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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

              Monday, June 11, 2001, Vol. 2, No. 113


                            Headlines

* A U S T R I A *

LIBRO AG: Consortium May Buy Libro
STEINER GROUP: Chief Steiner Faces Lawsuit

* B E L G I U M *

LERNOUT & HAUSPIE: Inks Publishing Agreement With TLC
SABENA SA: Italy Favors Tie-Up With Sabena

* F R A N C E *

AIR LIBERTE: Faces Possibility of Bankruptcy
AIR LIBERTE: Marine-Wendel Fails to Finance Airlines
ATLANTIC TELECOM: Goes Into Receivership
VALEO SA: Proposes Redundancies at U.S. Plant

* G E R M A N Y *

EM.TV: Faces Fine for Delay in Filing Earnings
TELDAFAX AG: Restructures to Survive

* I R E L A N D *

EIRCOM PLC: KKR Did Not Submit Official Bid
EIRCOM PLC: Valentia Submits Eircom Bid

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

KPN NV: Dismisses Comment on Mobile Arm Sale
KPN NV: Unions Seek Assurance on Company Future

* P O L A N D *

ELEKTRIM SA: No Bid Decision Until Month's End

* R U S S I A *

NTV: Gusinsky Sues NTV to Enforce Debt Payment

* S W E D E N *

FRAMFAB AB: Will Drop Out of OMX

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

ISMM GROUP: FIFA Moves Meeting to June 13
SWISSAIR GROUP: Firms on CEO Reassurance

* U N I T E D   K I N G D O M *

MARKS & SPENCER: Spain's Mercadona Shows Interest in M&S Asset
RAILTRACK GROUP: Recovers Losses
VAUXHALL: Expects Continued Losses This Year


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


LIBRO AG: Consortium May Buy Libro
----------------------------------

A consortium represented by Euro Invest Bank AG will look into
the books of Libro and is interested in buying at least 50% of
the group, according to Reuters' Thursday edition.

The consortium estimates that between 700 million and 1 billion
schillings would be needed in fresh capital to rescue Libro from
insolvency.

Viennese venture capital firm VCH has also cited interest in
taking over the media retailer, which on February 28 had 2.3
billion schillings bank debt.


STEINER GROUP: Chief Steiner Faces Lawsuit
------------------------------------------

Authorities last week has issued an international warrant for the
arrest of Leopold Steiner, the head of insolvent Austrian
engineering group Steiner, Wirtschaftsblatt & World Reporter in
its June 6 edition said. Steiner is suspected of fraud,
embezzlement and faked insolvency.

According to Steiner's lawyer, his client was to return from
holiday in Italy but the Italian police said he left the Italian
resort earlier without giving notice of his destination.

The Steiner group is said to have liabilities of Sch4 billion.


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


LERNOUT & HAUSPIE: Inks Publishing Agreement With TLC
-----------------------------------------------------

Lernout & Hauspie Speech Products N.V., a world leader in speech
and language technology, products and services, announced on
Thursday that its Speech and Language Solutions Group has entered
into a marketing and distribution agreement with U.S.-based The
Learning Company.

The U.S. Bankruptcy Court for the District of Delaware approved
the agreement.

Under the terms of the agreement, The Learning Company will be
the sole distributor of L&H's L&H Voice Xpress(TM) and Dragon
Naturally Speaking(R) consumer product lines within the U.S. and
Canada.


SABENA SA: Italy Favors Tie-Up With Sabena
------------------------------------------

The Conservative Italian government is considering a tie-up
between state-owned airline Alitalia and Belgian carrier Sabena,
according to M2 Communications' June 7 report.

Several parliamentarians have indicated that they prefer alliance
with Belgians than the French. An outgoing minister has even
confirmed that Sabena has always been of interest as a partner.

Other government sources have stated that the Alitalia situation
will not be a top priority. Issue will be addressed on December
or early next year.


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


AIR LIBERTE: Faces Possibility of Bankruptcy
--------------------------------------------

AOM and Air Liberte could face possible bankruptcy proceedings by
the end of the month following the failure of shareholders
Marine-Wendel SA and Swissair Group to inject FFr3 billion or
find new investors, the Financial Times reported on Thursday.

Marine-Wendel head Ernest-Antoine Seilliere placed the blame on
Swissair and confirmed that his group had made no new commitments
to inject more money.

Swissair has provided funds for the French airlines only until
the end of June. It ran into financial crisis as a result of its
ambitious European expansion strategy.

More than 4,000 staff could lose their jobs if the airlines are
declared bankrupt.


AIR LIBERTE: Marine-Wendel Fails to Finance Airlines
----------------------------------------------------

AOM-Air Liberte shareholder Marine-Wendel said it has made no
undertaking to finance the airlines, AFX News in its Thursday
edition said.

According to Marine-Wendel chairman Ernest-Antoine Seilliere, it
is Swissair, which owns part of the French airlines, who has
committed to finance AOM-Air Liberte.


ATLANTIC TELECOM: Goes Into Receivership
----------------------------------------

Atlantic Telecom SA, which has been in receivership since May 31
and in default of payment since May 18, said that the plight of
the company should not affect clients, Les Echos in its June 6
edition said. The shareholders of Atlantic Telecom have planned
to put a continuation scheme into place.


VALEO SA: Proposes Redundancies at U.S. Plant
---------------------------------------------

Auto-parts maker Valeo SA said it needed to slash costs at its
troubled plant in the United States by 38.9 million euros, cut
wages of up to $5 an hour, as well as reduce in health-care and
other benefits, the Wall Street Journal on Friday reported.

Last month, Valeo President Thierry Morin said the company would
slash up to 1,200 jobs out of its 2,400 workers at the plant.

According to Joseph Gifi, president of a union that represents
workers at the plant, the union will fight the company's efforts
to lay off workers and to scale back pay and benefits. He said
company's demands break an eight-year labor contract signed in
August that included job guarantees in return for greater
flexibility on work rules. The contract includes a letter signed
by Valeo officials promising not to close the plant for the
duration of the contract.

Union representatives have countered with their own proposal,
asking the company to reduce the work force by sweetening an
early retirement plan already in place. The union also pointed
out that a high rate of turnover among management personnel has
hindered the implementation of productivity improvements already
agreed to in the contract signed last year.


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


EM.TV: Faces Fine for Delay in Filing Earnings
----------------------------------------------

The Frankfurt Stock Exchange fined EM.TV & Merchandising AG
50,000 euros for failing to report its fourth-quarter results on
time, according to the Wall Street Journal's Friday edition.

The exchange requires companies listed on its Neuer Markt segment
to report audited earnings within 90 days of the end of each
quarter. EM.TV was granted 30 extra days and reported some
figures April 30. Its audited figures weren't released until May
18, when it showed a 1.3 billion euro loss for 2000.

A spokeswoman of Deutsche Boerse AG, operator of the exchange,
declined to comment, saying the matter is still an ongoing case.

EM.TV nearly collapsed six months ago amid internal strife and a
Munich prosecutor's investigation into possible fraud. It EM.TV
piled up more than 2 billion euros in debt after buying Muppets
creator Jim Henson Co. and half of the Formula One auto-racing
series.


TELDAFAX AG: Restructures to Survive
------------------------------------

TelDaFax's insolvency administrator Bernd Reuss said that the
telecom firm, which is undergoing insolvency proceedings in a
German court, would restructure and cut some 120 employees in
order to survive, according to Reuters' report on June 7.

TelDaFax management board member Stefan Koch said his company was
in talks with possible buyers for subsidiaries NetzTel Plus AG,
GeoNet Systems and Demuth Dietl GmbH.

Deutsche Telekom AG cut off the TelDaFax from its network because
of overdue access fees of around 73 million marks. TelDaFax also
has debts of up to 300 million marks. Siemens, Alcatel and
Deutsche Telekom are among its creditors.


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


EIRCOM PLC: KKR Did Not Submit Official Bid
-------------------------------------------

U.S. buyout group Kohlberg Kravis Robert & Co. did not submit a
formal bid to telecommunications company Eircom PLC on its 1500
GMT deadline, according to Dow Jones Newswires' June 7 report.

Meanwhile, the Valentia consortium has confirmed it submitted its
bid at an undisclosed price. It is thought that the new bid was
at a higher price than their original bid of 2.74 billion euro.

Under the Irish takeover law, Eircom management is obliged to
consider all offers in the best interest of shareholders,
allowing other bidders to emerge at a later stage.


EIRCOM PLC: Valentia Submits Eircom Bid
---------------------------------------

Sir Anthony O'Reilly's Valentia consortium, together with Goldman
Sachs, Warburg Pincus, Providence Equity, and George Soros,
confirmed late Thursday that it submitted a bid for the fixed-
line, multimedia and directories operations of Eircom PLC,
according to Dow Jones Newswires' report.

E-Island, which has been pursuing Eircom for the last nine
months, would not confirm to Dow Jones Newswires if it had
submitted its bid by the 1500 GMT deadline.

Offers from U.S. buyout group Kohlberg Kravis Roberts & Co. and
Blackstone Communications Partners were expected but these
couldn't be immediately confirmed.


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


KPN NV: Dismisses Comment on Mobile Arm Sale
--------------------------------------------

KPN NV said on Thursday that a sale of its mobile-
telecommunication operations isn't under discussion, Dow Jones
Newswires reported.

The comments follow a report by Dutch daily Het Financieele
Dagblad that KPN is seriously considering the sale of part of the
mobile operations.

The newspaper report, which cited unnamed sources, said Telecom
Italia SpA and Spain's Telefonica SA appeared to be the most
suitable purchasers of KPN Mobile.


KPN NV: Unions Seek Assurance on Company Future
-----------------------------------------------

Trades unions at KPN will demand for plans on how the management
will solve the problems of the telecommunications group and what
the consequences are for the personnel, the Financial Times on
Friday reported.

The demand reflects mounting speculation that the company may
collapse as its debt has reached 23.2 billion euro. KPN's market
capitalization is now below 9 billion.

Should they fail to receive assurances, unions say they will
demand a meeting with KPN chairman and chief executive Paul
Smits.


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


ELEKTRIM SA: No Bid Decision Until Month's End
----------------------------------------------

The Supervisory Board of Elektrim SA made no decision on rival
bids by Deutsche Telekom AG and Vivendi Universal to take over
its telecommunications assets, according to Dow Jones Newswires'
Thursday edition.

The negotiations would probably be extended from June 8 to the
end of the month but declined to give a specific date.

Deutsche Telekom offered to acquire an additional 3.45% stake in
Elektrim's mobile unit Polska Telefonia Cyfrowa for $400 million.
Deutsche Telecom already controls 49% of PTC through its
subsidiary DeTeMobil AG and Holdco.

Vivendi, which owns a 9.99% direct stake in Elektrim, has floated
a rival share swap scheme that would merge the joint venture's
telecom subsidiary Elektrim Telekomunikacja back into parent
company Elektrim in exchange for Vivendi taking a direct 51%
stake in Elektrim.

Cash-strapped Elektrim is facing liquidity problems. Last week,
the Polish anti-monopoly office blocked the sale of its cable
unit Elektrim Kable for $100 million.


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


NTV: Gusinsky Sues NTV to Enforce Debt Payment
----------------------------------------------

Media-MOST head Vladimir Gusinsky filed a lawsuit against NTV and
its general director Boris Jordan to claim the repayment of
promissory notes of RUR13 million, RosBusiness Consulting in its
June 7 edition said.

The court ordered to freeze NTV's accounts at Alfa-bank and
Creditanstalt-bank in Austria as a debt-settlement measure.


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


FRAMFAB AB: Will Drop Out of OMX
--------------------------------

Internet consultancy firm Framtidsfabriken AB and Icon Medialab
AB will drop out of blue-chip OMX index for the second half of
2001, according to Dow Jones Newswires on Thursday.

Stockholm bourse operator Stockholmsboersen AB, a unit of OM AB,
said telecommunications operator Europolitan Holdings AB and
telephone directory group Eniro AB would replace the two Internet
consultants.


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


ISMM GROUP: FIFA Moves Meeting to June 13
-----------------------------------------

FIFA's executive committee meeting, set to discuss the
implications of the liquidation of marketing company ISL-ISMM,
has been rescheduled to June 13, Agence France-Presse in its June
6 report said.

The executive committee meeting was originally called on May 25,
four days after ISL-ISMM officially went into liquidation.

FIFA president Sepp Blatter is now fighting for survival as a
result of the ISL collapse and the revelation that the 75 million
Swiss francs paid to the company by Brazilian television station
O Globo, for the rights to broadcast the World Cup, was diverted
to a secret Swiss bank account.


SWISSAIR GROUP: Firms on CEO Reassurance
----------------------------------------

Shares of Swissair Group AG was up SFR3.5 or 2.5% at 142.5 on the
comments made by CEO Mario Corti in a television interview with a
Swiss channel on Wednesday, according to AFX News' report.

A Zurich-based analyst said the comments of Corti reassured the
market. The group's chief stressed Swissair's latest
restructuring plan, aimed at saving SFR500 million in the second
half of the year, is feasible.

Corti added Swissair would stop the SFR60 million injection into
its French AOM-Air Liberte unit by the month-end. The group will
also end its extension-flight services to Shanghai, Taipei and
Saigon to reduce costs.


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


MARKS & SPENCER: Spain's Mercadona Shows Interest in M&S Asset
--------------------------------------------------------------

Supermarket chain Mercadona is interested to buy Marks & Spencer
PLC's Spanish assets after the British retail company decided to
close operations in Europe by year-end.

In a report dated June 7, AFX News said that Mercadona has
approached M&S' management on the sale of the Spanish stores and
the possible acquisition with unions representing the majority of
M&S' employees.


RAILTRACK GROUP: Recovers Losses
--------------------------------

Railtrack has pulled out of its shares nosedive with a 6% rise
after four investment banks, including UBS Warburg, set a target
price for Railtrack's shares of between 400p and 600p, according
to Press Association's Friday report.

Railtrack saw 450 million pounds wiped from its value during a
disastrous week, including the relegation from FTSE 100 index.


VAUXHALL: Expects Continued Losses This Year
--------------------------------------------

General Motors' British unit Vauxhall is facing continued losses
this year because of sizeable losses in 2000, the strength of
sterling and weak demand for ageing models, the Financial Times
reported on Thursday.

Vauxhall lost between 160 million and 190 million pounds last
year after incurring restructuring charges of about 200 million
pounds for the closure of its Luton car plant in England.

Vauxhall chairman Nick Reilly said 2001 would be a difficult
year. It is characterized by price pressure on old models and
volume weakness across Europe.


                            *************


    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.

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