/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010629.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 Friday, June 29, 2001, Vol. 2, No. 127 Headlines * B E L G I U M * BLUEGATE SA: Files for Bankruptcy REAL SOFTWARE: Completes Debt Restructuring Deal SABENA SA: Swissair Proposal Is Unrealistic * F R A N C E * AIR LIBERTE: Court Okays Release of Guarantee Fund BATA: Will Hand in Bankruptcy Statement * G E R M A N Y * ADVANCED MEDIEN: Posts First-Quarter Sales Report BROKAT TECHNOLOGIES: Moody's Cuts Ratings to B3 DAIMLERCHRYSLER AG: To Produce Diesel Engines With Hyundai DEUTSCHE TELEKOM: Sets Debt Target DEUTSCHE TELEKOM: Units Begin Tender Offer TELDAFAX AG: Goldman Sachs Continues TelDaFax Sponsorship * I R E L A N D * IRISH ISPAT: Employees Want 9MM-Pound Pension Surplus * R U S S I A * MEDIA-MOST: Court Grants Bonum-1 Lawsuit * S W E D E N * BOLIDEN LIMITED: Names New President and CEO * U N I T E D K I N G D O M * ATLANTIC TELECOM: Shares Fall to Record Low BALTIMORE TECHNOLOGIES: Considers More Job Cuts BRITISH TELECOM: Appoints David Finch as BT Wireless CFO BRITISH TELECOM: Appoints Dev as BT Cellnet Chief CAMMELL LAIRD: Management Bids for Cammell Yard CLAIMS DIRECT: Founder Bids to Buy Back Claims Direct INDEPENDENT INSURANCE: Creditors to Seek Compensation INDEPENDENT INSURANCE: Lays Off 1,000 Staff NTL INCORPORATED: GE Capital Closes NTL Financing REDSTONE TELECOM: Cove Steps Down From Board REDSTONE TELECOM: Survives After Winning Rule Waiver SCOOT.COM: Chief Bonnier Quits Over Cash Crisis SCOOT.COM: Plummets Over Cash Shortage SCOOT.COM: Potential Issue of Ordinary Shares SCOTIA HOLDINGS: To Receive Lifeline From European Regulator ============= B E L G I U M ============= BLUEGATE SA: Files for Bankruptcy --------------------------------- Information technology company Bluegate SA said Tuesday that it would file for bankruptcy after its banks cut the company's credit lines and several major clients postponed orders. In a statement, Bluegate added that no short-term new sales opportunities could be identified, a concordat plan could not be implemented because no recovery was feasible in due time, and no other firm proposals from partners could be identified. As a result of Bluegate's insolvency, five employees will lose their job. The stock, which has been suspended since June 13, will also be removed from Euronext Brussels in line with insolvency rules. REAL SOFTWARE: Completes Debt Restructuring Deal ------------------------------------------------ Real Software SA is in the process of completing a debt restructuring deal with a consortium of banks, which agreed to give the company until June 30 to negotiate, according to Dow Jones Newswires' Wednesday edition. Part of the debt will be written off, but the banks will retain an option to reclaim some money if Real Software's fortunes improve in the future. The remaining debt will be restructured into 10- and 12-year loans, with the 10-year loan being last in the hierarchy of creditors. A failed U.S. acquisition and huge outstanding debts brought Real Software to the verge of bankruptcy last year. SABENA SA: Swissair Proposal Is Unrealistic ------------------------------------------- The Belgian government told Swissair Group AG that its proposal for funding Sabena Belgian World Airlines SA is unrealistic, the Wednesday edition of AFX News said. Swissair has proposed to pay for a Sabena recovery plan in exchange for a commitment from the Belgian government to release the Swiss company from its pledge to raise its stake in the struggling airline. Swissair, which holds 49.5% of Sabena, signed a contract with the Belgian government last year to increase its stake to 85%. Swissair's offer will provide an undetermined amount of money in return for the government letting Swissair remain at its current shareholding level. However, the Belgian government doesn't want to remain the majority owner of Sabena, thereby putting pressure on Swissair. Swissair chief executive Mario Corti said the company would stop pouring money into its unprofitable foreign holdings. Belgian Prime Minister Guy Verhofstadt said he would not release Swissair from the contract to raise its stake. =========== F R A N C E =========== AIR LIBERTE: Court Okays Release of Guarantee Fund -------------------------------------------------- The Creteil commercial court has given travel agents' union Snav the green light to release a guarantee fund for the potential reimbursement of customers of troubled French airline AOM-Air Liberte, La Tribune & World Reporter in its Monday edition said. FFr50 million to FFr100 million could be used to this end. According to chief executive Marc Rochet, AOM-Air Liberte, which has been in receivership since June 19, has enough cash to continue its activities until July 10, while receivers say it is until July 1. Yves Leonzi, lawyer for Jean-Charles Corbet, the Air France pilot who is a candidate for the takeover of the company, estimates that the French airlines need between FFr150 million and FFr250 million in order to carry on until the end of July. BATA: Will Hand in Bankruptcy Statement --------------------------------------- French shoe group Bata is expected to hand in its bankruptcy statement soon, La Tribune & World Reporter in its Monday edition said. The strike, which started on June 6, is worsening an already urgent situation. Losses are expected to amount to about 25 million French francs in the first half of 2001, compared with 42.1 million French francs for the whole of the previous year. ============= G E R M A N Y ============= ADVANCED MEDIEN: Posts First-Quarter Sales Report ------------------------------------------------- During the first quarter of 2001, the Advanced Medien Group achieved sales of 0.7 million euros pursuant to IAS, compared to 6.3 million euros for the same period last year. The Frankfurt Stock Exchange in its Wednesday press release said that about half of the sales were generated by the film production segment, while film distribution and licensing accounted for 26% and 24%, respectively. The group's earnings before interest, taxes, depreciation and amortization (EBITDA) came in at -1.9 million euros. After amortizations of 1.0 million euros, the group recorded earnings before interest and taxes (EBIT) of -2.9 million euros. The Advanced Medien Group ended the first quarter of fiscal 2001 with a consolidated net loss of 3.0 million euros, compared with a net income of 0.06 million euros the previous year. The result of the Advanced Medien Group is primarily due to weak sales in motion picture rights and the negative result in film distribution. Furthermore, delays in the delivery of films produced by the U.S. subsidiary U.F.O., which were caused by post-production disruptions, also impacted the result of the first quarter. BROKAT TECHNOLOGIES: Moody's Cuts Ratings to B3 ----------------------------------------------- Moody's Investors Service on Tuesday said it downgraded the senior debt rating of Brokat Technologies AG, a leading supplier of software for e-business solutions, to B3 from B2 and placed all of these ratings on review for possible further downgrade. The rating downgrade was triggered by the company's underachievement of its original business plan, a rising funding gap, and announcement of overindebtedness at the parent company, Moody's said. The rating review will assess the company's measures to reduce its cost base and secure additional sources of finance. The B3 rating still assumes a fast implementation of cost-cutting to advance the point of cash-flow break-even, which may prove challenging, and/or investments by a strategic partner to benefit from Brokat's well established product range and its strong client relationships. DAIMLERCHRYSLER AG: To Produce Diesel Engines With Hyundai ---------------------------------------------------------- DaimlerChrysler said on Tuesday it has agreed to establish a joint venture with Hyundai Motor Company to produce diesel engines for commercial vehicles by the end of June. Each partner will have a 50% interest in the company, which will begin producing Series 900 diesel engines immediately after it is established. The two partners will invest a total of approximately $180 million in production facilities. The new joint venture marks the first step toward extensive cooperation in the commercial vehicle sector. The current agreement provides DaimlerChrysler and Hyundai Motor with the option of increasing their investment in the new company at a time to be agreed upon at some later date. DEUTSCHE TELEKOM: Sets Debt Target ------------------------------------ Deutsche Telekom has planned to cut its debt by 19 to 50 billion euros by the end of 2002. Senior executive vice-president of finance and treasury Gerhard Mischke said he would achieve a debt reduction by selling non- core assets and issuing shares in its mobile telephone subsidiary T-Mobile, Reuters reported on Tuesday. BNP Paribas, Deutsche Bank and J.P. Morgan were mandated to manage the transaction. DEUTSCHE TELEKOM: Units Begin Tender Offer ------------------------------------------ VoiceStream Wireless Corp. and phone giant Deutsche Telekom AG's units Omnipoint Corp. and Powertel Inc said on Wednesday they have begun a cash tender offer for various bond issues, according to Reuters' Wednesday report. VoiceStream and Omnipoint offered to buy all of their outstanding 11.5% senior notes maturing in 2009, while Powertel offered to buy all of its outstanding 11.125% senior notes maturing in 2007. The purchase price for all of the notes is $1,010 for each $1,000 of principal. TELDAFAX AG: Goldman Sachs Continues TelDaFax Sponsorship --------------------------------------------------------- Goldman, Sachs & Co. OHG and HypoVereinsbank continue their mandates as designated sponsors of TelDaFax AG at Neuer Markt, Frankfurt Stock Exchange in its Wednesday press release said. ============= I R E L A N D ============= IRISH ISPAT: Employees Want 9MM-Pound Pension Surplus ----------------------------------------------------- Employees of Irish Ispat want a 9-million-pound surplus in the steel company's pension plan to supplement their statutory redundancy payments, according to The Irish Times' Monday report. The employees decided to pursue this option after the company rejected a trade union rescue package that would have resulted in company savings of 3.5 million pounds. The rescue package included 47 redundancies, deferral of production bonuses, cutbacks in the overtime budget and the elimination of contract work. Workers also agreed to invest 10% of their wages into a fund to be invested in the plant. The Irish Ispat plant has been losing 750,000 pounds per month. Some 400 workers face the dole queue following the closure of the plant. =========== R U S S I A =========== MEDIA-MOST: Court Grants Bonum-1 Lawsuit ---------------------------------------- The Moscow Arbitration Court has granted a lawsuit filed by the Finance Ministry of Russia to recover $62 million from Media-MOST subsidiary Bonum-1 Closed Corporation, in accordance with a loan agreement, RosBusiness Consulting in its June 20 edition said. The court has ruled to recover the principal of about $45 million and the insurance interest, penalties and fines in accordance with the agreement. On March 1998, the Finance Ministry and Bonum-1 made a loan agreement for $64 million, where repayment of the loan shall be completed in 2009. Nevertheless, repayment of funds stopped on January 2000. Based on the terms of the agreement, the Finance Ministry could demand that the remaining sum of the debt be repaid before schedule if Bonum-1 fails to make payments on schedule. The court also granted a similar lawsuit by the Finance Ministry to recover $4.6 million from Bonum-1 on June 13. =========== S W E D E N =========== BOLIDEN LIMITED: Names New President and CEO -------------------------------------------- Metals and mining company Boliden Limited on Wednesday has appointed Jan Johansson as its new president and chief executive officer effective August 1. Johansson has many years experience in the Swedish and international business communities, most recently as Senior Vice- President of Swedish telecommunications company Telia AB and Senior Executive Vice-President of Scandinavian power company Vattenfall AB. =========================== U N I T E D K I N G D O M =========================== ATLANTIC TELECOM: Shares Fall to Record Low ------------------------------------------- Shares in Atlantic Telecom sank 15% on Tuesday to a record low of 2殆 to 13p despite directors' pledges that the group could reach profitability without raising additional funds, according to The Times' June 27 report. Investors were worried by a big annual loss, sending the stock down in a weak telecom market. Atlantic said losses in its year to March 31 widened from 33.4 million pounds to 135.7 million pounds, on a 77 million pounds turnover. BALTIMORE TECHNOLOGIES: Considers More Job Cuts ----------------------------------------------- Internet security software group Baltimore Technologies is considering a second round of job cuts amid growing concerns about its cash position and diminishing market confidence in management, according to the Financial Times report on Wednesday. In May, Baltimore said it would cut 250 of its 1,400 workforce to save 30 million to 35 million pounds annually and reduce cash burn, which was 24 million pounds in the first quarter. However, analysts estimate the 250 job cuts would only save 14 million pounds. In February, the company warned that its short-term sales prospects were at risk from the slowdown in the US economy. A month later, it issued a profits warning after making comments to an analysts' briefing that had precipitated a 20% share price fall. BRITISH TELECOM: Appoints David Finch as BT Wireless CFO -------------------------------------------------------- British Telecommunications on Tuesday appointed David Finch as Chief Finance Officer of its mobile phone business, BT Wireless. Finch will work with Chairman-designate David Varney and chief executive officer Peter Erskine on the planned demerger of BT wireless from the BT Group later this year. Finch, who will take up his new role in mid-summer, has extensive experience in financial management and planning for a major business with international presence. He held senior posts at Novar plc and Grand Metropolitan plc. BRITISH TELECOM: Appoints Dev as BT Cellnet Chief ------------------------------------------------- British Telecom in its Monday press release said Chief Finance Officer for BT wireless Vivek Dev was appointed as Chief Operating Officer with immediate effect at BT Cellnet. The appointment follows the announcement of the ground-breaking agreement between BT wireless and T-Mobile to share and reduce the cost of developing the third generation mobile networks. Dev will be reporting to BT Cellnet Managing Director Dave McGlade. CAMMELL LAIRD: Management Bids for Cammell Yard ----------------------------------------------- A management team, led by former Cammell Laird director Eric Welsh, offered to buy the Tyneside shipyard, handing a lifeline to hundreds of workers fearing for their jobs, according to BBC News in its Wednesday report. Receivers PricewaterhouseCoopers said it also expected another management offer for the Birkenhead unit in the next few days. PwC declined to give details of the offers received. Cammell Laird called in the receivers in April. It has announced more than 600 job cuts in the UK this year after several cancelled orders devastated its business. Unions said management buyouts of Cammell's yards gave cause for hope that the remaining 770 workforce could be saved. CLAIMS DIRECT: Founder Bids to Buy Back Claims Direct ----------------------------------------------------- Claims Direct founder Tony Sullman and Colin Poole, who quit as chief executive earlier this month, formally launched to buy back the controversial personal injury group at a huge discount, the Financial Times reported on Tuesday. Sullman and Poole will launch a 10p a share offer to take the group private. Together they already own 43% of Claims Direct. However, one investor described the 10p offer as a joke since the company could be worth 30 to 40p a share with the brand name they have built up. The company, which has issued two profit warnings since it came to market and has been without a chief executive for a month, reported pre-tax losses of 20.2 million pounds for the year to March 31, compared with profits of 10.1 million pounds last year. It has seen its shares collapse from 353厚 in 2000 to a low of 8殆 earlier this year. INDEPENDENT INSURANCE: Creditors to Seek Compensation ----------------------------------------------------- Creditors of collapsed insurer Independent Insurance Group, led by a group of insurance brokers, intend to pursue Independent's auditors and actuaries for compensation, according to The Irish Times' report yesterday. Kevin Young, managing director of Argyll Insurance, was named as acting chairman. The group was looking at those they claim should have realized something was wrong. This includes auditors KPMG, actuaries Watson Wyatt, financial watchdog Financial Services Authority and even the Department of Trade and Industry. Individual policyholders who have outstanding claims with Independent, will have most of those claims paid by the Policyholders Protection Board, while the insurer's 100,000 corporate policyholders will only have claims for compulsory insurance, such as employer liability, paid by the board. Provisional liquidator PricewaterhouseCoopers will pay other claims from the funds available. INDEPENDENT INSURANCE: Lays Off 1,000 Staff ------------------------------------------- Half of Independent Insurance's 2,000 employees will loose their jobs following the collapse of the insurance company last week, according to the Financial Times' report on Wednesday. No final decision has been taken on the number of lay-offs, but it is expected to come from the staff involved in writing new business. This section alone employs about 1,000 people. The company went into voluntary liquidation after it was revealed that it was facing unquantifiable losses stemming from claims that had not been entered into its accounting systems. NTL INCORPORATED: GE Capital Closes NTL Financing ------------------------------------------------- NTL Incorporated said on Tuesday that the previously announced investment by GE Capital Telecom of $100 million 5 3/4% Convertible Subordinated Notes has closed. NTL Chief Financial Officer John Gregg said they are excited to have GE Capital as an investor of the company. The closing of the investment reaffirms GE Capital's commitment to the European broadband market and is a vote of confidence in NTL's management team and strategy. The completion of the previously announced GE Capital Telecom senior secured financing of $288 million is proceeding on course and will be reported separately. NTL offers a wide range of communications services to homes and business customers throughout the UK, Ireland, Switzerland, France, Germany and Sweden. REDSTONE TELECOM: Company Profile --------------------------------- Name: Redstone Telecom Plc Premiere House, Elstree Way Borehamwood, Hertfordshire WD6 1JH United Kingdom Phone: +44-70-2000-1000 Website: www.redstone.co.uk SIC: Business services (7389) Employees: 130 (2000) Revenues: 82 million pounds (March 31, 2001) Current Assets: 56.240 million pounds (March 31, 2001) Total Liabilities: US$72.7 million (March 2000) Net Loss: 101.848 million pounds (March 31, 2001) Type of Business: Telecommunications services such as technical support, marketing promotion and competition lines. Trigger Event: Redstone's losses rose tenfold to 101.8 million pounds in its year to March 31, 2001 due to poor financial controls. The group's trading was affected by the uncertainty regarding its the current financial situation. Graham Cove resigned from the Board on June 26 over the company's future direction. CEO: Ian Brown Finance Director: Andrew Walsh Chairman: Simon Slater-Thomas Auditor: Pannel Kerr Forster (PKF) Bankers: National Westminster Bank PLC Law Firms: Osborne Clarke OWA Financial PR Advisers: GCE Financial Group Limited Securities: Basic and diluted earnings per share 90.4p (March 31, 2001) Last published in TCR-EUR on June 28, 2001 REDSTONE TELECOM: Cove Steps Down From Board ------------- ------------------------------- Graham Cove on Tuesday resigned from the Board of Redstone Telecom plc, following differences over the company's future direction. Cove has been the telecom company's Managing Director/Chief Executive Officer since its formation in 1995 and has led it from a small start-up into a publicly quoted, full-service communications company. REDSTONE TELECOM: Survives After Winning Rule Waiver ---------------------------------------------------- Redstone Telecom escaped a near-fatal brush with insolvency after convincing the UK Listing Authority to waive listing rules, according to the June 27 edition of The Times. The telecom company said that it raised 22.5 million pounds in a placing to existing shareholders, as part of a 25.3 million pounds raising that will include a discounted rights issue. However, Redstone said it had been forced to convince the Listing Authority to waive rules excluding it from receiving an emergency bridging loan from its biggest individual shareholder. Without the waiver, Redstone, whose losses rose tenfold to 101.8 million pounds in its year to March 31, would have to cease trading and seek the appointment of an administrative receiver. SCOOT.COM: Chief Bonnier Quits Over Cash Crisis ----------------------------------------------- Scoot.com chief executive Robert Bonnier on Tuesday resigned from the UK Internet directory and classified advertising group, which admitted it had insufficient working capital for the next 12 months. Chairman Dick Eykel will step in as executive chairman until Bonnier is replaced. The company's financial position is further complicated by its need to settle outstanding convertible debt of about 14 million pounds. Similarly, chief finance officer Ronald Dorjee has resigned effective June 26. He will remain with the group until a successor is found. Chief Executive Officer Jon Mollyneux, who has been appointed chief operating officer, will support him. SCOOT.COM: Plummets Over Cash Shortage -------------------------------------- Shares in Scoot.com stood at 2.25p or down by 68%, after the online directory company said its cash shortage had become critical, according to the Wednesday edition of BBC News. The struggling company said it was cutting 285 jobs, postponing expansion plans to focus on UK operations and changing its way of charging customers. Scoot also said chief executive Robert Bonnier resigned on Tuesday with immediate effect in view of the impending strategy shift, as well as for personal reasons. Bonnier will temporarily be replaced by chairman Dick Eykel until a new chief executive is appointed. SCOOT.COM: Potential Issue of Ordinary Shares --------------------------------------------- On Wednesday Scoot.com posted to shareholders the listing particulars relating to the potential issue of up to 154,921,535 ordinary shares in connection with the company's outstanding convertible debentures. The directors believe that the potential issue is in the best interest of the shareholders as a whole and, accordingly, unanimously recommend the shareholders to vote in favor of the resolution. The listing particulars contain notice of an Extraordinary General Meeting on July 20 at the offices of Charles Russell in London. SCOTIA HOLDINGS: To Receive Lifeline From European Regulator ------------------------------------------------------------ Biotechnology company Scotia is close to receiving a lifeline from the European Medicines Evaluation Agency, according to the Wednesday edition of the Financial Times. The European drug regulator is understood to have reached a preliminary agreement to reverse an earlier decision and approve Scotia's most advanced drug, Foscan. EMEA's conditional approval for Foscan would be a success for Scotia's administrator Ernst & Young and its management as it would help E&Y to sell the drug to a rival or raise funds to ease Scotia's financial problems and repay at least some of its 50- million-pound debt. The European approval could also help attempts to convince US regulator Food and Drug Administration to approve the drug, FT added. The decision by both regulators to reject Foscan triggered the funding problems that led to Scotia's fall into administration in January. ************ 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. 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 * * *