
the House of Lords ruled it must pay the full cost of pension
guarantees to more than 100,000 guaranteed annuity rate
policyholders.


NTL INCORPORATED: Inks Outsourcing Deal With IBM
------------------------------------------------

Broadband communications company NTL Incorporated in its May 24
Nasdaq Europe Press Release said it has awarded a major new
strategic outsourcing contract to the world's leading information
technology and services company IBM. The agreement has a
potential value in excess of US$2 billion over its term.

The structure expects to generate savings for NTL in excess of
US$450 million over the life of the agreement, and will allow NTL
to size its IT needs and resources dynamically to generate
further savings and/or competitive advantage over time.

The agreement will not only generate significant competitive edge
and increased stakeholder value for NTL through the delivery of
state-of-the-art technology, a menu of support services and cost
savings, but also provide IT services for all of NTL's operations
in the UK and Ireland until 2012.


RAILTRACK GROUP: Needs Extra 3.6 Billion Pounds Funding
-------------------------------------------------------

Railtrack Group warned that it faced a 3.6 billion pound funding
gap as it plunged into the red with pretax losses of 534 million
pounds at the full-year because of the Hatfield crash, Electronic
Telegraph on Friday reported.

Railtrack, which has secured 13.3 billion pounds from rail
regulator Tom Winsor over the next five years, said it now needed
an extra 3.6 billion pounds. Railtrack has also warned that it
faces 750 million pounds more costs because of poor performance,
while the costs of the West Coast Main Line upgrade have risen
500 million pounds to 6.3 billion pounds.

CEO Steve Marshall said Railtrack would look to raise 2 billion
to 3 billion pounds in the debt markets this summer or autumn to
bridge the funding gap and finance part of its 10-billion-pound
major projects program.


RAILTRACK GROUP: Posts 534-Million-Pound Loss
---------------------------------------------

Railtrack Group PLC has reported a much worse-than-expected
pretax loss of 534 million pounds ($757.7 million) for last year
to March 31, following months of costly emergency repair work to
Britain's rail infrastructure and compensation claims in the wake
of the Hatfield crash in October, the Wall Street Journal in its
May 24 edition said.

Despite a government cash injection last month of 1.5 billion
pounds, Railtrack still needs to raise 3 billion pounds to help
maintain the rail network. It confirmed on Thursday that it would
still an additional 2 billion pounds of public money from
regulator the Strategic Rail Authority to meet the additional
maintenance costs.

The financial markets reacted badly to the financial results,
resulting in a 7% drop in early trading.









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. Lyndsey Resnick,
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
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Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

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via e-mail.  Additional e-mail subscriptions for members of the
same firm for the term of the initial subscription or balance
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